Welcome to the Falker County Board of Supervisors 2026 fiscal year budget adoption. Miss Downs will you provide us an overview of tonight's agenda and adoption process? Yes sir, thank you Mr. Chairman and supervisors. Tonight Mr. Oling will review where we have landed with the FY 2026 proposed budget and tax year 2025 tax rate. Before that I'd like to take a moment to thank each of you for your leadership feedback and support through this process. As sincere thanks to our citizens school board and community partners for their input and contributions to the process. I appreciate our county department heads and constitutional officers for working on board of supervisors requests and your presentations during the process. A special thank you to Dr. Warner, Mr. Shrestha and Mr. Dribbling. Together we have worked closely and communicated often to work on a balanced approach to healthcare and school division funding. conversations conversations start in the summer and have culminated with recommendations to both our boards that we believe best support our shared visions and goals. So at this point, I'm going to turn it over to Ms. Stroudling. Thank you. David, can we have the? Mr. Mamm, I'm going to seek a motion to adopt the agenda. Oh, yes you are. Yes. gonna seek a motion to adopt the agenda. Oh, yes, you are We have a motion to adopt the agenda Okay, a second Would this be the right point to ask the addition of Second resolution to be considered or is that when the first one is so first we're just gonna go through a quick power point of where we work from our last our last work session and then where we land it with the tax rate and then it will be time to request a second. All right in which case I'll second the. Thank you. Good job. Hi. Hi. Hi. Jen is not the thank you. Thank you. So first up we will review some follow up from our March 13 13th work session. Second, we'll go through Mark Down scenario and then third, head into budget adoption. There are three items as a part of adoption this evening. There has been a lot of discussion over the last few weeks in particular on the Shared Health Insurance Fund and its history between the county and the schools. The county and school administration are committed in FY26 to year two of the three-year strategy which is to refill recurring funds to the school division's employer contribution up to $20 million by FY27. This year we do have plan designs and rate structure changes that are being made to manage claims costs as we head into the new fiscal year. Also we have a transition plan that's underway to provide the school division with greater ability and autonomy to manage its health expenses. This is detailed in the FY26 health addendum as a third item on the agenda this evening. This includes the creation of a new fund, a newly created health fund for the school division and expenses that will be solely placed there, which would include medical, dental and prescription claims. Also just for FY25, a future appropriation for health insurance will be forthcoming to the board based on projected claims costs. At this time, I do want to call up Ms. Hilton to the podium to speak to RFP results that we to listen to budget. We also really do want to see for health, for the destruction, and so that at first has to be an island of interest, particularly to the area where we live. Across the part of the city, since the time we've been living in this land is critical, and it would also be a great pleasure. Does he want to make a record of this and have any illustrations, director's office? The rules, human resources, management and budget and risk management, and they worked with our health care consultant to review all areas where potential savings could be negotiated. After two rounds of offers and clarifications, we came out with a successful negotiation to reduce combined overall costs on health, prescription, and dental over the course of the next three years. These negotiations resulted in the following. First, we were able to limit the price increase on our dental plans to just 2% over the current rates and these will remain locked for two years. On the healthcare side we were able to secure savings through reduced administrative fees, offsets in network access fees, planned design changes, additional wellness funds, pharmacy allowances and enhanced performance guarantees.. Thirdly also on the healthcare side, we will receive the telehealth portal and the total health total U programs at no cost for two years, both of which will result in additional claims savings. And finally on the pharmacy side, we locked in improved prescription discounts, pricing and rebates. With the aforementioned negotiated changes for dental health and prescription, the total anticipated savings over the next three years will be just over $11 million. I'm happy to answer any questions that you may have. Questions from Shelton. Thank you. Thank you. We were also bringing to you at the March 13th work session a number of efficiencies that I've always tracked but we wanted to have those so it was requested by the board that we bring those back and writing just so that we were fully transparent as to what efficiencies we were able to find. In terms of the general fund, well across all departments, we transferred over $100,000 between fleet lines so that we did not need to increase our fleet projections for FY26. Those remained flat. That did result with seven departments operating budgets, actually decreasing year over year from FY 25 adopted budget. The county reduced the county employer contribution that goes towards the Virginia retirement system hybrid plan contribution that achieved about $216,000 in savings. We also have no new positions in the budget that we are proposing today that resulted in two positions being removed, that being a senior assistant county attorney and the drug court coordinator with opioid abatement fund. Those two new positions that we'll be discussed later in this presentation are fully offset by funding that previously was going towards additional hours in workforce. Additionally, we have about $300,000 in contractual items that we received submissions on that we were able to fund from within, meaning certain departments were able to fund within existing lines so we did not have that, it's not incorporated in the budget. We retained the Berkeley Group, which is a consulting group to conduct an efficiency study with community development regarding a number of processes. And Miss Downs has undergone a number of organizational restructures. In terms of our market, Mark Down down based on feedback from the board in the hope and desire to decrease the tax burden on tax fairs, we have reduced our proposed real estate tax increase from the original three cents in the general rate down to 1.9 cents and we've done that as follows. We've reduced our compensation adjustment for the general workforce from the COLA plus merits down to just a 3% across the board compensation increase. We have increased compensation board revenue, that's state revenue that goes towards our constitutional offices, that's just based on updated projections that we receive in early March, which is just after we propose the budget. We have the creation of those two positions that I spoke about in the prior slide, which are in support of community development. That is the environmental specialist one and a zoning planner two. We've removed three positions that were requested in the proposed budget. All of the positions that were requested and then proposed. And that's a traffic position with the Sheriff's Office, a social services associate with the social services department and a deputy treasure of one with the treasure's office. Additionally, we have removed the Vint Hill construction from the CIP for FY26. It is still in the CIP, but currently is sitting in future years in this scenario. So that brings the general real estate tax rate in this market, mark down down to 1.9 cents. Secondary to the budget, we have the fire rescue levy. We have been able to shift the public safety asset replacements related to the fire levy over to the actual fire rescue tax rate. So that's about $800,000 that we were able to shift off the general rate. So we're at a $1.9 on general and $0. cent on the fire levy. In this scenario, the overall average homeowners tax are real estate bill would increase about $110 a year or $9 a month. And the breakdown of the general rate fire levy and conservation easement is there. There are no proposed increases to the conservation easement levy so that's a zero dollar impact. The adopted, well this is the tax dollar allocation under this market mark down scenario is that the school division funding will increase to 52.85% that's up about 0.2% and public safety increases by 0.0% the largest difference between this market markdown and what was proposed by misdowns is a reduction in general workforce spending, general government spending. Additional items that we are not funding through this budget but we are going to be recommending it future work sessions transfers for. And these are typically asset replacement items that are submitted that if they're one time in nature we're able to instead fund them outside of the budget cycle and as a transfer from capital reserve or from the fire rescue capital reserve. And so this is just an update as to what the board of Supervisors will be potentially seeing in our April and May meetings. In April, the Sheriff's Office portion of the Public Safety Radios for FY26 will be a request from Capital Reserve. That's $835,000. The Registrar's Office submitted a electronic poll book replacement. That's about $55,000. Information technology is requesting an automated vulnerability testing software. Mr. Savage is here today if he'd also like to speak to that item. There's been a substantial amount of savings that he has proposed under this request. Evening, just to give you, I guess, a general summary of what we're looking to do with the software that was just mentioned, we're looking to automate a number of cybersecurity improvements for the entire county. A couple of challenges that have been experienced in the past is just the amount of labor that goes into some of these changes and fixes necessary to better secure all the computing systems for Fawkear County. The amount of time, the amount of effort that we would be looking out under normal conditions would take about eight and a half years of dedicated effort, honestly. That's just a nice way of saying it will probably never really get done properly. The automation that we're looking to implement right now can basically get this job done for us within 30 minutes to an hour, which means that we can better secure and better monitor our systems constantly around the clock. The other key piece to this automation is that we would be looking at our systems and assessing vulnerability, assessing all of our weaknesses and essentially patching up those holes on a daily basis instead of once in a blue moon. So it puts the county in a far far better place to defend itself from all the things we see going on these days. Any questions I can answer for you about that? Thank you very much, appreciate it. Thank you. The next item on here is for parks and recreation, central sports phase two will be underway in construction soon. This is for the half of the year of one-time costs associated with that project. The Fire Rescue System, cash portion of SCBA replacements is requested under the Fire Rescue Capital Reserve. And in the Sheriff's Office, the 911 CPE Refresh replacement is being requested. There is an asterisk there as coming to the board supervisors at next week's meeting is a request for the sheriff's office to apply for a grant that is zero local match up to $200,000. So we're hopeful that if we can receive grant funding the actual request will not be $320,000 and might be much less than that. So these are just items that we would like to call out today as we were able to recommend transfer from capital reserve as opposed to putting it in the budget. I'd be happy to answer any questions on the mark down scenario. Otherwise we do have the three agenda items in front of you today. We may comment your questions on these items. All right. So, I don't know any of the resolution to adopt a revision to the Department of Community Development, Land Development Feed, Schedule, and Building and Inspection Feed Schedule. This fee schedule was proposed as a part of the budget process. There was a public hearing held on March 20th at Falkier High School at 7 p.m. There were no speakers to the item. Ms. Meade is also here today. Should there be any additional questions on the schedule updates? Any further questions? Okay. I'll seek a motion on item A. Mr. Chairman, I move that we move to approve the resolution to increase the fees as proposed. Okay. We have a first, we have a second. Second. Okay. We have a second. Any discussion on the matter? Hearing none, all those in favor signify by saying aye. Aye. Aye. Motion carries, any adoptive item a. Item b is a resolution to adopt and appropriate the fiscal year 2026 budget calendar year 2025 tax rates and the fiscal year 2026 through 30 capital improvement plan. That resolution includes the items incorporated as a part of market markdown. It sets the overall tax rate at 0.967 with a 1.9 cent increase to the general rate and a 0.5 cent increase to the fire levy. And I would also be happy to answer any questions. Should there be any? Is this the appropriate time? So yeah, I would move to amend that resolution to increase the 1.9 cent to 2.5 cents on the general real estate tax with the sole purpose of adding to our ability to fund the health insurance fund. We've had enormous discussion amongst one another staff and board members and it is my belief that we are cutting it too close and that we are attempting to fund this deficit that does exist and it's going to be something like $6 million this year. I believe it will be bigger than that next year in spite of a lot of effort to reduce claims and to reduce healthcare costs. And I think that it is, it's going to be difficult for the school to bridge that gap on their own, if not impossible. And I think we should do all that we can in, I would like to actually propose a much more significant increase, but I recognize that there are political realities that we have to deal with. And so I do move to amend the resolution to 2.5 cents for the general rate, everything else I would keep the same. Okay. We give them. Loach of the table, do we have a second? The first discussion purposes under the second. We have a second. And open for discussion. I guess the one other thing I would add is I am, of course, disappointed to see the CIP push the, the, the, the Vinhil Library yet again, another year down the road. If I was asking for all the things I thought that, that made sense, I would be asking for that as well. You all know how passionately I feel about that. I think it's a, it's a building that's sitting there that we own that it won't take a lot to turn it into a library. And yet, while it sits there, it deteriorates. And it is costing us money to own this building. It is, you know, we have libraries in Marshall. We have, and in the, in Warranton and in the southern part of the county, and right on the border between the, the sea run and lead districts, there is not a library where our greatest population resides in the southern part of the Scott District in Vinhil. It's been promised for about 20 years. It's been pushed off one year at a time for those 20 years. Actually, one time it was pushed off for a few years at once. But it had been put back on. Last year, it was pushed a year to this year. I was confident that we had made some concessions in operating hours that would allow us to make sense of that. But I bring this up just to tell you, you know how much I want that. And yet, I think that the responsible thing for us to do is to bolster our reserves. At the moment, what we have planned in the budget is to use all of our surplus reserves plus any projective reserves we may a year in by carry forward funds. And at the end of this year, we will be in a position that we haven't been in for a few years, and that is we will use up those reserves. We still have plenty of cash. We still have plenty of reserves that we have with the required reserves, but the surplus reserves, we will be, I believe spending most spending most if not all of that to fund this gap in the health insurance fund. And I think that while what I proposed in this amendment will only raise I'm guessing 800,000 give or take maybe 900,000. It's about 920,000. Yeah, that is not going to make the difference, but it will keep us from, I think, a position that we don't want to be in. The other things we need to consider are we know that there are likely federal changes that may impact us this year. We're seeing them. We're hearing the stories. They haven't trickle down to us yet, but it is, whether it's likely or not, I think it's prudent for us to prepare for something that might hit us. And number two, the same thing might hit the state and the state has already shown us in their recent budget negotiations that the governor at least wants to significantly increase the reserves as a contingency for what might happen that is at this point unknown. And lastly, we think that it is likely, I think, that is likely that we will see a downturn in local spending as federal employees wait to see what's going to happen to them. They probably are less likely to buy cars. They're less likely to eat out. They're less likely to spend money. And so our sales tax revenue, our meals tax revenue, our personal property tax revenue could take a hit. We don't know that they will. At the moment, we're not projecting that our budget doesn't anticipate that. But it has happened before and I'd hate for us to have spent all of our reserves and not be prepared for that possibility. So this doesn't fix the problem. It doesn't take away, it doesn't fix my event Hill Library problem library problem. What it does is it proposes a tax rate increase that basically keeps up with inflation. The proposed 1.9 cent is well below inflation. And if we want to keep up with the raises we need to give folks and the maintenance that we need to provide to our facilities and our equipment. I think that it is imprudent for us to lag behind inflation in our revenues. So those are my thoughts. I think you've all heard them many times now. So I appreciate you listening again and I hope that you'll consider this resolution. Thank you, Mr. Brothers. You have more comments. I'll just say appreciate your thinking about this. I apologize for what I was saying. I'm sorry. I'm sorry. I'm sorry. I'm sorry. I'm sorry. I'm sorry. I'm sorry. I'm sorry. I'm sorry. I'm sorry. I'm sorry. I'm sorry. I'm sorry. I'm sorry. I'm sorry. I'm sorry. I'm sorry. I'm sorry. even more so now than what we have been in the past. Every year we come to the end of the year, we've at least seen something on this floor we've seen that. careful on what we charge our citizens even more so now than what we have been in the past. Every year we come to the end of the year, we've at least happened on this floor. We seem to have surf buses left overs which would have bothered it. We uh, the end of the day we probably charge more taxes than any of the charging. Someone argue that we don't charge enough. Someone and we charge too much, but I personally think with the trajectory we could possibly be on with the government impacts in this area, I think budgets are going to get tight, and I've given a lot of thoughts since our conversation has happened in, frankly. And I think we've landed on an appropriate increase for this go-around. I will 100% support you and your efforts, send this group's efforts to basically come up with some more sessions where we delve into some of these issues or we have the time and we do it in daylight so that everyone understands the discussions and sees what we go through on an annual basis to come up with, or go through this process and come up with these rates. I think we're doing the appropriate thing given the times and where we are right now. So again, I appreciate you voicing your opinion and taking your position. But that's where I'm gonna land tonight. Fair enough. I'd also like to say something on this note. I think this is a beautiful representation of the contrast between board members. I'm gonna go to the complete opposite and to the spectrum here. One of the common themes that I hear from constituents when I speak to them is you better not raise my damn taxes. Word for word, a hundred times over again. And while I truly appreciate all of the effort that has gone into all of this to bring it up to where we are right now, where we're about to vote. I simply cannot get behind the tax increase. I just, I feel like I have a duty to the people that I represent to be there, voice when it comes to make a decision from a fiscal standpoint. So for that, I will not be in favor of either of these resolutions tonight. Thank you. It's a great thing to be able to think of. Yeah. I think I'm going to probably fall right in the middle here between the two. It's funny when you first get up here, you go through your first cycle. And the biggest thing you want to do is a representative is not raised taxes. And then you watch Janelle and Mallory go through everything with the fine-tos comb and try to do it in the minimal as possible. And before we even started we were 65% no across, you know, requests. And then you still end up with the race. So I think the challenges of looking at the big picture and say what can we do where we're not going through the same battle every single year. And Per Supervisor brought us to say, well, let's try to get ahead of this a little bit more. And I appreciate that direction and the amount of time that he's spent up here and with staff as well as trying to crunch these numbers. But what it comes down to is in our county we have around 25,000 people that don't make enough to pay their bills. That's not poverty level. That's people that have decent jobs that can't pay everything that comes to them every month. So as much as I hate to do a tax increase, if we've got to do one, to me every time it's going to be the minimum of what we've got to increase to survive the county and still offer the same services and schools and everything to the people that rely on. So I support our original plan. What I do appreciate is that we're trying to find a solution for the next years and get ahead of this. Thank you all. I'll just conclude by saying that I also appreciate the work that you've done, Sir Bonis, and we had a good productive conversation. I'll be at short today. I understand the concern about our reserves and the fact that we will be using those reserves likely depending on how our forecasting turns out. And there's a lot of uncertainty clearly in the economy. And so we do have thank goodness because of the foresight of this board have a very considerable self-imposed reserve that is, it really was allowed us to have such a great credit rating. So we're in excellent physical shape, should we need to come in the middle of the year to pick some of these forecast challenges. And I would agree with Mr. Gehrhard that if we have reserves that means we're taking too much money from the taxpayers and I don't think that's appropriate either so the key for us is to balance all of that and and provide the services that were required to provide. I will say I also appreciate the very hard work from the team and from major Warner and the school board and the administration to help try and solve our issues in terms of the healthcare. We come up with way, we're going to continue down that road until we get it fixed. Through planned design, hopefully some different claims experience, we should see some improvements this year. That's the hope. And we have a pretty good strategy, I think, to get to that. But I'll finish by saying that I don't support the additional tax that you're suggesting and but I do believe we as a board need to focus on economic development as our revenue source to solve this problem. It's something that we don't talk enough about. It's very easy to sit up here and vote to increase people's taxes. But as Mr. Cobert's pointed out, that's very hard on many people. And we have to be very judicious with how we do that. The answer to our revenue problem is economic development. We have a history in Falker County of saying no to pretty much everything. And I think we need to be able to figure out as a group what we're willing to say yes to. I'm not talking about data centers. There's more to life than a data center, although I think there's a place for those as well. But we have to have an honest conversation about what we're willing to invest in and how we can improve our economic development and commercial tax base. So that's my commitment to you. I'll continue that fight until you all kick me out of here and hopefully we'll bring in some more economic vitality to this community. That's all I have for this motion and I will call the vote. I have a motion just to be clear. We're voting on the the likes motion. Correct. I'm happy to withdraw the motion when we see where this is going and we can go back to the original resolution. OK. OK. The motion has been recalled. Do we have a substitute motion for tonight? Mr. Chairman, I will go ahead and move that we adopt and appropriate the fiscal year 2026 budget calendar year 2025 tax rates in fiscal year 2026 2030 capital improvement program as presented this evening by staff. Thank you, Mr. Vice Chair, and do we have a second? Second. Thank you, Mr. Culbertson. Any further discussion? I just call vote. All those in favor seem to find the saying aye. Aye. Aye. All those opposed? No. Three, two is the vote. And the pass. Onto item C, in addition, the resolution to approve and authorize the execution of the FY26 health insurance ofendum. Yes, sir. This addendum has been worked in conjunction as a partnership with the school division administration. We've been working very hard on this together to develop two separate funds for health insurance. We will continue to share the procurement component of health insurance but but the school division funds will actually be Processed from a separate health fund where their medical dental and prescriptions funds will be tracked in that way Miss Downs, is there anything I need to add on that? See commotion on this item see. I will move to approve the resolution to authorize the execution of the FY26 health insurance adenin. Do we have a second? Second. Okay. Any discussion on this matter? Yes. I am read through, I think every iteration of this MOU, and I write contracts for a living. And I have seen how easy it is to believe you have a contract that everybody agrees on that they understand. And months later or years later to look back and say, oh, wow, I didn know that that's what you thought it meant. And I call it mutual mystification. I think that this contract does a very good job in some respects of spelling out a vision for the future. I am concerned that it doesn't go into enough detail so that it's very clear that schools are going to no longer have the county backing them if they are unable to pay their bills. And up until this point, the county has been putting in significant numbers of millions of dollars for the last few years, $6 million, then $4 million, and the agreement would be $2 million for the coming year. But based on the projections, we're going to have to put in another $6 million this year and we're going to have to probably put in or some but they're going to have to find a way to save $6 million next year of the way this thing is written. I hope that school administration understands that. It is not clear to me that it is clearly spelled out in the agreement. The agreement does mention a $20 million transfer for next year. And at the moment, that transfer would be about $6 million short of being able to cover the projected expenses. So even with all kinds of changes to healthcare plans, I don't think it's likely that the school will achieve a 20% reduction in healthcare costs. I hope that they do, because that would solve all the problems, but I fear that they do not, that it will not. So I do think we have, I think we are kicking the can down the road a bit here, and I think that this agreement, while I'll certainly move to, I'll support this, I'll vote in favor of it, but I just think it is important that we put on the table that this thing is going to need a lot of work. And so I would propose that we develop a task force of all the supervisors willing, as well as all the, the school board members willing, and any staff members that would be appropriate to participate to begin right away talking about this transition from a shared health fund to two separate health funds and how that impacts the bottom line of both organizations and how it's managed. I think there are definitely benefits to managing it jointly, and we both enjoy those benefits. But I think that that joint management for the last decade has caused so much confusion that we find ourselves in the position we're in now. And so I think this separation will make it clearer, but I think we should put together a group of folks willing to discuss this on a monthly basis and make sure we get it right. If I could just make a couple of clarifications about the addendum. So the addendum sets forth that the school division in the county are two separate legal entities. However, the county is still on the county books will have the school's health fund. So it's not moving to the school's entity. So it'll be umbrella still as one shared health fund. The reason that broken out is that it was believed that in year two we could start to manage and really see costs and also the use of reserves in a more clear way. So during the year we could have better conversations at our finance committees. So technically if you read further down in the agreement how it talks about funding appropriations we still appropriate the money to the school division and the school division will contribute it back to the health fund that since we're consolidated finance finance still has to pay the bills. So it's a step of management process, but not totally where the schools are out on their own managing their fund. We're still together, we're still together negotiating health and we've worked hard on our plan design changes recently. So it's a step forward just to better communication and to start talking about how we better budget and plan for these things. So not to, I mean, just wanted to clarify. So I'm really glad we're having this conversation because that's not what I understood in from discussions and from reading the MOU. So let me just ask a question of what if. So if next year, we put the $20 million in and the school contributes that $20 million to the fund. And if it turns out that the school's actual expenditures on claims turns out to be $26 million, net, well, 31 million with their 20 contributed and their employees, 5.3 million contributed turn and it turns out that 25.3 million or 25.5 million doesn't cover the full expenditures Who's paying that? We will continue to work together the schools will look at what they might have Whether it's with here in one time cost and we'll have to sit in a room and talk about how we've managed claims. So it's still very much together, school and county partnership until we get through this. Remember, this is the second year of a three year plan. The hope was to start to make it set up so that everyone knows appropriately how to budget when we move forward. Oh, boy. I just want to say thank you for that clarification, Janelle. I do appreciate that. Yeah. Mr. Cobbett. I'm good. I'm good. I see more comments. We will call the vote. All those in favor of resolution. I'm thinking five by saying aye. Aye. Aye. Motion carries. May. Sorry. Very good. Motion carries. 4 to 1. Thank you Mr. Rose. That concludes our agenda for this evening, and this meeting is adjourned. Thank you. Thank you.