The Wise County Board of Supervisors met in a Recessed meeting on Monday, January 28, 2013 @ 5:00 PM in the Board of Supervisors meeting room located in the Wise County Courthouse. The following members were present:
Honorable Robert R. Adkins – Chairman
Honorable Virginia Meador – Vice-Chair
Honorable Dana Kilgore
Honorable J. H. Rivers
Honorable Ronald L. Shortt
Honorable Robert E. Robbins, Jr.
Honorable Steve Bates – members of said Board and
Shannon C. Scott – County Administrator
David L. Cox – Finance Administrator
Karen T. Mullins – County Attorney
Annette Underwood – Executive Secretary
Honorable Fred Luntsford
IN RE: BUDGET 2013 DISCUSSION / ADJUSTMENTS – POWER POINT
Finance Administrator Cox explained that he had reviewed the adopted budget for 2013 as it compares to the status of the budget at this point in time. The major difference is on coal severance. At this point, based upon estimates, coal severance will be short $1.4M. He did find some offsets, positive and negatives in several categories that brought that down to $1,222,844. This is the projected shortfall for year ending 2013.
The budget amendments approved by the Board to date were reviewed.
The Year-End Projected fund balances without savings were reviewed. As of Fiscal Year Ending 2012, there was a fund balance of $13,876,271. Taking the projected shortfall of $1,222,844 along with the fund balance, the projected year- end 2013 fund balance is $12,630,837. If the 10% fund balance policy of ($5,661,024) is subtracted, the projected fund balance over the 10% fund balance policy would be $6,969,813 (that is an undesignated fund balance).
Regarding the $9,000,000 reserved fund balance for schools, $2,195,138 of those funds were used to balance the budget in 2013 to make debt service payments for the schools. As of the end of 2013, that balance is $5,904,862. Mr. Cox noted that the Board has committed, not to exceed, $2.5M, for additions at Central High School which would be subtracted from that fund balance of $5,904,862.
The Year-End Projected fund balances with allocated spending reduction were reviewed. Mr. Cox noted that if the short-fall amount ($1,222,844) was pro-rated over the remaining five (5) months of the 2013 budget, that would be 1.5% of 3.4%, which would compensate a portion of that shortfall through the end of the fiscal year in the amount of $509,926, and leave a fund balance $13,140,763. Removing the 10% Fund Balance Policy that is now in place would leave a fund balance of $7,479,739.
The early projections for FY 2014, which include assumptions, were reviewed and discussed as follows:
Projected coal severance shortfall from FY 2013 original budget will be $2M vs. $1.4M projected currently
Positive Note: Full year Power Plant revenue
Remaining funds reserved for schools not used for debt service
Use of FY 2013 spending model and know 2014 changes
Estimated projected shortfall for 2014 is $1.2M - $1.7M (4 – 5% reduction from current local expenditures)
Will require spending cuts or additional revenue sources to avoid spending fund balance
The Fund Balance was reviewed as follows:
The current minimum fund balance policy requires 10% of General Fund budgeted expenditures
This amount is $5.661M on a $56.61M budget
Recommends working toward 15% which would be $8.491M on a $56.61M budget
The 15% target is the policy of many Virginia counties
All funding agencies promote balanced budgets for localities
Mr. Cox noted that one of the first questions asked from the funding agencies is whether or not the County has a balanced budget.
The importance of having a healthy fund balance was reviewed as follows:
Funds to carry the County through economic uncertainty
Maintain good credit ratings
Provides lower borrowing cost and give more ability to borrow funds
Funds for any emergency situations that the County could face
The following options to meet the shortfall were reviewed as follows:
Pro: Adjusts for declining revenues in the short-term
Con: Does not allow much time for planning
Pro: Allows planning time for the decreased expenditures
Con: Does not immediately address declining revenues
Pro: Encourages departments and constitutional offices to save funds
Con: Potentially expends additional funds vs. cut
The Board discussed options before them, which included having constitutional offices make some cuts in the next five months to help alleviate this shortfall. Some members felt it would be best to dip into the fund balance this year and implement cuts in FY 2014 budget and not ask for cuts this late in the year.
Mr. Cox advised the Board if they choose to use the fund balance to meet this shortfall, it could possibly mean a 6.5% cut next year to replenish the fund balance.
After much discussion, it was the consensus that Mr. Cox advise the constitutional offices about possible budget cuts for next year to allow them to make adjustments accordingly.
IN RE: CLOSED SESSION
A motion was made by Ronnie Shortt, seconded by J. H. Rivers, to go into closed session as permitted by the Code of Virginia per the following Code Sections:
After closed session, a motion was made by Robby Robbins, seconded by J. H. Rivers, to reconvene the regular meeting. The motion was unanimously approved.
IN RE: RESOLUTION – CLOSED SESSION
Secretary Underwood read the certification for closed meeting.
A motion was made by J. H. Rivers, seconded by Ronnie Shortt, to approve the resolution verifying matters discussed while in closed session. The motion was unanimously approved by roll call vote.
RESOLUTION # 4 - 2013
(Said resolution is on file in the County Administrator’s Office)
There being no further business, a motion was made by Ronnie Shortt, seconded by J. H. Rivers, to adjourn the meeting. The motion was unanimously approved.
ATTEST: WISE COUNTY BOARD OF SUPERVISORS
Shannon C. Scott, Clerk Robert R. Adkins, Chairman