HomeMy WebLinkAbout2/1/2012 - SpecialFebruary 1, 2012 8
Roanoke County Administration Center
5204 Bernard Drive
Roanoke, Virginia 24018
The Board of Supervisors of Roanoke County, Virginia met this day at the
Roanoke County Administration Center, Fourth Floor Training Room, 5204 Bernard
Drive, Roanoke, Virginia for the purpose of a joint work session with the Roanoke
County School Board to discuss fiscal year 2012 -2013 budget development. Audio
recordings of this meeting will be held on file for a minimum of five (5) years in the office
of the Clerk to the Board of Supervisors.
IN RE: CALL TO ORDER
Chairman Flora and Chairman Minnix called their respective boards to
order at 6:03 p.m.
MEMBERS PRESENT: Chairman Richard C. Flora; Supervisors Michael W. Altizer,
Eddie "Ed" Elswick, Charlotte A. Moore
MEMBERS ABSENT: Supervisors Joseph B. "Butch" Church
STAFF PRESENT: B. Clayton Goodman III, County Administrator; Daniel R.
O'Donnell, Assistant County Administrator; Diane D. Hyatt,
Assistant County Administrator; Paul M. Mahoney, County
Attorney; W. Brent Robertson, Director of Management and
Budget; Rebecca Owens, Director of Finance; Deborah C.
Jacks, Clerk to the Board
SCHOOL BOARD
MEMBERS PRESENT: Chairman H. Odell "Fuzzy" Minnix; Supervisors C. Drew
Barrineau, Jerry L. Canada, Michael W. Stovall, David M.
Wymer
SCHOOL BOARD
MEMBERS ABSENT: None
SCHOOL ADMINISTRATION
STAFF PRESENT: Lorraine S. Lange, Superintendent; Allen W. Journell,
Deputy Superintendent of Administration; Penny A. Hodge,
Assistant Superintendent of Finance; Brenda F. Chastain,
Clerk to the School Board; Angela Roberson, Deputy Clerk
82 February 1, 2012
IN RE: DISCUSSION OF HIGH DEDUCTIBLE HEALTH INSURANCE PLANS
WITH A HEALTH SAVINGS ACCOUNT
Ms. Julie White gave a presentation on high deductible health insurance
plans. A copy of this presentation is on file in the office of the Clerk of the Board of
Supervisors. After discussion, it was the consensus of the Board to bring back for later
work sessions with a possible start date for fiscal 2013 -2014. Chairman Flora and
Supervisor Elswick both stated they would like to see how it would affect different levels
of employees with actual case examples to be included. Chairman Flora also asked for
staff to look into a health reimbursement plan.
IN RE: HEALTH INSURANCE PLAN DESIGN CHANGES FOR 2012 -2013
Rebecca Owens outlined the next steps in the insurance plan design
changes for 2012 -2013 would be the implementation of Key Care 200 with a calendar
year deductible, $200 single and $400 family, with the out of pocket maximum to stay
the same. She stated there were only two other changes with regard to emergency
room and inpatient stays that would be replaced with the front -end deductible. Co-
payments would remain unchanged. She explained the ultimate goal is not to have an
increase to employees.
Supervisor Elswick advised he would need to leave early.
IN RE: OVERVIEW OF COUNTY BUDGET FOR 2012 -2013
Mr. B. Clayton Goodman III explained the departmental budgeting was
just getting started and that Management and Budget would be receiving budget
requests on February 3, 2012. He indicated that revenue estimates will continue to be
estimated throughout February and March and sales tax numbers would be received in
February. He indicated his main point was that everything remains a work in progress.
He explained he has assigned each department a target reduction and anticipates these
departments with having a hard time reaching these reductions. He added he had
included a proposed budget increase at the beginning of the year for salary increases;
no promises have been made and if the funds are not there, no increases will be given.
Mr. Goodman explained due to the large deficit numbers, Roanoke County will need
help from the schools.
Ms. Diane Hyatt reviewed the preliminary numbers listed on page 2 of the
budget breakdown provided with the agenda. A copy of the agenda materials is on file
in the office of the Clerk of the Board of Supervisors.
February 1, 2012 83
Mr. Brent Robertson reviewed page 3 of the budget information and
indicated this was the first time in twenty -two (22) years that the budget process was
starting with negative numbers. He explained that property taxes represent
approximately seventy percent (70 %) of total revenues and have been profoundly
affected by the economy.
Ms. Hyatt explained the Virginia Retirement System (VRS) is the biggest
issue to be dealt with. The actuarial rate assumptions for local governments this year
were changed and went to a seven percent (7 %) investment return instead of seven
point five percent (7 1/2 %) that was previously used. Accordingly, everyone was
underfunded and resulted in a larger payment going in for future years. Roanoke
County went from $15.05 to $19.01 and includes a five percent (5 %) employee portion,
which will cost Roanoke County $2 million. There are some savings from the Plan 2
employees of $100,000. The retiree health insurance credit with VRS also went up
slightly, $4,800 and the VRS life insurance rate, which is one rate for everyone, would
be one point nineteen percent (1.19 %), which will cost $455,000. Nothing has been
added for a health insurance increase, which is currently six point eight percent (6.8 %),
but is hoping with negotiations and plan design changes to get close to zero (0). After
these adjustments are made, Roanoke County will be left with a deficit of $5.2 million.
For further details, this information is fully quantified on the bottom of page 2 of the
presentation. Departments have been asked for another $1.4 million in cuts and will
involve service cuts, which will need to be brought back to the Board. After all of the
cuts have been made, it appears between a $1.1 million and $2.6 million would need to
be potentially reduced from the school transfer, depending on what is decided on the
salary increase.
IN RE: OVERVIEW OF SCHOOL BUDGET FOR 2012 -2013
Superintendent Lange reiterated the schools are also in the beginning
stages of their budget process. She advised they feel it is going to be a tough year, with
the same problems the County has with retirement and have had tough years in the
past. Since the 2009 -2010 school year, $12 million has been cut from the budget and
have eliminated over two hundred (200) positions in Roanoke County schools.
Additionally, Bent Mountain and two other programs were closed. She stated she felt it
was going to be difficult for school staff to look at the cuts that will need to be made.
She advised they feel their employees are very important and have not been promised
anything. They have not had a raise in four years so she would like to see if there is
anything that can be done for their employees. To start, they have implemented a hiring
freeze and are not replacing any positions unless it is a critical position. Central office
people will be used to cover as well as retirees.
Ms. Lange advised all departments have been asked to cut their budgets
by three percent (3 %), but cautioned eighty -three percent (83 %) of the budget is
personnel. Accordingly, they will have to look at personnel.
84 February 1, 2012
Penny Hodge referenced pages four and five of the agenda information for
the revenue detail. She advised there were four lines that were of particular importance
for this year. The first being the sales tax appropriation. The sales tax numbers have
shown signs of improvement. The schools allocation is based on sales State -wide, not
just Roanoke County. She indicated they had seen signs of improvement in the current
year, however, the General Assembly voted last year to change their allocation for
schools for fiscal 2013 from the locality census to be based on the 2010 federal census.
She explained the Weldon Cooper Center in Charlottesville is using this data to enter a
formula and are projecting Roanoke County sales taxes for schools next year will be
$13.8 million, the prediction last year was $15.5 million, resulting in a $1.6 million
reduction. She advised they have been speaking with Virginia representatives and the
federal representatives working in this area for assistance.
Superintendent Lange advised she has spoken with Senator Newman
who has asked Weldon Cooper to present to the subcommittee and find out what is
happening.
Ms. Hodge explained no one has been able to provide an explanation as
to how two thousand (2,000) more children were counted than appeared on the federal
census. Secondly, Ms. Hodge pointed out the retirement line. Thirdly, is the school
operating costs, which was also a General Assembly action last year to balance the
budget and have taken it out of the budget for this year. Lastly is the transfers from
other funds, $600,000 of health insurance reserve was used to balance the operating
budget and they had a $100,000 adjustment for the joint alternative program that has
been closed. She explained the estimated loss of revenues is approximately
($520,434). She detailed the expenditure side; the schools have the same situation
with regard to VRS, which will result in a net increase in VRS of $4.7 million. Health
insurance has been left without an increase, a salary increase has been included and
the joint CIP increase has been included as well as the technology plan and the
increase in County IT charges resulting in a beginning deficit in the school budget of
approximately ($9.8 million). She advised she also included some historical information
in the packet as it relates to the sales tax issue, personnel cuts, local appropriations and
required local effort.
IN RE: CLOSING COMMENTS
Supervisor Altizer commented there is no doubt each side is going to have
tough time. He feels both Roanoke County and the Schools are facing the "new reality."
He stated he thinks the "new reality" is going back and looking at everything that has
been done in the past three to nine years, etc. He advised this is best opportunity to go
back and change the wrong things that were done in whatever was created, whether it
is programs, etc. He stated the Board does not make budget decisions on raises until
the end and knows neither side has promised raises.
February 1, 2012 85
He explained staff must "turn over every rock" and then it is what it is at
the end of the day. From the County side, he hopes that staff will look at every single
thing that can be done that is not needed. He explained that he does not think it will be
any better next year or the year after and even if there is a nominal one percent (1 %)
growth and the greatest thing in the world happens and the State legislature goes
through their budget and does not take any more money away. His fear is that he could
see employees not seeing a raise for five (5) to ten (10) years. His thought is if not now,
when? He thinks staff needs to give its best efforts at looking in each department, if
something was created and it is not paying for itself, the Board needs to find money.
The Board is being tight, but so are our employees. This is tough on all and whether it
is a raise, something at year end as a combination, he does not know but something
must be done because case after case and it does not matter whether you are a school
teacher, firefighters or a police officer, the pay schedules have become so compressed,
some of the areas that are doing raises are going to begin to take Roanoke County's
good people. A clear case in point is the regional jail. The jail is losing people to other
localities just because they have given some raises. His fear is as Roanoke County
continues to shrink and compress these pay schedules, the Board is trying to do the
best it can by its employees, but then they start to look and you start to lose more and
more experience. The only thing the Board can do is give its best effort to see where
some things can be cut, eliminate things that are not needed and try to do something for
our employees, in whatever form that takes or whatever combination that takes, but
something needs to be done to relieve the stress for the liability of Roanoke County and
our employees and knows each and every one will do so throughout the budget
process.
School Board Chairman Minnix commented this was his seventeenth
(17 year in Roanoke County, twelve (12) years on the Board of Supervisors and now
starting his fifth (5 th ) year on the School Board and he has never seen it worse and it
seems that Richmond has forgotten us, not just us but all schools in the Commonwealth
of Virginia. He advised he always thought of education as being a very high priority in
the State because you train young men and women to do jobs for businesses
established in the Commonwealth. They are trained and prepared them to do these
kinds of jobs, but we cannot do that forever. In the past four years, schools have been
cut to the tune of $15 -$17 million and this year it could be up around $8 -$9 million. It is
depressing because staff keeps combining classes and does not hire people when
people retire. We are going to get to the point where SOL's will be the same. He does
not know if the folks in Richmond will throw up their hands all of a sudden and say
"what's going on ?" He stated he guessed one of the things that disturbs him the most is
that when the local folks run for government tell us how important schools are to them,
but they do not reflect it when they get to Richmond, which places us at a gigantic
economic impact; puts us far behind.
86 February 1, 2012
He stated he is afraid it is going to get worse before it gets better. We
have some tough roads ahead of us still and we all need to be together. He agrees with
the County Administrator, we need to be together on this by helping each other as much
as we can, where we can because we are going to have to make, on the School Board
side, some very unpopular decisions with parents, teachers and other people
concerning our school system. They are going to have to; they just do not have the
money. Hopefully, and they will encourage at each of their meetings, our parents,
friends and people to contact their delegates, senators and the Governor. Last year, he
feels it probably helped a great deal because in the end they were able to derive a few
more funds out of having their people talk with their politicians. It is going to be very
difficult and his feeling is we are in this thing together and would like to see everyone
work as hard together as we can in order to make it successful. Primarily looking
ahead, what has happened in the past is over and there is nothing we can do to change
it, but there are some things we can do to change the future and take a new look at
what we can do to make ourselves stronger because he has heard from many
authorities that next year is going to be worse than this. We have a charge from the
folks that put us in office to make our systems work. We must work as diligently as we
can in order to do that and come up with the best possible solution.
School Board member Canada stated he looks at this a little differently.
Now that they have gone beyond $9 million and in effect looking for $12.9 million, which
is the bottom line on top of $15 million in cuts over the last three (3) years and over two
hundred (200) fewer employees over the course of the last three (3) years. The School
Board feels like they have retooled themselves to some extent already and they are
doing business differently than it has in the past and doing it very well. Although, if you
are out in the schools and speak to the teachers, you can see some of the strain in their
faces because they have a lot more being placed on these folks. So far, mainly at the
elementary levels and the high schools. He stated he thinks what the Board will see
from the Schools is a good effort on their part to make this happen. There is no use
landing blame anywhere. It is what it is; $28 million over four (4) years is a lot of money
and is a big reduction. It takes a lot of work to reduce your services to accommodate
$28 million. He stated he knows there is very little that he can do about it and thinks the
County side is where they are with lost revenues. When the School Board was told
about this on Friday, he advised he has not slept a whole lot since. He stated he has
been mad, sad and now he is just resigned to the fact that it is what it is and they need
to go back and look at this again and see if they can retool themselves even one more
time to become even leaner and meaner. Mr. Canada stated he is just talking for
himself and there are five different opinions down this table and would ask as they look
at these things to generate this kind of money, it will involve some changes. It will be
changes maybe where children go to school and those kinds of things. Probably, some
of the things they can lay on the table, their first meeting is next Wednesday, to actually
look at some of the things staff is going to recommend. Once the meeting is held,
February 1, 2012 87
there is going to be a lot of proposals on the table that will generate some interest. He
is sure it will generate some interesting meetings between now and the end of budget,
which will probably overflow to Board of Supervisor meetings as well. So, he asks that
as they go through this and struggle with this, and he is sure there will be time spent
yelling at ourselves because they are not going to agree on what they need to cut and
how they get there. He does not look forward to that either, but has been here twenty
(20) years now and can see it coming, but would ask for the Board of Supervisors
support as they struggle through this and try and make this work for all of us. He stated
he hopes that if they get to that point and they can make this effort and make it work, he
hopes they can save every job; that is his number one goal. He commented that he is
not interested in sacrificing any employee so that they can give the others a raise; that
is not how they are going to get there. If they can get this money, they are not going to
get it that way. He hopes that his fellow Board members will agree to that. Even if they
wind up closing a school here or there, he hopes that they can mingle the people in with
the holds on different positions. He reemphasized he is asking for the Board of
Supervisors support as they work through this because they will really need the Board's
support on this side as well.
School Board Member Barrineau stated first of all he wanted to thank the
Board of Supervisors for just being a tremendous partner in K -12; they have been
blessed to have the Board putting our children and students in the best possible position
to succeed; that being Roanoke County. In a perverse sense the downturn maybe has
been good for them from the standpoint that they have been nonstop budgeting and he
thinks the last time he was Chairman the very first day of the new year, July 1 St sending
out an email that they had to continue looking. In essence, they have been making cuts
a year in advance and what they have been able to do to date, they are down 217 full
time equivalents, net of $12 million including a supplement a few years ago; that is an
awful lot. He thinks the schools have done a tremendous job trying not to impact people
as much as what otherwise could have been, but a lot of that has been foresight,
looking ahead. What bothers him about what they are looking at now realistically is
both sides have lain on the table $15 million of reductions that need to be made; it
needs to come from somewhere. Also, he added he is very pessimistic and what is not
on the table is probably at least another $6 million in VRS, another $2 million from the
County side and at least another $4 million from the school side that is still underfunded.
To top that, there is no momentum in the real estate market of any significance that
would help us. There are options whether to non - renew, non - essential, non - tenured
teachers; that is one option. There are four (4) elementary schools that could be looked
at: Ft. Lewis, Clearbrook, Back Creek and Mt. Pleasant. Going forward is going to be
extremely difficult.
88 February 1, 2012
They have done this in a very humane way so far. He commented
another thing is that he sees what Richmond is doing to the County as well to the
schools. We are assuming that hopefully they are at the bottom, but there is no one at
the table that thinks Richmond is not going to push down expenditures on to the County.
He stated he thinks they are living in a fantasyland to think that is going to stop. He
advised he is also concerned with what the federal government is going to do on the
school side. This is a very difficult time to be a Board member and then you go out in
community meetings and parents have high expectations; they are used to the way
things have been in the last ten (10) years in his tenure on the Board and what they
have been able to do. "It is kind of okay if something gets cut in Mr. Canada's district,
but leave us alone and cut everybody else." Those days are over and where they are
going now is unchartered waters going forward. The primary focus that he is looking at
is the integrity of the classroom, where they are educated is on the table. To date, the
schools have expended a tremendous effort to get to where the school system is and
quite frankly, he is quite proud of what has been accomplished. He commented he
looks at what is going on in Washington; they are pretty well dysfunctional and
Richmond is still up in the air. He thinks they have done it the right way in Roanoke
County. He reemphased they have worked together, there is a revenue sharing format
that has been used in the past; have never bickered about that money. They have not
second - guessed the County decisions and the County has pretty much left them alone
to handle K -12. As one School Board member, he will do whatever it takes to put
Roanoke County in the best possible position. As far as the magnitude of what they are
looking at is indescribable right now. He added they have their first budget session next
Wednesday and it is going to be interesting and from there he is planning on having
some community meetings to discuss. Unfortunately, a lot of his constituents are not
aware of the magnitude of the cuts they are facing and how it is going to impact them. It
is going to be a difficult few months ahead.
School Board Member Stovall stated they know the magnitude and has
said so in the past, Mr. Barrineau is correct. They know where they are because of
Richmond and Washington and they are where they are because of the County. He
has done his best to advocate what Mr. Altizer mentioned — raises. He stated he
remembers sitting beside Mr. Altizer in a meeting eight or nine years ago, still has the
article handing on the wall in his office. Mr. Flora looked at him and said let's go for five
percent (5 %) and the next morning in the press someone not in this room got very mad
at him and sent a letter over saying he was hurting the relationship with the County
Board of Supervisors and the School Board. We worked through that. A couple of
years ago when he was Chairman and was sitting downstairs and had a guy at the
lectern and turned around and looked at him and called him everything because of a
$500 bonus. Last year, we gave a four percent (4 %) bonus. So, to him, everybody
knows everything, everybody in this room is smart.
February 1, 2012 89
He advised you can break the budget down into three areas: make a
budget; balance the budget, balance the budget and see if the raise can be given,
whether it is a $500 bonus or a four percent (4 %) bonus. Lastly, it comes to the ratings.
Do we go from balancing the budget and giving the raise; he does not think so. The first
thing they have to do is the $1.1 to $2.6. We need $1.1 from the schools, so we have
talked about $15 million and you know all the numbers and thinks this is what we have
to do and do right now. The school board is going to start on Wednesday; normally they
do not start until March. Can we do the $1.1 million? He stated he would not do it, he is
not going to consolidate schools, and affect people's jobs so that he can look back four
(4) months from now and say he gave a three percent (3 %) raise. He is not going to do
it. He is not going to consolidate schools, affect people's jobs and not take the
classroom into consideration to give a bonus. He will not do it. Yes, we look at each
and every one of them in the eye and tell them we love them every day and hope they
know that, but everybody knows what the economy is. In his opinion, he is from Vinton
and they do things a little different, but break the budget down to three areas; get the
budget balanced, if we can give a bonus let's give it or a raise.School Board Member
David Wymer stated one thing that has not been talked about this evening and again
thinks it shows good stewardship on both sides — the stimulus money that they were
criticized for not hiring and creating jobs. We cut 217 and if they did not have the
stimulus money three (3) years ago, we would be having this same discussion then. He
commented he thinks the thing that has made it worse is the State, because of how they
have handled funding, especially VRS and the funding of VRS by using the VRS to
balance their budget and a few other items, plus the LCI which the Weldon Cooper
Center has thrown us into the drink with. He stated they are looking at $6 million or $7
million that could not be anticipated.
When they plan and go through the process before and making these
adjustments, who knew at this hour, Richmond was going to drop $7 million on them
that they did not anticipate and that is kind of the thing that hurts the most. In all of the
deliberations and all the decisions they have made regarding everything in the budget,
they have tried to make sure that they think down the road, can they do this, what is the
effect going out, but this is a unique budget. He reimphased they have talked about this
a couple of times, but look at what the school's budget has been reduced and it would
have been reduced more if the County had not helped in the last three (3) years. The
County contribution the last three (3) years made it go from $17 million to $18 million to
$13 million. This year, the schools could conceivably be looking at $10 million, $9 to
$10 million in one (1) year on top of the $12 million over the last three (3) and that is a
tough situation. They are going to make that decision. They hope at the end of the day
both Boards will come together and find a way to do it. They are committed that is what
they are here for and as they begin deliberations next Wednesday, all the things the
Board has heard tonight are important. Students in Roanoke County will be affected.
The School Board's goal is to make it as noninvasive as possible over that period.
90 February 1, 2012
Chairman Minnix advised Chairman Flora that the Board of Supervisors
has their pledge of support to do the very best they can in working with the Board of
Supervisors, probably a good deal more as they get to end of this. He added the
School Board appreciated meeting here tonight.
Chairman Flora advised sitting there looking around the table, most
everyone sitting here was here when times were good. Ms. Moore happened to come
on board just about the time the economy went south, but during the good times, they
had the most relaxed budget sessions. The worst thing that had to be done was
figuring out where to spend the money. Things have changed. He advised he likened
this to what many, many families across this nation have gone through in the past three
or four (3 or 4) years, where one of the spouses lost their job and now instead of a two
income family, that family now has one income and they are having to adjust everything
they do, all the money they spend, every decision they make has to be thought through
very carefully and it creates huge stress within that family just making those
adjustments. He can sense the stress that the Boards have had to deal with because
when you don't have the money, you don't have the money and that is the way it is.
The short of it is that family is solid, they work through it and that is exactly what we are
going to do. The elected officials cannot sit there and make those decisions on how we
are going to make this thing work. People sitting on the other side of the table can
make it happen or not make it happen and they will tell us whether or not they can make
it happen. He commented he is with Jerry Canada on this, we talked about it the other
day, and we do not want to give raises if we have to pink slip anyone. He stated he has
been through times like this, but not this long, back in the 1980's when times were
tough, he was with local government then as well. He knows how tough it really gets to
be to balance the budget when you just don't have the money and you know you cannot
raise taxes because that is sending the wrong message. People are having a tough
enough time as it is. He stated he is sure it will be worked out; there is no doubt in his
mind. When this thing ends and in May when the budget is adopted, we will all feel
good about what we did even though it is going to be a difficult road to get where they
are going. We have worked together for so long; we may as well continue working
together. Chairman Flora then asked if anyone had any good news.
School Board Member Stovall announced for those who did not know,
Lorraine Lange is Superintendent of the year in the Commonwealth of Virginia and is
one of the top four finalists for national superintendent of the year for the United States
and she will find out in February.
February 1, 2012 91
IN RE: ADJOURNMENT
Chairman Flora adjourned the meeting at 8:03 p.m.
Sybmitted by: _ Approved by:
C ;
Deborah C. J s Richard C. Flora
Clerk to the Board Chairman
92
February 1, 2012
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