BUDGET, FINANCE & INVESTMENT COMMITTEE

 

November 8, 2001                                        6:15 P.M.                                        Courthouse

 

MINUTES:

 

Members Present:                              Others Present:                        Others Present:

Comm. Joyce Ealy                              Nancy Allen                              Jeff Sandvig

Comm. Paul Johnson                         Evans Maples                          Tim McLaughlin

Comm. Tina Jones                             Jennifer Gerhart                       Col. Virgil Gammon

Comm. Robert Peay                          Truman Jones                           Jeff Craig

Comm. Steve Sandlin                        Regina Nelson                         Joe McKenzie

Comm. Dwight Throneberry              Maj. Bob Asbury                      Bryan Brooks

Comm. Jimmy Evans, Chair.            Capt. Curtis Little                     Paul Long

                                                                                                                Elaine Cawthon

 

Chairman Jimmy Evans presided and called the meeting to order at 6:15 P.M. with all members being present at that time.

 

APPROVE MINUTES

The minutes of the October 4, 2001 meeting were presented for approval. 

Comm. Throneberry moved, seconded by Comm. Jones to approve the minutes as presented. 

The motion passed unanimously by acclamation. 

INVESTMENT REPORT

Mr. Evans Maples, Trustee, presented the monthly Investment Report and a Property Tax Collection Report for the use and information of the committee. 

Mr. Maples reported 4.13% of the 2001 property taxes have been collected compared to 3.76% for the same period last year.  He advised 96.99% of the 2000 property taxes have been collected. 

Mr. Maples reported the LGIP interest rate for the month was 2.48%.  Mr. Maples explained the investment transactions that occurred during the month. 

Comm. Ealy moved, seconded by Comm. Throneberry to approve the Investment Report as presented. 

The motion passed unanimously by acclamation. 

FUND CONDITION REPORT

Finance Director Paul Long presented the Fund Condition Report for the month ending October 31, 2001 for the use and information of the committee. 

Mr. Long advised the Development Tax collections for the month were $282,000 compared to $252,375 a year ago.  The year-to-date collections are $963,750 compared to $775,500 for the same period last year.  He advised this is the highest point of the collections as of October since the tax was first implemented. 

Mr. Long reviewed the cash balances for the various funds.  He advised the General Fund cash balance is significantly lower due to the fact the General Fund loaned the Employee Insurance Fund $1.5 million and also $1.1 million was contributed to the deficit in the Employee Insurance Fund. 

Mr. Long advised the General Purpose School Fund cash balance is down, because the fund has been drawn down and applied to some capital projects.  The total cash balances are $106,490,260, with operating funds being $59,746,617 and borrowed funds being $46,743,643.   

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Mr. Long advised a new account has been established in Fund 171, General Capital Projects, for the Animal Shelter, and the Development Tax Fund has been repaid for some of the start up expenses.  Bond proceeds were also deposited into the Siegel High School Account and several other school projects. 

Mr. Long reported there are no unusual conditions relative to expenditures to report at this time.  However, he advised the committee in reviewing the revenue situation, it appeared there was going to be a substantial shortfall in the area of idle interest earnings, as well as the state revenue that has already been discussed.  He reported if the interest rate holds around 2.5% for the remainder of the fiscal year, it might mean approximately a $2 million shortfall.  He advised it would be about $1 million for the General Fund, $600,000 for the General Purpose School Fund, and $300,000 for the Highway Department. 

Mr. Long reported that almost every department has submitted something to the County Executive in response to reducing their operating budgets by 5%.  He stated the submissions received totaled slightly less than $800,000.  He explained after backing out items that did not apply to the 5% reduction, such as contributions and state flow-through funds, it was calculated the 5% would amount to $1,858,000.  He reported in a lot of cases departments are so personnel heavy, they could not achieve a 5% reduction without layoffs.  He advised the departments were informed that it was not believed it was the intention of the Commission to lay anyone off at this time. 

A discussion was held regarding the Employee Insurance Fund cash balance and the changes that were made to the health insurance program. 

Following discussion, Comm. P. Johnson moved, seconded by Comm. Throneberry to accept the Fund Condition Report as presented. 

The motion passed unanimously by acclamation.

 

REPORT ON MISSING ASSETS:

 

Jeff Craig, Inventory Control, presented the Inventory Control Report for the fiscal year ending June 30, 2001. 

The Finance Director advised there were approximately $480 million in fixed assets that the Inventory Control Office is trying to maintain records on.   

Mr. Craig reported 99.9% of the assets searched for in this accounting period were accounted for. 

Comm. P. Johnson moved to take the report home to review it and ask Mr. Craig to come back next month to discuss it. 

Comm. Sandlin stated he would like to go through it and have Mr. Craig highlight some things. 

Comm. P. Johnson withdrew his motion. 

Mr. Craig reported the number of offices with missing assets was reduced this year.  Oakland High School was able to reduce their number of missing assets substantially.  Riverdale High School had some problems with missing band equipment.  He advised his office depends on the band instructor to provide a list of band instruments.  He reported, apparently, during the last three or four inventories, the list had not been updated.  When it was reviewed in detail this year, it was discovered there was a lot of band equipment that was not there.  He reported Mr. James at Riverdale is working hard to get the inventory updated.   

Mr. Craig advised there were 73 missing assets with a historical cost of $70,321.  The depreciated value was $7,517.   
 

Budget Minutes                                                November 8, 2001                              Page Three

 

 

Mr. Long advised some of the missing assets might have been missing for a long period of time.  He reported he did not think this would be a problem in the future. 

Comm. Sandlin moved, seconded by Comm. Peay to approve the Inventory Control Report as presented. 

The motion passed unanimously by roll call vote.

 

GENERAL FUND BUDGET AMENDMENTS

 

REGISTER OF DEEDS

Mrs. Jennifer Gerhart, Register of Deeds, requested approval of the following budget amendment to provide funding to pay a 10% customer satisfaction agreement relative to her computer system.  She advised failure to pay the bill was an oversight by both parties: 

            Increase Revenue:            101-43392 – Data Processing Fee-Register -            $5,500

 

            Increase Expend.:            101-51600-317 – Data Processing Services -            $5,500

 

Comm. Jones, moved, seconded by Comm. Throneberry to approve the budget amendment as requested. 

The motion passed unanimously by roll call vote.

 

FINANCE DEPARTMENT:

 

Finance Director Paul Long requested approval of the following budget transfer to provide adequate funding for the maintenance agreement on the copy machine.  He advised last year the overage on copies was 20,000 and this year the overage is 90,000 copies:
 

            From:            101-52100-169 – Part Time Personnel -            $535 

            To:                101-52100-334 – Maintenance Agreements -    $535

 

Comm. Sandlin moved, seconded by Comm. Throneberry to approve the budget transfer as requested. 

The motion passed unanimously by roll call vote.

 

SHERIFF’S DEPARTMENT

Regina Nelson, Chief Deputy requested approval of the following budget amendment to provide adequate funding for jury expenses:

 

            From:            101-39000 – Undesignated Fund Balance -             $5,000

            To:                101-54110-199 – Other Per Diem & Fees -              $5,000

 

Comm. Peay moved, seconded by Comm. Throneberry to approve the budget amendment as requested. 

The motion passed unanimously by roll call vote. 

Chief Nelson requested approval of the following budget amendment to appropriate a $250 donation from Nissan:

 

Increase Revenue:            101-44570 – Contributions & Gifts -                                $250
Increase Expend.:             101-54110-429 – Instructional Supplies & Materials -   $250

 

Budget Minutes                                                November 8, 2001                              Page Four

 

 

Comm. Ealy moved, seconded by Comm. Sandlin to approve the budget amendment to appropriate a $250 donation from Nissan. 

The motion passed unanimously by roll call vote. 

Chief Nelson requested approval of the following budget amendment to provide funding for the 2001 Local Law Enforcement Block Grant.  She advised the federal funds would be $41,502, and the matching funds would be $4,000 to $5,000, which will come from the Sheriff Department’s current operating budget:

 

            Increase Revenue:            101-47990 – Other Direct Federal Revenue -                     $41,502

            Increase Expend.:             101-54110-716 – Law Enforcement Equipment -               $41,502

 

Comm. Sandlin moved, seconded by Comm. Peay to approve the budget amendment for the funding for the Local Law Enforcement Block Grant as requested. 

The motion passed unanimously by roll call vote. 

Chief Nelson requested approval of the following budget amendment to provide additional funding for inmate bunk beds to maintain certification.  Major Asbury reported these are steel wall-mounted bunks:

 

            From:            101-39000 – Undesignated Fund Balance -             $30,000

            To:                101-54210-707 – Building Improvements -               $30,000

 

Comm. Sandlin moved, seconded by Comm. Peay to approve the budget amendment for the inmate bunk beds as requested. 

The motion passed unanimously by roll call vote.

 

DEBT SERVICE FUND BUDGET AMENDMENT

The Finance Director requested approval of the following budget amendment to appropriate funding for the principal and interest requirements on the $30.6 million General Obligation School and Public Improvement Bonds that were sold in October:

 

            From:   151-39000 – Undesignated Fund Balance -                                         $921,325

 

            To:       151-81100-601 – General Debt Service Principal on Bonds -            $  14,300

                        151-81100-603 – General Debt Service Interest on Bonds -                    36,373

                        151-81300-601 – Education Debt Service Principal on Bonds -            245,700

                        151-81300-603 – Education Debt Service Interest on Bonds -               624,952

 

Comm. Peay moved, seconded by Comm. Jones to approve the budget amendment for the principal and interest payment as requested. 

The motion passed unanimously by roll call vote.

 

SCHOOL BUILDING PROGRAM AMENDMENTS DEFERRED FROM OCTOBER

Mr. Jeff Sandvig and Mr. Tim McLaughlin addressed the committee regarding a request to transfer $15,000 from Siegel High School construction funds to Other Contracted Services for the purpose of inspecting the Siegel High School roof.  The committee deferred this item in October so that Mr. McLaughlin could be present to explain. 

Comm. Peay stated he believed it was the contractor’s job to make sure the sub-contractor installed the material correctly.  He said he did not understand why the School Board would want to spend more money to insure that the contractor is doing the job they are already being paid to do. 

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Mr. McLaughlin reported the general contractor is supposed to be overseeing quality.  However, he stated they have found that neither the general contractor nor the architect has experience in roofs.  He reported if someone does not look at the roof every day, it gets covered up.  He stated they continue to work, and without roof inspections, they end up with a roof that lasts five to six years.  He stated a rubber roof has a warranty of 10 to 15 years.  He stated roof warranties have little or no value.  He stated all a roof warranty says is if it leaks, they will fix it.  As a roof deteriorates, the contractor will continue to fix it, but if it is not installed correctly, it will continue to leak.  He said the same leaks happen over and over until the warranty expires, and then there has to be a full replacement.  He stated that since the School Board has started using roof inspections, they have accepted new schools that are leak-free.  He stated before that, they have never had a leak-free roof.  He reported Blackman High School has never been a leak-free roof.  He reported when you walk over a roof and see defects in a roof, the only way to correct them at that time is to cut out the problem and repair it.  He said if you catch the problem when the roof is being installed, it can be corrected at that time.  Mr. McLaughlin advised the warranty companies are suppose to inspect the roof at different phases of installing the roof, but he said it never happens.  He said the warranty companies never come out to inspect the roof until it is complete.  He said they do a walk-through and verify and okay the work.  Mr. McLaughlin stated $15,000 on a 300,000 square foot roof is a small amount to pay.  He said it is the best insurance you can buy.   

Relative to the geo-technical testing on Siegel High School, Mr. McLaughlin reported that previously all of the testing has been budgeted under the contractor’s contract.  He said the contractor pays his own inspector to come out and inspect it.  He said that does not work.  He said the inspection should come under the owner.   

Mr. McLaughlin advised that as far as the inspections he does himself, one-third of his time is devoted to new schools.  The rest is consumed with maintenance and capital projects.  He said his office is basically a two-man operation, and that he barely has enough time to get to all of the sites on a weekly basis.   

Mr. McLaughlin reported these items have been figured into the construction costs on each of the schools, but needs to be moved to a different category.   

Mr. McLaughlin advised the individual they have been hiring to perform the roof inspections is a very detailed person.  He does provide reports with pictures.  He stated he does check on him.   

Following discussion, Comm. Peay moved, seconded by Comm. Sandlin, to deny the request for $15,000 for the roof inspection for Siegel High School.

 

The motion passed by roll call vote with Commissioners P. Johnson, Peay, Sandlin, and Throneberry voting “yes”, and Commissioners Ealy, Jones and Evans voting “no”.

 

Mr. McLaughlin addressed the request to transfer $100,000 within the Siegel High School project from construction to Other Contracted Services for the purpose of performing earthwork, foundation soils, structural steel, paving/curbs, grout and concrete slab testing on the Siegel High School site.  AMEC submitted the lowest and best bid.  At the October meeting, the committee also deferred this item.

 

Mr. McLaughlin provided copies of the bid tabulations for the Siegel High School testing proposal.

 

Mr. McLaughlin advised these items used to be included in the general contractor’s bid.  However, he has pulled these items out on the last four projects.  He stated when these items are under the contractor, it basically means that he is testing himself. 

 

He advised AMEC used to be Ogden Environmental and was purchased by a larger company.

 

Comm. P. Johnson moved, seconded by Comm. Ealy to approve the $100,000 transfer from construction to Other Contracted Services within the Siegel High School project to perform the

Budget Minutes                                                November 8, 2001                              Page Six

 

 

earthwork, foundation soils, structural steel, paving/curbs, grout and concrete slab testing as requested.

 

Mr. McLaughlin reported he would like to continue to bid these services in this manner on all future projects.  He stated he believed this gives the School Board of Education better oversight.  He stated they could test when they need to test and do not have to depend on the contractor to test. 

 

A discussion was held as to whether the City or the County has inspectors that perform any of these services.  Mr. McLaughlin advised the State sends inspectors periodically.  He reported the City did have inspectors to oversee the Blackman Road, but they did not inspect the school, itself.

 

Comm. Peay stated he would like to have an answer to the question as to who has jurisdiction to inspect the school construction, whether it is the state, county, or city?  Mr. McLaughlin reported he would find out the answer.

 

Following discussion, the motion to approve the $100,000 transfer from construction to Other Contracted Services within the Siegel High School project to perform the earthwork, foundation soils, structural steel, paving/curbs, grout and concrete slab testing passed unanimously by roll call vote.

 

Comm. Ealy voiced her concern regarding the $15,000 for the roof inspection at Siegel High School that was denied.

 

Mr. McLaughlin reported there would be no inspection and that it was a mistake.  He stated there would be no daily inspection, and in a case such as Blackman High School, there are a lot of leaks.  He said when mistakes are found during construction, the contractor is made to tear it off right then and replace it.  Once it is covered, there is not much that can be done except patch it when it leaks.

 

A discussion was held regarding pitched metal roofs.  Mr. McLaughlin reported it would probably cost $4 to $5 more per square foot, but it should last 30 years.  He stated when you do have a leak, it is really hard to find.

 

REQUEST FOR FUNDING FOR SIEGEL HIGH STADIUM & BALL FIELDS AND EAGLEVILLE SOFTBALL FIELD:

 

Mr. Jeff Sandvig requested $65,000 be funded from the Siegel High School Construction line item for the design and geo-technical testing for the Siegel High School stadium and ball fields. 

Mr. Sandvig also requested $25,000 be funded from Phase II High School repairs for boundary and topographic surveys for the Eagleville Softball Field.   

Comm. Sandlin asked what the School Board was doing, or if they were doing anything regarding a 5% reduction in their budget? 

The Finance Director advised a mandate was not sent to the School Board to look at trying to achieve a 5% reduction.  He said next year is when the School Board might have problems if the State decides to keep the TVA Revenue Sharing money.  However, with the shortage in the interest earnings and the sales tax, the School Board could have a substantial shortage in revenue this year. 

Comm. Sandlin stated with the economy the way it is, and with the potential of a $2 million shortfall, he believed if the commission said no here and there, maybe there would not be a $2 million shortfall.  He stated he believed they needed to start somewhere.  He stated if something could be held off for another year, it might be better.  He stated he did not want to cut someone off from getting a stadium or field, but if this could be postponed for a year, it would help toward the county’s funding problems. 

Budget Minutes                                                November 8, 2001                              Page Seven 

 

Comm. P. Johnson moved, seconded by Comm. Sandlin to defer the request until further notice for the $65,000 for the design and geo-technical testing for the Siegel High Stadium & Ball Fields. 

Comm. Peay asked if the Siegel High Stadium would be shared with Siegel Middle School?  It was reported the two schools would share the stadium. 

Comm. Sandlin stated if the two ball fields were pulled out now, it does not mean they will not happen, but just not now.   He stated he did not want it to be forgotten, and would want to revisit it again in a year. 

Mr. McLaughlin advised if the stadium is begun in the spring, it does not give enough time to have them ready to play on in the fall. 

Mr. McLaughlin advised the $25,000 for Eagleville is not for a softball field.  He stated it is for a boundary survey for the land that was condemned.  Mr. McLaughlin stated Bob Reed, the County Engineer, performed a paper survey to identify the 18 acres.  Mr. McLaughlin stated a survey would have to be done before anything can be done on the property.  He stated there are two issues involved:  1.  The boundary of the outside of the property is not identified; and 2.  When the land was condemned, no one knew where the proposed new Highway 99 was going to go across the property that was condemned. 

Mr. McLaughlin stated Bob Reed could do all of it if he has the time. 

The committee discussed the fact that there was not really a need to have this survey performed until something is done on the property. 

Following discussion, the motion to defer until further notice the request to transfer $65,000 from the Siegel High School Construction line item for the design and geo-technical testing for the Siegel High School Stadium and ball fields passed by roll call vote with Commissioner Ealy voting “no”. 

Comm. P. Johnson moved, seconded by Comm. Ealy to defer until further notice the request for $25,000 to be funded from Phase II High School Repairs for the boundary and topographic survey on the Eagleville condemned property. 

The motion passed by roll call vote with Comm. Throneberry voting “no”.

 

REQUEST TO UTILIZE PHASE II HIGH SCHOOL REPAIR FUNDS TO REIMBURSE THE GENERAL PURPOSE SCHOOL FUND

Mr. McLaughlin advised at the Rock Springs Middle School there was excess rock that was going to be hauled off site by the contractor.  He stated the Town of Smyrna was originally going to use the rock on the road.  He stated they only used about one-half of the rock, so the contractor was going to haul it off site.   

Since there was a drainage problem at La Vergne High School, it was requested the rock be hauled to LaVergne High School.  Mr. McLaughlin also advised it was necessary to replace some topsoil and install a culvert under the stadium road. 

There is $47,835 remaining in the Phase II High School Repairs Account, and it was requested that this money be used to reimburse the General Purpose School Fund for the work performed. 

The Finance Director advised this work has already been performed, and it was paid for from the General Purpose School Fund.  He explained money that has been shared with the City of Murfreesboro has been used to pay for this project, and it is being requested that money that has not been shared with the City of Murfreesboro be used to replenish that.  He stated that is a good idea to do that whenever it is possible.

 

Budget Minutes                                                November 8, 2001                              Page Eight 

 

Comm. Sandlin moved, seconded by Comm. Throneberry to approve the request to fund $47,835 from Phase II High School Repairs to reimburse the General Purpose School Fund for utilizing the rock and to replace topsoil and install a culvert at LaVergne High School to correct a drainage problem. 

The motion passed unanimously by roll call vote.

 

RECOMMENDATION FROM PROPERTY MANAGEMENT COMMITTEE REGARDING SCHOOL LAND ACQUISTION FUND

Comm. Jones reported the Board of Education had requested the creation of a Land Acquisition Fund from the sale of surplus property to be used to purchase future school sites. 

Comm. Jones advised the Property Management Committee has recommended that proceeds from the sale of surplus land owned by the Board of Education be deposited into Fund 171, General Capital Projects Fund, and be designated for school land acquisition.  Further, upon request of the School Board for use of the funds it was recommend the funds be transferred to Fund 189, Other Capital Projects Fund.  Additionally, all new purchases will be in the name of Rutherford County.

Comm. Jones moved, seconded by Comm. Throneberry to approve the recommendation from the Property Management Committee as stated.

The motion passed unanimously by roll call vote.

 

UPDATE OF CAPITAL PROJECTIONS:

The Finance Director reported he has not completed this project.  He will be presenting something to the Health & Education Committee and will also present the same report to the Budget Committee at the next meeting.

 

RECOMMENDATION FROM STEERING COMMITTEE REGARDING RESOLUTION NAMING INNER CIRCLE:

The County Executive advised if the committee would like to follow through on the original resolution adopted in 1985 to name the inner circle around the Courthouse “Hugh Robinson Circle”, she could take care of it without appropriating any new dollars.

Comm. Throneberry moved, seconded by Comm. Sandlin to authorize the County Executive to follow through on the original resolution adopted in 1985 to name the inner circle around the Courthouse “Hugh Robinson Circle” and to purchase a plaque from existing funds.

The motion passed unanimously by acclamation.

 

ADJOURNMENT:

There being no further business to be presented at this time, Chairman Evans declared the meeting adjourned at 7:55 P.M.

 

________________________________________

Elaine Cawthon, Secretary

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