[This article has been corrected to reflect Pinehurst Fire Chief Carlton Cole's correct title and to clarify questions raise by the Moore County Chiefs Association. The corrected sentences appear in boldface and italics.]
Though there were no motions and no votes, a day-long discussion of "critical issues" gave the Moore County Board of Commissioners an opportunity to make progress on some longstanding issues -- and scratch their heads over some new ones.
Here are some highlights.
Water
The Board and Public Utilities Director Randy Gould appeared to have settled on a new contract with Harnett County as the best option for increasing the County's water supply. The County will invest in the expansion of a Harnett water plant, guaranteeing a steady supply and a lower rate.
Projecting demand out to 2030, Gould believes the County needs an additional 1.71 million gallons per day [MGD] of supply to meet peak demand. Three new wells planned for sites along Linden Road are expected to produce 500,000 gallons per day.
The County currently purchases water from Harnett County under a contract that provides up to 2.0 MGD, and uses a maximum of about 1.2 MGD. Harnett is expanding its water plant, and Moore County can purchase a 3.0 MGD share of that capacity for $5.25 million.
Moore County would continue to pay for each gallon of Harnett County water it uses, but the upfront payment would reduce the rate from the $2.40 per thousand gallons the County is currently paying Harnett to $1.92 per thousand gallons. It would also contractually guarantee that Moore County is first in line for the 3.0 million gallons, in front of even Harnett County retail customers.
Adding a water tank, booster pumps, and new water mains to the project brings the total cost of the project to $10.8 million. That's about half the cost of bringing water from Robbins or from Wagram. And it would provide a second supply of water to the Seven Lakes area.
Gould said the Harnett deal could raise water rates by $5.79 per month, a roughly ten percent increase on the average $53.51 water and sewer bill. But Chairman Nick Picerno was quick to warn: "I don't want the press to report that Moore County is going to raise water rates ten percent. That's not going to happen."
Picerno said he would prefer to see rate increases phased in over time, and he also noted that Gould's rate projection assumed no increase in the number of customers, which is unlikely.
Commissioner Larry Caddell and Jimmy Melton spearheaded the Commissioners' task force on water. Caddell said he hoped the Harnett plan could be brought to a Commissioners meeting in May for approval.
Budget
Sales tax revenues are flat, and the Commissioners have no interest in a property tax increase, but they are facing increased benefits costs that average $1000 per employee.
County Manager Wayne Vest told the Commissioners that the Budget Team, which includes Commissioners Picerno and Saunders, are currently looking a Fiscal Year 2014 expense budget of $119.6 million, up from $118.2 million in the current year's budget.
That $119 million does not include additional funding requested by Moore County Schools, Sandhills Community College, or the Moore County Animal Center. Nor does it include any cost of living increase for County employees. County employees were awarded a 1.5 percent cost of living increase for six months of the current budget.
Schools Technology
While seeking no increase in local operational or capital funding, Moore County Schools [MCS] is asking the Commissioners to create a new digital technology fund in support of the 1:1 Initiative to put a laptop or tablet computer in the hands of every student and teacher. MCS is asking the County to contribute $750,000 to that fund this year, an amount that rises to $1 million and then to an on-going $2 million per year.
Commissioners Caddell, Melton, and Picerno all complained that the $750,000 request came as a surprise. Based on meetings with MCS Superintendent Aaron Spence and member of the Board of Education, they believed the digital technology initiative was on a slower track, that would rely on test installations to build local data on effectiveness before rolling the program out more broadly.
"The $750,000 was unexpected for this year," Melton said. "We definitely want to fund it, but I'm not for the longterm lock-in without results."
"I understand what they want to do," Caddell said. "I think it's great. But it's $2 million forever. You can't take $2 million out of the fund balance every year and balance your budget." He also noted that a bond issue for new schools is on the horizon, which will require even more new funding for the schools.
Commissioner Saunders expressed some hope that the price of computers and tablets would decline, reducing the expenses involved below the MCS projections for future years.
"I think some members of the school board were shocked at how fast the Superintendent wants to move," Picerno said. "The thing that always bothers me: it is sort of funny that the legislature has put us in charge of funding it, but we have no role in spending it. Every year they [MCS] have ended up with a surplus. They are adding money to their fund balance. At the current funding levels, they have a surplus. They have used this to jumpstart digital learning."
"We should view this as a one-year trial," Picerno said. "We don't look at it as a four-year project. And we should make them have skin in the game. We should come up with a joint way to do this. Put it in a fund, so that we know that every cent of it is being spent on technology."
The MCS budget request, presented to the Commissioners two days prior to the Critical Issues Summit, showed the schools matching the $750,000 requested from the County with $1.5 million in MCS funding, which Spence indicated was largely being taken from designated fund balance.
School Board Chairman Ed Dennison told the Commissioners: "We don't budget a surplus; but, because of the rules the state has, [Chief Financial Officer] Mike [Griffin] is able to save us money. Instead of spending it, we have put it in our fund balance. With the program that we have discussed with you, we know our fund balance is going to go down for three to four years and will get to four percent. We are saving it — not spending it."
Though the Commissioners did not spend a lot of time discussing Sandhills Community College's request for a $200,000 increase in operational funding and a one-time $500,000 capital infusion, Picerno suggested that the County may want to fund part of that request, while asking the college to fund the remainder from its own fund balance.
"The college had a $1.6 million surplus last year," Picerno said. "Does that mean we are giving them too much money, or that they are doing what we ask and being good with their money? I think these both are doable, but that they are going to have some skin in the game."
Employee Benefits
The Budget Team's draft FY2014 budget includes a $634 per employee increase in Health Insurance; $209 per employee to fund newly legislated unemployment Insurance; and roughly $116 per employee for retirement. It does not include any cost of living increase in salary. Giving employees a 1.5 percent increase for the last six months of FY2014 would cost $219,500.
The County currently makes contributions to a traditional defined benefits pension plan for its employees, and also contributes an amount equivalent to three percent of salaries to each employee's 401K plan. Commissioner Picerno suggested the possibility of capping the combined pension and 401K contribution at ten percent of salary.
Perhaps more interesting was an Employee Heath Improvement Initiative proposed by the County's employee benefits consultant, Mark Browder of Mark III Employee Benefits.
Under the plan, employees who agree to participate in a wellness program would continue to have the full cost of their individual health insurance covered by the County. Employees who opt out of the wellness plan would pay $15 every other week, or an extra $390 for the year. The same extra cost would apply to the various dependent coverage options available to County employees. The goal is to improve employee health and reduce claims against the County's self-funded employee health insurance program.
The Wellness Program would measure a variety of risk factors shown to have a strong correlation to illness, including waist circumference, blood pressure, cholesterol ratio, and blood sugar levels. In FY2014, the discount would be available simply for agreeing to participate in the plan. In subsequent years, employees would have to meet certain targets in the control categories in order to avoid higher health insurance costs.
"There will be some wailing and gnashing of teeth," Consultant Browder told the Board. "However, it is a real catalyst for having people think about their health and do better." He stressed that such programs work only if they include an economic incentive.
Commissioner Larry Caddell expressed strong support for the plan; it will require a vote of the Commissioners to be implemented.
Fire & EMS
Consultants have just completed a comprehensive study of the County's fire and EMS system that generated thirty-five recommendations, including the merger of a some districts and moving to a single, countywide fire tax rate, rather than the current district by district rate structure.
Public Safety Director Bryan Phillips told the Board that his staff had begun to dissect the recommendations and use them to develop a public safety strategic plan. Pinehurst Fire Chief Carlton Cole, speaking for the Moore County Chiefs Association, said the chiefs had questions about the allocation of funding among districts if the County moves to a single fire tax rate. He noted that fire tax revenues collected from within a district can only be used within that district. So implementing a flat fire tax rate will be more complicating than simply adopting the same rate in each district.
Both Phillips and Cole asked the Commissioners for guidance, but found the questions turned back to them.
"We're not the experts," Commissioner Caddell said. "You guys are. We spent the money on the study. Get a group together to get this ironed out. We need for somehow you guys to get together in a room and lets make a recommendation."
Though he didn't mention McLendon Hills by name, Commissioner Picerno reminded Cole of the problem that originally generated support for the study: the fact that some communities are included in and pay taxes to support one fire district, when they are actually closer to another. McLendon Hills is in the Eagle Springs district but is closer to the more highly-rated Seven Lakes squad. That means McLendon Hills residents are paying higher homeowners insurance rates than they would be if they were in the Seven Lakes District.
"What we want is a situation where we aren't increasing a person's insurance rate because their tax dollars are needed to fund a department over here," Picerno said.
Other Matters
Other topics discussed during the Thursday. April 18 Board of Commissioners Critical Issues Summit included:
County Facilities. The county recently paid for a comprehensive study of its future space needs that recommends building a 111,000 square foot Judicial Center and moving County Administration into the circa-1979 facility currently used for Superior and District Court. But Commissioner Larry Caddell was highly skeptical that the "pillbox of a building" can meet the need. Commissioner Randy Saunders warned against over-building, noting that an increasing reliance on the internet and virtual presence technologies may shrink County and Court space needs in the future.
Information Technology. The Commissioners appear ready to call in the lawyers to deal with a supposedly advanced government software package that was purchased to provide coordination across County departments, but has instead created more work for County staff.
Economic Development. County Attorney Misty Leland presented a draft Economic Development policy that appeared to meet with approval from both the Commissioners and Partners in Progress CEO Pat Corso. An ad hoc committee is planned to edit the draft.
