Board of Supervisors: February 21, 2008

February 21, 2008

Virginia:

AT A CONTINUED MEETING of the Nelson County Board of Supervisors at 5:00 P. M. in the Circuit Court Room located in the Nelson County Courthouse.

Present:     Thomas H. Bruguiere, Jr. West District Supervisor
       Allen M. Hale, Vice Chairman, East District
       Constance Brennan, Central District Supervisor
       Joe Dan Johnson, South District Supervisor
       Stephen A. Carter, County Administrator
       Candice W. McGarry, Administrative Assistant/Deputy Clerk
       Debra K. McCann, Director of Finance and Human Resources
       Roger Collins, Superintendent of NC School Division
       Shannon Irvin, Asst. Superintendent of NC School Division
       Kathy Hughes, Clerk to the NC School Board
       Nelson County School Board Members, Jane Bibb absent

I.   Call to Order

Mr. Harvey, Chairman called the meeting to order at 5:00 p.m. with all members present to establish a quorum.

A.   Moment of Silence
B.   Pledge of Allegiance

The Chairman recognized Mr. Edward L. Embrey of the EMS Council who discussed the multiple fires in the County over the previous weekend, including a 400 acre fire incident. He urged the Board to write a letter or adopt a resolution commending all of the EMS agencies and County staff for the outstanding job they had all done in managing these incidents. The Board directed staff to prepare a resolution for consideration at the next meeting.

II.   FY08-09 Budget Work Session

Mr. John Kirchner, Chairman of the School Board noted that they had just received the School Division’s proposed budget and that currently the expenditures exceed State, Federal and Other revenues by $2.5 million, in part due to the change in the composite index, which reduced State revenues, and increases on the expenditure side. The Boards discussed the impact of the change in the composite index and changes in enrollment due to discontinuation of the Virtual Academy in FY09. Standards of Quality (SOQ) positions were discussed and School Board members stated that the Vocational SOQ requirement is 4 staff members with current staffing at 14 at the Middle and High School, noting they would be looking at how to streamline these programs. Ms. Irvin noted that the budget included a 4% COLA ( plus a step) increase for employees approximating $850,000 with associated benefits, an increase in VRS retirement rates costing $200,000 and an anticipated Health Insurance increase of around $250,000 plus additional increases in fuel and other operating costs. School Board members reiterated their commitment to maintaining low student/teacher ratios, especially at the elementary school level, and maintaining competitive starting teacher salaries. The Board of Supervisors noted their desire to maintain low student/teacher ratios especially in grades K-3 and maintain the current level of services. However, the Board stated that it is an affordability issue, noting that the requested local funding increase is four (4) times the normal amount and would approximate a 27% increase over last year. Mr. Carter reported that all things remaining the same as last year, the local contribution to the School Division would still be more than $1 million dollars over the required local effort. The School Board also noted that they are exploring ways to leverage other funding opportunities to increase other revenue streams. Dr. Collins stated that he would like to know an unofficial local contribution amount in order to be able to notify those staff members who will need to seek other employment, if need be, as soon as possible.

In conclusion, both Boards agreed that the School Board would work to reduce their budget, the Board of Supervisors would provide an estimated amount of local funding as soon as possible, and shared knowledge and information was important so that they can all be on the same page.

The Board of Supervisors took a short break from 6:00pm to 6:10pm prior to resuming the FY08-09 Budget Work Session with County Staff.

Staff overviewed a handout that summarized the revenue shortfall facing the School Division based on the numbers that they had previously provided. Mr. Carter noted the loss in State revenue due to the increase in the composite index is $481,978 and a potential decrease in enrollment from 2000 to 1950 yields a loss of $150,538 for a total reduction in State revenues of $632,516. Federal revenues were shown to be reduced by $71,809 and other revenues reduced by $77,567 for a total revenue loss of $781,892. Staff advised the Board that elimination of the Virtual Academy resulted in a lower enrollment and subsequently lower State funding, but also resulted in a cost savings on the expenditure side, estimated to be around $78,089 which would mitigate the loss in State revenues and result in a shortfall of $403,889.

Ms. McCann noted the following relative to the calculations provided:

The original FY08 School Fund Budget was based on an enrollment of 2000 students. The FY09 budget is based on a projected decreased enrollment of 1950. If this decrease is not realized, the state loss would only be $481,978.   She noted that the loss due to enrollment can be addressed once school begins when a more accurate student count is available. The decision to continue or discontinue the Virtual School Program is a significant factor that may impact enrollment in the coming year. She stated that the Virtual School Program boosted enrollment numbers in FY08 resulting in a budget amendment to reflect additional state dollars in the amount of $245,781. The FY09 budget is proposed without the program which also has the effect of reducing expenditures as compared to FY08. The total cost of the program in FY08 is estimated to be $323,870 with $245,781 of that cost coming from the budget amendment as noted above and the remaining cost of $78,089 from within the original FY08 budget. The $78,089 would be a reduction in expenditures that reduces the impact of the overall loss in state funds.

The FY09 School Fund Budget also reflects a decrease in federal funding of $71,809. She noted that since Federal Programs operate on a fiscal year that runs from October through September, typically the School System does not know the exact amount of federal awards at the time their budget is developed. Over the last several years, a budget amendment is submitted in late fall to reflect additional federal awards not included in the original budget. In FY07 the additional amount of federal awards was $428,266, and in the current year it was $227,163. The federal funding shortfall may be better addressed after the amounts of federal awards are confirmed.

She then stated that the reduction in local revenue (non-General Fund) is attributed to two particular program areas. The first program is the after school program which was budgeted in FY08 to generate $97,027. This program is no longer being operated by the school system and as a result no revenue or related expenditure is reflected in the FY09 budget. The second program is the Special Education PREP program. The regional program reimburses the locality based on costs incurred. Revenues projected for FY09 reflect a reduction of $56,329 which would correlate to reduced expenses. These local revenues do not reflect true losses as they are offset by expenditure reductions.

The Board discussed the State funding shortfall including whether or not the difference in the amount over the required local effort between fiscal years is the actual shortfall. Supervisors indicated that County Staff and School Division staff should work toward a consensus on what is the state revenue shortfall and noted that it appears that the local funding range should be within the range of $632,516 to $2.5 million.

Staff then reported that the land use adjustment to taxes based on $.72 is around $4.45 million dollars that is deferred. Supervisors discussed the land use program acknowledging that the associated reduction in tax revenue is significant and discussed the program’s contribution to maintaining the rural character of the County. Mr. Carter noted that should the tax rate decrease from the current rate, the property owners in the land use program would actually pay less in taxes due to the fact that their values remain constant as set by the Commissioner of Revenue. He stated that the Commissioner of Revenue has the discretion, as prescribed by State Code, to set the land values for the land use program. He also noted that she considers rates provided by Virginia Tech and the SLEAC (State Land Evaluation Advisory Council) in setting those values for the County. He noted that due to declining values provided by Virginia Tech and the SLEAC, the Commissioner has held the values constant for some time now. Mr. Carter then suggested there may be other ways to recoup some of the lost revenue for the program by adjusting the application fees upwards from the current $50. It was discussed that the $50 application fee applies to each parcel of land, even if contiguous. Supervisors directed staff to gather more information on the land use program including reaching a consensus to approach the Commissioner of Revenue about adjusting the land use values such that those in the program would not pay less in taxes in the coming year.

Mr. Carter then noted that a possible source of additional revenues for the County would be to increase the vehicle license tax from $20 to $33, which would yield approximately $200,000. The Board’s consensus was not to consider this increase for the upcoming year.

Supervisors then reviewed a summary of the first draft of the County budget focusing first on requested new staffing positions and a proposed 4% salary adjustment for employees. The Board made the following changes:

$66,789 for an Assistant Planning Director, $50,938 for a Soil & Erosion Inspector, $49,978 for a Budget & Procurement Technician, and $51,808 for a Records Manager were deleted from the budget. $46,286 for the Assistant Emergency Services Coordinator position was left intact to be considered further at a later date and the 4% salary increase for County staff and Constitutional Offices was left intact. The $17,995 proposed dispatcher shift differential was left intact in order to possibly provide funding for re-grading of the dispatch positions (rather than initiating a shift differential).

Agency funding was briefly discussed with Staff noting that level funding was proposed with no funding recommended for new requests. Staff noted that full funding of the agency requests amounted to $139,308 a 10.28% increase. Supervisors deferred review of the agencies until a later date.

Supervisors reviewed optional items for consideration and made the following changes:

$39,500 for hardware and software for records management, $17,000 for a vehicle for the proposed Soil & Erosion Inspector, and $50,000 for review of Comprehensive Plan were removed from the budget.

$23,000 for equipment to allow credit card payments in the Treasurer's Office and $9,000 for laptops for Supervisors remained in the budget.

$5,500 for a network control modem for disaster recovery, $32,000 for a Reverse 911 notification system and $25,286 for Paid EMS weekend coverage remained in the budget pending further discussion at a later date.

III.   Other Business (As May be Presented)

Piney River Volunteer Fire Department Interest Free Loan:

Mr. Harvey noted to the Board that in order for the Piney River Volunteer Fire Department interest free Loan to be disbursed it was necessary to put an additional $150,000 in to the loan fund. He stated that this could be done conditionally as a one-time allocation to be returned to the General Fund; with the first $150,000 that is paid back to the fund coming back to the County.

Ms. Brennan made a motion to approve the additional funds of $150,000 to the EMS Interest Free Loan Fund for the Piney River Volunteer Fire Department, with the condition that the first $150,000 paid back is returned to the General Fund. Mr. Bruguiere seconded the motion and there being no further discussion, Supervisors voted unanimously (5-0) by roll call vote to approve the motion and the additional funding.

Mr. Harvey noted that they would need the funds disbursed by Thursday of the next week.

Nelson Heritage Center:

Mr. Carter noted to the Board that the Heritage Center had some pending issues and that Ms. Brennan and Mr. Harvey would be meeting with Edith Napier Wardlaw of the Millennium Group to discuss these. Mr. Carter also stated that per a cursory review by Nolen Frisa (Engineering Consultants) the cost to demolish the gym at the Heritage Center would be approximately $220,000.

Next Budget Meeting:

The Board discussed meeting again for a budget work session and decided not to meet again prior to the regular meeting on February 28th.

IV.   Adjournment

At 7:50 PM, Mr. Hale moved to adjourn until the regular session on February 28th. Ms. Brennan seconded the motion and Supervisors voted unanimously by voice vote to approve the motion and the meeting was adjourned.