BUDGET, FINANCE & INVESTMENT COMMITTEE

     March 9, 2000                        6:15 P.M.                        Courthouse

 

                                                           MINUTES

 

Members Present:                    Others Present:                      Others Present:       Others Present:

Comm. Jimmy Evans,Chair.     Nancy Allen                           Dainton Rahn          Charlie Black

Comm. Jerry Baxter                  Evans Maples                         Jeff Sandvig             John Deason

Comm. Joyce Ealy                   Comm. Anthony Johnson     Dana Richardson     Jim Mahanes

Comm. Joe Frank Jernigan     Tommy Smith                           Joe McKenzie          Paul Long

Comm. Paul Johnson              Martha Trammell                     Andrew Fowler        Elaine Cawthon

Comm. Allen McAdoo           Ron Petty                                 Angela Allison

Comm. Steve Sandlin              Mike Nunley                           Stefani Brown           John Davis               

                                                  Ray Pope                                David Jones               Steve Schroeder

 

 

Chairman Evans presided and called the meeting to order at 6:15 P.M. with all members being present at that time.

 

APPROVE MINUTES:

 

The minutes of the February 3, 2000 meeting were presented for approval. Comm. Baxter moved, seconded by Comm. McAdoo to approve the minutes as presented.

The motion passed unanimously by voice vote.

 

INVESTMENT REPORT:

Mr. Evans Maples, Trustee, presented the monthly Investment Report for the information and use of the committee.

Mr. Maples reported at the end of February, 77.7% of the property taxes had been collected as compared to 79% for the same period last year.

For a two-year period, 98.71% of the property taxes have been collected, as compared to $98.75% for the same period last year.

Mr. Maples explained the various investment transactions that occurred during the month.  The LGIP rate was 5.78%.

Comm. Jernigan moved, seconded by Comm. Ealy to approve the Investment Report as presented.

The motion passed unanimously by voice vote.

 

FUND CONDITION REPORT:

Mr. Paul Long, Finance Director, presented the monthly Fund Condition Report for the information and use of the committee.

Mr. Long distributed and explained a credit report from Standard & Poor's relative to the $34 Million General Obligation School Bonds issued in March.  Standard & Poors has affirmed the county's AA rating.

The Development Tax collected during the month totalled $433,125 compared to $292,500 for February, 1999.

The year-to-date collections totalled $1,676,250, compared to $1,852,500 for the same period last year.

Mr. Long reported most all of the cash balances continue to remain ahead of the same level as last year, with the exception of the Employee Insurance Fund. 

The total cash balances were $106,811,062, with $88,209,999 being operating funds and $18,601,063 being borrowed funds.  This compares to total cash of $118,608,829 for the same period last year, with $84,276,225 being operating funds and $34,332,604 being borrowed funds.

Mr. Long explained there are no other unusual conditions to report.

Comm. Jernigan moved, seconded by Comm. Baxter to approve the Fund Condition Report as presented.

The motion passed unanimously by voice vote.

AMENDMENT TO NISSAN MOTOR MANUFACTURING CORP. U.S.A.
MEMORANDUM OF AGREEMENT:

Mr. Tommy Smith, Industrial Development Board, addressed the committee regarding the Nissan payment-in-lieu agreement.  He reported the Industrial Development Board had met and approved an Amendment to the Nissan Motor Manufacturing Corp. U.S.A. Memorandum of Agreement extending the existing PILOT Agreement for Nissan.

Mr. Smith explained approximately 19 years ago, the Industrial Development Board and Rutherford County entered into an agreement with Nissan to get them to locate in Rutherford County.

At that time, there was going to be approximately 1,500 employees, and there would be a bond issue of about $300 million to build the plant.  As it stands today, there are approximately 6,000 employees, and they have built a plant that has assets valued at over $1 billion.  Their payroll 19 years ago averaged approximately $24,000.  Today their payroll averages $56,000.

Mr. Smith explained they build approximately 1,000 cars a day.  They have become, possibly the finest automobile manufacturing plant, not only in the United States, but perhaps the world.  He stated Nissan has received an award for being the most efficient automobile manufacturer of this class in the world.

Mr. Smith reported Nissan wants to expand the plant in order to accommodate more lines of automobiles at this plant.  He explained the Maxima could very well be developed at this plant, as well as other lines being designed.

He reported with the plant being in Rutherford County, it creates another 30,000 jobs in this region.  Mr. Smith reported Nissan's payroll alone is approximately $275 to $300 million.  Within the region, it creates an economic strength of approximately $1.5 billion.

Mr. Smith explained Nissan is considering a major expenditure to develop the additional lines to produce the different models.  He stated the increase in the expenditure is estimated to be $500 to $800 million.  He reported to make the additional expenditures, Nissan is requesting the PILOT Agreement be extended.  The present PILOT Agreement expires in 2012.  Nissan wants to extend the agreement to 2022.

Mr. Smith explained Nissan pays approximately $5.2 million in taxes.

Mr. Long explained of the $5.2 million in taxes, $1.5 million goes to the Town of Smyrna.

Mr. Smith reported if the improvements are made, that tax factor will go up.

Mr. Smith reported the Industrial Development Board has been in discussions about this extension with Nissan for about two months.  He stated they are trying to reach the County Commission meeting next week, primarily because a package is on its way to Japan.  He stated Rutherford County is in competition for this project with Alabama, South Carolina, and excess factory capacity that Japan has.  Alabama has offered Nissan $250 million to come there, and they will build a new plant and give it to them.  He stated that is not done in Rutherford County.

Mr. Long stated this would mean some additional in-lieu of property taxes.

Mr. Smith reported during the last reappraisal, Nissan received the benefit of the property tax rate going down, and therefore paid less taxes.  In this agreement, there is a provision that Nissan's taxes will never be less than they were the year before.

Mr. Long qualified that by saying the taxes will never be less, unless Nissan reduces their assets.

Mr. Smith reported the approval of the recommendation is very critical due to the competition.

Following discussion, Comm. Jernigan moved, seconded by Comm. Baxter to forward to the full commission without a recommendation the Amendment to Nissan Motor Manufacturing Corp. U.S.A. Memorandum of Agreement extending the Nissan Payment In-Lieu of Tax Agreement from 2012 to 2022.

Comm. Sandlin stated he believed they should have had more time to review the request, and he opposed sending it on to the full commission.  He stated he believed it was a budgetary issue.  He stated he believed the duty of the committee is to make a statement.

Following discussion, Comm. McAdoo moved, seconded by Comm. Baxter to amend the original motion to forward to the full commission the approval of the concept of extending the Nissan PILOT Agreement from 2012 to 2022.

The motion passed by roll call vote with Comm. Sandlin voting "no".

The original motion to forward to the full commission the Amendment to the Nissan Motor Manufacturing Corp. U.S.A. Memorandum of Agreement extending the agreement from 2012 to 2022 passed by roll call vote with Comm. Sandlin voting "no".

GENERAL FUND BUDGET AMENDMENTS

 

PROPERTY ASSESSOR:

In the absence of the Property Assessor, Finance Director Paul Long presented the following budget amendment requesting additional funding for the Reappraisal Employee Insurance Account due to an additional eligible employee electing to participate in the county's health insurance program:

     From:  101-58600-205 - Employee Benefits, Employee Insurance - $1,790

     To:  101-52310-205 - Reappraisal, Employee Insurance - $1,790

Comm. Ealy moved, seconded by Comm. Sandlin to approve the amendment as requested.

The motion passed by roll call vote with Comm. McAdoo being absent at that time.

CIRCUIT JUDGES:

The Finance Director presented the following budget transfer for the approval of the committee to appropriate contributions of $4,000 each from the City of Murfreesboro and the Smyrna Police Department for the Drug Court Pilot Program:

     Increase Revenue:  101-48130 - Contributions - $8,000

     Increase Expend.:  101-53110-399 - Other Contracted Services -$8,000

Comm. Sandlin moved, seconded by Comm. Baxter to approve the amendment as presented.

The motion passed by roll call vote with Comm. McAdoo being absent at that time.

EMERGENCY MEDICAL SERVICES:

Mr. Mike Nunley, Emergency Medical Services Director, was present to request approval of the following budget amendment:

     Increase Revenue:  101-44520 - Insurance Recovery - $70,500

     From:  101-55130-338 - Maintenance & Repair Vehicles - $600

     Increase Expend.:  101-55130-718 - Motor Vehicles - $71,100

Mr. Nunley explained insurance proceeds have been received in the amount of $70,500 for an ambulance that was totalled in an accident, and he requested the funds be appropriated to purchase a replacement ambulance.  Mr. Nunley also explained the Motor Vehicle Account was currently overdrawn by $394, and he requested an additional $600 be transferred from Maintenance & Repair of Vehicles to cover the overage as well as cover the cost of state license and vehicle tags.

Following discussion, Comm. Sandlin moved, seconded by Comm. Baxter to approve the budget amendment as requested.

The motion passed by roll call vote with Comm. McAdoo being absent at that time.

PLANNING & ENGINEERING:

Mr. John Davis requested approval of the committee for the following budget transfers:

     From:  101-51720-718 - Motor Vehicles - $3,800

                 101-51720-103 - Assistants -      9,000

 

         To:  101-51720-169 - Part-Time Personnel           - $8,500

                 101-51720-191 - Board & Committee Members Fees - 2,300

                 101-51720-332 - Legal Notices  - 1,200

                 101-51720-425 - Gasoline -   800

Mr. Davis explained he had a position that had been vacant for most of the year, which created surplus funds in the Assistants Account.  He reported after the vehicle was purchased, there was a surplus remaining in the Motor Vehicle Account, as well.

Mr. Davis explained he was requesting to transfer these additional funds to the Part-Time Account, the Planning Commissioners and Board of Zoning Appeals Account, Legal Notices, and Gasoline.

Following discussion, Comm. Jernigan moved, seconded by Comm. Ealy to approve the budget transfers as requested.

The motion passed by roll call vote, with Comm. McAdoo being absent at that time.

BUILDING CODES:

Mr. David Jones, Building Codes Director, requested approval of the following budget transfers:

     From:  101-54510-435 - Office Supplies - $300

         To:   101-54510-718 - Motor Vehicles -   300

 

     From:  101-54510-196 - In-Service Training - $1,000

          To:  101-54510-355 - Travel   - 1,000

Mr. Jones explained he had taken bids on an automobile, with Wilson County Motors being the low bid.  However, the bid was $16,650.  He had $16,500 budgeted in the account for the automobile.

Mr. Jones also explained he needed additional funds for the Travel Account to allow several employees to attend the Tennessee Building Officials Association annual conference to be held in Knoxville.

Following discussion, Comm. Ealy moved, seconded by Comm. Baxter to approve the budget transfers as requested.

The motion passed by roll call vote with Comm. P. Johnson voting "pass", and Comm. McAdoo being absent at that time.

FINANCE DEPARTMENT:

Finance Director Paul Long requested approval of the following amendments to provide additional funding for the Employee Insurance Account due to an employee electing to participate in the county's health insurance program.  Mr. Long also requested additional funding for the Communications Account, Dues & Memberships and Postal Charges:

     From:  101-58600-205 - Employee Benefits, Employee Insurance - $3,760

         To:  101-52100-205 - Employee Insurance - $3,760

     From:  101-52100-709 - Data Processing Equipment - $430

     To:  101-52100-307 - Communications              -  250

            101-52100-320 - Dues & Memberships          -   60

            101-52100-348 - Postal Charges              -  120

 

Comm. Jernigan moved, seconded by Comm. Sandlin to approve the budget amendments as requested.

The motion passed by roll call vote with Comm. McAdoo being absent at that time.

REPORT ON SHERIFF'S DEPARTMENT COMP. TIME BALANCES:  

A report on the Sheriff's Department Comp. Time balances was submitted to the committee.  The report lists the total comp. time buy out as of March 3, 2000 as $318,816.80.

Mr. Long stated the report does not indicate how many individuals are at nor near their maximum.

County Executive Allen reported last year during budget time, she requested a comp. time report by employee so she could determine how many were at the 240 hour or 480 hour maximum. 

Chairman Evans requested the County Executive send a letter to the Sheriff requesting a comp. time report by employee.

SOLID WASTE/SANITATION FUND BUDGET AMENDMENTS

CONVENIENCE CENTERS:

County Executive Allen presented the following budget amendment for the approval of the committee to appropriate insurance proceeds in the amount of $11,697 received for damages to a 1991 Mack Truck:

            Increase Revenue:  116-44520 - Insurance Recovery - $11,697

         Increase Expend.:  116-55732-338 - Maint. & Repair
         Vehicles $11,697

Comm. Baxter moved, seconded by Comm. Sandlin to approve the request as presented.

The motion passed by roll call vote with Comm. McAdoo being absent at that time.

LANDFILL OPERATIONS & MAINTENANCE:

Mr. Dainton Rahn, Landfill Director, was present to request approval of the following budget amendments providing additional funding for the Part-Time Personnel Account and benefits and to the Uniform Account:

     From:  116-55770-463 - Postclosure Care Cost, Testing - $3,600

     To:  116-55754-169 - Part-Time Personnel - $2,500

            116-55754-201 - Social Security -        160

            116-55754-212 - Employer Medicare -       40

            116-55754-451 - Uniforms -               900

 

Comm. Jernigan moved, seconded by Comm. Ealy to approve the budget transfers as presented.

The motion passed by roll call vote with Comm. McAdoo being absent at that time.

ROAD & BRIDGE FUND BUDGET AMENDMENT:

In the absence of Mr. Mike Williams, Road Superintendent, Comm. Baxter presented the following budget amendment to provide funding for a payment of a deductible on a civil suit filed by an employee, relative to a job reclassification.  This reclassification resulted from a work related injury which rendered the employee no longer capable of performing the physical critical requirements of the higher graded job.  As a result, the employee was reassigned to a lower graded position.  The court ordered a settlement in this case.

     From:  131-39000 - Undesignated Fund Balance - $10,000

     To:  131-65000-505 - Judgments (new item) - $10,000

Comm. Sandlin moved, seconded by Comm. Baxter to approve the budget amendment as presented.

The motion passed by roll call vote with Comm. McAdoo being absent at that time.

GENERAL PURPOSE SCHOOL FUND BUDGET AMENDMENT:

Mr. Jeff Sandvig, Assistant Superintendent, requested approval of the following budget amendment, which funds the Riverdale Baseball Booster Club's request for $25,000 in matching funds for an all-purpose building and an additional $5,000 for public rest rooms.

     From:  141-39000 - Undesignated Fund Balance - $30,000

     To:    141-76100-799 - Other Capital Outlay - $30,000

Mr. Sandvig reported the Health & Education Committee approved this amendment on February 24, 2000 subject to school board approval.

Mr. Sandvig reported the Board would be voting on the issue at their meeting tonight.

A discussion was held relative to the county's maintenance of effort and if allowing the School Board to use money from their ending fund balance increased the county's requirement the next year for maintenance of effort.

 Mr. Long explained if the funds were used for capital outlay, it would not impact the county.  He stated capital outlay is not a factor in that formula. 

 Following discussion, Comm. Jernigan moved, seconded by Comm. Ealy to approve the budget amendment as requested contingent upon School Board approval.

 The motion passed by roll call vote with Comm. McAdoo being absent at that time.

 SCHOOL BUILDING PROGRAM TRANSFERS:

 Mr. Sandvig requested approval to transfer Phase I Building Program funds in the amount of $123,292 for the LaVergne Primary Roof from repairs to site development for the turn lanes at Buchanan and Lascassas Schools. 

Mr. Sandvig explained the Buchanan turn lanes had been set up in Phase II, but since they are facing a deadline on using the Phase I funds, they wanted to take care of the turn lanes from Phase I.  Therefore, Phase II funds in the amount of $44,956 is being requested to transfer from the Buchanan Turn Lanes to 1998 Unidentified Elementary Repairs.

Mr. Sandvig requested a transfer of $155,830 from Phase I Elementary Repair for various building improvement and roof repairs to Elementary Site Development for paving.

Following discussion, Comm. Jernigan moved, seconded by Comm. Baxter to approve the School Building Program transfers as requested.

The motion passed by roll call vote, with Comm. McAdoo being absent at that time 

RECOMMENDATION FOR FIBER OPTIC INTERCONNECTION PROJECT:

County Executive Allen requested approval of the following budget amendment from the Development Tax in the amount of $346,800 to provide funding for a fiber optic interconnection project:

     From:  120-39000 - Undesignated Fund Balance - $346,800

     To:  120-91190-799 - Other Capital Outlay - $346,800

The County Executive explained various representatives from the municipalities have been working on drafting an agreement, which revises a previous agreement with the City of Murfreesboro to develop a Geographic Information System.  She reported the new agreement will supersede the original agreement, and will allow the municipalities to participate in the G.I.S.  The City of Murfreesboro is making available approximately $346,000 in federal highway funds for the actual fiber optic interconnection project.  The municipalities will be funding the engineering portion of that.

The County Executive explained Rutherford County will not specifically be participating in the cost for the fiber optic interconnection project.  However, the county will be participating in the cost of providing the updated orthophotographs for the City of Murfreesboro as part of the joint project.  The cost is approximately $346,800. 

It will require the county to extend the special services contract with Wiser and Co. to provide that service to the county and to also approve the new agreement for the Fiber Optic Interconnection Project between Rutherford County, City of Murfreesboro, Town of Smyrna and City of LaVergne.  The County Executive reported Smyrna and LaVergne have already approved the agreement.

The County Executive explained this will allow the sharing of very current data.  She stated the Property Assessor is extremely supportive of this project.  She stated it will also allow for transportation issues to be handled effectively and inter-governmental.

The County Executive reported the Public Works Committee is in support of the project, and she is recommending the project as an important tool for all the citizens of Rutherford County.

Mr. Dana Richardson, City of Murfreesboro, was also present to answer questions of the committee.   He reported the cost of Smyrna and LaVergne is based on linear mileage within each city.  LaVergne will be paying approximately $7,000, Smyrna will be paying approximately $10,000 and the City of Murfreesboro will be paying approximately $7,000.

The County Executive explained Rutherford County will be responsible for doing the actual re-fly and digitizing of the information.  The County is not actually participating in the fiber optic project from that standpoint.  The County is not funding that.  The City of Murfreesboro is making those funds available in the amount of $346,000.

Following discussion, Comm. Baxter moved, seconded by Comm. Jernigan to forward to the full commission to authorize the County Executive to execute the Fiber Optic Interconnection Agreement with the City of Murfreesboro, Town of Smyrna, and City of Lavergne and to extend the contract with Wiser & Co. and to approve the amendment funding $346,800 from the Development Tax for the said project.

The motion passed by roll call vote with Comm. Sandlin voting "no" and Comm. McAdoo being absent at that time.

RECOMMENDATION FROM PUBLIC SAFETY RELATIVE TO INCREASE IN THE DEVELOPMENT TAX:

Chairman Evans stated this item would be deferred until a later meeting.

BUDGET POLICY RELATIVE TO FUND BALANCES:

The Finance Director requested this item be deferred until the April meeting for further study.

RECOMMENDATION TO INCREASE SALE TAX BY ONE-HALF CENT:

County Executive Allen reported she and the Finance Director have several meetings with each individual entity regarding the increase to the sales tax.  She reported a 1/4 cent increase has been mentioned; however, the proposed increase is at 1/2 cent increase.

A proposed Intergovernmental Agreement for the allocation of a portion of any additional county sales tax levy was provided to the committee.

The Finance Director stated there was enough feedback from the cities they would not participate in a 1/4 cent increase in sales tax that a 1/2 cent increase proposal was developed. 

Mr. Long presented a detailed analysis of what the county will be dealing with in terms of capital projects.  The analysis indicates the county will need approximately $221.3 million over the next eight years.

An Analysis of 1/2 cent sales tax increase was provided to the committee.  The analysis indicates in the year 2000-2001, a 1/2 cent increase in sales tax with a 10% growth factor would generate approximately $10.5 million.  Of this amount, one-half has to go to education, with Rutherford County Schools receiving $4,281,003 and the City of Murfreesboro receiving $952,497.

Of the portion remaining, which is the situs portion, the cities have been requested to allow the county to retain a portion of that situs and direct it to the Debt Service Fund.  Mr. Long reported some of the cities requested this be done on a sliding scale, because the cities might be more inclined to agree with the proposal if they had some hope of some increase in the future.  Mr. Long explained a sliding scale is being proposed allowing the county to retain 70% of the increase the first year and moving down to 35% in 2007-2008, and then zero in 2008-2009. 

In the year 2000-2001, with the county retaining 70% of the increase, this will generate $3.6 million for the Debt Service Fund.  

Mr. Long explained this analysis has been reviewed with the cities, and they received a favorable reaction.  

Mr. Long provided an analysis of revenue projections for the General Debt Service Fund.  This analysis deletes the Wheel Tax revenue from the Debt Service, because it is being proposed to distribute the Wheel Tax 1/3 to the Road & Bridge Fund, 1/3 to the General Fund, and 1/3 to the General Purpose School Fund.

The analysis also shows 1/2 of the current development tax being distributed to the Debt Service Fund, and half of the proposed increase to the Development Tax also being distributed to the Debt Service Fund. 

The interest earnings are being reduced, because it is anticipated the county may use the variable rate market in the future.

An Analysis of Available Debt Capacity based on the sales tax agreement was also provided.

A Long Range Budget Projection after possible revenue revisions for the General Purpose School Fund was provided.

Mr. Long stated the cities were impressed enough to proceed with a recommended interlocal agreement to invite them to participate in the process.

County Executive Allen explained the proposed Intergovernmental Agreement for the allocation of a portion of any additional county sales tax levy, which all of the municipalities would need to adopt. 

The County Executive explained the cities also wanted some bench marks for certain school projects to begin and to be completed.  An anticipated schedule of school projects from 1998-2008 was provided.

The County Executive explained there were certain things the municipalities asked to be in the Intergovernmental Agreement. 

They asked that Rutherford County agree not to increase the Development Tax by more than the proposed double amount of $1,500.  They, also, asked the proceeds from any of the interest earned be applied to Debt Service.  They asked the proceeds and interest be utilized for the constructing, equipping, and site acquisition for school construction.  They also asked that Rutherford County and the municipalities, which are a party to the agreement, understand and agree that in the event the State of Tennessee should alter the present formulas for distribution of State shared sales tax