Minutes 01-22-2015 - Laserfiche WebLink

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Chair McKee referred to Bonnie Hammersley's response to a question from a commissioner in reference to the Chapel Hill Carrboro City Schools (CHCCS) request of $750,000 for older schools, as included below: "My reluctance for recommending additional funds to the schools at this time is threefold. One, I am always concerned about appropriating additional funds, even from fund balance, outside of the normal budget process. Even if the purpose is worthy, as the CHCCS request is, it gives special treatment to that request when competing requests cannot be equally considered. To do so, would necessitate conducting a mini budget process. As I am sure you know the County has a number of needs that go unmet every year that should be considered as well. It has been reported that state revenues are coming in lower than expected which might necessitate that we appropriate more in county funds to avoid further reductions. Two, as you suggest, with only 6 months into the fiscal year, we do not have a good idea of where we will end up at year- end. Although, I am sure we won't have a problem with keeping the budget balanced, I wouldn't want to end up with a fund balance at year-end lower than what the credit rating agencies consider necessary or prudent to maintain our credit rating. The County just earned our third AAA rating this past summer, which helps ensure reasonable borrowing costs for both the County and schools. Third, as with any budget there are uncertainties that may result in urgent or unexpected requirements that the county has to fund and we need to be in a position of having funds available to meet those needs. At the January 27 BOCC work session, I will provide more information on the upcoming budget revenue and expenditure projections." Bonnie Hammersley said she and Clarence Grier felt it was also important, with the $450,000, to restore the social justice fund, as all of this fund money has been fully allocated and the childcare issue may not be fully resolved. Commissioner porosin asked if the $59 million in outstanding liability for OPEB is a static amount, or if it changes every year. Clarence Grier said it changes every year based on actuarial assumptions of employees coming on to the plan and those retiring. He said over the next 4 to 5 years the liability should come down. Commissioner porosin said the state wants local governments to make deposits into this fund, and he asked if there is a formal requirement or time for the contribution of specific amounts. Clarence Grier said no. He said the state would like for the County to fund at least 90 percent. He said Orange County is one of very few counties in the state that are making actual contributions to the OPEB fund. He said this will become an issue over the next couple of years, as there is a new standard out for pension liabilities that is the same as the OPEB liabilities. He thinks there may be more stringent requirements about contributions for both of these at that time. Commissioner porosin asked if the coverage is ten percent. Clarence Grier said yes. Commissioner porosin asked if there is a formal policy as to what the Board of County Commissioners should be contributing. Bonnie Hammersley said Orange County does not currently have a policy regarding OPEB; however, she will be looking at this during their budget process. She said this is important, and 10 percent is not a good number, so it is important to have a policy. Clarence Grier said one of the stipulations from the bond agency a few years ago was that Orange County needed to decide how to address OPEB. Commissioner porosin said there is an impression in the public that excess fund balance is found money, and then everyone wants a piece of the pie. He said it would be easier to address this if there was some structure or policy in place. He appreciates that this is going to be more formalized, and he thinks it is important.