Loading...
HomeMy WebLinkAboutApril 18 2012 Minutes of Special Meeting Re: BudgetA Special Meeting of the Frederick County Board of Supervisors was held on Wednesday, April 18, 2012, at 12:00 P.M., in the Board of Supervisors' Meeting Room, County Administration Building, 107 North Kent Street, Winchester, Virginia. PRESENT Chairman Richard C. Shickle; Christopher E. Collins; Charles S. DeHaven, Jr.; Bill M. Ewing; Gene E. Fisher; and Gary A. Lofton. Ross P. Spicer. CALL TO ORDER Chairman Shickle called the special meeting to order. He then read the following opening comment: "I want to thank my fellow board members for their support in calling this special meeting. We are here today to consider extraordinary budgetary measures for the following reason, the State's pending budget plan. We must deal with both the content of the State's proposed budget plan and the late timing of the State's approval. Frederick County has already completed its budget process for the fiscal year 2012 -2013. Just last weep the Board approved a conservative budget that did not include a tax increase. Many sacrifices were made and many worthwhile requests for additional funding were denied. We knew that we needed to give our employees raises, and we did not, and we knew that we were short funding essential local services. We did this because we were concerned about our local economy and we knew that Richmond was looking for money. The Board and the administration worked hard to live within its current revenues. The Board did all that it could do to keep from asking the citizens of Frederick County for any additional tax dollars and we hoped that Richmond would shoulder its own burdens and care less about its public perception. The Commonwealth of Virginia has not completed it budget process. The State Legislature forwarded a budget to the Governor for approval and the Governor proposed amendments. These amendments may or may not have been approved by the Legislature. These amendments may or may not be headed back to the Governor for approval. And yes, Richmond is looking for money. Frederick County was forced to adopt a budget without knowing what Richmond would or would not be doing. Once again, the `shell game' is being played as Richmond talks out of both sides of its mouth by shifting its fiscal burden to the localities and, at the same time, criticizing localities for escalating local tax rates. Cost shifts and unfunded mandates are abundant in the State's budget proposal. There is even talk of taking traditional local revenues such as court fees, fines, ABC profits, and sales taxes, and making them State revenues. What is very different this time is that Frederick County cannot absorb any more of these cost shifts, unfunded mandates, or revenue reductions dictated by Richmond without a tax increase. To quote, in part, a newspaper article in The News Leader from Staunton/Augusta County, `Virginia's elected leadership in state government is tight with state taxpayers' money. And Gov. Bob McDonnell and state legislators don't mind point out — a lot — that they bring Virginia's tax and spending ledgers into line without raising taxes... The state government might be able to balance its budget without raising taxes, but it has done so in part by raising the cost of local governments, forcing city councils and the Board of Supervisors to find money for services the State had been providing... The disingenuous part of this is that, they are gonna claim they didn't raise taxes, but what they are doing is raising taxes for virtually every locality across the state. ' NMI LANWAM Minute Book Number 37 Board of Supervisors Special Meeting of 04 /18 /12 The straw that breaks the camel's back is YSRS, the State's retirement system. Over time, the state government•has borrowed money that was deposited into the State's Retirement Plan and shifted funding burdens back and forth between the employer and employee. But Virginia's lawmakers couldn't borrow employee service time, though, as older workers who are retiring, expect to get the pension money they have worked hard for. Richmond needs to come up with the deficit to keep the plan solvent and they think the local tax payer should pay the bill. The State's solution and perhaps the most onerous new State mandate from this year's budget proposals is the one that requires local employees to contribute an additional percentage of their paychecks to replenish their pension fund and local governments to give pay raises to its employees to covers these increased contributions. In Frederick County, we have not given raises for four years. Now, we must give our employees a 5% raise so that they can contribute the raise to their retirement plan to keep it solvent. The ultimate payer of these additional contributions is the local taxpayer via real estate and personal property taxes. The County's cost is large and our employees will not see any increase in their take home pay. In almost an apologetic way Richmond has offered phase -in options. These phase -in options will cost local taxpayers more money and are not sustaining. I believe that if the Board had approved a tax increase last week it would have gone for increased funding of essential services and raises to our employees, but we did not know what Richmond would be looking for and we knew our citizens could not afford what we wanted to do and what Richmond might dictate. So here we are with much to do and little time to do it in. And I might add we are still without an approved State budget. Should it come to be that we must amend our approved budget and raise taxes based upon the information we will receive today, let it be known that this is a State inflicted "pass the buck" local tax increase to cover State unfunded mandates. The old saying that `if it looks like a duck, walks like a duck, and quacks like a duck, it is a duck' applies here. The local mandates in the State's proposed budget plan area tax increase, just not a State tax increase. " Chairman Shickle then asked if other board members wished to comment. Vice - Chairman Ewing stated he was disappointed with the State. Supervisor Lofton reiterated the comments previously stated. Supervisor Collins stated it disturbed him that the only things the General Assembly had been able to pass this session was legislation regarding ultra - sounds and a bill allowing citizens to purchase more than one gun per month. He went on to say it infuriates him when the legislators claim they did not raise taxes. Supervisor Fisher expressed his displeasure with the State and wondered how long taxpayers can stand for what is going on in Richmond. Supervisor DeHaven stated "well said all ". Administrator Riley provided an update on State funding. He noted the VRS increase resulted in a $465,259 mandate for the county in order to meet the new requirement. This would make the employee whole and address the increase FICA due to mandated 5% salary increase. He went on to say the VRS ratios would be artificially lowered. He went on to say there would Minute Book Number 37 Board of supervisors Special Meeting of 04118/12 be an increase for the county to fund the Line of Duty Act, which used to be a state funded item. In addition, there was the County's $293,812 payment in aid to the Commonwealth, which was a one time request from the State to assist them in their fiscal distress that is now in its fourth year. He touched on the increase in life insurance premiums for non - school employees, which is mandated to be paid by the local government. He then tumed the presentation over to the superintendent of schools. Dr. David Sovine, Frederick County Superintendent of Schools, read the following statement: " 1. Opening Comment Thank you far inviting me here today to share the difficulties with the FY13 budget. In about seven weeks, more than 900 students will receive diplomas at our high school. For each of those new graduates, about 2, 000 employees did their part to help those 900 be successful, and they'll do the same for each of the 13, 000 students with us next year. Investing in our public schools is an investment in the future oL our children and our community. A portion of my job is to do my part to help our community and governing bodies recognizing the value of public education and the value of the school division serving this County. Just as you've experienced, it's been challenging for us to deal with the significant changes in the amount and temporary nature of state and federal dollars available, and it's been difficult to accommodate the specific mandates and administrative complexities associated with the funds. Nonetheless, I hope this handout demonstrates the needs and challenges of our school division. Listed below are the school division's needs that remain unfunded. Following that is a listing of highlights in the School Board's budget as it stands in line with your budget approval last week. IL Unfunded Needs of the School Division A) Competitive wages. We don't need to match Loudoun County's salaries, but we do need to be relative to our area's cost of living and need far a viable employee base. B) Restoration of technology funding to sustain ever - changing technologies in software development and hardware capabilities. C) Reduced class ,sizes in specific areas to address curriculum improvements or changes. D) Funding for full- -day Kindergarten program. E) Sta develo meat and tuition assistance funding to maintain excellence in the classroom. F) Restoration of annual funding for replacement buses (13 per year) and one -time funding for catch --up replacement buses for those overdue for replacement. G) Restoration of funding to the classroom for instructional materials. H) Restoration of building level services for instructional content coordination, building maintenance, and support services. In. Budget Highlights for FY2013 — School Operating Fund --- abbreviated from 4117112 presentation to School Board and derived from the Conference Report April 10, 2012 I . Minute Book Number 37 Board of Supervisors Special Meeting of 04/18/12 A) Virginia Retirement S stem: 1. $4.9 million in additional funds is allocated for the employer rate increase The employer rate will be about 70% of the VRS Board of Trustees certified rate (11.66% for the professional group). Mandated increases in the rate will occur over the next four biennium budgets until fully funded at 100% in FY2019. 2. The General Assembly change in the employee and employer funding of the VRS contributions, along with the mandate for offsetting compensation, has been a contentious issue during this budget session. This budget for FCPS reflects the full 5% charge to employees for their pension contribution offset by increased compensation to make em to ees who — meaning no negative impact to their net pay. The net savings and associated cost for both these items is $1.8 million. B) Federal revenues will decrease by $2.8 million primarily due to the end of the Education Jobs Fund money, which was used to sustain jobs in FY12 --- requires local and state dollars to continue those jobs. C) State revenues will be $5.1 million higher, but some of it is temporary_ Additional revenues will be used to offset the loss of the last of the federal stimulus funding and to begin paying back the VRS rate deferral. D) Staff will be downsi ed h 31.5 ull -time a uivalent ositions division -wide. E) Instructional Ends will he reduced by $100,000. This is the third reduction to schools over the last four years resulting in just under $600, 000 less available to support the programs each year. F) Staff development and technology funding is insufficient. G) There are no dollars in this budget for new or replacement school buses. H) Health insurance expenditures are increased by 10% for the school division while employee premium deductions will be held constant. 1) There are no dollars in this budget for salaries to increase employees' net pay. J) There are areas of si ni '"cant concern within this budget • Fuel costs • Staffing to qualify for state K -3 and full day kindergarten funding ($0.6 million and $0.5 million respectively). • Cost increases in utilities. " Dr. Sovine concluded by thanking the Board for the opportunity to provide an update on the budget. Commissioner of the Revenue Ellen Murphy reviewed a handout regarding the various taxes charged in Frederick County. She noted increases in BPOL, meals, and lodging taxes were not possible as all Were at the maximum rate allowed by the State. She went on to say increases to personal property and manufacturers' rates were discouraged because Frederick County has a high personal property tax rate compared to other localities and we are at a disadvantage with West Virginia when it comes to the manufacturers' rate. She concluded by noting Frederick County has a low real estate tax rate.compared to other Virginia localities. Minute Book Number 37 Board of Supervisors Special Meeting of 04/18/12 1297 Administrator Riley noted a $0.04 tax increase would be needed to fund the State mandates that have been passed down to Frederick County. He then reviewed the proposed budget calendar should the Board desire to proceed with the increase: April 25, 2012 & May 2, 2,012 — Advertisement of Public Hearing. May 9, 2012 — Public Hearing and adoption of real estate tax rate. May 10 -28, 2012 — Printing and mailing of real estate tax bills. June 15, 2012 — Tax bill due date (extended). Administrator Riley advised that there was a lot of time and effort involved in meeting this calendar, so the Board must be committed to this strategy. He went on to say if the Board was not committed to this strategy then we need to stay where we are with regard to the budget. Vice - Chairman Ewing asked if the $0.04 rate covered all the VRS mandate. Administrator Riley responded the $0.04 rate would cover more than VRS. Vice - Chairman Ewing stated it was irritating to know the General Assembly dictates things and mandates things to us and we have to go back to the tax payers locally because "Richmond doesn't have the backbone to do it ". Supervisor Collins moved to accept Administrator Riley's recommended process and to advertise a real estate tax rate of $0.05 in order to provide some cushion in case other mandates were enacted. The motion was seconded by Supervisor DeHaven. Vice - Chairman Ewing advised that he was opposed to a tax increase, but if the Board saw a need for a $0.04 rate increase then he would do that. Supervisor Fisher stated he supported a $0.04 increase. The above motion failed by the following recorded vote: Richard C. Shickle Nay Bill M. Ewing Nay Christopher E. Collins Aye Charles S. DeHaven, Jr. Aye Ross P. Spicer Absent Gene E. Fisher Nay Gary A. Lofton Nay Upon a motion by Supervisor Fisher, seconded by Supervisor Lofton, the Board authorized the advertisement of a $0.04 tax increase. The above motion was approved by the following recorded vote: Richard C. Shickle Aye Bill M. Ewing Aye Christopher E. Collins Aye Charles S. DeHaven, Jr. Aye Minute Book Number 37 Board of Supervisors Special Meeting of 04/18/12 Ross P. Spicer Absent Gene E. Fisher Aye Gary A. Lofton Aye Treasurer C, William Orndoff, Jr. and County Attorney Rod Williams advised an ordinance amendment would be required in order to change the tax bill due date in order to accommodate the budget calendar previously discussed. Upon a motion by Supervisor Lofton, seconded by Supervisor Collins, the Board approved advertising an ordinance amendment to allow a one -time change to the tax bill due date from June 5`� to June 15''. The above motion was approved by the following recorded vote: Richard C. Shickle Aye Bill M. Ewing Aye Christopher E. Collins Aye Charles S. DeHaven, Jr. Aye Ross P. Spicer Absent Gene E. Fisher Aye Gary A. Lofton Aye ADJOURN UPON A MOTION BY VICE- CHAIRMAN EWING, SECONDED BY SUPERVISOR FISHER, THERE BEING NO FURTHER BUSINESS TO COME BEFORE THIS BOARD, THIS MEETING IS HEREBY ADJOURNED. (12:45 P.M.) e Richard C. Shickle John It. Riley, Jr. Chairman, Board of Supervisors 1`:lerk, Board of Supervisors Minutes Prepared By: 6 `:�'&_ Jay E. Ttobs Deputy Clerk, Board of Supervisors Minute Book Number 37 Board of Supervisors Special Meeting of 04/18/12