At the continued meeting of the Council of the Town of Chilhowie held at the Municipal Building, Tuesday, June 19, 2014 at 6:30 p.m.

Transcription

1 Virginia: At the continued meeting of the Council of the Town of Chilhowie held at the Municipal Building, Tuesday, June 19, 2014 at 6:30 p.m. Present: Honorable Gary L. Heninger, Mayor Presiding; Councilors James B. Bonham, III, Bill Clear, Brent Foster, Kelly Spencer-Hill, Lewis Shortt and Cathy M. Smith. Absent: None. Also Present: Mr. William C. Boswell, Jr., Town Manager; Mrs. Marlene L. Henderson, MMC, Clerk-Treasurer; Mr. Paul Cassell, Town Attorney; Messrs. Stephen Price, Chief of Police and C. David Haynes, Fire Chief. Budget Workshop on Proposed Budget: Mr. Boswell reported that the revenues have been revised from the meals tax reducing the tax by $88,000. He stated that there are other accounts that were reduced to make up the $88,000 in the budget. Mr. Boswell stated that the budget has been revised to reflect the recalculation of the meals tax and the other items that have been reduced to meet the budget. He stated that this still includes the 2% increase at this time. Mr. Foster inquired if the Council can reduce the 2% increase without another Public Hearing. Mr. Boswell stated that the Council can leave it as it is or raise it to the 2% increase without a Public Hearing. Mrs. Smith inquired if Council wanted to change the percent then they would have to have another Public Hearing and amend the budget. Mr. Cassell confirmed and stated that would be the process he recommends and he referenced a range of percentage increase in the future advertisement to avoid the situation the Council is currently dealing with. Mr. Bonham stated that he noticed in the budget cuts to balance the budget the line item operations where there is $35,000 for grants on police cars. Mr. Bonham inquired if the grant is not received do they not spend the money. Chief Price stated that it is not a grant but a settlement fund that was granted and shared throughout all Commonwealth Attorney s Office. Chief Price stated that he had to write a letter of request for the exact amount of what the Department was requesting. He stated that he had to list the equipment, vehicles and weapons requested and also obtain a letter from Mr. Boswell to submit as well stating that none of the mentioned items were included the budget. Chief Price explained that the Commonwealth Attorney s Office sends the request to the coordinator of the settlement fund and they approve or disapprove the funding. He stated that if funding is approved the money goes to the Commonwealth Attorney s Office and the Department purchases the equipment or vehicles and send the invoice to the Commonwealth Attorney s Office and they pay the billing. Chief Price stated that everything was submitted three weeks ago and there has not been a response. He stated that if the settlement funds do not come through then the Department is going to have to start replacing vehicles. Chief Price stated that the three Dodge Chargers are six years old and developing mechanical problems. He stated that the plan moving forward into the future is to replace one vehicle per year so they do not get in the situation that the entire fleet needs to be replaced at once. Chief Price stated that the duty weapons are 15 years old and if

2 funded the Department is willing to pay the shipping and handling instead of reapplying for the funds. Mr. Clear inquired as to how many weapons Chief Price is requesting to replace. Chief Price stated all six shot guns, all six duty weapons, all six Tasers, speed trailer, Nikon camera and three vehicles. He stated that Smyth County s allotment of the settlement funds is $1.5 million and the total request is $123,000 which if approved it would be free to the Town. Mayor Heninger inquired if Marion or the County has received any items. Chief Price stated that Marion, Smyth County and Saltville have received some items. Mr. Bonham inquired as to what the current total amount of the budget is. Mrs. Henderson stated that it is $4,554,985. Mr. Foster inquired if the meals tax was proposed on what is currently in Town. Mr. Boswell confirmed. Mr. Foster inquired if Council was ready to vote on the meals tax rate and water and sewer rate. Mr. Bonham stated that according to the Town Attorney they are to vote on what the current rate is and leave it for now. Mr. Foster stated that Council can leave it the same now and then change it later. Mr. Cassell stated that if the 2% is included in the budget then they will have to amend the budget before they pass it. Mr. Boswell confirmed and stated that there is another $145,000 to cut from the budget and he requested Council to review the items and determine where to cut the budget. Mr. Bonham inquired as to how much money would be saved if the wages were not increased. Mrs. Henderson stated that the wage increase is $31,734. Mr. Bonham inquired if that is the 3.5% increase for all departments. Mrs. Henderson confirmed. Mrs. Spencer-Hill inquired about the Smyth County reimbursement line item. Mrs. Henderson explained that it is billed to Smyth County based on the flows at the sewer plant where the County pays their portion of the expense of the plant. Mrs. Spencer-Hill inquired about line item for computer software and support, are the computers being updated on an annual basis. Mrs. Henderson confirmed. Mrs. Spencer-Hill inquired if one work station was updated at a time. Mrs. Henderson stated that they try to update two at a time but the support is support fees from Southern Software. Mrs. Smith inquired as to why there was an increase in the building inspection expense. Chief Haynes stated that it is a Code change year and a new set of Code books will have to be purchased. Mrs. Smith inquired if Chief Haynes anticipated any revenue from the use of the burn building. Chief Haynes stated that he has mixed feelings about that. He stated that he has a problem with charging their close mutual aid partners, the people they rely on to come and help, but he does not have an issue charging someone that is not a mutual aid partner. Mr. Foster suggested inserting that in the Mutual Aid Agreement. Chief Haynes agreed. Mrs. Spencer-Hill inquired about line item , equipment rental, the current year is budgeted at $8,785 and the proposed year $32,500. Mr. Boswell stated that the Town is going to lease to purchase a backhoe that represents about $24,100 per year as opposed to purchasing a backhoe at $70,000 or $80,000. Mrs. Smith stated that she noticed an anticipation of an increase of $10,000 for utilities on line item Mr. Boswell stated that is essentially electricity and he advised not to cut that line item. Mrs. Smith agreed. Mr. Bonham inquired if the lease to own needs to be shown as a capital outlay. Mr. Boswell agreed and stated that it will be corrected. Mr. Bonham inquired as to what all is included in , water capital outlay. Mr. Boswell stated that they have cut that line item by $15,000. Mrs. Henderson stated those funds in the line item number is for replacing a line if needed.

3 Mrs. Smith inquired as to how the water and sewer collection is, how much per month or year is not collected. Mrs. Henderson stated that the Town does very well on that because if the citizen does not pay the bill they get disconnected. She stated that some do move but the Town also collects from set-off debt which is from the Virginia tax refunds. Mrs. Henderson stated that the Town has collected about $15,000 through set-off debt this year. Mrs. Spencer-Hill inquired as to how much it cost per month to rent a backhoe. Mr. Boswell stated that the backhoes are older and the Town is currently paying about $1,000 to $1,200 per month for a track hoe. Mrs. Smith inquired about a $15,000 reduction in the line item , Smyth County reimbursement. Mrs. Henderson stated that is the billing to Smyth County based on the flows of the sewer treatment plant; Smyth County pays a portion of the debt service as well as the expenses of the plant because Smyth County owns a portion of the plant under an agreement with the Town. Mrs. Henderson stated that the Smyth County Green Hill sewer is where the Town bills the citizens in the Green Hill area for their sewer then the Town pays it to the County. She stated that it comes in as revenue and then goes out as expenditure. Mrs. Smith inquired about postage and office supplies under sewer. Mrs. Henderson explained that the postage is roughly $800 per month. When the water bills are mailed postage is split between water and sewer therefore the expense goes to both departments. Mr. Bonham inquired as to what consumer utility tax is. Mr. Boswell stated that is the tax allowed to charge by the State on the electric bill. Mr. Bonham inquired if the communication tax is on the telephone. Mr. Boswell confirmed. Mrs. Smith inquired as to which line item that is. Mr. Bonham stated that it is line item ; he inquired if that rate is set by the State. Mrs. Henderson stated that it is set by the Town but collected by the State and sent to the Town. Mr. Bonham inquired as to what the current rate is. Mrs. Henderson stated that on the residence is $1, on factories it is so much per kilowatt hour. She stated that the minimum is $40 as a base and it increases as the use of electricity increases. Mr. Bonham inquired if that amount would change when a new industry moves into the park. Mrs. Henderson confirmed. Mr. Bonham stated that it would help with consumer tax, communication tax and commercial water and sewer. He suggested trying harder to sell the property. Mr. Boswell stated that the most important thing is to sell the property because the Town lost all tax rights when the County purchased it. Mrs. Spencer-Hill inquired about line item number for UV lights. Mr. Bonham stated that it is for sewer treatment. Mr. Boswell stated that the last thing that happens to the water before it is put into the river it goes through two banks of ultraviolet lights and the lights have to be replaced once a year. Mrs. Spencer-Hill inquired if the lights have been replaced this year for the $2,460. Mr. Boswell stated that there are three banks and not all three are replaced every year. He stated that they are replacing one or two every year. Mr. Foster inquired about cot straps for EMS, he inquired if they are wore out. Chief Haynes stated that they have worn out and it is cot straps. Mr. Foster inquired about Class A Uniforms, is that the turn out gear or dress uniforms. Chief Haynes stated that it is the dress uniforms. Mr. Foster inquired about the 90 tee shirts, 60 sweat shirts and the patches, he wondered if they were replacing everybody. Chief Haynes stated no, they have 37 people and they go through a lot. Mr. Foster inquired if two shirts and two pants are given out per year. Chief Haynes stated that it

4 depends on activity, everyone does not get the same amount; some people may get four pairs. Mrs. Smith inquired if this was basically ordered every year. Chief Haynes stated that the last order was 60 or 70 and they typically try to order like that once a year. He stated that this current budget year was a big order because the previous year they did not order any. Chief Haynes stated that he is not sure what they spent last year, but if everything was coded right between Jeannie, Marlene and Felicia, there should have been money left over in uniforms because they have been using the safer grant funds to purchase a lot of uniforms, especially new members. Mr. Foster inquired if radios required a 5% match. Chief Haynes confirmed. He stated that he put the entire cost of all of the radios in the budget and he put the 95% that would be received from FEMA as revenue. Mr. Foster stated that it still balances out in the budget. Chief Haynes stated that expenditures are 100% and revenue is 95%. Mr. Foster stated that there is some fund in Fire and some in EMS. Chief Haynes stated that he split them up because he gets asked that question every time he goes before the Rescue Squad Systems Fund Grant Committee; he stated that they always ask if the department is spending EMS money on Fire Department. He stated that they have more EMS calls so actually it is the other way around. Mr. Foster inquired as to what the mapping is. Chief Haynes stated that he has actually had that in the budget for three years; when 911 addresses went in they were provided with map books which did not work very well. He stated that the County does not provide the department with mapping because the County Attorney stated that the County cannot require people to post their addresses. Chief Haynes stated that 70% of their calls are to residences that do not have their address posted. He stated that they have a really hard time locating addresses. Chief Haynes stated that there is a company that takes the County s GIS system and generates map books via electronic and paper and that is what that line item is for. Mr. Foster stated that the Council could approve the budget as is with the 2% and go back in July and review the idea of lowering that and revisit certain line items. Mr. Bonham stated that it all depends on the timing with the Public Hearing. He stated that they are about to run out of time for the Public Hearing and the budget must be adopted by the end of the month. Mr. Foster stated that the rates can be changed at any point with a Public Hearing. He stated that as it is now the budget is balanced with the 2% and Council can approve that now and look at it again in July. Mr. Bonham stated that they would have to have another Public Hearing. Mr. Bonham inquired as to what Mr. Foster s thoughts are concerning the increase of cigarette tax. Mr. Foster stated that the tax could go up some. Mayor Heninger stated that he would probably be the biggest cigarette distributor in Town and 85% to 90% of the business is from out of Town. Mr. Foster stated that if the tax is increased a lot then the cigarette sales will fall to nothing because people will drive all the way to Glade and spend $6 on gas to save $0.15 on a pack of cigarettes. Mayor Heninger stated that the Town is receiving $0.60 per carton and $0.60 is better than nothing. He stated that people come from Marion and the man buys five cartons and his wife buys five cartons and it is legal the way they do it, but it will stop if the tax is increased. Mr. Foster stated that Marion is at $0.12 per pack and the Town does not need to go that high and the County does not have a cigarette tax. Mayor Heninger stated that Green Hill would love it for the Town to increase the tax, Little s and Rita s; the business would come to their stores. Mr. Bonham stated that the Town does not need to turn its back to the revenue either; even a small

5 change adds more money back to the Town. Mr. Foster stated that the tax could increase a little bit and not have the detrimental effect of running people off. Mr. Bonham stated that he has spoken to the restaurant folks and they say that anything the Town does will be passed on to the consumer. He stated that there is a 7% ceiling and when they are up against that then they are the same as Marion and Abingdon. Mr. Bonham stated that this would run the businesses off. He stated that the increase would put the percentage higher than the State tax percentage which is 7.5%. Mr. Bonham stated that it sends the wrong signal to the new starting up businesses that may be coming in. Mr. Foster agreed. Mr. Bonham stated that with the increase of water rates that hits them both ways. He stated that the 2% does not look at anything but when you look at the whole picture it is a lot bigger. Mr. Bonham stated that 2% is too big of an increase on the meals tax. Mrs. Smith stated that at 5.5% meals tax they are looking at generating $31,000 less than what was projected at $8 million. She stated that there is still a shortfall there that could possibly be made up with the cigarette tax. Mrs. Smith stated that the Town collects about $40,000 per year via cigarette tax if they increased from $0.06 to $0.10 the Town would receive about $67,000 per year, if increased to $0.12 per pack then it would be almost $80,000 per year. Mr. Foster stated that if the tax was increased to $0.12 per pack the cigarettes would not sale. Mr. Boswell stated that is assuming the cigarette vendors stay in Chilhowie. He stated that there are places to go to in Seven Mile Ford to sell the cigarettes cheaper. Mr. Boswell stated that there is a point of diminishing return, prices increase a little then that can be held where it is, but if prices increase too much then the bottom drops out. Mr. Bonham stated that can happen with the meals tax as well. Mr. Boswell stated that he spoke with the Taco Bell s main office and he stated that the meals tax is 5% at this time. He inquired if it would make a difference to the Taco Bell if the meals tax was raised to 7%. He stated that the Taco Bell representative stated that it would not make any difference at all to them. Mr. Boswell stated that what they are looking at is deeper than 2%; their marketing department knows that McDonald s is making about $2 million per year. He stated that this store will be put in based on at least $1 million per year from that store. Their marketing concept is they are going to provide more food for someone s dollar. Mr. Boswell stated that they are very much aware that people love Taco Bell food or they hate it, there is no in-between. When someone walks into their store they are coming in for a product and the customer is looking at something for $0.99 and the cash register rings up $1.05 or $1.07 the customer does not really care, they came in for a product. Mr. Boswell stated that the meals tax appears to hit private restaurants, someone that has to raise the price. The larger chains that the Town collects most of its revenue from are driven by something different. Mrs. Spencer-Hill inquired about people buying cigarettes, if the price increases by a couple of cents, will the people pay attention to that. Mayor Heninger stated that what is going to hurt the Town is the fact the County does not have a tax. Mrs. Spencer-Hill related the cigarette tax to the meals tax where people really do not pay attention to the meals tax; she inquired if those purchasing cigarettes would notice a few cents difference. Mayor Heninger stated that the price is posted in the store and people do look at the price. Mary Heninger stated that smokers do look at the tax unlike those who go to a restaurant. She stated that the Town is collecting $0.60 per

6 carton and if they increase the tax the Town will not make the $0.40 extra cents, the Town will lose the $0.40. Mr. Foster stated at that rate that would probably be true, but they were thinking about increasing the rate by $0.02. Mr. Smith stated that $0.08 per pack and if the rate was increased by $0.02 that would be $53,000 for an additional $13,000. Mayor Heninger stated that if the rate was increased to $0.10 that would be too much of a jump at one time. Mr. Foster stated that the $0.02 would be the maximum since a person can go outside of the Town limits and Saltville is at $0.05. Mrs. Spencer-Hill inquired if the rate can even be changed at this time. Mr. Foster stated that it cannot. Mrs. Smith stated that it is something to think about and review. Mrs. Spencer-Hill inquired if the budget is passed does the Council have to wait until July 1 st to make any changes. Mr. Foster stated that the Council can pass it tonight and change it tomorrow. Mr. Boswell confirmed and stated that is as long as a Public Hearing is not involved. Mr. Cassell stated that the tax rate goes into effect July 1 st and the Council would not want to wait to break that to make it easier for the restaurants to write. Mrs. Henderson stated that it should be the first day of the month that it is passed. Mr. Foster inquired if the real estate tax rate and personal property tax rate have been reviewed. Mrs. Henderson stated that they bring in roughly $231,000. Mr. Boswell stated that real estate tax rate is $0.17. He reported that the Town of Glade Spring real estate tax is $0.23, Damascus is $0.46, Abingdon is $0.28 and Marion is $0.15. Mr. Boswell stated that these are the current rates; it does not include any increases that may be proposed. Mr. Foster inquired as to what Wytheville s real estate tax rate is currently. Mr. Boswell stated that it is $0.16. Mr. Foster stated that if the $231,000 is divided by the $0.17 comes out to about $13,600 per percent of tax rate. Mr. Foster stated that if the Town increased the rate by $0.01 the Town would gain another $13,000. Mr. Bonham inquired about the garbage fees and a potential increase. Mr. Boswell stated that at this time garbage is essentially paying for itself. Mr. Bonham inquired if the service provider had proposed any increased. Mr. Boswell stated no. Mrs. Smith inquired as to when the Town revised the garbage service provider several years ago was there a contract between the Town and the service provider. Mr. Boswell confirmed. Mrs. Smith inquired as to when the contract would expire. Mr. Boswell stated that it is probably past the expiration and the rates have not increased. Mr. Shortt inquired as to where the amount that has been spent on the Bonham House listed in the budget. Mrs. Henderson stated that it is under Buildings and Grounds. She stated that not that much have been spent on the Bonham House. Mr. Shortt inquired if the railing was not going to cost the Town $18,000. Mr. Boswell stated that has not been done yet and he has recently obtained a price from Paul Williams to replace the railing for $8,500. He stated that he has not seen what Mr. Williams plans to replace it with. Mr. Boswell stated that the question remains if Chilhowie should have to pick up all of that money. Mrs. Smith inquired about the expense of the fencing around the burn building. Chief Haynes stated that he is to obtain two different quotes over the next couple of days. Mrs. Smith inquired if he had a ballpark idea of a figure. Chief Haynes stated that he had obtained a quote about a

7 year ago for $17,000 but it is the same fence that is around the Waste Water Treatment Plant, but he does not know the cost per foot. He stated that it only has to be fenced on two sides since the VDOT fence and the Public Works fence is already in place. Mrs. Smith inquired as to how high the fence is. Chief Haynes stated that it is 8 foot. Mr. Shortt inquired about pest control. Mr. Boswell stated that they try to evaluate that each year and there is still a demand for the services within Town. Mr. Boswell stated that if the Council passed the budget with the 2% to take affect August 1 st, the budget is looking at 7% in July but the difference to find some place to reduce is about $3,452. He stated that gives the month of July to hold a Public Hearing and make a decision of what will be done August 1 st. Mr. Boswell stated that gets the budget off the table and Mrs. Henderson and himself would have to rebalance the budget but it is a very small amount because it is one month of a 2% increase. Mr. Clear inquired about the new Council members taking seat July 1 st. Mr. Cassell stated that they will have to take action and if they do not take action on August 1 st it stays at 7%. He stated that there is no legal problem on having a delayed impact on the tax; that is normal on most tax increases. Motion by Brent Foster, second by Lewis Shortt Council accepts the budget as is with the 2% increase for meals tax increase to go into effect August 1 st and transfer one police officer wage into the operating fund and all raises go into a wage contingency fund for the month of July to balance. The motion was approved with following recorded vote: Jim Bonham Aye Bill Clear Abstain Motion by Brent Foster, second by Cathy Smith Council will hold a Public Hearing July 10 th at 7 p.m. regarding cigarette tax up to $0.02 and meals tax possible reduction up to 2%. The motion was approved with following recorded vote: Mr. Boswell reported that there is a water customer that has called him recently. He reported that she is not overdue as of yet, her husband has cancer and she has had three people die recently in her family and she cannot pay the main bill until July 3 rd. Mr. Boswell suggested that this lady appear before Council this evening and she stated that she is 73 years old and has recently had open heart surgery and she required as to what her other choices were and he volunteered to bring the matter before Council. Mayor Heninger inquired if this person has ever been late in the past. Mr. Boswell stated that from time to time there have been billing issues. Mr. Shortt inquired as to how much the bill is. Mr. Boswell stated that she is current with the bill and she lives in Town and it is not an excessive amount. He stated that this is not the normal policy. Mr. Bonham stated that it seems like an extraordinary stream of events at one time, he suggested allowing extra time for payment.

8 Motion by Jim Bonham, second by Cathy Smith Council will extend time to pay due to extenuating circumstances. The motion was approved with following recorded vote: Mr. Boswell stated that if this customer has not paid by July 3 rd at 5 p.m. the water will be disconnected. Mr. Foster agreed. Mayor Heninger inquired if Mr. Boswell would inform the customer. Mr. Boswell confirmed. Gene Groseclose reported that there is a fire plug or fire hydrant on the west end of Town has been out of service for three or four months. He stated that it sits close to the Lyons Club building and the factory and it should be replaced. Mr. Boswell inquired if that is the hydrant that they are working with the insurance company and inquired if there is not another hydrant within 1,000 feet of the building. Chief Haynes stated that there is not another hydrant within 1,000 feet of the building. He stated that the hydrant Smyth County purchased and had installed at the EPOCH site is operational. Chief Haynes stated that the PDP building is 1,400 feet. Mr. Boswell stated that the hydrant that is out of service has been tied up with the insurance company but he will look into the matter. Mr. Groseclose stated that the hydrant should be put in and then worked with, those people live out there with no water protection. Mr. Boswell stated that if there is a hydrant in stock he will have it installed the next day. The matter of a request to enter into a Closed Session to discuss a personnel matter concerning the salaried personnel, as allowed under Section (A)(1) of the Code of Virginia, as amended, was brought on for discussion. Motion of Brent Foster, second by Cathy Smith Council hereby enters into Closed Session to discuss a personnel matter concerning salaried personnel, as allowed under Section (A)(1) of the Code of Virginia, as amended. The motion was approved with following recorded vote: Motion of Brent Foster, second by Cathy Smith Council hereby enters into Open Session. The motion was approved with following recorded vote: The Clerk polled each member that only the personnel matter concerning salaried personnel was allowed by Section (A) (1) of the Code of Virginia, as amended, was discussed. The motion was approved with following recorded vote:

9 Mr. Foster stated that at this time due to budget concerns Council would like to hold off on hiring any new Police officer until the budget is satisfied during the July meeting. Motion by Brent Foster, second by Bill Clear Council will hold off on new hires due to budget concerns. The motion was approved with following recorded vote: There being no further business, the meeting adjourned at 8:21 p.m. Mayor Gary L. Heninger Clerk Marlene L. Henderson