The Avery County Board of Commissioners met in a Joint Budget Meeting with the Avery Board of Education at the offices of the Avery Board of Education on Thursday, May 4, 2006 at 4:00 p.m.

Members Present: Kenny Poteat, Chairman; Susan Pittman, Vice-Chairman; Phyllis Forbes, Joe Strickland and Bill Beuttell
Also Present: Robert Wiseman, Tim Greene and Atty. Michaelle Poore

Members Absent: None

Avery Board of Education: Frances Banner, Peck Taylor, Edwina Sluder, Marty Barinowski, Grace Calhoun, Bob Tatum and Jeff Jaynes

Call to Order
Both boards were called to order at 4:10 p.m. Mrs. Calhoun offered prayer.

Walt Clark Road/Crossnore Elementary School
Mrs. Calhoun provided the boards with a copy of a letter which both boards had previously agreed to send to the NC Dept. of Transportation requesting that the Dept. of Transportation install guardrail along the playground at Crossnore Elementary, install flashing lights on Walt Clark Road for caution, and reduce the speed limit from 35 mph to 25 mph on Walt Clark Road. She advised the letter was sent April 24 and that we are still awaiting a reply.

Board of Education Budget Request
Mrs. Grace Calhoun and Mr. Jeff Jaynes presented a FY 2006-07 budget request from the Board of Education. Ms. Calhoun apologized for not being able to get this budget request to the Commissioners prior to today’s meeting, adding that they have had several other meetings which delayed getting the budget ready prior to today’s meeting.

The total FY 2006-07 budget request from the Board of Education is $4,155,050.00. This request represents approximately a 15% increase over the 2005-2006 budget. Ms. Calhoun pointed out several factors affecting the school revenues for the coming fiscal year such as Federal budget cuts totaling $784,951.00; state budget cuts of $521,570.00; State required budget increase of 5% for certified employees and 3% increase for non-certified employees (which applies to locally paid employees as well); health insurance increased by $422.00 annually per employee; property/liability insurance all increased considerably; heating and transportation fuel for this year exceeded $150,000 more than was budgeted. Also, utility bills exceeded budgeted amounts; state sales tax refund revenue was cut out for 2006-07; must return $74,000 state dollars in 2006-07 unless legislation stops discretionary cuts to State’s budget; according to school auditors, they cannot take more than $255,000 from Fund Balance without incurring cash flow problems and personnel and programs have all been cut as far as the schools feel they can be cut for the 2006-07 school year. We have already cut 4 teaching positions and 2 teacher’s assistant positions, Ms. Calhoun said. If we can’t find ways to balance the budget with what we are asking for, we will have to do deeper cuts.

Discussion on number of locally paid employees in the school system. Two certified teachers are being paid out of our local budget but there are a lot of non-certified people currently being paid out of our budget, Ms. Calhoun advised. Ms. Calhoun advised that her staff would compile a list for the Commissioners of the total number of certified and non-certified personnel being paid out of the school budget.

School systems have been denied any sales tax refund, Calhoun said. That is approximately $115,000 per year which has been cut.

Ms. Calhoun said that the State cuts in budget were part of the reason we are losing enrollment. Last year enrollment was 2,340 students and it is down to 2,290 students this year. Banner Elk Elementary has gone down from 210 to an estimated 140 students for this coming August. Part of our problem is that we are not able to hold our graduates here because there are no jobs for them. Mr. Shoemaker and I have discussed various vocational programs for our children to train them and get them into the workforce to do things such as building these $5 million dollar resort homes, etc.

Discussion regarding reimbursement to the Board of Education for the $111,000 they paid up front to Padgett & Freeman Architects for the plans they prepared for the renovation of the High School. Robert Wiseman advised we had previously discussed reimbursing these monies once the QZAB monies were received by the County. That issue has changed since then and our Finance Officer will be presenting a Resolution to the Commissioners at the next meeting to amend the previous Resolution on this matter, Robert said. We will be reimbursing the Bd. of Education for those funds.

Ms. Calhoun said that if the schools were to have to make further employee cuts that they would have to let the teachers know something by June 15, according to state law, if they are not going to have a job. We are begging you to be as lenient as you can with us this year. The County’s appropriation to the schools last year was $3.6 million for both Capital Outlay and Current Expense, combined. This year we are requesting $4,155,050 for both. Joe Strickland commented that the Commissioners have committed to at least what we gave you last year and any other we can afford to give you.

Bill Beuttell asked, for the record, how much 1 cent on the tax rate would equal. Tim Greene said that based on the current revaluation, one cent would equal $371,000 approximately (at 100% collection), or about $300,000 at 96% collection. We won’t collect 100%.

Bill asked about the amount the schools can take out of Fund Balance. Ms. Calhoun said our auditors say we can’t take more than $255,000 out. She said their auditors don’t want them to get below $750,000 in the Fund Balance. She advised that this past year the schools had a Fund Balance of $875,000.

Kenny Poteat reminded everyone that regardless of what one of the local papers said this week, the County tax rate has not been set. He then read aloud the press release which was provided to the newspapers and also read aloud the definition of a revenue neutral tax rate. Mrs. Calhoun said that the school system doesn’t expect the Commissioners to make up the cuts of the Federal and State, but they want to make the Commissioners aware of what they have to do and to cut.

Discussion on percentage increase of the school capital and operating budgets over last FY. Current Expense had an approximate 11 ¾% increase and the Capital Outlay budget increased by around 60% over last year, Tim Greene said.

Frances Banner asked how much money the County keeps in their Fund Balance. Joe Strickland said that the County has a Fund Balance of around $14 million dollars. Tim Greene added that the County keeps about a 20 percent Fund Balance. He said that we maintain around a $4.3 million dollar Fund Balance in our General Fund. Our Courthouse Project Fund Balance is around $7 million and we still have to finish up the Courthouse Annex, build a new Jail addition and remodel the old Courthouse on a “pay as you go” basis. We are using Fund Balance to pay as we go on these projects, Tim said. We are about $1.5 million shy of what we need now to finish all those projects. This does not include the High School project or the new Banner Elk School, Tim said. We are using our Fund Balance to make these repairs and do this construction on a “pay as we go” basis. Tim advised that we are projecting our tax revenue increase to be about 3.74% over last year. As to the overall budget increase, we still need to back some of those flood monies out in order to see what the overall increase will be this year, Tim said.

Discussion on request for salary increase of 3% for non-certified employees and a 5 percent request for teachers and employees with certificates.

Capital Outlay Budget Request
Ms. Calhoun presented the Capital Outlay request for FY 2006-07. She said that the total request from the principals at all of our schools was $2,258,550.00. That amount has been cut down to $427,050.00, which is our request today for Capital Outlay.
Discussion on the artificial Astroturf request of $500,000 for the field at Avery High School. Many school systems around the nation are installing this Astroturf and allowing it to pay for itself in field maintenance costs over a period of years, Ms. Calhoun said. I don’t think we can even touch this request this year due to all of our other requests, but if the time comes when we can, we think that we can raise about half of this amount in donations.

Joe Strickland asked about income from the Lottery and whether it fits into this equation anywhere. Ms. Calhoun said that the income from the Lottery is for Capital Outlay expenses. She said that the formula the state has set up for the Lottery revenue to distribute to the local school systems is partly based on the average daily membership (ADM) and partly based on the county’s ability to pay. That is for all of the 18 counties in the western part of the state. We have tried to get our legislators to change the formula on the Lottery revenue to let it be based on enrollment period, straight across the state, which would be a fair way to distribute it, Ms. Calhoun said. We are supposed to get about $178,000 based on the projected revenue, which is not materializing as much as they had hoped. If they went to a flat enrollment formula per county, our portion would go up to about $264,000. Bob Tatum added that the Lottery money can only be used for new construction.

Ms. Calhoun listed the capital needs for each school facility and the associated costs.
The playground equipment requested for the Banner Elk School would be moved to the new school once it is constructed.
Ms. Calhoun said that the current enrollment at Avery Middle School is 371 students and that their enrollment will be going down next year.
Beech Mountain School has to have a new roof right away, Ms. Calhoun said.
We have listed 15 or 16 things that we want under Capital and we would appreciate your trying to approve at least the top 10 capital items if you can’t do all of them this year, Ms. Calhoun said.
We have put those 15 items in priority order of what we absolutely have to have, she said.

Jeff Jaynes was asked to explain the new telephone system request for Banner Elk Elementary. He said that Banner Elk currently leases their phone system from Skybest and that they are paying about twice as much as the High School pays annually due to having this leasing arrangement. If Banner Elk could purchase their phone system it would be a big cost savings.

Kenny Poteat asked if the Board of Education would rather the Commissioners allocate them a lump sum, such as $3.6 million, and divide it up according to current and capital expenses as to what we feel should be spent for each, or give you a lump sum and allow your board to decide how it should be spent. Robert Wiseman said that he does not think the Board of Commissioners has the authority to tell the Board of Education how to spend their money for operational purposes (Current Expense), but the Commissioners can designate certain amounts of money for certain Capital projects if they so desire.

Joe Strickland commented that the election is now over and he is on his last term as Commissioner. He asked if the Board of Education has given consideration to consolidation in schools particularly where they have eroding school populations in order to save money. He said that with funds dwindling and enrollment declining, you may be faced with consolidating schools in the future and may wish to look at it.
Discussion was held on this recommendation. Ms. Calhoun commented that if, at some point in time, the enrollment drops to the level that we would need to look at taking this action, that we would consider it.

Bill Beuttell asked about the future plans for an Astroturf field. He said some schools have already gone to the new type of artificial turf and they get a lot of usage out of a limited amount of space this way. In this county, we have had to have a lot of play on a limited amount of space as well. He said he felt that if we are going to renovate the high school, that we could combine our athletic needs with the renovation of the facility. He said that if we do the Astroturf, that the turf from the high school field could be moved to the Avery Middle School field where hopefully the dirt and rock are going to be moved in order to create a field there. Also, in the School Board request, they mentioned a million dollar renovation project to the Avery Middle School Gymnasium. I ask you to consider where an auxiliary gymnasium could fit into this. We could most likely build an auxiliary gym to facilitate most if not all of the needs of the middle school and the high school, so we wouldn’t need both. If we are going to do a renovation project, I feel we should look into this possibility, Bill said. It could save us a lot of money. I am on my way out, but I am going to do my best to facilitate your needs as well as those of the children, Bill said. Ms. Calhoun said she has asked about using Astroturf and has been told that it pays for itself in a short amount of time in field maintenance costs. Bill said it has about an 8 yr. guarantee, but it has been found to last much longer.

Mr. Mark Garrett, with Avery High, said he has met with different providers and discussed this new Astroturf. It is much better than the type used in the 80’s. It provides better safety and durability with less injuries involved. The number one cost factor is the cost per hour per usage, which is about one third as much as a grass field. He added that it is estimated that we could get about 20 years of usage from this type of field. He also said that the Little League programs could use these facilities if we get this new Astroturf material.

Chairman Poteat advised that the Commissioners will hold another budget meeting on May 11 at 3:30 p.m.

Joe Strickland commented that he hopes future boards will appreciate the value of having at least quarterly meetings with the Board of Education. He felt it was very helpful for both boards to get together and put things on the table and have a good working relationship. Edwina Sluder agreed that it is very good to be able to have open communication between these two boards.

Adjourn
Motion by Joe Strickland and second by Bill Beuttell to adjourn this meeting at 5:25 p.m. Motion unanimously approved.

__________________________________
Kenny Poteat, Chairman
Avery County Board of Commissioners

ATTEST: ________________________________
Nancy H. Cook, Clerk to the Board