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February 22, 1995 Work Session 2031 A budget worksession of the Frederick County Board of Supervisors was held on February 22, 1995, at 3:00 p.m., in the 107 North Kent Street Conference Room, Winchester, Virginia. PRESENT: Chairman Richard G. Dick; Vice-Chairman W. Harrington smith, Jr.; James L. Longerbeam; Robert M. Sager; Jimmie K. Ellington; and Charles W. Orndoff, Sr. Also in attendance were Treasurer C. William Orndoff, Jr.; Finance Director Cheryl B. Shiffler; County Administrator John R. Riley, Jr.; School Board Superintendent R. Thomas Malcolm; School Board Finance Director James E. Boyd; School Board Vice-Chairman Joseph L. Headley; Lord Fairfax Health District Director Mohamed A. Khodr, M.D., M.P.H.; Lord Fairfax Health District Chief Administrative Officer David D. Crabtree; and Finance Committee citizen Member Henry C. Buettner. CALL TO ORDER The Chairman called the meeting to order. SCHOOL BOARD BUDGET Mr. Tom Malcolm presented an overview of the Frederick County School's Fiscal Year 1995-1996 budget. Mr. Malcolm explained that the majority of the increase in the school board's budget will go to teachers' raises and compensation of the salary scale for teachers. Funding of debt service has also increased by $674,000. Mr. Malcolm further advised that the budget also includes 19 new positions of which 13 are mandated. Mr. Buettner inquired as to the reason for an increase in worker's compensation insurance premiums. Mr. Malcolm advised that the worker's compensation is experienced rated. Mr. Buettner wanted to know where the claims were coming from. supervisors Longerbeam and Orndoff inquired as to the amount of increase in administrators' salaries that is projected for Fiscal Year 1995-1996. 204 Mr. Malcolm responded that the range in increase is from 1.6 to 3.7 percent. Supervisor Sager inquired as to compatible salaries between the school board and general fund for positions such as account clerks and secretaries. Mr. Malcolm did not know the answer. Supervisor Sager was also concerned about retaining qualified bus drivers. Mr. Malcolm replied that maximum miles driven per bus driver has been reduced from 1,800 to 1,200 miles and increased the base salary by 3.7 percent to offset decreasing mileage cap. Supervisor Orndoff inquired about delaying or not doing the Kline renovation and keeping the school board administration offices where they currently are. Mr. Malcolm responded by stating that there are obvious short-term cost savings in capital outlay but the school system will eventually have to replace Gainesboro and Robinson schools and will cause the construction of a new elementary school somewhere. He felt this would delay the construction about five years. Mr. Riley inquired as to his original request to do mid year raises rather than the plan proposed which provided raises at the beginning of the school year. Mr. Malcolm responded that the school board felt it appropriate to put the major emphasis on teacher salaries and to implement that objective in mid year would only exacerbate the problem. A lengthy discussion ensued as to the comparative cost per pupil in the adjacent school systems. It was concluded by the board of supervisors that it was not a fair comparison when debt service was excluded from the per pupil spending ratio--the school board disagreed but will provide ratios that include debt service. 205 Chairman Dick inquired as to the maintenance projects that had been delayed that would eventually cost the county more in the long run. Mr. Malcolm replied that in most cases issues that con- cerned significant maintenance problems were being addressed. Supervisor Orndoff advised all present that he thought there was a federal program available that would provide funding for tank replacement on expenses incurred over $10,000. He advised that the livestock exchange had a similar experience with tank replacement and the federal government provided the excess funding. Supervisor Sager expressed his concern over funding addi- tional staffing requirements when the proposed capital improve- ments were completed. Mr. Malcolm was reluctant to provide funding estimates for future fiscal year budgets. Most board members commended the school board on a job well done as far as budget preparation and negotiation. There were few problems and most of the objectives were met. LORD FAIRFAX HEALTH DISTRICT Dr. Khodr presented the Lord Fairfax Health District's request for expansion to the board of supervisors. Dr. Khodr felt that the most cost effective solution for the health department was to expand on the existing site. All clients know where the current facility is located, is accessible to public transit, is in close proximity to migrant labor camps, and remote enough to provide confidentiality necessary in most client cases. The proposal will meet the growth needs for the next 15 years and have ample public parking. Chairman Dick and Supervisor Sager had been concerned about the current location but felt after Dr. Khodr's explanation that the proposal seemed reasonable. GENERAL FUND BUDGET Mr. Riley was requested to update the board on the Fiscal Year 1995-1996 budget. Mr. Riley indicated that based upon the 206 direction of the board not to increase taxes, the use of fund balance in the amount of $3.6 million could be used to balance the budget. This would mean the use of some one time sources to balance the budget which would cause the budget process for next year to start out on a negative basis. However, all of the $3.6 million is not a one time source of revenue as two-thirds of that source is comprised of unbudgeted revenue. Mr. Riley explained that on the school board side of the ledger that debt service alone for the school system next year would increase by $1.7 million and that new operational cost would probably exceed $500,000. Mr. Riley advised that new operational cost may be premature based upon construction schedules and opening dates. Also, if Frederick County has access to literary loan funds, it could reduce the $1.7 million in debt service. On the general fund side, Mr. Riley felt that through the reductions he had made and cost reduction measures already in place that the budget was very lean. Mr. Riley advised that he has researched a five percent across the board reduction exclusive of personnel and merit increases that could provide an additional $350,000 if necessary. Mr. Riley requested that this five percent reduction be held in abeyance until he could fully analyze the outcome of the General Assembly which will adjourn on February 25, 1995. Of particular concern was Senate Bill 898 which puts trucks in a machinery and tools tax classification which could result in a significant revenue loss. Supervisor Ellington inquired what the cost saving would be if we delayed or eliminated the second phase of the new office building project. Mr. Riley indicated that he could not provide a dollar amount at this time on that question. 207 Chairman Dick advised that as far as he was concerned that was not an option. Chairman Dick continued that he did not like using reserves but he felt that it was the best alternative. Supervisor Orndoff felt that it may be necessary to in- crease taxes a little bit now in order to offset a big increase next year. Treasurer Bill Orndoff felt that a 15 to 20 cent tax increase would be necessary next year. He further stated that it may be appropriate to look into a two year budget cycle which may make it easier to look at long range fiscal planning. Chairman Dick responded that two year budgets had not worked for the city and it surely had not worked for the state. Supervisor Smith felt it appropriate to use the reserve funds now. That is what the taxpayers expect. Upon motion made by Jimmie K. Ellington, seconded by Robert M. Sager, that the Fiscal Year 1995-1996 budget be advertised as presented; that any additional funds received from action by the General Assembly for schools be evaluated and approved by the board of supervisors prior to appropriation into the school board budget; and that the five percent across the board cut proposed by Mr. Riley be held in abeyance until the outcome of the General Assembly action on bills affecting local revenues can be fully evaluated as to its impact on local revenues. The above motion was approved by the following recorded vote: Richard G. Dick - Aye w. Harrington Smith, Jr. - Aye James L. Longerbeam - Aye Robert M. Sager - Aye Jimmie K. Ellington - Aye Charles W. Orndoff, Sr. - Aye BOARD RETIRED INTO EXECUTIVE SESSION Upon motion made by James L. Longerbeam, seconded by Robert M. Sager, the board retired into executive session in accordance with the Code of Virqinia, 1950, as amended, Section 2.1-344, Subsection A(3), to discuss acquisition and disposition of real estate. 208 The above motion was passed by the following recorded vote: Richard G. Dick - Aye W. Harrington Smith, Jr. - Aye James L. Longerbeam - Aye Robert M. Sager - Aye Jimmie K. Ellington - Aye Charles W. Orndoff, Sr. - Aye BOARD WITHDREW FROM EXECUTIVE SESSION Upon motion made by James L. Longerbeam, seconded by W. Harrington Smith, Jr., the board withdrew from executive session and reconvened into regular session and certified that nothing other than what was noted as reason for going into executive session was discussed. The above motion was passed by the following recorded vote: Richard G. Dick - Aye W. Harrington Smith, Jr. - Aye James L. Longerbeam - Aye Robert M. Sager - Aye Jimmie K. Ellington - Aye Charles W. Orndoff, Sr. - Aye UPON MOTION MADE BY ROBERT M. SAGER, SECONDED BY W. HARRINGTON SMITH, JR., THE BOARD OF SUPERVISORS ADJOURNED AS THERE WAS NO FURTHER BUSINESS TO DISCUSS. Cler