04-05-2012 Budget Work SessionBUDGET WORK SESSION OF THE ISLE OF WIGHT COUNTY BOARD
OF SUPERVISORS HELD THE FIFTH DAY OF APRIL 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
Michael W. Terry, Director of Budget and Finance
Donald T. Robertson, Director of Information
Resources and Legislative Affairs
Carey Mills Storm, Clerk
Chairman Casteen called the budget work session to order at 4:00 p.m.
Supervisor Alphin delivered the invocation.
The Pledge of Allegiance was conducted.
Sheriff Marshall addressed the Board regarding a one -time monetary
request in the amount of $80,000 for the following items related to officer
safety: OC spray and supplies; ballistic vests; firearms upgrade; 9 mm
handgun to a 40 caliber weapon; fire extinguishers; fire aid /biohazard PPE;
Special Response Team startup; crime scene equipment; and, uniform duty
gear. He stated that he would not be requesting funding for these items in
subsequent years if his request is approved today.
Responsive to liability issues associated with Officer safety, Supervisor
Bailey moved to appropriate $80,000 to the Sheriff's office from the FY2012
Unassigned Fund Balance. 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.
Michael W. Terry, Director of Budget and Finance, advised that,
following direction from the Board today, staff will develop a proposed
budget recognizing that it will be preliminary until final information is
received from State. He further advised that a representative will be present
at the Board's April 19, 2012 meeting to brief it on proposed health and
dental costs for County employees.
Donald T. Robertson, Director of Information Resources and
Legislative Affairs, distributed copies of the County's CIP as recommended
by the Planning Commission.
Jimmy Sanderson, Davenport and Company, briefed the Board
regarding the County's debt service. He advised that the utility note due
March 1, 2013 is currently callable with no penalty as the plan when that note
was originally issued was that it would be short term and the County would
refinance it on a permanent long -term basis prior to its being due. He stated
that he still recommends that the note be taken out in advance in the fall of
this calendar year. He advised that the note due on April 1, 2014 for the
second utility band is in the amount of $6,460,000 and can be permanently
refinanced now or wait until 2014. He advised that the last band is a school
note associated with the new middle school in Windsor which would not be
taken out until later with bonds that the County would issue through a
Literary Fund Program with the Commonwealth. He stated with respect to
debt service, the County's actual debt service for FY2012 will be 1.7 million,
which is lower than originally budgeted, and the expectation is that the Board
would reappropriate those savings for debt service in FY2013 to address the
variance referred to by the Director of Budget and Finance. He stated with
respect to borrowing plans, the County's debt expectations for its Capital
Improvement Plan, in 2013, is that the County would borrow $15.4 million
and allocate $12.4 million for utilities and $3 million to any General Fund
project to cover projects for FY2013 and FY2014. He advised that the next
borrowed debt is planned for 2015 in the amount of $8.7 million, with an
anticipated $5.7 million for utilities and $3 million for General Fund projects,
which would cover the cost of the County in FY2015 and FY2016. He
recommended that the Board go to the bond market around audit time during
the budget process.
Supervisor Bailey questioned what the best method would be for the
Board to pay for its recently approved Isle of Wight Volunteer Rescue Squad
facility.
Mr. Sanderson advised that public markets are typically the best way to
proceed. He stated if the County is already borrowing $7.7 million, it should
go ahead and any other obligation for the next fiscal years in the market.
Supervisor Alphin inquired if Davenport and Company has any ideas
for additional revenue on the debt payment side.
Mr. Sanderson replied that the County's debt is monitored weekly with
respect to refunding opportunities. He advised another option is for the
County to refinance debt, although that makes less sense from an economic
1)
perspective. He advised that the expectation is that money borrowed will be
spent within a three (3) year period.
H
Mr. Robertson briefed the Board regarding options and associated
impacts, as listed below, for the Board's consideration:
1. All options assume the Debt Service will be refinanced in CY2012;
2. Schools and Public Safety (including Sheriff's Office) are deemed priorities per Board
feedback on 3/29/12
Option
Tax Rate/Fees
New
Priority
Impact
Revenues
Addressed
Generated
No adjustments
No adjustments
$0
None
Inability to address State
from FY2011-
in tax rates,
mandates; RIF/ severe
12; Internal
fees, etc.
reduction in services across
Reductions
the board; Elimination of
School programs;
degradation of public safety
services; potential liability
and litigation concerns
Adjust Utility
15% increase
Approx.
Sheriff s
Impact on utility customers
Rates
in rates
$200,000
Office
Land /Timber
Sale of assets
$425,000
Sheriff's
Loss of assets; One -time
sales per list
Office,
only infusion of revenue;
from County
Fire /Rescue
Replacement revenue
Atty*
necessary in FYI
Create special
Tax on
$850,000
Fire /Rescue
Impact on County
taxing districts
assessed value
households/businesses
for Fire /Rescue
of all real and
Funding can only be used to
(Code of VA 27-
personal
address Fire /Rescue
23.1)
property
Reimburse
Reallocate
$1,350,000
Public
One -time only infusion of
General Fund
unused
Safety,
revenue; replacement
for interest
Principal &
Schools
revenue necessary in FYI 4;
payments for
Interest from
Requires consultation w/
bonds
bond proceeds
Bond Counsel
Adjust real
$0.69/$100
$1,709,300
Schools
$0.83 /$100,000 /month per
estate tax rate,
Real Estate
penny impact on County
create special
Tax Rate
households; Home valued at
taxing districts
$250,000, increase would be
for Fire /Rescue
$8.33 /month or $100/ ear)
* Should any portion of revenues not be realized, expenditures would fall to Unassigned Fund
Balance
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Responsive to Supervisor Darden's request, County Attorney Popovich
requested a closed meeting pursuant to Section 2.2- 3711.A.1 of the Code of
Virginia concerning a personnel matter.
Supervisor Bailey moved that the Board take a break, followed by a
closed meeting for the reason stated by County Attorney Popovich. 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.
Supervisor Hall moved that the Board return to open session. 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.
Chairman Casteen moved that the following Resolution be adopted.
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- 3712.1) of the Code of Virginia requires a
certification by this Board of Supervisors that such closed meeting was
conducted in conformity with Virginia law;
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: Bailey, Darden, Hall, Alphin and Casteen
NAYS: 0
ABSENT DURING VOTE: 0
ABSENT DURING MEETING: 0
Chairman Casteen commented that the recordation taxes for wills looks
low and $5301000 is a more appropriate amount than the $150,000 that Mr.
Terry has proposed.
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Phillip A. Bradshaw, CFO, Isle of Wight County Public Schools,
addressed the Board regarding a decrease in Federal funds in the amount of
$1.25 million.
The Board provided the following direction to Mr. Terry relative to the
proposed FY2012 budget.
With respect to the $500,000 growth under general government,
Chairman Casteen expressed a concern with the proposed 21% increase for
the Budget and Finance Department, the 11 % increased for the Board of
Supervisors; 30% increase for the Human Resources Department; 13% for
the Treasurer; and, 5% for the Commissioner of Revenue.
Supervisor Hall requested an explanation for any department reflecting
a significant increase.
Responsive to the suggestion of Chairman Casteen, it was the
consensus of the Board to adjust the utility rates by 15 %.
Responsive to an inquiry by Supervisor Bailey to sell timber, Mr.
Robertson advised that the County does not have a sufficient amount to sell.
Responsive to an inquiry by Supervisor Darden, Mr. Robertson advised
that the 13 acres in hazard mitigation sellable properties, but because the
County acquired them through hazard mitigation, insurable structures can
never be put on those properties, so the chance of selling them to anyone
other than a farmer is slim.
Chairman Casteen recommended that the hazard mitigation properties
be included in the list of other properties to be considered for sale. He
advised that the Building, Grounds and Transportation Committee met prior
to this meeting and will be recommending to the full Board at its next regular
meeting that the Stoup and Health Department properties be sold.
Supervisor Bailey spoke in favor of creating a special tax for fire and
rescue in the amount of $.02 in order to support the County's fire and rescue
organizations.
Recognizing that revenue is not available to do what all needs to be
accomplished, Chairman Casteen and Supervisor Darden reluctantly agreed
with consideration of a special tax of $02. Chairman Casteen commented
that he would have to be completely convinced that there is no other way to
balance the budget.
Supervisors Hall and Alphin were not in favor of a special tax.
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The Board members concurred with considering reimbursement of the
General Funds for interest payments on bonds.
The Board members were not interested in a real estate tax increase.
The Board members agreed with Chairman Casteen's preference to
have the budget tightened and not increase taxes, recognizing and taking the
risk that mid -year the County's Reserve Fund may have to be dipped into or
another revenue source found.
At 7:30 p.m., Chairman Casteen declared the budget work session
adjourned.
Carey Milig Storm, Clerk
It
Alan E. Casteen, Chairman