Board of Supervisors: March 19, 2007

March 19, 2007

Virginia:

AT A CONTINUED MEETING of the Nelson County Board of Supervisors at 5:30
P. M. in the Board of Supervisors Room at the Courthouse, Lovingston Virginia.

Present:     Thomas H. Bruguiere, Jr., Chair
       Thomas D. Harvey, North District Supervisor
Harry S. Harris, South District Supervisor
       Constance Brennan, Central District Supervisor
       Allen M. Hale, East District Supervisor
       Stephen A. Carter, County Administrator
       Candice W. McGarry, Administrative Assistant/Deputy Clerk
       Debbie McCann, Director of Finance & Human Resources
       Fred Boger, Director of Planning & Zoning


I.   Call to Order

Mr. Bruguiere, Chair, called the continued meeting to order at 5:45 P.M. with five members present to establish a quorum.

Prior to beginning the work session, Mr. Carter noted that Fred Boger, the Planning and Zoning Director had an item of business to introduce and recommended that the Board consider this item before beginning work on the FY08 budget.

Mr. Boger distributed a draft resolution that would refer Zoning Ordinance Amendments pertaining to the inclusion of 3 classes of wine tasting rooms, to the Planning Commission for consideration and asking for their recommendations within a number of calendar days to be set by the Board. He noted that there was one local vineyard that could not currently hold tastings on site due to its location and current deed restrictions. He noted that they have submitted a parallel application under the Restaurant section of the A-1 district of the current Zoning Ordinance, but do not really want a restaurant. He noted that Nelson County is at the forefront when it comes to zoning pertaining to wineries etc. and that the Virginia ABC Board allows up to 4 or 5 offsite tasting rooms; however the County’s current zoning ordinance doesn’t allow for it. He noted that the Planning Commission had tabled the issue and that May was the prime wine marketing month for local wineries and thus the need to expedite processing of the proposed amendments.

The Board discussed timing issues and how many days to allow the Planning Commission to make its recommendations. The consensus was to allow 30 calendar days which would facilitate a public hearing at the May regular Board of Supervisors meeting.

Mr. Harvey made a motion to adopt the proposed resolution as presented with the inclusion of 30 calendar days. The motion was seconded by Ms. Brennan and there being no further discussion, Supervisors voted unanimously (5-0) to approve R2007-029 as follows:
Zoning Ordinance Amendment

   I move the adoption of the following resolution R2007-029:

   Whereas, public necessity, convenience, general welfare and good zoning practice requires consideration of amendments to the Zoning Ordinance.

   Resolved, that the proposed amendments to the Zoning Ordinance, a copy of which I am handing the clerk for the minutes, be referred to the Planning Commission for its recommendations.

   Further resolved, that the Planning Commission shall make its recommendations to this Board within 30 calendar days of its next meeting following this referral; and, the failure to so report shall be deemed approved.

Adopted: March 19, 2007       Attest: ________________________ Clerk,
                          Nelson County Board of Supervisors

The following Zoning Ordinance Amendments were referred to the Planning Commission:

AN ORDINANCE TO AMEND SECTIONS 4-1 AND 4-15-b
OF THE CODE OF THE COUNTY OF NELSON, 1989, THE AMENDED SECTIONS RELATING TO USES PERMITTED
BY RIGHT AND BY SPECIAL USE PERMIT
IN AN AGRICULTURAL DISTRICT, (A-1)

BE IT ORDAINED BY THE NELSON COUNTY BOARD OF SUPERVISORS:

1. That Section 4-1 of The Code of the County of Nelson, 1989, be amended to include the following use as one of the “Uses - Permitted by right”:

4-1-23   Wine Tasting Room (Class I): A facility in which wine products    grown or processed on the owner’s property may be tasted and sold. The facility must be operated in association with an existing vineyard located in Nelson County and on the same property, or multiple adjoining properties in same ownership.

2. That Section 4-1-15b of The Code of the County of Nelson, 1989, be amended to include the following uses as “Uses – Permitted by a special permit only”:

4-1-15b   Wine Tasting Room (Class II): A facility located either on or off-site in which wine products may be tasted and sold. Accessory uses per-mitted with this facility include antique sales, craft and gift shop, the serving of light snacks, i.e. cheese, crackers, peanuts or similar. The facility must be operated in association with an existing vineyard located in Nelson County.

4-1-16b   Wine Tasting Room (Class III): A facility located either on or off site in which wine products may be tasted and sold. Accessory uses permitted with this facility include antique sales, craft and gift shop, meeting rooms, dining and catering facilities, and a restaurant. The facility must be operated in association with an existing vineyard located in Nelson County.

3. That this Ordinance shall become effective upon its passage.

II.   Work Session – FY08 Budget

Mr. Carter noted that the goal of staff was to look at major items of focus for the Board, set subsequent budget meeting dates and get some direction from the Board in preparation for future meetings. He suggested that in looking at operations, if the Board’s agreeable to set a percentage to be cut, staff could go back through and make cuts; however the expenditure budget presented is bare bones. He then deferred to Ms. McCann to lead the work session.

Ms. McCann distributed a handout showing budget updates and items for FY08 budget consideration including:
Budget Update

1) Compensation Board estimate of revenues reflects an increase of $75,512.
2) Due to increases in delinquent collections, the General Fund transfer of $10,000 will
    not be required in FY07 or FY08. This generates an additional $10,000 in FY07
    carry-over revenue and frees up $10,000 in FY08.
3) The county received a $55,000 wireless grant from the state which will offset the use
    of the local funding from the E911 fund.
4) The School Board submitted a revised expenditure request reflecting an additional
    $116,767 in local dollars. The original request included $869,325 in additional local
    dollars for FY08.
5) The county just received the first remittance of $32,000 for the telecommunications
     tax. If this is representative of future monthly installments, the revenue yield will be
     substantially below FY06 revenue neutral amounts. In FY07, this translates
     to a $42,000 shortfall and possible $153,000 shortfall in FY08.

FY08 Budget Considerations

Revenues:
1) New sources of revenue
2) Real Estate tax rate
Expenditures:
1) Operations
   A. EMS Council
   B. Paid EMS
   C. Solid Waste Convenience Centers (staffing & hours of operation)
   D. Salary and benefits adjustments
   E. Other
2) Agency Contributions
   A. Senior Meals (consistent per meal price)
   B. Percentage adjustment
3) Capital Outlay
   A. Courthouse Project
   B. Front Street renovation
   C. Maintenance Shop roof
   D. Region 2000 Water Planning Study
4) Debt Service
5) Social Services & CSA
6) Schools & Nursing Program

Establish date for next budget work session.

Ms. McCann reviewed items 1 -5 of the budget update and it was noted by Mr. Bruguiere and acknowledged by staff that in relation to item 2., Linda Staton of the Finance Department was to be commended for her efforts in collecting on delinquent Piney River Sewer accounts and delinquent Street Light Tax accounts.

Item 5 was discussed with Mr. Carter explaining that the telecommunications tax change was supposed to be revenue neutral for localities but is yet to be determined and he then explained the distribution of the percentage share from the State. Ms. McCann noted receiving an email from the state that suggested that the telecommunications revenue should still be shown as local revenue as the State views it as “a local revenue being administered by the State.”

It was also noted that the estimated ABC tax revenue in the budget is the actual number and the actual sales tax revenue number for FY07 reflects a reduction of $10,490 from the estimated amount.

Ms. McCann noted a net gain in revenues as shown of $75,022 and a net gain of $10,000 in carry-over revenues.

Ms. McCann then overviewed a handout that outlined potential sources of new tax revenue including: increasing the Lodging Tax for FY08 from 3% to the maximum of 5% which would yield a projected $190,000 or $95,000 per 1% increase. It was noted that 26 out of 76 counties charge 5% or more; levying an Admissions Tax for FY08 of 5% on museums, performing arts, and winery/other to yield new revenues of $10,487. It was noted that the implementation of this tax could strengthen the County’s position for legislation that would allow an admissions tax for participatory sporting events, which has the potential to yield up to two million dollars in new revenues. Additionally, the local Motor Vehicle License Fees for FY09 could be adjusted from $20 to $23 for passenger vehicles and from $8 to $18 for motorcycles yielding $56,000 in new revenues. It was noted that 62% of counties charge $23 or more for passenger vehicles and 27% of counties charge $18 for motorcycles.

The Board discussed the merits of initiating the new revenue sources presented, at the beginning of the budget process and debated the use of the re-assessment funds and the use of fund balance as an alternative to new or increased taxes. Going from a flat rate business license tax to gross receipts was discussed and not deemed an attractive option. Mr. Carter noted he would check to be sure, but noted that he didn’t think the County could increase the flat rate above the current $30.   Instituting the increased lodging tax to 5% was discussed favorably as not having a primary impact on County residents and interest in this increase was expressed by Mr. Hale and Mr. Bruguiere. It was noted that an immediate decision was not necessary to meet the timelines for implementation in FY08 and no formal action was taken.

Mr. Carter noted that the Board would be charged with deciding what to do about meeting increasing demands from the schools, agency requests, and debt service payments for the Courthouse project. He noted anticipated increased costs associated with operating a building that is essentially three times as large as what we have now; such as increased security, custodial services and utilities etc. He expressed concern about the Board setting the bar too low with the upcoming reassessment. He noted that there is not much change in the revenue picture going forward and there is concern about becoming dependent on carry over monies that may not be there in the future and starting to erode the fund balance. He stated that Davenport is working on the modeling tool using fresh information for 5 year projections, to be presented using a 30% increase in Real Estate values. He noted in some scenarios presented in the models, there are some years where we just squeak by and 1 or 2 years of a deficit situation up to 2012 before the next scheduled reassessment. He noted that this was including a preliminary estimate of ten million for the radio system, which has been adjusted back to 4.6 million. Even in the scenario just including the courthouse project, a deficit situation is shown.

The Board decided to move on to discussion of the School division’s needs and request.

The Board inquired as to the yearly increases provided to the Schools. Ms. McCann noted that the school allocation had increased $400,000 in 04-05 or 5.3%, $649,461 (including $149,000 for capital) in 05-06 or 6.3%, and $805,422 in 06-07 or 7.2% (not including the $200,000 for capital), noting an average increase of $618,000 per year from FY04 to FY07.

Ms. McCann overviewed the copy of the summary report based on the school division’s summary that itemized savings from various sources and the associated costs of new initiatives and new positions and distributed a handout that summarized the most recent school request at $986,092.00, a 10.7% increase. The worksheet showed this number less new initiatives of $184,253.60 and less new positions of $261,464.80 yielded a reduced request of $540,373.60. It was noted that an increase of $262,447.00 is already included in the budget which would mean a difference of $277,926.60 that would need to be made up by increased revenues or cutting expenditures. She noted that the percentage salary increase included is 4% plus a step.

The use of a percentage method to determine the school’s allocation and the Board’s willingness or lack thereof to raise taxes for school funding and what is reasonable and affordable was discussed.

Mr. Carter and Ms. McCann reiterated that the amount currently budgeted represents the local match based on the composite index applied to the proposed increase in State funding of about $550,000. It was noted that Nelson is currently two million dollars over the required local effort for school funding. The big jump in FY06 school funding was noted to include increases for VRS rates, fuel costs and the inclusion of $200,000 in carryover funds initially earmarked for capital but included in the transfer to operations, which has to be made up for in subsequent years.

The Board discussed historical school funding trends and the School Board’s request. Mr. Carter noted that the current estimated cost of the Courthouse was $19,844,000 with an annual debt service payment of $1,450,000 which equates to $.10 that needs to be kept out of the upcoming reassessment. Additionally, the increase to the schools being discussed is approximately $.02 more cents; which the Board will need to consider when setting the tax rate next spring. The Board discussed briefly the merits of shortening the reassessment cycle further and alternatively doing incremental tax rate increases between reassessment years to soften the blow of huge increases to the tax payers. Mr. Carter noted that a long reassessment cycle is one reason the County’s real estate Fair Market Value percentage is at 45.4% and the County loses that differential (from 100%) in Consumer Utility taxes. He noted that increases in values can only be captured during re-assessment years. The Board’s consensus was to use the $540,374 School funding number, representing the full request less the proposed new initiatives and new positions as the initial allocation for operational funding. It was clarified that this would require an additional $277,927 more than the budgeted amount of $262,447. The Board thought it prudent to let the school division know of this initial allocation and there was some interest in meeting with the School Board on the budget allocation, but no consensus was reached. The Board briefly discussed the large number of potential school system retirees and related savings and the County’s retiree health benefits.

Mr. Carter noted that the expenditure side of the County’s budget is driven by a 4% salary adjustment, 2.7% health insurance increase and a limited number of essential expenses. He noted some capital expenditures that are currently in process. He noted that the 4% increase was proposed to be commensurate with what the State Compensation Board and School system are proposing. There was some discussion about the proposed salary increases and retiree benefits.

Ms. McCann briefly explained each revenue item in the synopsis that showed a decrease, noting specifically the downward trends in public service taxes, building permit revenues and recordation taxes which tend to correlate with each other, and decreases in court fines & forfeitures and Sheriff’s fees were also noted and discussed.

Mr. Carter noted that the Board should focus on the local revenues which are the drivers of the budget and looking at projected vs. proposed revenues shows a more realistic picture. Ms. McCann then explained the relationship of the numbers and categories shown on the synopsis sheet to the numbers on the detailed budget print-out and where they can be found and cross referenced.

Ms. McCann and Mr. Carter noted that the Board needed to set the tax rates, noting that if they did nothing they would remain the same.

Ms. Brennan moved that the Real Estate tax rate remain at $.72 and the motion was seconded by Mr. Harvey. There being no further discussion, Supervisors voted unanimously (5-0) to approve the motion.

The Board agreed by consensus that all other local property taxes would remain the same as in FY06-07.

III.   Other Business

A.   Resolution –R2007-026 2007 Personal Property Tax Relief

Ms. McCann gave an overview of the Resolution explaining that the percentage of tax relief will change annually because it is proportionate to the values. This is expected to decrease because as the personal property values increase, the amount of relief decreases.

Ms. Brennan moved to approve resolution R2007-026 and Mr. Harvey seconded the motion. There being no further discussion, Supervisors voted unanimously (5-0) to approve R2007-026 as follows:

RESOLUTION (R2007-026)

NELSON COUNTY BOARD OF SUPERVISORS

2007 PERSONAL PROPERTY TAX RELIEF

WHEREAS, the Personal Property Tax Relief Act of 1998, Va. Code § 58.1-3523 has been substantially modified by the enactment of Chapter 1 of the Acts of Assembly, 2004 Special Session I (Senate Bill 5005), and the provisions of Item 503 of Chapter 951 of the 2005 Acts of Assembly; and

WHEREAS, the Nelson County Board of Supervisors has adopted an Ordinance for Implementation of the Personal Property Tax Relief Act, Chapter 11, Article X, of the County Code of Nelson County, which specifies that the rate for allocation of relief among taxpayers be established annually by resolution as part of the adopted budget for the County.

NOW THEREFORE BE IT RESOLVED that the Nelson County Board of Supervisors does hereby authorize tax year 2007 personal property tax relief rates for qualifying vehicles as follows:

•   Qualified vehicles with an assessed value of $1,000 or less will be eligible for 100% tax relief;
•   Qualified vehicles with an assessed value of $1,001 to $20,000 will be eligible for 60% tax relief;
•   Qualified vehicles with an assessed value of $20,001 or more shall be eligible to receive 60% tax relief only on the first $20,000 of assessed value; and
•   All other vehicles which do not meet the definition of “qualifying” (business use vehicle, farm use vehicle, motor homes, etc.) will not be eligible for any form of tax relief under this program.

BE IT FINALLY RESOLVED that the personal property tax relief rates for qualifying vehicles hereby established shall be effective January 1, 2007 through December 31, 2007.

Adopted: March 19, 2007           Attest: _____________________________, Clerk
                       Nelson County Board of Supervisors

B.   Resolution –R2007-027 Local Choice Health Benefits Renewal

Ms. McCann explained that the renewal forms were due to Local Choice by April 2, 2007 and that the County was very fortunate to only have a 2.7% increase in premiums. The rates reflected in the resolution are the full premiums, both employer and employee portions. Ms. McCann noted that the County picks up the full cost of the individual premium on the base plan and about 30% of the dependent coverage for the other levels of coverage. The full funding of the individual premium on the base plan was briefly discussed as an item that could be revisited in the future.

Ms. Brennan moved to approve resolution R2007-027 and Mr. Harvey seconded the motion. There being no further discussion, Supervisors voted unanimously (5-0) to approve R2007-027 as follows:

RESOLUTION (R2007-027)

NELSON COUNTY BOARD OF SUPERVISORS

LOCAL CHOICE HEALTH BENEFITS PROGRAM RENEWAL

WHEREAS, Virginia Administrative Code Chapter 20 governs the Local Choice Health Benefits Program and provides that local government employers may participate in this program;

NOW, THEREFORE, BE IT RESOLVED, that the Nelson County Board of Supervisors does hereby authorize the continued participation in the Local Choice Health Benefits Program with renewal premiums reflecting a 2.7% increase over current premiums. Monthly renewal premiums effective for coverage beginning July 1, 2007 through June 30, 2008 are as follows:

ACTIVE EMPLOYEES/
RETIREES NOT ELIGIBLE FOR MEDICARE   SINGLE     DUAL   FAMILY
Key Advantage Expanded                  $530           $981         $1,431
Key Advantage 200                      $510           $944      $1,377

RETIREES WITH MEDICARE
Advantage 65                          $135

Adopted: March 19, 2007       Attest: ___________________________, Clerk
                               Nelson County Board of Supervisors

C.   Resolution –R2007-028 Land Use Classification Panel

Mr. Carter noted to the Board that staff research indicated that the annual appointment of this Panel and the setting of their rates of pay needed to be done and noted verbal confirmation provided by the County Attorney. There was brief discussion about the panel’s review of parcels and it was noted that not all applications were verified by the panel; only new applications and those that seemingly needed verification are done annually.

Mr. Hale moved to approve resolution R2007-028 and Mr. Harvey seconded the motion. There being no further discussion, Supervisors voted unanimously (5-0) to approve R2007-028 as follows:

RESOLUTION -R2007-028

NELSON COUNTY BOARD OF SUPERVISORS

2007 LAND USE CLASSIFICATION PANEL

BE IT RESOLVED, that the Nelson County Board of Supervisors does hereby appoint Mr. Gordon Fletcher, Mr. Hughes Swain, and Mr. John E. Purvis to the Land Use Classification Panel for calendar year 2007, to be effective January 1, 2007.

BE IT FURTHER RESOLVED, that compensation for said panel be set at $100 per day with mileage reimbursement at the current approved rate of $.485 per mile.

Adopted: March 19, 2007       Attest: ________________________, Clerk
                               Nelson County Board of Supervisors

D.   NCSB- High School Paving Project

Mr. Carter noted the letter sent from Doctor Collins relating that the bids had come in on the High School Paving project at $627,184. He noted that this cost estimate less a contingency of $55,875 and less Engineering amounts paid of $3,140 yielded an immediate funding requirement of $568,169. Funding sources noted were US Bank project funds in the amount of $410,115, VPSA 2004D Refunding from SNAP account of $141,951 less estimated arbitrage rebates of $29,000 to yield an available funding amount of $523,066. Subtracting the available funding from the immediate funding requirement leaves an immediate funding shortfall of $45,103. It was noted that $83,744 was previously paid out of the SNAP funds for replacement of the damaged NMS gym floor. This is currently in mediation/litigation, and it is possible that this expense may be partially or fully reimbursed by either the contractor or the insurance company.

The Board discussed the project and agreed that any further delays would only make it more costly.

Mr. Harvey moved to approve funding of the immediate funding shortfall in the amount of $45,103 with the stipulation if or when monies are received from the gym floor mediation/litigation; the $45,103 is paid back to the County.

Ms. McCann then clarified that the $45,103 would come from fund balance. Mr. Carter expressed concern that the schools could come back and ask for some of the contingency since no contingency is included but that this would enable the project to go forward. The Board discussed the contingency as not particularly necessary.

There being no further discussion, the motion was seconded by Mr. Hale and Supervisors voted unanimously (5-0) to approve the motion.
In response to questions about tax relief to the elderly, Mr. Carter noted that the Commissioner of Revenue was considering a proposal to increase the tax relief for the elderly next year and Supervisors requested a report on the issue.

Mr. Carter noted to the Board that the Wintergreen-VHDA issue was not included on the agenda because staff is waiting for VHDA to provide a legal opinion concerning the State Code language regarding the revitalization area as it relates to their loan program being used by Wintergreen to fund associate housing. The Board’s consensus was that staff should not spend any more time on the issue as they are not willing to pass the resolution as is and would not reconsider it unless the State (VHDA) can back themselves up.

The Board discussed meeting dates for the next budget work session and agreed on March 28th from 5-7 PM. Mr. Harris noted he needed to leave and exited the meeting.

Mr. Carter inquired as to how staff can make the budget process easier and the Board discussed looking at expenses by category and coming back with questions vs. going through it by department. There was some consensus that the Agencies should be looked at individually. Ms. McCann noted that a 1% increase to the level funded agencies is approximately $8,100.

The composite index affecting Nelson’s state funding for schools was discussed and it was noted that only two other counties in the state have a similar composite index, those being Bath and Surry Counties.

IV.   Adjournment

At 8:40 PM, Mr. Harvey moved to adjourn and continue the meeting until the next budget work session scheduled for March 28th at 5 PM at the Lovingston Courthouse. Ms. Brennan seconded the motion and Supervisors voted unanimously (4-0) to approve the motion with Mr. Harris being absent for the vote.