The Wise County Board of Supervisors met in a Special Called meeting on Wednesday, April 23, 2014 @ 6:00 PM in the School Board Education Center located on Lake Street in Wise. The following members were present:
Honorable Robert R. Adkins – Chairman
Honorable Virginia Meador – Vice-Chair
Honorable Fred Luntsford
Honorable Ronald L. Shortt
Honorable Steve Bates
Honorable Dana Kilgore
Honorable Robert E. Robbins, Jr.
Honorable J. H. Rivers – members of said Board and
Shannon C. Scott – County Administrator
David L. Cox – Finance Administrator
Karen T. Mullins – County Attorney
Annette Underwood – Executive Secretary
SCHOOL BOARD - BUDGET PRESENTATION – POWER POINT
Dr. Jeff Perry, Superintendent of Public Schools, provided the following power point presentation on the School Budget for FY 2014/15:
He began his presentation with comments regarding School Board’s understanding of the financial struggle the County is facing at this time. He stressed that financial need for both the school system and the County, need to be shared with efforts to make cuts where possible and to save where possible.
The Operating budget was reviewed.
The health insurance rates were reviewed with a chart showing the steady increase since 2009.
The chart for VRS rates for school staff starting in 2009 was reviewed showing a decrease in 2011 and increases thereafter.
The chart for showing the WCPS local composite index was reviewed showing a steady increase since 2009.
The chart showing Wise County required local effort was reviewed.
School’s Efforts to Reduce Budget
Reviewed the chart showing staff reductions.
Regarding Academic Success, the state ranking SOL results for 2013 were reviewed and discussed.
Dr. Perry touched on the difficult economic times, the need to focus on economic development and what the public schools can provide to help Wise County move forward.
In his closing remarks, Dr. Perry made the following recommendations and requests:
Fund the current budget request
Engage in conversations with BOS
How to reduce budget next year
Provide school with time to prepare
Share services to save money
Make a decision soon
Stop rumors and fear
Plan for next year
Issue contracts/keep good staff
Create spirit of cooperation
Ms. Meador was concerned that in Dr. Perry’s presentation he did not give the County credit for taking care of debt service nor did he mention the extra funds that the County gives above the required amount.
Dr. Perry explained that the State has noted that since the School Division has no fiscal ability to generate money, so that makes the Board of Supervisors responsible for that debt. When the State looks at required local effort, they separated buildings and grounds out because this may take away from things that are required such as teachers pay.
Dr. Perry explained that if they had not had the increase in the local composite index, there would have been another $2M from the State. That would have made a big difference in Wise County and the surrounding counties. He noted some counties are having classes on line because they cannot afford teachers. On line teaching is cheaper, but the quality of learning is based on good teachers. Any further cuts to their budget at this time, he said would make a negative impact on the instructional program.
He asked that in the future, conversations regarding the budget begin in January and February to allow time to make decisions on cuts and/or adjustments in the budget process. Sharing in services and working together to make the right decisions for both parties will help Wise County move forward.
In his final remarks, Dr. Perry asked that they be funded for this year as was presented to the Board with the understanding if there is surplus money in the State budget it will be reverted back to the Board and if there is a surplus at the end of this fiscal year, that will also be reverted back to the Board. It is late in the year to make cuts at this time.
Board members congratulated Dr. Perry and the School System for the good academic scores that were received for Wise County.
Ronnie Shortt made a motion to accept the School Board budget as presented. Dana Kilgore seconded the motion.
Fred Luntsford stated that Finance Administrator Cox has important information related to the budget and addresses some of the concerns that were brought before the Board. He felt the Board should hear his presentation before taking a vote on this motion.
Mr. Cox stated that this was a part of his presentation and he wasn’t expecting the Board to vote at this meeting. However, he has been working with Davenport regarding re-structuring of the school loan. He explained the initial interest and cost to extend the principle payments to refinance the loan for three years was $1.8M which is over the 20 year amortization period. The other issue is the $4.5M or $1.5M annually for the next three years that would require re-payment beginning in 2018. Regarding the $1.8M interest mentioned at the last meeting, over a 10 year period that would be $180,000 that could go back to debt service. The Board also has the option of putting the $4.5M left from the capital money of high school construction into debt service. If the Board wants to start building a debt service fund, he would recommend doing this. There would be time on the amortization to begin this next year This would give the School Board indication next year that that amount be funded into debt service and the operational budget would be further reduced by that amount.
After further discussion, Ronnie Shortt withdrew his motion and Dana Kilgore withdrew her second.
Mr. Cox presented his current draft budget summary as follows:
After 3 cents real estate tax increase
Projected revenues.. $49,922,802
Projected expenditures.. $49,774,910
Net balance.. $147,892
Balanced budget and no use of fund balance
5 cent personal property would provide.. $200,000
Net balance if 5 cents is approved .. $347,892
Recommend placing full amount into debt service fund
Remaining balance of high school construction – Consider re-designating to debt service at the May meeting. This, he said, would require an amended resolution to move that money into debt service.
Mr. Cox noted that in projected expenditures, there are no personnel cuts but 5% has been cut from every department. There is no fund balance being used at this point in balancing the budget.
If the Board decides to rescind the decal ordinance, in order to keep the same amount of revenue, the Board may want to consider increasing the personal property tax to 7 cents, which would bring in approximately $80,000. This would be a $20,000 decrease from the amount collected from the decal.
Board consideration of rescinding decal
Replacing with an additional 2 cents on personal property
Decal revenue is currently around $100,000
2 cents on personal property is approximately $80,000
Net decrease of ($20,000)
Total personal property increase would be 7 cents under this scenario
He reviewed the draft budget timeline requesting to set the public hearing on the FY 2014/15 budget at the May 8th Board meeting.
After further discussion, Fred Luntsford made a motion to accept the School Budget as presented with the caveat that any surplus money from the State would come back to the County with no strings attached and be placed in the debt service fund. Virginia Meador seconded the motion.
J. H. Rivers asked Dr. Perry if he could see any State surplus funds that may come back to the County.
Dr. Perry noted that there are certain things that are mandated by State, but they will return as much of that amount as possible which includes any surplus at the end of this fiscal year. He recommended to the Board that both parties meet in January or February to talk about cuts etc.
Dana Kilgore said she thought the motion was too restrictive.
Ronnie Shortt made a substitute motion to accept the School budget as presented to be a part of the County budget. Dana Kilgore seconded the motion.
Aye Fred Luntsford Nay- Virginia Meador
J. H. Rivers
IN RE: PERSONAL PROPERTY TAX RATE
A motion was made by Dana Kilgore, seconded by Ronnie Shortt, to set a public hearing for May 8, 2014 at 6:00 PM on a proposed tax levy of $1.56 based on 100% of NADA loan value for personal property for FY 2014/15. The motion was unanimously approved.
IN RE: STORM WATER MANAGEMENT OPT-IN
Attorney Mullins explained the Storm Water Management Opt-In Plan and the legislation changes that have recently been introduced regarding said Plan. She recommended authorizing the County Administrator to sign the Opt-In form, and an ordinance will be provided for the Board’s review at the May meeting.
A motion was made by Ronnie Shortt, seconded by Steve Bates, to authorize the County Administrator to execute the Locality VSMP Opt-In Form for the Storm Water Management Plan. The motion was unanimously approved.
A motion was made by Steve Bates, seconded by Ronnie Shortt, to adjourn the meeting. The motion was unanimously approved.
ATTEST: WISE COUNTY BOARD OF SUPERVISORS
Shannon C. Scott, Clerk Robert R. Adkins, Chairman