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11-19-2010 Strategic Planning MeetingSTRATEGIC PLANNING RETREAT OF THE ISLE OF WIGHT COUNTY BOARD OF SUPERVISORS HELD THE NINETEENTH DAY OF NOVEMBER IN THE YEAR TWO THOUSAND AND TEN PRESENT: Thomas J. Wright, III, Chairman Stan D. Clark Al Casteen JoAnn W. Hall Kenneth M. Bunch Also Attending: A. Paul Burton, Interim County Attorney W. Douglas Caskey, County Administrator Michael W. Terry, Interim Director of Budget and Finance Donald T. Robertson, Director of Information Resources and Legislative Affairs Carey Mills Storm, Clerk Chairman Wright called the Strategic Planning session to order on Friday, November 19, 2010 at 2:30 p.m. in the Demonstration Room located in the Human Services (Social Services) Building at the Courthouse complex. Dana Dickens, President, Hampton Roads Partnership, addressed the Board regarding the Partnership's Comprehensive Economic Development Strategy. He requested that the Board keep that document in mind as it moves forward with the County's strategic planning. He advised that the three (3) major drivers of the Hampton Roads economy consist of the military and Federal spending, the Port and tourism. He advised that task forces have been formulated to embellish the Port and tourism areas and responsive to the disestablishment of the Joint Forces Command, specific industries such as modeling and simulation are being studied. He advised that funding for a national center for medical modeling and simulation is being sought and that the robotics industry is anticipated to become more prevalent. Chairman Wright introduced Michael Chandler, a consultant from Midlothian, who was designated the Strategic Planning Retreat Facilitator and asked to guide the planning retreat. The Board reviewed and reaffirmed the County's Values and Mission Statements. The Board's performance and progress relative to its adopted 2009- 2010 County Strategic Plan was reviewed. A report developed by County Administrator Caskey outlining the 2009 -2010 Strategic Plan and recommended action steps and accomplishments was also reviewed and discussed by the Board. The Board discussed the results of a survey administered and tallied by Mr. Chandler in advance of the planning retreat involving the Board's performance, both positive and weak, perceived strengths and weaknesses, and improvement of the Board's performance. Regarding opportunities and challenges likely to be encountered by the County in 2011 and 2012, the FY 2012 County budget and the potential role collaborative service delivery might play in the future, the Board's consensus was that the County needs a utilities plan, especially for water; needs to develop the Windsor Intermodal Park; it can /should become a top school division in the State; needs to enhance /expand its tourism efforts and overall operational effectiveness and responsiveness. The Board's consensus regarding challenges in 2011/2012 was focused on the loss of County revenue and its impact on County services; maintaining quality services for County residents with a 54¢ real estate tax rate; maintaining a quality workforce /staffing pattern in a constrained economy; and, improving its working relationship with the school system. The Board took a brief recess. The Board endorsed the idea of collaborative service delivery and agreed that the school system and the County have several areas of opportunity to share services in the areas of central purchasing, physical plant maintenance, vehicle procurement and maintenance, financial management, insurance programs, legal services and IT services. The Board's further consensus was that the County should consolidate all existing initiatives and efforts focused on public information and public relations into a single department or unit. The Board endorsed the idea of having the County's administrative staff examine ways that programs and services could be offered in partnership with other service providers, with another local government or through a regional partnership, with the goal that such examination would determine the legality of offering County services in partnership with another entity, as well as determining whether collaborative service delivery would produce a cost savings for the County. The Board took a dinner break. Michael W. Terry, Interim Director of Budget and Finance, provided a budgetary overview of Isle of Wight County specifically, its foundation — unaudited undesignated general fund balance as of June 30, 2010; maintenance — capital projects; and expansion — preliminary FY 2011 -2012 outlook. Mr. Terry advised that with respect to the Undesignated Fund Balance, as of November 19, 2010, the County's FY 2010 year end audit is still in progress; however, the unaudited undesignated general fund balance as of June 30, 2010 is projected to end in the amount of $15,081,843. In keeping with the Board's Fund Balance Policy to maintain a minimum of 10% of the following year's budgeted operating expenditures in the undesignated fund balance, the minimum amount to be maintained was 2 projected as $9,620,106. Therefore, $5,461,737 is projected as the unaudited undesignated general fund balance available to the Board. Mr. Terry stated capital projects currently in construction were budgeted at $63,191, 268; $52,110,123 has been expended; and $11,081,145 remains in the budget. Those capital projects that remain in a commitment /good faith promise status are currently budgeted at $7,078,457; $1,315,476 has been expended; and $5,762,981 remains in the budget. Lastly, those capital projects that relate to future needs /requirements, $13,270,000 is being requested from the Volunteer Fire Departments and Volunteer Rescue Services through the capital improvement plan requests beginning FY12 through FY20. Also, it is estimated between $8 million to $23 million will be required to fulfill the Schools desire to construct a new Windsor Middle School. Mr. Terry made reference to a handout provided by Davenport & Company, LLC entitled "Capital Funding Plan and Debt Related Information" which identifies the County's credit rating; provides an overview of funding the Capital Improvements Program (CIP) with respect to the General and Utility Funds; a detailed analysis of the Utilities Fund CIP Funding; FY2011 borrowing strategy; FY11 -15 proposed CIP; proposed General Fund Debt Service; and, proposed Utility Fund Debt Service. Mr. Terry advised the Board regarding the preliminary outlook for FY 11 -12 related to anticipated revenue reduction in the amount of $5.6 million in Machinery & Tools; estimated net revenue growth of $650,000; anticipated areas of concern — stability of personal property values, decrease in personal property revenues, tax status of IP power plant and the projected look on tax rates for FY 12 as provided by the Commissioner of Revenue. Mr. Terry provided a preliminary outlook for FY 11 -12 for the general Operating budget which reflects a $5.6 million decrease in revenue. The Board took a brief recess. The Board concurred that the County will likely need to cut back on the programs and services currently being offered to County residents if revenues decline as predicted in FY12. The Board expressed support for funding core services, such as education, public safety and public utilities before funding other programs if FY12 County revenues decline as expected. The Board selected the following as 2011 and 2012 issues of consequence which must be addressed: Development of a utilities plan, especially for water; development of the Windsor Intermodal Park; enhancement /expansion of the County's tourism program; development of a County staffing plan; and, improvement of the working relationship with the school system. The Board discussed the importance and value of having a solid relationship with the public they serve and a positive internal work relationship between and among Board members. The Board also discussed the following steps which could be taken to ensure that Board meetings are managed in an effective and efficient manner: limit time devoted to special presentations and proclamations; preclude or prohibit last minute additions or changes to items of business during Board meetings; and, adopt a code of performance /conduct governing how the Board will function and operate as a governing body. The Board endorsed the idea of exploring the opportunities and advantages to be gained by delivering County programs and services in a collaborative manner involving the County and the school system by establishing a dialogue between the Board and the School Board in 2011. County administration was charged with the responsibility of exploring the range of programs and services currently being offered by the County that could be offered in partnership with another entity or local government and that this study should be conducted over the next two (2) year timeframe. The Board discussed the FY12 projected County Budget shortfall due to the loss of revenue resulting from County businesses closing in 2010 and focused on strategies it could use to prepare the County's FY12 Operating Budget with $5.6 million fewer tax dollars than one (1) year ago. The Board concurred that core County services must be funded at an adequate level and identified the following as Isle of Wight County core /must do services: Public education/school system; law enforcement /public safety; fire and rescue services; utility services such as water and sewer service; solid waste management; and, support to Constitutional Officers. It was concurred that while important and valuable, County- services and programs not listed, assuming the FY12 Budget forecast remains bleak, should be viewed as discretionary programs and services that will be subject to alteration and change. The second cost - cutting measure the Board discussed focused on the identification of possible revenue enhancement strategies that the County could employ and specific spending adjustments in FY12. Revenue enhancement options discussed for FY12 included draw down on the Fund Balance; increase of Personal Property and Meals taxes; increase of fines and fee rates; and, increase of the Real Estate tax. Proposed cuts in services and programs for FY12 discussed were to consider putting some employees on a part-time basis; the elimination of School Resource Officers; cut the motor pool budget; cut the Historic Resources and Museum program; institute central purchasing and fleet maintenance with the school system; share employees between County departments; delay capital expenditures; and, hire certified employees to eliminate training needs within the Sheriff's Department. Chairman Wright indicated a desire for the Board to meet jointly with the School Board and the Sheriff after January 1, 2011 to discuss budgetary matters. 4 1/ At 7:00 p.m., Supervisor Hall moved that meeting. The motion was adopted by a vote of Bunch, Casteen, Clark, Hall and Wright voting in f. 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