MINUTES
STATE
OF
The Henderson
County Board of Commissioners met for a special called meeting at 3:00 p.m. in
the Commissioners' Meeting Room of the Historic Courthouse on
Those present
were: Chairman Bill Moyer, Vice-Chairman
Also present
were: Deputy Clerk to the Board Teresa L. Wilson, Sheriff Rick Davis, Captain Greg Cochran,
Public Information Officer Pam Brice, Finance Director J. Carey McLelland,
Research/Budget Analyst Amy Brantley, Engineering Director Marcus Jones,
Associate County Attorney Sarah Zambon, Planning Director Anthony Starr, Code
Enforcement Director Toby Linville, and IT Director Becky Snyder.
CALL TO
ORDER/WELCOME
Chairman Moyer called the meeting to order and welcomed those in
attendance. He stated that the purpose of this meeting was a Facilities
Planning Workshop to continue Board discussion.
FACILITIES
PLANNING WORKSHOP
During the discussion of this issue at the last Board meeting the
Commissioners requested some additional information. The consensus of the Board was to get to the
point of making some decisions today regarding facilities and move forward and
to conclude the meeting by 5:00 p.m.
Chairman Moyer requested the
Projects List
Public Schools:
Project
Estimates (
Project
Projected Cost Annual Debt Service
Estimate (15 yrs/4%)
|
Apple Valley/North High |
$8,000,000 |
$720,000 |
|
Former Health Dept. Bldg. |
$1,000,000 - $1,500,000 |
$90,000 - $135,000 |
|
Courthouse Annex/Law |
$11,000,000 |
$989,000 |
|
|
$6,000,000 |
$540,000 |
Jim Wilhide and Dan Mace (of Moseley Architects) had prepared the above
figures.
The question was raised as to what the best use would be for the old
Discussions were then centered on the former Chamber of Commerce
Building: What fits best in this facility? Cost to up-fit the building
dependent upon facility use. Rough cost
estimate was $400,000, to make it usable office space.
|
Repairs and renovations |
$6,500,000 |
$585,000 |
|
Campus-wide Repairs and Renovations |
$4,404,304 |
$396,000 |
|
-
Gravel Parking |
$11,000 |
N/A |
|
-
Paved Parking |
$25,000 |
N/A |
The
Commissioners and the School folks are looking at fast tracking the school
repairs and renovations and Chairman Bazzle committed to being able to do these
projects in 18 months.
Grand Total for
the following Projects List = $31,404,304.
Public Schools:
Apple Valley/North High Classroom
Building $
8,000,000
System-wide repairs and renovations $
6,500,000
$14,500,000
Campus-wide repairs and renovations $
4,404,304
Former Health Department Building $ 1,500,000
Courthouse Annex/Justice Center
(Sheriff -$6,500,000) $11,000,000
$12,500,000
Grand Total = $31,404,304
Carey McLelland
referred to a slide of the PowerPoint presentation. If the Board made the decision to finance the
total costs for the above projects for 15 years @ 4% the total annual debt service
payment would be $2,825,000. He
discussed funding sources for the different projects and the debt roll-off that
would occur each fiscal year. (Option #1)
In this option the Board would use the full Capital Reserve Fund Balance of
$2,326,195.
Carey McLelland
then referred to Option #2, a
pay-as-you-go option. He explained that the capital reserve fund balance stands
currently at $2.3 million at the end of this fiscal year. He presented the
annual cumulative debt service reduction that could be used. In FY 2010 there
would be $3,098,872 available, in 2011 there would be $1,998,402, in 2012 there
would be $2,337,074, in 2013 there would be $2,665,653 and in 2014 there would
be $3,000,318.
Carey McLelland
then explained that Option #3 is a
Capital Reserve/Capital Interest Funding option. He had worked with Chairman
Moyer to prepare this slide. Chairman
Moyer explained that the other options make the assumption that the
Chairman Moyer’s
Option #3 phases the projects in, doing the following:
Schools Maintenance, BRCC
Maintenance, Old Health Dept., and Chamber Bldg. in 2010
Apple Valley/North High Debt Service
(15 years @ 4%) in 2011
Justice Center/Courthouse Annex Debt
Service in 2012
Chairman Moyer
explained that he didn’t believe it is good business practice to finance
maintenance projects with long-term capital debt. Chairman Moyer favors option
#3.
Chairman Moyer
asked Chairman Ervin Bazzle to speak to the maintenance projects and the time
needed for those. Chairman Bazzle said
if the Board of Commissioners tells him to do it in 18 months, then he will try
to do it in 18 months. But his opinion
is that it is preferable to have 2-3 years, need three summers. The most
practical and best time table for the School Board is the one they put into
their budget this year where the maintenance projects are phased in over a
period of time.
Commissioner
Williams feels the Board should push forward on these small projects. We are
currently in a low cost environment. One of the major benefits of doing these
small projects quickly is “job creation”. He feels it should be done as quickly
and efficiently as it can be. Not only
are building costs lower now but interest rates are also.
Commissioner
Young felt these projects should be done in 3-5 years and should not be
financed. He’d like to see them done in
three years but if the economy deteriorates further or our revenues
deteriorate, then we may have to extend to five years.
Commissioner
Messer said the list is growing, “let’s stop the bleeding now”. He also was opposed to borrowing money for
maintenance projects, ditto for the college maintenance projects.
Commissioner
Williams has a big concern about depleting our cash. He doesn’t want to finance
but feels that financing is better than depleting our cash. Cash flow is very
important. He stated there are some unknowns in terms of what may happen in the
way of state funding and the reduction of funds that we may receive plus the
fact that interest rates are low and construction costs are also lower. He
stated maybe at a future date we can either pay off debt with cash we’ve saved
or pay cash for other projects instead of financing at that point in time.
Commissioner
Messer stated that we’re looking at $19 million for just the Apple Valley/North
Henderson project and the school maintenance and the BRCC maintenance. He favors some debt on some of the projects. About every two years the county has grouped
several capital projects together for financing purposes. In this economy he can understand going in
debt for $18 - $20 million but not for the $32 million needed to do the bulk of
the projects. He and Commissioner
McGrady are going to
Chairman Moyer made the first motion, to move
Planning, Inspections, and Permitting to the old Health Department Building and
to renovate it to the minimum extent necessary to house those facilities and
that it be considered their permanent home which will give them some room for
growth and include a meeting room that would be adequate to handle the needs of
the Planning Department so they can have their own hearings and meetings in
that building. Following
some discussion, all voted in favor and
the motion carried.
Chairman Moyer made the motion to move the
Assessor’s Office and the Tax Collector’s Office into the 100 North King Street
Building, basically doing the move as is but that the Board promptly study the
recommendation received from the County Commissioners’ Association and then
determine the minimum cost to make that space usable for whatever
reorganization the Board decides on. All voted in favor and the motion carried.
Chairman Moyer made the motion not to plan to bring
the old Chamber of Commerce building up to handicap accessibility but to study
that further and work in conjunction with moves in the 1995 courthouse to see
if we can make that into a record storage area, mainly for the 1995 courthouse.
All voted in favor and the motion carried.
Capital Projects
Chairman Moyer made the motion not to do any capital
projects this year but to identify the Apple Valley/North
Chairman Moyer
expressed hope that the $8 million construction figure will hold. Chairman
Ervin Bazzle (School Board) and Jim Wilhide were both questioned about the
aggressive schedule. It will take about
6 months to develop the drawings and plans, go to bid about October\November,
and by the end of the 2009 have the bids back and are ready to begin
construction by the end of the calendar year. It will take 12-14 months for construction
so two years from now we would be able to occupy the school. Carey McLelland stated that the Local
Government Commissioner (LGC) will require bids in hand before they will
approve the financing. The debt service would be about a quarter of a year for
the FY 2009-2110 budget. The full amount would begin in FY 2010-2011.
Chairman Moyer amended his motion (above) to move on
the schedule mentioned in the paragraph above we’d have to incur some debt
service in the last quarter of FY 2010 and then the full amount in FY 2011.
Commissioner
Williams was not ready to vote on this yet and wished to share with the Board a
rather detailed spreadsheet that he had put together of projects that he would
plan but he only finished it about 30 minutes prior to the meeting. He asked Amy Brantley if it could be put up
on the screen so that he could address his ideas with the other Commissioners
regarding the borrowing aspect for these projects, going ahead with them and
doing the financing. The merit he sees is preserving the cash and taking
advantage of the opportunities identified. He thinks the risk may be greater,
that we will pay more in the long run if we wait around.
Commissioner
Williams had laid out a list of projects that he felt were priorities (from his
standpoint) and put them in order and then looked at what all funding sources
are available, looking at each year going forward. He is very interested in protecting our cash
flow.
CAPITAL FINANCING OPTION
SUBMITTED BY:
COMMISSIONER MARK WILLIAMS
Project
Total Cost Debt Servicing
School
Renovations 6,500,000 585,000
BRCC Renovations (less major projects) 2,200,000 200,000
Old Health
Department Renovation (Consider paying for from cash) 1,000,000 90,000
23,700,000 2,135,000
Funding Sources 2010 2011 2012 2013 2014
Capital Reserves
+ Surplus 2,236,195 3,599,935 4,318,676 4,776,089 5,062,081
Debt Service
Reduction 772,677 1,998,402 2,337,074 2,665,963 3,000,318
Budgeted School
Renovations Variance 1,805,339
755,339 25,339
(244,661) (244,661)
Budgeted BRCC
Renovations Variance
90,724 -
- - -
Interest –
Unapplied Loan Funds 200,000
100,000 - - -
5,194,935 6,453,676 6,911.089 7,197,081 7,817,738
New Debt Servicing
School
Renovations 585,000 585,000 585,000 585,000 585,000
BRCC Renovations 200,000 200,000 200,000 200,000 200,000
Apple
Valley/North
Old Health Dept.
Renovation 90,000 90,000
90,000 90,000 90,000
1,595,000 2,135,000 2,135,000 2,135,000 2,135,000
Surplus / (Deficit) 3,599,935 4,318,676 4,776,089 5,062,081 5,682,738
Notes on School
Renovations Budget
Budgeted for 2009 2,255,339
This figure is used as the base for the renovation budget
Preliminary
Amount 2010 50,000
Assumes all but $450K to be included in renovation package
Projected 2011 1,500,000 Reduced due to renovations being caught up
Projected 2012 2,000,000 Incremental increase of $500K over prior
year
Projected 2013-2015 2,500,000 Incremental increase of $500K over prior
year
Benefits
Takes advantage
of opportunities
of unusual environment of low interest rates and lower construction cost
Creates jobs and local economic stimulus due to
numerous smaller projects
Cleans up back
log of
carryover repairs and capital improvement projects for the school
Financing
instead of paying for projects from reserves will preserve cash to
overset risk of uncertain economy
If reserves
build as shown less borrowing on future projects, including the law
enforcement center
Takes care of
needed capital projects that have been planned for a number of years
Additional
spaces will remain available for other uses or to be sold (Old
Chamber,
Commissioner Williams referred to the
above spreadsheet.
Commissioner
Young felt that this was a good proposal but felt that if we were going to
borrow any capital project money for maintenance services that we need to look
at long-term maintenance projects such as the chiller for Upward Elementary or
a roof repair. The smaller projects
should be done without borrowing money.
Commissioner Young stated that the Sheriff’s
Chairman Moyer
felt that the Board was looking at an unrealistic number. He questioned the $11 million dollar cost of
a 60,000 square foot building versus a 40,000 square foot building at $6
million. The cost per square foot
figures are way out of line.
Mr. Jim Wilhide,
of Moseley Architects, explained that the proposals were for different building
types and different cost per square foot for those building types. When you get into the securities and the
detention facilities the cost is much higher than standard construction. Mr. Wilhide reminded the Board that he worked
with schools and these proposals were from Dan and not his expertise.
Commissioner
Messer felt that $6 million for a
Chairman Moyer
feels that the public will perceive that the County has money and must spend
it. The issue should be whether the
project, in this environment, is essential to do. From the citizen’s standpoint, he feels if
there is extra money they would rather see the Commissioners’ reduce taxes next
year than spend it. He was not in
support of spending money on projects such as the
Commissioner
McGrady has viewed the consolidation of the Sheriff’s Department as a
significant priority since he came in as a Commissioner 4 ½ years ago and still
believes it should be high on the list.
Several of the buildings are clearly inadequate and are spread all over
the place. Now is the time to do this as
we have an opportunity with lower construction costs and financing rates. He would like to see the Commissioners put
money in to get the architectural work done in this coming fiscal year with the
idea that we would be ready to go (bid it and begin building) at least very
early in the next fiscal year.
Commissioner
Young suggested building the
Chairman Moyer
emphasized that once we have committed this year it doesn’t matter what happens
to the economy two years down the road, the decision has been made, debt
issued, and we are obligated.
Commissioner
Young restated that this would not deplete the capital fund and at that time if
we had to use the capital fund balance we could sell the Nuckols buildings, do
away with some leases, etc. to create a fund balance.
Commissioner
Messer would not vote to have a 40,000 square foot
Sheriff Rick
Davis stated that 40,000 square feet is exactly what the original discussions
were. This included the evidence storage
and consolidation of offices not including the 911 center. Sheriff Davis felt that building the
Chairman Moyer made the motion that the Board
advances with the Apple Valley / North Henderson projects and be ready to go
with bids in about 6 months with the bidding process lasting for 1 month,
continue through the local government process and ready to begin construction
between December and January. Debt
serving would kick in sometime between spring or last quarter of 2010 and a
full year in 2011. All voted in favor
and the motion carried.
Discussion
followed in regards to the length of the debt.
Commissioner Young made the motion that the Board
approves financing long-term capital (projects which last longer than the
length of the financing) maintenance projects, not to exceed $3 million. Commissioner Moyer restated the motion that
the Board approves financing of capital projects for which the life of the
project will exceed the length of the debt (15 years). The vote passed 4-1 with Chairman Moyer
voting nay.
Discussion
followed in regards to the
Chairman Moyer
was not ready to take action on the
Commissioner
Messer was not ready to take action on the
Commissioner
McGrady was in favor of directing the
Commissioner
Williams was in favor of committing to going forward and letting it be known
that this is a project we are planning to do.
We will have to determine the final figures and it may have to be pushed
to the next year.
Chairman Moyer
did not wish to send a message to the public right now that we are planning in
the next year to build a new
Commissioner
Williams made it clear that his entire scenario has nothing to do with raising
taxes. He is trying to formulate a plan
that avoids raising taxes and does not set the Board up so that they are in a
position that they have to raise taxes.
His efforts were made with financing in a very favorable climate to
preserve cash.
Commissioner
Young was concerned that the window of opportunity would be lost if the
Commissioner McGrady made the motion that the Board
directs the
Chairman Moyer
assumed that the same concept in a previous motion of packaging renovations for
schools as long-term capital would also be utilized for
Commissioner Young made the motion that the Board
borrows the long-term capital maintenance projects for
Commissioner
McGrady raised the concern of the Fletcher library issue. The Town of
The
Adjourn
Commissioner McGrady made the motion that the Board
adjourn at 5:15 pm.
Attest:
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________________________________________ ________________________________________ Teresa L.
Wilson, Deputy Clerk to the Board William
L. Moyer, Chairman |
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