HomeMy WebLinkAbout2/19/2014 - SpecialFebruary 19, 2014 129
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 School Administration Building, 5937 Cove Road, Roanoke, Virginia
for the purpose of a joint work session with the Roanoke County School Board to
discuss fiscal year 2014 -2015 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 McNamara and Chairman Barrineau called their respective
boards to order at 6:03 p.m.
MEMBERS PRESENT: Chairman Joseph P. McNamara; Supervisors Al Bedrosian,
Joseph B. "Butch" Church, P. Jason Peters
MEMBERS ABSENT: Supervisor Charlotte A. Moore
STAFF PRESENT: B. Clayton Goodman III, County Administrator, Richard
Caywood, Assistant County Administrator; Paul M.
Mahoney, County Attorney; Rebecca Owens, Director of
Finance; Deborah C. Jacks, Deputy Clerk to the Board
SCHOOL BOARD
MEMBERS PRESENT:
Chairman C.
Minnix; Jerry
Wymer
Drew Barrineau, Supervisors H. Odell "Fuzzy"
L. Canada, Michael W. Stovall, David M.
SCHOOL BOARD
MEMBERS ABSENT
None
SCHOOL ADMINISTRATION
STAFF PRESENT: Dr. Lorraine S. Lange, Superintendent; Allen W. Journell,
Deputy Superintendent of Administration; Penny A. Hodge,
Assistant Superintendent of Finance; Dr. Martin Misicko,
Director of Operations; Angela Roberson, Clerk to the
School Board
130 February 19, 2014
IN RE: BUDGET
1. Proposed revenue sharing formula change
Rebecca Owens and Penny Hodge provided the Boards with a
PowerPoint presentation; a copy of the presentation is on file in the office to the Clerk to
the Board of Supervisors. The new revenue sharing formula was reviewed, based on a
rolling three -year average and it was noted all numbers can be traced back to a number
in the financials. Staff recommends the approval of this new formula.
Supervisor Bedrosian inquired if the split of revenue is sixty -five percent
(65 %) for the schools (salaries and benefits) and thirty -five percent (35 %) for the
County. Ms. Hodge responded in the affirmative.
Supervisor Church inquired where is the debt service with Ms. Hodge
advising this does not figure into the new calculation.
School Board Member Canada asked if the percentage for the schools is
sixty -five percent (65 %) even though they have lost employees. Ms. Hodge explained
the percentage is a percentage of the total and takes into account a substantial increase
in VRS.
Supervisor Bedrosian asked for an explanation because of the debt
service. Ms. Owens advised the formula in the past had a component incrementally
increasing the amount that we were putting toward capital program. This is the last
budget year for an incremental increase. Expenses and debt are not factored into the
new formula. Supervisor Bedrosian then asked how does this effect the calculation?
This is a pure revenue sharing allocation advised Ms. Hodge. The previous formula
was more of a hybrid. The short answer would be pure revenue sharing and a
completely different approach.
Chairman McNamara advised the old program took into account various
items including differences and changes in VRS, health insurance changes, life
insurance, dental, which was a really nice part of the formula. The only problem is that
it works with slightly increasing enrollments and slightly increasing populations and it
does not work very well in the scenarios that we have been dealing with the last several
years. He advised the big thing this does is to try to correct the sixty -five percent (65 %)
factor. To simplify, the schools have a much higher percentage of their budget in
personnel so you give them more benefit because of the higher portion in personnel and
they have less discretionary things they can work on.
Supervisor Peters inquired if the debt of the County were to continue,
where does that money come from, School or County budget or joint. Ms. Owens
responded evenly from both. School Board Member Canada advised since day one
$300,000 came from each side for each year. Ms. Owens advised $2.9 million for a
total of $5.8. After this year, which is the last year for the $300,000, this will be a self -
supporting fund and allow for the $10 million debt each year. Chairman Barrineau
stated the one unique aspect of this program, is to fund this, money is taken from your
February 19, 2014 131
operating budget. So, all the projects they have been able to complete to date have not
increased the operating budget. What we have done is taken it out of operating and put
into capital. Montgomery County just had to raise taxes. City of Salem just increased
sales tax. Bedford and Franklin County have also had some issues. We have
incrementally reduced our operating expenditures to cover this and now it is self -
funding. People marvel on how this is set up and what we have been able to do.
Supervisor Peters inquired when will the fund be tapped out with Ms.
Owens responding fiscal year 2034/2035. Supervisor Peters then asked in a
catastrophic disaster, that we would have to bond for whatever reason what is our total
limit we could go to. Ms. Owens advised at June 30th there was approximately $182
million outstanding and our total maximum would be $271 million. There is quite a bit of
capacity or cushion.
Supervisor Bedrosian stated we have $182 million in debt and noted he
was raised to not like debt. The conversation seems to be around the County being
able to pay it. The debt increases, but we are still making the payments. It seems to
him that the conversation is always centered around the County paying the bill and not
really concerned that the debt is actually going up. Twenty years ago, the debt was $60
million. Today we have $182 million and if we do Vinton and the school, the debt will be
over $200 million. So, the debt actually does go up; we are servicing it and in two (2)
years there will be another project that will add another $20 -30 million in debt. He
asked if he is missing something, we do not appear to ever pay this debt down. How do
we pay the debt down when we are adding $10 to $20 million? Chairman Barrineau
stated the Schools do not bond anything over twenty (20) years; that is the maximum.
We have thirty (30) facilities so essentially with the age of our facilities we are trying to
play catchup from years past. He stated he thinks what this plan does is the debt as a
percentage of revenues will go down in the foreseeable future once we fully implement
this and this is the base level. He stated he could also see a time to continue the
$300 if you chose to. Instead of additional bonding, you could build up your cash
reserves. Mr. Bedrosian asked what happens to the $182 million that we have right
now; he believes the schools carry $100 million. Ms. Owens responded the schools
have fifty -six percent (56 %) of the total. Mr. Bedrosian asked if this number ever goes
down.
Chairman McNamara stated the capital budget is a huge thing, which is
why we put the Cultural and the Health and Human Services in one day. Rebecca is
putting together three (3) different scenarios from a capital perspective for the Board to
look at. Obviously at one end of the spectrum, if we stop projects we drop $10 million a
year that is pretty simple we would not have to do anything else. If you want to keep
everything exactly the way it is then we are going to do $10 million a year. Our total
outstanding debt will come up with those numbers, but will be reasonably consistent.
The third alternative is to keep the $10 million a year and keep bumping up
contributions. In which case you can either increase what you do or lower debt. That is
a discussion that we need to discuss as a Board and evaluate.
132 February 19, 2014
Supervisor Peters stated in using the analogy of our homes, he would
hope that none of us would live in our homes for twenty years and not do anything to it.
If you do you are going to have a huge amount of debt because you will have to replace
everything all at one time. He stated that for years the County has put projects off and
now they have piled up. There is a way to do it that is not going to put the County over
a barrel.
School Board Member Stovall stated they have to bring these buildings
into the 21st century. He further added, he admires Mr. Bedrosian's position, but it is
not practical.
Supervisor Bedrosian stated we have tripled the debt in the last twenty
(20) years. Mr. Stovall stated the difference between us and the federal government is
the federal government wants to keep increasing the debt ceiling and we are not doing
that. We are paying this off as a rolloff. Twenty years is a long time.
Supervisor Church added that with regard to Glenvar, it is the right thing to do for the
area, it is an antiquated building and construction costs should not be as high.
School Board Member Wymer stated his only comment is that through this
whole project of renovation, he sees it almost like an insurance policy for the older
schools against catastrophe. We are renovating our oldest buildings, but by having the
funds it is being done in an organized way and being able to project. In talking about
the Glenvar project, this project is part of the study that was done in 1996 and here we
are eighteen (18) years later talking about doing it. There are a lot of other projects that
were in line or moved ahead of this project because of their needs. It is not going to
stop with Glenvar. We have Cave Spring High School and the Burton Center and a few
elementary schools that have not been renovated. He stated he thinks it is the foresight
that the County and Schools had in 1996 to address the problem and put in place a
system so that we did not have to raise taxes; did not have to come to the Board of
Supervisors and say we have a school that is ready to collapse. The prior planning that
went into the CIP and funding is now allowing us to do these things so that we do not
have a catastrophic situation or a financial situation where we had to come up with a lot
of money in a very short period of time.
Chairman McNamara stated 1996 was the Blue Ribbon Committee. 1998
was when he came on the Board and Mr. Minnix was here. If he remembers correctly,
there was not $148 million in 1998 dollars of need; $148 to $150 million worth of needs
in twenty (20) year old dollars when we were building Hidden Valley with construction
costs of $19 million and now our debt as a percentage of total revenue is a tad higher,
but we were in a sad, sad state of affairs and totally neglecting our educational
infrastructure at that time. It has taken twenty (20) years to get back to some
reasonable sense from a facility standpoint. There was never an issue with teachers
and administrators and staff, but we did have facilities and we had fire hazards at Cave
Spring High School, ninth grade in with the Junior High.
February 19, 2014 133
School Board Member Canada remarked that times and technology in the classrooms
have changed. We did not have the infrastructure twenty (20) years ago to support the
technology that we have now.
School Board Member Minnix stated he does not like it, but it is
unfortunately here to stay. He added that we cannot wait until we save up the cash.
Staff has come up with a pretty good plan. It will cause us to incur debt. He knows we
don't like it, he does not like it either, but it has caused us to perform well up to this point
as far as our facilities and yours. All the debt is not the school's. So, it has placed us in
a position where we have been able to keep up with the needs of the children that we
are teaching and preparing to take care of us when we get older, but it is a fact of life.
We are going to have debt. It would take a long time for you to save $50 a payday to
buy that $225,000 house that you want to buy. So, he understands that you do not feel
comfortable with this and that is why you can vote yes or no.
Supervisor Church stated he knows we have an unappropriated fund
balance, does the school have a "rainy day" fund. If the bottom falls out of our world on
our side the Board has directed our budget department to come up with approximately
eleven percent (11 %) or $21 million dollars, so it is not like we are sitting on the corner
with a hat asking for money, but that is a pure "rainy day" emergency fund. He thinks
this funding process has served us well over the years. Hopefully, we are going to get
to the point, hopefully sooner versus later, where we can take that money and pay
down. On our side, he believes we are retiring some debt, the County Administration
building and Salem Bank and Trust in another year. So, we are paying off debt service
but at the same time we cannot let our buildings get so dilapidated and antiquated that
we are doing a disservice to any particular area. We have five areas that we try to treat
on a fair basis in a rotation, needs coming first. He added he thinks we are doing things
in a proper avenue, between us we are keeping a rein on both Boards; this is the beauty
of this agreement. It is better than most.
Chairman Barrineau advised the school system has a $2 million
contingency fund. It is not a very high percentage of the total budget. It originally
started when fuel went over $4 a gallon. The last thing the schools want to do is come
back to the County Board with money issues.
Ms. Owens finished the presentation drawing attention to pages seven
and eight, the draft Memorandum of Understanding (MOU). Please review the other
items of interest on page 8 as they relate to the MOU.
2. Fiscal year 2014 -2015 priorities and employee raises
Mr. Goodman advised the County was looking at compensation; two
alternatives: two percent (2 %) and two percent (2 %) with market adjustments. He
indicated the County is no longer in the middle of the market and no longer competitive.
The issue is can the County afford it. He added that sales tax figures were down
134 February 19, 2014
twenty -four percent (24 %) for December. Staff will be reviewing to make sure there is
not an error in report. Of additional concern is that the cold weather in January and the
snow events in February will have impacts on sales and meals tax. Preliminary
numbers indicate an $800,000 loss at year end. It appears we will need an additional
$2.8 in revenue for fiscal 2015.
Chairman Barrineau stated the schools will set priorities next month, but a
two percent (2 %) raise is being considered.
School Board Member Minnix advised we need to look at what we need to
do to keep our staff. We need to address some type of help in the form of a raise and to
figure out a way to keep our staff at the same level we have.
Chairman McNamara stated if both Boards are in agreement, staff needs to
get the raise on the table first and then figure out the budget. Both Boards should try
and give the same raise.
School Board Member Canada asked Mr. Goodman about the market
adjustment with Mr. Goodman advising they would be looking at jobs, not people.
School Board Member Canada stated the only caveat he has is that he
does not want to do a pay raise if they have to eliminate positions.
School Board Member Canada then asked what the County cut off is under
the Affordable Health Care Act with Ms. Owens responding not allowing employees to
work more than 29 hours.
School Board Member Stovall asked if they were receiving benefits before,
with Ms. Owens advising they were allowing them to work more hours, but they did not
have benefits.
Supervisor Bedrosian inquired if the correct number is around 2,000
employees with Chairman Barrineau advising 2,100. Supervisor Bedrosian asked if that
was the number they were budgeted for or is that 2,100 actual, physical people that
have a name with School Board Stovall responding in the affirmative. Supervisor
Bedrosian stated he asked that question because sometime you budget for 2,200
people but all the positions are not filled. School Board Member Stovall responded they
do not round numbers and 2,100 people come to work each morning. Supervisor
Bedrosian stated so that is the amount of money that we allocate. School Board
Member Stovall responded that over the last fourteen years, they have lost over $14
million in revenue and in that $14 million; we have lost over two hundred and fifty (250)
employees. They have not laid off any full -time employees off through attrition or
retirement. Supervisor Bedrosian stated so when you lost $14 million, the budget for
salaries for two hundred and fifty less employees; was it the same. Ms. Hodge stated
on page 277 of the budget book you can see the full -time equivalent they have
budgeted. They have budgeted in the current year for full -time equivalents, not all
employees are full -time. So it is not physical bodies. This is an education standard.
Supervisor Bedrosian stated out of the whole group about fifty -five percent (55 %) are
actual teachers with Ms. Hodge confirming.
February 19, 2014 135
Supervisor Peters stated he would like to add one thing that he thought
was very enlightening him. When talking about raises and what it cost from the County
side he had the opportunity to meet with Mr. Goodman and Chief Hall. Over the last
five to six years, they have hired eighty -eight (88) people and lost thirty -eight (38) of
those people to other jurisdictions. Out of those thirty -eight people, the County invested
$39,000 per officer in training, which is more than $500,000 and most of that was
because of pay. That loss is going to continue. He advised his concern is that he does
not want to see Roanoke County, whether it is Fire and Rescue, Police or teachers, as
the training ground for everybody else.
IN RE: GLENVAR HIGH SCHOOL PROJECT OVERVIEW AND TIMING
Dr. Martin Misicko provided a PowerPoint presention on Glenvar High
School and its current condition. A copy of this presentation is on file in the office of the
Clerk to the Board of Supervisors.
Next, representative of Spectrum Design gave a PowerPoint presentation
of the proposed changes to Glenvar.
Supervisor Peters inquired if it was cheaper to tear down and start over
and was advised no because the building is structurally sound.
Ms. Hodge went though the remaining time schedule, which was the last
page of the agenda package.
IN RE: DISCUSS FUTURE MEETINGS
Chairman Barrineau advised he would like to have ongoing discussions
especially with the pressure points they are facing and would like to get together on a
quarterly basis.
Chairman McNamara stated both Boards would be spending a lot of time
looking at capital and debt over the next several months and suggested meeting again
in July.
It was the consensus of both Boards for the next meeting to be held on July
1, 2014, with dinner at 5:30 p.m. and the meeting to begin at 6:00 p.m.
136
IN RE: ADJOURNMENT
February 19, 2014
Chairman McNamara adjourned the meeting at 8:00 p.m.
u4mitted by:
Deborah C. Jocks,/
Deputy Clerk a Board
Approved by:
geph P. McNamara
airman