Board of Supervisors

Virginia:

AT A REGULAR SCHEDULED MEETING of the Nelson County Board of Supervisors at 7:00 p.m. in the Board of Supervisors Room located in the Nelson County Courthouse.

Present:
Thomas D. Harvey, North District Supervisor
Constance Brennan, Central District Supervisor- Chair
Joe Dan Johnson, South District Supervisor – Vice Chair
Allen M. Hale, East District Supervisor
Thomas H. Bruguiere, Jr. West District Supervisor
Stephen A. Carter, County Administrator
Candice W. McGarry, Administrative Assistant/Deputy Clerk
Debra K. McCann, Director of Finance and Human Resources

Absent:    None

I.    Call to Order

Ms. Brennan called the meeting to order at 7:06 pm with all Supervisors present to establish a quorum.

A.    Moment of Silence
B.    Pledge of Allegiance – Mr. Bruguiere led the Pledge of Allegiance

Ms. Brennan then noted the need to conduct a brief closed session and Mr. Hale moved that Nelson County Board of Supervisors convene in closed session to discuss the following as permitted by Virginia Code § 2.2-3711(A) (7):  Consultation with Legal Counsel, or briefing by staff about a probable future litigation pertaining to former Sheriff Department deputies’ demand for payment and/or the pending case of former Deputy S. Folsom vs. Sheriff D. Brooks. Mr. Bruguiere seconded the motion and there being no further discussion, Supervisors voted unanimously (5-0) by roll call vote to approve the motion.

Supervisors conducted the closed session and following its conclusion, Mr. Hale moved to reconvene in open session.  Mr. Johnson seconded the motion and there being no further discussion, Supervisors voted unanimously (4-0) by roll call vote, Mr. Harvey being absent for the vote, to approve the motion to reconvene in open session.

Upon reconvening in open session, Mr. Hale moved that the Nelson County Board of Supervisors certify that, in the closed session just concluded, nothing was discussed except the matter or matters (1) specifically identified in the motion to convene in closed session and (2) lawfully permitted to be discussed under the provisions of the Virginia Freedom of Information act cited in that motion.  Mr. Johnson seconded the motion and there being no further discussion, Supervisors voted unanimously (5-0) by roll call vote to approve the motion and certify the closed session.

II.    Public Hearings

There were no public hearings scheduled for the Board’s consideration.

III.    Consent Agenda

Mr. Hale moved to approve the Consent Agenda and Mr. Johnson seconded the motion.

In connection with Item C., R2010-12 Support for FY11 Federal Appropriations Funding Requests, Mr. Bruguiere asked if the County had gotten a radio grant and Mr. Carter explained that the County had gotten a $1.3 million dollar PSIC grant for partial help to put up a tower but that it was not nearly enough. There being no further discussion, Supervisors voted unanimously (5-0) by roll call vote to approve the motion and the following resolutions were adopted:

A.    Resolution – R2010-06 Minutes for Approval (Deferred)

RESOLUTION-R2010-06
NELSON COUNTY BOARD OF SUPERVISORS
APPROVAL OF MEETING MINUTES
(December 8, 2009 & December 29, 2009)

RESOLVED, by the Nelson County Board of Supervisors that the minutes of said Board’s meetings conducted on December 8, 2009 and December 29, 2009 be and hereby are approved and authorized for entry into the official record of the Board of Supervisors meetings.

B.    Resolution – R2010-08 Minutes for Approval (Deferred)

RESOLUTION-R2010-08
NELSON COUNTY BOARD OF SUPERVISORS
APPROVAL OF MEETING MINUTES
(January 12, 2010)

RESOLVED, by the Nelson County Board of Supervisors that the minutes of said Board’s meetings conducted on January 12, 2010 be and hereby are approved and authorized for entry into the official record of the Board of Supervisors meetings.

C.    Resolution – R2010-12 Support for FY11 Federal Appropriations Funding Requests

RESOLUTION R2010-12
NELSON COUNTY BOARD OF SUPERVISORS
SUPPORT FOR FY11 FEDERAL APPROPRIATIONS REQUESTS

WHEREAS, the Nelson County Board of Supervisors has established that substantial upgrade of the County’s public safety radio communications system and the Blue Ridge Tunnel project are priority initiatives;

NOW, THEREFORE, BE IT RESOLVED, that the Nelson County Board of Supervisors does hereby endorse and direct the County’s submission for FY11 Federal Appropriations funding for the following two (2) priority projects: Nelson County Public Safety Land Mobile Radio and Interoperable Communications System, and the Nelson County Blue Ridge Tunnel.

IV.    Unfinished/New Business

A.    Roseland Waterline Extension and Related Capital Improvements

Mr. Carter distributed copies of the DEQ response to his question about what they would do if the Board does not accept the funds. He noted that they said that they would continue to use state funding to continue the mitigation efforts that are in place including testing and that once these funds were exhausted, they would look to the responsible parties; while also acknowledging that they (Roseland Rescue) have no means to address the problem as per the hardship waiver submitted by them, but this could be reevaluated at that time.

Mr. Carter also noted that DEQ said that they would not increase the amount of funding that was offered and was based on Draper Aden Associate’s estimate.

Mr. Harvey noted that the County would get stuck with the maintenance costs thereafter, and if the County doesn’t accept the funding, it is DEQ’s problem and it won’t cost the County anything.

Mr. Carter reported that NCSA had provided proposed funding sources for its proposed projects as follows:

•    Regional STP effluent relocation: STAG grant application – $435,000 and DEQ Clean Water Revolving Loan Fund Green Project Reserve – $1,518,660
•    Tye River Intake and raw water line: VDH Drinking Water State Revolving Loan Fund – $2,160,840
•    Roseland Extension and Looping Water Main: DEQ UST grant – $1,683,000, Rural Development – $2,558,820
•    Water Plant Upgrade: Rural Development – $1,044,000

He then noted the best and worst case cost scenarios, as follows: The best case scenario would equate to an annual debt service payment of $144,012 and a possible lump sum shortfall in construction costs of $219,280 for all of the projects.  He noted that the worst case scenario would equate to an annual debt service payment of $296,412 and a possible lump sum shortfall in construction costs of $219,280 for all of the projects. He stated that these numbers were estimates and were as close as he could get them.

He reported on the meeting with Board members and NCSA staff and noted that it had been agreed upon that flushing costs in the Roseland Extension would possibly be $31,000 but could be variable.

Mr. Bruguiere asked Mr. Castillo if they test the water when flushing it out of the system and he replied that they don’t flush unless they get a complaint right now. In that case, they test the water and if the results are not appropriate, then they will flush it out. He noted that they do regular testing for bacteriological things monthly and chlorine residuals.

Mr. Carter discussed the presented pros and cons and DEQ and VDH responses to staff questions as follows:

Pros:  a) the funding from DEQ may provide for the entire cost of the waterline
extension to Roseland; otherwise the project is unlikely to be constructed

b) the waterline extension to Roseland will mitigate the need for a long term
solution to the UST contamination at Ferguson’s Store and Roseland

c) the waterline extension has the potential to add customers to the PR 3
System, which could help with system expenses and reduce the volume
of flushing that will be required

`    d)  the bidding climate continues to be a potential advantage

d) the waterline extension could result in new commercial/residential
development in the PR3 and Roseland service areas (South District) and
Rt. 29 Corridor

Cons:  a) annual revenues from the waterline extension to Roseland (approximately
$3,000 per year (based on 8 customers) will be substantively less than the
Projected O&M costs, which could range from $25,000-$60,000 per year;
imposing an even greater deficit expense to the County (estimated at
$114,000) in FY 2010-11) for the expanded PR 3 System with Roseland

b)  an additional $219,280 may have to be provided by the County beyond
the $1,687,940 from DEQ (per Bury Partners estimated project cost); this
will further burden the County financially at a very difficult time

c)  the potential for new customers once the water line extension to Roseland
is completed is indeterminate due to the costs to connect to the system
and that the County can only mandate new connections be made to the
system; existing residences/businesses can only be required to connect
if their water service (well) does not meet VDH requirements

d) constructing the waterline extension to Roseland could have the domino
effect of the NCSA taking the position that each of its project proposals
must be completed and that the County be responsible for debt service
costs, which could range from $144,012 to $296,412 per year

e)  NCSA’s project proposal to construct new facilities at Tye River locations
on Old Roseland Road are approximately three times the cost of other
alternative locations and are an outcome of avoiding conflict with a
business that is opposed to the most cost effective locations for NCSA’s
proposed installations

f)  the County is faced with substantial budgetary issues due to extraordinary
budget reductions from the state over the 2010-2012 Biennium and, quite,
possibly beyond

g)  there are other capital projects that the County must address (i.e. roof
and window projects at TRES and RRES, Radio Communications
Project, Courthouse Project – Phase 2 and 3)

h) it is fairly debatable whether or not the proposed initiatives will result in
growth and development that could benefit the County

2.  Construction of the Roseland Water Line Extension may not result immediately in NCSA having to complete any of its project proposals other than the wastewater effluent discharge project.  Unless some other alternative is identified (none at present) the Authority will need a discharge point at a location on the Tye River by May 2012.

3.  The Board must establish/maintain closer communication with NCSA to assist with decisions that may impact the County financially and developmentally

Mr. Carter noted that the need for flushing is debatable if they build the loop system and could be another problem until demand picks up in system.

He noted the withdrawal point is proposed on the Tye River above or below the Saunders and that DEQ would do an in depth analysis of the impacts to users up and down the stream. They would analyze how another withdrawal permit would impact the environment, the current users, and the safe yield of the Tye. He noted that NCSA’s capacity limit is slightly larger than what has been reported and DEQ is in constant communication with NCSA on capacity issues. He stated that it was indeterminate as to when increasing their capacity and identifying a new water supply would have to take place.

He then related that a new effluent discharge point was the most imminent concern and that they would have to do something by May 2012. Mr. Castillo added that construction would have to happen in 2011 to be ready in 2012 and that they were seeking grant funding and the best package scenario to complete this.

Mr. Carter stated that once the NCSA hit 80% of their water capacity threshold for three (3) months in a row, they would have to develop a plan and an implementation timetable. He added that the Board could choose to do the extension and hope that the DEQ monies cover the costs and that they will have the annual operating funds.

Mr. Bruguiere noted that the NCSA 50,000 gallons to go before they got to 80% of their permitted water capacity. In response, Mr. Castillo noted that the system’s wells were less productive now and he anticipates that their permitted capacity will be reduced.  In response to questions, he noted that there was plenty of water capacity in Roseland for more to hook up before getting to 80% and that they are working with VDH and would have some time under the regulatory numbers.  He also stated that they could enlarge the reservoir some, but that space was limited to expand and there was rock to the side of it. He noted that the water quality was an issue because of its turbidity when they got a lot of rainfall.

Mr. Hale remarked on the meeting and noted that Mr. Carter had done an excellent job of summarizing the events. He noted that he could discuss the projects but that there are many unknowns at this time. He stated that his understanding was that the Board is supposed to decide one aspect of the project(s), the waterline extension to Roseland built with DEQ funds. He added that the key elements had been presented clearly. He questioned the amount of DEQ funding for the project and Mr. Carter noted that there was $1.2 Million in state funding and they have added federal stimulus funding to maximize the use of these funds. He explained that the $1.2 Million would still be there if they don’t accept the full deal.

Mr. Hale added that the conclusion was that the DEQ amount was correct but that they don’t know if it is sufficient to cover the project costs. He supposed that it probably would cover the construction costs in the current climate; which left the Board with the question of covering the cost of flushing and operation. He agreed that at best, they would be committing to a cost of between $25,000-$35,000 annually for eight (8) customers; with the understanding that further costs would come.

Mr. Bruguiere asked that if they don’t do this extension, will they end up with smaller systems in Roseland and Fergusons; with Mr. Carter stating not necessarily. Mr. Castillo noted that in colleen, they identified the problem and NCSA helped to solve the problem and meet the need in that area.  Mr. Carter added that was a different dynamic because no one was paying for the water besides the customers since it was well based. He reiterated that there is enough money to extend the line to Ferguson’s Store using LUST funds. Mr. Castillo noted that there was an option for an isolated system in Roseland if they can find a good well. He added that DEQ saw an opportunity to fund the entire problem at one time, by combining the funding for both locations.

The Board briefly discussed the favorable construction climate and in response to questions, Mr. Carter stated that the County would not be able to bid out the project and then decide to accept the DEQ money or not; DEQ would have the County sign a binding agreement to use the funds before that.

The Board and staff discussed the problem of the annual operating money that would be paid and Mr. Bruguiere stated his support for hooking up as many customers as they could, not just the eight (8) people affected by the UST contamination by offering incentives of reduced fees etc.

Following this discussion, Mr. Hale moved that Nelson County not accept the $1,687,940 from DEQ for the Roseland waterline extension.

The Board’s follow up discussion included Mr. Hale noting that he had given this a great deal of thought, had studied the engineering reports, and was in no way imputing NCSA for their dedication in trying to provide the best service for its customers; but he noted that he thought that the Board was being lured into a project that has an annual cost and associated costs for eight (8) customers and any variation would add the additional projects that add up to $9 million dollars.  He added that there were pressing needs to be handled, such as wastewater discharge and new raw water; however this project would not solve these problems and might rather exacerbate them. He concluded by stating that it was not time to take on more annual costs for eight (8) customers.
Mr. Johnson stated that it was tough to vote against water for anybody and the greatest issue was the annual operating costs. He further noted that he was still split down the middle on the issue.

Ms Brennan stated her agreement with Mr. Hale and noted that it was a difficult budget time and there were too many uncertainties to go forward with this given the O&M costs etc. She further expressed that her priority was funding for the schools and could not at this time in good conscience be in favor of accepting the money. She stated that she was in favor of going to Ferguson’s Store if possible and that she was hesitant to take on considerably more debt.

Mr. Carter noted that it was a difficult decision and that he couldn’t make a recommendation.  He noted that there was a difference in philosophies with NCSA but they have done a good job in being proactive and cooperative on this.

Mr. Hale expressed his desire to continue to work together with the NCSA to address upcoming problems and projects and that rejecting this project doesn’t mean ending the discussions.

Mr. Harvey stated that he doesn’t want to turn the money down, but that he was not happy with the amount of money being offered. He suggested not turning the money down, but stated that they also need help with annual operating money.

Mr. Carter reiterated that the Board’s decision deadline was tonight and Mr. Harvey stated that he would rather take no action than turn the money down outright. Mr. Bruguiere stated that it might be perceived as they don’t want to do anything and have plenty of money. Ms. Brennan noted that the DEQ money will still be there, and they would only be losing the stimulus money.

Mr. Bruguiere suggested that they find a private well source in Roseland and install a tank and pipes to the UST locations. Mr. Castillo stated that DEQ looked at doing a well system there but chose this as the solution.

Mr. Hale noted that he was not adverse to Mr. Harvey’s suggestion, but it would have the same effect as his motion. Mr. Harvey noted that a different message would be being sent between the two. He added that Mr. Hale could withdraw the motion and they could vote on a motion not to accept the funds.

Ms. McGarry reviewed the original motion with the Board noting that it was a motion to not accept the DEQ funds.

Mr. Carter added that the Board could consider adding language relative to the annual costs. After briefly discussing this, the Board agreed by consensus that this could be explained by letter.

Mr. Harvey then seconded the motion and Supervisors voted (3-2) by roll call vote to approve the motion with Mr. Bruguiere and Mr. Johnson voting No.

Members discussed presenting the Board’s concerns in an email and follow up letter; with Mr. Carter noting that he has made this clear. Mr. Bruguiere expressed his concern that this decision will affect future NCSA funding for projects.

B.    Draft FY11 General Fund Budget

The Board took a short break prior to consideration of this item.

Ms. McCann distributed and reviewed the following budget information:

FY11 BUDGET OVERVIEW

REVENUES

Current year revenues continue to be on target to meet the revenue forecast that was adjusted in November 2009.  Primarily due to unspent contingency funds, we anticipate some balance that can be utilized in the upcoming year.  Anticipated carryover is not currently incorporated into the FY11 budget proposal.

Governor Kaine’s budget proposal was utilized in estimating state revenues for fiscal year 2010-2011. All revenue, excluding grants, is anticipated to decline by $552,933.  Grant funding is expected to increase by $445,683 over the expected grant receipts for the current year.

As you know, the state budget is not finalized and legislative decisions could have significant impact on the county’s revenues for the upcoming year.  Next week a conference committee will be appointed to develop a compromise spending plan.  It could well be mid-March or later before budgets are finalized.  As details are released, we are sorting and analyzing to determine the dollar impacts to Nelson.

OVERVIEW OF HOUSE & SENATE BUDGET PLANS

Both plans propose restorations to public safety and constitutional offices.  The House version restores about two-thirds of reductions proposed by Governor Kaine but proposes to partially fund this using the communications sales and use tax fund.  The communication sales and use tax is funding already being distributed to localities.  The House also restores the deputy ratio of 1:1500 population.  The Senate proposes a 1:1,650 ratio which translates to a reduction of funding for one deputy position.  The Senate also proposes substantial restoration of constitutional office funding by implementing increased district and circuit court fees.

Both plans also propose additional reductions to VJCCCA and local departments of social services.  The House plan includes further reductions for registrars and electoral boards.  The Senate plan proposes the continuation of the across-the-board reduction in aid to localities implemented in the 2008-2010 biennium.  This reduction had been eliminated in Kaine’s introduced budget.  In FY10, the reduction for Nelson County is $79,147.
As for impact on the school division, both plans undo the proposal in the introduced budget that would have frozen the local composite index of ability to pay.  The House plan proposes an 80% hold harmless payment for FY11 and the Senate version provides full hold harmless provisions for both years of the biennium.

Both plans propose lower retirement contribution rates for teachers which should provide locality savings in an effort by both the House and the Senate to cushion significant reductions to public education.  Both plans provide funds for an FY12 Virginia Public School Authority educational technology equipment grant program.  The Nelson County school division has typically received $150,000 annually through this program.

Based on Governor Kaine’s budget, School Board expenditure reductions, and level local funding, the school budget is expected to have an approximate $900,000 shortfall. The House plan would potentially reduce school funding by an additional $650,000.  The Senate plan would reduce school funding by an additional $166,000.  Per state estimates, Nelson would save $185,000 due to the reduced VRS contribution rates.  Funding reductions together with savings will yield budgetary shortfalls ranging from about $880,000 to $1,365,000.

EXPENDITURES

Departments were requested to submit level funded budgets.  Agencies were also asked to be considerate of the economic climate when submitting their budget requests.   Total expenditures based on requests by departments and agencies exceeded current year projected expenditures by $217,710 and yielded an anticipated budgetary shortfall of $117,863.  Staff has reviewed budgetary requests and is recommending reductions that will cover the shortfall.  However, staff is working on developing operational costs associated with the completion of the new court facility.  These costs could potentially impact the last quarter of FY11 and will need to be incorporated into the budget.

Generally, the FY11 expenditure budget provides for level funding of departments, agencies, and schools.  However, there are some anticipated expenditure increases which are currently included within the budget.  These increases are summarized below.  It is important to note that the reassessment increase will be paid from funds set aside for this purpose in prior years.  The E911 equipment increase is also offset by additional grant revenue.  The net increase not offset by specific revenue sources is $172,050.

NEXT STEPS

More detailed information will be provided at the March 9 Board meeting.  Staff will continue to analyze state budget information for incorporation into the county budget.  Staff will also look at additional expenditure reductions and potential sources of new or additional revenues for the Board’s consideration.

Ms. McCann noted that some contingency funds would be carried over to next year’s budget, but it is not yet incorporated herein. She said that this contingency is primarily from unspent capital set aside monies. She also noted that there had been some restoration of police and const. officers funding in both the Senate and House budget versions.

Additionally, she reported that the new Courts building would be occupied by January 2011; and six (6) months of operational expenses would be needed per the construction progress meeting held that morning.

The Board and staff discussed non-level funding of the budget being a concern and Mr. Carter noted that this was addressed at the staff level; however some increases have been included, such as the 4.2% increase in Health Insurance premiums.

Other things of consideration noted by staff were:

-    The Regional Jail was still monitoring the budget but plans to contain any shortfalls; costs were going up due to increased prisoner populations not state shortfalls at this point.

-    70% of total Reassessment costs would hit this year, and staff was putting $95,000 into the fund as it does every year to use monies from this set-aside for expenses.

-    Some departments reduced their budgets and most were not spending their full budgets this year. Grant funding went up $400,000 and inflates the budget somewhat.

-    Will be carryover of about $400,000 and staff did incorporate the PSIC grant match funds as carryover.

-    The Department of Education (DOE) has not come out with new templates yet and staff will be monitoring this and the state closely.

-    At the March 9th meeting, more detailed printouts will be provided with suggestions for cuts and possible new revenue sources.

Ms. Brennan inquired as to the state of this year’s Real Estate tax revenues, with Ms. McCann noting that they were good and would meet the budget number. Mr. Carter added that staff was waiting on the Commissioner of Revenue for final Real Estate and Personal Property tax numbers and have encouraged her to get these done.

Mr. Carter noted that in summary, the County side had been balanced, but that staff doesn’t know what Richmond will do, and maybe will by March 9th and can work forward. He stated that the real challenge was school funding, and that using carryover is a temporary fix. An additional problem was how to fix the entire problem that will get worse.

Mr. Johnson suggested that the Board look at working with a middle of the road figure of an approximately $1,250,000 shortfall. Ms. McCann noted that localities may take some more hits, but may benefit from the restoration of funding and the method of doing that.

Mr. Carter reiterated that the challenge was what to do with the education hole and how this would be addressed; adding that he could not say if they could overcome this deficit with current revenues.

Ms. McCann polled the Board for any direction as to how to address the shortfall using new revenues or cuts, and Ms. Brennan suggested that some new fees could be explored and requested that staff provide a list of all possible fees.

Mr. Bruguiere inquired about plans for the new building’s security and Mr. Carter supposed that there would be security staff during court; the building would have all new locks and a keycard system and they could probably do with security staff only on court days.

Mr. Johnson requested that Ms. McCann send out the Agency Priority spreadsheet; and Ms. McCann noted that any reduction made on this sheet was to reduce them to level funding. Members discussed looking at the Agencies and evaluating them on their merits; noting that this was how it should be done.
Mr. Harvey stated that at best, the Agencies should be level funded and they could come up with more cuts. Mr. Johnson noted that three (3) Agencies comprise most of the funding and the others were small change but would have to be looked at.

In conclusion, Members and staff discussed vacant County positions that could be held next year and the need for more custodial services for the new building.

V.    Public Comments

There were no persons wishing to be recognized for public comments.

VI.    Adjournment

At 9:12 PM, Mr. Hale moved to adjourn the meeting and Mr. Bruguiere seconded the motion. There being no further discussion, Supervisors voted unanimously by voice vote to approve the motion and the meeting adjourned.