Loading...
HomeMy WebLinkAbout10/27/2004 - Special October 27, 2004 897 Roanoke County Administration Center 5204 Bernard Drive Roanoke, Virginia 24018 October 27, 2004 The Board of Supervisors of Roanoke County, Virginia, met this day at the Roanoke County School Administration Office, 5937 Cove Road, N.W., Roanoke, Virginia, this being an adjourned meeting from October 12, 2004, for the purpose of a joint work session with the School Board to discuss funding of the County and Schools Capital Improvement Program (CIP). IN RE: CALL TO ORDER Chairman Jerry Canada called the meeting to order for the School Board at 5:35 p.m. MEMBERS PRESENT: Chairman Jerry L. Canada, Vice-Chairman Drew Barrineau, Marion G. Roark, Michael W. Stovall MEMBERS ABSENT: William A. Irvin, III STAFF PRESENT: Tom Hall, Assistant Superintendent of Personnel; Lorraine Lange, Assistant Superintendent of Instruction; Allen Journell, Assistant Superintendent of Administration; Penny Hodge, Director of Budget and Finance; George Assaid, Construction Projects Coordinator; Brenda Chastain, Clerk; Darlene Ratliff, Deputy Clerk; Marty Gilchrest, Intern Chairman Flora called the meeting to order for the County of Roanoke at 5:40 p.m. The roll call was taken. MEMBERS PRESENT: Chairman Richard C. Flora, Vice-Chairman Michael W. Altizer, Supervisors Joseph McNamara, Joseph B. “Butch” Church, Michael A. Wray October 27, 2004 898 MEMBERS ABSENT: None STAFF PRESENT: Elmer C. Hodge, County Administrator; Diane D. Hyatt, Chief Financial Officer; Brent Robertson, Director of Management and Budget; Mary V. Brandt, Acting Clerk to the Board OTHERS PRESENT: Tara Holland, Roanoke Times IN RE: FUNDING OF THE COUNTY AND SCHOOLS CAPITAL IMPROVEMENT PROGRAM (CIP) Ms. Hodge presented an overview of currently implemented practices that have an impact on bond ratings, as well as four additional practices that the County and Schools should consider implementing which are: (1) fund balance reserve policy and working capital reserves; (2) policies regarding nonrecurring revenue; (3) debt affordability reviews and policies; and (4) pay-as-you-go capital funding policies. She noted practices to be considered in the future are also listed. Ms. Hyatt reported that Penny Hodge and she had met with their respective Boards individually and now want to be sure both Boards understand how these financial policies are being developed. She also advised that they are seeking direction from the Boards in developing a final set of policies for approval. She recommended that the current County year-end surplus policy should be revised so that all surplus revenues will go into the General Fund Unappropriated Balance until the maximum fund balance requirement for that year is met. She added that any remaining revenue surplus will go into a newly established Major County Capital Fund. Expenditure savings to the budget at year-end will continue to be shared October 27, 2004 899 by the departments on a 60/40 basis. She reported that the non-departmental allocation will be put into the Minor County Capital Fund, formerly the County Capital Fund, along with the proceeds from the sale of land and fixed assets. She noted that the revenues in this fund can be moved up to the Major Capital Fund if necessary. Ms. Hyatt suggested that the County Fund Balance policy should be revised so the required fund balance increases over time to a range of between a 10% minimum and an 11% maximum, as shown below. She added that the fund balance is currently 6.25%. YearPercentage i 2004-05 7.0 – 8.0 ii 2005-06 7.5 – 8.5 iii 2006-07 8/0 – 9.0 iv 2007-08 8.5 – 9.5 v 2008-09 9.0 – 10.0 vi 2009-10 9.5 – 10.5 vii 2010-11 10.0 – 11.0 Ms. Hyatt also recommended that a new School/County Debt Service Reserve Fund be established to accumulate funds to pay for the planned future capital borrowing needs of both the County and Schools. She further suggested the debt policy should be revised so that the net debt per capita ratio will be in line with other ratios currently used. She reported that this ratio should be increased from $1,500 per capita to $2,500 per capita, or it should be eliminated completely. She added that this ratio is not seen to be very meaningful by rating agencies. October 27, 2004 900 Ms. Hodge reported that the School Board currently does not have a formal finance policy and recommended that one be created. She suggested that the first step should be to establish a school year-end surplus policy so that two-thirds of the school year-end surplus will go into the Major School Capital Fund.In addition, of the remaining one-third, any balance in excess of $1 million will go into the Major School Capital Fund. State construction grants for schools will also go into the Major School Capital Fund. One-third of the school year-end surplus, not to exceed $1 million, will go into the Minor School Capital Fund. She added that proceeds from the sale of land and fixed assets will also be put into the Minor School Capital Fund. She noted that the revenues in this fund can be moved up to the Major Capital Fund if necessary. Ms. Hodge also suggested a joint School/County Debt Service Reserve Fund should be established to accumulate funds to pay for the planned future capital borrowing needs of both the County and Schools. She also recommended a school laptop initiative funding policy should be established to accumulate funds to pay for the annual laptop computer purchases. Annual increases in the baseline budget will be supplemented with grant funds and minor capital funds over the next five years until the baseline budget is sufficient to fund the annual purchase. She added that at that point, grant funds will be redirected to other school technology needs including middle and elementary school needs and infrastructure needs. October 27, 2004 901 Ms. Hodge recommended that the County Board and the School Board each update and prioritize their respective Capital Improvement Plan (CIP). She reported that staff will then develop a funding timeline for the CIP adopted by the respective Boards. Ms. Hyatt reported that the chart on page 4 of the handout summarizes incoming revenue sources and outgoing cash outlays for the recommended Major and Minor Capital Funds for County and Schools as well as the joint Debt Payment Reserve Fund. Supervisor Flora inquired if school sales of surplus land would go into construction. Ms. Hodge responded that under the new policy, these funds would go into the School Minor Capital Fund. Ms. Hyatt reviewed four tentative future debt service projection scenarios as shown in the handout. She stated that the initial additional annual contribution of $900,000 was considered ambitious so alternative scenarios were evaluated. Supervisor McNamara inquired about what had changed. Ms. Hyatt replied that there were no changes except the dollar amounts of the additional annual contributions under the various scenarios; however, there has been no change in the projects themselves. Ms. Hodge added that unless one of the scenarios is adopted, there will be no school construction projects until 2012. Chairman Canada noted that in the original plan, four school construction projects were started in a row. Ms. Hyatt concurred, adding that was still the case. She October 27, 2004 902 added that after the initial four years of school projects, a pattern will be established of two years of school construction projects followed by one year for County construction projects. Supervisor McNamara inquired if the new public safety building had been taken into consideration. Ms. Hyatt responded that it had been considered under additional debt. Supervisor Wray asked if operating costs were factored into the debt service. Ms. Hyatt responded that operating costs were not factored in. Supervisor Church requested that the scenarios be presented in a format that would be easier for those without a financial background to understand in the future. Ms. Hyatt advised that the format can be refined. Chairman Canada inquired how the County’s economic development drop off would work in the various scenarios. Ms. Hyatt explained how the amounts were determined and when they would become available. She recommended adding the economic development drop off to the Debt Fund although that could be changed in the future. She noted that the $400,000 used in the various scenarios is the current economic development drop off. Supervisor McNamara remarked that some of the projections will not be feasible if there are increases in expenses and suggested that a larger amount be used initially and continue with the schedule in order to begin the school construction projects earlier. There was general discussion regarding the merits of the various scenarios. Mr. Barrineau stated that these tentative projections dealt with the long-term but not the October 27, 2004 903 short-term and they are two separate issues. He suggested that the Boards needed more details so that each issue can be evaluated. Ms. Hyatt suggested the Board Members consider the tentative projection schedule requiring an additional annual contribution of $600,000 which would delay the start of each construction project one year; however, she noted the decision does not need to be made tonight. Ms. Hodge added that with the recommended schedule, the Debt Service Fund will be fully funded by 2012. Supervisor McNamara suggested a five-year commitment to the schedule.Chairman Canada stated that the $600,000 annual contribution was the best scenario from the School Board’s point of view. Ms. Hyatt explained that these projections were put together to give the Board members an idea of what it would be possible to accomplish with the recommended policies in place. Supervisor Altizer agreed that these projections were on the right track and that a commitment was necessary. He added that he would be comfortable with adding additional monies up front so that construction would not have to be delayed. There was further discussion of the various scenarios. Chairman Flora suggested that the construction projects need to be listed and prioritized. Mr. Hodge requested direction from the Boards so that guidelines can be established and the money can begin to accumulate. Ms. Hodge added that the finance and management budget meetings will help to prioritize the project list. Mr. Hodge emphasized that establishing the policies was the first step and the exact scenario could be determined later. October 27, 2004 904 There was a consensus of the Board of Supervisors and School Board to proceed. IN RE: ADJOURNMENT Chairman Canada adjourned the Roanoke County School Board meeting at 6:37 p.m. Chairman Flora adjourned the Roanoke County Board of Supervisors meeting at 6:40 p.m. to November 1, 2004, at 5:30 p.m. for the purpose of a work session to discuss proposed changes to the Roanoke County Community Plan, Roanoke County Administration Center, 5204 Bernard Drive, Roanoke, Virginia. Submitted by: Approved by: ________________________ ________________________ Mary V. Brandt Richard C. Flora Acting Clerk to the Board Chairman