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HomeMy WebLinkAbout11/11/2007 - Special November 11, 2007 1035 The Homestead Resort Hot Springs, Virginia November 11, 2007 The Board of Supervisors of Roanoke County, Virginia met this day at The Homestead Resort, Hot Springs, Virginia, this being a special meeting for the purpose of the annual retreat. IN RE: CALL TO ORDER Chairman McNamara called the meeting to order at 1:12 p.m. The roll call was taken. MEMBERS PRESENT: Chairman Joseph P. McNamara, Vice-Chairman Richard C. Flora, Supervisors Michael W. Altizer, Joseph B. "Butch" Church, Michael A. Wray MEMBERS ABSENT: None STAFF PRESENT: Elmer C. Hodge, County Administrator; Paul M. Mahoney, County Attorney; John M. Chambliss, Jr., Assistant County Administrator; Dan O'Donnell, Assistant County Administrator; Diane D. Hyatt, Chief Financial Officer; Teresa H. Hall, Public Information Officer, Brent Robertson, Budget Director; Wanda G. Riley, Clerk to the Board OTHERS PRESENT: Eldon James, Legislative Liaison (left at 3:00 p.m.); Jim Johnson, Financial Advisor (left at 1 :30 p.m.) IN RE: OPENING REMARKS Chairman McNamara welcomed everyone to the annual retreat and congratulated Supervisor Church on his re-election to the Board. He also stated that the Board looked forward to working with Supervisor Wray for the remainder of his term on the Board. 1 036 November 11, 2007 IN RE: FINANCIAL STATUS OF ROANOKE COUNTY 1: Bond Schedule (Jim Johnson. Financial Advisor) Ms. Hyatt introduced Jim Johnson, Financial Advisor for Roanoke County. Mr. Johnson provided the Board with a graph which showed interest rates on March 15, 2007, at 4.38 percent and on November 1, 2007, at 4.73 percent. He stated that the biggest issue concerning the marketplace is the sub-prime mortgages, which has nothing to do with Roanoke County, but everything to do with municipal bond insurers. He advised that rates have decreased primarily in the short-end over the last couple of weeks. He stated that he did not foresee that rates would increase. He further advised that possibly between now and January 2008, the County is in a very good marketplace, and in January they would look at the market and make a decision as to whether there are still acceptable market conditions. Mr. Johnson stated that Requests for Proposals for Underwriters were sent to approximately eight investment institutions and proposals were received from all but two firms. He advised that interviews with the firms will be held and one firm will be selected as senior manager, and one or two firms will be selected to serve as co- managers. He stated that this will be completed by the first part of December 2007. He stated that the resolution will be presented to the Board for approval at their December 18, 2007, meeting and the Economic Development Authority will approve the bond documents at their meeting on December 19, 2007. He stated that theoretically the bonds could be ready for sale by December 19; however, by that time some firms have November 11 , 2007 1037 started to close their books for the year and the holidays begin. He stated that it is anticipated the bonds will be sold in mid-January with closing by the end of January. Supervisor Altizer asked Mr. Johnson what the rates would be if the bonds were sold today and Mr. Johnson stated that the average rate would be below 4.75 percent; probably around 4.70 percent. He explained that the amount of funds needed for the five projects, (Garage, South County Library, Multi-Gen Center, North County Fire Station, and the radio system), will be approximately $70 million combined, and the County will need approximately $58 million in bonds in addition to the $11 million that the County has available. He explained that the idea is to combine the five projects under one lease and the bonds will be issued by the Economic Development Authority (EDA). He further explained that the project will be done by the EDA and then leased to the County. He stated that although all five projects are part of the lease, there will be only one lease payment. He stated that all five projects will be blended into one project, which gives it the strongest case for financing. Mr. Johnson stated that with regards to the earlier question about the rates if bonds were sold today, the radios and the North County Fire Station have a short life and the true interest cost (tic) for those bonds would be on the lower end. Supervisor McNamara asked why the fire station has a different life than the library. Mr. Johnson explained that this is typical and most fire stations have a debt service of only 20 years. Ms. Hyatt explained that with the increase in the fees for transport, that 1038 November 11, 2007 money could be used over the 20 year life and money would still be left over for salaries. Mr. Mahoney asked Mr. Johnson if it would affect the schedule if the Board did not act on the sale of the bonds until January 2008 as this typically takes two readings of an ordinance, and the schedule shows presenting the documentation to the Board for approval on December 18; therefore, the second reading would be in January, or the Board could waive the second reading by a four-fifths vote. Mr. Johnson stated delaying until January would remove the opportunity of getting into the market earlier and that traditionally interest rates are lower the first part of January. Supervisor McNamara stated that his preference would be that the Board hold two readings of the ordinance and not waive the second reading. Mr. Hodge stated that this would be done. Mr. Johnson left the meeting at 1 :30 p.m. 2. Year End Balances = County and Schools (Diane Hvatt. Chief Financial Officer) Ms. Hyatt handed out a report which the Board had already received in their agenda packet for the November 13, 2007 Board meeting, and which showed the results of operations for the fiscal year ended June 30, 2007. She stated that the budgeted revenues for the year were $154,073,427 and the actual revenues were $159,260,117, which is a surplus of $5,186,690 of revenues over budget. She stated that $672,501 has already been used in the budget for Fiscal Year 2007-2008, which November 11 , 2007 1039 leaves a balance of $4,514,189. She advised that out of the remaining balance, $2,234,779 will go into the General Fund Unappropriated Balance and $2,279,410 will go into the Major Capital Account. In response to Supervisor Wray's inquiry, Ms. Hyatt stated that the unappropriated balance is being increased by one-half percent per year until it reaches 11 percent. She advised that this new balance will put the fund at 9.5 percent. Ms. Hyatt briefed the Board on the sources of the additional revenue. She stated that the largest percentage is in the use of money and property, or the interest income. She stated that this is due to the increase in the interest rate since the time the money was budgeted, and as the reserves build there is more money in the account to earn the interest. She advised that this generated an additional $1,619,068. Ms. Hyatt stated that real estate taxes generated an additional $724,955 over the budgeted revenues for Fiscal Year 2006-2007 and local sales tax generated an additional $510,818. Mr. Mahoney complimented Treasurer Kevin Hutchins, Commissioner of the Revenue Nancy Horn, and Senior Assistant County Attorney Katherine Jones for their efforts in collecting delinquent accounts which has generated additional monies for the County. Ms. Hyatt stated that the some of the reserve balance will be used toward down payments for some of the major projects that are planned and some of the large reserve balances will be reduced in the future. 1040 November 11, 2007 Mr. Robertson pointed out that a lot of the growth areas that generated revenues above the budgeted projects are the elastic revenues and proportional to the economic activity. He stated the amount of $404,930 shown under Miscellaneous Revenue was reimbursement received from the City of Salem for Social Services and was received after the accrual period; therefore, it is shown as surplus. In answer to Supervisor Altizer's inquiry about the personal property tax surplus, Mr. Robertson stated that adjustments were made in the spring of 2007 and it was estimated that revenues would be up 3 percent; however, the actual figure was 2.4 percent. Supervisor Altizer asked if the County is receiving its share of the revenues from the telecommunications tax. Ms. Hyatt stated that Roanoke County, like other localities, is receiving fewer revenues than anticipated. In answer to an inquiry from Mr. Hodge about Fire and Rescue Fee for Transport, Mr. Robertson stated that the $2,050,000 budgeted amount was overestimated by approximately $40,000, and this was due to calls anticipated from Roanoke City that did not happen. Supervisor Church asked for an explanation of the General Fund Unappropriated Balance and why it is necessary to keep that fund growing. Ms. Hyatt stated that the Board adopted a new policy approximately three years ago to build up the General Fund Unappropriated Balance. She stated that at that time the unappropriated balance was at 6.75 percent of General Fund Revenues. She stated November 11, 2007 1041 that the rating agencies prefer to see a large amount of money in the unappropriated balance which is used for emergencies such as natural disasters. She stated that the Board made the decision to grow the fund to 11 percent. Ms. Hyatt advised that for the year ended June 30, 2007, $944,054 remained from budgeted expenditures. She explained that $454,919 of that amount will go back to the County departments per the rollover policy, and the remaining $489,135 will be added to the County's Minor Capital account. Ms. Hyatt explained that year end funds are allocated to the General Fund Unappropriated Balance and to the Major and Minor Capital Reserves per policy adopted by the Board. Ms. Hyatt explained that the Schools had budgeted revenues in the amount of $136,518,265 and the actual revenues received were $139,960,098, which leaves excess revenue of $3.4 million. She explained that the major reason for the increase in revenues is that the schools had budgeted enrollment at 14,400 and actual enrollment was 14,777. She stated that this increased enrollment resulted in receiving more state funding and is the reason for the additional revenue. She advised that there was a savings in expenditures of $3,551,000 and most of this came from personnel expenditures. She stated that the Schools had approximately $7 million in savings. In answer to Supervisor Altizer's question, Ms. Hyatt stated that the Schools usually have savings each year in personnel and state aid. She explained that the $1.3 million in Reserve for Emergencies is the same money being rolled over from last year's budget. 1042 November 11 , 2007 3. Capital Accounts Balances = County and Schools (Diane Hvatt. Chief Financial Officer) Ms. Hyatt distributed a handout showing a summary of major and minor capital reserves for the Schools and County. She stated that the Schools have a balance of $1.4 million in minor capital and $6.2 million in major capital; the County has $1.7 million in minor capital and $2.3 million in major capital. She advised that none of the available balance in the County's reserves has been used for capital projects currently underway where cash is being used as a down payment as the down payment had already been taken out of the available balance. She advised that the cash the Schools is using toward renovations of Northside High School has already come out of their reserves. She also explained that the Schools minor and major capital balance of approximately $7.7 million does not include the $1.3 million in emergency reserve. Ms. Hyatt reminded the Board members that an Audit Committee meeting is scheduled for November 13, 2007, and an item will be discussed at that meeting regarding the Length of Service Awards Program (LOSAP). November 11 , 2007 1043 4. Southview Renovations (Elmer Hodae. County Administrator) Mr. Hodge stated that in a meeting with chairs and vice chairs of the County and Schools, the Schools had expressed an interest in retaining an A&E firm for renovations to the old Southview Elementary School. He advised that there was discussion about the County and Schools sharing in the cost of the A&E and the County's share would be $175,000. He stated that the Schools have asked the County to participate in the renovations and how much will the County contribute. Supervisor Flora stated that the total renovation is estimated at $6 million based on architects the Schools have interviewed. He stated that the exact cost will not be known until approximately 30 percent of the design work is complete at which point they can do value engineering. Mr. Hodge explained that at one point the County was going to use the former William Byrd High School building; however, the County does not need that building. Mr. Hodge suggested to the Board that the Schools retain the old William Byrd High School building, which currently houses the Roanoke County Career Center, and put the funds from the disposal of that building into the Southview renovations. Mr. Hodge advised the Board that the County has contributed money to the Schools in the past in the form of building a warehouse and replacing a sewer line when land was swapped with the Schools for the new Public Safety Building. He stated that the former William Byrd High School is estimated to be worth $1 million. 1044 November 11 , 2007 Supervisor Flora stated that the Schools hinted at a SO/50 participation in the renovations of Southview which would make the County's share $3 million. Supervisor McNamara referred to the Memorandum of Understanding between the County and the Schools which stated the County would help with the renovations of Southview and stated that now the Board is saying we cannot afford it. He stated that the County is spending $70 million on a bond issue, and that there is $2.2 million in major capital, and there are enough funds available to honor the Memorandum of Understanding with the Schools. Supervisor Altizer stated that he did not agree with the Memorandum of Understanding. Supervisor Flora stated that the Memorandum of Understanding states that the County will pursue funding for the renovations. He stated that this could mean the County will help issue bonds or pay for the renovations. Supervisor McNamara stated that the members on the Board have not changed since the agreement with the Schools. Supervisor Altizer stated that he does not remember saying the County would split the cost with the Schools. Supervisor Wray stated that it was not stipulated, but understood that the County would contribute. Mr. Hodge stated that if the Schools are going to keep the former William Byrd High School, the Career Center will not have to move. He advised that the State Forensics Lab would like to purchase Southview. He also reminded the Board that the County bought the Merriman Road property from the Schools. Supervisor Flora stated that the Board needs to take care of County needs first. November 11 , 2007 1045 Supervisor Wray questioned why the Schools wanted to move the Career Center to Southview. Supervisor Flora explained that the space at the former William Byrd High School far exceeds the program's needs. Supervisor Altizer stated that he would like to have a joint work session with the Schools to review the Schools capital projects, including where the current William Byrd fits into the Schools' capital plan since there have been overruns in the renovations to Northside High School. He stated that the Schools need to prioritize their projects. Supervisor McNamara stated that at the time of approving the Memorandum of Understanding, the Board thought the renovations to Southview would cost $3 million and now the estimate is $6 million. However, he stated that he felt the Board should still honor the agreement. Supervisor Flora stated that the Board should consider the value of the land for the new Public Safety Building, the cost of building a new warehouse for the Schools, the value of the former William Byrd High School, as well as the value of Southview. Supervisor Church stated that he would like to have a meeting with the School Board to discuss this issue. Supervisor Altizer stated that he felt this is about putting the funds in the correct place and stated that the School Board needs to prioritize their projects. Supervisor Flora stated that Southview was not on the School Board's list of priorities. 1046 November 11, 2007 Ms. Hyatt stated that she had met with School staff to explain to them how the County was able to fund the capital projects that are currently underway and was asked to work with Penny Hodge, the Schools Assistant Superintendent of Finance, to review their priority list and determine funding. She stated that the schools had not updated their priority list in three years and they are to reprioritize and get updated cost estimates. She advised that once this has been done, she and Ms. Hodge can review funding for the projects. She advised that the Schools had savings from the renovations to Northside High School in their debt schedule because the rate came in lower than anticipated. Supervisor Church suggested that the Board and School Board meet after January 1, 2008, to review these issues. Supervisors Flora and Altizer expressed that they would like to see an updated priority list from the Schools with project costs and schedules. It was the consensus of the Board to agree to pay 50 percent of the A&E fees for Southview renovations for design purposes only, and not for construction or project management, and these fees are not to exceed $175,000. It was further consensus of the Board to not commit to paying 50 percent of the renovations to Southview. Mr. Hodge stated that this item would be placed on the agenda for the first meeting in December 2007. November 11 , 2007 1047 IN RE: RECESS Chairman McNamara declared a recess at 2:20 p.m. The Board returned to open session at 2:35 p.m. 5. Retired EmDlovees Health Care Coveraae (GASS 45) : Diane Hvatt Chief Financial Officer Ms. Hyatt explained that GASB 45 is a recent statement by the Government Accounting Standards Board (GASB) regarding financial disclosure of post-retirement benefits which for the County pertains to health insurance. She stated that this affects every government in the country and is similar to legislation that was enacted approximately ten years ago for private industry. She explained that the key requirements of GASB 45 is that the post employment benefits (OPEB) must now be recognized on an accrual accounting basis instead of a cash accounting basis. She stated that the options to the County are (1) ignore it as the locality is only required to disclose the OPEB liability, not fund it. However, she further explained that continued contribution shortfalls cause the debt to grow with interest and this will eventually impact the County's credit rating. (2) Eliminate or reduce the OPEB. (3) Fund the full cost of the annual contribution. (4) Finance the benefit with OPEB Obligation bonds. Ms. Hyatt explained the various cost study results as shown on the handout "GASB 45 Overview" dated November 11, 2007. Mr. Hodge stated that he wanted to have a work session with the Board in January 2008 to discuss this further. 1 048 November 11, 2007 IN RE: GENERAL ASSEMBLY ITEMS (ELDON JAMES, COUNTY'S SPECIAL ASSISTANT FOR LEGISLATION RELATIONS) Mr. James stated that there is concern that there may be budget issues again this year in the General Assembly. He explained that the House leadership is going on record saying they are having problems funding new programs when they will be cutting existing programs. He advised that the County still needs to request funding, such as funding for the regional jail. Mr. James discussed the changes in the Senate leadership and in the committees. He predicted that there would be no more than one committee chairmanship in southwest Virginia. Mr. James asked the Board if there are other issues except the regional jail. Mr. Mahoney advised the Virginia Association of CountiesNirginia Municipal League (VACONML) Legislative Day is scheduled for February 7, 2008. Supervisor Altizer asked Mr. James about the status of annexation in the upcoming General Assembly. Mr. James stated that it depends on how much the governor will expend on other budget issues. There was discussion of how annexation would affect 599 funding. Mr. James discussed other issues such as pre-kindergarten, transportation, and homestead exemption. Mr. Hodge stated that he had been approached about a coalition with the Shenandoah Valley. Supervisor Flora stated that the Shenandoah Valley had gone on November 11, 2007 1049 record that they are opposed to any improvements to 1-81 from Lexington-north, and that there were not many other issues the Roanoke Valley and Shenandoah Valley had in common. It was the consensus of the Board that it would be best to focus on the Roanoke and New River Valleys. Mr. James left the meeting at 3:00 p.m. IN RE: CLOSED MEETING At 3:05 p.m., Supervisor Flora moved to go into closed session pursuant to the Code of Virginia Section 2.2-3711 A (5) discussion concerning a prospective business or industry where no previous announcement has been made. The motion carried by the following vote: AYES: Supervisors Wray, Church, Altizer, Flora, McNamara NAYS: None IN RE: CERTIFICATION RESOLUTION R-111107-1 At 3:26 p.m., Supervisor Church moved to return to open session and adopt the certification resolution. The motion carried by the following recorded vote: AYES: Supervisors Wray, Church, Altizer, Flora, McNamara NAYS: None RESOLUTION 111107-1 CERTIFYING THE CLOSED MEETING WAS HELD IN CONFORMITY WITH THE CODE OF VIRGINIA WHEREAS, the Board of Supervisors of Roanoke County, Virginia has convened a closed meeting on this date pursuant to an affirmative recorded vote and in accordance with the provisions of The Virginia Freedom of Information Act; and 1050 November 11, 2007 WHEREAS, Section 2.2-3712 of the Code of Virginia requires a certification by the Board of Supervisors of Roanoke County, Virginia, that such closed meeting was conducted in conformity with Virginia law. NOW, THEREFORE, BE IT RESOLVED, that the Board of Supervisors of Roanoke County, Virginia, hereby certifies that, to the best of each members knowledge: 1. Only public business matters lawfully exempted from open meeting requirements by Virginia law were discussed in the closed meeting which this certification resolution applies, and 2. Only such public business matters as were identified in the motion convening the closed meeting were heard, discussed or considered by the Board of Supervisors of Roanoke County, Virginia. On motion by Supervisor Church to adopt the resolution and carried by the following recorded vote: AYES: Supervisors Wray, Church, Altizer, Flora, McNamara NAYS: None IN RE: REGIONAL COOPERATION AND WESTERN VIRGINIA WATER AUTHORITY UPDATES 1: Water Authoritv Plans and Uodate (Elmer Hodae) Mr. Hodge informed the Board that construction of the water line down Route 220 South from Roanoke County into Franklin County is scheduled to begin in the spring. 2. Exolore Park Uodate (Elmer Hodae) Mr. Hodge stated that Explore Park is making plans to close the offices and facility at the end of November 2007. It was noted that the restaurant is already closed. Mr. Altizer stated that under the lease agreement, Larry Vander Maten, the developer, must notify the Virginia Recreation Facilities Authority by March 15, 2008, whether or not they want to exercise the option. November 11 , 2007 1051 Supervisor McNamara stated that the park could be used to fish, bike and hike, and the interpreter center would not have to be opened. Mr. Hodge stated that if there is a change in the use of the park, he would get back with the Board and would suggest working with Bedford County. Supervisor McNamara stated that if Mr. Vander Maten asks for a year's extension on the option agreement that he would like to see what could be done to use the park for passive recreation for a year. IN RE: GROWTH AND DEVELOPMENT .L ProDertv Manaaement Code (Buildina Code) (Paul Mahonev) Mr. Mahoney stated that the Board members have heard complaints from citizens about deteriorating housing arising from aging neighborhoods where property is not being maintained. He stated that one way to address this issue is through a Property Maintenance Code. He explained that cities have used this code. He stated that it is an intrusive element of government and requires inspectors and more enforcement activity. He stated that Mr. Hodge has asked Community Development staff to gather information about this code. Mr. Mahoney noted that this code is for structural issues. 1052 November 11 , 2007 Mr. Altizer stated that it is not just aging neighborhoods, but rural areas where homeowners are not maintaining their property that is becoming a concern. Mr. Hodge advised that this was a recurring theme in the recent meeting of the quarterly civic league presidents. He stated that the staff would bring these issues to the Board in a work session in a couple of months. IN RE: NEW BOARD MEMBER ORIENTATION PLANS Mr. Hodge stated that in the past when staff has conducted orientation for newly-elected Supervisors, the major departments have met individually with the Supervisor-elect; however, he inquired if the current Board members wanted to be included in those sessions. It was the consensus of the Board that the Supervisor-elect should meet individually with the departments without the other Board members present. IN RE: REQUEST TO POSTPONE PUBLIC HEARING FOR REZONING REQUEST - AUSLO, INC. (PAUL MAHONEY, COUNTY ATTORNEY) Mr. Mahoney referred to the memorandums he recently sent the Board members regarding the Auslo, Inc., request to postpone the public hearing for a rezoning request scheduled for November 13, 2007, because the developer had recently obtained an attorney who had not had adequate time to review the matter. He noted that the Planning Commission denied the request for rezoning. November 11, 2007 1053 Supervisor Flora suggested that the public hearing be held as scheduled on November 13, 2007, and then continued, with the developer will paying the cost for another legal advertisement. Supervisor McNamara stated that he did not want to see a precedent set for continuing public hearings. Mr. Mahoney stated that he would contact the attorney for the developer. IN RE: ADJOURNMENT Chairman McNamara adjourned the meeting at 3:47 p.m. Submitted by: Approved by: ~~~:<~ Clerk to the Board AA~ s p P. McNamara irman 1054 November 11 , 2007 This Daae intentionallv left blank.