060820 Special MeetingJune 8, 2020 Special Meeting -Budget Presentation
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. Chairman Darrell Frye, Vice -Chairman David Allen, and Commissioners Kenny Kidd,
Maxton McDowell, and Hope Haywood were present. Also present were County Manager Hal
Johnson, Finance Officer Will Massie, County Attorney Ben Morgan, Clerk to the Board Dana
Crisco, and Deputy Clerk to the Board Sarah Pack. Required social distancing was maintained
throughout the meeting due to the COVID-19 pandemic. The meeting was livestreamed on
Facebook and YouTube. The public could attend the meeting but the meeting room capacity was
limited to 50 people.
The purpose of this meeting was to hear a formal presentation of the Proposed FY 2020-2021
County Budget and budget requests from the County and City Schools and Randolph Community
College.
Manager's Proposed Budget
County Manager Hal Johnson said, in accordance with North Carolina law, the County
Manager and the County Finance Officer are required to present to the Board of County
Commissioners, and to the citizens of Randolph County, a balanced budget for the next fiscal year,
2020-2021. The law requires that a budget ordinance be adopted by July 1, 2020.
The proposed budget of $133,211,931 is balanced and no property tax increase is
recommended. The use of appropriated fund balance will be necessary to maintain core services
due to expected revenue losses.
Tonight is the beginning of the budget process. Mr. Johnson stated that presentations from
Asheboro City Schools, Randolph County Schools, and Randolph Community College would be
heard. Sandhills Mental Health has submitted a copy of their budget which has remained
unchanged for the last several years. Due to social distancing recommendations, representatives
from Sandhills were not present.
On June 111h, individual budget presentations will be made by County Departments. On June
15', requests from Community Agencies and Volunteer Fire Departments will be presented. A
Public Hearing is scheduled for June 15'h regarding the proposed budget. Final decisions and
adoption of the County Budget is scheduled for June 25Ih.
Mr. Johnson said that never before in the history of Randolph County have we faced the
unprecedented challenges that are before us in June 2020. Never has the responsibility of county
government been more critical. Some of the challenges that have a major impact on the budget
are the COVID-19 health crisis, the effects of business closures on our economy and our citizens,
and the bankruptcy of Randolph Hospital. This creates a financial unknown on how County
revenue collections will be impacted.
Mr. Johnson said that this was his 6 I budget presentation as County Manager, but he was
involved at various levels in over 30 previous County budgets. The budget process this year will
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be the most challenging and different because of the major economic unknowns that are being
experienced. Much of the Proposed Budget is based on assumptions that could change in the
coming weeks. Decisions can be refined as more information becomes available.
To fully understand what the County can afford, and to provide flexibility in making decisions,
it is recommended that this year's Proposed Budget be prepared and implemented in stages. Each
stage has its own policy goal but will allow expected expenditures to be balanced with current
financial resources as they may develop. All total, there are 8 individual stages.
The proposed budget includes the first two stages:
• (Stage One) Maintain core services despite anticipated revenue loss. This will require use
of existing fund balance of $2,760,723.
• (Stage Two) Prioritize Departmental requests and concentrate funding on public safety.
Stage Two would include new positions that are necessary to continue previous
commitments by the Board of Commissioners: this includes new positions for the
Detention Center including ten Detention Officers beginning July 1st and nine Detention
Officers beginning October 1st. Additional staff will be necessary to implement the 12 -
hour shift policy for Emergency Services including seven Paramedics beginning July I"
and four Paramedics beginning January 1st
In addition, the following positions are recommended for consideration in Stage Two of the
Proposed Budget:
• Public Health
0 1 Health Educator
0 1 Accounting Specialist
• Social Services
0 1 Social Work Trainer
0 4 Social Work Trainees
0 1 Paralegal
• Juvenile Crime Prevention
o 1 Substance Abuse Counselor
Two position upgrades in Veterans Services and Public Health are also recommended in Stage
Two. This would require allocation of existing fund balance resources beyond the $2,760,723
necessary to maintain existing core services.
Mr. Johnson introduced County Finance Officer Will Massie to present a more detailed review
of County revenues and expenditures outlined in the Proposed FY 2020-2021 Budget.
FY 2020-2021 Proposed Budget
Will Massie, Finance Officer, said that he recommends that this year's spending go slowly.
The road ahead has a lot of twists and turns. The budget needs to be prioritized in stages. Each
stage needs to move the County forward and must be constructed to be balanced and stable. A
budget stage identifies a specific need and looks for the best way to pay for it. Each stage must
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balance revenues and expenditures before it can be considered part of the budget. Certain needs
might need to wait until later in the year.
Mr. Massie said you must have a strategy, but you must be willing to adapt to change. Stage
One involves maintaining core services despite anticipated revenue loss. Projections are key to
understanding what that loss might look like. Economists prepare forecasts of national trends,
they can be used to estimate the impact on local economies and financial resources.
Last year was a tax revaluation year, which occurs every six years. A property tax base is a
combination of properties that include real estate and personal property values. Mr. Massie
showed a graph demonstrating revenue trends from motor vehicle distributions.
The property valuation for FY20-21 is projected to be $11,843,000,000. The County's property
tax rate of 63.27 cents per $100 will be maintained. The collection rate has been reduced to 98%
with a total levy of $73,432,048. One cent on the tax rate provides $1,160,614.
Through February, regular tax collections were 3% over budget with an estimated 9% reduction
for the remainder of the year. The effects of the Stay -At -Home order and unemployment will be
negatives. The effect of income tax refunds and stimulus payments will be positive. In FY20-21,
there will be an estimated 4% percent reduction in regular tax collections from FY19-20. There is
an estimated 33% reduction in Medicaid Hold Harmless. Article 46 sales tax is dedicated for
Capital reserve and RCC.
In Stage One, it is assumed that major economic effects would not last beyond FY20-21 and it
would not be necessary to make substantial cuts to existing services. Mr. Massie said that the
County can consider the use of fund balance reserves to maintain existing services. The available
Fund Balance on June 30, 2019, was $35,169,006. This is equal to 28% of General Fund
Expenditures. Amounts over 24% are committed for capital improvements, which totals $3.7
million. The Fund Balance Policy requires a minimum of 20% of expenditures. If FY 2019-2020
is breakeven, these resources should still be available.
Stage One of the base budget includes reducing certain operating expenses, removing all capital
outlay including replacement ambulances and patrol cars, adding no new positions, and having no
cost of living adjustment. It still requires the use of $2,760,723 of appropriated fund balance to
make up the loss of revenues.
Stage Two includes prioritizing department requests and funding the most critical to maintain
public health and safety. Two areas of focus are the Sheriff's Office/Detention Center and
finishing the move of Emergency Services to 12 -hour shifts. The proposed budget includes 19
positions for Detention Officers, 11 Paramedic positions, four Social Work Trainees, one Social
Work Trainer (Child Welfare), one Social Services Paralegal, and one JDRC Case Manager.
Mr. Massie showed overviews of the effects Stages One and Two will have on the County's
budget and showed the FY20-21 Budget at a Glance, which displayed summations of budget
expenditures, departmental revenues and restricted resources, and the remainder funded by general
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County revenues. The Board of Commissioners can determine when to consider other budget
satges.
Stage Three includes evaluation for the federal CARES Act allocation and determines the
possible effect on the General Fund Budget. Stage Four involves reassessing sales tax revenue
estimates after the June 15'h distribution and determining the possible effect on the General Fund
Budget. Stage Five includes consideration of restoring critical capital outlay such as replacement
patrol vehicles and ambulances. Stage Six includes the consideration of funding options for a cost
of living adjustment.
Stage Seven is to consider funding options for appropriations to public schools and the
community college. Mr. Massie gave an overview of statistics regarding Asheboro City and
Randolph County Schools, including average daily membership, current expense, current capital,
and construction capital. In total, these allocations are 24.6% of the County budget at $32,898,493.
Stage 8 includes appropriations to outside community service agencies.
Mr. Massie showed the FY20-21 debt service that is currently scheduled. Lottery funds are
estimated to decline to $1,125,000 for the Public School Building Capital Fund.
Four fire departments are requesting higher fire district tax rates; Farmer, Northeast/Liberty,
Randleman/Sophia, and Westside fire districts. Fourteen fire departments are requesting an
unchanged fire district tax rate.
Mr. Massie reviewed strategic planning objectives. Landfill lease revenues are projected at
$1,081,436 in July. The first $1 million is recommended for the Capital Reserve Fund and the
remainder to the Wellness Reserve.
Chairman Frye asked if there were open positions that have been open for a while that may
have lapsed salaries. Mr. Massie said not generally; any departments with positions that are open
for long periods of time may stop funding those positions, so there aren't really any lapsed salaries.
Chairman Frye said this budget can't make any consideration regarding potential effects or
anticipated costs for Randolph Hospital. Mr. Massie said there is nothing in the Budget to address
that.
Commissioner Allen asked if there was any potential revenue replacement plan in the Budget
for the CARES Act. Mr. Massie said that he is watching this because the distributions from the
CARES Act are currently prohibited by Congress for revenue replacement. Any salaries related
to COVID-19 would be able to offset expenses from the General Fund.
Commissioner McDowell asked if there will be any anticipated issued debt. Mr. Massie said
anticipated debt issuances include the renovation of Asheboro High School that will occur next
March and the Detention Center renovation that will likely be issued in the fall of 2021. Debt
issuance has been volatile the last couple of months. Interest rates have been lowered which should
keep the County rates down. There is still plenty of time to issue debt and take care of these
projects.
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Asheboro City Schools Presentation
Dr. Aaron Woody, Asheboro City Schools (ACS) Superintendent, recognized several Board
members who were in attendance. He thanked Commissioners for their leadership and presented
budget requests for Asheboro City Schools.
Dr. Woody said he believes in partnering together to benefit students. Asheboro City Schools
is requesting $406,850 more for their continuation budget for expected increases in retirement,
health insurance, utilities, and the COVID-19 response.
Chairman Frye asked if students will be in the new addition if students are able to physically
come back to school in the fall. Dr. Woody answered that if everything works out, that space will
definitely be utilized.
Chairman Frye asked if any assistance with COVID-19 response is anticipated. Dr. Woody
said they have received some stimulus money and there may be more federal money available. It
is unknown what future expenses might be at this time. Additional relief amounts are unknown at
this time as well.
Chairman Frye asked Dr. Gainey what the effects are of the State budget not being passed. Dr.
Gainey said we are better off right now with mini budgets instead of large budget cuts. Dr. Woody
said ACS has a lot of relief money to restore things but this won't take the place of State budget
areas that get adjusted down. He would love the State budget to be increased and address issues
that weren't addressed last summer but he isn't waiting on the State budget.
Chairman Frye asked if the biggest impact was on teacher pay. Dr. Woody said it isn't helping;
no one received raises in North Carolina. Teacher and employee salaries need to increase. It also
wasn't good timing since the mode of operation has changed to remote learning. Technology
funding is the lowest it's been in 18 years. COVID-19 relief money can be used for technology.
This money will replace the computers that have been sent out for remote learning.
Total current expense funding of $6,137,135 is included in this request. Dr. Woody asked the
Board to continue supporting the revenue neutral tax rate of 14.39 cents for the Asheboro City
Schools Supplemental Tax District. This County appropriation request represents an increase of
$406,850 to cover the continuation budget items over the FY19-20 appropriation.
Dr. Woody gave an overview of Year 6 of the 10 Year Capital Improvement Plan and requested
total capital outlay of $1,070,712. He said that they are focusing on operations and maintenance
to increase the longevity of their buildings. He reviewed the remainder of the 10 Year Capital
Improvement Plan including the facility plans for Asheboro High School. ACS is requesting over
$28 million to complete Phase III of the renovation of Asheboro High School.
Charter schools have an impact on Asheboro City Schools. Uwharrie Charter pulls about 330
students with a cost of $477,000. The total charter school student loss is 347 for a total cost of
$495,000. The average supplemental tax expense per student is $1,425.
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Chairman Frye asked if supplemental funds follow students to charter schools. ACS Finance
Officer Sandra Spivey answered that if the school is chartered in the ACS district, it receives the
supplemental tax.
Dr. Woody said there is a cost savings opportunity by beginning work on the roof at the high
school now since students are not currently in the building. With remaining funds, there is
$500,000 left over from Phases One and Two. This cost of the roof is projected to be $1.3 million.
ACS is asking for $700,000 to finish this roofing project. Completing this project now would be a
cost savings of $100,000 from Smith-Sinnett Architects. He concluded by thanking the Board for
their continued support of Asheboro City Schools and their vision.
Randolph County Schools Presentation
Dr. Stephen Gainey, Randolph County Schools (RCS) Superintendent, introduced several
Board members in attendance and presented the Randolph County Schools budget request.
Dr. Gainey explained the budget sheets that had been submitted at the start of the budget
process. He said RCS is requesting continuation costs of $551,000 which include increases for
insurances, retirement, salaries, charter school growth, and utilities. He said RCS would like to
offer a supplement increase of .25% to all employees in order to build on three previous increases
to equal one percent. That request requires $335,000. The request for technology replacements
and upgrades was in the amount of $100,000. The total requested current expense is an increase
of $986,000. An additional $100,000 is needed to cover increased costs for facility upgrades and
repairs related to the "9 -Year Facility Upgrade/Repair Plan." The total of all items is $1,086,000.
He then thanked the Board for their partnership and continued support and told the Board how
much he appreciated everything they have done.
Chairman Frye said it's amazing what the County Schools can get done with the money
appropriated by the County. This Board should be able to give teachers the supplement they need.
The schools in the county are well kept and he is proud of the school systems in this county.
Randolph Community College
Dr. Shackleford, Randolph Community College (RCC) President, introduced some of the
leadership team for the College who were in attendance. Being in a small town community, the
growth and tax base of a larger city is not present. The community college in Raleigh builds
campuses like RCC builds buildings. However, there are good things in this community. People
know each other and help each other succeed. The new world after the pandemic will be different
than the world before that. Some jobs will be eliminated and some jobs will be needed that haven't
been thought of yet. People may be displaced. Students have to be prepared for the jobs of
tomorrow, not the jobs of yesterday.
Community college enrollment goes up and down inverse to the economy. Right now, the
unemployment rate is the highest it's been since the Great Depression.
People have lost jobs due to businesses being closed. There will likely be a significant increase in
enrollment because the unemployment rate is high. This could happen while two primary funding
sources (State and County) are operating on lean budgets.
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Dr. Shackleford does not believe Randolph County or North Carolina can recover without
community colleges. The community colleges are nimble and have a network in the community.
The vast majority of first responders in Randolph County are trained at RCC. Most of the nurses
are trained at RCC, as well as other supporting healthcare disciplines. The Small Business Center
will be an asset in small business assistance and recovery due to the pandemic. There are advisory
committees in every program. Its times like this for which community colleges were created. RCC
is ready to help get the county back on its feet.
RCC is requesting a 9.1% increase over last year's request for a total budget request of
approximately $2.8 million. The increases include insurance, security, office and cleaning
supplies, and housekeeping salaries. Utilities and electrical costs are also included.
The new Allied Health Center will be an asset with Randolph Hospital downsizing. The Center
will create many advantages. The simulations available in the Center will allow clinical training
in the Allied Health Center once a Simulation Director is hired. This is significant because clinical
slots in other counties are not always immediately available to Randolph County students. Nurses
will still be able to get jobs because they will be in demand.
Budget increases are due to things RCC has no control over. Cleaning and cleaning supplies
are very important. He thanked the Commissioners and said that RCC will do its best to help in
economic workforce development in the days ahead.
Chairman Frye thanked Dr. Shackleford for his positive attitude and said the ability to recover
and advance is dependent on RCC.
Commissioner Haywood asked when the Allied Health Center will open. Dr. Shackleford said
it is anticipated to be at the end of June. RCC will accept students this fall.
Chairman Frye asked if there are enrollment projections. Shackleford said RCC is preparing a
video to send to students, faculty, and staff explaining the mitigation the college is preparing for
COVID-19 response. There is no indication yet, but it is likely enrollment will be up.
Commissioner Haywood asked if relief funds cover increased cleaning supplies. Dr.
Shackelford said yes, CARES Act money can be used for both the college and students. The
cleaning supplies in the current budget are not COVID-19 related; they reflect current and new
buildings.
Chairman Frye thanked all of the presenters.
Commissioner Allen said that funding won't change for Sandhills Mental Health. The Building
has been completed and inspected in February. It will hopefully be up and running in the next
month or so. Medicaid transformation will have a big impact on Sandhills. They will hire several
clinicians. Two facilities are planned for Greensboro; a children's facility and an adult facility.
Ground has been broken for both facilities and funds have been appropriated. Sandhills will own
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the children's facility and the adult facility will be owned jointly by Cone Health and Guilford
County.
Chairman Frye said that mental health is a broad spectrum issue facing the County. This is
evidenced by looking at the Detention Center population. Many County departments are affected
by mental health issues in the community.
Adjournment
At 7:52 p.m., there being no further business, a motion was made by Allen, seconded by
Haywood to adjourn.
Darrell Frye, Chairman David Allen
Kenny Kidd
Hope Haywood
Maxton McDowell
Sarah Pack, Deputy Clerk to the Board
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