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HomeMy WebLinkAbout1996-10-14 adjOctober 14, 1996 (Afternoon-Adjourned Meeting) (Page 1) 00023 An adjourned meeting of the Board of Supervisors of Albemarle County, Virginia, was held on October 14, 1996% at 4:30 p.m., Room 235, County Office Building, McIntire Road, Charlottesville, Virginia. This meeting was adjourned from October 9, 1996. PRESENT: Mr. David P. Bowerman (arrived at 4:39 p.m.), Ms. Charlotte Y. Humphris, Mr. Walter F. Perkins and Ms. Sally H. Thomas. ABSENT: Mr. Forrest R. Marshall, Jr., and Mr. Charles S. Martin. SCHOOL BOARD MEMBERS PRESENT: Mr. John Baker, Mr. R. Madison Cummings, Jr., Ms. Susan C. Gallion, Mr. Joseph, Mr. Stephen Koleszar, Ms. Karen Powell and Dr. Charles M. Ward. OFFICERS PRESENT: County Executive, Robert W. Tucker, Jr., and County Attorney, Larry W. Davis. ALSO PRESENT: Dr. Kevin C. Castner, Division Superintendent, Mr. A1 Reaser, Director of Building Services and Deputy County Attorney, Mr. Mark Trank. Agenda Item No. 1. The meeting was called to order at 4:32 p.m., by the Supervisors' Chairman, Ms. Humphris, and the School Board Chairman, Ms. Powell. Agenda Item No. 2. Discussion: Financial Planning. Mr. Tucker said that at the September 16, 1996, Financial Planning work session with the School Board, the Supervisors requested that a second meeting be held to continue discussions on the projected revenue shortfall over the next five years. Information which was presented at the last meeting on short-term and long-term solutions has been sent to the Boards in written form during the interim. Ms. Roxanne White, Executive Assistant, said in Scenario I staff has revised the estimates for the shortfall for the next five years. In FY 1997- 98, $432,000 has been saved, but the estimates show a greater increase in the deficit over the out years. This was changed based on: County population growth rates have been adjusted from an average annual increase of 1.02 percent used in the prior projections to 1.5 percent based on discussions with the Virginia Employment Commission (VEC) and the University's Center for Public Service. The revised annual growth rate, which should more accurately reflect the County's population over the next five years, is used in the revised scenario to project General Government baseline increases along with the Consumer Price Index (CPI). Virginia Retirement System (VRS) Cola payments were increased in the out years to reflect the cumulative costs for both General Government and the School Division, plus the annual rate increases in the School Division, which were not included in the initial analysis. Revenue Sharing Agreement projections have been revised by the Depart- ment of Finance based on a reevaluation of their initial assumptions. Their original projection was based on weighted averages since the beginning of the Agreement. Their revised estimates are based on a more realistic three percent increase on the 1997 reassessment and carried forward for the next several years. Projected Debt Service costs for expanded and new school projects in the FY 1998-2002 Capital Improvement Program (CIP) have been added to the School Division costs, since additional Virginia Public School Authority (VPSA) bonds will increase the Debt Service payments each year. Ms. White said that in the fifth year, there are not a lot of ~good" numbers for expenditure projections. Looking at the enormous cost increases in VRS for both General Government and the School Divisions is a cost staff did not know about one year ago. Things do come up which cannot be planned for. 000232 October 14, 1996 (Afternoon-Adjourned Meeting) (Page 2) Ms. White said Option 1 discussed at the last meeting was to either defer or eliminate capital projects which would have the following impacts on the operating budget shortfalls: Debt Service costs would be reduced freeing up revenues for other operating costs. Deferring all the major school projects such as Murray, Henley, Red Hill, Walton, a new Northern Elementary, Greet, Jouett and Stone Robinson could reduce the five-year Debt Service costs by approximately $1.74 million. The Capital Transfer would be reduced thus freeing up revenues for other operating expenses. Since this is the only source of funding for General Government projects, this would have the greatest impact on non- school capital projects. Since many FY 1998-2002 CIP projects have already been committed, the impact would be on the following types of projects: fire/rescue contributions, police computers and radio system, highway and sidewalk projects, and parks, athletic fields and the Rivanna Greenway. The operating costs associated with the deferred projects would also be reduced, thereby freeing up other revenues. Examples of these types of operating expenses are support and training costs for new computers, maintenance of entrance corridors and parks, fire service personnel and custodial and maintenance costs of new and expanded facilities. Ms. White said Option No. 2 is to use more borrowed funds for Capital Maintenance and Repair Projects. The County's Financial Policy which was adopted in October, 1994 increased the annual CIP transfer, with a correspond- ing increase in current revenues used to fund maintenance and repair projects in the School Division. This amount increases from $500,000 in FY ~98 to $1.0 million in FY '2002, but does not cover the total maintenance and repair costs requested by the School Board over the five-year period. The impact of using borrowed funds for maintenance and repair projects would be increased Debt Service payments over the five-year period of $746,500, as well as being contrary to the adopted Financial Policy. If VPSA funds were used for maintenance projects as a temporary measure, new revenues would be needed at some point to begin rebuilding the maintenance and repair revenues back to the current level. Ms. White said Option 3 is to use one-time Fund Balance moneys to fund CIP projects. There is currently a Fund Balance of about $15.0 million. The Director of Finance has said that he requires about $13.0 million for cash flow needs. There has been a recommendation from the CIP Technical Committee to use about $750,000 of the $2.0 million that can be freed up, and to put that back into School capital projects because those revenues, which were unanticipated, came from the split-billing of taxes. Approximately $1.2 million of the Fund Balance could be allocated tO one-time capital projects thereby freeing up a like amount in the CIP transfer to be used for other needs. She noted that these one-time revenues could be used only for one-time costs, and could not be used for on-going operational expenses. The major expenditures, i.e., VRS, bus replacements, textbooks, associated capital operations including the new high school, are on-going expenditures, and not one-time costs. Ms. White said that raising revenues is the major impetus of long-term solutions, These would include: Meals Tax. A meals tax would provide approximately $2.3 million in on- going revenues. The allocation of these revenues would be at the discretion of the Board of Supervisors. General Property Taxes. A one-cent increase in the real property tax rate would generate an additional $544,000 in revenues in FY 1997-98. one-cent increase in the personal property tax rate would generate an additional $49,000 in revenues in FY 1997-98. A Charges for Services. Approximately $705,000 could be picked up at a 100 percent maximum on fees for services for both development and parks departments. That is a maximum amount. This needs further review and also requires policy decisions about percentages of cost that would need to be recognized. October 14, 1996 (Afternoon-Adjourned Meeting) (Page 3) 0002 3 Transient Taxes. An amount of $570,000 could be realized from transient taxes, but that amount would have to be used for tourism and travel related expenses. There are some projects those dollars might be used for if the tax were increased as allowed by the 1996 Legislature. Those are: Entrance Corridor Improvements Bike Lanes Rivanna Greenway Associated operating costs of these projects $203,000 297,000 350,000 178,760 Land Use Tax Changes. Making a major change in the Land Use Taxation Program would recognize about $5.5 million. Eliminating all categories of land use taxation except those properties in agricultural/forestal districts would net approximately $4.1 million. Several counties have eliminated use value on forest land only, which for Albemarle County represents more than 65 percent of the land currently enrolled in the program. Ms. White said the last category is to look at long-term solutions for expenditures. To reduce expenditures in General Government, the suggestions are: Hiring freezes. The impact of this would depend on the number of positions vacated during the year. Across-the-board cuts. This would impact the service levels across all County departments with the greatest impact falling on small depart- ments. Reduce service levels in selected departments and programs and/or operating hours at parks, recreational programs, library, etc. Eliminate funding of any discretionary agency requests. Annual savings could be $1.5 million. Ms. White offered to answer questions about the presentation. Ms. Thomas said she has previously asked about an ~admissions" tax. She believes it would require action by the General Assembly before it could be implemented, but it has been allowed in some other counties. She asked if there is a revenue figure associated with that tax. Ms. White asked the County Attorney to address that question. Mr. Davis said some counties have been given the authority to impose an admissions tax, but to date, no County has actually imposed the tax. There were some constitutional issues that arose when Fairfax County tried for an admissions tax on theaters. That is an issue that would need to be settled even if Albemarle County were enabled to do so by the General Assembly. Mr. Tom Nash, Director of Special Education/Student Services, said he was asked to develop some information on possible savings in terms of person- nel or transportation. The schools are staffed in two ways. A base instruc- tional allocation that is basically done on enrollment, 15 students for one FTE instructional person in elementary schools, and 15.84 for one in middle and high schools. This basic allocation includes a lot of different folks, teachers, teaching assistants, counselors, media specialists, etc. The basic allocation does not translate directly to class size because a lot of people are included in the ratio. When talking about 15:1 that looks at all instruc- tional positions. Therefore, actual class size will be in the low twenties, depending on the school and the programs. There is also a special education allocation that is completely separate based on the actual needs of the identified special education students in the school. Special education students are counted as full students in both the basic allocation and the special education allocation. Mr. Nash said that in last year's budget the Schools looked at increas- ing the base instructional allocation to 16:1 and 16.84:1, in other words, one full student per FTE. Based on that change, $420,000 could have been saved. In addition, they looked at taking special education students, who receive more than 50 percent of their services outside of the regular classroom, and counting them as 0.6 rather than 1.0 for the base staffing allocation. That would have saved about $350,000. These same kinds of changes had been looked at in other years. October 14, 1996 (Afternoon-Adjourned Meeting) (Page 4) 000234 Mr. Nash said Transportation is another cost area. The Transportation budget is about $4.7 million, or seven percent of the budget. Based on the current schedule, they are also looking at about $1.5 million per year in bus replacements through the year 2000. In the past, they have looked at reducing transportation costs by changing schedules. In the mornings, from the first drop-off to the last drop-off, there is a 45 minute window. In the afternoon, from the first pickup to the last pickup, there is a 60 minute window. By making the window broader, they estimated that $250,000 could be saved. That money could have been used for ~'growth buses", i.e., buses for students from new enrollments, and operational costs (buses, drivers, gasoline, maintenance, insurance, etc.). They could also have avoided $1.0 million in bus replace- ments over the next several years. Mr. Nash said in the past they have also looked at how to replace buses. Basically there are three approaches. A bus replacement fund, which is the approach they are using now, has higher up-front costs, but over the long-term the costs are less and there is a greater degree of flexibility in terms of replacing buses based on their actual condition. They are using a 13-year cycle, but there is judgment involved depending on the condition of the individual bus. Another approach is using a "lease-purchase" agreement. It has much lower up-front costs, but is higher long-term because of interest payments. Under this agreement, the company requires certain kinds of repairs, and certain kinds of maintenance which is an issue when it comes to having buses available. They have explored the option of using the CIP to purchase buses. Because of limitations on local funding, they would probably use VPSA 30-year bonds to purchase buses which have a life span of 13 years. Dr. Castner asked Mr. Nash to respond to a remark made by Mr. Perkins at another meeting about the privatization of buses, and whether that would create a cost savings. Mr. Nash said he has talked to other localities that have done this, and most of them are smaller systems that are compact. In Albemarle County, there would be difficulty in getting a vendor who is willing to do the outlying routes. In the urban ring, it would not be much of a problem. It is difficult to be as cost-effective and profit-oriented in the outside areas because buses are run which are only half full because of time factors. School staff has talked about this at length. Mr. Willie Smith, Director of Transportation, said that in the southern region right now, there are a number of buses which operate with less than 30 children, primarily because of time and distance. The routes may be 60 to 70 minutes long, but they only gather up 15 to 20 children in that length of time. Mr. Nash said that in order to fill up that bus, the route would be two hours in length. Ms. Powell said that in data presented to the School Board concerning redistricting, it shows that there are 17 buses of students who are trans- ported over 90 minutes, and 17 elementary students who travel over 60 minutes at present. Mr. Nash said at the present, there is an average route time of 32 minutes for elementary, 53 minutes for middle, and 57 minutes for high school. There are 17 routes which are greater than 60 minutes at elementary and 17 that are greater than 90 minutes for high school. That does not mean every child rides the bus that length of time, but in the outlying pieces of those routes, those children would ride that long. In looking at redistrict- ing, they are trying to reduce those times. Ms. Humphris said the Board has some work to do now. The Board is being asked to give some budget preparation guidance to the staff which has laid out this information and provided some options. She suggested that the options be discussed, and decide which might be acceptable, and which are not acceptable, and which are debatable. She suggested starting with the document for General Government. The first set of options is to Defer/Eliminate Capital Projects: The first item suggested was to defer school expansion/renovation projects at an approximate cost of $1.74 million, thereby reducing debt service costs. Ms. Humphris asked if any member is interested in this idea. Mr. Perkins said he believes it is something the Board will have to look at; nothing is sacred. Mr. Bowerman asked what part of the $1.74 million is for renovations versus expansion. Ms. Powell said it would be easier to have October 14, 1996 (Afternoon-Adjourned Meeting) (Page 5) the CIP to refer to when discussing this. Ms. Humphris said this is just for general comments, and nothing done today will be ~fixed in stone". It is for guidance only. Ms. Powell said the School Board is in the middle of a redistricting debate, and it depends on the capacity at a school when that is projected. Mr. Joseph said the expansion projects have been in the planning stages for nine months with the Redistricting Committee. He asked Mr. Reaser if he knew how many projects there are in each category. Mr. Reaser said Uno". Mr. Joseph said he would not want to pull out any expansion projects because there has been too much work done to this point. Ms. Thomas said that if renovation projects are deferred too long, there comes a point when that damages the building, etc. On the other hand, sometimes they can be delayed. Ms. Humphris said staff is looking for strong sentiment about the suggestions, so some things can be eliminated. Mr. Bowerman said he is not in favor of eliminating that part of the cost associated with expansion. He would agree with Mr. Perkins about renovations if the Board looked at those plans and prioritized those projects. The second item suggested was to defer general government capital projects, thus reducing the capital transfer of $12.3 million. Mr. Perkins said it is an idea that should be investigated. The third item suggested was to reduce operating costs for capital projects, $7.3 million not including the new high school. Ms. Thomas said it follows the other options so must be looked at. Mr. Perkins said the Board must look at all of the options. The next set of options is Borrow for School Maintenance/Repair Pro- jects. Ms. Humphris said this would require an additional $746,500 in Debt Service payments, and it is contrary to County policy. She asked if anyone thought the policy should be changed in order to borrow funds. It was the consensus that this not be considered. The next set of options is to use Fund Balance Revenues. Ms. Humphris said the Board has been told that approximately $750,000 from split-billing revenues in the Fund Balance could be used for capital projects. There was a general consensus that this is a good idea. Mr. Bowerman asked if Ms. Humphris was addressing also the suggestion to use the remaining $1.2 of the Fund Balance for one-time needs. Ms. Humphris said she thinks the full $2.0 million will be used for one-time needs, keeping the $13.0 million for cash flow needs. Ms. White asked if the $1.2 million should be directed toward one-time needs. Ms. Thomas said she is convinced that the bids on the new high school will come in at what has been projected, but she believes that some of the split-billing revenues should go to that project because these revenues have been higher than projected. The next option is for Long-Term Solutions for Revenues. Ms. Humphris asked about the meals tax which is estimated at $2.3 million. She asked if anyone knows if the citizens group will petition to get this question on the ballot. Mr. Madison Cummings said the meeting he attended was very quiet. There were people who called later who were reluc- tant to speak at that meeting. Some people who were asked to attend such as the Farm Bureau and others did not sent representatives. The League of Women Voters, Chamber of Commerce, Piedmont Environmental Council, and others did. There is an interest in the community for a meals tax, but there still needs to be a citizens group that will help to get it off the ground. It is moving slower than anticipated. The next option is an increase in the real property tax rate. This could bring in $544,000 for each one cent increase in the rate. Dr. Ward said he does not believe it should be ruled out. That was the general consensus. The next option is an increase in the personal property tax rate. Ms. Thomas said there is a fairly serious effort to do away with the personal property tax all together. Three is a General Assembly committee looking at the idea, and a majority of the members who spoke at their last meeting seemed to think that replacing it with a sales tax was a good idea. October 14, 1996 (Afternoon-Adjourned Meeting) (Page 6) 00023 3 The next option has to do with charges for service. Ms. Humphris said from reading the staff's report it seems that this idea needs a lot of study under the County's policy of having services paid for in certain categories. The next option of Increasing the Transient Tax would bring in an additional $570,000 which would be targeted for tourism and travel. She said this would relieve the County's obligation in the CIP, so she believes this is an idea that should go forward. There was a general consensus to this effect. The last option in this category related to Land Use Taxation ($5.5 million) would require a major change in the land use policy. Ms. Thomas asked if any of the changes the Board has discussed are even available to the Board to implement. They have discussed changes which would have some value for land use policy reasons and not just for revenue reasons. She has never been sure if these ideas would have an impact on revenue. Requiring open space, or requiring joining an agricultural/forestal district in order to make the land use tax something the Board can count on the land being kept in an agricultural/forestal district for a definite period of time. Ms. Humphris said requiring a contract or requiring membership in an agricultural/forestal district, actually would be an additional expenditure to the County and probably require another employee. She does not know of any cost savings, only additional expenditures. The last set of option is Long-Term Solutions for Expenditures. The first option listed was hiring freeze. Ms. Humphris asked if this option should be considered. There was no consensus on the part of the School Board members to consider this option. Mr. Koleszar said if the ides is to lower the number of employees, do not do it with a hiring freeze, but with some other budget method. A hiring freeze is too blunt of an instrument. Th next option listed is across-the-board cuts in departments and agencies. There was no interest in this item. The next option is to reduce service levels. There was no interest in this item. The last option listed is to eliminate discretionary funding to outside agencies, a savings of $1.5 million. Ms. Thomas said that sounds tempting, but with cuts in Federal and State funds, particularly Social Service types of funding, the County will get more and more stress on it as opposed to having any leeway. When welfare reform goes in, and it is found that portions are not working, there will be more agencies asking for help. She said staff looks carefully at those outside agencies, and eliminating that funding will be nearly impossible. Ms. Humphris next moved to a report entitled ~SCHOOL STAFFING". She said there are several issues involved which she believes the School Board would like to discuss, but in the interest of time, she said the Board understands the School Division's feelings about staffing allocations. Ms. Humphris said there is one final item, and that has to do with busses (bus replacement fund; lease/purchase agreement; CIP bus purchase). She said the CIP bus purchase costs more to do it that way. Ms. Powell said she thinks it is important to consider the impact of this item on instruction. Everyone needs to be mindful of starting and dismissal times, and the impact on students on the bus. Mr. Koleszar said more calls have been received about the starting time for school than for redistricting or any other issue. Ms. Powell said having children waiting in the dark to catch a bus (morning or night) is unrealistic. Dr. Castner said the School Board was going to discuss this again this year, but with the implementation of the new redistricting plan some routes will be shortened, and since it is an emotional issue, they will probably wait until the Fall of 1998 to decide. Mr. Joseph said no matter which option is chosen for redistricting, they will save approximately $100,000. There is already a step-down in terms of cost from the new high school being built, so they decided to take only one controversial issue at a time. Changing bus times was a horrendous task. Ms. Humphris said if there was nothing further to discuss on any of these options, the Board would proceed to the executive session. Approved by Board of County Su- pervisors Date ~]~ Initials October 14, 1996 (Afternoon-Adjourned Meeting) (Page 7) Agenda Item No. 3. Executive Session: Reversion. 000237 At 5:20 p.m., motion was offered by Ms. Thomas, seconded by Mr. Bowerman, to adjourn into executive session pursuant to Section 2.1-344(A) of the Code of Virginia under Subsection (7) to consult with legal counsel and staff regarding specific legal matters concerning reversion. Roll was called and the motion carried by the following recorded vote: AYES: Mr. Perkins, Ms. Thomas, Mr. Bowerman, Ms. Humphris. NAYS: None. ABSENT: Mr. Martin and Mr. Marshall. Upon motion by Mr. Cummings, seconded by Dr. Ward, the School Board adopted a motion to adjourn into executive session by a unanimous voice vote. Agenda Item No. 4. The Board reconvened into open session at 6:20 p.m. Motion was offered by Mr. Bowerman, seconded by Mr. Perkins, to certify by a recorded vote that to the best of each Board member's knowledge only public business matters lawfully exempted from the open meeting requirements of the Virginia Freedom of Information Act and identified in the motion authorizing the executive session were heard, discussed or considered in the executive session. Roll was called and the motion carried by the following recorded vote: AYES: Mr. Perkins, Ms. Thomas, Mr. Bowerman, Ms. Humphris. NAYS: None. ABSENT: Mr. Martin and Mr. Marshall. (Note: The School Board adopted a motion to certify the Executive Session during its regularly scheduled night meeting at 6:30 p.m.) Agenda Item No. 5. With no further business to come before the Board, the meeting was immediately adjourned. C~i~rman