01-10-2012 Special MeetingSPECIAL MEETING OF THE ISLE OF WIGHT COUNTY BOARD OF
SUPERVISORS HELD THE TENTH DAY OF JANUARY IN THE YEAR
TWO THOUSAND AND TWELVE
PRESENT: Alan E. Casteen, Chairman
JoAnn W. Hall, Vice - Chairman
Rex W. Alphin
Byron B. Bailey
Delores M. Darden
Also Attending: Mark C. Popovich, County Attorney
W. Douglas Caskey, County Administrator
Carey Mills Storm, Clerk
Chairman Casteen called the special meeting to order at 10:00 a.m.
Michael W. Terry, Director of Budget and Finance, outlined the
timeline associated with the adoption of the 2012 -13 Operating Budget,
Capital Budget and Capital Improvements Program (CIP).
Supervisor Darden requested that she be provided a report which
reflects the various County departments, their budgeted amount, total
expenditures and a remaining balance.
Donald T. Robertson, Director of Information Resources and
Legislative Affairs, distributed a calendar of events highlighting the budget
process for the Board's information. He requested direction from the Board
regarding how staff should proceed with respect to a Capital Improvements
Program (CIP) Subcommittee.
Supervisor Darden moved that the Chairman be authorized to appoint a
Capital Improvements Program (CIP) Subcommittee. The motion was
adopted by a vote of (5 -0) with Supervisors Darden, Bailey, Hall, Alphin and
Casteen voting in favor of the motion and no Supervisors voting against the
motion.
Mr. Robertson advised that he would be contacting Chairman Casteen
regarding the individuals who are to serve on the Capital Improvements
Program (CIP) Subcommittee. He requested the Board to review the
calendar to ensure there are no conflicts with the noted key dates. He advised
that by the end of May, 2012, staff hopes to have the Board in a position
where it can adopt the School Budget and County Operating and Capital
Budgets. He advised that, by law, the School's Budget must be adopted by
May 1, 2012 and he called the Board's attention to the fact that May 1St is not
a regular Board meeting date.
Chairman Casteen commented that historically the first year of the
Capital Improvements Plan (CIP) was incorporated into the County's Capital
Budget.
Mr. Robertson explained that the Capital Improvements Plan (CIP) and
the Capital Budget are two (2) separate documents. He stated that if funds
are available to do certain projects, the first year of the CIP can represent the
Capital Budget; however, in difficult economic times, the two (2) documents
may not be identical. He advised that the Board had taken action at its May
125 2011 meeting to appropriate funding for several projects which are part of
the Capital Budget.
Chairman Casteen commented that the Board had adopted the Capital
Improvements Plan (CIP), the Operating Budget and the School Budget. He
asked for clarification regarding what the Capital Budget consisted of that
had been adopted and funded.
Mr. Terry confirmed that the Capital Budget had also been adopted at
the Board's May 12, 2011 meeting. He advised that staff had also received
authority from the Board at that meeting to go to the bond market.
Chairman Casteen stated the Board voted on the Capital Improvement
Plan and bonds to support that same venture. He requested clarification if the
vote for the bonds was the only funding for the capital for the year.
Mr. Terry confirmed that was the only capital funding for the year
when the Board voted to issue bonds.
Supervisor Darden stated that the Capital Budget reflects that on May
12, 2011, $4.175 million dollars was authorized for bonds to fund certain
projects.
Chairman Casteen referred to Page 17 of the Capital Budget under
"General Operating Revenues" which reflects that $75,000 had been funded,
but was not included in the Operating Budget to be funded. He stated all
previous budgets have reflected that when funds were provided from
operating revenues, those funds were included in the Operating Budget under
Capital projects funding.
Mr. Robertson stated that in previous years where there was adequate
funding coming in on an annual basis, that term was actually a substitute term
for the Fund Balance. He noted that staff had advised the Board last year that
a best practice was not to use Fund Balance as a revenue source for the
County's Operating Budget.
Chairman Casteen noted that $75,000 is from operating revenues, but
that there is not $75,000 in the Operating Budget to fund this.
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Mr. Robertson advised that if the funds are not available before June
303 2012, staff will return to the Board to request that those funds be
appropriated from the Unassigned Fund Balance.
Chairman Casteen, following consensus of the Board, directed that any
items to be rolled from the Capital Improvement Plan to the Capital Budget
be funded from Operating revenues and included as a line item in the
Operating Budget. He stated that he contends that the Board did not adopt a
$10.7 million dollar Capital Budget and that the Board will need to make a
motion to fund the $75,000 at some point in the current year. He requested
staff to provide the Board with a report recapping the projects that are
covered in the most recent bond issue.
Mr. Robertson stated that this information had previously been
provided to the Board and he recommended that the County's financial
advisors be invited to address the Board regarding specifics of the bonds. He
stated the County's long -term debt is now $145 million, an increase of 25 %.
Responsive to Supervisor Hall's suggestion, County Administrator
Caskey offered to invite Davenport representatives to the Board's February
16, 2012 meeting to advise how the County plans to handle the large spike in
anticipated debt service.
Chairman Casteen requested staff to include a right column on Page 45
of the audit document totaling principal and interest and email same to the
Board members.
Gerald H. Gwaltney, Commissioner of the Revenue, briefed the Board
regarding his forecasting role in the budget process. He distributed a handout
illustrating property taxes prior to the closure of International Paper which
showed that Machinery & Tools represented 15 %; real estate taxes
represented 54% and personal property represented 26% of the budget. He
advised that FY2012 revenues reflect an increase in real estate taxes, making
it a larger portion of the budget, increasing from 54% to 68 %. He stated
forecasts show signs of growth in meals tax, business license and sales tax,
all of which is based on consumer spending; however, real estate
sales /construction and foreclosures are trending downward. He
recommended that the Board consider developing a two (2) year budget plan
in the future.
Judy C. Wells, Treasurer, briefed the Board regarding the process by
which her office collects taxes. Responsive to the request of Chairman
Casteen, Ms. Wells offered to list anticipated State funds on the report
provided to the Board by the Treasurer.
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Chairman Casteen noted that receiving a report from the Director of
Budget and Finance which includes the Treasurer's Statement of Assets
would be beneficial in helping the Board to understand the relationship of the
County's funds.
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Mr. Terry advised that a monthly financial report will be provided to
the Board in February which includes the Unassigned Fund balance and
recommended roll -over funds.
Chairman Casteen requested that the capital report contain a funded
section and that it contain the Plan in its entirety.
Supervisor Alphin requested that the Board be advised what has been
expended in the Capital Plan and what projects have been approved to date.
Responsive to Supervisor Darden, County Attorney Popovich advised
that the Board had adopted a resolution at its meeting on May 12, 2011 to
approve the FY2011 -12 Operating and Special Revenue Budgets which
authorizes the Board to go to the bond market and creates the Capital Budget.
The Board concurred that, in the future, it would vote specifically on a
Capital Budget apart from the funding.
Chairman Casteen moved that Supervisor Bailey and he be appointed
to serve on the Board's Finance Committee (who also will serve as the
Capital Improvements Plan (CIP) Subcommittee members). The motion was
adopted by a vote of (5 -0) with Supervisors Darden, Bailey, Hall, Alphin and
Casteen voting in favor of the motion and no Supervisors voting against the
motion.
At 12:15 p.m., Chairman Casteen declared the meeting adjourned.
L A01 JJE.,- 41 1 M �A dp�n
Carey IN, Storm, Clerk
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A an E. Casteen, Chairman