At right of this page under Main Information links is an Hickory's City Website link. If you click on that link, it takes you to our city’s website, at the left of the page you will see the Agenda's and Minutes link you need to click. This will give you a choice of PDF files to upcoming and previous meetings.
You will find historic Agenda and Minutes links. Agendas show what is on the docket for the meeting of that date. The Minutes is an actual summary of the proceedings of the meeting of that date.
Here is a summary of the agenda of the 11/16/2010 meeting. There were a couple of important items that were discussed at this meeting and the details are listed further below:
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Invocation by Rev. Susan Smith
Consent Agenda:
A. Proclamation Declaring November 20, 2010 as “John and Sally Ross Day” in the City of Hickory
B. Approve Vacant Building Revitalization Grant “Operation No Vacancy” to Mary Jane Hutto Setzer and Karen Ann Hutto Hooper for Previously Approved Grant for Property Located at 2905 N. Center Street in the Amount of $25,000.00 - The Vacant Building Revitalization Grant Program was established by City Council in September, 2008 whereby the program provides matching funds up to $25,000.00 for projects seeking to renovate and rehabilitate vacant buildings and the demolition of substandard buildings. The original contract related to this property was made with Grace Point Holdings, LLC, who had a contract to purchase the property, but failed to close on said property. The property owners, Mary Jane Hutto Setzer and Karen Ann Hutto Hooper made the improvements specified in the original contact. This revised contract would allow the City to pay the owners for the renovations made to the building. The facility is being renovated for use as a Verizon Wireless retail store. The renovation involves approximately $60,075.00 in eligible project improvements with a total project estimate of $151,220.00 to include both exterior and interior improvements. The Redevelopment Committee reviewed the application and voted to recommend approval of $25,000.
C. Approval of Property Tax Refund as Recommended by Catawba County Tax Office to Poppelmann Plastics USA, Inc. in the Amount of $267.41 - Poppelmann Plastics was located at 785 Hwy 70, SW from April 1, 2006 through March 7, 2007. They moved to 2180 Heart Drive in Claremont and were listed incorrectly as being located in Hickory instead of Claremont. The records have been corrected and have been verified by the Tax Collector’s office.
D. Transfer of Cemetery Lot in Oakwood Cemetery (Section 33, Bock A, Lot 11, Graves 001 & 002) From John W. Teague and wife, Lana L. Teague to Sandra Taylor (Document Prepared by Christian & Associates)
E. Request From Children’s Protection Council for Use of Union Square to Hold a Candlelight Vigil to Honor Zahra Baker on November 16, 2010 from 6:00 p.m. to 7:30 p.m.
F. Approval of Fifth Annual “Food for Fines” Amnesty Week at the City Libraries From November 29 – December 4, 2010 - Staff requests that overdue fines be waived for library customers who donate canned food items at either of the City’s libraries during the week of November 29 - December 4, 2010. One (1) can of donated food will cancel $1.00 in overdue fines and the donated items will be given to the Cooperative Christian Ministry. The Catawba County Library system will also hold Amnesty Week at the same time and we are working together to publicize this event. Last years’ event helped the Cooperative Christian Ministry fill their shelves during a critical time of the year and with this years’ joint effort, staff feels it will result in a large collection of much-needed food. Staff recommends approval.
G. Approve Resolution Honoring Military Veterans and the Memory of Gunnery Sergeant Christopher W. Eckard During the Annual Greater Hickory Metropolitan Community Veterans Day Ceremony Held at The Hickory Elks Lodge on November 11, 2010
H. Budget Ordinance Amendments
1. To budget $144 of Local Government Revenue in the Police Department overtime line item. This revenue is payment from Catawba County Mental Health for a portion of an Officers time spent when accompanying involuntary commitment patients.
2. To appropriate $6,826 of Capital Reserve Fund Balance to the Street Division Right of Way Acquisition line item. This appropriation is to pay Caldwell County for the City's portion of additional Right of Way that was secured for the Grace Chapel Road US 321 Connector.
3. To appropriate $6,916 of General Fund Balance Appropriated and transfer to the Grace Chapel Road US 321 Connector project Engineering line item. This appropriation is to pay a part of the City’s portion of the Louis Berger Engineering Agreement Amendment.
4. To transfer $7,538 from the Police Department Uniforms line item to the Bureau of Justice Assistance (BJA) Multi-Year Grant Uniforms line item. The BJA Grant was awarded in the amount of $7,538 with a 50% required local match. An allocation for uniforms is budgeted in the Police Departments current fiscal year operating budget; therefore those funds will be transferred to the Multi-Year Grant project and used for the local match.
5. To transfer $1,132 from the Police Department Departmental Supplies line item to the Gang of One Multi-Year Grant Departmental Supplies line item. The Grant funding does not cover the cost of cups, pencils and silicone wrist bands for the project therefore a $1,132 transfer from the Police Department Departmental Supplies line item to pay for the items is necessary.
6. To transfer a total of $18,125 from the Police Department Specialized Equipment line item ($15,000) and Non-Asset Inventory line item ($3,125) to the Governor’s Highway Safety Program Multi-Year Grant project Specialized Equipment and Non-Asset Inventory line items. The Grant was awarded in the amount of $24,375 with a required local match of $18,125. An allocation for uniforms is budgeted in the Police Departments current fiscal year operating budget; therefore those funds will be transferred to the Multi-Year Grant project and used for the local match.
Informational Items:
A. Report of Mayor Wright’s Travel to Winston-Salem, NC for the 2010 NCLM Annual Conference From October 25 – 26, 2010; registration - $285.00; hotel - $146.74; mileage - $70.00; parking - $9.00
New Business - Departmental Reports:
1. Second Reading - Approve Vacant Building Revitalization Grant “Operation No Vacancy” to Mary Jane Hutto Setzer and Karen Ann Hutto Hooper for Previously Approved Grant for Property Located at 2905 N. Center Street in the Amount of $25,000.
2. Quarterly Financial Report -
Warren Wood, the City's assistant manager in charge of finance, delivered the presentation. Last year the City had a $2 million budget gap to close. Much of this was related to a huge drop in sales tax revenue that the city experienced during the year. The way the city corrected the situation was to eliminate 20 positions, a small layoff, some departments were reorganized, and some services were brought in house. Employees have not had a raise since 2008. There has been a hiring freeze in place over the last two years with only the city manager being able to authorize positions being filled. The city also instituted a an early retirement incentives package offered to coworkers about a year ago.
The City also increased the solid waste fee by $2, but most of the corrections were made involving personnel. This gave the city a structurally balanced budget. The State of North Carolina requires the city to have a balanced budget.
This year, the city is looking at problems with the general fund. So far with 33% of the year complete, the city is seeing 25.5% of its revenues received, and the five-year average shows that 26.2% should have been received. The city feels that the numbers are in the ballpark. Over the next few months the city will start to receive property tax revenue, which will help to bring this number in line.
On the expenditure side, the five-year average shows that we should be at 32.7%, but we're running above that and 34.2%. The reason that is is because money has been moved out of the general fund to complete the Clement Boulevard project.
The bottom line on the general fund is that the city has spent $2.2 million more than has been collected. The five-year average shows that the city should have spent $1.9 million more than it collected. Property tax revenues coming in and the factoring of the Clement Boulevard project would bring these numbers in line.
Ald. Meisner asked Mr. Wood how often we get the tax revenue from the county pertaining to the property tax amounts. Mr. Wood stated that we get the money every month, but mainly December, January, and February. Those are the big months.
The water and sewer fund is the second-biggest fund and it makes up over 25% of the budget. It is fairing a lot better than the general budget. What has hurt, in the past, is when the city has gone into drought restrictions. From a financial perspective, we have a water plant to sell water, and drought restrictions hurts the ability sell water and affects finances. With 33% of the year complete, the five-year average says that we should have received 28.8% of revenues. The city has received 28.4% of revenues. On the expenditure side the five-year average shows that the city should be at about 30% expended, but we are above that at 37%, because of the money invested in the Northeast waste water treatment plant project. Over $1 million has been moved out of the water and sewer fund to the Northeast waste water treatment fund. If this is factored out, the numbers are in line.
The city has struggled with building permit activity over the last three years. When these numbers are doing well, the property tax numbers do well. The last three years have been a struggle. The numbers need to be about 2 to 2 1/2 times what we're seeing. We are on course to do about $55 million in permits this year. That equates to about a 1% growth in the tax base. The tax base has been struggling because of this. In 2006 and 2007, the city saw about $105 million in permits, which is decent, the city needs to see about $150 million in permitted value, in order for things to look good.
As far as property tax collection rates, the city is down to 96.5% on the collection rate. This number has declined since 2002, which was the peak on the collection rate. This is an indication of people struggling to pay their property tax bill. For every 10th of a percent that we see the collection rate drop the city loses $23,000 in revenue. Compared to the 2002 number that is over $300,000 lost to the annual budget. We won't know what the new numbers are going to be until the end of this fiscal year. The trend is down and that is troublesome. The permitting dropping in addition to the reduction in collection rates is a double whammy. Warren stated that a good indication that things are turning around is when we see two or three years of an increase in the property tax collection rate.Warren next went into the workforce related to the Hickory Metro area. Back in 2000 the civilian work force in the area was 182,000. Today we are at 144,000. That is a loss of over 38,000 jobs. That's been our major struggle over the last few years. When Caldwell County, Burke County, and Alexander County struggle Hickory hurts, because Hickory is the economic hub of the area. The slight bit of good news is that we have added close to 2,000 jobs, but it would take nine years to get back half of what we lost since the year 2000 at that rate. That is something that we focus on is jobs and we will continue to do that. Warren stated that he doesn't like to look at the unemployment rate as much. The unemployment rate in the metro area is 11.7%. It peaked at 15.8% in February. The unemployment rate doesn't mean that much because that is just the number of people that are looking for jobs. This does not include discouraged workers who are not included in those rates. The unemployment rate has not dropped 4% with the addition of 2,000 jobs. The real unemployment rate is probably greater than 15% in the metro area.
When Warren started working for the city in the early 90s, the budgeting development period began in February. This has now become a year-long process. They already know what the major concerns are for next year. The number one issue for next year is that the State of North Carolina faces a $3.5 billion budget shortfall. Last year they used $3.5 billion worth of one-time money to plug the gap and then they went home. Now they have to close that gap and then start working on it. What worries Warren, is that the State collects $13 million in taxes on behalf of Hickory. About eight years ago, over the course of two years, the State of North Carolina took $3 million that the city never got back.This budget gap is bigger than the one that they had eight years ago. What worries the City is that the State will do this again. They do not know that that it is the intention of the State, but that is what they did the last time they had a shortfall. The league of municipalities is focused on this. If the State of North Carolina were to do this, then most municipalities would be faced with raising taxes to cover the shortfall or dipping into the fund balance.
The other concern is that the State is not going be able to fix the $3.5 billion problem in one year. One of the problems is that the City of Hickory will likely be done with its budget before the State is and they will not know what the State's intentions are until after the State is through with the process. The city is going to have to put some kind of a plan together to potentially offset the money that the State may take from the city.
Ald. Lail said that he wanted to add that the State taking that money was improper in his opinion. It is not by the State's graciousness that they collect $13 million for the city of Hickory. We are entitled to that money. They held it on their own accord. Mr. Wood stated that the legislation that set up those taxes was specifically for local governments. That was our money that was not remitted. That was a good point. Mayor Wright added that that did not stop them. City Manager Berry added that it is more difficult this time, because before the Governor had the authority to confiscate the funds. The league worked hard to change statutes and they were successful. The governor can no longer just come in and take the funds. The general assembly has to vote, so there is more of a barrier there. Still with a $3.5 billion deficit we are concerned about that. Mr. Wood added, not that they would take $13 million, but $13 million is one third of the general fund budget.
Revaluation and property tax revenue, we've talked about this. The county is going through the revaluation process. They're sending out the notices of what the revaluation rates are. The first bit of information that we got is that there is no increase or decrease, that we are flat -- in one respect that is good. The city's number in terms of revenue neutral is that the city's tax rate will remain at $.50 per thousand dollars.
The concern is that there will be appeals. Let's say I have an industrial building that is valued at $1 million that has been vacant for three years and the owner comes in and says it is not worth half that much, the county may split the difference or something. The county is expecting a lot of that sort of thing through the revaluation and appeal process. The county is figuring that they will grant appeals equivalent to 1.6% of the value of the property. That tells Warren that the city needs to figure 2% (loss of revenue) )due to our having more of an industrial base. This would be the equivalent of $350,000 of revenue lost. Added that... no growth to the base, the decline in the collection rate, loss of aircraft at the airport that we are gonna lose which is about $150,000 in property tax revenue that has left over the last year... those numbers are starting to add up. The property tax values is something we are going to have to right the ship on.
Investment earnings. Our longer-term investments are starting to mature and the rates aren't as good as they were three or four years ago. We are going to see a decline in our investment earnings just due to the fact that our long-term investments are catching up to us. That's another $150,000 that we're going to have to find somewhere. The SAFR grant was a grant to add an additional ladder company, next year the cities share of that will increase by $150,000, because the grant money will drop off by a $150,000. That was not a surprise. We knew that was going to happen.
Moody’s is showing North Carolina is a risk for a double dip recession. The city has not figured in any double dip recession projections into their numbers for next year. Protecting the cash reserves; the undesignated fund balance decreased by $600,000 last year. We don't want to do that two years in a row. Will we want to make a point of protecting our cash reserves.
The bottom line for 2011-2012 is that we're looking for another significant budget gap. Ald. Lail asked Mr. Wood if you would be so bold as to make a projection of what that budget gap would be? Do you think it's more than $1 million? Is it more substantial than last year? Mr. Wood stated it all depends on how much we want to set aside when looking at what the State might do to us. It would be approaching what we had to cut last year which was $2 million. And that is just in the general fund. Mayor Wright asked if that included pay raises? What is a one percent pay raise? Mr. Wood stated that a 1% increase would be an impact on the general fund of $250,000. There may be some ideas in some ways to extend that kind of money. He also didn't include health insurance money which is going up. When all is added up it's probably close to $2 million.
Warren stated that he wanted to end by differentiating between budget problems versus financial problems which we have not have, because the city has done the heavy lifting to ensure that financial problems would not happen. Over the last 10 years the local and national issues have been impacted the city's budget. The city has not had problems with its cash flow or fund balance. Some cities have depleted their fund balance to an amount where the local Government commission is now stepping in and writing letters to these municipalities about their fund balance. We have not gotten any of those letters. Some cities have gotten so bad in the past that the local Government commission will come in and take over the city. Ald. Patton stated that she had heard that there were 58 municipalities in the State of North Carolina who have not submitted their audits. Mr. Wood added that that will get the commission's attention as well.
We have not had those problems because we have made the tough decisions on the budget side to avoid the financial problems on the other side, which is much more difficult to correct. We don't know how long the current situation that we're in will go on. The physical constraint that we have been exercising over the last few years is still called for and hopefully things will turn the corner sooner or later.
Ald. Lail added that it's really no surprise. Everyone knows the shape of the economy, so it is not surprising and the cities are going to feel it to. As far as the city, we tend to lag behind and we are sort getting hit. Mr. Wood added that we are a little slower to fall into the problem and we will be a little slower to come out of it. Ald. Guess stated that the good news was the first slide. It is admirable that we have employees with the city of Hickory that put together a plan to make sacrifices and the employees of the city of Hickory have sacrificed and realize that as a team; is a key to where we're at today. Mayor Wright stated that the thing that is most amazing to him is that this mentality of his ten years budgeting that "we've got to spend it" is something that he has never seen in any department here. The thought is if I'm ahead on my budget, let's put that money in the bank. Mr. Wood added we try and run the city's budget like we run our household. We try to use the good times to prepare for the bad times as much as possible.
The Hound truly appreciated this presentation and I got more out of this summary than about any presentation I have ever seen given by an official of our city. It is straightforward and to the point. If you read this analysis, then you will understand what this city is facing and there is no reading between the lines, because we want to sell these numbers like a used car salesman. The numbers are what they are.
That being said, these are not times to crawl back into a shell and not figure out how to operate in the realities of this world. Moving forward in a progressive manner is a good thing. In attending the Innovation 2010 event last week, the mentality that struck me was that even the companies that were considered to be innovative in our area had a mindset of survival. There innovation was about survival and not about growth and thriving.
I do not think that what I state should be taken as a harsh criticism, because that is not the intent. Most of us have been beaten down by the realities of this Economic Depression and most of the Managers and Decision Makers sole focus has been directed towards putting out small fires. That is what happens during a panic and in a real fire you eventually become exhausted and eventually consumed by solely focusing and putting out those small fires and ignoring the blaze, which continues to rage and grow larger. We need to step back a second and take a deep breath. This sole focus on the short run is going to kill us. We need to figure out a long term strategy for survival. I've worked with fire my whole life and I love it. I don't like getting burned, but it is the reality of what I do. You are going to get burned. Just like with playing with money, eventually you are going to get burned, but you don't focus on the burn. You focus on the creation. We need to analyze the trends and not figure out where we want to be next year. We need to focus on where we want to be in 5 or 10 years and have a flow chart that builds some flexibility into that endeavor.
Trends Analysis is what is lost on our community. Sometimes that is because of the egos. No one wants to be wrong, but you have a better chance of being successful, if you project a map of where you want to be and head that way. We need to look at what other successful communities have done, and are doing, and not copy that, but meld that into our own strategy for future growth. I have done that with the "Putting the Pieces of the Puzzle Together" series linked at the top right of this page. I did that analysis last year and it is still valid today.
Those building permit decreases are due to the Real Estate Depression and the dim economic prospects of our area. We aren't going to be able to turn around the National Economic Picture, but I believe that we can do a lot working within the present economic realities to improve our area's prospects and I think the bunker mentality is harming that.
We need to make this a more attractive area to live and work in. That is going to take investment from the local public and private sector. It is also going to take changing the social norms and a willingness to market our new objectives in a real and meaningful way. We don't need to be Snake Oil salesmen to sell this area. People will see through that. We need to keep it real and show the world what we are doing to change our area's prospects. It is my hope that we will stop the Talk of Change and start doing something to create a Reality of Progress.
3. Parks and Recreation Commission’s Recommendation to City Council on Aquatic Recreation - Newsletter about the City Council meeting of November 16, 2010 - Addendum on the Hickory City Pools
Recognition of Persons Requesting To Be Heard
1. Mr. James Davis of 715 1st Avenue Place, SE requests to address City Council regarding
aquatic recreation. - Newsletter about the City Council meeting of November 16, 2010 - Addendum on the Hickory City Pools
1 comment:
thanks again thom for your perseverance. i appreciate reading your records of these meetings.
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