052311May 23, 2011
The Randolph County Board of Commissioners met at 6:00 p.m. for a special budget session in
the 1909 Randolph County Historic Courthouse Meeting Room, 145 Worth Street, Asheboro, NC.
Commissioners Holmes, Frye, Haywood, Kemp and Lanier were present. The purpose of this
meeting was to hear a formal presentation of the Proposed FY 2011-2012 Budget and budget
requests from the County and City Schools and Randolph Community College.
Will Massie, Assistant County Manager/Finance Officer, presented the Proposed FY 2011-2012
Budget via PowerPoint presentation. He stated there are long-term structural changes in the
economy, from Federal and State policymakers, and public expectations that will affect how local
government provides services and how citizens pay for them. He noted the following items that are
affecting the budget:
• Decline in real estate value and new development
• Less sales tax and revenue sources
• Less Federal and State financial assistance
• Loss of public school building capital funds
• Cost shifting from State to County
• More reliance on property tax than ever
Mr. Massie listed the following pressures the County faces with the current 2010-11 Budget:
• County revenue loss due to recession
• Repercussions of State budget crisis passed on to counties by actions of NC General
Assembly
• Increased demand for many services
• Two years of budget cuts make it difficult to maintain existing services
• Use of reserves to balance budget
Mr. Massie reviewed the following highlights in the proposed budget:
• No increases for current expense or current capital for Randolph Community College or
public schools
• No pay plan adjustment for County employees
• No requested new positions for departments included in proposed budget
• New requests from outside agencies include:
-Senior Adults Assn. requesting $6,500 for RCATS
-Partnership for Children requesting $29,000
-Ash-Rand is requesting $50,000
-Randolph Hospital is requesting $298,777
• Contingency Fund includes a $400,000 contribution to the County employees' 401(k) plan
and $107,132 from eliminated positions that could be used for critical positions in other
departments.
• Requests from three fire districts for their district tax rate to increase
Mr. Massie said that the FY 2011-2012 Proposed Budget is balanced at $110,801,757, an
increase of $608,247 or .55 percent over last year's budget and is still based on a property tax rate
of 58.6 cents per $100 valuation, same as last year. In 2010-11, Randolph County had the 39th
lowest property tax rate of N.C.'s 100 counties. Mr. Massie noted that several neighboring counties
have a tax rate higher than Randolph. At the current valuation and collection rate, one cent on the
tax rate produces $981,720. The estimated property valuation for 2011-12 remains at
$10,100,000,000, the same as the past three fiscal years. Lack of residential and commercial
development, decline in new car sales, and a slowdown in the replacement of business equipment
have limited growth in the property base. Every year, there is $100 million in depreciation on
personal property, and there will likely be difficulty maintaining the current tax base until property
development and business investment resumes. A considerable amount of the County's reserve will
be drained to make it through the end of the current fiscal year; the County currently has $4.3
million appropriated in 2011 with little hope of recovering it. The 2012 Proposed Budget requires
the use of another $4,995,777. Continued use of appropriated fund balance just creates additional
pressure on the property tax rate next year.
Budgeted Revenues and Other
Financing Sources
FY 2011-12
Ad Valorem Property Taxes
$
58,828,792
53.1%
Local Option Sales Tax
16,200,000
14.6%
Other Taxes and Licenses
1,339,000
1.2%
Unrestricted Intergovenmental
520,000
0.5%
Restricted Intergovernmental
18,163,530
16.4%
Permits and Fees
977,600
0.9%
Sales and Services
8,992,784
8.1%
Investment Earnings
310,000
0.3%
Miscellaneous Receipts
474,274
0.4%
Appropriated Fund Balance
4,995,777
4.5%
$
110,801,757
Budgeted Expenditures and Other
Financing Uses
FY 2011-12
County Services
$
60,797,610
54.9%
Education
27,582,041
24.9%
Debt Service
15,543,093
14.0%
Appropriations to Outside Agencies
4,171,881
3.8%
Transfer to Other Funds
2,200,000
2.0%
Contingency
507,132
0.5%
$
110,801,757
Mr. Massie stated that after various user fees, grants, and other revenues are matched to the
expenditure categories, property taxes fund the difference. The proposed 2012 property tax rate of
58.6 cents is used as follows:
County Services
23.0¢
Education
25.50
Debt Service
8.1¢
Appropriations to Outside Agencies
2.0¢
58.6¢
Like every other entity, Randolph County government has reacted to the recession and evaluated
its operations to find cost savings and efficiencies. Unlike some businesses, however, demand for
most County services has greatly increased over the past few years. Randolph County is always
conservative and provides essential services, but budget cuts continue to affect the County's ability
to provide critical services. Departments cut around three percent of their operating expenses in
2010 and another three percent in 2011. Departments work diligently to provide quality services to
taxpayers within the budget appropriations they are given. However, in many departments, the
increase in workload is stretching our employees, equipment and budgets to the edge. There comes
a point that a department cannot provide a satisfactory level of service without devoting more
financial resources towards operations. Several departments have significant needs, which are
detailed in the requests. Obviously, without financial resources, these requests could not be
included in the proposed budget. Only property taxes generate the revenues needed for any
substantial initiative.
For the 2011-12 proposed budget, the following short-term budget priorities were established:
• Fund departmental operations at the minimum necessary to maintain public safety and other
critical services that citizens expect and demand
• Maintain current level of financial assistance to public schools, the community college, and
outside agencies
• Minimize the use of appropriated fund balance and other reserves for recurring costs
Mr. Massie concluded by saying that Randolph County will continue to face issues that will put
additional pressure on our property tax rate. County officials have a responsibility to communicate
the status of departmental operations to the Commissioners and to the public; the Board has the
responsibility to find the right balance between meeting the public's demand for services and the
public's desire to pay for them.
Randolph County Schools
Donald Andrews, Randolph County Schools Superintendent, discussed the Randolph County
Schools budget request. He said that the current state of our economy continues to have a negative
financial impact, and requested that the Board accept the County Schools' budget request with only
continuation costs. Mr. Andrews said that the County Schools has implemented cost savings
procedures into their current budget. These reductions, combined with the expansion items, result in
a Current Expense request of $17,372,375; Capital Outlay request is for $2,241,330.
Asheboro City Schools
Dr. Diane Frost, Asheboro City Schools (ACS) Superintendent, reported that ACS remains
committed to their 2010-2013 strategic plan. She said they are not requesting any additional funds
for expansion budget items or salary increases, but, in order to fund the continuation budget, they
requested $4,419,900, which is $128,258, or three percent over last year's appropriation. The
increase in expenses are due to State budget cuts, retirement contribution rates and the expected
increase in hospital insurance rates as well as the projected growth in enrollment.
Dr. Frost requested $570,250 for Current Capital and $250,000 for Construction Capital to fund
the following projects: 1) upgrades to restrooms, electrical, sound system and lighting at AHS; 2)
HVAC upgrades at Balfour; 3) elevator for handicapped accessibility at SAMS; 4) roof repairs; and
5) furniture. Dr. Frost said that no increase in the current Asheboro City Schools Special Tax
District rate of $0.1385 is requested for FY 11-12.
Randolph Community College
RCC President Dr. Robert Shackleford stated that the RCC budget is broken out at 85% for
operations which is funded by the State and 15% is for capital and is provided by the County. RCC
was fortunate to have received nearly $700,000 in grant funding to take care of some projects. The
college had a 36% increase in enrollment, largely due to the loss of jobs in the area, but had a 16%
decrease in the operating budget. They have made many sacrifices, such as travel, spending and
hiring freezes as well as realignment of many employees. The State is estimating another 10-12%
cut to the college for next fiscal year. Dr. Shackleford stated that they refuse to lower standards and
made the choice to serve the county rather than closing the doors as had been suggested.
Dr. Shackleford stated that the only increase they are asking for is a .07 increase totaling $16,000
for retirement and health care costs increases.
Dr. Shackleford also gave an update on the Industrial Trades Center (former Klaussner building)
project, stating that the design phase had been completed and they have received approval from the
State to begin construction. Now they need to determine when to bid and when to start
construction. If they can go to bid now and start construction by fall, they could be in the building
by August of 2012. They have until September to go to bid or they have to go through the State
construction application process again and run the risk of higher construction costs if they wait.
They are requesting that the County advance them funds for the project until sales tax revenue can
be used to repay the debt. Dr. Shackleford stated that they would be able to pay the County
$170,000/month, and promised to repay the County in full by August of 2013.
Dr. Shackleford thanked the Board for their continued support of RCC and the citizens of
Randolph County.
Adjournment
There being no further business, the meeting adjourned at 8:08 p.m.
J. Harold Holmes, Chairman Darrell L. Frye
Phil Kemp
Arnold Lanier
Stan Haywood
Amanda Varner, Deputy Clerk to the Board