Town ofl Mocksville Special Board Meeting April 30,2024  The Town of Mocksville Board of Commissioners met for the Special Board Meeting on Tuesday, April 30, 2024 at 6:00 p.m. at the Mocksville Town Hall located at 171 S. Clement Street.  Present: Commissioners Present:  Mayor, Will Marklin Jenny Stevenson Johnny Frye Justin Draughn Carl Lambert  Absent: Rob' Taylor  Others Present: Ken Gamble, Town Manager Lynn Trivette, Town Clerk Chris Vaughn, Parks and Grounds Director Brian Moore, Public Works Director Emily Quance, Human Resource Director, Deputy Clerk Rana Gaither, Administration Specialist Lead Andy Lipscomb, Assistant Fire Chief  Mayor Marklin called the meeting to order.  The' Town of Mocksville Board paused for a moment of silence. Mayor Marklin led the Pledge of Allegiance.  Adoption of Agenda  A motion was made by Commissioner Draughn to adopt the agenda as wrilten. The motion was. seconded  by Commissioner Stevenson which carried by a uanimous vote 4-0.  NEW BUSINESS  A. Raftelis Waterand Sewer) Rate Study Presentation-Dlaine Vastis  April 30,2024    Study Objectives  Develop a financial plan that will: > Provide a road map to ensure future financial sufficiency > Meet the Town's policies and objectives Create an optimized capital financing plan Financial Plan Update  CAPITALI PROJECT FUNDING Funding! Mix (Cashy vs. Debt)  Debt Covenants  FINANCIAL PLAN INPUTS Cuslomer accounts Bledo consumplion Revenues Operalingexpenses, Capitalplan Beginning cash position  ANNUAL CASHE FLOW FISCAL POLICIES ANDI TARGETS Cash Reserves  ANNUAL REVENUE REQUIREMENTS  Debts Service Coverage  Cost Drivers = 0&M national water/sewer industry  Operating andi maintenance (0&M) costs have increased 18%1 from! FY 2019t tol FY2 2023 due to COVID-19 and inflationary pressures, similar to - FY2024 budget and costs to-date are! 9% higher than FY2023 O&M over thet five-year forecast period anticipated to increase significantly Doubling the amount ofs sewer flowt to Davie Countyi in FY2025 Begin to purchase water from Davie Countyi in FY2 2026 and cease water  treatment operations  Cost Drivers - Capital Costs Funding of 10-year capital improvement plan ($24.5M)  : $6.2M in reserve $0.3M in debt funding $18M in estimated grant funding  April 30, 2024    Cost Drivers - Financial Metrics  Maintaining fund balance ($1M or more) Debt service coverage ratio  Work toward self-sufficiency of water and sewer system  Revenues Needed for Financial Sufficiency  Financial Sufficiency  $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $-  2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Needr rate increases to achieve financial sufficiency and meet capital infrastructure needs  "Operaling! Expenditures Transferst to General Fund -Revenues- Scenario1 --Revenues- -NoF Ratelr Incr.  Debt Service and CapitalExpendtures Reserve Funded Capital Revenues- Scenario2  TWOSCENARIOS OfRATE ADJUSTMENTS SCENARIO 1: Lower sewer increases in first few years sewer rate increases Slightly lower debt service coverage  SCENARIO2: years  Higher sewer increases int firsti few Slightly stronger debt service coverage  Use more reserves to allow for lower Allows fund balance to be healthier  Rate Increases - Scenario 1 and 2  Ratel Increases 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Water- Scenario1 3.0% 6.0% 6.0% 4.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% Sewer- Scenario1 3.0% 10.0% 10.0% 10.0% 10.0% 3.0% 3.0% 3.0% 3.0% 3.0% Water- Scenario2 3.0% 6.0% 6.0% 4.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% Sewer- Scenario2 3.0% 14.0% 14.0% 5.0% 5.0% 5.0% 3.0% 3.0% 3.0% 3.0%  Need ratei increasest to achieve financial sufficiency andr meet capitali infrastructurer needs  April 30, 2024    Debt Service Coverage  Debt Service Coverage Ratio 3.65 3.06 3.30 3.31 2.18 2.84 1.42  6.0 5.45 5.0 5.45 4.0 3.0 2.0 1.0 0.0  4.66 4.72  3.55 3.57 3.61 4.69 4.76 3.51 3.57 3.59 3.63  2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Systemt total debts service coverage Scen. 1 --System totald debts service coverage- Scen. 2  Edit Master texts styles  Operating Reserve Balance  Reserve Balance  $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $-  2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Reserves- Ending Funde Balance- Scen.1 1 --Reserves- EndingF FundBalance. Scen.2 Reducing ourf fundb balancei initiallyt tok keepr rates ando customer impacts asl lowa aswec can Buildingt thef fundb balance! back upf forf future capitalr needs  Water and Sewer Bi-Monthly Bills  SCENARIO1  2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Combined Bill $139.77 $151.11 $163.43$175.33 $187.47 $193.09 $198.88 $204.85 $211.00 $217.33 Dollar Change $4.09 $11.34 $12.32 $11.90 $12.14 $5.62 $5.79 $5.97 $6.15 $6.33 %0 Change 3.0% 8.1% 8.2% 7.3% 6.9% 3.0% 3.0% 3.0% 3.0% 3.0% Combined Bill $139.775154.07 $170.04 $177.81 $185.16 $192.83 $198.61 $204.57 $210.715217.03 Dollar Change $4.09 $14.30 $15.98 $7.76 $7.35 $7.67 $5.78 $5.96 $6.14 $6.32 %Change 3.0% 10.2% 10.4% 4.6% 4.1% 4.1% 3.0% 3.0% 3.0% 3.0%  NC WIS Average at4kgal.  SCENARIO2  2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 $153.92  Average monthly residential consumption is about 4kgal.  April 30,2024    MSRB REGISTERED MUNICIPAL ADVISOR  Raftelis is al Registered Municipal Advisor within the meaning as defined in Section 15B (e) of the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder (Municipal. Advisor Rule). However, excepti inc circumstances where! Raflelise expressly agreesc otherwisein writing, Raftelisi isnota acting asaN MunicipalA Advisor, andt thec opinions or views contained! herein arer noti intended tobe, andd dor noto constitute advice" withint the  meaningo oft theN MunicipalAdisor Rule.  Staff Recommendations  Water and Sewer Rate kecommendations Water- Scenario 1 3.0% 6.0% 6.0% 4.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% Sewer- Scenario 1 3.0% 10.0% 10.0% 10.0% 10.0% 3.0% 3.0% 3.0% 3.0% 3.0% Implement rate increases toa achieve financial sufficiency and meet debt Impact on average residential customer will be ani increase of FY2025: $11.34 (8.1%)V versus $14.30 (10.2%)b-monthly FY2026: $12.32( (8.2%) versus $15.98 (1049)b-monthly Avoid al higher rate shockf for FY: 2025 and FY2 2026 Water/sewer ratei increases are needed tof fund future operating and capital needs oft the watera and sewer utility Water/sewer rate adjustments required over next severaly years are similar to those experienced across NC Questions and Discussion Town Manager addressed the Board.  Rate Increases  2024 2025 2026 2027 2028 2029 2030 2031 2032 2033  obligations  a  The capital projects that are included are the ones necessary for operations oft the utility. Two projects going out to bid in May; North Tank and Southpoint Pump Station; between these two projects we. have secured about $5,000,000 in grant funding; sO taking these projects out and not doing them does not make financial logic to staff. These are the projects that will provide thei infrastructure for development at the Cana Road site, Blackwelder property and address water pressure issues on the north Mayor wanted tol know how we compared to the County. Raftelis said we were in line with the County. They arel looking at increases on the waters side; might not be exactly 6% but they are increasing.  side of40.  April 30, 2024    Staff recommends scenario 1. 6% water and 10% sewer -8.1 total impact resident's rate? Expenses are coming from those higher users.  Commissioner Draugh asked; what is the possibility ofincreasing the higher users more than the Town Manager said the Board would need to direct staff to research this option. Higher users generally get bulk rates not higher rates. Example Brakebush is a huge user on the system with water and sewer; you need tol be very careful placing most of the financial responsibility on an industry; remembering the past firet that burned down the plant and you had to deal with the lower usage; then having to crank rates back up higher. Be careful how you assign the burden in supporting the system. The expenses are coming from the higher users but sO are the revenues. Needs to make sense and well thought out. Brakebush and Gildan are the two highest. Chuck says this is risky. Gildan is a heavy water customer not Raftelis said you need to look at customer to see ift they are being consistent or peaking on the system. Per the Board's direction, they would like to explore a rate structure that charges more tol heavy users. Staff will: set upa a call with Raftelis to discuss how we would need to set up a rate: structure that ensures  sewer.  equity while increasing revenues?  B. FY2024-25 Budget Discussion Town Manager addressed the Board.  FY24-25 Budget -COLA and Fire Department Growth  1. Pay Study was approved by the Board FY22-23 and iti is not approved annually. The pay study developmental pay is to be competitive with the market. All developmental % are different based onj performance and where the employee stands towards his or her mid-point oft the pay study. 3. Staffhas not recommended a merit proposal int the past. (Merit is when you exceed during the  FY26-27 another pay study is due (every 5: years). 2. COLA is voted on annually and reflects the cost ofinflation only. year and iti iss strictly based onj performance).  Participation by type of  jurisdiction County  Municipality of 15,000 or more Municipality of 5,000-15,000 Municipality of less than 5,000  14  April 30, 2024    Have you had difficulty in filling staff vacancies or new positions?  ON Nod dificulty inhiring eN Numerous positions have beend diticuittofi e Haveh hads some difficuilyi ina tews selectp positions e No open positions. sono issues  14.7% 11.8%  41.2% 73.6%1 Having Problems  What results have come from the exit interviews? (Public Works some find that they do not like thej job)  (Fire Department they want a larger organization and more excitement) Are they using the Mocksville Fire Department for at training ground? Dropping the taxi rate .01 would decrease the revenues in General Fund $115,000.  Can they work their way up?  Have you had to increase wage rates above what was projected in last  year's budget?  OYes ONo ON NotApplicable  513%  April 30, 2024    How frequently are you making offers / hiring above minimum?  e Never e Rarely e Frequently  10.5%  31.6%  57.9%  In the upcoming budget year, does your organization plan to provide:  o COLAonly O Meritonly OE Both coLAandmert ON Nop payi increasesp planned e Nots sure! lundecided 74.3% Increasing Pay  12.8% 12.8%  23.1%  48.7%  Amount of salary increase planned  ON None 026-2.956 036-399 0 456-4.95 055-7.956 08 856orn more e Undecidedoru unknown 66.7°0 3°0 or Higher 41-5°oorl Higher  205%  10.3% 15.4% 10.3%  33.3%  April 30, 2024    WHAT IS THE PURPOSE OF A COLA?  Increasei inb benetits or salaries to inflation. Oned ofseveralr retentiont tools.  ACOLAisnot: MakeA Adjustment NextP Pays Study Due2 20:7 Keepss alariest mored competitivea andresultsi inloner natketa adjusments. Bonis Merit Raise  Inflation Vs. Cost of Living 5 Year Trend INFLATION- 19.10% TOWN COLA= = 16% DIFFERENCE-3 3.1%  AVERAGEUS Year INFLATION% TOWNCOLA% 1.8 1.2 4.7 8 3.4  2019 2020 2021 2022 2023 5YearTotal 19.10%  2 2 2 5 5 16%  OFLIVINGADISIMENT  GENERAL  PERBASEISSSTO $45,997  Percentage of GF Budget: 0.6% Reasonable & Data Driven: Brings staffy pay slightly underi inflation rate. Consistent with our strategic plan. Sustainable: Supported through strongr revenues and taxl base.  1. Pay as we grow; equipment, personnel and services  2. Strong revenues 3. Strong tax base 4. Growing tax base 5. Low tax rate 6. Building fund balance 7. Accomplishing all priorities  April 30, 2024    Strategic Goal 10: Asan employerofchoice, we will retain and recruit a highlyskilled workforce. Focus Area: Organizational Excellence  Provide competitive pay andl benefits that retains and 10.2 recruits topt talent.  Enhance recruitment tools, incentives, and/or benefits to attracta 10.4 skilled workforcein difficult toi fill positions.  The million dollar fire truck does not drive itself and we need skilled people to drive that truck. People are  our most important resource. We need to make sure we are taking care of them. PAY COMPARISONS - DAVIE COUNTY  EMT-$43,809 (Firefighter 8E EMT $38,474- Requesting $44,538) Administrative Support-$37,844 Administatire: Specialist $34,902 Water Department Linel Maintenance- $34,538 (Prblic Works Tech 81 Parks 80 Grounds Tch- $31,657)  Vacancy overa a year.  FY 2024-25 STAFF ADJUSIMENT PROPOSAL  - DAVIE COUNTY  Internal Classification & Realignment to Market Pay Avg6.25% Acvoss Organization  SALARY 100: 0  PAY Adjustment  April 30, 2024    RETAIN EMPLOYEES Turnover Rate Goal: 10% or less F FY21-22: 29% I FY22-23:25% F FY23-24: 22% Oiuly-Aprilonly)  Turnover Rate  W. 434. ESCL 100 690, 530, 405 sC 90s 16s 10.0% s3s  22.0%  Standard FY21-22 FY2223 FY23-2+  The goal is 10%.  RETENTION BONUS - $32,781 Percentage of GF Budget - 0.45% I Proposed: Retention Bonus Expectations" for FY24-25 erahuation period.  Currently: Retention Rate Significantly Below 10% Goal 2% Retention Bonus to be applied to FullTime employees rated "Meets Bonus to be provided at the end oft thel budget year (June 2025)  This is outside the pay study, outside the COLA and looked at annually. If we get retention down to 10%  which is our goal than this would go away. & RETENTION BONUS- ENTERPRISE FUND 3%COLA S1199/022M4/EFbwlyw,  PROPOSED COST OF LIVING ADJUSIMENT  2%1 Retention Bonus 59276/0.1750/EFB Budger)  COSTOF LIVING  April 30, 2024    Mayor asked: What results have come from the exit interviews? (Public Works some find that they do not like the job) (Fire Department they want a larger organization and more excitement) Mayor asked: Are they using the Mocksville Fire Department for ai training ground? (It's possbile)(Unless they want as small more relax fill of Mocksville) Commissioner Stevenson asked: Can they work their way up on the pay scale?  (They dol have the ability to work their way up) (Career ladders and rank structure)  Town Manager -Not going to cure everything with money but when you have a vancy for a year we have Commissioner Lambert says sorry for the questions but we. have citizens blowing our phones up. complaining about expenses at city hall. So we: are having to ask the tough questions. We are taking the heat on a tough economy when other people are not getting COLA's and citizens are saying Commissioners pump the breaks. We want to explain to the citizens what we. are looking at. Ifwe pull the COLA out will the employees still have a deveopmental raise? We are trying to get our heads wrapped around all the numbers to make the right decisions. I do agree with the 2.5% for the P-T fire fighters because they fill the gap while trying to fill the vacancies. The 2% retention is a one time bonus? Town Manager-Yes developmental will still exist. Yes the 2%1 retention is a one time bonus.  to try something. Chief! has changed the work schedule, advertised, career fairs..  Commissioner Draughn has had several phone calls also. because we: are growing at $44,000?1 Is it doable and susitanable?  Commissioner Steveson says what does the future look like when we have to hire morel F-T fire fighters Town Manager-We are taking the growth and applying it to our needs int this years budget. Example: Putting $300,000 in our capital reserve SO when the fire engine in built in 3 years we are paying fori itI full and no debt. No need to raise fire tax; no need to raise taxes and we are building fund balance. Dropping the tax rate .01 would decrease the revenues in General Fund $115,000.  Raise Starting Pay $47,000  2FTF Positions Vacanti for Over 1 Year Usinga alla advertising available. Only? 7 qualified applicants over 3p processes. Have changedy work schedule ine effortt to attract applicants. Raise starting salary from $38,474.001 to $44,538.86  CANYOU STANDTE HEAT?  April 30, 2024    Apparatus Replacement Strategy  Increase Capital Reserve Fund from $50,000 to $300,000 - Interest Income ($180,000) -Ad' Valorem Growth ($70,000) -Fire or Property Tax (Only if Needed)  Property Tax VS. Ad Valorem Growth  >1C Generates. $113,755 $ $250,000 = 2440  $250,000 in Ad Valorem Growth $86,206,897 in Tax Base Value  Engine 1 - $1,082,980  Ordered 3/7/24 Est. Delivery 3/7/27 FY23-24 Capital Reserve 379,000 1,279,000F FY26-27  - E  April 30, 2024    Station 2 PropertyAquisition  FY24-25 Identify Sites Consistent wl Study E Budget $196,200  LAND. FORSALE  Ifyour not planning behind the growth then you will be behind the eight ball. Fire Tax & County Contribution Growth FY:2016-17- FY2024-25 FireT Tax& County Contributionl by Fiscal) Year  60% Growth $236,370  700.000 600.C09 500,000 4100,000 300.c00 200,000 100,000  F 11 1  FVIE-17 :Fy17-18 FY18-19 "FY1P-20 FY20-21 Fy21-22 FY22-27 #FY23-24 FY24-25  Ad Valorem Growth FY2016-17-FY: 2024-25 AdValorem Revenues byF Fiscaly Year  26% Growth $685,19  0.000 2.500,000 500.000 500,000  I  FY18-17 FY17-15 FV18-12 FYIR-30 FV20-21 "FV21-32 FY22-23 "FY23-24 #FY24-25  April 30, 2024    Fire Department Budget Growth FY16-17through FY24-25 Fire Department BudgetbyR Revenue Source  FY2125 FY23-24 F122-23 F21-22 FV20-21 FYI8-19 FY19-30 FV17-15 FY16-17  FY24-25+ $250,000 toc Capital Reserve 1.273,750 FY23-24 FirstF Full Yearc .092,146 OfFT 831,554 FY22-23+ FTF Firefighters 796,305 FY21-22 +60,000 NewE Brush Truck 731,602 FY20-21 +77,000 SCBAI Refresh 613,947 FY19-20 +51,000F Part-Time Salaries 562,461 FY18-19 +125,000 Debt Service TaalBuiget  403,869 200.000 400.000 000000 a00000 "Toan  200,000 1400000  Mayor -How about the fire tax paying for all of the Fire Department expenses? Ift the citizens were: not paying fire tax and town tax. It is easier to tell the citizen that the fire taxi is paying for the fire department. Commissioner Lambert -How about a district fire tax? We need new sidewalks. A fair question (raises) Commissioner Draughn-Tax payers are not getting raises and they see what we do for the town and that is Town Manager-The County has ai role in this and we would have to go to the County Board and let them know we would like to create ai fire district (at taxing district). Ifyou wanted to change the tax rate you would have to go through the County Board annually. Citizens would have to vote on it. The budget can  Ity would be smart to do this before ai new fire station.  for the tax payer because they are facing the same inflation as the town employees.  why they are having issues.  still be changed but we. have tol have a Board consensus to make any changes.  Commissioner Lambert -Dropping the tax rate .01?  Town Manager- Would need to decrease the revenues in General Fund $115,000. The vehicle tax was $70,000 in revenue taken out last year. The town does have growth needs so ify you reduce you need to understand the long and short term impact. Extra funds in Powell Bill for sidewalks.  Adjourn  A motion was made by Commissioner Lambert to adjourn the April 30, 2024. Special Board. Meeting. The motion was seconded by Commissioner Stevenson which carried by a umanimous vote 4-0. The attached documents are incorporated herewith and are hereby made aj part of these minutes.  m  William. Marklin,  ApMak  Mayor  dpun Junete Lynn Trivette, Town Clerk, MMC, NCCMC  April 30, 2024