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March 4 2015 Minutes of Budget Work Session with Finance Com226 A Budget Work Session of the Frederick County Board of Supervisors and Finance Committee was held on Wednesday, March 4, 2015 at 8:00 a.m., in the Board of Supervisors' Meeting Room, 107 North Dent Street, Winchester, Virginia. PRESENT Chairman Richard C. Shickle; Vice - Chairman Charles S. DeHaven, Jr.; Gene E. Fisher; Robert A. Hess; Gary A. Lofton; and Robert W. Wells. ABSENT Redbud District Vacant. OTHERS PRESENT Finance Committee members Bill M. Ewing, Angela Rudolph, and Judith McCann- Slaughter; Roderick B. Williams, Interim - County Administrator; Kris C. Tierney, Assistant County Administrator; Jay E. Tibbs, Deputy County Administrator; Commissioner of the Revenue Ellen Murphy; Treasurer C. William Orndoff, Jr.; Finance Director Cheryl Shiffler; Assistant Finance Director Sharon Kibler; Budget Analyst Jennifer Place; Fire Chief Dennis Linaburg; Planning Director Eric Lawrence; Superintendent of Schools Dr, David Sovine; Executive Director of Finance for Frederick County Public Schools Lisa Frye; and Frederick County School Board Vice - Chairman Dr. John Lamanna. CALL TO ORDER Chairman Shickle called the work session to order. The board and committee reviewed the memo regarding FY 2016 committed costs and the breakdown of possible funding for public safety positions. Finance Director Shiffler stated that staff needed to know what to advertise as part of the budget public hearing ad, particularly whether to include $7.3 million in fund balance funding or only $4.3 million. Vice - Chairman DeHaven stated he could go either way regarding the $3 million. Chairman Shickle stated he did not know if the extra $3 million gives the board a lot. Mr. Ewing stated that in order to eliminate confusion, he suggested going ahead and including the $3 million. Supervisor Fisher stated he could go either way, but agreed with Mr. Ewing. Supervisor Lofton stated there were advantages to having the extra $3 million. Minute Book Number 40 Board of Supervisors Budget Work Session with Finance Committee on 03104/15 227 Chairman Shickle stated there was consensus of the body to include the $3 million as part of the budget advertisement. The next question had to do with how the allocation of the additional funds would be split. Would it remain the same 57 % -43% schools and general fund? Vice - Chairman DeHaven responded yes. Supervisor Fisher advised with the state providing additional funds for a pay increase for schools we needed to do likewise for our staff. He noted there were needs, especially public safety, that needed to be addressed; therefore, the split should be different this year, possibly 75 % -25% general fund and schools. Finance Director Shiffler stated ftmds have not currently been identified for salary increases. She noted staff would try to identify them through savings. Dr. Sovine stated the school administration recognizes the county's recently completed salary survey; however, there exist gaps between school and county employees in comparable positions. Mrs. McCann - Slaughter suggested taking $400,000 out of the $3 million for a salary increase for county employees, before doing the split with the school system. Dr. Sovine stated the schools have used the salary survey to compare like positions (i.e. custodians, ]maintenance, secretaries, etc.); however, they are trying to close the gaps in those areas. He noted the school board was looking at a one step increase, which would equate to about $2.5 million in order to close that gap. Commissioner Murphy stated she favored a salary increase for county staff because of the need to keep experienced people. Mr. Ewing stated he thought there was some rationale for a different split of the reserve versus the normal distribution. Vice - Chairman DeHaven stated he wanted to try to accomplish that, but he would prefer to stick with the normal split. He suggested continuing to look for a way to address the situation. Supervisor Hess echoed Vice- Chairman DeHaven's comments. He went on to say the increase needed to be on a more comprehensive basis. Supervisor Wells agreed with Supervisor Hess and Vice- Chairman DeHaven. Treasurer Orndoff noted the budget would hit approximately 75% of the schools' requests, based on need. He noted that when the economy declined the County laid off people, Minute Book Number 40 Board of supervisors Budget Work Session with Finance Committee on 03/04!15 228 but fielded buy -outs for the schools. He concluded by saying the salary survey that was undertaken touched only half of the County's employees. Supervisor Lofton noted the County had taken steps forward with the salary survey, but he did not want to slip, He went on to say he would like to see some type of salary adjustment that would be comparable to Frederick County Public Schools. He concluded by saying he had no preferred method on how to get there. Dr. Sovine noted that last year the schools did a 2.5% salary adjustment while the County got a 3 %. He went on to say there were significant gaps in identical positions between the schools and the County. He concluded by saying the proposed salary initiative would not close that gap. Supervisor Hess stated that he would like to examine fund balance and how it is handled. He went on to say that it appears to currently be handled on an ad hoc basis; therefore, we need to look at the Board's goals and objectives for fund balance. Supervisor Fisher reiterated there were currently two departments that were important to the County's operations and if we do not do something with staff, we are kidding ourselves by continuing down this path. He believed the spilt should be reversed, but he would go along with the Board's and committee's decision. Chief Linaburg advised that his department had slowed down employee loss. He went onto say that anything we could do to give employees encouragement that there is something on the horizon would be good. Chairman Shickle polled the board and committee regarding their desire to maintain the 57 % -43% split between schools and general fund. Vice- Chairman DeHaven — Yes Supervisor Fisher — No Supervisor Lofton — No Supervisor Wells — No Supervisor Hess — Yes Mr. Ewing — No Mrs. McCann - Slaughter — No Mrs. Rudolph —No Commissioner Murphy — No Minute Book Number 40 Board of Supervisors Budget Work Session with Finance Committee on 03104115 229 Treasurer Orndoff — No Chairman Shickle stated he would poll the board and committee to see if anyone wanted to see the distribution reversed so the split would be 57% general fund and 43% schools. Vice - Chairman DeHaven advised the he supported doing something for staff, but did not think this was the right way to do it. Mrs. McCann - Slaughter recognized there were some morale issues for county staff regarding an increase. Supervisor Wells suggested staying with the current distribution but then trying to come up with a plan to provide a 2% increase for county employees. Finance Director Shiffler stated, if board and committee did not want to change the split then staff would advertise the budget to reflect the current split. She went on to say that staff would review revenues and expenditures at the end of April to see how things were and to see if the county would be able to provide an increase. Staff would then come back to this group in May with a strategy. Supervisor Fisher stated he would go along with that proposal. He reminded the board and committee that there were major challenges in the areas of public safety and public works. Finance Director Shiffler advised that the proposed increase would be a merit increase. Supervisor Lofton advised that he struggles with the issue if the county can have a salary adjustment based on a competitive market, but the schools cannot do that then that was a problem. Supervisor Ewing asked what would happen if the money was not available. Where would we go to ensure the proposed pay increase? Chairman Shickle stated he would challenge the HR Committee to prepare an update to the compensation study to 'include what was done, where we are going, and what we would like to do. He suggested the results and a recommendation be presented to the Board. He urged the HR Committee to pay attention to comparables within Frederick County Public Schools, where applicable. Finance Director Shiffler summarized what would be included in the budget advertisement and actions going forward: - $7.3 million in Fund Balance funding would be part of the advertisement. The additional $3 million would be split in the normal 57% schools and 43% general fund. Minute Book Number 40 Board of Supervisors Budget Work Session with Finance Committee on 03/04115 230 Staff would prepare the budget presentation to include no tax increase. - Staff would review General Fund numbers and come back to the Finance Committee in May regarding a salary increase. - The public safety positions would be taken through the HR Committee. There being no further business, the work session adjourned at 8:55 A.M. Richard C. Shickie Chairman, Board of Supervisors oderick B. Williams Interim Clerk, Board of Supervisors Minutes Prepared By: Jay E. fiba Deputy Clerk, Board of Supervisors Minute Book Number 40 Board of Supervisors Budget Work Session with Finance Committee on 03/04/15