DeKalb Times

DeKalb County Finance Committee met June 3.

Here is the minutes provided by the committee:

The Finance Committee of the DeKalb County Board met virtually via Zoom. Chairman Bagby called the meeting to order at 7:00 p.m. Those Members present were Mr. Scott Campbell, Mr. Steve Faivre, Mr. John Frieders, Ms. Dianne Leifheit, Mr. Jerry Osland, Ms. Linda Slabon, and Chairman Tim Bagby. A quorum was established with all seven Members virtually present.

Others present via Zoom included Gary Hanson, Pete Stefan, Derek Hiland, Christine Johnson, Greg Millburg, Sheila Santos, Jeff Whelan, and Kathy Lampkins.

APPROVAL OF THE AGENDA

It was moved by Mr. Osland, seconded by Ms. Slabon and it was carried unanimously by voice vote to approve the agenda as presented.

APPROVAL OF THE MINUTES

It was moved by Ms. Leifheit, seconded by Mr. Osland and it was carried unanimously to approve the minutes of the May 6, 2020 Finance Committee Meeting.

PUBLIC COMMENTS

There were no public comments.

UPDATE ON PROPERTY TAX PENALTY WAIVER

DeKalb County Treasurer/Collector Christine Johnson shared that property tax bills were mailed out on time on May 1, 2020. Since May 1st Ms. Johnson’s Office has collected $75.5 million and on May 29th, they distributed $49 million, which is about 21% of what they are expected to collect this year. A fair number of taxpayers are paying both installments at one time. That is pretty normal and those full payments start to taper off when it gets closer to the first installment due date (June 5th). Ms. Johnson shared that she is noticing that really is not the case this year and the Office is continuing to see a large number of taxpayers paying both installments even this week.

The Office was opening up to the public this past Monday, Ms. Johnson shared. The entire building is practicing social distancing, wearing of masks, and following all CDC guidelines due to the COVID-19 pandemic. If the public doesn’t feel comfortable coming into the building, the Office has made documents and information available to the public on what banks they can pay at and step-by-step instructions on how someone can pay their property taxes online.

No penalty waivers forms have been turned in yet because the forms must be submitted with any payment made after June 5, 2020 to the DeKalb County Treasurer/Collector to receive a waiver of the interest penalty on the late payment of the first installment of property tax. The Office has fielded many phone calls on the subject and has mailed out at least 50 forms to those who have requested them and don’t have access to print them off the County’s Website.

ANNUAL REPORT OF COMPLIANCE WITH THE BOND RECORD KEEPING POLICY

Mr. Stefan reviewed with the Committee the annual report for 2019 that demonstrates compliance with the Bond Record Keeping Policy so that bond interest costs can be maintained at lower tax-exempt levels.

Mr. Faivre moved to accept the 2019 Annual Report of Compliance with the Bond Record Keeping Policy. Mr. Frieders seconded the motion and it was approved unanimously by the Finance Committee.

FUND BALANCE REPORTING & FLOW OF FUNDS POLICY ANNUAL REPORT

Mr. Stefan reviewed the annual report that provided the recommendations for fund balance allocations as of December 31, 2019 in accordance with the Fund Balance Reporting & Flow of Funds Policy. For comparison purposes, he also included the December 31, 2018 actual totals as well.

For the General Fund the Total Fund Balance went from $8.7 million to $11 million (mostly due to the Airline Fuel Sales Tax that was factored out of the budget but was still collected for 11 months last year and a couple other positive revenues that were taken in). Mr. Stefan added that was good news and they hoped to be able to do some good with that added cushion but some of that will mostly likely get eaten up with the COVID-related impacts this year. For the Total Governmental Funds, the Fund Balance went up about $800,000 in FY 2019.

Mr. Campbell moved to accept the 2019 Fund Balance Reporting & Flow of Funds Policy Annual Report. Mr. Frieders seconded the motion and it was approved unanimously by the Finance Committee.

NURSING HOME BONDS PARAMETER ORDINANCE

As discussed during the May Finance Committee meeting, Mr. Stefan presented the draft Nursing Home Bonds Parameter Ordinance. He explained that this Ordinance delegates the authority to sell the bonds to the County Administrator so that when an opportunity present itself in the bond market to complete the bond sale at terms favorable to the County that are within the parameters defined in the Ordinance, the sale could be accomplished in a more timely fashion than waiting for the next County Board Meeting which may be after the selling opportunity has already come and gone. Mr. Stefan reviewed the highlights of the Supplemental Bond Ordinance with the Committee and answered questions the Committee Members had regarding the process.

It was moved by Mr. Osland, seconded by Mr. Faivre and was approved unanimously to forward the Ordinance to the full County Board recommending its approval.

FY 2021 BUDGET CALENDAR AND PROCESS

Mr. Stefan additionally presented the proposed FY 2021 budget calendar and budget process for approval by the Committee. The process is generally the same as last year’s process with updated dates for the FY 2021 budget cycle.

The Committee discussed having in the budget process that they would like to pass a Balanced Budget again in FY 2021 (meaning, no Fund Balance utilization). In their discussions they inquired when they may begin to see more numbers that would give them a better idea of revenue projections and whether or not they should look at meeting in July.

The Committee determined that they would like to be presented with a Balanced Budget for FY 2021 and would like that stated in their budget calendar and process. Mr. Stefan additionally agreed to send the Committee updated budget project figures in mid-late June. The information would include updated sales tax number (which would have the first look at how COVID is affecting sales taxes) and income tax numbers. He also reiterated that he is currently still standing by his estimated $2 million budget shortfall for FY 2020.

Mr. Osland moved to approve the FY 2021 Budget Calendar and Balanced Budget Process. Mr. Campbell seconded the motion and it was approved unanimously by the Finance Committee.

TORT FUND RESERVES ACTUARIAL STUDY

Mr. Stefan explained that this is a follow-up item to previous discussions on the County’s Tort Fund exposure. The Finance Committee authorized the Finance Director to hire a consultant during 2019 to do an actuarial study of the activity in the County’s Tort Liability & Insurance Fund to determine (a) what the annual funding levels should be for expected claims to be incurred, and (b) what the appropriate reserve level should be in the fund to finance the County’s self-insurance program. Madison Consulting Group of Madison, Georgia was hired to make recommendations to answer those questions and subsequently issued their report on March 25, 2020, which considered data through December 31, 2019.

The Actuarial Study provided varying levels of funding and reserves that the County could utilize depending on how high a confidence level (50%, 75%, and 95%) is desired to cover current and future workers compensation and liability insurance claims failed against the County.

The Committee reviewed the report between last month and this month and decided that it would be best to review the revenue target each year during the budget process (especially due to the uncertainty of the current COVID-19 pandemic), but that it would be beneficial to establish a goal for a reserve balance so that this can be used each year in the budget process when determining the revenue level.

Chairman Bagby and Mr. Faivre both expressed that they would recommend that the reserve level goal should be at the 95% confidence level, which for the 2021 fiscal year would be to have an ending balance of $6,234,000 which is below the County’s projected balance of $6,329,424 as of December 31, 2019. The rest of the Committee came to that same consensus.

Mr. Faivre made a motion to establish the goal for the reserve balance for the Tort & Liability Insurance Fund to be at the 95% Confidence Level at the end of each fiscal year, with the annual revenues adjusted as necessary and appropriate through the annual Budget Ordinance in order to achieve and maintain that goal. Ms. Slabon seconded the motion and it was approved unanimously.

COVID-19 IMPACT ON COUNTY FINANCES

Mr. Stefan presented an updated Dynamic Revenues Report depicting the early stages of impact that the COVID-19 pandemic is having on the County’s FY 2020 budget. He also provided the Committee with numerous revenue charts and graphs depicting historical revenue trends of some key revenues for the County.

Mr. Stefan reported that the County has spent $157,000 in Commodities and Services through May for unbudgeted COVID-related items. That number doesn’t take into account any personnel numbers. Some of the $157,000 will be reimbursable but some won’t. Mr. Stefan reported that unfortunately the more information he gets the less confident that he is that much of any of it will be reimbursable. He is hearing that some of the dividers, shields, and sanitizers, unless you are a healthcare worker or emergency responder, they are considering those increased operational costs, which would not be reimbursable. He is waiting for additional guidance from FEMA because there is a lot of complaints about that so they are going to issue additional guidance. Everything that is FEMA-eligible will be reimbursed at 75%.

COUNTY LOANS TO RESIDENTS AFFECTED BY PANDEMIC

This item was suggested as a discussion topic by County Board Members Paul Stoddard for the Finance Committee to consider whether a loan program to residents was something the County wanted to develop and implement.

Chairman Bagby shared that he was not for certain what Mr. Stoddard’s intentions were regarding this item and so he reached out to him prior to the meeting but did not hear back from him yet.

Mr. Faivre noted that in his opinion, it is not the purpose of Government to be getting into the credit business. Mr. Campbell noted that he worked in consumer finances for a length of time and the law around lending money to someone are unbelievably complex. Mr. Frieders expressed that he thinks there are non-profits within the County that could do a much better job of providing that type of service than the County could.

CLAIMS REVIEW

Mr. Stefan highlighted that the May County Claims seemed to be much higher due to multiple interfund transfers that occurred. They wanted to get all of those done early in the year to help get a better picture of where everything is prior to beginning the FY 2021 budget process.

ADJOURNMENT

It was moved by Mr. Frieders, seconded by Mr. Faivre, and it was carried unanimously to adjourn the meeting at 8:37 p.m.

https://dekalbcounty.org/wp-content/uploads/2020/06/min20-finjun.pdf