STATE OF GEORGIA
COUNTY OF HENRY
The Henry County Board of Commissioner held a called public meeting at 9:05 a.m., Tuesday, May 11, 2004, in the Community Room, County Administration Building, 140 Henry Parkway, McDonough, Georgia. Notice of this meeting was posted on the bulletin board in the foyer of the County Administration Building. The Daily Herald was notified of this meeting. Those present were:
Leland Maddox, Chairman, presiding
Lee Holman, Vice-Chairman/District V Commissioner
Warren E. Holder, District I Commissioner
Gary M. Freedman, District II Commissioner
Gerry Adams, District IV Commissioner
Linda G. Angus, County Manager; Patrick Jaugstetter, County Attorney; Susan B. Craig, County Clerk; Rob Magnaghi, Deputy County Manager/Public Safety Director; Danny Taylor, Economic Development Division Director; Michael Harris, Public Works Division Director; Mike Bush, Finance Department Director; Angie Sorrow, Budget Analyst; and others.
Commissioner Adams made a motion to accept the agenda as published; Commissioner Freedman seconded; and the motion passed by a vote of 4-0, with Commissioners Holman, Holder, Freedman and Adams in favor.
Ms. Angus and the Board discussed the proposed Fiscal Year 2004-05 General Fund budget. The following was discussed:
· Major sources of funds are property taxes, sales and use taxes and charges for services, which combine to make up 89.1% of budgetary funding, with property taxes making up over half, or 57% of the County’s resources.
· Appropriations for functional areas include: 38.54% for Public Safety; 23.74% for General Government; 4.89% for Community/Economic Development; 8.76% for Judicial; 4.45% for Health & Welfare; 9.67% for Public Works; 2.89% for Culture & Recreation; and 7.06% for Other Uses.
· The format used is generally used in government financing. The budget will be turned in for the Budget Excellence Award by the Georgia Finance Officers Association (GFOA).
· The property tax figures used in the preparation of this budget are projections for the new year.
· The miscellaneous revenue sources include: interest income, lease interest income, contributions, telephone commission, reimbursements, overages/shortages, prior year reimbursements, insured losses, miscellaneous Medicaid payments, rent and royalties, recreation concessions, recreation rents, ASCS rent reimbursement, DFACS rent, Developmental Disability rent, discounts taken, and gas usage reimbursements.
· Assessment notices have been sent out by the Tax Assessors’ Office. The Board sets the millage and the tax bills are based on the amount of millage levied.
· Commissioner Holder voiced concern over the percentage proposed for Public Works. Ms. Angus stated there is a $7 million item the Board has yet to determine, which is not included in that number. SPLOST funds are not included in the General Budget. Commissioner Holder stated Public Works is being funded with less than ten percent of revenues. Ms. Angus stated the County has not been a strong player with the State and that will be the key to getting enough money in Henry County to deal with road issues.
· Anticipated revenues to be collected are $93,852,055, which is an increase of approximately 50% over the 1999/2000 Fiscal Year.
· Commissioner Freedman stated Henry County’s property taxes are high. He said the budget anticipates $53.5 million in property taxes, and if the millage was reduced, that amount would be less. He said the Board should consider reducing the millage rate. Ms. Angus stated the Board could cut $7.5 million and cut property taxes, but philosophically in government, the County is responsible for response times of police and for roads, and when you look at the assessed valuation, a bulk of it comes from growth, or new improvements to property. She said an investment needs to also be made in the County’s fleet.
· Commissioner Holman commented the budget in brief figures are hard to compare. He asked for the miscellaneous revenue figure. Ms. Angus responded 2004-05 is $1,435,773.
· Ms. Angus stated she went through all of the operational budgets and cut them to operating minimums. She said the County can run the government as it stands today with the proposed budget. She said $7.5 million is available for the Board to designate for specific projects. She provided the Board with a list of unfunded projects which have been discussed. Ms. Angus said the Board could cut the property taxes by $7.5 million, which she would not recommend.
· Commissioner Adams asked what the $7.5 million would allow as far as police response time and additional fire stations are concerned. Ms. Angus stated the Board can use the $7.5 million to invest in enhancing response time; in three-man crews on fire engines, which is what the Public Safety Department and Fire Department Chief are recommending; in roads; two Courthouse projects that the judiciary is very adamant about; and other projects. She said the Board has $35 million of what someone could reasonably classify as needs and $7.5 million to apply to them.
· Commissioner Freedman said the Board needs to look at cutting property taxes, which are such a burden. He said if the Board does cut taxes, the commercial growth in the County will rise. He said even if the millage rate is not increased, taxes will increase because assessments will go up. He noted the Board only controls 35% of the property taxes, with 65% going to the Board of Education. He further noted 2 mills goes to the Water Authority and 1 mill goes to the Hospital Authority for indigent care. Commissioner Freedman stated the Board has not increased the millage rate in 16 years, and five years ago the Board cut property taxes by .25 mill. He stated the Board of Education is raising the tax millage by 1.25 mills. He said his concern is the burden on the public. Commissioner Freedman stated services would have to be cut in order to reduce taxes. Ms. Angus stated the Board must consider what level of service has become acceptable in parks and recreation, roads, and response times, which is government’s function. She said the Board must make that decision. Ms. Angus noted the County is building new fire stations, building senior centers and libraries, which will all have to be staffed. She said the County does not have adequate staff now to fill the new buildings. She said the County’s revenue is not adequate enough to meet the needs and desires of the community.
· Commissioner Holder noted $7 million is the amount left over and above expenditures, which will equate to approximately 1.5 mills. He asked what each average homeowner would save if the millage rate was rolled back 1.5 mills. He estimated it would be less than $100.
· Commissioner Adams stated the Board needs to be mindful of a referendum which will be voted on in November to freeze property taxes. Chairman Maddox said if the referendum passes, the assessments will continue to increase. Commissioner Holder said if the referendum passes, the Board will only be able to increase revenue by growth. He stated the historical data proves the County is living on growth. Commissioner Freedman said it does not have to be growth just by property taxes, noting the County’s salvation will be sales tax. Commissioner Holder stated the County also has a progressive homestead exemption which continues annually to reduce the County’s revenue. He noted the Board of Education did not buy into the homestead exemption because it was going to cost them $150 million over a ten-year period. Commissioner Freedman said the Board needs to look at the entire $93 million budget for reductions, not just the $7 million.
· Ms. Angus stated the operating budget is to the point she has not included new positions. She noted the District Attorney, for instance, because of the third Judge, he believes will be here this year, says he will require two new attorneys. She stated the Courthouse space will need to be renovated for the third Judge. She said the operating budget does not include the positions, and it is to fund exactly what we have today. Ms. Angus said there is a 4% increase in the budget for pay and benefit changes in the budget. She said the Board could potentially cut that out, but where the County will gain efficiencies are investing in people with better qualifications and investing in training and hours. She said there is a 5% vacancy variance in the budget, which means at any point in time 5% of our work force is turning over. Ms. Angus stated all vacancies were eliminated from the budget and she put the vacancy variance of 5% in one number, and whenever a position comes up to be refilled, departments must justify why they need to replace a person. She said there is only $1 million in Contingency out of a $93 million budget.
· Ms. Angus stated approximately $2.5 million is being carried over from last year to the year we are in, forced out of this year’s budget. She stated this is a daily work for staff; to save money. She said the County made a big effort on roads and road improvements last year from the money pulled from fund balance. She said that effort cannot be duplicated this year. She noted all of the monies in the $14 million set aside last year are encumbered.
· Ms. Angus stated in an effort to fully disclose everything to the Board, the Board as a policy has set aside 25% in fund balance of the total revenues and expenditures. She said when staff made that calculation this year, it took more than $2 million to satisfy just that. She said fund balance would be $24 million, and the Board could theoretically spend that entire fund balance, but that one issue the Board took on was a big factor when the County went to the bond rating agencies and got the County’s bond rating increased from an A-3 to an A-2 for County government, the Hospital Authority, the Water Authority and the Board of Education. She said the Board could decide to set aside 20% instead of 25%, which would allow an additional $5.5 million to be spent. She said that is a decision the Board would have to make.
· Commissioner Holman stated the Board was provided a fund balance figure of what is anticipated at the end of the year. He asked what is in fund balance as of today. Ms. Angus stated while staff projected $32 million for the year that ended last June, it actually came in at $34.5 million. She said the Board had planned to spend about $10 million of that this year on road projects. She said today the fund balance at the end of this year should be about $26 million. She said if she gave the figures for today, they would be distorted because what fund balance represents is the end of your last year, plus revenues, minus expenses equals fund balance. She said because there is a difference of about $20 million in revenues and expenses today because all payrolls have not come out, etc., but revenues are collected in the middle of the year, it would not be a meaningful number.
· Commissioner Holman referred to the expenditure pages where in 1999-2000 the County budgeted $22 million for Public Safety and the proposed 2004-05 budget is $36.2 million, which represents a $14 million increase. He further noted for the same period Public Works only increased $300,000. Ms. Angus stated that is according to just the General Fund budgeted expenditures. She said it is not the picture of the Board’s investment in Public Works because of SPLOST I and SPLOST II and the $14 million set aside out of the General Fund last year for roads. She said it showed up as a transfer to the Capital Projects Fund.
· Commissioner Holman said if SPLOST funds were distributed equally throughout the County, he would not have a problem with this, but the SPLOST money is not proportional, at least for District V, and the proposed budget does not reflect any money to make up for the shortfall for infrastructure. Ms. Angus stated there are two schools of thought about SPLOST money; one is that SPLOST needed to be divided equally by five districts, and the other was the Committee determined specific projects and based on the proportionate amount allocated to each district of the total. She said that is a discussion the Board has not had, yet.
· Ms. Angus stated the $7.5 million is not an honest number; it is not a good picture of what is available. She said the County has got to make an investment in its fleet. She said she probably should have put $3 million of that $7.5 million in the General Fund budget.
· Ms. Angus stated the compensation plan was not specifically budgeted in the departments; it was budgeted in one line item. She noted this year the Fire Department and Recreation Department were two of the departments receiving the largest percentage in pay increases. She stated because the Board had given the Police Department employees 5% annually and a longevity increase they did not get that kind of increase out of the compensation plan because the market determined the County was not very far below market. Commissioner Freedman stated the Police Department received 2.5% annually, plus 2.5% longevity, which made 5%.
· Commissioner Freedman asked what the $12 million in the Fire Department’s proposed budget is for. Ms. Angus stated the budget, as amended for 2003/04, designates $9.7 million, and 2005 is $10.9 million. She said in 2005 staff took everyone who is on the payroll today and exactly what they are making in salary and benefits, including the increase, and they are at $10.9 million. She said they set aside, knowing the County has a 5% vacancy at any point in time, and did not show any vacancies in their budget.
· Ms. Angus stated detailed explanations were required for technical line items in the budget. She stated her recommendation is based on a review of the explanations plus what each department had spent to date because expenditures have been tightened. She stated she received varying degrees of explanations from other elected officials. Ms. Angus stated she also looked closely at travel requests.
· Ms. Angus stated one thing which increased was debt service because of the lease-purchases made this year. She said when the Board addresses fleet this year, consideration may need to be given to a three-year payment schedule.
· Commissioner Freedman stated a State law is addressing the public defender system. He asked whether the law mandates the County hire a public defender. Mr. Jaugstetter stated the County is required to provide a public defense system. He stated the State will fund the employment of certain public defenders, but only their salaries. The County must fund their office and other necessities. Commissioner Freedman noted the amount doubled in the proposed budget. Ms. Angus stated the figure represents an actual count. She noted when the County tried to address a public defender’s office during this past year, there were problems with some elected judges, Solicitor and District Attorney. She said she is not saying they were wrong, however, they objected to what the County was trying to put together.
· Commissioner Freedman noted the Juvenile Court is growing at a fast pace due to the increased number of youth. He further noted the funding did not increase. Ms. Angus stated Juvenile Court is grant-driven, and if a department could not provide specific data on a grant, it was not included as a revenue or expenditure in the proposed budget.
· Commissioner Holman asked about the Victim Witness Program. Ms. Angus stated the Program is being carried in a separate fund, and is not part of the General Fund.
· Commissioner Holman referred to Unallocated Funds in the Executive and Legislative budget, which is almost $12 million, and asked for an explanation, noting it has increased in recent years. Ms. Angus stated of the $11 million, the savings pooled together that are in the $7.5 million, $4.5 million is in that number to be transferred out of the General Fund to fund whatever the Board wants to fund out of the $7.5 million.
· Ms. Angus stated the County’s payroll is approximately $40 million, and four percent is approximately $1.6 million. She said with benefits, the increase will be approximately $2 million. She said $800,000 is proposed for new employees and if the District Attorney hires two additional attorneys, it will require approximately $200,000 of this amount.
· Ms. Angus stated a flexible benefit option may be offered where the employees can take pre-taxed dollars, put them into the plan and both the County and the employee can save on Social Security tax.
· Commissioner Holman asked what the value was last year of the digest and what the value is projected to be this year. Ms. Angus stated the gross digest for the current year is $5.1 billion and staff assumed there would be a 9.1% increase this year due to revaluations and growth. She stated last year staff assumed there would be a 6% increase in the digest and, in fact, it was 12%.
· Commissioner Holman said it is his understanding the process the Board is going through is to adopt the budget that will allow the Board to fund County government, and then the next step will be to adopt the millage rate along with the Board of Education and Water Authority so the Tax Commissioner will know what amount to collect from taxpayers. Ms. Angus stated that is true.
· Ms. Angus stated if the Board adopts the budget as it stands, after the Board has determined the detail of the $7.5 million spending, then the millage will remain unchanged. Commissioner Freedman said collections will be higher because valuations change. Ms. Angus stated the amount collected will increase only if the property owner’s specific assessed value increased.
· Commissioner Holman stated in 1998 the total revenues for Henry County was $46 million, in 1999-$51 million, in 2000-$58 million, etc. He said it appears the growth would be somewhat linear and smooth, but the historical data bounces up and down. Ms. Angus stated while the historical numbers mean something in the picture, our historical assessed valuation and building, etc. would vary like the stock market would. She said there is never a straight line in economic factors unless it is a model. Ms. Angus stated the interest rates this year are predicted to rise, which will have an effect on both the after-market real estate and the building, and staff has not used that as an issue here. She said from 1998 until now, interest rates, economic factors and unemployment have all impacted the numbers.
· Commissioner Freedman asked why the budget does not include debt service for FY 2004-05. Mr. Bush stated debt service is shown in another fund. Ms. Angus stated it is shown as a transfer out; the expenditures and the General Fund’s obligation is just in the other numbers. She said staff could categorize debt service in the General Fund to show the transfer out.
· Commissioner Freedman asked what non-departmental includes. Mr. Bush stated that is the debt service number and 911 fund.
· Commissioner Holder asked whether the $2.675 million represents the fees the County receives from the Board of Education for collecting their taxes. Ms. Angus stated the fee is for a service the County provides the Board of Education. Commissioner Holder stated the Board of Education is paying $2.675 million for the Tax Assessors Department and Tax Commissioners Office operating expenses of $3 million, so it is costing the County $353,738 to collect all of the taxes in Henry County. He stated he does not think that is fair. He noted he understands the law allows the County to charge up to 2.5% of the amount of tax collected. He said the Board of Education receives approximately 65% of the collected taxes and they should only have to pay 65% of the cost of running the departments instead of 90%. Commissioner Holder said some counties do not charge the Board of Education and others charge up to 2.5%.
· Commissioner Holder asked how much the Board of Education reimburses the County for the School Resource Officers. Mr. Bush stated the revenue figure is $332,000, which is exactly what it costs the County. Ms. Angus stated the only difference in the cost and the amount collected is due to the fact the County assigned an additional supervisor to oversee the program.
· Commissioner Freedman noted the budget indicates there was a deficit of approximately $50,000 in prisoner housing. Ms. Sorrow stated there was a $50,000 increase in revenue because the County housed prisoners. Mr. Bush noted when an inmate is convicted, he/she is housed in the County Jail until the State has available space to house them and the State reimburses the County $34 per day. Ms. Angus stated the County Jail is over capacity.
· Commissioner Holman stated in 1998 the County had a $46 million revenue and in 2005 the County is anticipating a $94 million revenue. He asked why it takes twice as much money since 1998 to 2005 to operate government. Ms. Angus stated if growth is linear and the Board has chosen to have service levels follow the linear progression of the growth, then it would only make sense that they would track. She stated there was controversy about bringing in a higher level of supervision in the division heads this year, this is a complex operation, and the kind of skill you might need to employ in total in all offices is more sophisticated in planning and police services, and it costs more than what you might need if you had a $10 million budget. She stated it is not linear because the level of sophistication in some of the deals we are doing could not be done by the same investment in people.
Ms. Angus asked if the Board would like to take a short break and then come back and focus on the $7.5 million and determine how the Board would like to budget the funds. It was a consensus of the Board to make a determination concerning the $7.5 million at a later meeting, after additional research by individual Commissioners.
Chairman Maddox asked for staff to prepare historical data showing how much each department’s budget has increased over the last five year period. Commissioner Holder noted as an example, in 1998 there was no senior center and all maintenance and operations for the buildings did not exist; the new library in McDonough did not exist; fire and police has increased; and the Department of Transportation has increased.
Commissioner Holder asked whether the other Commissioners think the percentages charged to the Board of Education for the collection of their taxes is fair. Commissioner Holman stated every time this Board is arguing about who is responsible for paving a road next to a new school, maybe this could be considered as a partial payment. Commissioner Holder stated the Board of Education has to build schools because there is a demand for them, and the demand is because the Board of Commissioners has allowed it to happen. Commissioner Holman asked whether there is a mechanism to put into place to help the Board of Education catch up. Commissioner Holder stated he thinks the answer Commissioner Holman is looking for is moratorium and he does not agree with a moratorium. He said his question is whether the percentage the County is charging is fair because the amount of fees the Board of Education is paying almost totally funds the Tax Assessors and Tax Commissioner’s offices. Ms. Angus asked whether indirect costs have been applied to the departments, and asked whether there is a line item in the budgets called “indirect costs.” Mr. Bush answered “no.” Ms. Angus stated that would be the only variable, noting “indirect costs” includes the Board’s time discussing these issues and those kinds of things.
Chairman Maddox said budget hearings must be scheduled. Mr. Bush said a public hearing has been advertised for May 17th. He noted the Board must wait seven days after the public hearing before adopting the budget. He stated a meeting to adopt the budget will be held on May 25th at 9:00 a.m.
Commissioner Holder made a motion to adjourn (11:00 a.m.); Commissioner Adams seconded; and the motion passed by a vote of 4-0, with Commissioners Holman, Freedman, Adams and Holder in favor.
Leland Maddox, Chairman
Susan B. Craig, County Clerk
Copyright © 2004 Henry County Board of Commissioners