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HomeMy WebLinkAboutJanuary 05, 2005 Budget Work Session I 242 I A Worksession of the Frederick County Board of Supervisors was held on Wednesday, January 5, 2005, at 8:00 A.M., in the Board of Supervisors' Meeting Room, County Administration Building, 107 North Kent Street, Winchester, Virginia. BOARD MEMBERS PRESENT Chairman Richard C. Shicklc; Barbara E. Van Ostcn; Gary W. Dove; Bill M. Ewing; Gene E. Fisher; Gina A. Forrester; and Lynda J. Tyler. FINANCE COMMITTEE MEMBERS PRESENT Richie Wilkins; Ron Hottle; and Gary Lofton. STAFF PRESENT Administrator John R. Rilcy, Jr.; Assistant Administrator Kris C. Tierney; Treasurer C. William Orndoff, Jr.; Commissioner of the Revenue Ellen Murphy; Deputy Clerk Jay E. Tibbs; Finance Director Cheryl B. Shimer; and Budget Analyst Jennifer Place. CALL TO ORDER Chairman Shickle called the budget workwsession to order. Administrator Riley advised that staff was attempting to give the Board more budget background information this year. He referred the Board to several questions to be answered during this budget process. They included: 1. What level of increased funding is acceptable for sehools and general government? Administrator Riley presented the Board with funding scenario A, which would require a $0.59/$100.00 tax rate. 2. What are the FY 06 budget priorities for administration and the Board of Supervisors? How are these priorities ranked? Administrator Riley advised that staff felt the top priorities were 1) salary and position reclassification upgrades; 2) construction of the new public safety building; 3) expansion of the Greenwood citizen convenience center; and 4) the new animal shelter. 3. What is the range of an aeceptable tax rate for real estate and personal property taxes? Administrator Riley adviscd that this budgct was proposing a roll back rate of$0.59, which equates to a $0.07 tax increase. No change in the personal property tax rate is being recommended. 4. What is the current estimated neutral rate for real estate taxes? Minute Book Number 30 Board of Supervisors Budget Worksession with Finanee Committee on 01/05/05 243 Administrator Riley advised that the current estimated neutral real estate tax rate was $0.515/$100.00. 5. How much revenue does 1 cent of real estate tax generate at the new values? Administrator Riley advised that one cent of real estate tax generates $600,000 under the new assessment values. 6. Is it realistic to expect only $3-3.5 million in additional revenue from the state when the current year the schools received approximately $6.8 million in new funds from the Commonwealth for school operating costs? If additional state funds are received at a later date, how will these funds be administered'? 7. At this time, what is the anticipated cash flow disruption from the change in reimbursement from the state for PPTRA? Administrator Riley advised that he was uncertain of the anticipated cash flow disruption, but informed the Board that the Auditor of Public Accounts would treat localities favorably that bill personal property tax on a semi-annual basis. 8. What is the level of unreserved fund balance that the Board of Supervisors wishes to maintain? Current level of unreserved fund balance is $17.8 million. The GFOA recommends a minimum of 15% of operating revenues which equates to approximately $14.2 million. Administrator Riley advised that staff felt comfortable with dropping below the 15% unreserved balance, if necessary. 9. What is the desire of the Board of Supervisors to spend unreserved fund balance for proposed capital requests? 10. The Animal Shelter is being proposed for funding from bond proceeds. The Board of Supervisors needs to approve project costs and authorize Public Works Director to initiate procurement. Administrator Riley advised that a request would be coming before the Board to authorize the Public Works Director to award the bid and move forward. 11. Sheriff Department vehicles could be leased in multiple years to defer the costs. Administrator Riley advised that vehicle replacement was a recurring expense and the Sheriff would be here next week to present his budget and discuss the option of leasing vehicles versus purchasing. Administrator Riley and the Board reviewed information regarding the calculation of the reassessment increase. Administrator Riley then reviewed the proposed scenario A. Hc commended the Board for Minute Book Number 30 Board of Supervisors Budget Worksession with Finance Committee on 01105105 244 their responsible leadership during last year's budget when revenues were adjusted mid-year to off- set a proposed tax increase and to meet any shortfall. Under the proposed scenario A, staff offered the following: GENERAL FUND FY 06 Projected General Fund Revenue FY 06 Requested General Fund Expenditures (FY 06 school funding at present level) County Administrator's Proposed General Fund Cuts SCHOOL OPERATING FUND Estimated increase in state funds (governors budget) (Estimate provided by School Admin. $3-3.5 million) Local funding increase for school population increase (Estimated 267 new students x local student cost of $4,205 SCHOOL DEBT SERVICE FY 06 estimated increase in debt service (all local funds) GENERAL FUND CAPITAL FUND FY 06 estimated funding (This amount equates to less than 15% of requests and could be funded from the county's unreserved fund balance) FUNDING STRATEGY General Fund Expenditure School Increase in funding for school population increase School Increase in debt service (would require a real estate tax rate of 59 cents) 101,018,673 120,884,938 -19,866,265 17.583.607 -2,282,658 (a) 3,250,000 1,122,735 (b) 4,372,735 1,200,000 (c) 2,200,000 2,282,658 (a) 1,122,735 (b) 1.200.000 (c) 4,605,393 Administrator Riley advised that there were a number of General Fund capital projects that could be funded from the County's unreserved balance fund. He concluded by saying that this scenario called for the tax rate to be rolled back from $0.73 to $0.59. Chairman Shickle stated that although the tax rate appears to decrease, it would still look like an increased tax burden for about 76% ofthe property owners in Frederick County. He went on to say that he wanted the Board to recognize that this break even number reflects a tax increase to a lot of citizens. The Board discussed the vehicle replacement policy. Minute Book Number 30 Board of Supervisors Budgct Workscssion with Finance Committee on 01105/05 245 Administrator Riley advised that Y, of the Sheriffs vehicle requests would be paid for out of fund balance. Treasurer Orndoff asked that the mileage policy be re-visited. Administrator Riley advised that staff could revisit that issue. Administrator Riley informed the Board that a number of the park issues, such as western park land and the aquatics center, could be addressed through a bond referendum next fall. Supervisor Forrester asked Administrator Riley what percentage of salary increase was being recommended. Administrator Riley responded that staff was looking at an average of 7% with emphasis being on the entry level or mid-management positions. The upper end of the salary scale would probably not exceed 4%. Supervisor Forrester referenced Scenario A and asked how staff arrived at the local contribution figure for the School's budget. Administrator Riley responded that was what the County had been paying, minus the debt servIce. Finance Director Shiffler advised that the figure came from Lisa Frye, Frederick County Public Schools Finance Director, as that was what the School Board was basing their budget on. Chairman Shiek1e discuS'Sed some "red flag" issues that caught his eye. He advised that he set an increase level of 5% and if that level was exceeded then he wanted to know why. He went on to say that this budget was in excess of that amount. He concluded by saying that the proposed scenario "shoots beyond" where he thought the Board would be this year. Treasurer Orndoff stated that the Board needed to narrow down some of the discussion questions and now was the time to do that. Chairman Shickle asked the Board and Finance Committee members for their thoughts regarding the proposal thus far. Mr. Wilkins, Finance Committee, stated that he was not sure he had enough information to get into too much detail; however, he did believe that 5% was a reasonable target. Mr. Hottle, Finance Committee, agreed with Mr. Wilkins. Commissioner Murphy stated that she would like to see the salary proposal funded, but Minute Book Number 30 Board of Supervisors Budget Worksession with Finance Committee on 01105/05 246 without the school budget figures it is hard to reach a consensus. Supervisor Dove stated that he had several concerns. He felt the 7% salary increase was probably a little high. He felt the proposed school funding under scenario A was fair, but he would prefer that the School Board give them a percent increase so the County could have something to go by. Supervisor Tyler stated that she wanted to support staff with the proposed salary increase because there would be a mass exodus if the Board did not take care of its employees. Supervisor Van Osten stated that getting information from the School Board would be helpful. She appreciated scenario A, but would also like to have a scenario B & C also. She concluded by saying that the propose 7% salary increase was probably too high. Supervisor Forrester stated that she would like to look at the Greenwood convenience center agam. Supervisor Ewing concurred with most of the comments. He was concerned about the reassessment's impact on taxes. He was also concerned about the school budget, but felt scenario A was adequate. He concluded by saying that the proposed salary increase might be too high. Supervisor Fisher stated that he had the same concerns as everybody else. He felt the Board needed to seriously consider increases in the fee structure. He concluded by saying, with regard to salaries, the County could not compete with the salaries "across the mountain". Mr. Lofton, Finance Committee, stated that he supported most ofthe comments that have been made. Treasurer Orndoff stated that a lot of individuals would not realize the impact of the reassessment until they receive their tax bill. He concluded by saying that the County should send a target budget figure to the School Board. Chairman Shickle encouraged sending the proposed scenario A figure to the School Board to see what their reaction would be. He agreed that priorities should be staff salaries and capital projects. He concluded by saying that he did not have a problem funding some of the capital projects out of fund balance. Administrator Riley advised that the County was not attempting to compete with Northern Virginia on a salary basis, but "we have to recognize it is there". Minute Book Number 30 Board of Supervisors Budget Worksession with Finance Committee on 01105/05 247 Chairman Shickle stated that he had some desire to see what the increases were based on. He went on to say that he tried to look for the true growth in the operating budget. Administrator Riley advised that staff would calculate that for the Board. Supervisor Tyler asked about the tourism budget. Administrator Riley advised that this budget had been reduced because staff did not feel there was equal contribution to the fund between the City and the County. He went on to say that this was an appropriate discussion for the Joint Finance Committee. The Board discussed the School Board's budget and asked Administrator Riley to forward the proposed figure to the School Board and ask them to show what those monies would or would not fund. Chairman Shickle asked the Board to forward any specific questions they have to Administrator Riley and Finance Director Shiffler. Ifthe answer or answers they received were not what they were looking for then they could bring these questions to the entire Board. Chairman Shickle felt that this approach would make for better use of the Board's time during the work sessIOns. Treasurer Orndoff advised the Board, with regard to question #7 concerning the anticipated cash flow disruption from the change in the state's PPTRA reimbursement schedule, that the County could anticipate $6.2 million being received after July 1,2005. Chairman Shickle asked if this disruption could be handled with short term borrowing. Treasurer Orndoff responded that it could. Chairman Shickle asked Administrator Riley to investigate temporary financing options. PARKS AND RECREATION DEPARTMENT BUDGET Director Doran appeared before the Board regarding his department's budget. He advised that his proposed budget was $3,720,794 with a local share of$1 ,954,071, which represented a local share increase of$59,097. He cited factors contributing to this increase including: increase in full- time fringe benefits, fuel costs, part-time wages, and motor vehicle insurance. A full-time maintenance position was added to this budget, but Director Doran anticipated recouping $26,000 of this cost through the schools. Chairman Shickle asked if this $59,097 included capital costs also. Minote Book Number 30 Board of Supervisors Budget W orksession with Finance Committee on 01105/05 248 Director Doran responded no this was for operating costs only. Chairman Shickle asked about the $344,331 reduction in local funding. Director Doran responded that this difference was from the current budget to the proposed budget. Supervisor Van Osten asked how long it would take for the proposed aquatic center to be self-sustaining, following construction. Director Doran responded that the proposed center would be operating at a break even point by the third year. Mr. Lofton asked about the increase in fringe benefits. Director Doran responded that the increase was due to health insurance costs. PUBLIC WORKS, ENGINEERING, ANIMAL SHELTER, LANDFILL, UTTER CONTROL. AND INSPECTIONS DEPARTMENTAL BUDGETS. Public Works Director Harvey E. Strawsnyder, Jr. and Building Official John Trenary appeared before the Board on behalf of these budgets. Director Strawsnyder reviewed his proposed budgets with the Board. Department Inspections Road Administration Engineering Refuse Collection Refuse Disposal Animal Shelter Building Appeals Gypsy Moth Current Budl:et $ 814,725 $ 30,700 $ 554,501 $ 1,073,264 $ 986,400 $ 242,692 $ 550 $ 123,123 Proposed Budl!:et $ 942,342 $ 30,475 $ 389,682 $ 1,054,375 $ 930,000 $ 261,309 $ 550 $ 147,216 Revenue Generated $ 1,015,000 $ 2,000 $ 2,000 $ 273,673 $ 173,880 $ 28,000 $ 0 $ 28,460 Director Strawsnyder advised that $500,000 of the Refuse Collection budget is the Landfill's contract with BFI. The decrease in Refuse Disposal is due to a reduction in tipping fees as the private sector is providing more curbside pickup. Finance Director Shiffler advised the Board that the current budget figures in the handout materials reflect supplements, which are not shown in the Board's budget packet. Chairman Shickle asked about the revenue in the engineering budget. Director Strawsnyder advised that these were for erosion and sediment control fees and that $140,000 would be reflected in the Planning Department's budget. Supervisor Van Osten asked about the state requirements for inspections. Minute Book Number 30 Board of Supervisors Budget Worksession witb "Finance Committee on 01105/05 249 Official Trenary responded that there was a 48-hour response for inspections per the State Code; however, his department was currently unable to meet that requirement due to insufficient staffing. Supervisor Van Osten asked about the repercussions of not meeting this requirement. Official Trenary responded that an individual could file a complaint with the state or transfer to third party inspections. Supervisor Ewing asked when the last time the inspection fees were adjusted. Official Trenary responded January 2003. Director Strawsnyder responded that the fees were lower than surrounding localities. The Board discussed services provided by the Inspection and Public Works Departments for which no compensation was being received. These included services to the Planning Department and Commissioner of the Revenue's Office. Administrator Riley advised the staff would review all of the services being provided by these departments. Supervisor Forrester advised that the Board needed to look at the fee structure and they needed to do something to address the delays in getting an inspection. Supervisor Tyler discussed the need to fund the additional employee for erosion and sediment control. Director Strawsnyder advised the this area currently has two employees, but they are required to have four. He went on to say that he was requesting only one additional employee this budget, which would bring the number to three. Chairman Shickle asked Director Strawsnyder if he had considered outsourcing some ofthis work. Director Strawsnyder advised that there were currently engineering firms that assisted his departments. Following Director Strawsnyder's presentation, the Board briefly discussed bulk purchasing for computers, vehicles, paper, etc. utilizing the school's contracts. Staff advised that they found it to be cheaper to purchase things separately from the school due to the administrative fees the school charged for utilizing the central warehouse, etc. Minule Book Numher 30 Board of Supervisors Budget Worksession with Finance Committee on 01105/05 250 The Board briefly discussed the maintenance budget and the facilities maintenance agreement with the schools. Administrator Riley advised that the Board would discuss the maintenance budget in more detail on February 2nd during the County Administrator's budget work sessIOn. THERE BEING NO FURTHER BUSINESS, THE WORKSESSION WAS ADJOURNED AT 10:30 A.M. , ~ o R. Riley, J , lerk, Board 0 Supervisors \L 0 Q ~ (I ~) Richard C. Shickle Chairman, Board of Supervisors Minutes Prepared By: (-h, I ( -1.ll ~bs Deputy Clerk, Board of Supervisors Minute Book Number 30 Board of Supervisors Budget Worksession with Finance Committee on 01105/05 L.______