BUDGET, FINANCE & INVESTMENT COMMITTEE
January 9, 2003 6:00 P.M. Courthouse
MINUTES:
Members Present: Others Present: Others Present:
Comm. Bob Bullen Nancy Allen Allen Miller
Comm. Anthony Johnson Evans Maples Eddie Bowman
Comm. Will Jordan Comm. Tina Jones Steve Smith
Comm. Robert Peay Sue O’Brien Elaine Cawthon
Comm. Steve Sandlin Deb Partin Lisa Nolen
Comm. Doug Shafer Tim McLaughlin Jeff Sandvig
Comm. Joyce Ealy, Chm. Mike Nunley
Chairman Ealy presided and called the meeting to order with all members being present.
APPROVE MINUTES:
The minutes of the December 5, 2002 meeting were presented for approval.
Comm. Sandlin moved, seconded by Comm. Johnson to approve the minutes as presented.
The motion passed unanimously by acclamation
INVESTMENT REPORT:
Mr. Evans Maples presented the monthly Investment Report for the information and use of the committee.
Mr. Maples explained that his office has received property tax collections totaling $24,991,848.93 (41.22%) as of December, 2002. This is substantially more than the prior year, of $11,676,385.02 (25.71%) This was due to receiving mortgage company payments earlier this year.
Mr. Maples advised there were two investment transactions that occurred during the month. The funds were invested at LGIP with an interest rate of 1.63%.
Comm. Sandlin moved, seconded by Comm. Jordan to approve the Investment Report as presented.
The motion passed unanimously by acclamation.
FUND CONDITION REPORT:
Ms. Elaine Cawthon, Deputy Finance Director, presented the Fund Condition Report for the month ending December 31, 2002.
The total cash balances are $103,243,286, with operating funds being $76,247,471 and borrowed funds being $26,995,815.
Ms. Cawthon advised the Development Tax collections for the month totaled $318,750. The year-to-date collections are $1,945,500. This represents the highest collection of development tax in any month of December in any of the previous six years.
The committee reviewed the fund cash balances. Ms. Cawthon brought to the committee’s attention that most of the cash balances are substantially higher than the prior year due to the early collection of mortgage company payments, as explained by Mr. Maples.
Ms. Cawthon advised the cash balance in the Employee Insurance Fund is $1,386,049. In December, the county spent out $350,000 more than was collected. She reported that the new
January 9, 2003 6:00 P.M. Page 2
premium rate went into effect January 1. Ms. Cawthon reminded the committee that this fund still owes the General Fund $2 million.
Also under fund 189 – 20002 LaVergne School Property shows a negative balance of $1,867,578. This resulted from paying for the property with funds on hand and will be replaced with borrowed funds.
Ms. Cawthon advised there are no other conditions to be reported at this time.
Comm. Peay moved, seconded by Comm. Shafer to approve the Fund Condition Report as presented.
The motion passed unanimously by acclamation.
CHANCERY COURT:
Ms. Cawthon requested approval for the following budget amendment for Chancery Court to provide adequate funding for longevity. An employee’s previous years in another county office was not taken into consideration.
From: 101-53400-187 – Overtime - $ 50.00
To: 101-53400-186 – Longevity - $ 50.00
Comm. Sandlin moved, seconded by Comm. Peay to approve the budget transfer for $50 for longevity.
The motion passed unanimously by roll call vote.
AMBULANCE SERVICE:
Mr. Mike Nunley, Ambulance Service Director, requested approval of the following budget amendment to appropriate a donation made to the Dive Rescue Team from Pack’s Towing
Increase Revenue: 101-44570- Contributions & Gifts $300
Increase Expend.: 101-55130-599 – Special Operations $300
Comm. Bullen moved, seconded by Comm. Jordan to approve the budget amendment as requested.
The motion passed unanimously by roll call vote.
EMERGENCY SERVICES
Mr. Steve Smith requested approval of the following budget transfers for Emergency Services to appropriate the proceeds of the Fiscal Year 2002 Domestic Preparedness Program sub-grant. The amount of the grant is $125,000 and is 100% federally funded for the purchase of specialized equipment. On June 25, 2002, the Budget Committee approved Mr. Smith application for the grant.
Increase Revenue: 101-47230- Disaster Relief $125,000
Increase Expend.: 101-54430-499- Other Supplies/Materials 28,430
Increase Expend.: 101-54430-790- Other Equipment 96,570
January 9, 2003 6:00 P.M. Page 3
Comm. Bullen moved, seconded by Comm. Shafer to approve the budget transfers for the Emergency Services Department as requested.
The motion passed unanimously by roll call vote.
SHERIFF’S DEPARTMENT:
Sergeant Eddie Bowman requested approval of the following budget amendments to appropriate monies recovered from insurance companies on wrecked and damaged vehicles and to purchase another car:
Increase Revenue: 101-44520 – Insurance Recoveries $16,686
Increase Expend.: 101-54110-338 – M&R Vehicles 972
Increase Expend: 101-54110-718 – Motor Vehicles 15,714
Comm.Sandlin moved, seconded by Comm. Jordan to approve the budget amendment as requested for the Sheriff’s Department.
The motion passed unanimously by roll call vote.
DISCUSSION FOR FUNDING FOR SENIOR CITIZENS
Comm. Bullen discussed finding a better way to fund programs/services for senior citizens and asked the committee to consider dedicating part of the tax rate for Senior Citizens. Ms. Sue O’Brien, St. Clair Senior Center, provided information on the current level of services provided to senior citizens and the current level of funding by the County. Comm. Bullen expressed his concern regarding the population growth of our senior citizens and wanted to find a way of funding services for them that had natural growth.
According to Ms. Obrien, the greatest need is transportation. Mid Cumberland provides transportation, but they have to routinely deny services because of a lack of funding. Services provided by St. Clair, other than recreational, include health promotion, wellness, caregiver programs, and programs designed to help seniors with their physical condition.
Following discussion, Comm. Bullen moved, seconded by Comm. Peay, to briefly discuss monthly in the Budget & Finance Committee, methods of funding services for the Senior Citizens and to forward to the County Commission the ideas being considered by the Budget and Finance Committee so that their input, and the input from citizens, can be included and evaluated.
The motion passed unanimously by roll call vote.
DESTINATION RUTHERFORD
Comm. Ealy presented an invoice totaling $105,280 from Destination Rutherford for Rutherford County’s pledged participation. Ms. Allen stated that the minutes did not reflect the adoption of a resolution authorizing the level of participation in the program; however, funding was appropriated in the 2002-2003 budget in Fund 119, Industrial/Economic Development. Ms. Allen felt it necessary to either adopt a special resolution or have the budget committee approve payment of the invoice.
Ms. Cawthon stated that the funding may not always be available in the Industrial/Economic Development Fund and that monies may need to be appropriated out of the General Fund. Comm. Shafer brought out the issue of sharing monies with the Town of Smyrna for funds spent out of Fund 119 that is not directly related to the AirBase and that it might be to the County’s advantage to appropriate the monies for Destination Rutherford out of the General Fund.
January 9, 2003 6:00 P.M. Page 4
Ms Allen suggested someone contact the City of Smyrna to see if they would be willing to forgo their share since the economic development program, Destination Rutherford, would benefit the City of Smyrna.
Comm. Johnson moved, seconded by Comm. Jordan, to approve the invoice, totaling $105,280 to Destination Rutherford.
The motion passed unanimously by roll call vote.
RUTHERFORD COUNTY FACILITIES MASTER PLAN
Ms. Cawthon presented the following for consideration by the committee.
1. Construction Schedule for the following projects:
Archives
R.C. Workhouse
Juvenile Detention Center
Criminal Justice Center
Parking Facility
Sheriff’s Dept/Jail
2. Potential Impact of Funding New Facilities for Courts and Correction
Schedule showing current debt load to projected revenues
Potential New General Capital Project borrowing schedule
Schedule showing current debt load, 2003 & 2004 debt issue to projected revenue
Debt Service Projections
Ms. Cawthon explained the schedules showing the impact on the debt service fund due to borrowing $2,050,000 in the current fiscal year for the Workhouse ($1,000,000), Juvenile Detention ($50,000) and Court Center ($1,000,000) project and borrowing $4,950,000 in the 2004 fiscal year for the Workhouse ($3,500,000), Juvenile Detention ($1,000,000), Court Center ($300,000), Parking Garage ($50,000), Jail ($50,000), Jail Offices ($50,000) projects. Ms. Cawthon explained that the debt service projections show expenditures will exceed revenues in fiscal years 2003, 2004, 2005, and 2006. The county will be able to comply with the 75% fund balance policy in years 2003 and 2004, but not in years 2005, 2006, and 2007 unless there is additional revenue allocated to this fund. Ms. Cawthon explained that the current construction schedule shows the Sheriff’s Dept./Jail project beginning in fiscal year 2004, however the debt service projections assume that the Jail offices would not begin until 2005 and the Jail would not begin until 2006.
With only $25 million available to borrow in the current fiscal year, Ms. Cawthon presented two schedules showing the amount of funds available if the committee decided to completely fund the new LaVergne School and another schedule showing the amount available to fund various school improvements, designing the new LaVergne School, along with the County’s Capital projects.
Comm. Bullen questioned the possibility and effect of changing the county’s fund balance policy. Ms. Cawthon explained that the bond rating companies would probably look unfavorable on that decision.
Comm. Peay questioned the timing and priorities of projects.
Comm. Bullen questioned the commitment of the commissioners to provide funding for the projects.
Comm. Ealy explained that the construction schedule is a skeletal plan and may have to be adjusted.
January 9, 2003 6:00 P.M. Page 5
Comm. Shafer stated that if they approve the master plan, then they are committing to funding the plan and to anticipate acquiring monies in the spring bond issue to begin the first three projects in the plan.
After discussion, Comm. Johnson moved, seconded by Comm. Sandlin to accept and approve the facilities master plan and construction schedule.
The motion passed unanimously by roll call vote.
BI-PARTY AGREEMENT FOR ARCHITECTUAL AND PROFESSIONAL WORK FOR THE JUVENILE COURT, JUVENILE DETENTION AND CORRECTIONAL WORK CENTER
County Executive, Nancy Allen reminded that committee that they had already appropriated $30,000 to develop plans to relocate a Juvenile Court in the Judicial Building utilizing space that is currently occupied by the District Attorney General and to begin the general preliminary design work for the County Juvenile Detention Center. Ms. Allen stated that the motions on the floor did not specify the approval of a bi-party agreement, nor did it specify who would be receiving the $30,000. Ms. Allen provided the committee with a BI-Party Agreement for architectural and professional work between the Public Building Authority and Rutherford County and request approval of the agreement.
After discussion, Comm. Johnson moved, seconded by Comm. Sandlin, to approve the Bi-Party Agreement between the PBA and Rutherford County for the Juvenile Court, Juvenile Detention and Correctional Work Center and to authorize the County Executive to sign the agreement.
The motion passed unanimously by roll call vote.
FUNDING FOR BEASELY ROAD CONNECTOR
Comm. Ealy explained the history behind the development of a local interstate connector, Beasley Road Connector from SR 96-to Burnt Knob Road in Rutherford County. The County approved participation along with the City of Murfreesboro in the development of the connector. The county is now being asked to pay their share ($398,325) of the estimated right-of-way cost. Comm. Ealy explained that the funds would be immediately paid from the County Highway, then the Highway Department would be repaid with future bond proceeds.
After discussion, Comm. Sandlin moved, seconded by Comm. Peay, to approve payment of $398,325 to the TN Department of Transportation for the Beasley Road Connector and that funding would come from the County Highway department to be repaid from future bond proceeds.
The motion passed unanimously by roll call vote.
SCHOOL BUILDING PROGRAM BUDGET AMENDMENT:
Mr. Jeff Sandvig advised that School Board is requesting funding of $1,750,000 to replace/renovate the mechanical systems at Thurman Francis ($1,000,000) and Buchannan ($750,000). Thurman Francis is the higher priority. Mr. McLaughlin explained that the new units would be on the ground instead on the roofs.
Comm. Sandlin questioned the source of funds to pay for the project. Mr. Sandvig stated that there would be a need for new money. Ms. Cawthon explained that these projects were included in her handout showing the capital projects listing with possible future funding needed.
Comm. Ealy pointed out that the listing assumes that the LaVergne school is delayed. Mr. McLaughlin stated that the Board of Education had not voted to delay the school at this time.
January 9, 2003 6:00 P.M. Page 6
Comm. Shafer noted that the capital project listing includes $500,000 for the design of the new LaVergne school and/or renovation of Roy Waldron.
Mr. Sandlin asked about the possibility of using existing funds for these projects. Mr. Sandvig explained the potential sources of unobligated monies in existing projects and the Board’s plan to use those funds.
Mr. Sandvig also advised the need for additional funding for re-roofing the following schools:
Walter Hill $ 200,000
Smyrna High 950,000
Buchanan 300,000
Smyrna Ele. 175,000
Smyrna West 100,000
Roy Waldron 450,000
Total $2,175,000
The Board of Education is proposing to use $275,000 left from the LaVergne High roofing project for the Smyrna High roofing project, therefore the amount they are requesting in new funding for roofing projects totals $1,900,000.
Comm. Sandlin questioned the type of products used for these re-roofing projects and the warranties. Mr. McLaughlin explained that the typical roof warranties state that the roofing companies agree to fix leaks. During the 10 year warranty period, the roofing company will fix the leaks as they occur, but they will not re-roof a building if the rubber membrane should shrink. Mr. McLaughlin stated the best measure is to ensure that the roofs are installed correctly when built. The school board has replaced roofs with a cold-tar system because it has the capability to “heal” itself.
Ms. Nolen pointed out to the committee that the Health and Education Committee had also approved replacement of the HVAC systems at Christiana for $1,500,000 and Walter Hill for $600,000 in addition to the systems at Thurman Francis and Buchanan.
After discussion, Comm. Bullen moved, seconded by Comm. Sandlin, to approve $3,850,000 for the replacement/renovation of the Mechanical Systems at Thurman Francis ($1,000,000), Buchanan ($750,000), Christiana ($1,500,000), and Walter Hill ($600,000); to approve $1,900,000 for roof repairs at Walter Hill ($200,000); Buchanan ($300,000), Smyrna Elementary ($175,000), Roy Waldron ($450,000), Smyrna High ($675,000) and Smyrna West ($100,000); and to approve $500,000 for the design/renovation of the new LaVergne Middle School/Roy Waldron.
The motion passed unanimously by roll call vote.
Comm. Shafer then moved, seconded by Comm. Peay to transfer $275,000 from the LaVergne HS roofing project to the Smyrna HS roofing project.
The motion passed unanimously by roll call vote.
Mr. Sandvig advised the committee that the original estimate for the Christiana School sewer and gas lines was $750,000. Bids were open January 7 and the accepted bid was $971,433. The Health & Education committee has already approved a transfer of $500,000 from the Riverdale/Oakland HVAC project and the use of GPS ending fund balance totaling $250,000 for the Christiana project. Taking in consideration the actual bid amount, Mr. Sandvig requested approval for the following transfers:
Decrease Technology Project 7&8 $147,722
Decrease: Oakland/Riverdale HVAC 500,000
Transfer funds from GPS ending Fund Balance 323,711
Increase Christiana Middle
Site Development $971,433
January 9, 2003 6:00 P.M. Page 7
Comm. Peay requested clarification on the City of Murfreesboro’s rights to tie into the line and how much are they will pay towards the project. Mr. McLaughlin explained that the City paid the difference in price between a force main and gravity main. Comm. Jordan asked if the county would receive any portion of the tap fees collected by the City. Mr. McLaughlin stated that the county does not have any written agreement with the City.
Commissioner Peay questioned who would be responsible for the lines. Mr. McLaughlin stated that the Board of Education is responsible for the force main, but anything the City builds with the gravity system, the City is responsible for the upkeep of that portion of the line. Comm. Peay requested Mr. McLaughlin to contact the City of Murfreesboro to determine their intent concerning the sewer lines.
After discussion, Comm. Bullen moved, seconded by Comm. Peay to approve the budget transfers totaling $971,433 for the sewer/gas main for Christiana.
The motion passed unanimously by roll call vote.
TENNESSEE CONSOLIDATED RETIREMENT SYSTEM
Ms. Cawthon presented a resolution to authorize the additional line-of-duty death benefits provided by Chapter 446 of the Tennessee Public Acts of 2001. Ms. Cawthon explained the County has historically approved all changes to benefits in the retirement plan recommended by the Tennessee Consolidated Retirement System. This benefit provides an annuity equal to one half the member’s average final compensation to be paid to the member’s surviving spouse or surviving minor child(ren), if a Group 1 member dies in service as the natural and proximate result of an on-the-job accident. The aggregate total death benefits payable by the Retirement System on account of a member who dies in the in the line-of-duty shall not be less than $50,000. Ms. Cawthon explained that this may change the county’s retirement rate paid to TCRS.
After discussion, Comm. Sandlin moved, seconded by Comm. Shafer, to approve the resolution to authorize additional line-of-duty death benefits for Rutherford County employees, as offered by the Tennessee Consolidate Retirement System.
The motion passed unanimously by roll call vote.
2003-2004 BUDGET
County Executive Nancy Allen explained to the committee that she would be meeting with all the department heads to begin the budget process. She stated that in developing the budget, she would be proposing a one step increase to full time employees as a preliminary amount. The cost to all funds total $966,938. Longevity would remain the same at $25/year after 3 years of service. The additional cost for longevity would be $16,074.
After discussion, Comm. Johnson moved, seconded by Comm. Sandlin, to endorse the County Executive’s preliminary plan of a one step increase for full time employees of Rutherford County.
The motion passed unanimously by acclimation.
COUNTY FINANCE DIRECTOR POSITION
Comm. Ealy reminded the committee that the finance director’s position was advertised in the Daily News Journal, The Tennessean, and was posted on the County’s web site. Comm. Ealy provided a summary of all applications (13) received for this position. The requirements for the position included a minimum of eight years accounting experience with four of those years in government. Of the applications received, only 4 met those requirements. Comm. Ealy asked
January 9, 2003 6:00 P.M. Page 8
the committee if they wished to interview these four applicants, extend the deadline, or to re-advertise.
Ms. Nancy Allen presented a fax letter from The Holland Group, offering their services to the county, pro bono, to manage the process to select a Finance Director for Rutherford County.
After discussion, Comm. Bullen moved, seconded by Comm. Sandlin, to eliminate those applicants that did not meet the minimum guidelines and to accept the offer by Holland Group to continue the search, the deadline is contingent upon the arrangement made with Holland by the Chairman and the County Executive.
The motion passed unanimously by acclimation.
Ms. Allen stated that a presentation should be made to the State Legislators on the effect to Rutherford County if state shared revenues are lost.
There being no further business to be presented at this time, Chairman Ealy declared the meeting adjourned at 9:00 P.M.
___________________________________________
Lisa A. Nolen, Secretary