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BUDGET, FINANCE & INVESTMENT COMMITTEE
August 8, 2002 6:15 P.M. Courthouse
MINUTES:
Members Present: Others Present: Others Present: Others Present: Comm. Joyce Ealy Evans Maples Gary Patton Elaine Cawthon Comm. Paul Johnson Comm. Carol Cook Jeff Sandvig Comm. Tina Jones Linda Vincion Leffel Brown Comm. Robert Peay Joe McKenzie Donna Long Comm. Steve Sandlin Jim Estes Lisa Nolen Comm. Dwight Throneberry Judge Royce Taylor Bryan Brooks Comm. Jimmy Evans, Chair. Hulon Watson Paul Long
Chairman Evans presided and called the meeting to order with all members being present.
APPROVE MINUTES
The minutes of the June 20, 2002 and the June 25, 2002 Budget Committee meetings were presented for approval.
Comm. Jones moved, seconded by Comm. Throneberry to approve the minutes as presented.
The motion passed unanimously by acclamation.
INVESTMENT REPORT:
Mr. Evans Maples presented the monthly Investment Report for the use and information of the committee.
Mr. Maples advised the LGIP interest rate for the month was 1.94%.
Mr. Maples reviewed the investment transactions that occurred during the month.
Mr. Maples requested the committee consider amending the Investment Policy to allow him to invest totally in LGIP, if a better interest rate is available. He advised the drawback to LGIP is that the interest rate received is not known until the month has passed. However, he advised the market had diminished at the local banks considerably. Mr. Maples advised the interest rate at LGIP has typically been equal to or slightly more than the interest rate earned on certificates of deposit.
Comm. Jones asked if money could be invested at LGIP for a longer period of time, because a stronger rate might be obtained.
Mr. Maples explained he could invest for a longer period of time, but if he needed the money, it would not be available. He stated he had not had any one-year quotes for some time.
The committee agreed the Trustee should be given the option to invest totally in LGIP if a better interest rate was available.
Mr. Maples advised the current investment restriction at LGIP is 70%.
Following discussion, Comm. P. Johnson moved, seconded by Comm. Jones to approve the Investment Report as presented and to allow the Trustee to have the option to invest 100% in LGIP if a better interest was available.
The motion passed unanimously by roll call vote.
Budget Minutes August 8, 2002 Page Two
FUND CONDITION REPORT:
Mr. Paul Long, Finance Director, presented the monthly Fund Condition Reports for the months ending June 30, 2002 and July 31, 2002 for the use and information of the committee.
Mr. Long reported the Development Tax collections for June, 2002 were $490,500. The year-to-date collections totaled $3,889,500.
The committee reviewed the fund cash balances as of June 30, 2002. The total cash balances were $116,289,758, with $72,230,341 being operating funds and $44,059,417 being borrowed funds.
Mr. Long reported the General Fund revenue was 1.84% above projections at June 30, 2002 or approximately $790,696.
In reviewing the expenditures, Mr. Long advised all departments came in below their budget estimates, and many departments achieved the 5% savings that was requested. The General Fund expenditures at June 30 were 95.15% of the estimated appropriations. Mr. Long advised $2.1 million was reverted to fund balance.
Mr. Long reported there were no major problems in any of the other funds. He stated in the Local Purpose Tax Fund, the Development Tax collections exceeded the estimation, and therefore when half of the collections were transferred to the Debt Service Fund, it caused the expenditures to be over the estimated appropriation. The General Purpose School Fund had a similar situation due to more funds being received on the Federal Breakfast and Lunch Program, and that money flows through to the cafeterias. When that money was paid out to the cafeterias, it put the category slightly over budget in Food Service.
Mr. Long reviewed the unaudited Statement of Operations. He advised as the audit is in process, the auditors are expected to reduce the revenue in the General Fund by about $400,000. He stated the audited fund balance would be approximately $12.6 million, which is about $600,000 to $700,000 more than expected. The General Purpose School Fund ending fund balance is approximately $7.7 million.
The committee discussed the Employee Health Insurance Fund, which had a cash balance at June 30 of $1,839,092. Mr. Long advised at June 30 approximately $2.6 million was owed in claims. Therefore, the fund ended with approximately $415,000 fund deficit. He stated there would still be a cash flow problem this year, and he would be asking for approval of a revenue anticipation note.
Mr. Long reviewed the July Fund Condition Report. The Development Tax collections for the month totaled $294,750, which was the best performance ever for July collections.
The total cash balances at the end of July were $110,271,516, with $68,081,415 being operating funds and $42,190,101 being borrowed funds. The Employee Insurance Fund cash balance was $1,116,649.
Mr. Long advised there were no unusual conditions to report for the month of July.
Comm. P. Johnson moved, seconded by Comm. Jones to approve the Fund Condition Reports for the months ending June 30, 2002 and July 31, 2002.
The motion passed unanimously by acclamation.
GENERAL FUND BUDGET AMENDMENTS
ELECTION COMMISSION: Mrs. Linda Vincion
requested approval of the following budget amendment to appropriate grant
proceeds in the amount of $1,725 for a grant received from the State of
Tennessee, Division of Elections. The grant money is for the express purpose of
purchasing, from the statewide contract, a personal computer, printer, and
software for the ongoing operations of the Automated Electoral System: Budget Minutes August 8, 2002 Page Three
Increase Revenue: 101-46190 – Other General Government Grants - $1,725
Increase Expend.: 101-51500-709 – Data Processing Equipment - $1,398 101-51500-411 – Data Processing Supplies - 327
Comm. Sandlin moved, seconded by Comm. Throneberry to approve the budget amendment appropriating the grant proceeds from the Division of Elections as requested.
The motion passed unanimously by roll call vote.
AGRICULTURE EXTENSION:
Mr. Joe McKenzie requested approval of the following budget transfer to hire additional part time personnel and required benefits. He has one vacancy and has been informed he cannot fill the state cost- shared positions at this time:
From: 101-57100-309 – Contracts w/Government Agencies - $22,607
To: 101-57100-169 – Part Time Personnel - $21,000 101-57100-201 – Social Security - 1,302 101-57100-212 – Employer Medicare - 305
Comm. Throneberry moved, seconded by Comm. Peay to approve the budget transfer as requested.
The motion passed
unanimously by roll call vote. TRI-PARTY AGREEMENT FOR ARCHITECTURAL SERVICES FOR AGRICULTURE EXTENSION FACILITY: Mr. Jim Estes and Mr. Joe McKenzie addressed the
committee regarding a Tri-Party Agreement for the new Agriculture Extension
Facility. The Property Management Committee has recommended a new tri-party agreement to cover architectural services and construction of the facility including a farmer’s market as the current agreement for engineering and testing will be expiring. Mr. Estes advised they are also requesting approval to submit a bid to lease office space for the USDA Service Center. Mr. Estes reported the PBA is working on the cost for the build out of the office space and the lease amount, so the numbers are not available. He explained the USDA Service Center would require approximately 9,300 square feet of office space. He reported they are currently paying $12 per square foot. He stated if the county decides to bid on the office space, the bid must be submitted within 30 days. Mr. Estes advised on the Agriculture Extension Facility, the first reading for the rezoning by the City Council would be Thursday night. He explained Mr. Lee from SEC has estimated the cost for the first phase at $3.3 million. He advised this included the parking lot, road improvements, and the building for the center. Mr. McKenzie advised he was assuming the USDA Service Center would be located within the same building. The committee discussed whether or not the estimate included the farmer’s market. Mr. McKenzie stated he did not believe it did include the Farmer’s Market. Comm. Jones advised there is approximately $79,000 remaining from the contribution from Mr. Lane. She stated there is approximately $15,000 remaining from the initial $35,000 that was appropriated for engineering and testing. Comm. Jones stated a new tri-party agreement would be needed to move forward with the architectural work. The Finance Director stated
he had spoken with Mr. Matt Murfree and advised he would need some guidance on
what to include in the tri-party agreement such as the scope of services,
specific facilities to Budget Minutes August 8, 2002 Page Four
be built, road improvements, etc. When the dollar amount is determined, Mr. Murfree can draft the tri-party agreement. Mr. Long reported if the county is successful in obtaining the lease for the USDA Service Center, that would provide enough revenue to service approximately $1.5 million toward the debt. Comm. Jones asked for clarification if Mr. Estes and Mr. McKenzie were asking for authorization to move forward to work with an architect on the project. She stated a specific dollar amount could not be determined until that was done. Mr. McKenzie stated a couple of things needed to be decided. He stated there was a 30-day window to submit a bid for the office space for the USDA Service Center. He advised this would provide revenue for an unlimited amount of time. He stated if the committee decided that is what they wanted to do, then the tri-party agreement needed to be extended so the site plan can be developed. He stated if the bidding for the USDA Service Center was not pursued, there would be no rush to do anything at the moment. Chairman Evans stated a new tri-party agreement would be for architectural services only, which would give the ability to pursue the bid. Mr. Long advised the first tri-party agreement only involved engineering and testing. He advised the committee previously approved the concept of making a bid and renting space to the Federal USDA Service Center once the specifications are received, and authorized the Public Building Authority to review the specifications and assist the county in submitting the bid by determining a range of costs for the build out of the required space to determine the lease amount and to forward to the Finance Director and the Budget Committee. The committee noted if the bid had to be submitted within 30 days, the costs needed to be determined before the commission meeting on Thursday, August 16. Following discussion, Comm. Peay moved, seconded by Comm. Throneberry to approve the concept of a new Agriculture Extension Facility and to revise the tri-party agreement to cover architectural services for a new Agriculture Extension Facility including a farmer’s market with the dollar amount for architectural services to be reported to the full commission. Additionally, the County Executive is authorized to submit a bid to lease office space to the USDA Service Center based on information provided by the Public Building Authority. Mr. Long noted if the county did not receive the bid for the lease of the office space for the USDA Service Center, not as much square footage would be needed, which would affect the cost of the project. Chairman Evans stated they would only be approving the concept, but they were going on record to build the new Agriculture Extension Facility. Mr. Long asked if the tri-party agreement would be revised at each step along the way, and that it could be revised when the construction cost was determined? Chairman Evans stated he believed that could be done. Following discussion, the motion to approve the concept of a new Agriculture Extension Facility and to revise the tri-party agreement to cover architectural services for a new Agriculture Extension Facility including a farmer’s market with the dollar amount for architectural services to be reported to the full commission. Additionally, the County Executive is authorized to submit a bid to lease office space to the USDA Service Center based on information provided by the Public Building Authority. The motion passed unanimously by roll call vote.
Budget Amendments August 8, 2002 Page Five
APPROVE CONTRACT WITH STATE OF TENNESSEE, ADMINISTRATIVE OFFICE OF THE COURTS:
Judge Royce Taylor was present to request approval of a contract between Rutherford County and the State of Tennessee, Administrative Office of the Courts to provide Parenting Plan Coordination in the 16th Judicial District. The maximum liability of the State under the contract is not to exceed $43,818. Chairman Evans noted this was included in the budget process. The Finance Director stated the County Executive needed authorization to sign the contract. Comm. Ealy moved, seconded by Comm. Sandlin to authorize the County Executive to execute the contract between Rutherford County and the State of Tennessee, Administrative Office of the Courts to provide Parenting Plan Coordination in an amount not to exceed $43,818. The motion passed unanimously by roll call vote. RECOMMENDATION RELATIVE TO RE-ROOFING LAVERGNE HIGH SCHOOL AND DAVID YOUREE SCHOOL:
Mr. Hulon Watson, Director of Schools, addressed the committee regarding roof replacements at La Vergne High School and David Youree School. Mr. Watson advised the School Board approved $800,000 out of the General Purpose School ending fund balance for the re-roof, design, and inspection of the La Vergne High School to go along with the $400,000 already approved from the heating and air conditioning at Riverdale and Oakland High Schools. This would allow a total funding of $1,200,000 to re-roof, design, and inspection of La Vergne High School. The Board also approved to add $385,000 from the ending fund balance for the re-roof, design, and inspection of David Youree School. The total funding to be taken from the ending fund balance for the design, inspection, and roof replacement of La Vergne High School and David Youree School would be $1,185,000. The Budget Committee previously approved to use $500,000 from the Siegel High School project, together with $400,000 from the Oakland and Riverdale HVAC project for a total of $900,000 for La Vergne High School. The committee also approved to request the School Board to receive firm estimates, which include alternative roofing techniques. Mr. Watson advised the Board did not want to transfer $500,000 from the Siegel High School project. He advised the Board wanted to take the money from the ending fund balance since the Siegel High School is still under construction. Mr. Long advised if the $800,000 was taken from the ending fund balance and used for a high school project, it would be wasting $180,000 because the money has already been shared with the City of Murfreesboro. He advised if the Board wanted to use ending fund balance for a school project, it would be better to use it for elementary purposes. Comm. Jones asked Mr. Watson if the Board had considered alternative roofing proposals from what has traditionally been used? Mr. Watson advised the alternative roofing techniques are being studied, and their findings would be reported in September. Following discussion, Comm.
P. Johnson moved, seconded by Comm. Throneberry to approve the original motion
on June 25 to request the School Board to receive firm estimates to fund the
roof replacements capped at the current recommendation including the fire doors
and the fire safety items for Central Middle, McFadden and Buchanan Schools and
that prior to September 1, if necessary the Budget Committee would meet to fund
the repairs. Budget Minutes August 8, 2002 Page Six
Comm. Sandlin stated there are other methods of roofing from what has traditionally been used that is less expensive and lighter on the roof. He stated the current roofs that are being used is an old method. He stated it is heavy and causes problems. Following discussion, the motion to approve the original motion on June 25 to request the School Board to receive firm estimates to fund the roof replacements capped at the current recommendation including the fire doors and the fire safety items for Central Middle, McFadden and Buchanan Schools passed unanimously by roll call vote. Comm. Jones asked Mr. Watson if the Request for Proposals for roof work were worded in such a way that bids for the Corning blow-on material could be submitted, as well? Mr. Watson stated that had not been done in the past, but they could do that. Comm. Jones requested that the Request for Proposal for the La Vergne High School roof replacement include the Corning blow-on material as an alternative. Following discussion, Comm. Jones, moved by Comm. P. Johnson to request the School Board to solicit proposals to include alternative roofing techniques. The motion passed unanimously by roll call vote. Comm. Peay moved, seconded by Comm. Ealy to approve the request for $385,000 from the General Purpose School Fund ending fund balance for the roof replacement at the David Youree School. The motion passed unanimously by roll call vote.
REQUEST FOR FUNDING FOR PROPERTY FOR NEW LAVERGNE ELEMENTARY SCHOOL:
Chairman Evans advised the School Board was requesting to purchase 106.5 acres of land for the new La Vergne Elementary School at $16,500 per acre for a total of $1,757,250. Mr. Watson advised the property has been surveyed and the total acreage is $114.5 for $1.9 million. Chairman Evans asked Mr. Long if it was not illegal for the government to enter into an agreement to purposefully purchase property for the explicit use of profiting from it in some fashion? Mr. Long stated the article was in the newspaper on the day the bond counsel was in town to close the bond issue in June. He advised the bond counsel has stated the county could absolutely not issue bonds to buy the property if it is intended to resell part of the land for development purposes. He stated the problem is with issuing tax-exempt bonds for a private purpose. Mr. Watson stated the Board’s attorneys have told them how they can do it. He stated an RFP would have to be issued so that every builder has to bid on it. He stated the Board has the option on the entire property. He stated there is a possibility the county would not have to fund any of the property. Mr. Patton stated Comm. Cook made the motion at the Health & Education Committee to purchase all of the property and to hold the excess property for future schools. Mr. Patton stated the School Board could not sell property, but that they would have to declare it surplus property, revert it back to the County Commission, and the County Commission could sell the property. Mr. Watson advised they would need approximately 25 acres for an elementary school. Comm. Cook advised she made the recommendation at the Health & Education Committee to purchase the land subject to the geo-tech testing for multiple schools. She stated La Vergne had a primary school and a middle school. She stated she was suggesting both of those schools be primary schools and build a middle school and a high school on the property. She stated if a stadium cannot be built there, then she would be in willing to build a high school for academic use only.
Budget Minutes August 8, 2002 Page Seven
She advised she has seen the property, and there are some sink holes on the property and a lot of timber that could be sold. She stated there is also a limestone field on the property. She suggested using as much of the property as they could and sell the rest. Chairman Evans stated Comm. Cook and the City of La Vergne deserve a parcel of property, but not 115 acres for $2 million when 25 acres will suffice. Mr. Watson agreed that their attorneys have said they could not enter into an agreement to sell the land. However, the Board holds the option on the entire 115 acres. The attorneys have discussed the option of issuing RFP’s to every developer to give away the option on the property in exchange for donating to the School Board a portion of the land. The Board’s attorneys have said that is legal. Mr. Watson advised the School Board has not met to change their vote. Mr. Long asked if it would be proper to defer action on the land purchase at this time? Mr. Watson stated that would be proper. Mr. Watson advised in the building program, a new elementary school has been projected for La Vergne. Comm. Cook stated she believed there should be another high school in La Vergne some day. She advised there are not many lots in La Vergne of 100 acres. She said they are almost completely out of land. Mr. Watson advised his prediction for the next high school would be in about five to six years. Mr. Watson advised the option was for six months and would be expiring in December. Comm. Jones asked why the School Board has not asked for any money to perform geo-tech testing on the property to make sure it was suitable for a school before acquiring the property? Comm. Johnson stated it appeared there would have to be some major infrastructure improvements along Stones River Road. Mr. Watson stated they would be asking a developer to provide that, also. Comm. Jones asked if a comparable sales analysis had been done on the property to see if the price was at fair market value? Comm. Jones stated she would like to have that before she could vote to acquire the property. Mr. Watson stated he had not done a study on that. He stated there were developers who were willing to pay $16,500 for the property. Following discussion, Mr. Watson withdrew the request for the purchase of 114.5 acres at $16,500 per acre for a new elementary school in La Vergne until the School Board can act on the proposal to issue RFP’s to developers to give away the option in exchange for a portion of the property for the school.
RECOMMEND FUNDING FOR EAGLEVILLE STADIUM: Chairman Evans advised the commission previously approved initial funding for up to $300,000 for site work for the Eagleville Stadium, and that a commitment was made to approve an additional $600,000 to be funded during Fiscal 2002-03 to complete the construction of the facility contingent upon the establishment of a football program, with some games scheduled for the 2002-03 school year. Comm. Throneberry advised a football team had been formed with 11 games scheduled. He stated the community is supporting the team with a booster club being established. He stated the team would have to travel for every game except two.
Budget Minutes August 8, 2002 Page Eight
Comm. Throneberry moved, seconded by Comm. P. Johnson to approve the funding in the amount of $600,000 to be included in a bond issue later in the year to complete the Eagleville Stadium Complex. Comm. Peay stated the School Board has staff that has been laid off, bus routes that have been cut, student fees that have been re-enacted. He stated he could not vote to spend $600,000 for a football stadium. He stated he understood there has been additional funds to come from the State. He asked Mr. Watson if the additional funds would help take care of these items? Mr. Watson advised he had recommended to the Board that the student fees and the bus routes be put back into the budget. He stated that utilized all of the additional money. Comm. Peay asked how funding this project would affect the county being able to go forward with any other projects this year? The Finance Director advised if the committee would allow him to do some creative structuring without increasing the cost of the issue, he believed the county could do about a $25 million issue late next spring. Following discussion, the motion to approve $600,000 in the next bond issue to complete the Eagleville Stadium complex passed by roll call vote with Comm. Peay voting “no”.
DISCUSS CONTRIBUTION TO TENNESSEE PHILHARMONIC SYMPHONY: Finance Director Paul Long advised $5,000 was requested from the Tennessee Philharmonic Symphony to help defray expenses of the July 4, 2002 concert given free of charge for the local community on the MTSU campus. In the budget process, $2,000 was approved for the request. Mr. Long explained since the concert was cancelled, he was asking the committee to direct him whether or not to pay the contribution and allow the symphony to use it for other purposes to benefit the general welfare of the citizens of Rutherford County or withhold the contribution? Chairman Evans asked if they could request the symphony to reserve the funds for next year? Mr. Long stated that could be done. Following discussion, Comm. Jones moved, seconded by Comm. Sandlin to request that the $2,000 contribution to the Tennessee Philharmonic Symphony be paid with the understanding that it is to be used for the Fourth of July concert on July 4, 2003. The motion passed unanimously by roll call vote. APPROVE REVENUE ANTICIPATION NOTE FOR THE EMPLOYEE HEALTH INSURANCE FUND: Finance Director Paul Long advised he was requesting approval of a Revenue Anticipation Note up to $2 million for the Employee Health Insurance Fund. He stated hopefully the entire $2 million would not have to be borrowed. He stated he would probably borrow about $500,000 at a time. Comm. P. Johnson moved, seconded by Comm. Throneberry to approve the Employee Insurance Fund Revenue Anticipation Note, Series 2002 in the amount of $2 million. The motion passed unanimously by roll call vote.
DISCUSS SEPTEMBER MEETING: Mr. Long advised the next scheduled Budget Committee meeting is September 5. He stated it was his understanding the new commissioners would be sworn into office on September 3, and that the Commission would meet that night to select the Steering Committee. However, the Budget Committee would not be selected by September 5. The committee discussed canceling the meeting.
Budget Minutes August 8, 2002 Page Nine
Chairman Evans suggested meeting Thursday, August 29. He stated he believed there were some projects that should not wait 60 days. He stated he did not believe the La Vergne school property item should wait that long. Comm. P. Johnson moved, seconded by Comm. Throneberry that the Budget Committee will meet on Thursday, August 29 at 6:15 P.M. instead of September 5 with the School Board to be notified of the change in the meeting time. Any items forwarded to the County Commission will be addressed at the September 12 Commission Meeting. The motion passed unanimously by acclamation. OFFICIALS’ BONDS: Mr. Long provided a schedule from the audit of the Salaries and Official Bonds. He explained State Law requires that officials be bonded in minimum amounts. He advised the Trustee’s amount would be increased based on the revenue collected from the previous year. The County Commission must approve the bonds, and the current bonds will be provided. Following discussion, Comm. P. Johnson moved, seconded by Comm. Ealy to approve the Official Bonds and forward the same to the full commission. The motion passed by acclamation, with Comm. Jones being absent at that time. ADJOURNMENT: There being no further business to be presented at this time, Chairman Evans declared the meeting adjourned at 8:20 P.M.
_____________________________________ Elaine Cawthon, Secretary |
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