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053017 BudgetMay 30, 2017 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 Allen, Frye, Haywood, and Kidd were present. Commissioner McDowell entered where noted. Also present were County Manager Hal Johnson; Finance Officer Will Massie; County Attorney Ben Morgan; Amanda Varner, Clerk to the Board; and Dana Crisco, Deputy Clerk to the Board. The purpose of this meeting was to hear a formal presentation of the Proposed FY 2017-2018 County Budget and budget requests from the County and City Schools, Randolph Community College, and Sandhills Center Mental Health. Manager's Proposed Budget Will Massie, Assistant County Manager/Finance Officer, said that in 2016-2017 property tax collection rates will be over 99% and the County continues to see strong collection of motor vehicle taxes. Sales tax collections are growing as a result of economic recovery, the additional tax base brought on by legislative changes and participation by on-line merchants. There were also additional sales taxes as a result of legislative reallocation by the NC General Assembly. Mr. Massie said, however, tax distributions are subject to continued legislative changes. Mr. Massie presented the Proposed FY 2017-2018 Budget, totaling $121,371,528 which is a decrease of $1,572,515 over the 2016-2017 adopted budget. The reduction is due to the elimination of scale house operations at the County Landfill, elimination of four positions in the Public Works department, and changes in State funding for Social Services. The Proposed General Fund Budget maintains the property tax rate of 65.25 cents per $100. To fund the entire Requested Budget this year, a property tax rate of 67.84 cents would have been necessary. He explained that things were added but since Public Works no longer operates the scalehouse and the landfill, the department will actually make money on white goods and electronics revenues. The short-term priorities included in the Proposed Budget were as follows: • Do not increase the existing property tax burden for our citizens in order to fund operations. • Continue to commit new revenue stream from landfill towards accomplishing Strategic Planning recommendations rather than County operations. • Fund departmental operations at the level necessary to maintain public safety and other critical services that citizens require. • Identify existing cost savings and reallocate resources to address critical needs in other departments. • Fund the County Pay Plan and Classification Study recommendations to improve employee recruitment and retention. • Implement the goals of the County Strategic Plan when possible. • Include the requested funding for the Uwharrie School Project. 05/30/2017 • Improve current level of financial assistance to public schools and the community college. Property Tax Levy Summary • Estimated $10.6 billion valuation in FY 2017-18 Budget • Maintain property tax rate of 65.25 cents per $100 valuation • Collection rate 99.0% • Total Levy $68,473,350 There were additional total appropriations to public schools and the community college. As mentioned, the Uwharrie School Project initiative for Randolph County Schools is fully funded. Mr. Massie said a 2.7% increase has been included in the total allocations for the public schools. The County's commitment to education is 25% of total expenditures. Commissioner McDowell entered at 6:12 p.m. Mr. Massie said that the Proposed Budget contains increases in County services for employee health insurance, jail operating costs, election equipment, utilities at the new Emergency Services Headquarters and the Northgate building, as well as leased space for the Cooperative Extension offices. He stated that the proposed appropriation for Sandhills Center had increased this year to $844,000, as they requested, because they own the building instead of receiving in-kind rent from the County. He said the final Strategic Plan recommended increased funding to the Economic Development Corporation. The Senior Adults Center received the final $100,000 capital contribution from the County in FY 16-17. Therefore, he recommended moving that amount to the Economic Development Corporation. Mr. Massie said the 2017-18 Proposed Budget funds efficient operations and primarily focuses resources on maintaining rather than enhancing services. The Proposed Budget covers many of the requests from departments, except for new positions. There were twenty-one new positions requested by four departments. One of those was grant funded, so it was added in the 05/30/2017 Requested Proposed Randolph County Schools Current Expense $19,801,741 $18,356,987 Current Capital $ 2,204,366 $ 2,402,130 Construction Capital $ 750,000 $ 750,000 Asheboro City Schools Current Expense $ 5,200,000 $ 4,950,513 Current Capital $ 647,500 $ 593,870 Construction Capital $ 350,000 $ 350,000 Randolph Community College Current Expense $ 2,631,676 $ 2,592,000 Current Capital $ 405,000 $ 402,400 Commissioner McDowell entered at 6:12 p.m. Mr. Massie said that the Proposed Budget contains increases in County services for employee health insurance, jail operating costs, election equipment, utilities at the new Emergency Services Headquarters and the Northgate building, as well as leased space for the Cooperative Extension offices. He stated that the proposed appropriation for Sandhills Center had increased this year to $844,000, as they requested, because they own the building instead of receiving in-kind rent from the County. He said the final Strategic Plan recommended increased funding to the Economic Development Corporation. The Senior Adults Center received the final $100,000 capital contribution from the County in FY 16-17. Therefore, he recommended moving that amount to the Economic Development Corporation. Mr. Massie said the 2017-18 Proposed Budget funds efficient operations and primarily focuses resources on maintaining rather than enhancing services. The Proposed Budget covers many of the requests from departments, except for new positions. There were twenty-one new positions requested by four departments. One of those was grant funded, so it was added in the 05/30/2017 Proposed Budget. However, the other twenty positions would require local funding and were not included. The County is a service organization that requires qualified individuals to carry out statutory responsibilities to citizens. Due to a high turnover rate and difficulty recruiting skilled professionals to provide the services, funds were included in the last budget for a classification study. Recommendations were implemented in this budget for the first one-third of the positions reviewed to keep them updated with market trends and competitive with other governments and private industry. Mr. Massie said the funding will improve the County's ability to recruit and retain those qualified individuals and provide for succession planning. He said losing experienced employees is costly and creates a problem for departments. Management also recommended an employee cost of living pay adjustment of one percent (1%) to recognize the effects of inflation. The $11,437,999 needed to fund debt service requirements is 9.4% of the Proposed Budget; the Debt Policy limits this ratio to 15%. No new debt service is included in the Proposed Budget. Seventy-nine percent of existing debt is related to educational facilities; the remainder is for County facilities and water projects. Mr. Massie spoke briefly about the State lottery monies that come to the County and are used for public school building capital funding. He estimated that for FY 2017-18, the lottery would bring in approximately $1,600,000. Mr. Massie said that four fire departments have asked for fire district tax increases: Climax, Fairgrove, Julian, and Ulah. County Capital Improvement Plan Mr. Massie said that current Capital Improvement projects include the Emergency Services Headquarters, the Animal Shelter, the RCC Photography Department, and the RCC Allied Health Center. He said that during the budget process, the Board of County Commissioners may wish to discuss adding projects to the Capital Improvement Plan. Randolph County has spent the past six months evaluating the most critical capital needs and has kept the Commissioners informed of possible timetables. He said the following are considered priority needs: Randolph County Government Detention Center Renovation Agri -Business Civic Center Asheboro City Schools Asheboro High School Addition Asheboro High School Renovation Upgrades to Other Schools Randolph County Schools Trinity Area Middle School 05/30/2017 Commissioner Haywood asked if all of this expense would need to be paid in this upcoming budget. Mr. Massie explained that, because of the magnitude of the expense, it would not be a budget item but instead be a Capital Improvement Plan item. He reminded the Commissioners that once a project was approved, it could take approximately three years to complete. Mr. Massie presented some potential debt service timelines to pay for the Capital Improvement priority needs. In his comments, he reported the school projects could not happen until 2022-23 unless additional financial resources were provided for debt service. Commissioner Frye spoke about the Wheatmore and Trinity High School graduating classes having approximately 190 seniors at each school coming from one middle school. He said he could not support putting off the school projects until 2022. Mr. Massie suggested some payment strategies for the Commissioners to consider. One of the considerations was to assess an additional one cent on the property tax in 2017-18, supplemented by the Article 46 tax after the Allied Health Center had been completed. Commissioner Frye asked if this proposal considered any additional funds from the State. Mr. Massie said that our timeline or funding strategy may change with State funding, but proposed legislation was not considered. Commissioner Haywood said he could not support taking money from RCC with all of the economic factors occurring in the county. He said taking RCC's funds would put them at a disadvantage and because they are an economic driver in the county, it would be a disservice to them as well as the taxpayers. He said money should come from somewhere else and the Board would need to discuss that. Chairman Allen summarized the amount of funding that the County would need but did not have currently. He said that it may be approximately $12 million. Mr. Massie agreed. Mr. Massie talked about which funds the immediate money needed could come from. Commissioner Frye suggested using fund balance for some of it. Commissioner Haywood said things needed to be prioritized to make those decisions. At the conclusion of Mr. Massie's budget presentation, Commissioner Haywood urged everyone to let their Legislators know how you would like them to vote on upcoming issues. Asheboro City Schools Presentation Dr. Terry Worrell, Asheboro City Schools (ACS) Superintendent, introduced Board members Chairman Kyle Lamb, Gidget Kidd and Michael Smith; and staff members Mike Mize, Director of Facilities and Maintenance, and Harold Blair, Assistant Superintendent of Business and Finance. Dr. Worrell said that Asheboro City Schools is requesting $137,000 in their continuation budget for expected increases in retirement and hospital benefits. She said that $630,000 was needed to retain and recruit staff, provide a 1% salary increase for local supplements, fund the 05/30/2017 Early College Academy, and purchase student technology devices. Current expense funding of $5,200,000 in is also included in their request as well as $997,750 in capital funding. She explained that $32,675,000 was for additions, renovations, and infrastructure upgrades at Asheboro High School; $457,631 for kitchen renovations at McCrary Elementary School; $490,040 for kitchen renovations at Lindley Park Elementary School; and $1,151,000 for HVAC in the gyms of North Asheboro Middle, South Asheboro Middle, and Asheboro High Schools. She also asked the Board to approve the current tax rate of 15 cents for the Asheboro City Schools Supplemental Tax District. Dr. Worrell concluded by thanking the Board for their continued support of Asheboro City Schools and their vision. Commissioner Frye asked if the numbers presented had accounted for the proposed 5% State teacher salary increase. Dr. Worrell said that it had. Commissioner Kidd inquired about the capacity of Asheboro High School and the enrollment. Dr. Worrell said that current capacity was 965 students but there were 1410 students enrolled. She explained that many of the classrooms were not to state standards. With the addition of the Pathways to Prosperity program, the Golden Leaf money would be used to purchase equipment. It would not cover the cost of the space necessary. She expressed other facility concerns such as some classrooms could only sustain a certain number of computers due to outdated electrical connections, parts of the building were not handicap accessible, and classroom spaces were too small. She told the Commissioners that an immediate need existed and if it wasn't addressed quickly, the building would deteriorate to a point that it could no longer be used. Commissioner Kidd said he agreed. Commissioner Frye said that both school systems have made every effort to save money and the time has come to address the overcrowding issues now. Chairman Allen asked about the average daily enrollment numbers prepared by the Department of Public Instruction which showed a student decline yet Asheboro High School is needing more space. Dr. Worrell stated that their trends for enrollment continue to increase. She said that the projections of a decline did not reflect the true Asheboro City School enrollment. Commissioner Haywood inquired as to whether or not science labs needed updating. Dr. Worrell said they did need to be updated. She was thankful the Zoo had partnered with them for some of the science classes. Commissioner Kidd asked about timing of the upgrades presented by Smith Sinnett Architects. Dr. Worrell stated that they have preliminary plans but need funding before proceeding. Chairman David Allen asked if they had considered a timeline for a tentative ground breaking for an addition. Dr. Worrell said that the summer of 2018 was their preferred start time. Commissioner Haywood asked if Asheboro City Schools would still use Smith Sinnett. Dr. Worrell commented that they are very strong partners and Smith Sinnett continues to look for 05/30/2017 ways to stretch a dollar. Commissioner Haywood stated that they were also good stewards of time. Commissioner Frye added that he had always felt that Smith Sinnett was realistic in designing the schools. Randolph County Schools Presentation Dr. Stephen Gainey, Randolph County Schools (RCS) Superintendent, introduced team members Marty Trotter, Assistant Superintendent of Operations; Cat Berry, Assistant Superintendent of Curriculum and Instruction; Amy Walker, Assistant Superintendent of Human Resources; Todd Lowe, Finance Officer; and Tim Moody, Public Information Officer. Dr. Gainey presented the Randolph County Schools budget request. Dr. Gainey reviewed the four current expense requests which total $1,814,000 in current expense. They are requesting continuation costs of $404,000 which include increases for insurances, salaries, utilities, and the loss of students to Charter schools. He said RCS would like to offer a supplement increase of .75% to all employees in an attempt to stay competitive. That request requires $900,000. The Uwharrie School Project was already approved by the Board for $410,000. The last request was for technology replacements and upgrades in the amount of $100,000. He said that there was no additional Capital Outlay funding requested. Commissioner Frye questioned whether or not all employees were paid through the State. Dr. Gainey explained that only 200 positions were paid locally. Dr. Gainey commented that earlier in the year, Randolph County Schools received notification of approved funds for the Uwharrie School Project and funding from Golden LEAF for the Pathways to Prosperity Program. He said that neither would have happened without the support of the Commissioners. Chairman Allen said he felt it was important to keep providing the supplements in order to hire and retain excellent teachers in both systems. Commissioner Frye asked if teachers were lost, in addition to the students, to the Charter school. Dr. Gainey responded that a few teachers have moved to Uwharrie Charter Academy. Commissioner Kidd inquired about the plan for a new middle school in the Archdale/Trinity area. Dr. Gainey said the plan would need to be updated, but if he could start tomorrow, he "would make it happen." Dr. Gainey stated that the Archdale -Trinity Supplemental Tax Council requests that the current rate of 9.54 cents be approved. He then thanked the Board for their partnership and continued support and told the Board how much he appreciated everything they have done. Randolph Community College (RCC) Presentation RCC President Bob Shackleford thanked the Commissioners for their support and partnership and commended both Asheboro City and Randolph County Schools on continuing to make a difference in students' lives. He introduced staff members Daffy Garris, Vice President 05/30/2017 for Administrative Services; Elbert Lassiter, Vice President for Workforce Development and Continuing Education; and Shelley Greene, Vice President for Institutional Advancement. He spoke of the success of RCC students and how their lives had been positively affected. He stated that not only did RCC train students for jobs; they made taxpayers of those students. RCC also offers assistance to businesses and industries to keep them current. He asked the Board to consider their request of $2,631,676 which is $139,676 more than FY16-17. The increase is due to the continuing rise in the cost of insurances, retirement, everyday supplies; the things they have no control of Dr. Shackleford said they are no longer paying rent for the Cosmetology Center but paying to purchase the property. Dr. Shackleford told the Commissioners that he was grateful to have such a great relationship with them and to have their continued support. He finished his presentation stating the RCC motto; creating opportunities, changing lives. Sandhills Center Presentation Victoria Whitt, Sandhills Center CEO, was unable to attend the meeting. Chairman Allen serves on the Sandhills Board and provided their request and an update. Chairman Allen stated that the Sandhills Center Board of Directors requested $844,000 in funding from Randolph County. This amount is more than last year because they now own the building instead of receiving in-kind rent from the County. He gave a brief update on the Asheboro Facility Based Crisis, as follows: • Lead and asbestos testing on the building has been completed indicating no significant problems. • The architect has completed the site and building drawings and submitted those to the State Division of Facility Services. These were reviewed by the Building Committee which consists of Daymark and Sandhills Center staff, Board Chairperson Richmond County Commissioner Thad Ussery, and Board member Mazie Fleetwood. • There will be extensive renovation of the first and third floors for the 23 -hour beds/24- hour screening area and the 16 secure 24-hour beds. There are some renovations occurring on the second floor with every attempt made to not impact the daily operations of the existing clinic. • Ms. Whitt has met with numerous groups in the community, including members from Randolph Health, Randolph County Health Department, Randolph County DSS, local law enforcement, and other community agencies, to update them on progress. • Sandhills Center staff are now located on Fayetteville Street in downtown Asheboro. • They are hopeful that the review from the State will occur expediently and that they will be able to advertise the construction bid during the summer. Once construction begins, it is estimated to be a four to six-month process. • They will begin meeting with Daymark and local stakeholders to further flesh out the program and develop collaborative protocols regarding operations. Adjournment 05/30/2017 At 7:53 p.m., there being no further business, a motion was made by Frye, seconded by Kidd to adjourn. David L. Allen, Chairman Stan Haywood Maxton McDowell Darrell Frye Kenny Kidd Dana Crisco, Deputy Clerk to the Board 05/30/2017