THURSDAY, FEBRUARYS 9,2 2017  TOWN OF SAWMILLS ANNUAL BUDGET RETREAT  9:00 AM  COUNCIL PRESENT Joe Wesson Gerelene Blevins Jeff Wilson Joe Norman Reed Lingerfelt  STAFF PRESENT ChristopherTodd Karen Clontz Ronnie Coffey Steve Coonse  CALLTO ORDER: Mayor Joe Wesson called the meeting to order. INVOCATION: Councilman Reed Lingerfelt gave the invocation.  PLEDGE OF ALLEGIANCE: MayorJoe Wesson led the Pledge of Allegiance.  ADOPT AGENDA: Mayor Joe Wesson asked for a motion to adopt the February 9, 2017 Joe Norman made a motion, and Gerelene Blevins seconded, to adopt the February 9, 2017  Agenda.  agenda. All were in favor.  GROUP BUILDING ACTIVITY: Town Administrator Christopher Todd presented the Town Council with a discussion and group building activity to help begin the retreat process. The "Six Thinking Hats" explained how you should look at every problem through adiversity of perspectives and viewpoints with the goal of best addressing the problem. DEMOGRAPHICS ECONOMIC DATA PRESENTATION: Town Administrator Christopher Todd presented a presentation showing the economic and demographic trends of Sawmills. The presentation was created for the town by the Western Piedmont Council of Governments (WPCOG). The presentation highlighted population trends and economic growth and decline occurring in Sawmills, Caldwell County, and the Hickory Metropolitan  Statistical Area (HMSA). FINANCIAEMAVIERS:  FINANCIAL UPDATE: Finance Officer Karen Clontz presented to the council the  following financial information for the Town Council.  1-Attached is the summary sheet for revenues and expenditures year to date - 12/31/2016 - for all funds. The budget total is $2,992,006 with $1,877,575    March 21,2017  budgeted for the General Fund and $1,114,431 for the Utility Fund. (See  Statement of Revenues and Expenditures-page4)  Annual Budget YTD Actual Remaining Budget %  Revenue Expenditures Over/Under  $2,992,006 $2,992,006  $1,405,300 $1,073,722 $ 331,577  53% 64%  2-Cash Balance and Budget by Fund as of12/31/2016:  A. Cash Balance by Fund Summary (See General Fund/Powell Bill- page 5: Utility Fund-  page6)  General Fund Balance - Unassigned Powell Bill Fund Balance-ResncteSitrets Utility Fund Balance Capital Reserve Fund - Committed  $4,548,167 $419,511 $3,978,017 $335,000 $9,280,695  Total:  Attached is a breakdown of the cash on hand and investments for each fund, The outline also compares the current fiscal year to the same time last year. Interest  rates remain low. (pages5 5-6)  B. Budget by Fund Summary: General Fund Revenue Expenditure Over/Under Powell Bill Fund Revenue-State Revenue-Reserve Expenditure  Budget16/17 $1,877,575 $1,877,575  Dec 2016YTD Remaining Budget %  $ 988,094 $ 811,140 176,953  46% 57%  Budget 16/17 $149,980 $0 $171,000  Dec 2016YTD Remaining Budget %  $147,621 $0 $88,082  .9% 49%  Regarding the Powell Bill cash balance - the Town's cash reserve must stay below the total sum of the past 5 years in revenue received from the State of North Carolina Department of Transportation. This is a result ofHB 200 changes to GS 136-41.1 through 136-41.3, In summary, towns with a population over 5,000 cannot have a total reserve: in excess of the 5 year total revenue received. The Town's current five year total is $750,807. Our cash balance is $419,511, which is  $331,296 less than the total received (see page 5).  Utility Fund Revenue  Budget 16/17 $1,114,431  Dec 2016YTD Remaining Budget %  $ 417,205  63%    March 21,2017 76%  Expenditure Over/Under  $1,114,431  $ 262,582 $ 154,623  Utility Fund revenues continue to remain steady. 3-Fund Balance Appropriation - (page7) from fiscal year ending 2004 to 2016.  Also included with this memo is a spreadsheet listing fund balance appropriations 4-General Fund (Property/Vehicle and Sales Tax only)/Utility Fund Charts. - for  the past four years ending December 31st. (Pages 8-9) Updates regarding increase/decrease in revenuesexpenditures  Retirement -The Local Government Retirement System (LGERS) Board proposed an increase of .58% beginning with fiscal year 2016-17. The LGERS Board will be increasing the rate by .25% over the next four years. Beginning July 1, 2016 the rate paid, by the Town for retirement, was 7.25% of gross wages. The new rate will be 7.50%, The Town, as an employer, contributed approximately $31,000 to the Retirement System for the fiscal year 2015-2016, A copy of the rate: increase chart  follows on the next page.  Employer Contribution Rate  Fiscal Year 2016-17 2017-18 2018-19 2019-20 2020-21  General Employees Law Enforcement Officers  7.25% 7.50% 7.75% 8.00% 8.25%  8.00% 8.25% 8.50% 8.75% 9.00%  Insurance roprtylteatsormins Comp. - The North Carolina League of Municipalities (NCLM) provides the Town's: insurance through the pooling  method.  Health Insurance - There was no rate increase for FY 16/17 pertaining to health insurance. The annual meeting will be in Hickory in April where NCLM staff will report any new proposed increases. Total employer Property Insurance - 5% decrease from FY 15/16. Employer expenditures Workman's Comp - 5% increase from FY 15/16. Employer expenditures  expenditures for FY 15/16 were $128,555. for property insurance for FY 16/17 were $15,565. for Workman's Comp for FY 16/17 were $14,849.  Fuel-I Fuel prices continue to decrease or remain stable, The overall average cost for diesel fuel is $1.85 compared to $1.92 this same time last year, Regular fuel prices have averaged out to $2.12, which was the average cost for the same time    March 21, 2017  last year. Both the General Fund and Enterprise Fund has 69% ofi its fuel budget Land Fill/Recycle The average recycling percentage for calendar year 2016 was  remaining.  62% compared to 64% for calendar year 2015.  Miscellaneous:  NCDebt Setoff Program - The Town was reimbursed $241.43 from the Debt Setoff program for calendar year 2016. This brings the total reimbursement to  $4,532.07 since implementing this program.  DISCUSSION.  MISSION AND VALOIES DEVELOPMENT: The Town of Sawmills currently does not have a formal Mission Statement. A Mission Statement, along with a list of values would guide the council and staff in creating and enacting policy. Town Administrator Todd, asked if the Town Council would like for the WPCOG to facilitate a discussion to help create a mission and value driven budget process during their March budget workshop.  Council agreed to have the WPCOG facilitate a discussion.  PERSONNEL UPDATE: Historically The Town of Sawmills has offered either a Cost of Living Adjustment or Merit Based Pay Increase. Based on the direction of the Council, TAX DELINQUENCY: The Town of Sawmills currently operates with a 92% property tax collection rate. This rate is comparable to the surrounding area and considered a decent collection rate. Currently though, there are approximately 672 delinquent tax bills back to 2007. The uncollected taxes during this time is worth approximately $67,302.12 in lost reyenue, Staff recommends using the North Carolina Debt Setoff Program to go after all bills that qualify for the program. Council directed staff to further investigate the program  staff will allow for a 0% - 5% Merit Based Pay Increase for employees.  and attempt to collect taxes using the debt setoff program.  PUBLIC WORKSMATTERS.  STREET RATING STUDY: Todd Poteet with West Consultants presented an updated street rating study outlining the state of all town streets. West Consultants showed the town streets were in good overall shape. Second, Poteet presented two proposed street maintenance plans. The first plan being a general plan, outlining streets with the most need and showing the cost to do a full repair/replacement for each street. The second plan outlined a process working on multiple streets throughout the town and fixing specific sections of those streets. Staff was directed by the Town Council to look into implementing the plan that would do multiple repairs to streets, rather than complete repaving projects. HORSESHOE BEND ROAD WATER LINE REPLACEMENT: At the direction of the town staff, West Consultants presented a water line replacement project on Horseshoe bend, The project would repair a section of line approximately 1990 feet from the corner of Cajah    March 21,2017  Mountain Road and Horseshoe Bend Road, This section has had multiple leaks in recent years and is in need of repair. The project was estimated to be $167,825.00 by West Consultants, The Town Council directed staff to include this project in the preliminary HORSESHOE BEND ROAD WATER LINE EXTENSION: At the direction of the Town Council, staff worked with West Consultants to prepare and present a waterline extension project located on the boundary of town limits in Horseshoe Bend Road. West Consultants presented a two section project, based on the request of staff and council. The primary section which was designed to serve to two properties, not located within town limits, and estimated to cost $121,875.00. This section was done with the understanding these property owners would annex into the town if water was to be provided to their properties. The second section, was a remainder of properties in the unincorporated area, which water service could be provided to as part of a large annexation and water project. The second section is estimated to cost $147,460.00. Council instructed staff to work to find out if there is any interest for water service and annexation in the second section of the SEWER INFASTRUCTURE FINANCING: West Consultants presented 3 different The first sewer project was estimated to be $6,800,000 and would include a pump station. This project would serve the entire Virginia Acres subdivision and some surrounding area. Staff was asked to look into scaling this project down and identify potential funding sources, The second project would finish the Bakers Circle area's necd for sewer. This project is The third project would provide sewer to the Stamey Road and surrounding area, for $1,723,485. Staff was asked to look into this project and identify potential funding sources. CLOSING REMARKS: Town Administrator Christopher Todd let the Council know that he appreciated their guidance in what looks to be another successful budget process. COUNCIL ADJOURN: Mayor Joe Wesson asked for a motion to adjourn.  budget.  project. sewer projects.  estimated to cost $1,428,545.  Jeff Wilson made a motion, and Joe Norman seconded, to adjourn the meeting. All were in  favor.  SEAL JULY1,190S C  Mayor  Quaind  hella