This newsletter is about the Hickory City Council meeting that I attended this past week. City council meetings are held on the first and third Tuesdays of each Month in the Council Chambers of the Julian Whitener building.
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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 8/2/2011 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. Robert Ford, Chaplain, Frye Regional Medical Center
Consent Agenda:
A. Voluntary Contiguous Annexation of the Property of the City of Hickory and Public Street Right-of-Way Located Along 9th Street, NE and Cloninger Mill Road (Authorize Public Hearing for August 16, 2011)
B. Request by the City of Hickory Staff for Approval to Use Union Square on Sunday, September 11, 2011 from 4:00 p.m. to 5:30 p.m. to Hold the Patriots Day 2011 Event
C. Request by Mental Health Partners for Approval to Use Union Square on Saturday, September 17, 2011 from 3:00 p.m. to 7:00 p.m. to Hold the WellnessFest 2011 Event
D. Budget Ordinance
1. To transfer $106,713 of Water Plant Capital Reserve to the Water Plant Maintenance and Repair of Equipment line item. This transfer is necessary to pay for refurbishing the Water Treatment Facility Chemical Room and to replace two Fluoride Tanks. The tanks have leaked enough Fluoride to degrade the concrete around the containment area and floor. This project is viewed as continued maintenance of the existing facility and is necessary to comply with the operational permit of the Water Treatment Facility.
New Business - Departmental Reports:
1. Presentation Regarding Performance Benchmarks -Karen Hurley, the City’s Budget Analyst, made the presentation.
What is the NCPMP? The North Carolina Performance Measurement Project resulted from a group of local government officials who in 1995 wanted to collect and compare service delivery data across jurisdictions. Questions at the time were: 1) can local governments measure their costs in a meaningful way? 2) Can performance measures in local government be legitimately compared to the performance of another?
The pilot stage of the program consisted of three stages from 1995 to 1998.After completion of the pilot project it was found that local governments can measure their performance and cost in a meaningful way. In July 1999, the steering committee and the school of government decided to continue the project and hired a full time director.
The Goals of the benchmarking project are to: Develop and expand the use of performance measurements across local government. To produce reliable performance and cost data for comparison. To facilitate the use of performance and cost data for service improvement. Participating communities include Asheville, Burlington, Cary, Charlotte, Concorde, Durham, Greensboro, Greenville, Hickory, High Point, Salisbury, Wilmington, Wilson, and Winston-Salem. Service areas measured include Residential Refuse Collection, Household Recycling, Yard Waste/Leaf Collection, Police Services, Emergency Communications, Asphalt Maintenance and Repair, Fire Services, Building Inspections (County Function in Catawba County), Fleet maintenance, Human Resources, and Water Services.
The City of Hickory has used the data for: Residential Refuse – Comparative Statistics were used to justify the use of automated collection with one-person crews. The City lowered its cost per ton collected. Recycling – Benchmarking data has been used to evaluate the cost per collection point for contract negotiations. Yard Waste/Leaf collection – Statistics supported the use of seasonal labor. The change helped to lower the cost per collection point. Asphalt Maintenance – Comparative Statistics were used to justify the purchase of a patch truck for pot hole repair. Fleet Maintenance – Data used to establish productivity goals regarding billable hours, parts turnover, and percentage of rolling stock available per day. Fire Department – Fire statistics high cost per response prompted the decision to begin responding to emergency medical calls. The Emergency Medical Technician (EMT) training classes began in January 2000 and were completed in October of 2000. Service City wide started in January 2001. In addition all 117 shift firefighters completed the Emergency Rescue Technician (ERT) training and certified through the State as Emergency Rescue Technicians.
Below are snapshots of selected charts that show where Hickory is outperforming the average of the other communities that form the NCPMP:
2. Quarterly Financial Report
Warren Wood delivered this presentation. There is still revenue coming in from the previous fiscal year. The final numbers will come with the audit this fall. The General fund contains about half of the city’s activities. Warren stated that it was a turbulent year and action was taken early on to offset losses that they anticipated throughout the year. Things have leveled out as far as revenues, but we aren't seeing any growth.
In the General fund the city recognized a $3.8 million loss. This was generally attributable to sales tax revenue dropping off and sales tax revenue dropping off dramatically. Together these two sources of revenue encompassed $1.5 million of the $3.8 million loss that had to be made up.. He stated that when looking at last year’s budget compared to this year’s that he believed that we would see good news. For the year, the City is less than 2% below budgeted revenues compared to the 5-year trend (92.24% vs 94.52%), last year the city had only received about 89% of revenues. They are below the 5-year average, but happy when comparing this number to last year’s number. The city received another $1 million in sales tax in May and June that are not included in these numbers. He believes the cuts that have been made over the last few year were needed to get the budget back on track and have done so.
Expenses in the General fund are slightly below the 5-year average (93.15% vs 94.12%). The bottom line for the General Fund is that the city is below the 5 year average in revenues over expenditures ($122,037 vs $484,716), but the good news is that last year the city’s expenditures were greater than revenues (-$55,000). The Mayor asked where we stood with expenses in comparison to last year to which Warren stated that to the best of his recollection he believes that the numbers are about the same. Revenues are where they really fell short last year. Slowly they are getting there budgeted revenues in line with here they should be. They feel better about their targeted revenues for the upcoming year. They feel like they are going to put money in the bank, but they won’t know for sure until later this month or September. Last year they spent $600,000 more than they received.
Looking at the water-sewer fund, which makes up 25% of the budget, he stated the numbers are running a little behind the 5 year average as far as revenues go (93.38% vs 94.52%). Expenditures are running slightly ahead of where we should be (92.28% vs 91.87%). However, when encumbrances are taken out, the water fund has received $700,000 more than it has expended since June 3. The water-sewer fund had weathered the economic crisis better than the General Fund.
Warren then went into the Building Permit issue and stated that there is no happy way to present this. (The Hound: Warren has spoken of this issue several times before and this follows the negative pattern we have seen). The most concerning issue is the lack of construction activity.
This past year we saw 33 Residential Construction Permits granted. Alderman Meisner asked if this was units and warren answered yes and this includes the ETJ. The story is the same when one looks at Industrial/Commercial new construction, which peaked at 137 in 2005-06 and fell to 22 this past year. Alderman Meisner asked about Renovations (He said he knew that Warren didn’t track this). Warren stated that the numbers are up, but you don’t get as much value. The trend is that people aren’t moving, but they are renovating what they have. Alder Patton asked about putting in the numbers where property is demolished and then new construction takes place (such as where Randy Marion Auto Dealership was located) that is fresh land and something new being built there. Warren stated that yes that would be considered new construction. There were 574 projects that took place last fiscal year. If one looks at 33 Residential Projects and 22 Industrial/Commercial projects, then one can see the number of renovations that have taken place.
The last 3 years, the tax value of these new properties has been steady at around $50 million. This is where the growth in our tax base comes from. Even if one assumes that all $50 million results in taxable income (which it won’t, because some of these projects will never be built and others aren’t taxable) this would only amount to an increase of $250,000 in property tax revenue (which in an General $42 million budget is .006%). That is what you have to work with in terms of growth and assuming no other revenues drop off. That is not much growth on a $4.6 billion tax base. He also talked about problems with the losses of revenue from loss from lack of new equipment and depreciation of existing equipment. We aren’t seeing new growth in permitting or new machinery being put in. Without this growth you can see your tax base slowly start to decline. (From a past presentation: The last time we went through a recession we saw a drop in the tax base between 2003 and 2005, if the trend holds true it will effect future budgets.)
Warren next went into local unemployment numbers for the local metro area. The percentage is down and heading in the right direction ( We were at 15% in 2009 and we are down to 11.9% now). The trend is the right direction, but when you look at the numbers behind the numbers, looking at the civilian workforce, we haven’t seen much change in the last few years. The reason the numbers have probably come down is because people have dropped out of the workforce. That is important because Hickory is a Shopping, Financial, and Recreational Hub for the Unifour. When Caldwell and Burke county hurt we hurt too.
Warren spoke about the city adopting a resolution, in July 2010, opposing the Federal Collective Bargaining bill sponsored in the Federal House and Senate. The Bill passed in the House, but failed in the Senate by 5 votes. Warren stated that we are one of the few States that do not allow collective bargaining on the local level. The Mayor stated that this would have affected other states, but none as much as us. Warren stated that this would have federalized the collective bargaining process nationwide. The Mayor added that 8 of our NC State representatives and one Senator (in Washington) have voted to overthrow our law.
In August, City Council approved a submittal of a $2.5 million project grant for 226 homes in Northeast Hickory to be provided city water, annexation is not part of this. In September, the City awarded a contract (to bid) for infrastructure installation for the Green Park Subdivision.
Looking at the past year’s financial highlights (Projects Completed):
Clement Blvd Ext ($4 million) City
Radio system Upgrade ($1.6 million) City
Rehab of Airport Taxiway A ($1 million) Federal
Downtown Bus facility ($500,000) Federal/State
Grace Chapel Road Design ($300,000) City
Brownfield Assessment Project ($200,000) Federal
80% of Traffic Signal Upgrade ($2.5 million) Federal/State
60% of Northeast Wastewater Treatment Project ($25 million) Half Federal/State
Cripple Creek Sewer ($2.5 million) Federal
Catawba Wastewater Treatment Plant Design ($500,000) City
Hiring Freeze is still in place, but they feel that revenue projections are better… Sales tax is moving in the right direction… State is not going to take money… Alderman Meisner asked about annexation in relation to people having an opportunity to receive City water and sewer support. People will look at an opportunity to join the city, because of failing Septic Tanks.
The Hound appreciates Warren and the City’s gameplan with much of the budgeting that has gone on in these trying times. . Once again, as I stated before, I question any positive scenario related to sales taxes. If one realizes that inflation has caused prices to rise, then surely one can extrapolate that the taxes associated those products will also rise. By all accounts, except the thoughts of the Federal government, inflation is rising between 8 and 10% currently and rose around 5% in 2010. That means if you see a 3% rise in sales tax, then you actually see no growth, because you lose it through the devaluation of dollars. Also city expenditures will have to rise to meet those inflated costs, such as with fuel or any other commodities needed to operate the City.
We see this all the time. People are spending the same amount as last year, but trying to stretch the money more. People are stretched. They aren't going to expand their consumption, so there isn't going to be any increase in government revenues until the business model is addressed. It would be interesting to cost out revenues, expenses, and budgetary numbers versus inflation to see where we truly stand.
At the most recent City Council meeting, July 19, Alder Patton proudly promoted a public-private partnership in relation to the cooperation between the Farmer’s Market, Tasteful Beans, and the Soup Kitchen. We are also seeing this with the Zahra Baker Park project. Efforts such as these build goodwill and camaraderie in a community. This is what people asked for with the City Pools and they were given a cold shoulder. This type of paradigm of city development is what will be necessary as times get harder and reading between the lines of what Warren presented, one can see that the next leg down is upon us.
Matters not on the Agenda
The Mayor talked about the Quality Report and Financial Report. A very big factor is state of mind and cooperation among coworkers and management at all levels. We are very fortunate that we don’t have layers of extraneous management and he has observed that Department heads aren’t getting in line to make their budget as high as possible next year. He wants the staff to discuss with the League of Municipalities what position they are going to take in relation to an economic threat by the National Labor relations board in relation to the initial decision barring Boeing from being able to move to a right to work state.
Alderman Guess stated that he was proud when he saw on the news that Hickory Firefighters and equipment were taking the place of Asheville firefighters in relation to an Asheville firefighter killed in the line of duty on July 28, 2011. The Mayor mentioned that this was a great reminder that Public Safety Officers put their lives on the line every day.
Alderman Meisner stated that Kudos go to the Recreation Department for the State little league Midget Tournament. The tournament went off without a hitch.
Alderman Seaver mentioned the Hickory Crawdads game on August 10, 2011. He has vouchers for $5 box seats and $4 goes to the Zahra Baker project, which has to date raised well over $126,000.
The Hound wants you to understand that we are in a new phase related to this Economic Depression that we are in. We are going to see more small and medium size companies go out of business. I have witnessed the struggles first hand with relation to such businesses, including my Aunt's restaurant 1859 Cafe.
You know we used to go at it in relation to that place and our blood, sweat, and tears have permeated the foundation of that building. Many of the defining moments of our lives were devoted to that business, Jane's 10 times over what mine were. Jane's heart was broken when my Uncle Alex Moore was killed in a motorcycle accident on March 31, 2007. I am not telling anyone this to put Jane's pain out for the public to see, because I know it was a struggle to make the decision to close her business. What I am saying is that this is what she means by not wanting to be in business alone.
You see, I was there from the beginning when Jane and Darlene (Now Feege) came to an agreement with Joe Long, Leroy Lail, and Lou Silvers to help finance the place that at the time was called the Wedgewood. The former owners had trashed the building and left it for dead. And many people have no clue about what a historic building that is. We all went in there and cleaned it up. We were all much younger with a lot more energy. I was only 17 years old and in my senior year of High School. Jane and Alex put their heart and soul into that business and it went gang busters for a long time, even though there were challenges related to the location.
Mr. Wilson of Wilson's Florist was always a gentleman and provided flowers and talked to Jane. He was a good neighbor. Jane always tried to help the less fortunate in the neighborhood. It is a shame that the city chose to abandon that area.
The Restaurant thrived in the 1990s ,when the Fiber-Optic boom and the Furniture Market in High Point were in their heyday. I would be up there sometimes until after midnight cooking when the European jetsetters would fly into town. They would praise my food and Jane's food and tell us that we ranked with the best and they would spend $1,000+ at a pop wining and dining their clientele. We did caterings all over western North Carolina. The sad part was that we took it for granted and thought it would last forever and I think that was the case with many business owners in this community.
Over the last decade, after we reached the stars in the 1990s, we have struggled towards despair. People are sick and tired of struggling and that is what makes it easier to walk away from things that you have put your heart and soul into. You have to have a soul and work ethic in order to understand that. So, maybe this will help you understand why Jane could walk away from something she put half of her life into. It's a shame what the mindset of this community has become. Expect the least and that is what you will end up with.
Hickory is fortunate that people such as my Aunt and her Husband stuck there neck out on the line to try to do something special in this town. I always heard about 1859 being that "SPENSIFF RESSRAUNT." Well quality doesn't come cheap. The 1990s weren't perfect. We all made mistakes in taking the good times for granted, but we are now in the polar opposite and from here we learn about character and respect. All I hope for is balance and that this community starts desiring quality again, and quality ain't cheap; while keeping in mind that we shouldn't ever let the future good times, if they ever come again, allow us to return to frivolity...
May the Peace of the Lord be with you all,
Until next time,
James Thomas Shell
