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04-26-2010 Special Meeting SPECIAL MEETING OF THE ISLE OF WIGHT COUNTY BOARD OF SUPERVISORS HELD THE TWENTY -SIX DAY OF APRIL IN THE YEAR TWO THOUSAND AND TEN PRESENT: Phillip A. Bradshaw, Chairman Thomas J. Wright, III, Vice- Chairman Al Casteen Stan D. Clark JoAnn W. Hall Also Attending: A. Paul Burton, Interim County Attorney W. Douglas Caskey, County Administrator Carey Mills Storm, Clerk Chairman Bradshaw called the meeting to order at 6:00 p.m. Supervisor Hall delivered the invocation. // The Pledge of Allegiance was conducted. // Chairman Bradshaw called for Approval of the Agenda. Interim County Attorney Burton offered the following amendments to the agenda: Under the County Attorney's Report, add authorization to execute a change order for the Smithfield Fire Station; under the County Attorney's Report, add authorization to execute a Resolution of the Board of Supervisors of Isle of Wight County (The "County ") Authorizing the Guaranty by the County of the Timely Payment of a Portion of Principal of and Interest on Certain Guaranteed Subordinated Revenue Bonds and Senior Subordinated Revenue Bonds Issued by the Southeastern Public Service Authority of Virginia; under the County Attorney's report, add Procurement Act change, entity authorized to do business in Virginia. Section 2.2- 4311.2; and under the County Attorney's report, add two (2) closed meeting items. Supervisor Wright moved that the agenda be adopted, as amended. The motion was adopted by a vote of (5 -0) with Supervisors Bradshaw, Casteen, Clark, Hall and Wright voting in favor of the motion and no Supervisors voting against the motion. // 1 Chairman Bradshaw called for a public hearing on the 2010 -2011 Isle of Wight County Schools' Operating Budget. Chairman Bradshaw called for persons to speak in favor of or in opposition to the Budget. Mary Tyler, spoke on behalf of her children who attend Smithfield High School, Westside Elementary School and Hardy Elementary School. She remarked that she had moved to the County for its beauty, wide -open spaces and the school system, which offered the best value and best education to be found in the metro area. She stated that State funding reductions make it even more important for the Board to fund the schools' budget. David Goodrich, Chairman, School Board, remarked on the need for the School Board and Board of Supervisors to continue to work together in order to meet the needs of the County's children. He urged the Board to full fund the School Board's budget as presented. He advised that the School Board, when it conducted its public hearing on the budget, only heard demands that a strong education opportunity for all children continue to be provided in the County. Angela Anderson spoke in favor of the programs offered in the County by the school system, which have made a difference for her son, who has benefitted from a 504 Plan. She advised that two (2) counselors are needed at Windsor High School. Donna Spivey, 40102 Carrsville Highway, spoke on behalf of her children who attend Carrsville Elementary School and Windsor Middle School, requested that Board fund the School Board budget as presented which will provide children in the County the best level of education that can be afforded. Melvin Atkinson, 13199 Poor House Road, spoke on behalf of his children at Windsor Elementary School and Windsor Middle School, recommended that the Board of Supervisors work closer together in the future with the School Board and begin earlier in the budget process. He urged the Board to adopt the School Board budget as presented and look at ways that the schools and the County can work together to eliminate duplication if at all possible. Sharon Hart, Newport District, remarked that there are many areas in the budget that can be cut without hurting quality of education. She recommended that the County and School Board work together to consolidate duplicate services, such as the Public Information Officer. She requested that the Board request the School Board to make additional cuts to its budget, where possible. 2 Stephanie Bailey, President of the Isle of Wight Education Association, requested that the Board support education and adopt the School Board budget as presented. Thomas Finderson, Sugar Hill Road, remarked that the closure of International Paper results in a loss of 25% of the County's real estate revenues, or an increase in the tax rate of $.52 to $.65. He commented that approximately one -half of the reduction in revenue from the closure of International Paper could be made up by sharing services with the Schools with respect to legal services, facility and transportation maintenance, Human Resources, Information Technology, finance, public information and legislative liaison services. He stated if the School Board does not agree with shared services, he would recommend going to the General Assembly and requesting the Board's authority to consolidate government and School services based on the extraordinary loss of local and State revenues. He stated that the Windsor Middle School could be closed as there is sufficient room in the Windsor High School to support those middle school students with the expectation being that a middle or high school in the Windsor area will be built in the next five (5) years due to the increase of students as a result of the Intermodal Park. Ed Easter, 12224 Hideaway Lane, stated it is critical that the school system be funded and that all schools have the necessary teachers that are properly trained and educated. Herb DeGroft, School Board member, recognized teaching staff and their support staff for performing an excellent job educating students over the years in the County. He stated that teacher pay in the County is competitive across the Hampton Roads region and he commended the Board for adequately funding past budgets. He advised that the MGT of America Efficiency Study conducted in 2006 found that the County had the second highest administrative costs per student. He commented that a County internal auditor could identify efficiencies that are being overlooked. Chairman Bradshaw closed the public hearing and called for comments from the Board. Chairman Bradshaw advised that, pursuant to State law, the Board must wait seven (7) days following the public hearing before taking action on the Budget. // Chairman Bradshaw called for Special Presentations /Appearances. David Simons, Superintendent, Western Tidewater Regional Jail Authority, advised that the Jail, originally designed for 552 beds, is currently housing 800 inmates. He advised that the County is financially responsible 3 for 15% of the jail population. He advised that inmates are housed for the Federal Government in an effort to keep the County's cost down. He advised that the Jail's FY2010 -11 Operating and Capital Budget is in the amount of $12,264,000 and the State has reduced its funding in an amount that is equivalent to 13 Jail positions, or $730,000; a per diem reduction of $340,000; and, a $1.1 million reduction in Federal inmate funding, which represents a $2.8 million reduction from the State. He advised that the Jail has the lowest operating cost of any jail in the region. Supervisor Wright advised that due to increased inmate ratios, there have been two (2) serious accidents recently at the Jail. Supervisor Clark stated that the County has the obligation to ensure the safety of the inmates, as well. He stated that he is already aware that the Jail is understaffed and he requested Mr. Simons to let the Board know if additional staff is needed. Chairman Bradshaw advised that the State reduction in funding to the Jail represents $.01 cent on the County's Real Estate rate. He stated that the State is also reducing $3 million in funding to the Schools. He stated that the over $5 million dollars has been lost in State revenue this year, which does not include the $3 million dollars lost in revenues due to the decrease in assessed values and the $1 to $1.5 million dollars lost in Machinery and Tools revenue due to the closure of International Paper. He stated that this is a very critical time. // Chairman Bradshaw called for Old Business. Chairman Bradshaw called for the Board's consideration of a Resolution to Appropriate Funds to Support the Acquisition of Protective Equipment by the Carrsville Volunteer Fire Department. Supervisor Clark moved that the following Resolution be adopted: RESOLUTION TO APPROPRIATE FUNDS TO SUPPORT THE ACQUISITION OF PROTECTIVE EQUIPMENT BY THE CARRSVILLE VOLUNTEER FIRE DEPARTMENT WHEREAS, the Board of Supervisors of the County of Isle of Wight, Virginia has agreed to provide $2,208 to be used as matching funds for a grant to acquire protective clothing and equipment for the Carrsville Volunteer Fire Department and; WHEREAS, the Board of Supervisors of the County of Isle of Wight, Virginia has also agreed to provide $6,140 to allow a full complement of eighteen (18) sets of similar equipment; 4 NOW, THEREFORE BE IT AND IT IS HEREBY RESOLVED by the Board of Supervisors of the County of Isle of Wight, Virginia that eight thousand, five hundred dollars ($8,500) be appropriated from the Undesignated Fund Balance of the General Fund to the FY 2009 -10 Operating Budget of the County of Isle of Wight, Virginia. BE IT FURTHER RESOLVED that the County Administrator of the County of Isle of Wight, Virginia is authorized to make the appropriate accounting adjustments in the budget and to do all things necessary to give this resolution effect. The motion was adopted by a vote of (5 -0) with Supervisors Bradshaw, Casteen, Clark, Hall and Wright voting in favor of the motion and no Supervisors voting against the motion. Chairman Bradshaw called for the Board's consideration of a Resolution to Appropriate Funds from the Unappropriated Fund Balance to Support the Hampton Roat1s Crime Line/Top Cop Program. Supervisor Clark moved that the following Resolution be adopted: RESOLUTION TO APPROPRIATE FUNDS FROM THE UNAPPROPRIATED FUND BALANCE TO SUPPORT THE HAMPTON ROADS CRIME LINE/TOP COP PROGRAM WHEREAS, the Board of Supervisors of the County of Isle of Wight, Virginia has approved a motion to provide $500 to support a Hampton Roads Crime Lineffop Cop dinner; NOW, THEREFORE BE IT AND IT IS HEREBY RESOLVED by the Board of Supervisors of the County of Isle of Wight, Virginia that five hundred dollars ($500) be appropriated from the Undesignated Fund Balance of the General Fund to the FY 2009 -10 Operating Budget of the County of Isle of Wight, Virginia and; BE IT FURTHER RESOLVED that the County Administrator of the County of Isle of Wight, Virginia is authorized to make the appropriate accounting adjustments in the budget and to do all things necessary to give this resolution effect. The motion was adopted by a vote of (5 -0) with Supervisors Bradshaw, Casteen, Clark, Hall and Wright voting in favor of the motion and no Supervisors voting against the motion. 5 // Chairman Bradshaw called for discussion on 2010 -2011 Isle of Wight County General Operating and Capital Budget. Reck D. Reck, Director of Budget and Finance, advised that the budget before the Board is balanced, which assumes a reduction of $650,000 to the Schools. He advised that in an effort to balance the budget, he has assumed that fund balance accounts could be utilized this year; that the Board would approve an increase in water and sewer rates; approve an increase in rates for inspections; and approve an increase to the County's vehicle license rates. He stated that he has been working with the Town of Smithfield and staff as it was brought to his attention that the County's contribution to E -911 program might be more than the County's share. Chairman Bradshaw suggested that Mr. Reck contact Dean Lynch, VACo regarding the Compensation Board. Supervisor Casteen requested that Mr. Reck return percentage amounts to the recaps. Chairman Bradshaw suggested that Mr. Reck review the County's financial model. Chairman Bradshaw and Supervisor Wright recommended that funds from the Undesignated Fund Balance or the Fund Balance not be used to balance the budget. Chairman Bradshaw directed Mr. Reck to contact Mr. Wrightson and be prepared to present information regarding the water and sewer fees from the consultant's report to the Board at its May 6, 2010 meeting. Chairman Bradshaw requested Mr. Reck to poll other jurisdictions to determine what they are charging with respect to vehicle licenses. Chairman Bradshaw directed County Administrator Caskey and Mr. Reck to speak with the Department Heads and advise the Board what services are being impacted. Chairman Bradshaw recommended that County Administrator Caskey's recommendations be implemented and any concerns throughout the year be considered on a case -by -case basis. Supervisor Clark requested that Mr. Reck present his recommendations to the Board for consideration. 6 Chairman Bradshaw requested Mr. Reck to return to the Board with a budget containing displays, graphs, a column reflecting a tax increase of a couple pennies and a column containing recommended cuts. /1 Chairman Bradshaw called for the County Attorney's report. Interim County Attorney Burton presented a change order for the Smithfield Fire Station for the Board's consideration. Supervisor Casteen moved that the County Attorney's Office be authorized to execute a change order for the Smithfield Fire Station. The motion was adopted by a vote of (4 -1) with Supervisors Bradshaw, Casteen, Clark and Hall voting in favor of the motion and Supervisor Wright voting against the motion. Interim County Attorney Burton presented a Resolution of the Board of Supervisors of Isle of Wight County (The "County") Authorizing the Guaranty by the County of the Timely Payment of a Portion of Principal of and Interest on Certain Guaranteed Subordinated Revenue Bonds and Senior Subordinated Revenue Bonds Issued by the Southeastern Public Service Authority of Virginia for the Board's consideration. Supervisor Clark moved that the following Resolution be adopted: RESOLUTION OF THE BOARD OF SUPERVISORS OF ISLE OF WIGHT COUNTY (THE "COUNTY ") AUTHORIZING THE GUARANTY BY THE COUNTY OF THE TIMELY PAYMENT OF A PORTION OF PRINCIPAL OF AND INTEREST ON CERTAIN GUARANTEED SUBORDINATED REVENUE BONDS AND SENIOR SUBORDINATED REVENUE BONDS ISSUED BY THE SOUTHEASTERN PUBLIC SERVICE AUTHORITY OF VIRGINIA WHEREAS, the Southeastern Public Service Authority of Virginia ( "SPSA ") was created pursuant to the Virginia Water and Sewer Authorities Act by its member jurisdictions (the "Owner Communities "), which are the Cities of Chesapeake, Franklin, Norfolk, Portsmouth, Suffolk and Virginia Beach, and the Counties of Isle of Wight and Southampton; WHEREAS, SPSA is currently indebted to the Virginia Resources Authority ( "VRA ") in the amount of approximately $140.7 million on bonds, consisting of guaranteed subordinated revenue bonds and senior subordinated revenue bonds, issued to finance and refinance various capital expenditures (collectively, the "SPSA Local Bonds "), including $71,985,000 in SPSA Local Bonds (the "2009 SPSA Local Bonds ") purchased by VRA on June 17, 2009 to restructure and refund certain outstanding SPSA Local Bonds as well as certain SPSA bonds not held by VRA; 7 WHEREAS, SPSA has entered into a purchase and sale agreement with Wheelabrator Technologies, Inc. ( "Wheelabrator ") in connection with the potential sale (the "WTE Sale ") of SPSA's RDF Plant and Power Plant (collectively, the "WTE Facilities "); WHEREAS, a portion of the proceeds of the WTE Sale are expected to be applied to the prepayment of a portion of the SPSA Local Bonds; WHEREAS, Section 6.1(b) of the Financing Agreement entered into by VRA and SPSA in connection with the 2009 SPSA Local Bonds (the "Financing Agreement") provides that SPSA may not sell, exchange, lease (as lessor), pledge, encumber, cease to operate, enter into a management agreement to operate or otherwise dispose of or alienate in whole or in part either the Disposal System (including the RDF Plant) or the Power Plant System (including the SPSA Power Plant, all as defined in the Financing Agreement) without the prior written consent of VRA subject to certain limited exceptions not pertinent to this Resolution; WHEREAS, as a condition to VRA's consent to the WTE Sale, VRA has required that the timely payment of principal of and interest on the SPSA Local Bonds remaining after the WTE Sale (the "Remaining SPSA Local Bonds ") be severally guaranteed by a moral obligation pledge of the County and the general obligation pledge of the other Owner Communities; WHEREAS, the terms of such guarantees are set forth in a Guaranty Agreement between the Owner Communities, U.S. Bank National Association, as trustee (the "Trustee ") and SPSA (the "Guaranty Agreement "), the form of which has been presented to this meeting; WHEREAS, the Board of Supervisors of the County (the "Board ") has determined that it is advisable to pledge the full faith and credit of the County to severally guaranty the timely payment of a portion of the principal of and interest on the Remaining SPSA Local Bonds pursuant to the Guaranty Agreement; and WHEREAS, a public hearing on the guaranty of the County has been held after notice was published in accordance with the requirements of Section 15.2 -2606 of the Code of Virginia of 1950, as amended. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF SUPERVISORS OF ISLE OF WIGHT COUNTY, VIRGINIA THAT: 1. Authorization of Guaranty. The Board hereby determines that it is advisable and in the best interest of the County to severally guaranty the timely payment of a portion of the principal of and interest on the Remaining SPSA Local Bonds, subject to the conditions outlined in Section 3 below, in the maximum amount of $2,000,000 pursuant to the Guaranty Agreement; 8 provided, however, the principal amount of the Remaining SPSA Local Bonds shall not exceed $50,000,000. 2. Pledge of Full Faith and Credit. The full faith and credit of the County are hereby irrevocably pledged for the payment when due of any amounts payable by the County under the Guaranty Agreement. Unless other funds are lawfully available and appropriated for the timely payment of amounts due by the County under the Guaranty Agreement, the Board shall levy and collect an annual ad valorem tax, over and above all other taxes authorized or limited by law and without limitation as to rate or amount, on all locally taxable property in the County sufficient to pay when due any amounts due under the Guaranty Agreement. 3. Conditions to Guaranty. The guaranty authorized in Section 1 above is expressly conditioned upon the following: (a) Timely participation by VRA with SPSA, prior to the WTE Sale closing, in seeking a closing agreement with the Internal Revenue Service to protect the existing tax status of the Remaining SPSA Local Bonds and all other SPSA indebtedness not retired by the WTE Sale; (b) Timely participation by VRA with SPSA, prior to the WTE Sale closing, in requesting an allocation of volume cap in such amount as is required to preserve the tax status of the interest on the Remaining SPSA Local Bonds and all other SPSA indebtedness not retired by the WTE Sale; (c) Unanimous approval and execution by all Owner Communities of the Guaranty Agreement; (d) Release of Chesapeake and Norfolk from their existing guaranties of Wachovia Bank, National Association debt under that certain Guaranty Agreement among SPSA, Chesapeake and Norfolk dated May 15,2 009 (the "Wachovia Guaranty ") and concurrent termination of the Wachovia Guaranty Agreement; (e) Release of the County, Franklin, Portsmouth, Suffolk and Isle of Wight from their existing guaranties of the 2009 SPSA Local Bonds under that certain Guaranty Agreement among SPSA, U.S. Bank National Association, the County, Franklin, Portsmouth, Suffolk and Isle of Wight dated June 1, 2009 (the "2009 VRA Guaranty Agreement ") and concurrent termination of the 2009 VRA Guaranty Agreement; (f) Application of the proceeds from the WTE Sale to pay off and satisfy all amounts owed by SPSA to Virginia Beach (the "VB Repayment ") under that certain Forbearance Agreement among SPSA and Virginia Beach dated as of May 15, 2009 (the "Forbearance 9 Agreement") and the concurrent termination of the Forbearance Agreement; and (g) Application of the proceeds from the WTE Sale remaining after the VB Repayment exclusively to pay down existing indebtedness of SPSA, including the SPSA Local Bonds. 4. Approval of Guaranty Agreement. The Guaranty Agreement, the form of which has been presented to this meeting, is hereby approved, and the County Administrator of the County (the "County Administrator ") and the Chairman of the Board (the "Chairman "), or either of them, are authorized and directed to execute and deliver the Guaranty Agreement with such completions, omissions, insertions and changes as may be approved by the County Administrator and the Chairman, or either of them, such execution and delivery to conclusively evidence such approval. 5. Approval of Reimbursement Agreement. There has been presented to the Board the form of a Reimbursement Agreement (the "Reimbursement Agreement ") between SPSA and the Owner Communities under which SPSA has agreed to reimburse the County for any amounts paid under the Guaranty Agreement on the terms set forth thereon. The Reimbursement Agreement is hereby approved, and the County Administrator and the Chairman, or either of them, are authorized and directed to execute and deliver the Reimbursement Agreement with such completions, omissions, insertions and changes as may be approved by the County Administrator and the Chairman, or either of them, such execution and delivery to conclusively evidence such approval. 6. Further Actions. The County Administrator, the Chairman and such officers and agents of the County as either of them may designate are authorized and directed to take such further action as they deem necessary regarding the execution and delivery of the Guaranty Agreement and Reimbursement Agreement, and all such action previously taken by such officers and agents are ratified and confirmed. 7. Effective Date. This resolution shall take effect immediately. The motion was adopted by a vote of (5 -0) with Supervisors Bradshaw, Casteen, Clark, Hall and Wright voting in favor of the motion and no Supervisors voting against the motion. Interim County Attorney Burton advised that the General Assembly has adopted a major change to require that all businesses, under Section 2.2- 4311.1 of the Code of Virginia must produce evidence that they are licensed to do business in the State of Virginia either as a domestic or foreign corporation; otherwise, the contract can be voided. 10 Interim County Attorney Burton presented a proposed Isle of Wight County Budget Calendar for the Board's information. Interim County Attorney Burton advised that he had two (2) items to discuss with the Board later during the closed meeting. // Chairman Bradshaw called for New Business. There was no new business offered for discussion by the Board. // Interim County Attorney Burton requested a closed meeting pursuant to Section 2.2- 3711.A.7 of the Interim County Attorney Burton requested a closed meeting pursuant to Section 2.2- 3711.A.7 of the Freedom of Information Act concerning consultation with legal counsel requiring the provision of legal advice pertaining to International Paper and under Section 2.2- 3711.7 concerning consultation with legal counsel requiring the provision of legal advice pertaining to the Smithfield Fire Department. Supervisor Clark moved that the Board enter the closed meeting for the reasons stated by the County Attorney. The motion was adopted by a vote of (5 -0) with Supervisors Bradshaw, Casteen, Clark, Hall and Wright voting in favor of the motion and no Supervisors voting against the motion. Supervisor Wright moved that the Board return to open meeting. The motion was adopted by a vote of (5 -0) with Supervisors Bradshaw, Casteen, Clark, Hall and Wright voting in favor of the motion and no Supervisors voting against the motion. Supervisor Wright moved that the Board adopt the following Resolution CERTIFICATION OF CLOSED MEETING WHEREAS, the Board of Supervisors has convened a closed meeting on this date pursuant to an affirmative recorded vote and in accordance with the provisions of the Virginia Freedom of Information Act; and, WHEREAS, Section 2.2- 3712.D of the Code of Virginia requires a certification by this Board of Supervisors that such closed meeting was conducted in conformity with Virginia law; 11 NOW, THEREFORE, BE IT RESOLVED that the Board of Supervisors hereby certifies that, to the best of each member's knowledge, (i) only public business matters lawfully exempted from open meeting requirements by Virginia law were discussed in the closed meeting to which this certification resolution applies, and (ii) only such public business matters as were identified in the motion convening the closed meeting were heard, discussed or considered by the Board of Supervisors. VOTE AYES: Bradshaw, Casteen, Clark, Hall and Wright NAYS: 0 ABSENT DURING VOTE: 0 ABSENT DURING MEETING: 0 There was no action taken following the closed meeting. /1 At 8:05 p.m., Supervisor Hall moved that the Board adjourn its meeting. The motion was adopted by a vote of (5 -0) with Supervisors Bradshaw, Clark, Casteen, Hall and Wright voting in favor of the motion, and no Supervisors voting against the motion. ip A. Bradshaw, Chairman . ll.4.. .. L. Carey , lis Stor , Clerk 12