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HomeMy Public PortalAbout03-25-19 Budget RetreatMinutes Board of Commissioners Annual Budget Retreat 3 p.m. March 25, 2019 Town Hall Annex Board Meeting Room, 105 E. Corbin St. Present: Mayor Tom Stevens and commissioners Mark Bell, Kathleen Ferguson, Matt Hughes, Evelyn Lloyd, and Jenn Weaver Staff: Budget Director Emily Bradford, Graduate Intern Richard Carey, Human Resources Director/Town Clerk Katherine Cathey, Assistant to the Town Manager Jen Della Valle, Police Chief Duane Hampton, Assistant Town Manager/Planning Director Margaret Hauth, Public Works Director Ken Hines, Town Manager Eric Peterson, Budget Technician Jamie Privuznak, Finance Director Daphna Schwartz, Utilities Director Marie Strandwitz, and Public Information Officer Catherine Wright Facilitator: Rod Visser Absent (excused): None Retreat summary Hillsborough town leaders discussed priorities for the next three fiscal years, including proposals to implement a $15 minimum wage and to connect town facilities with fiber. The retreat with the town’s management team took place from 3 to 9 p.m. March 25 at the Town Hall Annex Board Meeting Room. It included watching and discussing the documentary “All the Queen’s Horses” about a small Illinois city and the employee who embezzled nearly $54 million from it. Fraud prevention Hillsborough Financial Services Director Daphna Schwartz noted the importance of professional leadership and internal controls to prevent municipal fraud. The city featured in the film — Dixon, Illinois — switched to a council-manager form of government and separated employee financial duties following the embezzlement’s discovery. The Town of Hillsborough uses that form of government, in which the elected board establishes policy and the town manager handles the day-to-day operations. Hillsborough also practices separation of financial duties and oversight so a single employee is not handling all aspects of the town’s finances. “Trust is not an internal control,” Schwartz noted to the mayor and commissioners. Under her leadership, the Financial Services Department implemented a comprehensive purchasing policy for the town this fiscal year. She and the manager encouraged the board to review the town’s comprehensive annual financial report each year and to ask questions. The report is prepared by an independent auditing firm, a financial oversight that was compromised in Dixon as its auditor also handled some of the city’s accounting. Schwartz noted that it’s a good idea for the Town of Hillsborough to request bids for auditing services every five years and to request a different auditor if the same firm is selected. March 25, 2019 Board of Commissioners Annual Budget Retreat Approved: ____________________ Page 1 of 2 May 13, 2019 Budget proposals In preparation for the retreat, the board reviewed preliminary numbers prepared by staff using continuation budgets that carry forward only the services and initiatives already provided in the current fiscal year and the budget requests necessary to continue operations. The preliminary numbers show a deficit of about $379,000 in Fiscal Year 2019-20 in the General Fund, which is funded primarily from property and other taxes. The board and staff will continue to work, with input from the Water and Sewer Advisory Committee, on a strategy for continuing the implementation of water and sewer rate increases started this fiscal year to fund the reservoir expansion, the loss of Efland-Cheeks sewer customers to Mebane’s system, and capital needs to maintain the water and sewer systems. The Water and Sewer Fund pays for providing water and sewer service — which includes the operation, maintenance and improvements of the system — and is funded primarily from water and sewer fees. The mayor and commissioners expressed interest in pursuing a proposal to implement a $15 minimum wage for town employees with pay adjustments to avoid salary compression, in which only a small difference in pay is created between employees regardless of skills or experience. The proposal, to be combined with process improvements to annual employee evaluations, would cost an estimated $186,000 in FY20. “I really want to find a way to do this,” Commissioner Jenn Weaver said. “This is very in line with taking care of what we’ve got and taking care of people.” The commissioners also prioritized pursuing a project with Orange County to create a fiber loop that would allow the town to connect its facilities to improve Internet reliability, speed and redundancy as well as communication between departments. The board also wants to further seek inclusion of Orange County Schools in the project. The fiber network’s estimated $2 million cost to the town would result in debt payments of about $260,000 annually over 10 years, starting in FY21. Building a network with a useful life of more than 50 years appears to be more cost effective than leasing, which is estimated to cost about $200,000 annually. The fiber network also potentially could serve as the backbone for third‐party providers to offer last mile service to citizens. More information The mayor and board also reviewed and discussed the town’s strategy map, which helps leaders align budget decisions with the town’s priorities, objectives and values. They determined that the vision for Hillsborough should be revisited and that language should be added to the map to include resiliency for how the town manages resources. Resiliency would capture goals for emergency preparation as well as succession planning. Employees in eight key positions are or will be eligible for retirement within a year. In five years, 24 other employees — including 9 in the Utilities Department — will be eligible. A final draft budget will be available to the board and public for review in early May. On May 28, a public hearing on the budget will take place at 7 p.m. in the Town Hall Annex Board Meeting Room, 105 E. Corbin St. The Board of Commissioners is slated to vote on the budget proposal on June 10. Respectfully submitted, Katherine M. Cathey Town Clerk March 25, 2019 Board of Commissioners Annual Budget Retreat Approved: ____________________ Page 2 of 2 May 13, 2019