City Council Meeting Agendas and Minutes

SPECIAL MEETING AND BUDGET WORK SESSION OF MAY 10, 2021 The City of Kings Mountain, North Carolina met in a Budget Work Session at 2:00 p.m. on Monday, May 10, 2021 in Council Chambers at City Hall with Mayor Pro Tem Keith Miller presiding. ATTENDANCE The following Councilmembers were present: David Allen, Keith Miller, Mike Butler, Annie Thombs, Jay Rhodes, and Tommy Hawkins. Mayor Scott Neisler and Councilmember Jimmy West were absent. Also, present: Marilyn H. Sellers, City Manager, Nick Hendricks, Energy Services Director/Assistant City Manager, Karen Tucker, City Clerk, Randy Patterson, HR Director, and Chris Costner, Finance Director. INVOCATION The invocation was given by Mayor Pro Tem Keith Miller. PLEDGE OF ALLEGIANCE The Pledge of Allegiance was led by Mayor Pro Tem Keith Miller. SPECIAL MEETING Upon Motion by David Allen, seconded by Councilmember Jay Rhodes, it was unanimously voted to schedule a Public Hearing for Tuesday, May 25, 2021 at 6:00 p.m. to receive public input regarding the adoption of the City of Kings Mountain Unified Development Ordinance. BUDGET WORK SESSION (Presentation Attached) Marilyn Sellers, City Manager welcomed Council stating that an additional work session can be scheduled if Council feels that it is needed after today’s session. The total for the Fiscal Year 2021-2022 budget is $50,572,330. It is a responsible and balanced budget and identifies the revenue and expenditures, which are deemed necessary to maintain and improve the present level of municipal service provided by the City. She introduced Chris Costner, Finance Director and he reviewed the attached presentation. Budget Goals “Report Card” General Fund • No significant changes regarding services the city is currently offering- accomplished • Don’t use General Fund balance to cover operating expenditures – accomplished • Hold constant or reduce the operating transfer from the Electric Fund to the General Fund – accomplished Utility Fund • Meet our financial needs without significant rate increases this next budget year. Meeting needs entails providing sufficient resources to operate and maintain our systems (Electric, Water/Wastewater, Stormwater, and Natural Gas) – accomplished All Funds • 2.5% Rate subsidy/COLA proposed for all employees- accomplished  • No increase for Health Insurance premiums for employees – accomplished • Continue to fund all vacant positions anticipating that they will be filled if the position is justified by the Department Head - accomplished BUDGET RECOMMENDATION HIGHLIGHTS • Property Tax Rate – NO Change it remains at .43 • No proposed adjustments to City General Fund Fees • No increases in Health Insurance premiums for employees • No employee additions to the 2021-22 General Fund • No Electric rate increase • No Water rate increase • No Wastewater rate increase • No Stormwater rate increase • Natural Gas rate increase – Not initially proposed. Mr. Costner gave a City-wide overview of personnel which breaks down the salary, taxes, retirement, and medical benefits per fund. Energy Services received two new positions – one in Electric and one in Natural Gas. As far as debt is concerned, the city has a light debt burden, but that will change with gas and electric funded projects. It will still be very serviceable. Mr. Costner reviewed the debt by fund, and most of the City’s debt still lies in the Water Fund. Healthcare Benefits Randy Patterson, HR Director gave a brief overview of the healthcare benefits that will be offered. Highlights are as follows: • No proposed medical plan changes (Gold, Silver, and Bronze) • No increase in employee cost for medical • Information will be presented at open enrollment meetings General Fund The General Fund balance is based upon our peer group, and the City is in line with that group. Our peer groups consist of municipalities who have a population of 10,000-20,000 and have an electric fund. Funds from the General Fund should only be used for emergencies and for capital needs that would be beneficial not to finance or that cannot be financed. Overall, there was a 1.7% change in the General Fund Balance and this increase is due to keeping up with infrastructure. Mr. Costner outlined the General Fund revenues and expenditures for the 2021-2022 budget by department. The General Fund total revenue and expenditures for 2021-22 proposed budget are balanced totaling $17.883 Million. Capital Outlay Notes • The City plans to amend the General Fund budget for additional capital pending COVID-19 impacts. Capital that was budgeted in 2020-21 that was not completed by June 30th may have to be amended.  • Best practice via the LGC and the League of Municipalities is to budget only essential capital. They fully expect units to propose significant budget amendments to their 2021-22 budget given all the uncertainties existing at the time of budget planning/adoption. • There is additional funding coming from the American Rescue Plan (COVID relief); however, at this point it is unknown as to what these funds can be spent on. Mr. Costner stated that most personnel changes are due to the 5% COLA, which includes the one that was budgeted late in the year for 2020-21, as well as the 2.5% for this year. Also, contributions to the LGERS expense increased by 12%, which is state mandated and applies to all departments. Capital may be addressed via budget amendments once the true impact of COVID is determined. This applies to all departments. Non-Departmental There were slight decreases in medical insurance from retirees and Council. Medical charges were down slightly for this budget year. Change in operations is minimal compared to 2020-21. It should be noted that the “Actual” at 6/30/2020 reflects a $500,000 transfer to the reserve fund and the $430,000 YMCA contact is no longer included in this fund. Admin/Finance/Billing Personnel increases are due to COLA/LGERS increases and budgeted overtime increasing. Operations are down slightly primarily due to decreases in non-capital costs for the Northstar software implementation. Capital breakout is for various City Hall projects, as well as billing kiosks. Human Resources/Elections Board/Garage Personnel increases are due to COLA/LGERS increases; just as other departments are. Operations in these departments are very comparable to 2020-21. Police Personnel increases are due to COLA/LGERS increases; as well as, step increases. All vacant positions were budgeted. Increase in operations is minimal and additional capital will be addressed via budget amendments once the true impacts of COVID are determined. Capital budget, so far relates to two vehicles. Fire Personnel increases are due to COLA/LGERS increases; as well as, step increases. All vacant positions were budgeted. Operating budget increased primarily for capital supplies/equipment. Capital is for an additional vehicle and a mower. Public Works Administration Personnel increases are due to COLA/LGERS increases and overtime. Capital is for electronic access system. Streets/Grounds/Building Maintenance Change in personnel due to transfer of employee among departments partially offset by COLA and LGERS increases. Decrease in operation is due to loan payment for truck dropping off in 2021-22. Capital will be addressed via budget amendments once the true impacts of COVID are determined. Sanitation Personnel increase due to COLA/LGERS and overtime increases; as well as, transfers of additional employees to this department versus the 2020-21 original budget. Operations increase due to increased debt payment for new truck purchased in 2020-21. Cemetery Overall, the proposed operating budget is flat. Planning/Economic Development Personnel increases are due to COLA/LGERS/OT increases. Operating costs are decreased due to contracted services decreasing (NOTE: At the time of Budget Work Session, department is contracting UDO and Comprehensive Plan, both of which should be completed prior to the end of this budget year.) Codes and Inspections Personnel increases are due to COLA/LGERS and step increases. Operating request is up due to software licensing (new in 2021-22) and inclusion of abatements/community appearance funds. Senior Center Personnel increases are due to COLA/LGERS and overtime. Operations increase due to non-capital maintenance items and increase in food pantry expenditure line item, paid for by grant funding. Library Personnel increases are due to COLA/LGERS, overtime and step increases. Capital is to fix/replace a leaking roof and gutters on remainder of building. Special Events Personnel increases due to COLA/LGERS. Total budget is basically flat with slight increase for IT support and computer replacements. Moss Lake Personnel increases due to COLA/LGERS. Capital is for office roof replacement and bathroom renovations. Parks and Recreation This was a new department for the 2020-21 budget year that includes the annual payment for the YMCA contract, as well as, park maintenance line item. Any future park improvements, expansions, or other capital will be budgeted in this department. There are no personnel included in this department. Information Technology Personnel increases due to COLA/LGERS. Operations is up in this department primarily due to debt service on a $550,000 capital project completed in 2020-21. Main Street Personnel increases due to COLA/LGERS. Proposed operation budget is up primarily for special activities and various incentive/downtown grant programs. Mr. Costner reviewed the recent property valuation that was performed by the County. In the City’s case, residential real property is only 25% of our tax base. Real property revaluation is required by law every eight years and is the responsibility of the County. Cleveland County did a revaluation in 2008, 2016 and again in 2021. The 2016 revaluation was less that the 2008 revaluation. The City’s tax rate will remain at .43 per $100 valuation. In comparison to other municipalities in our peer group, Kings Mountain offers much more. A brief overview of the E911 Special Revenue Fund and the Economic Incentives Special Revenue Fund was provided. Energy Services – Electric (Presentation attached) Nick Hendricks, Energy Services Director/Assistant City Manager updated Council on the successful completion of several projects within the Electric Fund. He also addressed the overall consumption for 2020 as compared with 2019 and the affect that COVID-19 had on these numbers. Electric is requesting an additional Lineman position, due to the increase of an additional seven miles of distribution in place and the additional 250 plus homes that have been built in the last couple of years. This position is being requested due to growth that has already taken place. Mr. Hendricks gave an overview regarding several capital projects that are planned for the Electric Division stating that the site for the new Delivery 5 Station has been obtained and the final site planning and engineering has begun. Ninety percent of the delivery path has been solidified with property owners, and the goal is to have one hundred percent by July 1, 2021. When this project was introduced, there was a plan for two new delivery stations; however, it has been determined that only one delivery station is needed. Natural Gas Mr. Hendricks gave an overview of the allocations for the Natural Gas Department. The past year was a challenging year due to COVID-19. This year’s budget needs and revenue are very tight, and it will need to be a priority to monitor and act upon as conditions warrant. With this said, the year is starting with no recommended rate increase, but this recommendation could change quickly based on monthly data reviews. The closing of ABB (formerly Reliance) will be a negative impact for the gas division. Fortunately, Firestone and the asphalt plant are both back in full operation. There is a request for one additional technician in the Natural Gas Department due to an increase in local construction projects, service calls and daily locate requests. Mr. Hendricks reviewed several Capital Projects for the upcoming budget year that are vital to Economic Development, namely the following: • New 2nd Gate Station • I-85 Natural Gas Connection to York Road Station • Kings Mountain Blvd. Tie-In to Shelby Road • Multiple Regulator Projects Summary Mr. Costner gave a very brief overview of the Stormwater Fund and Water/Sewer Fund. Detailed information can be found in the attached presentation. Marilyn Sellers, City Manager stated that another Work Session can be scheduled if Council feels that it is needed. Unless there are comments or changes, this is the budget that will be on display for the public beginning June 1, 2021. This will also be presented at the Public Hearing on June 15, 2021 at 6:00 p.m. if Council is available for that date. ADJOURNMENT Upon motion by Councilmember Jay Rhodes, seconded by Councilmember David Allen it was unanimously voted to adjourn the Work Session of the City Council at 4:30 p.m. _____________________________________________ ATTEST: G. Scott Neisler, Mayor _____________________________________________ Karen A. Tucker, CMC