Agenda - 02-20-2018 8-a- Minutes

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 15 • In reply to a question from Commissioner Price, Mr. Myren said there is no requirement for the County to continue funding the Other Post - Employment Benefits (OPEB) account. In fact, last year the County did not make an OPEB contribution, he said. OPEB contributions could increase as the County's Full -Time Equivalent number increases. We know the potential liability and are including it on our balance sheet. Commissioner McKee said he feels the Board is obligated to fund OPEB. Ms. Hammersley said that everyone who is eligible is receiving their benefits. The OPEB account is a savings tool we have to ensure, if there are not enough "pay as you go" funds, then our retired employees would still be able to receive their benefits. We are one of only two counties in the state that maintain an OPEB account, she said. In states with greater economic challenges such as California and Michigan it is needed more. I'm not opposed to the idea of the account, she said, but there is a challenge to us when we're trying to figure out whether to serve residents or fund this savings account. Last year when we faced that challenge, we chose not to put additional money into the account. Commissioner McKee said he supported last year's decision, and that there is no guarantee that we will not be faced with the same economic challenges as the places where OPEB accounts are required. We have an ethical obligation to provide for the former employees we have made promises to, he said. Ms. Hammersley said that the County is indeed providing for them. • In reply to a question from Commissioner Price, Mr. Myren said that "the break" anticipated in new technology projects means the County will complete innovations that already have been budgeted. This will enable the administration to continue with improvements that will pose no burden on the budget. • In reply to a question from Commissioner Dorosin, Mr. Myren said that a one -time increase in the property tax rate of 4.56 cents would be combined with increased revenues from other sources and /or reductions in expenditures. • In reply to a question from Commissioner McKee, Mr. Myren said that Sportsplex operations are indeed generating a surplus. The surplus is plowed back into operations to help the organization absorb operational cost increases and stabilize its user fees. • In reply to a question from Commissioner Dorosin, Mr. Myren said the County's current practice is to recapture through fees a little better than 80% of the costs of issuing building and inspections permits. • In reply to question from Commissioner Burroughs, Mr. Myren said the long term debt capacity model he presented — in which as much as $200M of additional borrowing over six years begins to be available in FY2024 -25 if the County chooses to maintain $35M in debt capacity — also assumes one of the two tax increase scenarios he presented earlier. • Commissioner McKee said that the state of local school facilities, the increasing age of County facilities, and population increases will require continued or increased capital investment by the County over time. He asked the County staff to provide information on what the expected demand will be for school and County facilities into the future, and how that will impact borrowing and the tax rate. Ms. Hammersley said the chart on Capital Budget Planning — Long Term Debt Capacity Model illustrates when (i.e., FY2024 -25) the County could afford to do another bond referendum if the Board so chooses. • In reply to a question from Commissioner Price, Mr. Myren explained that while both of the tax - increase scenarios are designed to pay for peak debt service ($39M) in FY2021 -22, the one -time tax increase generates more than is needed in the year it's collected. The additional revenue from the one -time increase would be placed in a capital reserve account to pay for the debt service when it peaks. The incremental model collects revenue to cover expenses "as you go" each year they are in effect. Travis Myren's presentation ended and the group continued its discussion: