The Avery County Board of Commissioners met in a Budget Meeting on Thursday, May 18, 2006 at 3:30 p.m. in their offices, Avery County Administrative Complex, Newland, NC.

Members Present: Kenny Poteat, Chairman; Susan Pittman, Vice-Chairman; Joe Strickland; Phyllis Forbes and Bill Beuttell

Members Absent: None

Call to Order
Chairman Poteat called the Budget Meeting to order at 3:40 p.m. The Chairman then offered prayer.

There were a large number of students, coaches and some representatives from the Avery Board of Education in attendance, including Supt. Grace Calhoun and Sam Eller

Avery High School Field – Astroturf

Coach Matthew Bentley spoke on behalf of Coach Mark Aldridge and represented the group from Avery High and the Board of Education regarding a request for consideration for a new auxiliary gym, track and Astroturf for the Avery High School field. Bentley advised that Avery High is a community school and the school facilities are not used exclusively by the High School. He said they are in need of an auxiliary gym, a track and a new surface on their football field. He advised that they had 14 athletes who qualified for the State mete and there is not a regulation track in Avery County. Lees McRae has a track, but it is not regulation. There is no facility in the county for track. Eight Little League teams in the county use our fields as well as all of the Middle Schools. There are a total of 17 teams using our fields. It has become a safety issue as the ground is getting very hard. If we don’t get something done to the field, we are going to have to ask people not to use our facilities, Bentley said. The sprinkler heads are starting to stick up due to the wear and tear and the ground is getting very hard; it is becoming a safety issue.
The second issue is with the gymnasium. We have four teams using our gym each day. The last team to use it is scheduled from 8:00 pm – 9:30 pm. I don’t know if we should have our young people out on the road in the winter months at 9:30-10:00 pm going home from ball practice. There is no other gym we can use except Avery High School Gym. A lot of other school systems offer indoor track, but we have no indoor track facilities. Most other schools have this in an auxiliary gym or in the balcony of their actual gym.

An auxiliary gym would cost approximately $450,000.00; Astroturf field - approximately $480,000.00 and about $60,000-$75,000 for the track, Bentley said. If we could get these facilities, it wouldn’t matter who used it. Anyone could use it, including Avery Parks & Recreation. Our current field gets so much usage that we can’t keep it in shape. We have some people willing to donate some time to help us with these projects such as Judge Avery, David Jennings and Gerald Arthur. I don’t have exact figures at this time, just rough estimates, Bentley said. He then showed the Board a rendering of how the ball field would look with this new surface.

Bentley spoke briefly about being able to recoup the cost of the maintenance on the old field by installing this new surface. He said the maintenance costs on an Astroturf field would be much lower and we could eventually recoup the cost for the new field in maintenance costs we would have spent on the old field. If you project those figures for one year, it doesn’t amount to much, but when you project it over the actual life of the Astroturf, the amount of time you can play on it, etc. then the turf field would be much lower.

Chairman Poteat asked if the group has prioritized which of the 3 projects they would like to work on first, according to what monies are available. Matthew advised they have not yet prioritized these projects but that he would love to get them all, because that would solve all their problems.

Bill Beuttell provided the Board with a handout which gave statistics showing that athletes fare better than non-athletes in school because they have higher grade point averages, less disciplinary problems and less absenteeism. Bill said that many other schools in our Conference are going to auxiliary gyms. I would not want to see Avery County lagging behind in building up our athletic facilities to the point that we get so far behind that we have to do something to keep up with the rest of the schools in our Conference and district. Sometimes we wait until something is falling down before we do anything about it such as a Jail or school, etc. I would like to see Avery County at some point in time set an example for other schools so they can say they want to be like Avery County instead of Avery trying to catch up to everybody else, Bill said. Matthew Bentley said he is almost positive that Avery is the only school in our Conference that does not have an auxiliary gymnasium. He added that this project would benefit the High School, Middle Schools and the Parks & Recreation Department.
Chairman Poteat advised that the Commissioners have many budget decisions yet to be made and that they have about 30 entities lobbying them for money, many with good justification and desperately in need. It is our job to decide what is most worthy and how to prioritize and best spend the taxpayer’s money. The Chairman thanked everyone who came today regarding this request.

Supt. Grace Calhoun stated that the Board of Education is in favor of these 3 projects. In terms of priority from the Board of Education, our first priority would be the ball field she said. When we discussed it in our Joint Meeting we discussed the quality of the fiber and the life expectancy of the field, which would be about 30 years. This is not the average Astroturf fiber but is a new type of synthetic fiber. The Board of Ed would prioritize getting the field done first because it is an area we feel we could recoup cost and get more in-kind donations to cut down on the cost of it. That might help us on the cost of the gym and the track a little later on.

Joe Strickland spoke briefly about prior funding to the Board of Education as well as amounts currently being considered for this FY. He said that we are putting an additional $4 million in capital this year for renovation of the High School, plus there is another $11 million in Debt Services for schools that have been built and for public projects. Without the involvement of the community in such an endeavor like a bond referendum to cover all of these things that are so desperately needed, it will be difficult to raise the taxes to the point that the community will endure those changes without a serious backlash, Joe said. He said he wanted the group to appreciate the dilemma this Board faces. Susan Pittman thanked everyone for coming today and said the board will look at this request very closely. Phyllis Forbes also expressed appreciation to everyone for coming in today, adding that it is good to have input and we will certainly look at this further.
Chairman Poteat also welcomed Commissioner-elect, Dan South.

Robert Wiseman complimented the group on the fine presentation they made today, adding that this is one of the better ones he has heard in his 27 years in local government service.

The Board took a brief Recess at this time.

Budget Matters
Chairman Poteat advised that there have been some suttle changes in monies and revenues since we last met. The Board of E&R has concluded their work for this year and their actions affect what we are trying to do with the budget. We now have less revenue than previously. We met with Phillip Barrier, Tax Assessor, this morning, Robert said, and the Board of E&R is complete. They released about $7 million this year; however, there are 6 appeals pending to the state. One of those will be the Linville Golf Course. Nothing in the appeal process can transpire fast enough to effect what we have to do now on the budget. If Linville pursues this and we defend it, Phillip is confident we can win it, but if we don’t, then next spring about this time what will the other golf courses in the county do, Robert said. We are looking at some potential fallout a year from now that could mean big bucks, Robert said.
Chairman Poteat said that we are looking at an approximate $7,286,000 decrease in the overall property value in Avery County. The value is now $3.706 billion as opposed to $3.713 billion, Tim said. That bumped the revenue neutral tax rate up 1/10 of 1 cent. So, instead of 37.4 cents, the revenue-neutral tax rate is now 37.5 cents. Tim added that the Fire Tax is still 2.8 cents and the General Fund is now $0.347.
Kenny stated that the revenue neutral tax rate that was previously stated in the Press Release has now changed to 37.5 cents.

Discussion on the tax appeal by the Linville Golf Course. Joe Strickland said we need to think in terms of what happens if they prevail in their appeal and what happens in the event the other golf courses follow suit. Discussion on possibility that the Board may need to raise taxes in the 2007-08 FY to make up for this difference. Joe Strickland encouraged the Manager to prepare a Press Release to the newspapers and radio as to the circumstances and events of what has changed so the community will not conclude that we have reneged on any remarks that have been made to this point regarding the tax rate.

Joe said we do not yet have our year-end projections on revenues and we need to know those numbers. We also have a substantial amount of money in capital for the Courthouse Project. Phyllis Forbes commented that if we deplete Fund Balance too far, we have to deal with that in future years. Robert said that all this revenue sounds good, but the fact is that $3 million won’t build a Jail. It will take $1 million to renovate the second floor of the Jail annex. We have the Banner Elk School to build and we just transferred $750,000 for the High School project. If we start dipping into Fund Balance it becomes commonplace and we start setting up to fail when we do that. Joe said he didn’t see how we can accomplish all that is expected of us without doing 1 of 3 things: 1) redirect some of the Courthouse Project Fund; 2) Use Fund Balance or 3) Raise taxes, and I won’t vote to raise taxes, Joe said. Bill said we had to raise taxes back in 1993 by 14 cents in order to get the county back on its feet and we are in good financial shape now and I won’t leave office with a situation where Phyllis and Susan and Kenny are in financial straits. Discussion. Susan said it has taken us 10 years to get where we are today from what happened back in those earlier years. Robert Wiseman spoke in favor of continuing with the “pay as we go” philosophy which Joe Strickland was responsible for establishing whereby we have planned for and executed a program that has saved thousands of dollars with the high school project, courthouse project, etc. If we don’t stick with the 20% in capital, a pay as you go policy will be hard to adhere to under those circumstances. Robert said if we take the money out of Fund Balance now to keep from raising the tax rate , we either pay nor or pay later. Tim said we did experience a $3 million windfall this past year, but there is no indication of how much we will have this year.

Special Appropriations
Toe River Health District
Robert Wiseman advised that according to Ryan Whitson, Mitchell County Manager, Mitchell is considering holding their appropriation at the same amount as last year, $170,000. They are also considering allocating $32,000 for a 3% cost of living increase to the Mitchell County employees. The request was for each County to allocate $275,000 to the Toe River Health District. Susan Pittman commented that the Health District has been in financial straits because counties have not come up with their share of funding.

Lengthy discussion held on what action Avery County should take regarding the issue of equal funding of the Health District by all three counties. It was commented that Mitchell has not been paying their fair share for years. They recently cut their appropriation by $30,000, then they cut $50,000 and now they are planning a $100,000 cut. Phyllis said that tells us that we should either get out of the District or they should. Lengthy discussion on whether or not we should cut the Health budget by $85,000. Robert said he hears that Yancey plans to contribute the same as last year, around $225,000. Kenny suggested we appropriate $225,000 and just forget about Mitchell. That is still about $30,000 more than we gave last year. Joe Strickland said he would go along with that amount if the Board will consider having a separate Health Department for Avery County. The Board agreed they are interested in considering a separate Health Department.

Motion by Bill Beuttell to appropriate $225,000 to the District Health Department and give consideration to an independent Avery County Health Department. Motion seconded by Susan Pittman and unanimously approved.

Special Appropriation - Avery County Museum
Robert advised that the Museum (Old Jail Building) is in dire need of a new roof. The building is leaking badly. He said there is $25,000 in the budget to sandblast and repaint the hangar at the airport and I would like to move that money into the Museum to replace their roof, if the Board approves. The Board agreed.

Airport Funds
Susan Pittman suggested that at some point the Board needs to look at the Airport funds and the Airport Authority as to what progress is being made and the growth, etc. Robert Wiseman advised that the Authority reports on an annual basis to this Board as to what is going on down there. He added that the majority of their funds are not in an operating account, but there is something tangible they have to show for their expenditures. $50,000 went to repave, widen and extend the runway. They received a grant for that expenditure. Joe Strickland was not comfortable discussing their budget with no input from the Authority. He said the Manager cut $10,000 out of their budget and he didn’t feel we could arbitrarily cut more funds with no input from the Authority. The Finance Officer advised that their total request was $85,000 and the Manager cut $25,000 out, leaving $60,000. Tim and Robert met with the Chairman of the Authority and the request was $70,000, including $35,000 to build a fence up Brushy Creek, plus money to sandblast and paint the hangar. After these figures, Robert said the buyout with Spanky Spitler took place and to avoid legal action, the Authority decided to buy his fuel. They got everything cleaned out and gone at an approximate cost of $35,000. They used the fence money to settle the buyout with Spitler. Robert is recommending taking that $25,000 out that was set aside for painting and using it for the Museum roof since it is in dire need of repair. That leaves a recommended figure of $45,000 for the Airport appropriation.

School Budget
Joe Strickland suggested leaving the school operational budget as is and giving consideration to capital of up to $427,000. Discussion.
Joe suggested that the Board could also carve the money for Bill Beuttell’s Rock Project for the school out of this money, or address it separately. Bill said that the last estimate he got from Eggers Construction for rock removal was $55,000. That price would demolish the rock down to grade level and spread it out so it would be ready for topsoil for a field or to build a new building on it.
Bill said that in regard to some other school projects, if we are considering putting in Astroturf, it would be the perfect time to do the rock along with the Astroturf. However, Bill added that he would not vote to raise taxes in order to do this project.

Discussion with Supt. Grace Calhoun on whether the school system would rather have additional money in current expense or capital. Ms. Calhoun advised they would rather have it in current expense due to the new proposal from the State to give an 8 percent salary increase. She said they don’t have the extra funds to accommodate that.

Ms. Grace Calhoun said that she has served as Superintendent for 7 ½ years and during that time they have been encouraged to spend down their Fund Balance to meet the needs of the schools, which they have done. You told us we could come to you for a dire need. We came to you for our dire needs and you met them such as for band uniforms, boiler and new activity buses. However, right now I see keeping teacher assistants and others in the classroom as being more important; we can then meet other emergency needs as they arise. Phyllis Forbes agreed with Ms. Calhoun, stating that she would not want to see us go backwards in this regard.
Joe Strickland said he would agree to putting extra funds in current expense if the schools consider consolidating their system because they are losing State and Federal funds by their own admission. He felt they should consider this given the dire circumstances they continue to face with money. Ms. Calhoun said if the State cuts the Small Schools budget, there would be no question about that. Discussion continued on possible effect on State budget cuts on the school system. It was agreed to discuss the Board of Education budget at the next Budget Meeting on May 24.

Animal Control
Phyllis Forbes said she had hoped that we might be able to fund an animal control officer in this budget. Discussion on what would be needed in order to do this, such as an ordinance and sworn personnel. Joe Strickland suggested asking the Sheriff to delegate a person on his staff for this purpose. We would also need a truck. Phyllis said she would like to commit now to looking at this when the new Sheriff takes office. Maybe we can find the money somewhere at that time, she said.

Phyllis said she wants a commitment to pursue this at some point during the year. Joe recommended the Manager crunch some numbers so the Board can look at it and consider it. Phyllis added that she is not looking at having a leash law or anything like that. The Manager agreed to look into this and get an estimated cost for the Board to consider.

Phyllis also asked about getting a new defibrillator and the estimated cost.

Fire Commission Budget
The Fire Commission is currently requesting $1,476,272.00 and at this point is getting $990,000. Tim Greene said that the Fire Commission will actually get about $1,016,000 with the new property tax rate and at the 2.8 cent Fire Tax rate. Last year they received $990,000, Tim said.

Discussion was held on the cost to pay off the Fire Association debt. Every year they have to pay off $345,000 in debt payments on equipment, plus they will be paying off more debt after this year. Joe Strickland said that in order to give them some relief, we may wish to consider some strategy to accommodate their indebtedness. Brief discussion on where the funds would come from to help with this indebtedness. Joe suggested using the salary funds for the Association. Kenny Poteat advocated not assuming their indebtedness but that the Board might be able to do more than $1,016,000 this FY, whatever amount we decide on at our next Budget Meeting, he said. Discussion continued on possible ways to help them reduce their debt such as a moratorium on buying vehicles or establishing a multi-year plan, etc. The Manager did not recommend fixing this problem by paying off $5 million in debt for the fire departments all at one time. He said that if we did that, the departments would not have any ownership in the reduction of their debt and they might get back in the same situation 5 years from now, etc. He added that we can’t fix this problem by pouring money into it year after year. Bill Beuttell suggested it might not be the right thing for us to legislate for the Fire Association and Fire Commission, bodies that we appointed to do this job. Rather, he said he felt we need to figure out a formula to get them on the road to recovery.

Chairman Poteat instructed the Finance Officer to research what it would take to encumber the debt of $2.7 million and how much it would cost us in the coming year as debt retirement. We could then discuss the issue of how much we think we might be able to afford at our next meeting.

Joe Strickland asked to be able to start the next budget meeting with supplemental insurance for retirees, as he has some new information in this regard.

The Board agreed to hold their next Budget Meeting on May 24, 2006 at 2:00 p.m.

Adjourn
Motion by Joe Strickland and second by Bill Beuttell to adjourn at 5:35 p.m. Motion unanimously approved.

___________________________________
Kenny Poteat, Chairman
Avery County Board of Commissioners
ATTEST: ______________________________
Nancy H. Cook, Clerk to the Board