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BOC Minutes February 6 2017approve February 6, 2017 1 PERSON COUNTY BOARD OF COMMISSIONERS FEBRUARY 6, 2017 MEMBERS PRESENT OTHERS PRESENT Tracey L. Kendrick Heidi York, County Manager Gordon Powell Jimmy B. Clayton Brenda B. Reaves, Clerk to the Board Kyle W. Puryear B. Ray Jeffers The Board of Commissioners for the County of Person, North Carolina, met in regular session on Monday, February 6, 2017 at 9:00am in the County’s newly acquired property (future site of the Senior Center) located at 87 Semora Road, Roxboro, NC. This meeting was designated for the annual board retreat for the Person County Board of Commissioners. Chairman Kendrick called the meeting to order and welcomed the group to the annual Board retreat noting the retreat provides an opportunity to give direction to the County Manager for the upcoming recommended budget. County Manager, Heidi York told the Board the retreat was a time for staff to share relevant information related to fiscal projections. Ms. York encouraged the Board to participate and feel free to ask questions in an informal manner throughout the day. DISCUSSION/ADJUSTMENT/APPROVAL OF AGENDA: A motion was made by Commissioner Jeffers and carried 5-0 to approve the agenda. COUNTY SNAPSHOT AND TRENDS: Assistant County Manager, Sybil Tate set the stage with the following presentation titled Community Snapshot and Trends. February 6, 2017 2 February 6, 2017 3 February 6, 2017 4 February 6, 2017 5 Definition of poverty: $1,000/month per person. Ms. Tate noted there was 19.9 % of all people in Person County live in poverty, slightly less than 2/3 of households earn less than $50,000/year. February 6, 2017 6 There are 15,383 households in the County. Person County’s median income is $42,105, which has not caught up with pre-recession median income of $45,321. The county lags behind the State in median household income of $46,000. The mean household income is $52,167. The mean income gives an indication that more households are above the median, than not. February 6, 2017 7 Building permits are estimated to increase this year. Most of the growth projection is in the Timberlake area near the Durham County line and around Hyco Lake. February 6, 2017 8 All age groups are essentially flat, except the 65+ group. Over the next 13 years, the 65+ group will increase by 2,600 individuals. February 6, 2017 9 COUNTY SERVICES: County Manager, Heidi York presented to the group slides based on NC General Statutes illustrating County Services: Mandated and Optional/Discretionary. February 6, 2017 10 Ms. York stated the Board had no discretion with the items listed in the first column; the second column listed services that are mandated however, the Board retains discretion on the spending levels. The third column consisted of quality of life services that are not mandated to which the Board had full discretion. February 6, 2017 11 Ms. York illustrated the County’s estimate of spending for mandated versus discretionary. February 6, 2017 12 AD VALOREM AND VEHICLE TAX REVENUES: Tax Administrator, Russell Jones stated prior to the presentation on Ad Valorem and Vehicle Tax Revenues, he requested consideration on the following two items. February 6, 2017 13 Acceptance of the Report of Unpaid Taxes Mr. Jones told the Board that General Statute 105-369(a) requires that the Tax Collector report to the Board the amount of unpaid 2016 taxes that are a lien on real property as of the first Monday of February noting this was simply a check point for the Board as to the progress that the Tax Office was making on collections and a way to alert the Board if collections are down. Mr. Jones stated as of February 3, 2017, the Tax Office’s collection rate was just under 95% and the unpaid real estate tax on 2016 real property was just over $1.4M.   Mr. Jones stated no motion was required. The Board of Commissioners accepted the Tax Administrator’s Report of Unpaid Taxes. Advertisement of Unpaid Real Estate Taxes Tax Administrator, Russell Jones stated a motion was required to order the advertisement and set the advertisement date for delinquent 2016 real property taxes. Mr. Jones stated the Tax Office would like for the date to be March 4, 2017. Mr. Jones noted the newspaper advertisement was required under General Statute 105-369(c) and can be placed anytime between March 1st and June 30th, further noting the newspaper advertisement has been a great collection tool and the sooner the advertisement, the better the ending collection rate will be. The cost of the advertisement is charged to the delinquent real estate bills. Mr. Jones requested the Board to make a motion to set the advertisement date for March 4, 2017. A motion was made by Commissioner Puryear, and carried 5-0 to order the advertisement of unpaid real estate taxes and set the advertisement date for March 4, 2017 for delinquent 2016 real property taxes. February 6, 2017 14 Mr. Jones stated the 2017 appointed members of the Special Board of Equalization and Review would serve through February 2021; the term would expire prior to the next scheduled revaluation. February 6, 2017 15 Mr. Jones confirmed the Board of Commissioners could abolish its Special Board of Equalization and Review. However he noted the NC Dept. of Revenue’s new Appraisal Standards, which will take effect for 2018, requires a special board. There are over 60 counties in NC with a special board. Chairman Kendrick asked each commissioner to bring to the Board’s February 21, 2017 meeting a recommendation for the special board and asked Mr. Jones to informally poll the previous members for availability to continue to serve in this capacity. February 6, 2017 16 Mr. Jones noted for the current Fiscal Year 2016-2017, the biggest players are, of course, real property (land and buildings) for 66%, then state appraised property (Duke Energy) at just over 21%, then machinery(business equipment) at almost 11%. DMV has transitioned to the new NCVTS system, and it now collected by NCDMV local tag offices. February 6, 2017 17 Mr. Jones noted his projections were based on good information for real and vehicles, but State appraised would not be available until September, and the equipment numbers sometime in late April. February 6, 2017 18 Minimal new construction projected at $17 million. Total value for Fiscal Year 2016-2017 was based on actual, not budgeted. Mr. Jones projected .60% growth for Fiscal Year 2017- 2018. February 6, 2017 19 This shows continued growth in the real property values, from $2.779B to $2.795B. February 6, 2017 20 These are mainly place-holder numbers for now. Other increases here will not be known until late April. No new major projects for this year, however there are new projects in the works for FY2019 (GKN for example at $38M) Spuntech was a big new major project for last year. 9% loss mostly due to depreciation. February 6, 2017 21 There may be additional equipment that has been added by other companies, but this will not be known until late April. With the -$49M and limited new investments, this is projected to be slightly down from the previous year. In 2016 $451M, 2017 estimated at $402M. February 6, 2017 22 21% of the County’s base will not be known until September. The state will not see any of these numbers until late May at which time there will be estimates. Estimated $800M for 2014-2015, but came in at $849M, or $49M over. Estimated $815M for 2015-2016, but came in at $865M. Conservative budgeting (normally hold between $25 and $35M); estimating $853M for 2017-2018 (holding $35M based on last year value). February 6, 2017 23 February 6, 2017 24 February 6, 2017 25 February 6, 2017 26 February 6, 2017 27 For the past 10 years, Person County’s tax rate has remained unchanged at $.70 per $100. 100,000 house = $700 in county property taxes annually Revaluation year in green. February 6, 2017 28 While the tax rate has remained unchanged, the revenue per penny has grown as the county continues to experience some growth. Any change in the tax rate will only affect vehicles from October-June, due to renewal notices already mailed for preceding months. Takes into account all projections and budgeting conservatively. February 6, 2017 29 Mr. Jones stated these were the total four options that were discussed two years ago. To implement a fire tax option for Fiscal Year 2018, only options 1 and 2 can be considered. February 6, 2017 30 No new rules apply. Person County is currently spending 2.4 cents of the general levy in the current fiscal year to support fire/rescue services. February 6, 2017 31 February 6, 2017 32 Mr. Jones noted the term fire service district may need to be changed to fire/rescue district to more accurately reflect that the rescue is included. Mr. Jones confirmed that state appraised property would be eligible to be taxed although previously reported they would not. He outlined the process below: 1. Requires demonstrated need, 2. 4 weeks prior to public hearing, must provide maps and plan, 3. Conduct public hearing to hear public comments, 4. adopt by resolution, 5. must start July 1, and 6. may include the City of Roxboro, if agreed by City Council . Should the City of Roxboro agree, one penny still provides less funding in first year due to DMV at 9 months (-$ 14,528). February 6, 2017 33 At 97.25%, one penny (without City and only 9 months of County DMV) would be less by $76,995. Even if City was included in fire district, one penny would still be affected by 9 months of DMV, so one penny with City would be $421,582 (not $ 436,110, less by $14,528). February 6, 2017 34 Must be distributed based on need and desire of the Board due to fire service lines not matching parcel lines. City can be included if they desire. County decides rate and funding. Money must go into a restricted fund, to be used in current/future years by fire/rescue. A fire service tax that includes all monies distributed would better demonstrate their funding level (fire to City for mutual aid, VIPER radios, capital, etc.). A decrease in the general tax rate of 2 cents would roughly need a 3 cents fire tax. February 6, 2017 35 This chart compares annual insurance premiums for a new wood frame home valued at $100,000 with smoke detectors to illustrate how the ISO ratings affects citizens’ insurance costs. February 6, 2017 36 Even if only 1 fire district is interested in a petition and the fire protection district, up to 4 districts may see lines affected (and maybe adjacent counties). This demonstrates why one tax based on need is needed as the district lines do not follow parcels. February 6, 2017 37 The Board had consensus that the volunteer fire and rescue departments were in need of additional funding and discussed possible options which included:  Raising the tax rate from .70 cents by 1 to 2 1/2 cents for fire and emergency services,  Cutting discretionary spending for non-mandated services in lieu of a tax increase,  An across the board cut on discretionary funding, and  Renegotiating contract with Republic to earmark increased revenues to be used for more funding to VFDs. Ms. York reminded the Board of the Fiscal Year 2017 approved budget related to fire and rescue services provided in the County. Fire and Rescue VFDs/Rescue - Operating $567,902 Fire and Rescue – City of Roxboro – Operating $381,443 VFD and Rescue Capital Reserve Fund $ 90,625 Ms. York noted that the capital reserve fund would need a new appropriation from the General Fund should the Board continue this program. Related to cutting across the board for discretionary funding, Ms. York added that departmental budgets are already lean and that a cut would impact staffing. She and Commissioner Jeffers stated staff supervisor/employee ratios were already deficient and not meeting standards within the Department of Social Services, Emergency Services and 911 Communications. Chairman Kendrick announced a brief break at 10:45am. He reconvened the meeting at 11:00am. NEW SALES TAX LEGISLATION: Assistant Finance Director, Laura Jensen provided the Board with the following update related to New Sales Tax Legislation. February 6, 2017 38 Ms. Jensen commended the Board’s decision to not budget last year for the projected increase for the Sales Tax Expansion program due to concerns which proved to be a smart move. February 6, 2017 39 February 6, 2017 40 The Finance Department estimated Person County’s collection would be just under $349,000 versus the $550,000 the state had projected for the current fiscal year. February 6, 2017 41 84% of the projected growth is due to the Sales Tax Expansion program. February 6, 2017 42 FISCAL REVIEW & CAPITAL PROJECTS: Finance Director, Amy Wehrenberg provided a mid-year fiscal review compared to a year ago. Ms. Wehrenberg stated comparing mid-year revenues and expenditures was often a good measurement of the county’s current fiscal indicators, as well as an indicator of where things might fall at fiscal year-end. February 6, 2017 43 February 6, 2017 44 Showing significant drop in UFB for fiscal years 2013 and 2014 as the attempt was made to address deferred capital. Revenues have been slow to recover, but there are signs of improvement (i.e. sales tax, occupancy tax, DMV collections, DSS revenues) along with the reduced CIP expenditures that indicate a possible increase in the UFB for the current year. February 6, 2017 45 Assistant County Manager, Sybil Tate presented the update on the Public Safety Communication System Upgrade & Broadband Project noting the Mt. Tirzah tower was completed. Ms. Tate noted no cell phone vendors will be allowed on the state owned towers. The City of Roxboro is reviewing the 911 tower study analysis to which the County will be asked to partner in the upgrades for lifetime use on the tower for IT and emergency services. February 6, 2017 46 Ms. Tate encouraged the Board to contact state representatives for possible grant opportunities from the General Assembly for the broadband project. Ms. Wehrenberg corrected that the required match would be $1.01M and not the posted $1.07M for the Airport Runway Extension grant from NCDOT. February 6, 2017 47 Chairman Kendrick announced a lunch break at 12:04pm and asked the group to return for the meeting to be reconvened at 1:00pm. February 6, 2017 48 Chairman Kendrick announced the meeting back in session at 1:00pm. BUDGET PRIORITIES: County Manager, Heidi York led discussion for the Board’s FY17-18 Budget Priorities. February 6, 2017 49 Vice Chairman Powell pointed out that $2M of the $11.7M budget for PCS was distributed to the Charter Schools (Person County students’ funding allowance follows student to charter schools). Commissioner Jeffers stated the schools were having issues with snow removal. Ms. York added that both Bethel Hill Charter was requesting funding for technology and Roxboro Community School was requesting funding for safety and security issues. February 6, 2017 50 Ms. York noted the IT Dept. was not recouping its costs for providing services to the City of Roxboro. New funding is needed for the following operating needs. Ms. York noted that the VFD/Rescue funding and impact to the landfill decision could be added the list below noting the Year 2 Market Study may cost up to $100,000. Ms. York asked the Board to participate in the Budget Straw Poll to help identify budget priorities. February 6, 2017 51 February 6, 2017 52 Chairman Kendrick announced a break at 1:40pm and reconvened the meeting at 1:55pm. Ms. York presented the results of the informal, non-binding poll with the Board for FY17- 18 Budget Priorities. February 6, 2017 53 February 6, 2017 54 February 6, 2017 55 February 6, 2017 56 February 6, 2017 57 February 6, 2017 58 February 6, 2017 59 February 6, 2017 60 February 6, 2017 61 Ms. York thanked the Board for participation in the informal straw poll noting it gives staff direction for the recommended budget. Commissioner Jeffers stated his support for a tax increase only if the funds were earmarked for public safety including EMS and the volunteer fire and rescue needs. Commissioner Puryear stated he would not support a tax rate increase and he advocated for cutting discretionary spending for the needed increase to volunteer fire and rescue funding. When asked by Vice Chairman Powell about the $250,000 expenditure, Ms. York stated that expense was authorized for the engineering design for water lines to the mega site to obtain site certification. She added that before the award was made, this item would be before the Board for contract approval. Chairman Kendrick volunteered discussion to forgo his salary and the salaries of the commissioners as well as the travel budget of the governing body. Ms. York clarified for the group that of the $1.6M of Capital Projects submitted by Piedmont Community College, she only recommended including the roof for Building D at this time. Chairman Kendrick and Commissioner Jeffers stated support that the IT Dept. contract with the City of Roxboro should sustain all costs for the services provided. Vice Chairman Powell asked if the new insurance vendor would save the County costs related to the employee health benefits. Ms. York stated Mark III was projecting a small increase, less than the average market increase of 8% and much lower compared to the City’s increase of 40%. Commissioner Clayton made the group aware that the mental health advisory board that formerly represented Orange-Person-Chatham may grow to include Alamance and Caswell. Commissioner Clayton asked for Board consideration to move the regular scheduled July 17, 2017 meeting to be held on July 10, 2017. Chairman Kendrick asked that this be placed on the next Board agenda. February 6, 2017 62 CLOSING REMARKS & EVALUATION: County Manager, Heidi York asked Board members to complete the retreat evaluation and return to staff. Chairman Kendrick thanked staff for the informative presentations and the Senior Center for use of the space. ADJOURNMENT: A motion was made by Commissioner Puryear and carried 5-0 to adjourn the meeting at 2:29pm. _____________________________ ______________________________ Brenda B. Reaves Tracey L. Kendrick Clerk to the Board Chairman