Commissioners - Regular Meeting

This morning, I'd like to reconvene.

We've got a pretty busy schedule today. And if you notice, we have time allocations on the agenda. We're not going to press real firm on that, but out of respect for everybody's time and the working men and women out here, subconsciously, I do want to kind of follow the agenda. And I do ask that we let the presenters present, and let's kind of hold our questions towards the end, and that way we can try to expedite this the best we can. All right. Welcome, Mr. Cabe, and starting off the fiscal year 26-27 budget work session with Coliseum Gorge Fire Department. Ms. Glenda Cook, good morning.

Good morning. Thank you for your time. The purpose of me being here today is to request nine-tenths of a cent increase on our fire tax. The reason for the increase, the request for the increase is to replace aging life-saving equipment Maintaining vehicles and facilities, recruiting and retaining qualified personnel, meeting state and federal safety standards. I have given each of you a packet that Mary did lay on your desk that you can see. Also, new volunteer firefighters require training, cost of maintaining the new LAJ substation, which we got our certificate of occupancy on in February. And this would also provide a sustainable and predictable source of funding, allowing us to plan effectively and continue protecting lives and property without interruption. You can see our 26-27 proposed budget. I did show this at our community meeting, and I dare say that we're probably the only fire department in Macon County that has put their budget up for their community to see. I did put this budget up so everyone could see it. What I have done is I have grouped employment and personnel expenditures together. We lost our two paid firefighters. One came to work for Macon County. And the reason he came to work for Macon County was for benefits, because at the time we were providing zero benefits to our paid firefighters. And as we all know, benefits are a big drive right now. The other paid firefighter resigned. So now we have put in our budget for a paid firefighter, and part-time benefits, part-time there to cover this paid firefighter when he takes off for sickness, vacation, or any other requests. We have not included any overtime in there because we are going to try to cut that from the budget. Overtime can become a big expense and also comp time can become a very big expense. So we are going to try to cut that. We are going to try to hire outside our department if possible because hiring within the department can also cause problems. Fire call payments, we do try to reimburse our volunteer firefighters for answering fire calls due to the increase of fuel expense, and wear and tear on their vehicles and because it is an incentive to try to get volunteer firefighters out to answer calls. We all know that it is becoming more and more of a problem to have volunteer firefighters serve. Volunteers serving has become less and less over the years. We have also the FICA tax. We have included that. We have got that down to the penny to line up with our salary for a paid firefighter. We have also retirement. We have included that in our budget. We are looking at providing a simple IRA for our paid firefighter. To retain a paid firefighter, we're going to have to provide benefits. We cannot expect someone to come to work for us and not provide benefits for them. It's just not going to happen. We're just going to have to provide them health insurance. looking at hiring one paid firefighter, we're going to have to go through the Affordable Care Act, which you as employers, if you provide health insurance, you know it's not cheap. So I sought out, talked to some of the insurance companies in the area, and to go through the Affordable Care Act. And we figured a smoker, nonsmoker, and I did an age group. And to find out what it would cost to hire someone in that age group, you know, we came up with a $9,000 premium for the year. It's not cheap. But we are going to have to provide these benefits to draw someone to this job. Workers' compensation. When Barry and John came to our meeting, the state had always paid workers' comp for volunteer firefighters. We just got notification last week. The state's not going to pay it for us this year. I said they may not. Well, guess what? We got notification they're not going to. And I said workers' comp's not going to be cheap. We had budgeted $7,500. That's just barely going to cover it. So we are going to have to pay workers' comp. We don't know if the state will ever put it back in the budget to cover for volunteer firefighters. That may be something that we need to go and start fighting for again. Training, we know that we have to train. Coliseum decided this year You know, we're not sending people to the coast. Before, the prior administration had been sending people to the coast to train. Absolutely not. That will not happen anymore. We will use Southwestern Community College. We have connections there. And I will be pushing for them to provide classes to us. I know folks there. I know instructors. I will be pushing. for them to provide classes to us. At our department, we would do joint training with other departments. But there are classes in Marion. There are classes at Tri-County Community Colleges. If our firefighters can drive, they will drive. I don't mean to sound mean, but you can drive to Tri-County Community College. You don't need to stay in a hotel. You can get up at 5 o'clock in the morning and you can drive to your class. Yes, we'll feed you, we'll provide you a fire department vehicle and you can drive. We had seven folks go to Marion. A hotel room to stay for three nights was going to be over $1,400. I said, absolutely not. We'll find an Airbnb. We found an Airbnb for $720. We all stayed in that Airbnb together. And we all ate at reasonable places. We don't go out for steak anymore. That stopped. That will not happen anymore. Not at this department. It stopped. It came to a dead halt. Uniforms and turnout gear with aging equipment. We have turnout gear that is aging. It is old. And we have to budget for If a firefighter has the loss of turnout gear in a fire, which can happen, if it becomes damaged, it has to be replaced. A set of turnout gear can cost you around $10,000. If we hire a paid firefighter and have to outfit him in turnout gear, there you go. We've got to buy him a set of turnout gear. He has to be outfitted. He also has to be fit tested to make sure that he has a perfect fit for his air pack. As far as uniforms, you know, the firefighter does, the paid firefighter does have to dress appropriately. He is not going to wear everyday clothing and represent our fire department going into someone's home. He is going to wear duty gear and represent our fire department well. He will be expected to groom daily and wear a decent uniform. Dues and subscriptions, these are dues we have to pay the North Carolina State Firemen's Association yearly, North Carolina Rescue Commission, and also our retirement to the state of North Carolina. We do not have to pay this on any retired firemen that's still actively duty. in active duty, but anyone who earns their 36 hours per year, we pay $181 to the state now so that they, if they serve their 20 years, then they will get their retirement at the end of the 20 years. So that's what the dues and subscriptions are. That's not subscriptions to magazines or anything like that. We do not do that at our department. Does anybody have any questions on that at all? Okay. To the next page, property and liability insurance. $32,000, I just paid that, so I do know what it is. Next year, we all know there's about a 5% increase. So there will be an increase to that next year. But I did put 32,000 in there. That is what it is. Office supplies. Office supplies, that includes our paper, copiers, things like that that we have to use for the fire department. Printing off any certificates because we do have to keep up with those when the Office of State Fire Marshal comes in to inspect us. Operating supplies, our operating supplies include anything for daily use. as far as paper towels, toilet paper, soap for our extractor, which when I talk to Warren, I think our department may be the only department that has an extractor possibly to wash fire gear in Franklin, in Macon County. Turnout gear needs to be washed after a structure fire to protect your firefighters from toxins that cause cancer. The soap to wash this turnout gear is not cheap. It comes in five gallon buckets. It's not cheap. But that extractor is open to any fire department in Macon County to use. I don't want a firefighter in Macon County to end up with cancer because his turnout gear wasn't washed. I expect us to take care of our firefighters. I don't care what department they're from. If they want to come from Nantahala and use it, you come to my department, our department. It's not my department, our department. You use our extractor. You're welcome to it. We've even got a dryer, a PPE dryer you can dry it in. Our department is the county's department. We're here for everybody in Macon County. We're here as one. We're not just Coliseum, we are Macon County. And anything we have, if you have a truck go down, and if we got a truck to help you out, we're gonna share with you. We don't need to be stingy with what we have. We need to help each other out. We need to become a brotherhood. Each department in Macon County, we need to come together and be a cohesive team, be one. But our operating supplies are here to help each other. Fire foam, if you run out of fire foam and you need some, do you get some? We'll share with you, then replace ours when you get yours back. That's all we ask. That's how we should work together. Medical supplies, usually EMS will replace what we use because we buy a stock when we start. And if we use something, they'll replace it when they're on scene. We help each other out. Telephone and internet, that's a given. We have to have it. We went to Starlink when Hurricane Helene came through. We use our Starlink. We've not had any problem with it. We use internet telephone. So hopefully if we have another situation like Hurricane Helene or Peaks Creek, Hurricane Ivan that came three years ago, hopefully we'll have communication. We won't be down. Do we have a guarantee? Nobody has a guarantee. But we hope now that we will always have communication. Utilities and electricity, that's just a given. All of this has to go up because of inflation. We have no choice. It has to go up. Heating fuel, wow. Did anybody's go down? I don't think anybody's went down. Gasoline, diesel, and lubricants for our vehicles. We all know that that's not going down. And on the news this morning, they said gasoline could be $5 a gallon by the end of next month. Gasoline is $5 a gallon. What's diesel fuel going to be? Josh, what's it going to be? I know. It's going to be out of sight. It's going to be unbelievable. I am scared to death of what it's going to be. And Coliseum is on their fourth structure fire in six months, which is very abnormal. I think Warren would agree with that. That is, we've never, I don't think ever in the history of Coliseum have had four structure fires. that close, that quick. I don't think we've ever had four structure fires in a physical year. Very unheard of. And when those trucks set and run for a long period of time, and you had to put diesel fuel through them and death fluid, you're talking about some money going through a truck. Repairs and maintenance to equipment. Yes, we've got one new truck sitting in our station that we just got our tanker. And everybody likes it because Franklin even likes to use it on calls. They like that truck. We've got a new engine coming at the end of the year, made by the same company. But we still have some older trucks. Those older trucks are costing us money. use. So we do have to put money into them. Thank heavens we've got some guys that can work on those trucks. We do try to save money by taking them to folks ourselves, driving them, rather than them coming to us to work on them. Repairs and maintenance to buildings, we've got $5,000 in there. The reason That went down considerably is because we have, or stayed the same, is because we finished that substation. We're hoping that everything's going to stay to a minimum now. We do our maintenance as it comes along. Non-capital equipment, $20,000 we've got in there. It's like I told Barry and John in our meeting. Our air packs, what happened at Coliseum? They put in for a grant, purchased all these air packs at one time. So you purchase air packs at one time, what happens? They all go out of date at one time. An air pack costs you $10,000. What's 10 air packs going to cost you? Can we afford that at one time? Absolutely not. My goal is to start replacing things and stagger them to where we can afford them. So, two air packs, non-capital. Capital equipment, I put two more air packs in there. We're going to get four air packs this year. Make sense? Get four this year. We got four. Then next year, maybe get four more. You don't have 10 going out of date at one time. Capital improvements, I've got $4,450 in there. We've got a hole in a metal roof we found that a tree limb went through. We're going to have to fix that. It's coming down, and when it rains, it's coming in, and it's coming, the water's coming in, where turnout gear hangs in lockers. It's got to be fixed. No questions asked. That's what I have in there. Loan payments, $104,580. That is down to the penny of what the loan payment's going to be for the two new trucks. So you turn to the next page, the impact to property taxes of what I'm asking for the nine-tenths of a cent. On the $300,000 home, at the current rate of where we were at, at the 0.48 per 100, the current tax rate was costing the homeowner $144. Under the requested rate, you go up to the 0.57. It would go up to $171. The difference is $27 annual or $2.25 a month. $2.25 a month to provide the services we provide. take care of their homes, and provide life safety for them. That's not a lot of money. We're not asking for a lot. I also called GSI and I said, you know, help me out here. I need a wide range of homes. I need big. I need a high dollar down to a low dollar home. So if you turn the pages and you start looking, they come up with a $600 an $18,960 home. That homeowner would have a $55.71 increase. That's not a lot of money for a year. Then a $196,000 home, $17.68. Then you come on down to $313,770, $28.24 increase. So I put some examples in there, and I laid these out the night on the table of our meeting. So I was very transparent with our folks. And then a $479,310 home. So I laid several examples out, a $500,000 home. $45.74 increase. So folks had an idea of what it would cost them. We had one lady in the meeting. She said, I really didn't understand until I could see it, until she could visualize it. So she was able to visualize what it would cost her. So when you can visualize what it costs you for what you're getting, it's really not a lot of money. So, and the residents of the Ellijay community, with the 9S rating that they'll be getting, they'll see a reduction in their fire insurance. They will be saving a considerable amount of money. You're looking at 2,500 to 2,600 homes. It's more than 2,600. But those folks are going to see a considerable difference in their fire insurance or homeowners insurance. We've taken this tax request into serious consideration. Why didn't I ask for a whole penny? Some people laughed at me and said, why are you asking for 9 tenths of a cent? I'm not going to ask for more than I need. I'm not going to take more out of somebody's pocket than I need. I'm only asking for what our department needs. That's why I'm here today is just to ask for what we need. If you would consider this, you'd be investing in the safety, the resilience, and the well-being of our entire community. We have also come up with a grant plan to apply for two to four grants per year. We will apply for the 50-50 grants through the state. We're also looking at the federal grants that are available to us. This would also help, there's private grants out there that we can apply for. This would also help us with the role of the county funding. It would stabilize our county funding. It would ensure uninterrupted fire protection service. It would support grant eligibility and required matches when applicable. It would demonstrate local commitment, which strengthens grant application. It would reduce resilience on unpredictable external funding. And the grants would be used to enhance, not replace our local funding. It would only be there to help enhance. our local funding. The use of the grants would be used to purchase firefighter PPE and safety equipment for training and certification costs, communication equipment and radios, operational equipment that improves response capabilities, and community risk reduction and fire prevention initiatives. We have also come up with a community engagement fundraising ideas. We've come up with a community pancake breakfast or barbecues, family friendly community building, touch a truck safety day. Have a day where we have fire departments, law enforcement, all aspects of public safety meet together and have something where our community can be involved. or Chili Challenge, a Friends of the Fire Department program where folks can sponsor and have something, a sponsorship put on the truck. There's different things. Business sponsorship program. So there are things, social media that we're looking at. There are things we have thought ahead of now. We're not just sitting back. We are thinking ahead. The last thing I did include in your packet that you requested of us last June is the letter from the forensic attorney where he is working on the audit. I cannot guarantee you by June 9th he will have that completed, but I have requested when we started this with him, when this is completed, to send a letter to the county commissioners to warn Cabe to Coliseum Gorge Fire and Rescue and to the Board President of Coliseum Fire Department with me right now. So anything found in this forensic audit, if anything is found, will be pursued, will be discussed with Mr. Cabe and with our Board of Commissioners. And I thank you for your time today. Any questions?

I'm going to have a really hard time keeping on track here. Is there any quick burning questions we have for Ms. Cook? We want to save that for general discussion.

Real quick, just so we're all on the same page. In your budget, you've got FY24-25 actual. You've got 25-26 budget. And then you've got your 25, 26, actual, and then your projected.

Mm-hm.

Are those numbers to be added together?

The actual and the projected?

Yes, or is it ending at the projected? My question is, is if you go on down to some of these, you're- We've still got a lot of money left. Well, it doesn't even, it just looks like you're projected. Say, let's go with utilities. 54, 55 for your actual, and then your projected is 2,044, so that's quite a difference.

That's what we've got left to pay out to the end of the year.

Okay, so those two would be added together, is what you're saying?

This is what we've paid out is the 54, 55, 44. Okay. What we've got left to pay out for the rest of the year is the 20, 44, 56.

Can you explain these negatives?

I knew you were going to ask that. We had a treasurer for 30 years, and the only thing that I have to go on is the QuickBooks that she had. I had the accountant to come over with us, and she had numbers put Things put where things shouldn't have been put. She didn't understand QuickBooks. That's all been corrected. Fuel, things like that. Operating expenses, things that shouldn't have been in operating expenses were being put in operating expenses. We have corrected all of that. I can't go back and correct all of that for this fiscal year. We would be going back and moving tons of stuff. Going forward, I can tell you this is all corrected. Starting in January, this is all corrected. We have moved fuel for each truck. We will be able to tell you what truck got how much fuel, what building used, how much electricity, everything. What maintenance was done on what truck, what it cost for each vehicle, everything. But the negatives that were caused by the previous treasurer, I can give you everything in QuickBooks. The forensic auditor's got it.

Well, speaking of that, I think, you know, just looking at a quick glance, and I don't know if this is the appropriate time or what we're trying to do here, but It's really hard, as much as you want, I would love to give you an increase or whatever you're asking for. It's really hard to do that without the results of that forensic audit. So I think we need, in my opinion, we need to defer that until we get those results.

The capital equipment and the capital improvements, I'm going to say that's going to have to be in that building. The L.A.J. building, which they kept just pouring money into on the L.A.J. side.

And again, I think it's alarming to have these numbers and not know where it's at. Yeah. Until we get that forensic audit, I don't know that.

And I can have our accounting folks between now and the night of June, I can have them go back because I'll tell you what they did. They requested the bank statements from us to be able to help us out with that. They requested the bank statements to do that. I can see that for sure. get that, you know, if they can get that sorted out, it's going to take some work. But, oh man.

I've got one more comment. You know, an inch of rain can cost $100,000 in mold and sheetrock repair. I'd feel a lot better if somebody were to tarp that roof or put a bit of thing or a zip tape patch over it or

Mm-hm.

It's going to rain the next five or six days, we hope.

Right, and it's been taken care of right now.

Okay.

It has been taken care of.

All right.

Yeah, when we discovered the problem, it was taken care of. Yeah.

Chairman, if I may, Linda, what is the rate of pay that you guys are proposing per call to your volunteers?

It's $16.

per call. And you have average of how many calls per year?

Last year we had 494 calls.

400. And that includes all, every time your pager goes off? Yes.

Whether it's medical or... Medical, fire.

Okay. The next question is, and thank you for that, why did the training increase if you're going to spend most of your time trying to get your training at SCC? Because that increased by 300%?

We have multiple new firefighters. Okay. Multiple new firefighters. And you start sending multiple firefighters to Tri-County to train, which they will be going to Tri-County. You feed them lunch. You know, we have to feed them when they go. But when we go, we send them. They don't get a free ticket. We use the IRS per diem. They don't get the free ride anymore. And you pay out of your own pocket first, and you get reimbursed. There's an expense sheet that they have to complete and turn the receipts in.

Thank you. How many sets of turnout gear was purchased fiscal year 24-25 at the expense of a cost of $68,817.12?

I would dare say it was probably 20 sets that was bought under a grant. And we did get a grant last year from Hurricane Helene, got a $50,000 grant, and that was used to outfit the tanker we got.

Okay, so, all right. When you were talking about the $30,000 for uniforms and turnout gear, that increased.

Considerably.

2800% for this fiscal year budget request. And the next and the last thing is, at the end of this fiscal year, as of June 30th, 2026, what is projected that you will have in an undesignated fund balance?

We don't have a truck break down. I am hoping, I'm hoping We can have around $75,000. I'm hoping if we don't have a truck breakdown.

You will have $75,000 in your request for your needs this year.

I can't guarantee that.

Right, but your request for this tax increase is basically what your... what you're saying you're going to need or asking for for the 26th, 27th.

Right. But I can't guarantee that because we do have a truck that has a problem. Okay. We do have one truck that has a problem right now.

We've got to get work done. All right. Thank you. Thank you. All right. Highlands Fire and Rescue. I see Mr. Gerhardt.

Maybe his replacement. Good morning, sir. Good. How are you? Good morning, Commissioners. My name is Ryan Gerhardt, Chief of Highlands Fire and Rescue. Thank you for allowing me to come this morning before you to discuss our annual budget. As we approached the budget season in March, town manager Josh Ward, town commissioner Eric Pearson and I began discussing different needs for the fire department and how those needs would be met. We felt like we would have to have a service fee increase to accommodate the different things that the department was needing or is needing. Throughout budget sessions with the town board, We've worked out some numbers they approved those numbers and approved an increase I Set up a meeting with John at the end Josh and Eric at the fire department and I Just wanted to look over the potential increase and get guidance from Commissioner Sherrill on how to proceed. His suggestion was to have a public information meeting for anyone to attend and see what the proposal would be, ask questions, voice concerns, et cetera. That meeting was held on March 31st, which some of you attended. There were a few community members present from various parts of our district, none of which voiced any opposition. We have two main reasons for this request today. In 2025, Highlands Fire and Rescue had 946 calls for service. 16.28% of the calls received were overlapping calls, meaning we were paid to call While we were on that call, we get paged out for a second call. Of the 946, 154 call, I'm sorry. So yes, 154 of the 946 were overlapping. That's the need for a third firefighter on each shift. A third firefighter would allow for the station to be covered while the other two firefighters are on a call. The third firefighter could also deploy a second fire apparatus out of the station a little quicker in the event of an overlapping call. A lot of what we're seeing is going on mutual aid calls. We have mutual aid agreements with four other departments. So we have Cashers, Glenville, Scaly Mountain, and Satola down in Rabun County. So the way it is right now during the day, we have eight full-time employees. Six are shift workers 24 hours a day, three shifts. Two administrative, myself and my assistant. We have 21 volunteers. We're experiencing a continual rise in our call volume. The calls have increased 68.33% from 2020. To make matters more difficult for us, although we do have some very committed volunteers, we're also experiencing a decrease in volunteer response. Don't feel like that is a local trend to Highlands, but across the board. We cover 69.9 square miles. As I said, we have four mutual aid agreements. As you know, we're on top of the mountain, so it takes a little bit of time for help to get to us. Cashers Glenville has six people during the day, four that work 24 hours per shift. We respond almost weekly to help them or vice versa. As I said, Rabun County is all volunteer. Sky Valley, Scaly Mountain has daytime staffing, and the Coliseum Gorge has daytime staffing as well. Under the current system, when Highlands Fire and Rescue gets a mutual aid request to respond to one of our mutual aid departments, both paid staff will leave and assist, along with any volunteers that are available to go, thus leaving our station unmanned. and our district shorthanded. We would like to add a third firefighter per shift so that our fire district is not left uncovered. Two can go into mutual aid and one can stand by at our station to cover further calls. The second item that we see a need in is our fire apparatus. We'd like to start purchasing some new apparatus not just because we want new ones. NFPA is recommending now 15 years. After 15 years, it goes into a reserve status. After 25 years, it goes offline. Currently, our two frontline engines are an 04 and an 06 model. Current pricing on a new fire engine varies anywhere from $500,000 to $800,000. 800,000-plus. We're needing to start replacing several trucks over the next few years, so we would like to get that into a cycle. In closing, Highlands Fire and Rescue is charged with providing protection to properties and structures valued at just shy of $6.1 billion. In order to provide a high quality of coverage and protection to these property owners in the Highlands District, as well as maintaining a low ISO rating to retain low fire insurance premiums, Highlands Fire and Rescue is respectfully requesting a two cent increase per $100 evaluation. That would bring our service fee up to 0.0391 per 100 compared to the current 0191.

Thank you, Mr. Gearhart.

Mr. Gearhart, do you have some samples that we could compile with that? Do you have any information for us?

As far as for the budget?

Yeah, I heard what you just read there. Do you have anything for us that we could review?

I did not bring anything. I can get that to you. I can email you those. You're talking like the call volume and such?

Right, just it's easier for me when I go back and review what you're talking about.

Correct.

And I think the mutual aid was a question I had. If we're compensating for mutual aid, or is that just a gift to another county, mutual aid is?

From my knowledge, it's just give and take. If we go help them, they come help us.

Can we make a copy of this? Thank you, sir. Got you covered. Thank you, sir.

Anything else?

My memory can't hold all that in my head.

I completely understand.

Chief, what is the cost for the three additional firefighters?

I'll make a copy.

I believe roughly $100,000 per person. $300,000? Yes, sir.

Didn't you guys just have a pump test? on all of your apparatus? We did. And did any of them fail? No. Did you, do you have a list that you could provide of the engine hours and hours on these trucks that you're talking about replacing?

I can get those for you.

I do not have them on me. Your undesignated fund balance at the end of 25-26 is how much? $1.4 million in undesignated. You know, this goes right back to, and this is part of a discussion that could be at the end, but this is also going back to, what we've talked about with volunteerism, especially in the fire service. It's dying. Now, my tenure on the Highlands Fire Department, when you joined, if you didn't participate in training and calls, you were booted. I don't think that's an option anymore to keep the numbers up for the roster of the fire departments. So regardless of whether you show up or you don't show up, in order to keep the numbers there, and it's really not training, is that correct? I mean, it's really on actual calls. Well, that's where the rubber meets the road. It don't matter how much training you've got, if you're not going to participate in the call, then... And, I mean, I have...

We pay $15 a call across the board, medical, fire, whatever. It doesn't matter if it lasts five minutes or an hour and a half. We're considering changing that, upping that a little bit to, obviously, as was said before, fuel prices, so on and so forth. But I've asked a couple of the guys, I'm like, you know, what would it take for you to be able to start responding to calls? The answer is there is really nothing. I don't necessarily have the time. Time is a huge factor for people. I mean, we got some young guys that are raising families. I mean, they're got one, you all know him, he's got five boys. I mean, that's hard to respond. His wife is a big player at the hospital. That's a huge, when he was younger, he was a great volunteer, was a very active volunteer. Well, now he's having to raise his family, you know, so that's hard for him to take the time to, he can't leave his sons, to come on a call. So that's a huge thing that we're fighting right now.

And also, this is not unique to Highlands Fire Department, Macon County, the state of North Carolina. This is impacting this entire country for emergency services. And I don't know what the answer is.

It's odd you say that, Commissioner. About three weeks ago, I had a guy stop in the department just to chit-chat and see the station, whatever. He's from Arkansas. And I asked him, I said, what is y'all's biggest challenge? He said volunteer response. I had not said anything about it. That was his number one issue.

And also, full-paid fire departments are not, a lot of them are not being able to retain a full fire service, even when they're paid. Right.

And so... We went to the school for the career day. I mean, we've done everything to try to get some younger folks to come and There's just no interest.

Mr. So, back to Commissioner Shields' question about mutual aid. Mutual aid companies to each department is absolutely necessary, regardless whether Highlands goes to Jackson County, Highlands goes to Raven County. I mean, if without mutual aid, it would be extremely hard to provide fire service. And so it is a fantastic agreement. And I don't think one county gets less attention or less fire department, which brings to the next. There was a call in Colosagia Fire District just here recently, a structure fire. How many mutual aid companies were actually involved in that structure fire down right there at Jackson Hole? Oh, you didn't?

I was not present.

Oh, okay. So it was Franklin, Coliseum? Franklin, Coliseum, Highlands, and Clark's Chapel, I think. So four mutual aid companies responded to that one structure fire. And especially in the rural fire departments where there are no hydrants, all that water has to be pumped out of the river and hauled in and either dumped in a dump tank or – apparatus is hooked together to pump so that is the I mean it's it's absolutely necessary so and also one more thing your response during the daytime is greater than it is at night right because you have some firemen that are from other fire districts in Macon County that work in Highlands that can participate in your calls. Yes. That is correct.

Do you notice a difference in departments where you have a junior firefighter program, like volunteer, but in numbers up higher in those departments?

potentially yes and we have tried we matter fact we have two juniors right now one's a senior in high school so in when he graduates will vote on him and he'll be and he last year made more calls than pretty good percentage of our adult volunteers as a junior

Yes.

So he went through the academy at Southwestern, which was a great thing with the high school. So he likes his hazmat being a fully certified firefighter. He is very into it, but those kids are hard to find. I've had that problem. It's hard to find.

I BRING THAT UP BECAUSE I'M IN THE PROCESS RIGHT NOW WORKING WITH A LOT OF YOUNG PEOPLE AND KIND OF GETTING THE YOUNGER GENERATION TO GET BACK TO A PLACE OF UNDERSTANDING VOLUNTEERING. AND IF WE DON'T START THERE, WE'RE NOT GOING TO GET ANYWHERE AT ALL.

CORRECT.

AND WHAT I'M FINDING IS A LOT OF THEM ARE EAGER. THEY WANT IT. THEY'RE JUST LOOKING FOR THE RIGHT LEADERSHIP FOR THAT. YOU KNOW WHAT I'M SAYING? BUT IF WE CAN TACKLE THAT, THAT CAN CHANGE A LOT WITH THE VOLUNTEER SITUATION. I TOOK A GROUP DOWN TO THE SENIOR CENTER And in just asking when I explained to them the reason why I wanted them to go and volunteer, we had to put a cap on the number because too many of the kids wanted to come at that point. But beforehand, nobody really was interested. So I think having a good junior firefighter program where you kind of really get those kids understanding why volunteering is so important, especially in today's culture, you can see a big difference.

Let me ask one other question if you're through. Did I misunderstand this? You have people come in and they do the training, but they don't participate in fighting fires. And then those people's name goes down as a list of firemen from your department, but they don't participate. How do you satisfy a code or something that you have to have? You just have to have.

So they're getting their required training for the year. They're a volunteer. I mean, there is no set thing saying you have to make so many calls. There are some departments in the state that say you have to make so many calls in order to be eligible for training. a stipend or a state retirement or something. We have not done that.

Where does the insurance fit in here? If I have a home there and I'm paying my insurance and the people who are training there should be participating in helping put out a fire at my home, But they don't participate. It's just fuzzy in my head. It seems like somebody has to call that to your attention and say, we got fake firefighters or something.

T-shirt wearing pager toters is what some people call them.

What was it?

T-shirt wearing pager toters is what some people call them.

I've heard that a lot. I just didn't know how you.

No, I completely see where you're coming from. That is one main reason. Three years ago, we put on the full-time staffing, the 24-hour staffing, so that we did not have any non-responses. Right now, in Highlands, if the pager goes off, there's two paid guys that are there. They will automatically go to your home, and then any volunteers that... Which we do. We have a pretty... strong group of volunteers, a few. There are some other that are not responding as I feel they should. But those volunteers would come as well to your house, as well as the mutual aid departments, scaly, cashers, whoever it might be. Wherever it is in our district would be who determines that, so.

But the state organization. whatever it may be, that designates you've got to have, do they designate how many firemen you have to have responding to a fire? Like minimum of three, maximum of?

Minimum of four, I believe it is. Is that right, John? Four?

It has to respond to it.

Correct.

And if you don't have that response group, what happens?

Get a ding from the state, I'm assuming. Correct.

I didn't know if the insurance was going to say, wait a minute, we're here having to pay for this, but we didn't have a response team or number there.

Right. Yeah, non-response, as you know, looks very bad on your ISO. Yeah.

I appreciate you sharing it. I just wasn't aware of it.

Yes, sir. Chairman, if I may, Mr. Shields, state regulation is you have to have nine men and women on your roster.

Okay.

Each one of those men and women are required to have 36 training hours per year.

Okay.

That's all you can require of a volunteer. So, back to your question about what if you don't have that, then you get in violation with the state and they put you in probation for your inspection, and then you lose... At the end of it, if you don't correct it, then we end up with what we've ended up with a few times before.

And does the homeowner, does the insurance, the homeowner and the insurance company, they have a problem? But if I'm an insurance person and I'm providing insurance for a home, but no one can respond to a fire, Why would I insure your home?

Okay, that's when you come into lawyers and court system because somebody's going to get sued. If my house catches on fire, I call 911, 911 pages the department, the department don't respond, somebody's going to get sued.

Is it the county that's going to get sued or who gets sued?

Probably all, and this is legal, all persons that knew there was a problem that did not do anything to correct the problem could potentially be included in a lawsuit.

Now, you've made me aware of this, so I'm a potential... up there to be sued, too. I appreciate your information today.

I have one more question for you. Yes, sir. The departments, there are just certain departments that they actually require for the volunteers that they have to be at a certain number of calls to be a volunteer. Is that what you said earlier?

To be eligible, I know in Georgia. I don't know about North Carolina. I know in Georgia, certain... I believe they require a percentage. They have to respond to a percentage of fire calls in order for it to be, in order for them to get a pension. There are certain criteria for pension eligible calls, like in Raven County. So in order for those guys to get the pension, they have to respond to a certain percentage. I don't know what that percentage is.

Do you find, like, in that,

those situations are the numbers higher for volunteers they're struggling with it also they are oh yeah yeah i believe it's a struggle everywhere it's a struggle everywhere nationwide well uh excuse me no you go ahead we are aware of this struggle we i'm saying we as commissioners as a county you made us aware of this i would say I can't speak for our attorney, but I'd say we have a responsibility here somewhere of correcting this piece where we won't be, you won't be sued, the county won't be sued, Gary Shields won't be sued. They couldn't get anything out of him anyway, but anyway, if you don't have anything, you don't worry about it. But anyway, I think when we get through this budget piece, There's an answer that has to be determined here. Right or wrong, Mr. Cave?

You do have some responsibility. There's a big difference between responsibility and liability. You do have some responsibility to make sure that what they're asking for is valid and that you recognize their request.

And like Ms. Cook and what she presented today, she's making Gary Shields full aware of what their needs are. And I got a feeling that Gary Shields has a responsibility to support you in your research and what you've given to us today, same as you. But you made me aware of some things that I don't know how to get through, but we'll work through it, or I'll work through it. And we'll say thank you for your time.

If you have any questions, feel free to call me or email me either way.

Okay.

One more question, Chief. How many members have you got on the roster?

21 volunteers, eight paid staff, and six part-time.

Okay, so if you put a mandate on participation in calls, With the numbers that you have not showing up now, you would go below the state requirements, or you would still hold?

If I put a mandate on it, that you had to have 40 percent, had to make 40 percent of calls?

That would be tough. So, that goes back to Danny's, really, his question is, you're not at that luxury. You don't have people like we used to, standing in line, begging for an application to join fire department.

In 99, April of 99, when I got voted on as a volunteer, I was the fifth application that was voted on that night. I have an application in my desk right now from Gavin, Small, who's fixing to graduate, so we can vote on him. Other than that, I haven't had an application in a year and a half, probably. I mean, you got to think, we're in Highlands. It's a destination. It's a place where people go. They want to go and they want to live there, but they don't want to volunteer. They're retiring. They want to go play golf. And, you know, like a lot of the – when Commissioner Sherrill was on, I mean, a lot of those guys have retired and moved off the mountain. So, I mean, it's – we're in a tight spot. A liability spot. Right.

Thank you, Chief. As I've said before, of course, I can't predict the future, but where fire service in Macon County is headed – We have two municipal fire departments, town of Franklin, town of Highlands. And ultimately, the town of Highlands is going to take over Islands Fire Department. The town of Franklin is going to take over the town of Franklin Fire Department, and we're going to have all the other rural fire departments in this county as a full-time paid fire service in this county. It's where it's leading. Whether it's five years, ten years, or sooner than that, I have no idea, but that's what it's going to take for the fire service in Macon County. Thank you, Chief.

Thank you. All right, Hudson Library Foundation, Andrew Chamar.

Thank you Thank you sir

So it's tough firing and following the fire departments in terms of their need and the desire for your assistance with the Hudson Library Foundation's first in every 40 year capital improvement or its second. I want to say that begin by saying that nearly 100% of the improvements that we're asking you to help support are for items in terms of FFE or constructed elements that are now 41 years old. And that includes bookshelves, that includes carpet, that includes areas that have not been touched in those 41 years. The only kind of discretionary, only element that's not in that regard is the furniture in a small reading room that we're suggesting be replaced. It's only 18 years old. We'll go ahead and move along. And this is Philip Kukuru, the president of the Hudson Library Foundation. We, of course, came before you in December and spoke about this. And I've met with or spoken to a number of you. And I hope before you make a final decision on this that we can get each of you to come to the library so that we can show you what we're going to present in person. So the other item that I wanted to give, I'm sorry. presentation remind you that come to Highlands, 30,000 distinct visitors, 30,000 people enter that library on an annual basis, give or take a few. So we're touching a lot of people on a daily basis, over 100 perhaps, that are coming into the library. 100 includes the children that come from children programs or whatnot. So I just wanted to highlight again This is a community asset that's used extensively and is benefiting both the residents of Highlands and the visitors and anybody that comes to Highlands, even if they are non-residents of Highlands, they might be county residents. So, I was going to talk very briefly again about what we're currently achieving and what we hope to continue to achieve.

really separated into two distinct areas. There's the outside area, which is on the left side of this slide, and then the right side area. I'll just start at the front of the building on the right side.

That highlighted area is study conference rooms.

or books on CD and DVDs, those are being moved elsewhere, and those have become two additional study rooms. So you can see in that previous, or I guess the slide that Andy shared, we do get a lot of study room use, different from Franklin Library. We just have one study room. I know in Franklin, those five or six study rooms get a lot of use, and the one study room here does. And so the plan would be to... FURTHER IN THE BACK OF THE BUILDING, GETS USED FREQUENTLY, BUT OFTEN BY SMALLER GROUPS THAT DON'T NECESSARILY NEED THAT WHOLE SPACE. SO THAT SMALLER CONFERENCE ROOM WILL ALLOW SMALLER GROUPS TO BE IN THERE AND OPEN UP THE MEETING ROOM FOR LARGER ACTIVITIES LIKE AFTER-SCHOOL PROGRAMS AND THINGS LIKE THAT. AND BELOW THAT IS THE READING ROOM, WHICH MENTIONED THAT FURNITURE PLANS TO BE UPDATED. AND THEN AS WE HEAD TO THE LEFT IN THE COMMUNITY CAN UTILIZE. AND THIS WHOLE PLAN WAS BASED OFF OF A NEEDS ASSESSMENT SURVEY FOR THE TOWN AND A PLACE FOR YOUNG ADULTS TO GO IN THE TOWN WAS HIGH UP THERE ON THE LIFT, SO THAT GIVES THEM MORE OF A DEDICATED SPACE TO BE AFTER SCHOOL, ON WEEKENDS, TO MEET TUTORS, THINGS LIKE THAT. AND THEN IN THE REAR OF THE BUILDING, A COVERED PAVILION have some outdoor space right now. There's really just the rocking chairs in the front of the building, that people can sit outside and enjoy the library, whether that's working on a computer or reading. So that covered pavilion really helps utilize the outdoor space. And then that kind of flows into utilizing the rest of the property back there, which is currently wooded and very nice. But having some walking trails back there would really help make the library more

So our first phase was the outside. We knew we could do it. We knew we could probably raise the money to do it. And we had the right window of opportunity in terms of not affecting the operations of the library during a very busy time of the year. So this is the groundbreaking that took place on the outside. We have raised about 400, a little over between 400 and $450,000. Private donations. We have a pretty modest reserve fund of our own as the library foundation that's been raised over the last 10 or 15 years and been little used. And the delta there between the total cost and the amount raised is going to come from that. We're worried about using that fund too much. As an example, we have a $9,000 projector in that meeting room that you saw that pooped out about two weeks ago. And the county maintenance department came up and looked and said, we can't do anything about this in these three weeks. We consider that an obligation. It's not a capital improvement. It's a capital repair or replacement. But the foundation is responsible for a lot of the interior of the library. So we're going to replace that over the next, hopefully, next two weeks. and without burdening the county with it. But that's where our reserve funds for things like that that come up that are in the gray area where the county's not responsible. We're not necessarily responsible, but we know that it needs to be replaced. That's just one example. But we consider this to be a great success so far, and we hope to do the same on the inside come January, February of 2027 to do the interior renovations.

So here are some renderings of the areas I was describing on the map, starting on the top left. That's that young adult lounge inside that room. And then below that is what it would look like if you were in the main part of the library, looking at that young adult lounge from the outside. So you can see a lot of visibility into that room, but there's that ability to wall it off for sound.

So, this is kind of the bottom line in what we've asked, and we've asked this amount in December. We continue to use these figures based on estimates provided by Futural Enterprises on the actual construction part. Where we may have a little bit of latitude are the finishing, the fixtures finishing and equipment. And again, it goes to we, discretionary amongst our, within this budget are, is the furniture for this little reading room. The same furniture could be used even though it's not very popular with the users of the library because of what it is. So we're asking the county, we're asking the town for $350,000, and we'll raise the additional $200,000, $210,000, ideally through private donations or use our reserve or another portion of our reserve to close that gap. it's a challenging environment realize it's really challenging for you all this year in particular and very challenging for the town this year in terms of the tax tax environment and a collections environment revenue environment all right well yeah since

OF THE HIGHLANDS COMMUNITY. IT'S THE SECOND OLDEST PUBLIC LIBRARY IN NORTH CAROLINA. AND AS ANDY MENTIONED, ITS RENOVATIONS ARE NOT OFTEN NEEDED, BUT WE FEEL LIKE AS THE COMMUNITY CONTINUES TO RELY ON THE LIBRARY AS IT NEEDS OF WHAT THE COMMUNITY NEEDS FROM THE LIBRARY AS DEMAND CHANGES, WE WANT TO BE THERE FOR THE COMMUNITY.

Any questions?

Did you go up?

Just a few. You were talking about your reserve fund. How much is it?

$325,000 now? Well, it's going to be less because of the amount that we're putting on the outside. But we haven't been faced with the total budget.

Who owns the property?

We do. We own the property. We own the land, the real property, and a good amount of the interior.

And leased. Okay, okay.

It's part of the three-part agreement between Macon County, which designates this as Macon County Library, Fontana Regional Library, which staffs the library and provides, essentially operates the library, and the owners of the library itself, the physical plant, the real property, and the land is the Hudson Library Foundation. And we do all the outside maintenance on it, the landscaping and so forth, and a good portion of the interior maintenance.

Can you continue to operate with what you have?

Yeah. Our operation doesn't involve manpower, doesn't involve calling people out. It involves a lot of volunteers, including the board, which is all volunteer. We don't have a professional development staff. We just have a bunch of volunteers that are trying to improve this library. And I don't know. Commissioner Pearson is here. His grandmother was the president of the library in 1985 when this library was built. And it was built without county funds. It was built without town funds. It was built by local residents saying we need to replace the then 85-year-old, nearly 100-year-old library. I'm sorry, 70-year-old library that existed on the property then.

The work that you've presented, was it advertised for bids?

Not yet. Oh, the outside, yes.

No, I mean the inside that you're asking.

We've just asked Bill Futrell to provide us with a pro bono, a tentative estimate of what it is. We can't bid it out until we know what the monies are, if they're available.

Well, we can't write a check for something that we don't know what it's going to cost. I mean, you've got it well designed, so it seems to me like you could – I mean, you have to have it designed and then put it out for bids, and then you worry about where the money's coming from.

We would not ask you to write a check until we have the exact costs available.

I mean, you're presenting $910,000 for this cost, so you are presenting us. with a cost you're asking us for three hundred fifty thousand dollars correct you're asking the town of highlands for three hundred fifty thousand and then you're sitting here saying that we're going to raise 210 000 so realistically you are asking us for an unknown um it's an unknown well

Yes, we don't have an exact figure. We know at a minimum it's going to be this because the construction costs are based from last fall. And the only thing we are certain of is the construction costs, the 350 some odd thousand, are only going to go up.

I would like, out of respect of the taxpayers of this county, And your board and the needs for Hudson Library, I would like to see this put out for bid as what you guys have designed. I mean, if anybody's interested in bidding it, then they'll come and bid it. It's not going to cost you anything. It's not going to cost us anything. You've got it designed.

Okay.

We can do that. So I'd like real numbers before I could ever – I mean, I appreciate Mr. Futrell – You know, his input and that number, but for public dollars, we got to have the real notes.

Okay. Okay. So, there, well, I mean, we can do that, but I'm not sure the time, well, the time might allow it. But again, we're not asking you to provide the funds right now. What we're asking you is through your budget to have those funds available. if when we bid it out when we have hard hard figures and when we can give you hard numbers beyond the numbers that i have here that show what the costs are going to be for both the ffe as well as the construction based on current estimates right and and as you can see if you've looked at the headlines in the papers and stuff that's one of the reasons why we're here today is

We have asked for over $7 million from departments in this county that are not in the proposed budget. So we have to figure out where these dollars are going, where they're coming from, and everything else.

Understand. If I were going to use an analogy, you're being asked by the fire departments for money or budget or allow the tax increases for budget based on needs that they don't know what the final cost of a fire truck is going to be. $500,000 to $800,000. Please allow us to raise our tax rate. And so you have to have a certain degree of trust. They're not asking you... Well, they're asking the taxpayers to pay that. We're not asking you to pay that now. We're asking you to... provide the ability for us to draw those monies out when we're in a better position to do so. But we can try and bid out the process right now. We have the cost of the FFE. We know what that's going to be. And it's not bid out. It's from vendors.

Let me ask you a couple questions real quick. Yeah. You're part of the FRL.

No.

Not part of the FRL?

We're part of the signed agreement with FRL.

So have we asked FRL for any funds for this?

No, I don't know if they do capital improvements. I was just wondering. A facility. No, I don't know.

So the map that you have, all this outside work, that's all new work?

Yes. Yes, it's a new pavilion and it's landscaping.

So where it says bench seating, walking trail, all that stuff is new?

All of it's new.

At the cost of?

550.

550,000. So my fundamental issue with this is, if we're talking about needs, the needs are inside the library, not outside the library. So we've spent, or you're going to spend $550,000 of donations and however you come up with it for an outside walking track, and then you're going to come and ask us and the town of Highlands for $900,000, well, $700,000, and then you're going to raise the rest through donations. I mean, I just think that's the issue that I have with this idea, you know, that we're talking about needs-based. Well, the needs-based are inside. It's in the library, right? I don't know why we would go that route first.

Yeah, I can see why you'd think that. All of the improvements came from that needs assessment survey, which I mentioned that really bullet-pointed like five things came to the top. The outdoor improvements were one of those, also everything else. The reason we did the outside first wasn't because we thought the walking path was the most important. It was because we raised a certain portion of the funds, $500,000, which allowed us to just do all that because we want to do all the inside at once, too. And so we said, well, instead of waiting till we raise everything, $1.5 million, we have the $500,000. This is a great line to draw and say, we have enough to just complete all that. Let's do that so the town can enjoy that this year. and then focus on raising the rest for the inside. So again, we can do the inside all at once. So it wasn't because we thought that was the most important. It was just because that's what we could do now.

But why not do it the other way? Why not do the inside first? If you had the $500,000, why not put that towards the inside first and then try to raise money for the outside afterwards?

Timing is one thing. We couldn't do the inside. It's going to have to close the library for three to four weeks. And if we could do that now, if we did it during this season from March to September, the librarians went sort of apoplectic when we suggested that.

But you could have saved that money and done it at a different time if it's just timing. The problem that I have with this is it's more of a want. mean you just said that that's what we we wanted to go ahead and do the outside it's it's not a need the need is inside the library and we're and like john said our county manager has cut out over seven and a half million dollars worth of ass for our county we're doing the best we can i just feel like the priorities are are backwards the need is on the inside not the outside it's cool i like it it's nice for the folks that come all the things but at the end of the day You could have saved that money, and you could have put that towards the inside of the library and figured out the outside later and continued to raise money until the time was right.

Depends on what you define need is. None of this is absolutely critical. The building is falling down. These are enhancements that are desired and needed after 40 years of use. The outside is unused space, is destroyed. But again, was it a need? It was a need established by a survey. And so I agree with you. It would be nice to have done the inside first. We would have created the enhancements that are needed in there. But is any of this needed? Yes, but not critical. The projector is an example of something that needs to be done. And we could have easily come to the county and say, you're responsible for the equipment and whatnot in this library for maintaining this library per the agreement. But we didn't because we figured that's a need we need to have executed immediately and we can make the improvement.

So can you clarify something? Did you say that you're not a part of the FRL?

We are just as Macon County is. We are signatory to an agreement, a three-party agreement between FRL, Macon County, and Hudson Library Foundation. So we have no responsibility for the operation, for the staffing, for anything with regard to any decisions about content or whatnot. We have no role in that, no legal role. We're just the owners and caretakers of this property.

That's good. So you don't get any funding from FRL?

No. No, we give funding. We give $45,000 a year to FRL to buy the books that go into our library. Yeah, we write a check to FRL, checks, once a quarter, 12,500 to FRL. Yeah, so it's 50,000 now. FRL to purchase the books, periodicals, CDs, and all of the printed material in the library.

That's good.

Thank you, gentlemen, for coming down the mountain.

Thank you very much. Appreciate your interest in working. Thanks.

All right, update on the capital improvement plan. Mitch, Davenport & Company.

So, Mr. Chairman, I don't want to steal any of Mitch's thunder. If you want to, he's planning on staying around to the end of today for us anyway. So, if you want to save a little bit of time, we can very briefly hit the solid waste CIP statement. with that just a little and then save any questions or anything for the county general cip until the end if you want to do that because you give it that we'll get the high level view and then we'll wrap up at the end that's great does that have to be a motion or anything now you got five minutes to mitch if i can get do we have the presentation

You all see that okay?

And I passed out some hard copies. Oh, here you go.

Can you get that for me?

Okay. So you all have hard copies in front of you as well. And again, we'll make this one brief. But we wanted to give you a quick update on where things stand related to the solid waste discussion we had last year. funded the new cell construction. So just take a quick look back at where things stand. Similar to the general fund, there is sort of this credit framework for managing enterprise funds, right? Again, your solid waste system is not rated by the rating agencies, but they provide, the rating agency methodologies provide sort of a good guide as to how investors, lenders, LGC will evaluate the financial health of the solid waste system. Little bit different than the general fund because it is a business enterprise. It operates under a different framework. But there is some crossover. You know, we talk about economy in the general fund. Here we talk about system characteristics. It's, again, much the same thing in that it looks at, you know, the service area, wealth levels, but it also looks at the size of your overall system, right? Think about you all who run businesses, right? The larger the business, the more you can handle the loss of a client here or there or the increase of a certain expense. So, economies of scale factor in, as well as condition of the overall system, right? Is the system well maintained? Does it have capacity? All of that goes into these system characteristics. Management, you set proper rates and charges. Do you maintain compliance with regulatory provisions? Because that can create large expenses down the line if you do not. Debt and legal provisions, if you do issue debt, what do those provisions look like? And then finally, and the largest piece of this, is financial strength. And that's kind of where we're going to focus in on today. And this is measured a little bit differently than it is in the general fund. I would say there's two key factors that tend to focus in on, and they are, each of them are 15 percent of the overall credit. ANALYSIS THAT HAS ANNUAL DEBT SERVICE COVERAGE. SO WHEN YOU LOOK AT AN ENTERPRISE SYSTEM, YOU BRING IN YOUR REVENUES, AND THEN YOU PAY YOUR EXPENSES, AND WHAT'S LEFT OVER IS NET REVENUE AVAILABLE FOR DEBT SERVICE. IN AN ENTERPRISE SYSTEM LIKE SOLID WASTE, OUTSIDE OF THE HOUSEHOLD FEE, YOUR LARGEST REVENUE IS TIPPING FEES. And you cannot collect tipping fees if you don't incur the operating expenses, right, to manage that waste that comes in, right? So you can only collect the tipping fees if you're providing the service and offering and encumbering or paying the expenses associated with it. I'm not very verbal today. So, revenues come in. You pay the expenses to get those revenues. What's left over is available for debt service. That's where your debt service coverage comes in. How much is left over in net revenue available for debt service compared to your annual debt service payment, principal plus interest? Very simple math. Two dollars of revenue come in. you incur a dollar of expenses to collect that revenue, that leaves a dollar available for debt service. If you have 50 cents worth of debt service, that would be two times debt service coverage. One dollar to pay 50 cents, you could pay your debt service twice. Does that make sense? So that is a key factor that we're going to look at, debt service coverage. And the other factor is days cash on hand. Looking at the cash the enterprise system has compared to the annual operating expense, how many days could you operate the system if you stopped collecting revenue? Another way of saying that is percentage of expenses, percentage of O&M, right? What is your cash balance compared to your annual expenses as a percentage? Okay. So I wanted to set that up on the front end to go a little more quickly. You do have solid waste debt outstanding. It's the debt we just issued for the construction of the new cell. It is 10-year debt, and that will be paid off by 2036. Quick look back at your historical metrics, those two key ratios that we talked about. Debt service coverage is on the left, and you've essentially been in that one and a half to two times debt service coverage level. um that's a good level to be at um typical policy levels for enterprise systems like this or maybe in the one and a quarter on the very low end up to one and a half is sort of the standard um for debt service coverage levels the right hand side is a look at your cash as a percentage of operating and maintenance expenses um And we've broken this out into two colors. In fiscal year 25, you had just over $14 million of cash in the system. But internally, you all tracked that $1.85 million of that was for operating and maintenance, the general operating fund of the solid waste system. 12.2 million is set aside for future closure and post-closure liabilities. That is unique to a solid waste system. We'll get into that in a moment. But it's accounting for those regulatory requirements tied to the disposal of waste. So when you look at your audit, you'll see, oh, we got $14 million of cash. We're doing pretty well. But as you dig in and you get into Lindsay's world of this fancy accounting, $12 million of that is not really available. You have to set that aside on your balance sheet for these future closure or post-closure. And that's going to be an important concept to understand as we look at the financial health of this system. Next page is just tracking these closure, post-closure liabilities of the system. There are three main categories. Closure, so when you have an open cell, as you put waste into that cell, as you add tonnage to the cell, you are incurring a closure post closure or closure liability because you are much closer to having to close that cell, filling it up, not having any more capacity, and being required by regulators to formally close that cell, manage it appropriately so that there's no environmental issues. In addition to that closure liability, there's also a post-closure liability, a period of 30 years where you have to track that cell. You know, if there's, I don't know, I'm not going to get all the fancy terms right, but you've got to measure the gas, right? It may have to be vented. If gas builds up, as the waste deteriorates, creates gas, you have to vent that gas so it doesn't create issues. Have to manage any of the, call it leakage but there's fancy terms for it right as as it breaks down um make sure your liner is still intact and it's not leaking into the soil and ultimately the water table So there's dollars that have to be set aside for that. And then PACA is potential assessment and corrective action. That's a EPA guideline where they say, look, you've got to have money set aside where if there is an issue during the closure process, you have dollars set aside to address it. that's really what adds up to your liability and as of fiscal 25 that was estimated right at 16.2 million dollars that's reviewed annually every year but that is the amount that goes on your balance sheet as a liability it reduces your assets and thus you're setting aside some cash to address that Okay, so I'll just pause there briefly.

Two more questions.

Yeah.

That $12 million we set aside post closure.

Yep.

Are we able to put that in some kind of high yield interest investment account?

It is invested. It already is.

And does that interest on investments go back to enterprise fund or does that go to general fund?

It does, it goes back into.

Enterprise? Yeah. Okay. I'll save my next question for Ms. Jamie. Thank you.

Welcome to ask. Carry on. Okay. All right. So with that kind of as the backdrop, I mean, your solid waste system is in good financial health, right? You've got very strong debt service coverage. You've got a nice cash position. But a lot of that cash is tied up for these closure post closures. We're going to take a look at how that system might evolve, right? And the first thing we're going to look at is the solid waste capital needs. In fiscal year 27, total capital projects for equipment replacement is about $1.1 million. All of that is anticipated to be covered under the grant that you all received. In terms of what we'll call capital improvement needs, like facilities, major capital investment, $1.625 million. Again, all of that is covered from the grant. That's a total of, grand total of $2.75 million. I think in the budget there is $250,000 set aside for future, reserved for future capital projects as well. as we look out into the future you can see the needs are increasing in certain years there are some major pieces of equipment that are plugged in in 2028 right now total of about one and a half million and i do specifically want to highlight line 24 the phase 2 cell 2 closure that will be a requirement It's our understanding from the engineers that that cell is officially reaching its capacity and under regulations you will be Estimated by the end of calendar year 27, so fiscal year 2028, you will be required to start the closure process on that cell. I know current estimates are around $10.5 million for that, but as you get closer to that, it will be refined as you look at what is actually, what the actual requirements in the construction market are for closing that cell. but we're using a $10.5 million estimate, and we're assuming that all of that will come from that restricted cash that you've set aside. Okay? In total over this five years, about $4.1 million of equipment, $12.375 million for capital improvement needs, the bulk of that being the closure, for a total of about $16.5 million. The other piece that we're going to have to build into this forecast is expenditures and revenues. On the expense side, we're assuming a 3% standard sort of CPI style inflationary growth in expenditures. If we do include debt, it will be a 10-year term at 5%. And then we have come up with an estimation for how the future closure, post-closure costs will evolve, including opening of the new cell, closing of the old cell. Caveat that there's a lot that's going to change over the next two years. We'll have a much better picture after that on these closure, post-closure liabilities. But we have done our best, had some back and forth with the engineers on how to kind of estimate how those liabilities will evolve. On the revenue side, I should say on the expense side too, we are including the fiscal 26 proposed budgeted expenditures or fiscal 26 revised budgeted expenditures and the fiscal 27 proposed budget expenses in here as well. On the revenue side, 26 is the amended budget, 27 is the proposed budget and fiscal year 28 and beyond, Our baseline is 0% growth for right now. And what we're going to do is we're going to calculate how much revenue you would need, how much revenue growth you would need, whether that's growth in the system or growth in rates, charges, et cetera, to meet a minimum 1.25 times debt service coverage requirement and maintain at least 33 percent, so a third of a year, of operations sitting in cash that's available for operations, right, not cash within that is set aside for closure, post-closure. Okay? So, very baseline assumptions just to give you a feel for how things could evolve. And then that all comes together in this pro forma. And we're tracking the audited 25 year, the 26 budget year, 27 proposed budget, and then get into 28 through 31 on a projected basis. And at a high level, what we see is that You could maintain compliance with those targets, one and a quarter times debt service coverage, 33 percent cash, with no growth over the 27 proposed budget revenue in fiscal 28. In 29, growth would need to be about 4.7 percent, then 2.2 percent in 30, and 2.1 percent in 31. So I think what that shows is the solid waste fund is in a pretty good position from an operating budget perspective right now. Again, remember, we're growing expenses at 3%, and revenues can grow a little lower than that and still maintain with those expenses, right, just to kind of maintain those minimum levels of coverage and cash. I think that's a good thing. I would point out, and it's the orange highlight down on line 18, at those levels, you know, you would be, if you fund that closure from the restricted reserves, by the end of this period, you would have about $2.7 million of cash set aside for closure post-closure. And up on line 14 are closure post-closure liabilities. based upon this very high-level projection would be around $15 million. So there would be a gap there, right, that we'd need to think about. So my big takeaway here, I think, for you all as I've reviewed this would be the operations of the solid waste fund are sound. There's a lot that's going to happen over the next two years with the opening of the new cell, the closing of the old cell. And you're in good shape in terms of operations for the next two years as you work on those two projects. And then we'll have a much better picture at the end of that two-year mark, and we know how much it's going to cost to close that existing cell, the new cell is up and running, have a much better feel for what those costs actually were and are, and, you know, how that impacts your future closure, post-closure liabilities to really refine this analysis going forward and help you all think about future decisions related to the solid waste fund.

And I'll add just a couple of things. Obviously, you've never seen this before because we've never been this in-depth before on capital improvement plan for solid waste. So that's what we want to do is we want to get you a really good baseline from this year going forward so we have something to work off of. It gives us a really solid plan through the next 10 to 15 to 30 years to figure out where we need to be and what is billed on this year after year. And obviously, everything changes in the CIP from year to year. This year is pretty much nailed down. Most of our expenses are grant expenditures this year. Next year, you'll see some equipment. We've talked about our options for that. We have leasing options. We have purchase options. We have used options. So those dollar figures will change as we go through this year and the next year. But really what I wanted you all to really see was we're getting a really solid plan laid out for you. It shows you the expenditures and the revenues, the best of our predictions. And then when we come to you and we start talking about tipping fees or availability fees and and the volume that we're dealing with and how we process that. You know, we've talked about other options that we plug some numbers in the budget this year to haul some stuff somewhere else. So hopefully what that does is that plays into consideration with these numbers on line 18 there on those closure post closures. You know, you bump those a year down the road, You save a year somewhere, it helps those numbers. So the big picture is we're tying all that together into one format for you all to understand so that you know when we come up here, we have a really good understanding of where the money's going and what we're doing with it.

When you look at the next 10 years and what we're talking about here, but I'm a little void on the next 30 years. Is this a duplication of this 10 years?

No, you have two options, and Jamie will correct me if I'm wrong, and this is where I talk about my inverted triangles, but you have a 10-year sale that we will open this fall. Our goal is to make it 10 years. We want to monitor our recycling efforts. I've said our goal this year was to promote recycling. The Carson Convenience Center will be a model for recycling. You saw some monies on one of those other slides there where the following years we want to do some refreshes to our existing convenience centers. Between that and the hauling and various other options, we want to get that out to 10 years. At that point, you will have to make a decision. Do we haul everything at that point or do we create a new cell? The new cell, if you were to create the new cell, is parallel to the cell that's there now. So in addition to the airspace that you have for the cell that we construct, you multiply that by a factor of three or something because the triangle gets bigger and you have more space to put stuff. You also divert those closure costs because that cell is not closed at that point from 10 years to 30 years. So it gives you even longer at the same rates or the rates that you establish to build up those post-closure funds. So at this point, this gives you the baseline stuff. Within five years, we need to evaluate where we're at on the current sale, the hauling situation, our volumes, start laying a plan down on what we're going to do at the 10-year mark or right before the 10-year mark. But this helps you get that data to understand that, Mr. Shields, and for us.

Thank you.

So Jackson County hauls all their waste out of the county. Has anyone ever been to them and said, compared the amount of waste that we have here versus the waste that they have in Jackson County and what their total cost is for hauling it out as a whole picture? versus what we're doing. I mean, it seems like with all these millions and millions and millions, it's going to go on forever. And so the land we're destroying, the cost of opening the sale, the cost of closing the sale, the cost of monitoring the sale, and everything else, can we not just go to Jackson County and say, We had 60 million tons of garbage in Macon County. They had 58. Okay, what was your cost? I mean, it seems like it'd be a simple path moving forward.

It could, to some extent, however, your availability fees and your tipping fees subsidize each other on Even if you haul, you have to have a transfer station. You'd have to have a new transfer station at different locations. So you're going to have staffing for that, and you're going to have staffing for the Highlands Center. And then you've got to continue to staff the Convenience Center. So you can. However, you have to. That's part of this process, the business model of it, to say what part of our expenses have to stay. No matter if we were to haul everything, we still have some infrastructure we've got to maintain and put that all into a formula. And I think once we get this hammered out a little bit better and we know what our predictions are for the next 10 years, it'll help us really assess that question that you have to see how valid it is to see if our numbers match and see if that's a feasible option for us. Now, I will tell you, I've learned a lot more about landfills than I probably ever thought I would want to know. Sales are not possible, are not popular. However, your next sale, if you were to do it 10 years down the road, The cost will go up, obviously, because everything's going to go up. However, if you calculate the amount of waste you put in there per yard, it will be less per yard than what we're doing now because of the amount of capacity that you have. So that's the other thing with this is we need to put that all into the same financial equation. and look at the 10-year mark, and then look at the 30-year mark, and if it's not feasible, we'll either, we will know at that point what that's gonna cost us when we can make that decision. And I don't, I'll be honest with you, John, I don't have all the answers, and that's partially why we wanted to have this, is we could, I didn't understand financials on it. I'll just be honest with you, when I first started, and I think doing this,

gets us the point to where you all can make an educated decision on what you want to do with that i just look at it as the future growth of macon county i mean school systems talking about east franklin school we talk about a senior center we talk about a a new courthouse new jail i mean and it seems like we're looking for land that we already own and and we're going to destroy it by garbage when it may cost us a little bit more money but yet in the long run it seems like we would be in it would be in the best interest of macon county because we're talking about 30 to 50 years and that landfill's done

I mean, Jamie can correct me if I'm wrong, but I think the space where the new cell would be, you can't build on that anyway because of the restrictions on what the landfill that's already there. Not the cell we just did, but the one that we're getting ready to close. I think there's restrictions on that. I think we've stretched the boundaries as much as we can. So unfortunately, I think the only thing you could have there is a solid waste office.

to maintain from a landfill. I think Miguel did that analysis, and really the only place would be near the river. But that infrastructure to get back to that location, I don't know what you could put there. I mean, solid waste seems like the ideal thing to put back there because we already have to go through there.

I will just, 10 seconds, echo Warren's statements. Solid waste has become very common topic around the state over the last several years. And a lot of people are dealing with this and having to open new cells, et cetera. And I've learned a lot over the last several years. but I would also say that understand to be able to do the financial side of things but what I've come to understand too is there's a lot of the engineering side with solid waste that dovetails into the financials that I'm not an engineer but like Warren said there's a lot of opportunities with existing cells and new cells that create more capacity. And when you do that, it also reduces your reduces and extends these liabilities of cash that you have to set aside. So I think that's where we go. All right. After the next two years, we're going to have a lot more data on the closed cell, on the new open cell. And I think that's an opportunity to really dig in on what is the future engineering side of the solid waste system? What could that look like and how does that equate to the financial side versus other options.

And one more question. The fire-damaged building, did we receive an insurance settlement for that building?

We did. There wasn't enough money to do the repairs on the building, so that's where we're going to use the grant money to actually repair that and actually make it a little better, hopefully, in the process. We've been looking at the flows through that building to try and make it as convenient as possible.

So where did that—it was $400,000, wasn't it?

Thank you, Mitch. Yes, sir.

Let's take a brief four- or five-minute break.

Macon County Schools are up next. Thank you, Jamie. Welcome back. Here we have Macon County Schools, Mr. Laney Ledford and Josh Lynch.

Welcome. Thank you. Thank you. We appreciate the opportunity to be here to present to you and to explore and explain the needs of the Macon County school system. So in the essence of time, without further ado, I'm going to turn it over to Laney.

All right. We'll go ahead and start on the 26-27 local current expense proposed budget. First, we'll go over an overview. We'll talk about the legislative budget requirements of public school units, then go into funding sources, the budget projections for 27, and proposed local current expense budgets for fiscal year 20. The legislative timeline proposed 26-27 budget to the board and superintendent by May 1st. By May 15th, that has to come to the county commissioners and then board approval of the budget resolution for 26-27 for the county commissioners by July 1. Next, looking at the funding sources and revenue sources, we have state, so Fund 1, the revenue source is the state. We've got local, Fund 2 is our local current expense, Fund 4, capital outlay, and Fund 8, other restricted fund. The corresponding revenue is Macon County and miscellaneous revenue, that is your funds and forfeitures and timber sales for Fund 2. For capital outlay, that is the county as well. And then fund A, our other restricted fund, those are local grants and Medicaid. Looking at federal, we've got fund three, that's your federal grant fund. That's funded by the government. And fund five is for nutrition, USDA. Looking at our 24-25 fund breakdown, 24-25 is our last full year of current expense. Right here, we're looking at 64% is funded by the state, 20% local, 5% of the budget is federal, 2% capital outlay, 6% school nutrition, and 3% other specific revenue. Taking that 20% sliver in local, for 26-27, 60% of the budget is in salaries, 11% in utilities, 6% in central office, 5% local supplement, 4% maintenance, 4% technology, 3% athletics, 3 percent insurance, 2 percent schoolhouse, 1 percent transportation, and 1 percent charter schools. That's what the 26-27 budget breakdown is. Looking at budgetary projections, for 26-27, the salary increase we originally had projected a 7 and a 5 percent, but then we got the news from the state, so we made these changes to reflect those at 8 percent for certified. That will be state mandated if signed. on July 1, projected 3% classified raise. For benefit increases, we kept FICA the same at 7.65%. Retirement increased from 24.67% to projected 25.5%. Hospitalization increasing from 8,500 to 9,000. Utilities, we projected a 5% increase from a three-year average. And all other expenses, all other operating expenses based on a three-year average, and then looking at 25-26 actuals through February. Looking at the positions, so these are the current positions we will have or we have on our 26-27 budget as of now. We've got four directors. Most of these right here do not have state allotments, so we cannot pay them out of a state allotment.

So these are on local.

We've got certified staff. We have 37 teachers. That's up seven from last year. We had 30 last year. Guidance counselors is up to three. That's an additional two. And media coordinators is on here for one. That brings that total to 41. Our classified employees, these are your bookkeepers, your data managers, your receptionists, clerical, HR, data coordinators, your office support, your finance support, your technology, your TAs, transportation, board members, maintenance, and custodians. Bringing this total positions on local to 107.95, on local for 2627. Coming into the maintained budget, 2526 revenues to maintain will be the $9,816,628 we're receiving this year, along with the local supplements. We received $579,477.14 this year. So we would have to maintain those revenues at $10,396,105.14. The 2627 projected revenues, county appropriation, the landfill fees, $86,228.40. We've budgeted for fines and forfeitures at $160,000 and timber sales at $40,000. For projected revenues at $286,228.40. So combining those revenues, we're looking at $10,682,333.54 in 26-27 revenues. Looking to the right, you can see our maintain. So we talked a little bit about some of these in the budgetary projections. So you've got the 8% certified raise, the 3% classified raise, the FICA retirement hospitalization increases, utility increases, We did our local supplement again. And then looking a little bit further at these positions down here. So we talked about the seven classroom teachers in our positions area. The K-5 program enhancement teacher, central office administrator, guidance counselors, and media coordinators. These are not added positions. These are ones that would have to be moved from state to local because we lost positions from the state and 2425 and 2526 from 2425 to 2526. So that's why these are on here. They're not new positions. We are strictly just moving those to local because we lost some of those positions. We have Highlands Pre-K, the teacher and teacher assistant. We have MEC convert a part-time to part-time to full-time. These are new, both of these. Well, Highlands is new. We built the addition for the pre-K, and now we're asking to fund the teacher and the TA for that program. The MEC convert to part-time to full-time. One is on a contract now, so they do not receive benefits. So we would like to add those benefits to make that person full-time. And the other is a teacher that is a part-time teacher. We'd like to make that one full-time as well. We also received a decrease in state funding from 24-25 to 25-26 of $1.1 million. These hit areas like CTE, teacher assistants, assistant principal interns, children with disabilities, at-risk literacy intervention, amongst others, totaling that 1.1. And then inflation from 24-25 actuals to 26-27. We've got anywhere from local transportation to insurance, school-based, maintenance. So those are some of the inflationary areas. So we're looking at a total maintain of $3,611,805.11 for our budget to maintain where we're currently at. When you put the revenues to maintain, add the projected revenues and add in your total to maintain, we would have to ask the county for $14,294,138.65. Looking at the 26-27 proposed county budget total, this would be around 21% without capital outlay and debt service included in those figures. Now, looking at top priorities, they're in no particular order, but the first six we have had on here since last year. They're your instructional coach. There will be four of those. An instructional coach would facilitate curriculum, professional development, and support both students and teachers instructionally. We have two full-time art and two full-time music teachers. This would give each elementary school a full-time art and a full-time music. We have the Make and Pulse Internships. This would be to provide seniors with the opportunity to gain real-world experience. Instructional Technology Facilitator. This would support the effective and responsible use of instructional technology, including AI, to enhance teaching practices and improve student academic performance. And lastly, we have school nutrition, Franklin High School and Highlands. These schools typically do not qualify for the CEP program. So this would be to help fund those meals. These are additional this year. We have an EC teacher at FHS. EC numbers are rising from 26, for enrollment to 26, 27. Then in recent years, three teachers currently carry caseloads of 40 students each. So this would serve, this would help the caseload ratios to be reduced. We have a mental health professional on here for the middle school. I'm looking at that ratio of 250 to one. That ratio is intended to ensure effective, comprehensive counseling services through grades six through eight. Self-contained exceptional children teacher, there would be three of those. These are needed to help keep up with the growing number of EC students. And then, along with that, are your EC, personal care assistants, that support your students with significant needs by helping with daily care, safety, and access to learning. You can see the top priority with the corresponding figures there. So, total top priorities would equal $1,474,860.99. When you combine the total to maintain and the total to fund top priorities, you would come to a total of $15,768,999.64. When looking at the proposed county budget total, that would equal 23.17%, excluding capital outlay and debt service. This is just kind of showing a breakdown. The total to maintain top priorities, that total. Adding those revenues in, you can see the $14 million and the $15 million for maintain and the top priorities. And then you can see the percentage breakdown of the county budget there as well. The 21.01% for maintain and the maintain and top priorities of 23.17%. Looking into the future, we have some new facilities, or we may have new facilities. Franklin High School, for sure. And then with a potential East Franklin Elementary, these would have an operational impact, meaning increased staffing needs with teachers, TAs, and custodians, higher maintenance costs, utility expenses that'll be increased. And while we may see an ADM growth from state funding, may increase state funding but it may not offset the full staffing of those schools so an ongoing reliance on local funding would increase and you can see over to the right we have our 26 27 maintain at 14 million 294 and then when you add in a future operational impact what that figure is is 12 teachers at 889 000 5 tas nine custodians, maintenance cost, and utility costs there to bring that total to $1,779,000. So the future maintained with those operational impacts would be around $16 million. And when you factor that into the budget, you would see a 2.62% increase using 26-27 county budget totals. Moving on to 26-27 capital outlay. You can see our capital outlay list over here to the left. This list was originally $4 million, but our board has trimmed that down to reflect the $1.2 million here. We usually receive $550,000 in capital outlay. for brick and mortar, and then for technology, $600,000, bringing that total to $1,150,000 in capital outlay funds. With this list, we are asking for an additional $472,584 in the brick and mortar and an additional $200,000 in technology to go through some of that would be our IT and laptops for six schools. So you'll look and you'll see the county asks revenues to maintain with the total capital outlay additions in brick and mortar and the technology would be $1,822,584.18. The capital outlay to the left does not include the capital outlay refresh that we already received for technology. Next, capital outlay pending top priorities. We're looking at East Franklin for a new school. It's around $36 million. We have a part one assessment of the existing school. This was originally $96,000. We decreased that to $75,600. And East Franklin part two, feasibility study for a new school. This would be on a new site. That would be $37,500. You have Cartuga J Elementary, a six-classroom addition for $5 million. And Highlands Athletic Field at $1,450,000 with the assessment and feasibility study to be determined on those costs. Looking at $42,826,100 in capital outlay pending top priorities. I do want to note that if we were to move forward on an East Franklin, that the Cartiga J Elementary 6th Edition classroom would come off. So we would save around $5 million there. Bring in that total to $37,805,400 capital outlay pending top priorities. With that being said, are there any questions?

How much time do we have?

Things like Highlands, soccer field, those type of areas are still out there. We were talking about them the other day. East Franklin, new school, property, things like that. Where are we with that research?

So, first off, with the East Franklin, we would be setting ourself up to be able to apply for the grant next school year.

basically.

The 27 year is when we would have the new grant cycle come through that we could actually apply for that. So, in the meantime, we have to do the facility assessment and things of that nature to be able to determine, you know, are we able to renovate or are we looking at a brand-new rebuild? And that would be able to determine, okay, what is the direction that we need to go? And then from that, If we are going to do a new site, then we would need to determine what properties are available for Macon County Schools, either county-owned or other properties that could potentially be looked at. But we have not crossed that bridge at this point. Our liaison committee would like to meet very soon to be able to start, you know, the timeline moving forward so that we can set ourself up to potentially receive the grant once again, once the grant cycle is open for us.

One other question. Going to Walgreen, going out like you're going to Southwestern, you've got a new development out there, a big hole in the ground, something's going on. How do you – process a school district, or how do you, are they, is that student, is that family, or does anyone know what that development's going to be out there? Is it going to increase the student population, or are we going to have to change districts, or is East Franklin going to become obsolete for it's even built or finished if a new school we don't know what that is out there if you heard anything in that apartment it's apartments so is it let me ask this without being rude is it senior apartments or is it apartments for family apartments but i would think that would be regardless of what it is it's going to be a part of that study that they would do is they probably would look at that area and say is this children where would they need to go but that would be

I'M ASSUMING THE NEW EAST FRANKLIN SCHOOL, THE IDEA IS FOR GROWTH. THAT'S WHY YOU'RE TAKING OUT THE KARTUKA J. YES. SO, I MEAN, YOU WOULD ‑‑ THERE WOULD BE A FACTOR IN THERE.

WE WOULD READ DISTRICT THROUGHOUT THE ENTIRE DISTRICT IF WE'RE ABLE TO ‑‑ WELL, EITHER WAY, WE MAY HAVE TO READ DISTRICT. IF YOU BRING ON APARTMENT COMPLEX OF THAT MAGNITUDE AND POTENTIALLY HAVE STUDENTS, CURRENTLY THEY WOULD BE ZONED FOR KARTUKA J. And we know that we have ran out of room there, so we may have to look at redistricting. But if we have an East Franklin and you plan for future growth, you build it larger and you take off all the other elementaries, move them more in closer to town so that you can have room and you don't have the overcrowding at your other sites. But that would be definitely a study that we would engage in and do some long-term planning just so that we are setting our students and our schools up for success.

When we talk about doing these studies, is there a beginning date and ending date? With our people that we're working with the other day, that assessment and things like this, when are we going to look at this problem, East Franklin problem? We're already looking at it.

Yes. So we have internally looked at and deemed East Franklin that it has really served its time. It's done a fine job, but there's just no more room in the end. The infrastructure is not adequate. We're constantly having water issues, septic issues, things of that nature. Tracy can speak more about that with he and his men who are constantly there on site just mitigating the day-to-day activities. So once we are able to begin the formal process of applying for the grant, that would be the initial step, is to see the feasibility of that current campus and the building and the infrastructure. And based upon the rating and that determination, then we would be able to make some decisions. We're either gonna stay on campus and we're gonna try to mitigate, or we really need to almost abandon and build a new site. And with us positioning ourself well for that needs-based grant, I think we will be in great standing. We learned a lot off the Franklin High School build. And so we really kind of know what we need to do to meet the metrics in order to be awarded a grant that will give us opportunity and growth, as well as future growth.

Intervening the other day, the gentleman, they were there talking about the Highland situation. Seemed like we stalled. It's always the same conversation. Where is that at now?

So they had provided multiple options for our board as well as commissioners to be able to consider. And I think before we get ahead of anything, our two committees, liaison committees, need to sit down, really review it, do a deep dive and understand, you know, potentially what is there, what are the options so that we can really get a good feel as to the direction that we need to go to bring back to our boards for a recommendation. And I don't know what that will be at this point. But I think the first thing on the calendar would be to get a committee meeting together to do a deep dive. And that has already been in works. And we do have a calendar date for that in July. Some options, yes.

Just so you know, talk to me a little bit about, I'm going to call it Union Academy. Where are we with that? What's that going to be?

So next year will be the year that they are planning for their move, their transition to Franklin High School. And once we are able to remove students and teachers from that site, it truly at this point has not been determined what we're gonna do with that site. We definitely have options that could really, I think, help out the larger community for certain things that are needed countywide, but no decision has really been made at that point. Right now, our main goal is to make certain that we can have a really good transition of Bartram, which will be transitioning its name, The Peak, to FHS. And both principals have already started having those conversations and will continue to do so, so that that transition is successful.

The other day in our meeting, it was interesting that another group had shown up wanting a piece of that. Refresh my memory on that. They want to have the school.

Yes, the Boys and Girls Club has proposed some options to utilize the space for an after school facility. which would allow us to have the ability to utilize that during the day for training purposes or whatever we need to as a school system. So that's definitely an option that we need to consider as a board. But nothing definitive has been made yet in that regard.

My observation is you've got a good working relationship with a lot of people and your liaison people and Mr. Tallent there, they keep us right on the mark.

Absolutely. We're surrounded by some great folks.

What you do, too, you keep us in the budget.

So let me ask this so Commissioner Sherrill doesn't have to. What's your fund balance?

It is. Ending 24-25 was $2,851,873. We appropriated $1,521,721 in our 25-26 budget. So we're projecting to end the year with $1,330,152.

All right, let's go back to the maintain, the list of. So, over to the right, you've got your raises. Where's your FICA? Because there's an increase there, but there's no number.

We didn't have an increase. We kept it the same for our budgetary. I thought you said there was an increase.

I apologize. So, as we go on down through here, those seven classroom teachers that we lost from the state. What were those teachers?

So we had three and a half in classroom teachers. That's our 001 allotment. We lost, yes, that was reduced by 3.5. We had one in K-5 and then one in instructional support personnel. The others, we usually range. I think last year we brought 30, but we ended the year with more. It's usually around 30 to 35. So that's why they're There are seven instead of just the three and a half that are coming from positions that we lost from the state.

So explain how do you lose the position? They just say we're not going to pay for that position or?

It's just a reduction in that allotment from the state. It could either be based upon ADM. It could be state funds that are being earmarked or reverted to another pot of money, you know, somewhere within the state that it just reduces that initial allotment. But overall, it was an additional, or it was a reduction in the number of positions that we received.

Okay. So the K-5, central office, guidance counselors, media coordinator, those are all current positions?

Yes.

Yes.

Yes, we have those currently. Those are not additions at all. They're just being moved from a state allotment over to local because we can't, there's nowhere else to pay for them.

So this maintain figure, it is our bottom line. It's what we are hoping to maintain so that we don't have to make some really vast, deep decisions regarding personnel in order to keep our current level of support for all of our students.

Okay, so Highlands Pre-K, teacher and teacher assistant. Just in my first glance, my opinion, if you go to the next page, which you don't have to, those top priorities, I mean, you're talking art teachers, music teachers, EC teachers. I don't know that there's any requirement for us to fund a pre-K. I mean, you're talking $117,000 there. That could be used. Just in my opinion, I feel like those priorities maybe are a little off there. I know we built that pre-K. or this commissioner board paid to have that done, but funding that over some of those other teachers is just, that's questionable for me. My big question or my big issues are the decrease in state funding. So we went through this and we broke this down yesterday. There's a lot, I mean, the majority of that is grant money, right? I mean, that's not technically a decrease in funding, We knew that money was going to run out because it's grants.

Right. So what happens with grant? Whenever we receive a grant, yes, it is additional money and revenue that we are able to utilize. So whenever we have grant money, we're then able to take more individuals off of our allotment, put them on a grant, And it stretches that out for us. So it benefits us. We're able to utilize the grants more. We don't have the restrictions in terms of a grant like we do in 001, which would be a certified teacher within a grade level span. So it gives us more latitude to be able to take individuals off of local and put on like a grant. And that's what we always try to do is preserve as much local dollars as we possibly can.

But in that, you're using grant money to fund recurring positions.

Yes, but if we did not have that grant money, which I think it is for us as a system, we always need to be looking out for grants so that we can stretch our dollars and provide our services as much as possible. If we didn't have that grant funding, we would, of course, have been coming here sooner asking for more without those grant dollars. And we will continue to write grants. I think that's just being fiscally responsible. But like you say, you are right. Grants are not always reliable and you can't just always depend upon them. But when we have availability and we have the ability to apply for grants, we're definitely going to because bottom line, it will save and preserve the local dollar.

And then your inflation number. How do you come up with that inflation number?

We looked at a three-year average and then where we currently are in 25, 26 through February, and then just kind of budget those.

What is that inflation on?

That's on everything operational. I mean, that's your local transportation. That's your transportation salaries, your director, gas, diesel, tires, license, transportation of pupils at your bus driver overtime. Your insurance, your board, legal expenses, audit expense, computer software. I mean, it's really every line going line by line for operational.

You must have read my notes over here, Commissioner. So based on some lines that Commissioner Breeden said, These positions, and you said it was grant money that paid for these positions. The grant money's gone, so now you need local dollars to provide the funds for these. How does the state determine whether these positions are needed or not needed? I mean, if they're not providing funds, it seems to me like the state DPI is saying, you're overstaffed. You don't need these positions, and we're not going to fund them. And the only way you're going to get them funded is if you get a grant or you get the local commissioners to provide the funds for those. So my question on those is, Do we have positions that the state don't recognize that we really, really, really don't have to have or need, but the school system wants them in place?

So these are your classroom teachers. They're instructional support individuals. The state does give us restrictions, like we have K2, or K3 rather, classroom size laws. We cannot exceed a certain number within a certain classroom. And they differ from K through third grade. So in that regard, they do require us and we have to audit that and we have to send in numbers that we are maintaining that classroom size law. But we don't necessarily get the funding for that. So what we normally have to do is beyond third grade, Our fourth grade numbers, our fifth grade numbers, sixth grade numbers, they are much larger because we have to take some of those teachers to fill in the void at the K-4 level. It's a requirement. We have to be within the letter of the law, but we don't necessarily receive the funding to fully fund that. So that has to come down to a local decision. How are we gonna make that work? How are we gonna close the gap? And so we basically have to rob Peter to pay Paul in that regard.

Because I've sent some information to the state because I want clarification on this. I mean, North Carolina state constitution was clear. Schools are state funded. Yes. And now the breakdown is 70-20-10 according to what the state looks at, 70 percent state funded, 20 percent local dollars, 10 percent federal dollars. So, I want clarification from them as to how they can mandate all these things. that are required and necessary for your operations of everyday school system of teachers, classroom sizes, and everything, and how you can decide that you have funded everything that you need to fund for this school system, Lake County school system, to operate. Sure. effectively and efficiently to educate our children. So that's Ian.

And, John, we're on the same page with that because, like you said, it is the state's obligation to fully fund. And if they would just be fully funded, we would have to come to you all. Right. That's where the breakdown is.

So since we're – well, where was the – oh, the Highlands Pre-K. You and I talked about this. Before the school classrooms in Highlands was finalized and everything, I went to Ms. Keener, and we sat down, and I don't have a problem with pre-K. I understand that both sides of the coin on this, the need and what the school system says, educating the children. You have a public dollar pay, which qualifies for state funding. And then you have private pay. And so the private pay was supposed to have been set up to where there were no public dollars going into the pre-K in Macon County. Because what got my attention, you guys were 100. And that one year, you were $160,000, $170,000 in the hole. We didn't have pre-K in Highlands. It was in here, and you were in the hole. Well, what do we do to change that? It is a – to me, that is absolutely critical that pre-K is self-supporting. No public dollars going into it. The state don't recognize it, so we're not required to have it. So then – That needs to take place, in my opinion, as if it costs another $117,000, then where are you going to come up with that money? Private pay. I mean, my son paid $1,200 a month for his child to go to daycare service. There was no help for him. So I understand the expense to the working families. and the benefit from the community for those parents to go to work. But I don't think it's something that public dollars should be funding. Going back to the percentages that you presented here to maintain 21.01, this percentage excludes capital outlay and debt service. What is the percentage when we add that in?

I think capital outlay was 2% more, and then debt service may have been another 2%. So that would be around 25, 26.

And what we're paying now for the new high school, the new expansion from Highland School, how much did we just send in for the first payment of the?

It's general fund dollars for the 27 budget for debt service, which includes the high school, is $2 million. $3,272.

Okay, so when you factor, so the payment on the high school was $9 million. Is that not correct?

But you have Article 21 sales tax that helps offset that. So, there is a, but I'm just saying out of general fund dollars, it's $2 million.

Okay. So, when you add it all up, I mean, it's real money. If you've got $140 million for a high school and $12 million for Highlands, that's $152 million financed for 20 years. Well, minus the grant. So, you got to factor that in, do you not? I mean, it's still in our budget.

Yes, it's a $9 million payment annually.

Right.

But it is not shown in your general fund balance where we are appropriating fund balance from and that kind of thing.

So, our budget of $68 million.

Does not include.

Does not include.

The entire 9 million payment, no. It only includes the $2,003,000. Okay.

All right, so when you factor that in, that puts us back to what percentage?

I think around 25, 26%.

If you add in the capital outlay and the debt service.

All right, my last question. What does the Macon County school system do if the state don't fund your needs, the county does not have the funding to provide the funding for your needs, and the federal government don't have the money? What does the school system do with the shortage of the maintain? Because you don't have taxing authority. So what do you do? I mean, how do you break even?

So, unfortunately, we would have to sit down and make some really hard decisions as a board to determine, okay, our last thing we want to do is send people home. So you look at programs. You look at areas such as technology. There are other entities that we would have to pull from, which is going to really hurt the schools. The services they're currently receiving, they just would not be able to receive at that level. So ultimately, yes, it hurts the schools, but it trickles down to the students, which is why we are here. It's who we serve. But ultimately, we do not want to send anyone home if we can help it. So we would start there. And determine, did we make the threshold? And if not, then we would have to go through and prioritize, are there any way through attrition or anything of that nature to cut even more, to cut deeper for sustainability? Which is unfortunate, because it would directly affect and impact the classroom, and it would ultimately hurt the students. But yes, we would have to have those conversations.

Thank you. I think one other question. Pro-education, we want the best for our students. I think your taxpayer wants the best for your students, because it in turn comes back to benefit them. You can be a senior citizen, but you're dependent on that education of that child coming through Franklin High School, through CTE or whatever it may be, to be your nurse one of these days. So it's a cycle of benefit to the taxpayer. Then when I look here, to see that our exceptional children being in a tight spot, exceptional children teacher at Franklin High School, your mental health professional, like a middle school, your self-contained exceptional children teacher got three, exceptional children personal care assistant is four, Legally, can you cut into that situation or they come out on top? Because we have to serve those through the IDEA. So that's a piece there that could not be dickered with. with our exception of children.

And with EC, we have to, it's called maintenance of effort. We have to maintain a certain level of support and care based upon what we've already spent out and based upon our student population, which is continuing to grow. The needs are great and they're vast. And I know you all had mentioned pre-K. One thing that pre-K does, it identifies students really early on. And it provides for kindergarten readiness. But a lot of our pre-K students have intense support at three years old, at four year old, that we are able to identify and help have a plan of action to help support them so that they can be successful as they progress through our educational system. But yes, you're right, we would not be able to do much with that.

I think a pre-K also assists us here in Macon County with employees being able to work. If you're having, you can talk to parents who have pre-K age students, they would be working, but they've got to stay home with their children. And so it's an economic problem too.

It's economic. It's also a retention and a retainment tool. Right. When we have individuals who want to know, do you have a pre-K, and knowing that their child would be able to be at one of our school sites, it rests their mind, and we're able to conduct, you know, transportation pieces, things of that nature. So it really does come full force. full circle, but it does help us recruit as well as retain really highly qualified individuals to put before our students as teachers.

So there's a certain degree of legal responsibility and ethical responsibility we have to our community. And in my opinion, if your community is educated, you're an attraction to tourism, you're an attraction to people. Coming here to live, whether you're a senior citizen or not, we want to be a prosperous community serving our young people. If we don't serve these young people, these young families, we're just going backwards. That's just my opinion.

Well, I feel like I have a lot of thoughts right now. And it's kind of hard to really sit here and pick on this. You hear all the complaining about bus drivers and their pay. Last year we got hit for the school lunches. To piggyback on what Commissioner Breeden alluded to, I deep down feel like this exceptional teachers and the assistants, That should be a number one priority in even superseding pre-K. I don't know if that were an option. I think that's a top priority, hands down. I mean, mental health's important. I don't know. I feel like my problem with our budget, and I'm struggling with that, to be honest with you. Mr. K proposed cutting out an ambulance, several vehicles. And we've cut our budget down to where we're treading water and water's coming up to our nose. And I'm really kind of counting on this quarter cent sales tax. And I hope the budget that was presented really kind of paints the picture to the public that there's a major deficit with this school system, a major deficit within the county. And if we come out here and raise The mill rate, one or two cents to only capture the school, I don't think the quarter cent sales tax passes. And then we'd probably have to raise them again next year if it doesn't pass, and it's like you double dip. And you saw the fire departments. So essentially, somebody in the town of Highlands gets a tax increase from the town, the fire department, and then the county twice. It's four increases in less than a year's time. And I think that's my struggle here, because we're scraping the barrel. I think you guys are scraping the barrel. I look at Tracy over there and his maintenance staff. I watched him yesterday and on a day like today, they're potentially cleaning out a clogged sewer at a school. If anybody's ever been in a manhole with sewer, a bunch of kids, You know, those guys need money. And based on what I can see on here, they got a 3% raise. Is that right? And it's just hard. You sit here and look at this, and I don't have the right answer. I wish we had a magic pencil. But I think about that quarter cent, and, you know, we're pulling. And our proposed budget, what, $1.1 million, $1.2 million?

So I was going to remind the board, obviously, typically we don't move money out of fund balance to do capital. Typically the $1,150,000 we do for the school, we typically pay out of our operating budget, which is what we call our PAYGO capital. So you earn the revenue that year and you spend it that year. This year, because of the other increases we had, I couldn't make that work. Your only option to fund that $1,150,000 was to either fund it out of fund balance or to do a property tax increase. I'm not terribly concerned, and obviously Mitch is still here and we'll have this conversation maybe a little bit later. But it doesn't bother me much to appropriate that money this year out of fund balance, knowing that hopefully a lot of governments do it. Your revenues will hopefully increase a little bit next year. We'll have funds roll back in at the end of the year. On paper, it could be a wash because a lot of governments will appropriate it and never spend it because their revenues catch up. However, you want to be very cautious with that because at some point, your revenues may not catch up. And yes, essentially, we are paying for capital out of fund balance and using that excess money to cover operating expenses. Even on paper, using that to pay for capital, you're covering ongoing expenses, recurring expenses. So you just want to be very cautious with that. Mitch, like I said later on, he will tell you that's not necessarily a problem, but it's something that you want to be very cautious with. If you want to look at any of these other dollar figures as far as how you're going to generate this revenue, if you're not going to do a tax increase, if you want to get to a number somewhere. I guess the other question I had, I know the legislature was bouncing those percentages around on those raises. They haven't hammered that out 100% yet, correct? We're still in limbo on those, okay.

No, and just a few side notes. I love to see capital. I feel like you can kind of show the community where their dollars are being spent. But I often overlook the maintenance and the cost associated with that. If you think about the Mecca Middle School, we just added the gym facility, 8 or 10,000 square feet, added maybe 100,000 square feet to the high school. I love to see the capital, but there's a price tag that reoccurs with that every year in the county staff. So I don't know, I'm struggling with this budget. Like I said, I really want to show the urgency to the public that You know, we don't really have a choice. Revenues have to come in, and it's going to come from sales tax, pass-through money, or it's going to have to come off, you know, the backs of our community, and I think that's kind of where I'm hung up right here.

Let me add one thing to that. We do have a team that's... working with the one quarter of a penny sales tax at this time. And we're going to be moving out in the community to market this idea. And hopefully, you're looking at two plus million dollars that could go back into our revenue pieces there and uh overall you say well that two million dollars versus 68 it's not but it's it's a piece back in there that sure can be an asset when you get in these hard places like that i want to say thank you to the school board for their uh supporting this i see mr breed love back there somewhere thank you for being on this team but we hope that the uh the team does, when we look at this quarter-cent sales tax, it's bringing in two-some-million dollars for one quarter of a penny versus two cents trying to bring that in to your local property tax. And we're in that wishy-washy place right now, which ones we do. And I just hope the voters see the value of the quarter of a penny sales tax and that money going into the pot instead of increasing our property tax two pennies. I'm a property owner, too, and it's tough.

The

The money that's in there for the $200,000 for school lunches again, is that for every student in Highland School and Franklin High School? Does that, is that, that's all inclusive? Okay. So, you were talking about not taking local dollars and letting the state pay it. Well, the program in the federal government that provides free and reduced lunches to these students, we sort of went back to what we were talking about a minute ago. If you fill out the application, this process started in 1946 or something like that in the federal government. And if your family qualifies for free lunch, then the federal government's going to send that money into the school system. If your child or your family qualifies for reduced lunch, then the federal government's going to offset that cost. If you don't qualify, you got to pay the piper. I mean, that's what we all have to do. So I'm looking at it at $200,000 by all means. the kids should be fed. And I've been listening to this across the nation about this. And they said, you know, if you're incarcerated, you get three meals a day, free. Well, if you want to call it free. But our kids, I mean, if our children don't go to school, what happens? The officer goes to the family and somebody's in trouble. So realistically, the children are incarcerated because they have to go to school. They don't go to school. So it's a double-edged sword there because if the inmates are fed three meals a day, then the children should be fed two meals a day. So I'm torn with that, but at the same time, there is a program in the federal government that takes care of these children. So I think that money could be used at a different place on this budget. Because I know we all got beat up that we were against feeding the children. We weren't against feeding the children. It's just there are processes for all of this.

One last comment. My kids brought home, my little girls, their yearbook. And I guess they're in kindergarten. But when I was in kindergarten, I was number 27. My last name being Y. They're number 14. The last one is. And I just happened to flip through, and a lot of the classes have 12 to 16 kids. Is that still part of the unfunded mandate that That came into place a couple years ago. But I did notice that they didn't have a teacher assistant on the photo. Right. So you had one teacher per, just say, 15 students.

Yeah, we don't have teacher assistants primarily outside of kindergarten. You may have one that's a floater that serves all the grade levels. clerical or maybe a small group. But, yes, with the K-3 funded class size, we have to keep within certain numbers, and we can't go over. It's K-3? It's K-3, yeah.

I got one more comment. It slipped my mind just a minute ago. So, we've sat here for hours this morning talking about the different government agencies needing more money. Inflation is killing them. The costs are rising. So is it on every household in Macon County. You're talking about we have to decide whether we send someone home or we cut this or we cut that. Well, our family's sitting out here that's on fixed income or sitting there saying, do I buy a tank of gas or do I buy my medicine this week? So to, and just like we said, we're all in this boat together. When this ship sinks, we're all going down together. But by all means, if our families are out here struggling to buy medicine or buy a tank of fuel, making hard decisions, then it's up to us to really buckle down and make the hard decisions as well.

I WAS ABLE TO TRACK DOWN REPORTS. DO YOU ALL GET NOTIFICATIONS SO IT'S TAKEN SOME TIME. BUT ANYWAYS, SO YOUR, WE USUALLY BUDGET, IT'S PASS THROUGH MONEY, SO IT DOESN'T HELP YOU MUCH. BUT ON OUR END, WE DO 60,000. YOU ALL HAVE 40,000. WE'RE COMFORTABLE WITH GOING UP TO 140,000. IT'S EXTENDED THROUGH 26, BUT WE'LL GET THAT PAYMENT IN 27, THE SCHOOL YEAR 27. SO ON YOUR END, YOU CAN CHANGE YOUR TIMBER SALES NUMBER TO 140. OKAY, PERFECT. AND ON OUR END, IT'LL JUST BE PASS THROUGH REVENUE. I do have one more question.

So on the raises for certified and uncertified, whenever they hammer that out, is there a requirement that we have to do that for the non or for the local? Yes. Okay.

All right.

Guys, thank you all. We appreciate it. Board, thank you guys for showing up.

Thanks for what you do.

Same here.

Don't let the kids go hungry.

We won't. We got them.

Don't let them go hungry. We can do that. We're old enough to do that. Thank you.

All right, Southwestern Community College. Dr. Thomas. Good afternoon.

Welcome.

Thank you for this opportunity just to have a conversation just as you had with the school district. I just want to take an opportunity to kind of share our thoughts on where we're at as a community college and the support that we have from you all. I want to thank you for that support. Just a real quick update on the burn building tower that has been on our 11-year itch or more. We broke ground on the... of the utilities and getting the platform in and so that building should be kind of on schedule we've kept up with warren and joe and uh hopefully he'll be here maybe september october installed and up and maybe operational by december uh is kind of what our time frame is on that so Just a little bit of hopefully positive news, but it's been a long time in the process for us all and and but I I do appreciate because y'all did do some additional funding to help us get that over the finish line. So appreciate that very much so. Is someone driving or is there a or do I have to do this? I can walk around. I don't think you know. You know me too well, Curtis. Just give you a little bit of quick, you know, about our presentation today. We're going to, you know, just going to talk about the budget request. We're going to talk a little bit about some impact that the SEC has as a role in return on investment here in Macon County and then also the approved budget reflects what are operating. I'd like to come in from the standpoint of sustaining. I also want to come in with the standpoint that I'm going to ask you for what we believe our needs are. We look at our projections of what we spent, where we're at, what the future holds. You talked about inflation. You talked about the cost. You know, this conversation is not going to be probably a whole lot different than what I listened to with the school system with some of the costs from that standpoint. Strategic plan is directly linked to the Macon County budget and to the college. We talk about student success, which is access, retention, the completion. We've got the early college out at our location there by the library. with the Grove Center, which is about 125 students, plus or minus. That is a free education for two years of college for those students if they complete through their fifth year. So whatever that number of students that is out at the early college, then they matriculate over and take college courses through SCC. So they have the opportunity to finish an associate's degree with SCC Some of them finish prior to graduating high school, or before graduating high school, and then others take the fifth year and finish on. And then others will transfer out or matriculate over to SCC. So that's a great opportunity. We have a great relationship with the public schools. So we do career and college promise. Mr. Shields had mentioned CTE. So we've got a great relationship with CTE and the nursing aspect of it. I'm glad you brought that up from a standpoint of THAT PROGRAM GOING FROM HIGH SCHOOL TO THE COMMUNITY COLLEGE. IF YOU GO TO ANGEL MEDICAL CENTER, SPEAK WITH CLINT. THESE ARE HIS NUMBERS, NOT OURS. But anyway, like 98% of their nursing faculty, or faculty, nursing people that he has there, 98% of them come through SCC. So just the economic impact of what we do and what we provide as far as that opportunity taken from the public school through our system and then providing the taxes that hopefully will help you as commissioners to be able to share that wealth amongst all the needs that you have. So I appreciate you all taking that project on because I know there's a lot there for you all to consider. The impact, you know, from the college, and I'm talking about Our service area now our service area is making Jackson and Swain. So it's a three county service area plus the quality boundary, right? So we look at about these are individual head counts a little over 1100 workforce students that were served right at 2000 curriculum students. We have a small business center that works. Marnie Harris works really well and really close with the Chamber of Commerce and the small businesses. throughout our region. And so there's that. And then the public safety and training, you know, and are familiar with Curtis on the first responders. So stewardship, you looked at a little over 10,000 public safety trainees. You looked at small business clients that came in for counseling, help to expand their business or to start a business. We, healthcare is a big part of who we are as a As a matter of fact, the health science building we opened up in the fall of 21, not counting the graduates that graduated two weeks ago, there's been 695 students graduating in a healthcare field in the last four and a half years. We have 17 health science programs, soon to be 18, with the addition hopefully of the dental hygiene program. Now, our data also shows that 89 to 90% of our students reside or stay within our service area, but that's our three-county service area, correct? So if you take 90% of 695, just roughly in your mind, it's about 620 students, plus or minus. And you look at that from a good jobs perspective with the nursing that can make And there's a whole range, you know, because you've got CNAs, you've got LPNs, and then you've got the ADNs. But if you take just an average of a $50,000 a year average over all those health science programs, add benefits of about another third of $15,000, and you take $65,000 as an impact on the economy, Take that times 620, and you can run that number, and it's about $40,300,000 that is impacted within our three-county service area. So, I mean, just kind of give you a perspective of what SCC does and the impact it has within our service area for the training that we provide. And that's just the healthcare. That's not the career technology and the other areas that we have, and even, say, for public safety and training from that standpoint. um so just to give you all that uh information just you know who we are and what we do and then we get down to the request and finally it's you know we're looking at 652 000 reoccurring which is really the operational support that's keeping the utilities the lights everything else uh insurance uh on and then we have a 1.4 million capital uh request in there but again that Part of that, the largest part of that, has been the reoccurring over the last four, five, six years of paving the driver training range, which we, about a year ago, had talked about as far as the CDL program. But if you take that out of it, depending, you know, how we work it as a partnership, you know, then the request comes down to about, you know, 600,000-ish plus or minus on that kind of area. Again, just the area, this is what our square mileage looks like. We provide services for a little over 9,000 students. That's workforce and curriculum. See what our residents are, and we have 40-plus programs. So kind of covered this slide already. This is what our current operational funds were, $510,000. That's between the Grove Center and Public Safety and Training. And we were given $126,000 or allocated $126,000 for capital last year. Capital has always been a concern for us because that's part of the... Got back to the question of what the requirements are, state mandates and things of that nature, and 115D-32. We cover that, and I think I've mentioned that to you last year, that those are the responsibilities of local county government to keep the facilities up and running. So that's everything from maintenance and vehicles and positions for housekeeping and maintenance, et cetera, all the way down to insurance and renovations and repairs of those facilities. So that just gives you another quick guidance on that. This next slide just really shows you where we've been 22, 23, all the way up to last year, 25, 26. And then what we had currently had been asking for so there's the operating expense detail from you know you heard the school system mentioned that the general assembly is looking at additional pay raises we have I think 2 and a half positions. on our schedule right now thank you for allowing us the full-time position for the grove center that has been has worked out really well overall for us and i hope for you also but we have that position i think we have one and a half positions Public safety. So that's that's a small part of it. But it is part of it. We are adding because of the new burn tower coming in. It will be coming on in November, December range. Part of that was a new position to help run that so that we don't have just anyone running it. So that includes about a seven month. portion of that 12 month salary in that neighborhood. So we got that in there. So that gives you an idea of where those costs. Otherwise, it's just pretty much inflation as you have talked about with the public schools. So we're just trying to do that same thing. Maintain, keep up with inflation and keep things current so we can sustain our operations to provide that for our and your citizens so that they can take and be educated and trained and get the jobs that are out there and provide the tax revenue that comes back into the county. for you all. Capital requests, you can see the blue line. We've always had it. There's a lot there, but like I said, about $800,000 of that in the past, we always had put a buffer in there at the highest cost. We have shared some more current information with Mr. Cave on the actual, hopefully actual cost. It's a whole lot lower, probably a couple hundred thousand lower, so that has really been a blessing and a benefit to us at this particular point in time. with a fairly quick turnaround from what Curtis got on his last. So if that's a conversation we have and how we're moving forward with all that, then that can all kind of be. So the next page actually shows you where you can take that. However, that works within the budget. $800,000 off that, 1.4, which comes back to requests. We had a fire that destroyed a modular unit that has been missing now for probably three years at a minimum at this particular spot. Has it been? Well, time flies when, so we're short a classroom we've never replaced. So that request has been in there also, just to give you an idea. The roof at PSTC has been leaking and it's something that, and that's the main building, the Jerry Sutton building that we have there. So that's, there's some need of repair there. The HVAC units are in need and that FCAP is when the state construction came out from Raleigh and they do for free for us, they do a deferred maintenance, look through our buildings and kind of say, ooh, this is the age of that, this is what needs to be done. And so that was on their request to, or on their report to say those need to be looked at to be replaced. And we have a generator backup in case everything goes down, we have that request for the generator backup. and then you have the keyless door swipes that is a better security system for us and gives access and we know who's coming and going uh through our doors and we do that on all of our campuses to provide at least one or two doors per building for key card access for security reasons so huh that's interesting oh there There we go. It's just a quick summary of what the requests are, what they've been, but then just kind of give you, talk about the economic growth, what we do, what we do as a college to provide that opportunity for our citizens, your citizens, to maintain an opportunity to lead a sustainable life with job security and job placement. So I won't entertain any questions, but Curtis and I brought with me Tina Wilson, who is our CFO, and they would be happy to answer any questions. So go for it. Yes.

Only question I have, who determines what the tuition rates are?

The state.

The state. So you're bound? by the state of North Carolina, so you have no control over?

I do. I cannot personally run amok as an individual community college and say my tuition, I got to raise my tuition by 10 bucks a credit hour or whatever. That is set by state, and we follow that. So every community college in the state of North Carolina has the same $76 per credit hour right now.

I was at the early college awards thing last night. Oh, cool, thanks. And very impressed with the young people there who had received their associate degree. How much money did you just save that family?

$8,000? Oh, if you're going to Western, you save probably $16,000 over two years to $20,000. And if you're going downstate to one of those bigger four-year universities that people talk about, such as the red and the black or the light blue or the dark blue, you're probably closer to $35,000 to $40,000 a year. Yeah. EARLY COLLEGE IS GREAT. CAREER AND COLLEGE PROMISE IS ALSO A GREAT OPPORTUNITY. THOSE STUDENTS ALSO DON'T GO IN AS FRESHMEN, USUALLY. IF THEY'VE COMPLETED THAT, THEY'RE GOING IN AS JUNIORS BECAUSE THEY'VE ALREADY GOT ENOUGH CREDIT HOURS TO, SO YOU GOT A YOUNG PERSON COMING OUT OF HIGH SCHOOL GOING INTO NC STATE, UNC CHAPEL HILL, OR WHEREVER AS A JUNIOR. CAREER AND COLLEGE PROMISE, IF THEY TAKE 30-PLUS HOURS, THEY'LL GO IN AS A SOPHOMORE. SO THEY'RE SAVING A YEAR, SO THEY'RE SAVING ANYWHERE FROM, YOU KNOW, $20,000, $25,000 TO GO DOWN STATE OR, YOU KNOW, IN THAT NEIGHBORHOOD. SO THERE IS A SIGNIFICANT COST SAVINGS, YOU'RE CORRECT.

and you served with us a group business advisor council when we were making a decision about a new franklin high school once they appreciate your work in that with the cricklin park and you have carried that theory on to your school, I guess when I think of Southwestern, now I think of 13th and 14th grade.

Yeah, almost like a one plus one, two plus two type deal where they can finish high school and complete an associate's degree depending on what they do through their high school career. They can get a CNA through the public school and then they can matriculate right into our LPN or ADN program without having to

DO THAT AFTER HIGH SCHOOL.

SO, YEAH, THERE'S A LOT OF THOSE PARTNERSHIPS ARE VERY STRONG, AND WE ARE VERY PROUD AND VERY SUPPORTIVE OF THOSE PARTNERSHIPS. MAKING COUNTY LEA, THE PUBLIC SCHOOL, DOES A GREAT JOB WITH THE CTE PARTNERSHIPS AND THE CCP CAREER AND COLLEGE PROMISE, WORKING WITH THE COMMUNITY COLLEGE TO PROVIDE OPPORTUNITIES TO SAVE parents that tuition and fees that they would end up spending if they graduate and move straight on.

Thanks for your leadership.

I've always been able to call on you. Absolutely. Anytime. I'm here to serve. I'm here to help out.

Mr. Chairman, if you want me to very quickly, I'll summarize his budget request on the proposal that I had. Obviously, we're short on operating money, so I took his request back to the operating money that we had last year is where that figure came from. We talked about that position earlier. we we think that position that they're asking for will be around december we think based on the construction you building but i told him maybe one of the best things for us to do with that is for you all obviously are aware of it maybe if we give it another month or two we hammer out the official start date of that facility give us a little more time to figure out when it's going to start and we can look at that maybe a couple months in if we have to on the budget process um as far as the driving track if you remember correctly we've been planning we planted the planning the renovation of the armory we had a 2.5 million dollar hold in our capital improvement plan to do that uh joe and i kind of made you the commitment that we would do the renovation and pull off paving the driving track for that $2.5 million. We're also going to have some conversations with our architect hopefully next week to make sure we're value engineering those numbers as much as we can on the armory. But the good news that I have for you is on the driving track, they brought back a figure, the low estimate was instead of $800,000, it was $574,600. They can start within about two to three weeks of whenever this is approved. Just something for you all to consider. You have a couple options with that. Obviously we can't, I knew we were having to set aside some fund balance and we'd have to use fund balance for a lot of these capital projects. Well, typically what we do and we'll have to do this year is like the jail roof, the library roof. We have them come ones and twos to you throughout the year. make the case and we pull it out of fund balance rather than moving a big big appropriation somewhere so i think we can deal with those as they come up you know the roof obviously troubling if we need to fix the roof however if you want us to consider pushing the driving track to make sure i think that's a fairly big urgency there's a class that you've managed to already get a class scheduled in october correct So if we want to assist that and make sure that that happens, we can do one of two things. If you want to continue with that, and obviously it's your decision, we can make that appropriation at a July meeting. Or if you gave us the okay, we go ahead and plug it into the budget request this year as an allocation from fund balance. Then when the budget's approved, then of course it's approved for them to go the first of July. And that's entirely up to you if you want to do that. obviously i don't want to keep pulling from fund balance because eventually the savings account no matter how big it is will go dry however we have been planning for this for the 2.5 million has been on the books for five years i guess in our cip So that's part of the, when you heard Mitch talk about the $20 million that we've kind of essentially earmarked for past and current and future things that we already know we're going to deal with, it's part of that $20 million. So not to say that it's easy to spend that money, but when we have further discussions on this, if you want to decide if you want to expedite that or not, we can certainly make that happen.

Where would one find the specs on this repaving? Curtis has the...

I've got the...

I have the bids that we sent out.

Specs as far as to what degree...

I mean, what's actually out there bidded, and also are they going to be core compaction tested? And it's asphalt? I mean, because asphalt's just like... a lot of other things, you can go out and throw asphalt down and run a roller over it, or are you actually going to put binder and surface and compaction tested to make sure that it's going to hold up on these?

I checked with DOT as far as what the requirements were for CDL and stuff like that, too, and they suggested doing two one-and-a-half-inch overlays of it with a sealer on it just to make sure that it was compacted correctly.

Don't you have a lot of cracks and stuff out there? We do. Okay. Well, I mean, what's going to take place with those cracks? Because, I mean, ultimately those cracks will open back up regardless. I mean, if it's not removed completely and, I mean, the asphalt or the surface is only as good as the base it's sitting on. Yeah. So, and I can't go against what DOT requires, but at the same time, you know, this is a great opportunity for you guys in Macon County to host this region for CDL training, and it is an economic impact and everything. But, you know, like other things that we try to do, we want to make sure that it's going to last for a long time. With the pickleball courts, we went to this concrete. And we have a 50-year guarantee on this. Now, get us somebody to give us 50 years on that asphalt.

Let me talk to you about this driver's school. Yes, sir. I'm really excited about it. It says right here, dates and times, October 13 through December 17, Monday, Tuesday, and Wednesday from 8 a.m. to 5.30, Thursday, 8 a.m. to 3.30, and Fridays online. Who can take off work for two months to go pay $2,000 to learn how to drive a truck?

That's a good question. I mean, it's someone who's making a career change as a funding.

That doesn't really, in my opinion, fit the need of anybody in our community because most of the people wanting to drive, they've got to pay rent, and we can't do evenings and weekends. Can we set up a course for 5.30 to 9 p.m.?

Well, the whole thing that we went with was Caldwell Community College because they're a gold standard for the CDL program in the state. And we had reached out to Haywood, and they were not in a position to partner with us at this time. They don't have the... ability to do that as well. So we went with them, went with Caldwell because of the equipment that they have and everything there. The only thing they said that there was some funding available to help with the cost of the training during the time on that, too, as well.

So we're, since we're partnering with them, we're pretty much at their schedule, if you will.

There's alternate sources. Tri-County has a schedule that accommodates the working person, and so does the community college down around Westminster. I mean, that's where people are going after work. In my opinion, if I would have saw this on day one, I don't know anybody that would help. Who can survive without a paycheck for two months to try to get an entry-level CDO position?

We have the same challenge when we're doing law enforcement training, too, because we're there for over five months. Eight to six or later during the day, too. So it's a difficult time when you're asking someone to do that, but sometimes it's a career choice.

I mean, there's no way to find an alternate.

I can talk to Caldwell. The only thing that Caldwell had is they were scheduled to go to Wilkes to partner with them. And Wilk's canceled, so it kind of was an open door for us to invite them to come in so that we could get something moving forward here, if you will, on that, too, because we don't have the budget to buy all the trucks that we need to have that. And Caldwell, fortunately, has that.

Oh, you're partnering with them for the fees?

Yes, yes. They're bringing all the equipment, everything, and it's by the mile that we have to pay. And then once the class is over, they'll invoice us for 50% of the cost of the class.

Got some old spare dump trucks up there somewhere?

A school bus or something?

There's so many nuances on what kind of different trucks you got to have to get different.

I guess you're... Yeah, but, man, that's a little bit disappointing to me right there, just being honest with you.

That's a great observation. THERE ARE QUESTIONS THAT WE HAVE TO ANSWER AND TRY TO ADDRESS ON A LOT OF PROGRAMS LIKE THAT. JOSH, CAN YOU DO IT DURING? WE GOT EVENING PROGRAMS THAT PEOPLE NOW WANT DURING THE DAY. AND YOU GOT DAY PROGRAMS THAT PEOPLE WANT IN THE EVENING. IT TAKES PERSONNEL AND EQUIPMENT AND ALL THAT OTHER KIND OF STUFF. BUT WE ARE AT THE... mercy of Caldwell because we don't have the funding to buy our own tractors and trailers and you got a flatbed you got a boxcar and then you got a tanker also so asthma yeah so you gotta have all that equipment which is beyond our capability. So it's best for us to be able to partner with an institution that already has it. And as Curtis says, Caldwell has done this with various community colleges throughout the state. Now, timing-wise, that's an easy opportunity for us to go back and say, hey, is there any way we can do this in the evening and weekend? And then what's the duration of time applied? And we may be limited because they may have that need. and say we can't help you because we only have this window open. So you've got to figure out how to offer it in that window. Or if they have the opportunity to expand it, that's just something we'd have to entertain with them.

They're sending instructors here from Caldwell who are staying local hotels.

I didn't know all that. I'd just be willing to bet if you opened up a class from 5.30 to 9 p.m., It'd fill up with a waiting list hundreds of people long. This one, I'm sure it'll fill up right away. It's just a strain. My last question is that building that caught fire, did we have insurance on it? Is that $150,000 the gap for replacement?

There was some insurance. It was pretty nominal. It was very nominal.

$15,000 maybe, somewhere in that neighborhood.

I mean, if the building's worth $150,000.

It's a replacement cost on a new modular unit. You've got to remember. It was a mobile home. You don't have to remember, but let me help you. From the standpoint, those were modular units that the local school system had that they no longer had a need for. It came out to us. So those buildings are, gosh, 40, 50 years old or 40 years old. So when you lose that building, there's not a lot of insurance to replace that. But if you go to replace them, AND I ASKED THE SAME QUESTION AND I ASKED THE SAME QUESTION AND I ASKED THE SAME QUESTION WHEN I SAW THAT NUMBER. WHEN I SAW THAT NUMBER. WHEN I SAW THAT NUMBER. I SAID $150,000, AND THAT'S THE I SAID $150,000, AND THAT'S THE I SAID $150,000, AND THAT'S THE QUOTE THAT THEY, MAINTENANCE AND QUOTE THAT THEY, MAINTENANCE AND QUOTE THAT THEY, MAINTENANCE AND FACILITIES HAD RECEIVED. FACILITIES HAD RECEIVED. FACILITIES HAD RECEIVED. TO BE COMFORTABLE GETTING IT TO BE COMFORTABLE GETTING IT TO BE COMFORTABLE GETTING IT MOVED IN AND GETTING IT MOVED IN AND GETTING IT MOVED IN AND GETTING

buy another modular from a temporary classroom? I mean, they're all in marketplace all the time for, I mean, a lot of places will tell you they can't get rid of it. So is that not an option?

Sure.

I think it would be.

I mean, I don't know why it wouldn't be a recommendation to at least explore that as an option to come back with what the cost is. Good questions, all great thoughts.

I do have a couple questions. Just walk me through the armory. What's that going to be used for when it's done?

So basically, with the completion of the fire rescue training grounds behind it, it will be a multi-use facility that will mainly house our fire rescue program as far as classroom space and that. But we will have also the gymnasium is going to be utilized for all kinds of physical training and do CPR, too. But in our conversations with the county on that too, as far as that, it could be used in case of an emergency if something happened. I think that's why we're trying to look at the generator backup for that as well too. So the gymnasium part will be mainly used for subject control. I remember the fun times with that. I remember it well. Our PT training that we have to do and the police officer's physical abilities test in there, too. And then because we do PT, if we do fire academy and EMS academy, we'll utilize it in there, too. But we're also utilizing it for the different training because we've got an advanced SWAT going on this week, too. They're utilizing that. One of the storage rooms will be set up as a training room for different scenarios, if you will, that we can use for use of force or fire rescue training or EMS. Another portion, just because the equipment we have is going to be used for storage. The entranceway, as we come in, is just outside where the louvers are for the, where the old indoor range used to be at the armory. We're going to utilize that space for the 9-11 artifacts that we have, that we've been storing now for So while it mainly fire rescue will be occupying the office space and utilizing that in the classroom, we'll be utilizing the whole gymnasium, which we already have been doing since.

Are you telling me they don't do pop out outside anymore?

We're going to while we're doing the renovations. We've already made plans. But it is one that we can do either inside or outside now. It's a little different than the one up on top of the driver trainers.

Yeah, it's real hot. Yes. The other questions I have, so is there going to be a need for that other, I mean, the modular that went down, is there still a need for that when you start moving these other classes in?

It is because we lost classroom space. It will alleviate some when we get the new classroom in the armory. I think we're probably a year or two before maybe.

I don't know.

Just based on when I get with Peter and see where we're at on that.

So still two BLET classes a year? Yes, sir. Two national parks. What about fire?

We're doing a fire academy. trying to partner right now with Cherokee Indian Fire Rescue just because they've had the most full-time positions to do that. But they're still coming over and using the facility because they don't have the burn facility to do the practicals that they need as well. I know when we get the new fire tower up, we're going to have exponential growth just because the agencies have that need. And it's something new that they want to train in. And we'll get a lot of folks coming in for that as well.

And you're still doing EMS out there as well?

Yes, sir. We're doing the EMR basic here. And we're doing an advanced EMT and paramedic at the Jackson campus just because of the accreditation requirements now for the advanced EMT. And then this month we, earlier this month, we were able to graduate 23 from the EMT class that we had that was a combination of a hybrid and a traditional classroom, too. So we had a good success. The first of the year was phenomenal with the EMS students that we had signed up.

Well, I think we need to make it a clean sweep and just go ahead and ask, what's your fund balance? Investor, anybody else? Zero?

We don't carry fund balances.

That's why we look at a need-based request, and we don't have anything from the state that comes in that's a fund balance.

Our expenditures, as we look at them and project them out, are that month-to-month, and we should be all right to get to that at the end of the year.

That's why we come in. I don't play the game where... I NEED A MILLION DOLLARS OR I WANT A MILLION DOLLARS AND I ONLY NEED 500. AND THEN YOU ASK ME WHAT A FUND BALANCE IS AND I'VE GOT SOMETHING SITTING OVER HERE ON THE SIDE. I JUST, THE COUNTY HAS RESPONSIBILITIES AND I JUST TRY TO WORK IT THAT WAY AS PRESIDENT WITH YOU ALL TO SAY, HELP US GET TO THE FINISH LINE. THIS IS WHAT OUR NEEDS ARE. AND THAT WAY, I JUST, THAT'S JUST THE WAY I'VE ALWAYS TRIED TO DO BUSINESS WITH COUNTY COMMISSIONERS.

Respectable. Thank you. Last question. It's kind of off topic, probably geared towards Commissioner Shields. With that monument out front, would there be any heartburn moving it to the Veterans Memorial Park? I've heard rumblings of that.

You're talking about, and the National Guard left that? We don't know. My understanding, it's off of a ship somewhere. And we utilize it when we're doing scenarios because we have a national park and we say it's a monument out there. But if you want to move it, there's no heartburn.

I'd heard rumblings in that. I don't know if there's anything to it.

I'll check it out. We'll use it. I mean, we're not going to not use it, but we have other areas that we can use. It's just what I'm saying. You know, when you're training National Park Rangers, they take monuments, too, and we say, here's a monument where you've got something going on.

But it would not be anything if you wanted to.

I think that would probably serve a better purpose for it if you wanted to move it there.

I think it's – special, and not a lot of people really know it's there. At the Veterans Park, I think it's a lot more utilized.

No heartburn on our part, and it won't create any on your part.

It's yours to do what you believe that one. It needs some TLC.

I'll check into it. While we're on that subject, Monday we'll have our Memorial Day ceremony out at the community center, which is our veteran park, 11 o'clock. Welcome to come. Great. Thank you for the invitation.

I'll follow up on your request. Just in closing, one more comment is you see your senator and representative that we all know as our friends. Go ahead and thank them one more time because we are in the construction design phase of the documents for the indoor firearms training facility, which To me, it's a shooting range, but Kirst wants all these long theatrical words to go with it. But anyway, we should be breaking ground on that building, hopefully, this fall also. I can't give you a date, so I'm not going to say that, but then that construction for that particular building could be finished somewhere around December 27, January of 28, somewhere in that time frame. So we'll have that facility out there that will be on the parking lot next to, yeah, right across from UPS, that empty parking lot.

I probably should share one thing with this board here. The lease agreement on the Armory building. Yes, sir. How long? Forty. Forty years. Now, that wasn't something that we chose to do, Commissioner. It's by law. That was state.

Yeah. When we put it in and worked with legal on both ends, a long-term lease from the state's eyes was 40 years.

Yes. And so that's a commitment that we need to make sure we stay with in honor of what we're doing for it. Correct. Yes, sir.

you gentlemen thank you all appreciate your time thank you all right all right well we've got mitch hanging around for us no i think abby's okay i think now is just a time for open discussion uh thoughts on the budget Direction for the county manager?

Well, I've said one thing, don't let me young as go hungry.

So Mr. Chairman, let me throw out some thoughts. Obviously, Lindsey and I need direction if you want to make any changes on the dollar figures or anything that's there. numbers we plug into the budget usually when we present it to you for instance on the fire departments we plug in the rate that they had last year so we don't plug a rate increase into those unless you tell us to do any kind of an increase um you understand about our expenditures from fund balance and the main thing is i'm going to admit to be here in case you had questions about that so that you understand that it's not necessarily a problem if we do that. There's just certain cautions, correct, Mitch, if you want to reiterate that. Am I correct in saying that they're not necessarily a problem, it's just something you need to be aware of for the recurring effects of that down the road?

Yes, sir. I mean, a couple things on that. We talked about it when we've gone through the general fund, looked at your historical financials, and we talked about the structural balance of your operating budget, right? Your operating revenues covering your operating expenses. Your fund balance policy states anything over your minimum policy level can be appropriated for one-time expenses like capital. So that's kind of the framework for how your operations are set up. rating agencies, your credit rating is based upon your historical years of that structural balance and maintaining a solid fund balance. So, I think within all of those frameworks, right, ideally you don't appropriate fund balance for recurring expenses. And the idea behind that, the background behind that is fund balance is a one-time revenue source. And a recurring expense like operations is obviously recurring, right? So you spend the fund balance, it's gone, but that operating expense is still there. And Warren kind of filled me in a little bit on some of the considerations, options about funding some of the expenses this year. And I think given the SITUATION THAT YOU ALL ARE IN, MR. CHAIRMAN, YOU MENTIONED THE QUARTER CENT COMING UP. I KNOW REVAL IS NEXT YEAR AS WELL. YOU KNOW, APPROPRIATING FUND BALANCE FOR THE MILLION, 1.15 MILLION OF CAPITAL FOR THE SCHOOLS, RIGHT, YOUR ANNUAL CONTRIBUTION, THAT IS A RECURRING EXPENSE. IT'S A RECURRING CONTRIBUTION. IT MAY BE FOR CAPITAL, RIGHT, BUT YOU'RE STILL doing that every single year. So appropriating fund balance for that will still result in the same situation of having to go back and find that recurring revenue in the future. But given the scenario of potential new revenues after November 3rd, Reval coming up next year and a commitment to trying to find those revenues in the future, I think there's a story that we can share with the rating agencies about why you chose to do that this year as part of the budget. So under the circumstances, it doesn't give me as much pause knowing the reasoning potentially behind that if you choose to do it. But in general, as a best practice, I would never stand up here as your advisor and say, oh, yeah, appropriate fund balance for recurring expenses, no problem. I think there has to be an understanding and a reasoning behind it that you all make if you choose to do that. And I think there are reasons why it could make sense this year.

But there's no implications from, you know, the credit rating and the bureaus and?

Yeah, I, in my opinion, you know, Rating agencies make their own decisions through their committee process. I can't tell you definitively, but in my opinion, I work with them a lot, I think that we could justify that, no problem.

Also, I want to make the Board aware, you remember last year, we plugged some contingency numbers in there. You had a contingency fund. We had $200,146, I think, in contingency. And when we got to this point in the discussions, you made a decision Instead of holding that contingency, you appropriated it to some of the needs that you saw come up during the year. Well, this year, we have stretched that. We have $96,995 in contingency. So you obviously have the option. You can either hold that because you've seen over the year we have these projects that pop up during the year that we have to fund. And if we don't have contingency, we pull it out of fund balance. Or you have the same option if you realize, well, here's $96,000. We'll fund X or Y or whatever you want to fund. You do have that option.

Can you pull up the fund balance slide one more time, or is it deep? Yeah, I've got it. If I can drive, I think. Or if Trevor can drive for me.

I'm just curious about kind of where we're at as a percentage of our budget. Actually, no, I'm sorry. I do not have a paper copy.

Yeah, I do.

I have a paper copy.

But it was in the last.

Mr. Cabe, since we're at mid-year last year, we went back and readjusted. Are we doing that again? Is this what we're talking about right here?

I think we should. We always have a mid-year view, but I think we should.

Can you, for the record, just go ahead and read maybe percent of our budget for unallocated fund balance?

So the- What we were at last year. Mitch, if I'm looking correctly on page six, there's an unassigned fund balance increased by approximately 6.2 million to 48.3. Is that the correct number?

Yeah. Unassigned fund balance was $48.26 million, which is 67% of expenses. However, that still includes The excess fund balance transfer that you all have went ahead and said is going to be encumbered, transferred in the future for the capital projects, which is base, which is what that capital plan is based on. So, if you account for that, right, you remember that dotted blue line, accounting for that would take you to $28.2 million and about 40% of expenses.

Where I'm going is, is this an appropriate time to set up a capital reserve fund and set aside?

Yeah. So, Lindsay's, like, giving me eyes because we've been talking about that. We're going to be getting together this summer and talking about... We have scheduled all this, trying to let all this settle.

I mean, I don't want to overspeak, but I personally don't want to do it right this second. I think that might get a little convoluted on what we're trying.

It's hard to sit here with a massive fund balance. Absolutely. While the schools, everybody's begging for money and here we are. And I think it's, we're capital. Yeah. This board has a lot of capital intent. And I just wanna make sure we don't over allocate.

And I mean, that's a conversation we had as soon as I started. I was like, I really, it's hard for public perception to be sitting on this money. That's where I'm going. But we're not sitting on it. So that's when I asked him, can we get through this budget process? Can we continue as we have? get through this budget, but can we get some guidance on how we really want to earmark that? So, I mean, we've had some conversation about it, because I think that would be very good for the board to see you truly don't have $48 million in the signage.

Well, and the perception, and not going back to that quarter cent, but that's the problem with the community is why do you need more money when there's $50 million sitting there? you know, again, it's nice to paint a very clear picture of exactly what's going on.

Yeah, absolutely. And I don't want – I'm sorry, Lou and Lindsay, because there's accounting stuff that's involved with it and how your chart of accounts are set up and all that. But in my opinion, I think it's cleaner to have a process set up from the capital funding perspective where you move those dollars. And, again, we've got to talk through the details, but it may be – It may be such that as part of your budget, you're not funding capital projects from the general fund anymore or funding debt service from the general fund anymore. You're funding a transfer to this whatever it ends up being and whatever it's called, a CIP fund, whatever it is, and you pay for those out of there. But it's easy for me to sit up here and say that makes a lot of sense. Because I'm not the one implementing it within the chart of accounts and how it flows. So the answer is yes, there is a way to do that. And I think we are on staff and ourselves are on the same page that it makes sense to do that. And that is the intent. But how it gets done and what makes sense within your chart of accounts framework, your accounting framework is something that I think has to be done.

In reality, we're at 28.

That's right.

No, not really, because we just spent $3.9 million on pickleball courts, right?

Right, and part of that was in the $20 million, because we had budgeted $2.9, $2.8 million for the pickleball courts, because they'd been in there for a long time. So in reality, part of that came out of the $20 million that he talked about prior. The excess would come out of what you consider you have left after that, which is, again, why it makes it important for us to get the really good picture of that.

Our auditors are coming the first week of June, and I was going to talk to them about the best practices.

And I'll also just, obviously I'll remind the board, this year that budget included $2,554,000 worth of capital expenditures. So that was school, Macon County, whomever the capital requests were. I made the proposal to pull $1,150,000 of that out of fund balance. So there's another $1,259,000 and some change of capital that you're still funding out of your operating budget, your PAYGO budget.

Which is bringing a full circle to your original question, which goes back to best practice of appropriating fund balance for operations. What I am dealing with is your June 30, 25 audit, right? So it's almost a year old. Those are the fund balance numbers that I just quoted for you, right? Things have happened over 26, you know, spending on capital, but how is your 26 budget performed as well? You know, so there's things that will change. And so that's where kind of, the policy and the typical best practices is using fund balance in excess of your policy to fund these major non-recurring capital projects because you can do that based upon known fund balance levels. You make the transfer into this reserve or you set aside the unassigned fund balance for future capital, you know those dollars are there and you can spend them, and you're not counting on them for the future. So I think it's a great question in terms of the reserve. I think that is the intent, and I think it will help you all track things better on that capital plan, not to mention just being able to explain your financial situation. It's healthy accounting, you know.

It's healthy accounting, and there's other needs that we're considering, you know, in closed session, but it would really help me to paint a picture of exactly.

Absolutely.

Barry and Commissioner Sherrill both have, this has been an internal discussion for a while.

I mean, if you want to. people to be willing to pay for things, then use their money that you have already. Don't talk about tax increases when you're sitting on a $28 million fund balance, undesignated fund balance. That's the wrong action of leadership. But I want to talk about the fund balance. There is no statutory amount in state government that requires us state mandate of a fund balance. None. Zero. The recommendation from the state of North Carolina is we have 8%. That's a recommendation. There is no requirement. The Macon County Board of Commissioners has chosen to have 25 percent in an undesignated fund balance. That is taxpayers' monies that should be used for the benefit and the best interest of the taxpayers and the citizens of this county. So we're sitting on 48 million or whatever it is, and we've appropriated some. But I will tell you what, and I've said it before, A fund balance like we have in Macon County, I've said it before, is political suicide. Most people, the voters and the taxpayers would not allow this. I've requested information on every county in this state as to what the fund balances are. Is it nice to have that? Absolutely. Does the state want us to have that? Absolutely. The only time, and I may be wrong by saying this, that this fund balance was truly used for what it was intended for was Hurricane Ivan. And we pulled the money out of that fund balance for the emergency funds that we needed. And then we waited for a long time, I don't know how long, until the state and federal government returned that money to us. Now, said it before, you want this quarter cent sales tax to pass, tell the people what you're going to use it for. We have no path forward of what we're going to use that money for. Is it nice? I'd love to have an extra $2 million in my checking account, but I'm not going to go borrow money to get it. The same way with the taxpayers. If you provide a path forward, we've talked a lot about these capital improvement projects. Senior Center, Justice Center, all these things that Macon County is behind on. But when you want more money from the taxpayers, provide them facts on what it's going to be used for. We talk about, well, we can do this, or we can raise property taxes. What are we raising taxes for anything? Now, that's where that capital improvement fund comes into play. You take your undesignated fund balance, you drop it down to the 25 percent. You put the remainder in to that CIP fund, And then you have a path forward with that money, and then you tell the people it's going to cost $50 million for a justice center. This is what we're going to use the funds for. So transparency is key because I hear it all the time. Why does the county need any more of our money? I mean, you have plenty of our money already. So I think it's not a path forward that is really cluing in on what and where we're going as a county. Now, changing the subject a little bit, the budget, proposed budget is $68 million, correct? That's $4 million more than it was last year. So if we're $4 million in a proposed budget, How in the world can we be $7.5 million behind needing more? I mean, we got through the through the year with $64 million or whatever, but yet we don't have another $7 million to fund the things that are asked for and needed. I don't understand.

Our actual probably ends up, Lindsey, correct me if I'm wrong, our actual is closer to $73 million. So when you figure the money's coming in, because you get the operating budget based off certain things, and then we have intergovernmental transfers or you'll have grant monies and you'll have other funds that come in during the year. And we tend to treat those separately so we don't have that conversation of recurring costs on grants. So that's why we kind of treat those as a separate I don't want to say expense, but lends you a separate item, essentially. So that's where your $72 million comes in. So in reality, if you look at the actual versus the 68, we're actually less than what the actual was because we don't, you know, if the grant ends, we don't keep that up. And a lot of that had to do, and part of it's accounting processes. For instance, We might start off with $64 million this year, but during the year, we come in and we fund projects during the year, and you'll fund them out of fund balance, or we'll maybe fund them out of interest on investments, or we'll increase fund balance out of that. That's how that growth comes in, and then, of course, when you add in the regular expenses, that's how we got up to the $68 million. So, I don't know, did that answer how we landed there?

Yeah, I mean, I was just curious.

I mean... Because, and to me... I like that picture better, and I'll use the driving track as a good example. If you told me today or next week or whenever, you know what, we're fine with the track, pull it out of fund balance, put it in the budget ordinance. When we pass the budget in June, it's already there. Well, that's going to drive your budget up another $574,000. To me, July 1st is just a date, because I know eventually we're going to get there anyway. So you're either selling it now or you're showing it after July. So to me, I like that picture better because it shows you those actuals. It doesn't matter what I tell you. It's kind of like the estimate that you get. It doesn't matter what the estimate says. It's what I end up with is what's really meaningful.

Right. And back to the chairman's point about, you know, we've cut two patrol cars out, a remount for – I mean, to me, those are absolutely things that we can't or cannot, I mean, we have to fund those.

So let me throw out an option for you to consider. Mitch will probably look at me like I'm crazy. You're funding $1,259,000 of capital in addition to the school capital. You're paying for that out of your operating budget. if you're so desire and you see these requests school system whatever that you need you need to fund them something you don't want to do a tax increase you could fund all of our capital this year out of fund balance which would give you that 1.2 million dollars to apply toward operating somewhere which again it goes back to that conversation mitch has if you're trying to avoid a tax increase but yet you see the need and you want to get there for a one-time shot you're probably okay with that again you're deepening that conversation that he had you know we we can recover from a million dollars because hopefully your revenues will catch up stuff will happen when you get closer to two million or two million and a half you're dipping into that fund balance to to kind of use it what you're saying there use use it and then get to where you want to be it's just you again you're using it essentially for recurring even though you're paying for capital because it's recurring capital but That's another tool in the toolbox you could use if you want to get somewhere with that.

Yeah. And again, I think given the circumstances, I think that's a story that you can tell. And the question will be, right, when fiscal year 26 ends, wraps up, you do the audit, maybe there's additional excess fund balance that can cover that, right? We won't know until January, February, when everything is all said and done, right? But given the vote that's coming up, given revaluation that everything has to be revisited, I think that's a story we can tell. It's just not something that you want to do regularly. particularly if you end up having to spend it. Like Warren said, you know, you're already doing a little bit more. But I think in this instance, certainly is, I think there's justification. I think that's the story. We can tell the rating agencies and it won't have an immediate impact on your rating. Again, no guarantees, but I don't think it will. So from that perspective, I think that's a reasonable option, but With the caveat, so we'll need to see how it actually ends up with fiscal year 26, whether you end up spending it in fiscal 27, or whether you've replenished it and then have that conversation as part of the budget next year of how to replace it.

So what I would like, whether we get to it today or whether we have to come back and have another one of these, Lindsay, I need direction on how you want to proceed with the proposed increases or requested increases from the fire departments. If you want to give us any direction on any change in funding on anything you've heard here today, preferably we would like to have that next week early if we could get there, because if we start waiting until the week after, we have to prepare the budget ordinance. You've got a public hearing on June 9th. Is that the correct date? we go into that meeting and we start having these conversations, then it's a nightmare for us on the budget ordinance. So I guess my only request is no matter which direction you go is if we can get some direction from you, we will craft you some financial figures and a revised budget draft based on whatever you would like for us to do. And if you like it the way it is, then I'm done.

But

well it's and you're asking for direction on the increases any any increases on the fire departments and or the school systems or any any other changes that that you can think of that we need to fix yeah i'm not prepared for that one though there's a lot of but anyways um abby's been in here for some time and And if I read this correctly this morning, General Assembly or the House voted for the Constitution amendment to limit city and county governments from increasing taxes. Abby, so If that is true, I also read in that same thing that a lot of counties are going to delay the reval for 27. Have you heard anything?

Come on up.

I watched the meeting yesterday, both of them. What they're trying to do is, of course, limit spending. That's the function. So what they did yesterday was right now they can limit the amount that you spend by some tool, however they want to do that. They have the means to do that. The reason that they did this, they're going to be putting it out on the ballot. And you, the people, us, the people, are all going to be voting on, do we allow them to do that? They already have the ability to do that. But this is going to say that people want us to do this. I don't know what that says to you all, but I think it will come into play. Some of the things I talked about. is the le it's the levy so the levy is the 37 million that y'all and in that you have your general levy you have your motor vehicles um there's lots of things that make him that levy so the levy as a whole can they're going to say okay you can only increase it by So when you put that on the ballot, they're not going to say, you can only increase it by 3%. They're just going to say, your legislatures can put a limit on that. They can come up with whatever they want. So, oops, sorry. It's, there's a lot of discussion. If anybody wants to watch those, there's a lot of back and forth, a lot of information, a lot of things that they're asking. You know, how do we do this? What do we do? But it's the levy. So it's not the assessment. And the tax office does the assessments. We do 100, the Constitution says, and this is going to be a constitutional change. But the Constitution right now says the tax office puts that assessment level at 100% market value every reappraisal. The market is what it is. But then you come out with a levy. How do we get that levy? By the tax rate. So they're not actually – they're not saying they're going to cap the tax rate. But they are going to say if you – and that's where you were just talking about we're going from 68 to 70, whatever – You can only go up 3%, 10%, $5 million. I mean, whatever they decide. But the only way you can get there is by a tax rate. So they're going to force you to look at the numbers of what you're going to have, what you need, and then you're going to have to set the tax rate to whatever that is. So, like, right now, you don't want to go. You don't want to raise that tax rate. You're not going to have a choice depending on what your needs are and how much you need. And every year we have growth. So every year that's where that extra fund comes in. So we have growth. Well, if your levy increases, you know, we're going to have some growth anyway. So we're going to be able to increase that levy from the growth. But then they're going to say you can't increase it so much and whatever it is. So that's going to force you all to do the rate and change it every year. And right now, we have been very good to be revenue neutral and keep that rate the same, which has been good for our county, for our taxpayers. It's not a rate increase. Even though we've got extra money, it's because we have extra funds coming in every year from different sources. The sales tax, we grew $298 million in value in new construction last year. That's $800 and some thousand dollars extra. Motor vehicles grows usually every year. Public utilities grow every year. So you have all these extra funds.

So what are they talking about with the counties? Some counties are going to be limited or not allowed to do the 27.

I just went to a conference, and we talked about this. and how bad it can be for counties by not doing your reappraisal. Because as you see here, we're not doing one, but yet we're trying to get all this extra money, and we came out with a $7 million deficit of what we need. When you do a reappraisal, and a lot of people don't understand, you know, you do the reappraisal because it's 100% market value, you're revenue neutral. If they will go to a revenue neutral rate, then your rate will go down to keep the same amount, but you're still going to have the growth. It's a responsible way to manage taxes. Another thing we all talked about, because the age exemptions, even the veteran exemptions, Each county has, so right now they have a set amount, because that's something that's a problem for a lot of people and their fixed incomes. So they have a set amount that you can only make $38,900. Every year that changes. A lot of people, though, living in a city who has a lot more income, but yet their cost of living is a lot more, are excluded from that, and they are having a hard time making it. So they talked about the adjusted median income for counties in bigger cities, and that instead of having one limit, you base it on your adjusted median income for that area. But this is the back and forth that you hear of how they're going to handle this, what they're going to do. So the reappraisal was another way they wanted, because it's about equity and it's about being equitable to everybody in every county. We have the 100 counties. So to be equitable to all of them, reappraisal was one. But there was nine counties that had the reappraisal. It's down to maybe one that's going to be able to do it. The rest of them are either being able to opt out or not have to do it. It's not a popular idea for counties to not do reappraisals because it's very, very inequitable for your taxpayers. As I showed you in my presentation, if you don't do the revenue, if you don't do a reappraisal, you're going to have a lot of inequity in your taxpayers and be very unfair. But then you're going to have to go and increase that tax rate. And when you do, you're going to increase it on people who probably are paying too much as it is right now in between the reappraisals. A reappraisal resets that, makes the people whose values have gone up significantly pay their share while they, you know, you're not going to keep that tax rate. If you go down and do the revenue neutral, that's where you adjust that tax rate and make it equitable for everybody. But the value is what it is. Oops, I think I had that again.

Thank you, Abby.

Well, and the other thing is Some of these, and I've heard it, municipalities more than county governments are in fear that this is actually going to happen, and some of them are raising their tax rates without a need before they're told they can't.

I have not heard that. I have heard it's a very big issue with the municipalities. A lot of municipalities are in different, the municipalities are split between districts. And so that's created a problem in a lot of the larger cities.

But it's not a law yet, though, is it?

It is not. But they are, this was the first thing that happened was for.

The Senate and then the House.

Well, the House and the Senate passed it yesterday. So it'll be on the ballot in November. And you will be voting on whether to make your Congress people set a limit on a levy increase every year.

Yeah, okay. Thank you. Thanks, Evan. All right, a couple more thoughts. Going back to some of your comments, Commissioner Sherrill, I feel like while we do have a surplus of fund balance, it's important to be able to operate with the money you generate that fiscal year. And that's what worries me. I think it's a terrible habit to balance from fund balance, although we do have a surplus. Moving that money to the capital reserve, And then operating based on our calibrated revenues, I think that's the only way to go. But I also feel like if we don't generate the funds, it's going to set up the future boards to have to generate at a faster rate and raise the mill rate faster and quicker if we don't, right? We keep building capital. Cost to maintain. And does anybody want to take action on any of the millage discussions today? Do you want to call another meeting next week? Does it have to be early? Like a Monday, Tuesday morning or evening?

Monday's a holiday.

Monday's a holiday.

It would be a Tuesday. Tuesday would. Tuesday or Wednesday. Well, I'll be gone Wednesday. So Tuesday would. Tuesday morning, Tuesday evening.

Because. Tuesday morning, 9 AM. Does anybody have a conflict?

I would love to know if you have questions or anything that we can help. I mean, I'm not trying to think of anything or if there's anything that you need clarification on.

I would support, I mean, if we're pulling money from fund balance, I would support using that money to remand that ambulance. I've had heartburn over that.

So that ambulance cost was $256,681.

Yeah. I would support that in a heartbeat. I mean, I don't think anybody in the county would disagree with that.

I mean, we have to provide. emergency services, I mean, and what that looks like. And just like you mentioned, if we take four cars, we normally buy six. We do four cars this year, well, next year we may have to buy ten. So we're just passing the buck right on down the road.

That's the point I was trying to make earlier.

That's it. But some of these things, I mean, I need to really digest this. Is it really a need? Or is it something we just want? And I have to get into this because the fire departments, they're asking stuff like that. It was presented as one of them has $1.4 million in undecided fund balance. And I agree with them. They absolutely need more staff. But I question the fact of the engines. And I need to have a chance to talk to some people in the communities, because I will tell you that it's on the table, and it will come up tonight. It's my understanding that the town of Highlands is in conversations of raising property taxes 3 cents. And you're talking about a 3-cent tax increase on the people of Highlands and then imposing a 2-cent tax increase for the fire department? That's a 5-cent tax increase, one lick.

We'll recess. I need a motion to recess for Tuesday morning, 9 a.m., unless there's a conflict. Salute. A motion by Commissioner Breeden, second by Commissioner Antoine. Any further discussion? All in favor, please raise your right arm, state aye for the record. Aye. Any opposed? Aye.