Thursday, July 18, 2024

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Commissioners continue to mull budget, spending, tax rate

Alamance County’s elected leaders had little to show for their sweat equity this week after they invested roughly four hours into the preparation of the county’s next annual budget.

The county’s board of commissioners had originally hoped to put this new budget to bed during the course of two “work sessions” that ultimately took place on Monday and Wednesday.

The board’s stated goal for these work sessions had been to tweak a proposed budget that Alamance County’s manager Heidi York has proffered for the new fiscal year. In particular, the commissioners had hoped to minimize a 2-cent increase in property taxes that York has suggested.

County manager Heidi York

In the meantime, they intended to use this opportunity to reconcile York’s plan with a late-coming budget request from the Alamance-Burlington school system, which calls on the county to raise the school system’s annual allotment by roughly $10.3 million – or the equivalent of 4 cents on the property tax rate.

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In the end, the commissioners devoted 120 minutes to each of these gatherings, without reaching any decisions on either the county manager’s proposed tax increase or the school system’s budget request.

In the case of the school system’s proposed allocation, the commissioners have entertained two competing proposals – neither of which seems to have generated much enthusiasm among the board as a whole.

One recommendation, which commissioner Craig Turner has proffered, would fund about two thirds of the requested increase but is silent on how the cost would be born.

The other, which commissioner Bill Lashley floated, promises to solve the school system’s financial problems by halving the cash set aside for teacher salary supplements.

In fact, the only consensus the board has reached during its work sessions is to allow the sheriff’s office to offer a $10,000 hiring bonus to its newest recruits. The commissioners have nevertheless glossed over the cost implications of this proposal by blithely assuming the expense will be absorbed by lapsed salaries from the sheriff’s vacant positions.

In the meantime, the commissioners have resolved to hold yet another work session at 2:00 p.m. on Friday in order to continue their deep dive into the county government’s finances. At this point, they still plan to vote on the budget at their next regularly-scheduled meeting on Monday, June 17.


Breaking developments

These seemingly ceaseless deliberations actually began on a high note on Monday as the county’s administrators revealed some recent adjustments to the proposed budget that the county manager originally unveiled on May 20.

At the start of Monday’s proceedings, Rebecca Crawford, the county’s budget manager, announced that she had been able to add $200,000 to the manager’s projected revenues for the local school system thanks to an adjusted estimate for the fines and forfeitures exacted by the local court system. In addition, Crawford reported that the local library system had just been awarded a state grant that will add another $27,200 to next year’s expected receipts.

Rebecca Crawford, the county’s budget manager

As for expenditures, Crawford revealed that she and her colleagues have been able to nix $30,000 from the manager’s proposed outlays due to the anticipated closeout of an multi-year incentives grant, while another $325,000 has been shifted from next year’s capital outlays for the school system to account for funds that the commissioners have agreed to release in the current fiscal year to shore up the ramshackle bleachers at Cummings High School.

Most of these staff-level adjustments had corollaries on the other side of the ledger. As a result, the net outcome of these various changes was a surplus of $30,000.

The positive impact of these various changes were somewhat undercut by the warnings that the commissioners received about the state of the county’s financial reserves.

According to the county’s latest annual audit, the county’s general fund had $46.8 million in “unassigned” dollars – or cash that hadn’t been pledged for any particular purpose. Because this figure exceeded the county’s stated goal of 20 percent of the general fund’s annual budget, the commissioners transferred the excess, which amounted to about $7.4 million, into the county’s capital reserves. Since then, however, the county’s finances have come under some new pressures that may prevent the remaining funds from being replenished as had been the expectation when the commissioners signed off on the transfer.

During Monday’s work session, the county’s finance director Susan Evans admitted that, on paper, the general fund’s savings are on track to fall to about 18.3 percent of the budget by the time the current fiscal year ends on June 30. Evans added that, in years past, the county could rebuild the general funds savings thanks to sales tax receipts that consistently beat expectations.

County finance director Susan Evans

“But while we are seeing sales tax growth [in the current financial cycle],” she added, “we’re also budgeting for that growth.”

Evans told the commissioners that, for the first 10 months of the fiscal year, the county’s sales tax revenues have come in at about $37.2 million – or about $9.2 million shy of the budgetary projections for the full 12 months. Based on these figures, commissioner Bill Lashley declared that the county will probably be $2 million to $2.2 million “under water” in its sales tax receipts for the current year.

Despite this less than rosy outlook for sales taxes, Evans acknowledged that the county will probably keep its savings intact thanks to other sources of revenue. She recalled that, since 2018, the county has penciled in between $2.8 million and $6.6 million of the general fund’s savings to balance the budget. She added, however, that the county has never actually had to draw on those funds since its revenues have perennially outpaced expenditures.

Evans observed that the county’s current budget sets aside $6.2 million in savings in order to make ends meet. She added that even with the subpar performance of sales taxes this year, she anticipates a “swing” of $2.9 million to the good by the time that the current financial cycle comes to a close.

This prediction generally seemed to go over well with the county’s governing board.

“It’s not as dire as I thought it was,” asserted commissioner Craig Turner.


School system breakdown

In the meantime, Turner and his fellow commissioners tried to create some additional wiggle room for themselves by making various adjustments to the school system’s budget request.

Because the school system had missed the state-mandated deadline for getting its request to the county, York’s proposed budget had entirely omitted the additional $10.3 million in funds that the schools hope to receive from the county over and above their current allowance.  It has consequently been left to the commissioners to tinker with the school system’s request – the details of which were ultimately presented to them at their first budgetary “work session” on May 30.

Read the newspaper’s editorial page views on what’s ahead for taxpayers, a big property tax increase:

During the board’s previous work session, Turner had expressed a desire to spin out $1.4 million in technology-related expenses from the school system’s request.  On Monday, York returned with a plan to fund $1.38 million of those expenditures through the county’s capital reserves, thereby sparing their impact to the county’s general fund.

In addition to this change, Turner leaned on the school system’s representatives to reduce the size of a proposed contract for preventative HVAC maintenance from $550,000 to $345,000. This recommendation was warmly received by Greg Hook, the school system’s chief operations officer.

ABSS chief operating officer Greg Hook

“I think it’s a great place to start,” he told Turner, adding that this allocation could be covered with the lapsed salaries from three vacant positions that the school system currently has for in-house HVAC technicians.

Hook was less amenable, however, when Turner attempted to cut a 20 percent contingency that the school system included in its requested allocation for electricity and other utilities.  Although this contingency comprises nearly $1.2 million of the $3.7 million in increased utility outlays that the schools are proposing, Hook insisted that the added expense isn’t at all arbitrary or frivolous since it reflects the increased usage of HVAC systems, which had previously been powered down at night and on weekends – a practice that has been widely blamed for a system-wide explosion of mold last summer.

“We weren’t running the air-conditioning last year in June and July like we will this year in June and July,” the school system’s COO went on to inform the commissioners. “We also had a mild winter…And without the contingency, I’ll be back up here [to request additional funds].”


Breaking the piggy bank

In addition to the school system’s budget, the commissioners also dug into a couple of items in York’s proposed spending plan for the county’s general fund.

Among other things, the commissioners inquired about the county manager’s recommended allocation of $350,000 to upgrade a county-owned ballfield at either E.M. Holt or Altamahaw-Ossipee elementary. Last year, the commissioners agreed to set aside $1 million for a similar upgrade at B.E. Jordan Elementary, and they had tentatively planned to make a similar investment at one of the other two schools in the next fiscal year. York nevertheless informed them that the work at Jordan had come in closer to $700,000, and she now proposes to fund a similar project at either E.M. Holt or Altamahaw-Ossipee over the course of two fiscal years.

Meanwhile, Turner inquired about the manager’s omission of four-person crew of paramedics to operate a peak-time ambulance that she had previously proposed adding to the vehicular fleet at EMS. York told the commissioners that she had held off on this proposal in order to explore the possibility of privatizing the county’s non-emergency ambulance services and plow the resulting savings into the peak-time ambulance.

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Another topic that generated some discussion among the commissioners was the proposed reduction of funds to some of the nonprofit organizations that receive proceeds from Alamance County’s 3-percent tax on hotels and motels. York said that she halved the proposed allocations for the African-American Cultural Arts & History Center in Burlington and Alamance Arts in Graham since the recipients are located within the municipal limits of two cities that have decided to assess their own 3-percent taxes on top of the county’s existing levy.

When all was said and done, the results of Monday’s work session had proven so reassuring to some of the commissioners that they were ready to fold some additional expenditures into those that York had proposed.

Commissioner Bill Lashley suggested, for one, that the commissioners should hear directly from the county’s recreation director about her operations – including any additional needs that didn’t find their way into the county manager’s spending plan.

“I know she has a good story to tell,” Lashley told the rest of the board.

Lashley’s suggestion prompted John Paisley, Jr., the chairman of Alamance County’s commissioners, to interject his own assumption that the rec director’s proposed presentation wouldn’t necessarily include any additional budgetary requests. But Lashley wasn’t about to toe the chairman’s line on this point.

When you say ‘come in and ask for more money,’” Lashley said as addressed Paisley directly, “I say ‘why not?’”

Lashley went on to suggest that the sheriff should, likewise, have a chance to pitch any budget requests directly to the commissioners.

Meanwhile, Turner suggested that he and his fellow commissioners may want to continue their previous efforts to fill the large number of vacancies among the county’s jailers, social workers, and paramedics. He even tossed out the possibility of a compensatory increase “in the $2,000 to $3,000 range” for these particular posts.

“We’re not doing that with the current plan,” he added. “I’m not necessarily suggesting that we add revenue to that. But I am suggesting that we find additional revenue to take those folks above market [level]…I think that makes sense, and it’s a private sector idea.”

In the end, it was left to York to pump the brakes on the sudden spurt of ideas that seemed to coincide with the board’s increased optimism about the county’s next budget.

“We just need to be careful that we don’t go down a road that we tried to turn a curve on,” she told the commissioners.


Breaking point

The mood grew much more serious on Wednesday, as the commissioners started to incorporate additional items into the county manager’s spending plan.

As a prelude to this exercise, Steve Carter, the vice chairman of Alamance County’s commissioners, reminded his colleagues what will be at stake if these changes make their way into the final budget.

“We need to be cognizant of the fact that everything we add is going to affect the tax rate,” he said, “and I don’t see many places in this budget we can cut.”

The echoes of Carter’s caveat appeared to linger as the commissioners began their budget adjustments with the school system’s requested increases.

Commissioner Craig Turner suggested that the county should at the very least pick up the bill for school system’s utility increases. He went on to propose a sum of $2,553,000 based on the school system’s latest estimates – which doesn’t include any sort of contingency to serve as a cushion.

Meanwhile, Pam Thompson proposed another $495,000 to cover a proposed contract for preventive maintenance on the school system’s roofs and HVAC systems.

“I don’t want to cut this short,” she added. “I don’t want to see this mold in the county ever again.”

Turner, who also endorsed this preventative contract, went on to throw out a laundry list of other items that he said should give the school system the money it needs to operate.

“I came up with a $6.8 million number – down from $10.3 million,” he summed up as he reached the end of the list, “which would allow you to have the same service level that you had last year.”

Turner’s efforts nevertheless fell short of the hopes that interim superintendent William Harrison had entertained for the county’s governing board.

“We tried to keep this number as low as we can,” he said, “and there’s nowhere I can find a cut… Everything that we asked for which goes down to zero, we’ll have to take off the table.”

Meanwhile, Carter chastised the school system’s supporters for allegedly hyping up hysteria that the schools have been shortchanged by the county.

“We all support education,” the board’s vice chairman said of himself and his fellow commissioners. “But I think the problem that ABSS has had this year is a public image problem.”

In an attempt to address the school system’s travails, commissioner Bill Lashley reiterated a request he had previously made for the sums which the school system had spent on teacher supplements over the past two fiscal years. Lashley insisted that this figure could lead to a break-through in the board’s deliberations about the school system.

“I had a solution to the school system’s problems,” he added. “but I can’t say anything until we know what that supplement number is.”

The school system’s administrators proceeded to scare up these figures, which showed that the supplements for the school system’s teachers cost $10.8 million and $11.6 million for the financial cycles that ended in 2023 and 2024. After factoring in the supplements for other positions, these figures rose to $12.2 million and $12.9 million for each 12-month period.

With these figures in hand, Lashley suggested that the school system could reallocate about $7 million of the funds earmarked for the supplement to cover gaps in the school system’s budget – a move he justified based on the $19 million in bonuses that the school system handed out a couple of years ago from its pot of federal pandemic relief.

“If you were to take the number that you’re in the hole and subtract it from the teacher supplement, it gets the school system on solid ground,” the commissioner said. “It’s a hard decision…But this would answer your question. It would also make people who are part of the school system – the teachers who come up before us asking for money – realize that there are repercussions to the school board’s votes…And maybe you wouldn’t have as many Kool-Aid drinkers coming up in front of me asking for money.”

Lashley told Harrison that he needn’t respond to this suggestion. The interim superintendent nevertheless said a few words that revealed his reluctance to take the commissioner’s advice.

“We’ve hurt teacher’s enough this year.”


A breakthrough (of sorts)

The tenor of Wednesday’s meeting grew more enthusiastic as Lashley called on the sheriff’s chief deputy Jackie Fortner to pitch a request for hiring bonuses to the commissioners.

Fortner went on to suggest a cash incentive of $10,000 to encourage more people to apply for his agency’s 70 vacant positions – 49 of which are in the detention center.  Fortner added that the bonuses would be sunset once the sheriff’s office has filled 80 percent of its vacancies (or 56 out of 70 positions).

The sheriff’s chief deputy predicted that this benefit could help his agency fill 10 of its vacancies during the next fiscal year and added that, with any luck, these bonuses will attract veteran jailers from other jurisdictions.

“We hope that many of these will be transfers from other agencies,” he told the commissioners.

Lashley endorsed Fortner’s proposal before Carter concurred. “I think this is a great idea,” the board’s vice chairman told his colleagues. “I don’t think it will have a net impact on our budget because we [currently] have 70 positions that we’re not funding.”

While Carter argued that lapsed salaries would cover the cost of the bonuses, York pointed out that the county still needs to have some “seed money” set aside if it intends the pay out the bonuses when the new fiscal year begins.

Lashley proposed an allocation of $106,443 to fund bonuses for a quarter of the sheriff’s vacancies. The rest of the board ultimately accepted these recommended enticements – to be paid out in two installments, with $5,000 due upon hiring and an additional $5,000 after 12 months of service.

Turner broached the possibility of signing bonuses for other departments, such as EMS and social services. York nevertheless discouraged this move.

“In the past we said we weren’t in favor of signing bonuses,” she said, “because the data shows they don’t retain employees. They leave after a year, and you’ve lost $10,000.”

Wednesday’s work session didn’t include John Paisley, Jr., the chairman of Alamance County’s commissioners, who was reportedly “under the weather” that afternoon.

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