Board of Commissioners · Work Session · June 3, 2025

All right. Good morning, um board. We uh left yesterday close to um finishing up budget conversations. Uh at the end of the meeting, we walked through the um add delete list and we also talked about the need of u discussing our budget ordinance with the slight modification to that as well.

And so, um, as far as your preference, we can recap where we are with the add delete list and then, um, walk through the ordinance component. And so, we'll pull that [Music] up. And the board asked us to um look and revisit where we were and then um come back today to see based on those discussions if there were ways to close the gaps um based on where we were yesterday

um without it being a tax increase. So, I'll first walk through that exercise and then we can talk to see if there are um additional conversations beyond that, which I do believe there may be. So, Stephen, I'll let you walk through that. Yes, ma'am.

It's not showing up on our It's not showing up on mine. Maybe I need to move to Okay, it's not okay. Let me see. Okay, thank you. Well, while Monica fixes that, I'll go over what the ad delete list is for a third time just to make sure everyone gets it in your head clearly. This is uh we're tracking changes between the manager's recommended budget and ultimately and hopefully what you will approve on July the 9th, but we're hoping to finish today changes between

the manager's recommended budget and the commissioner approved budget. The highlighted top section in blue are sort of man they're not mandatory but they're sort of administrative updated numbers. Remember I told you yesterday sometimes we miss an expenditure and we need to add it in that should be built in. Sometimes we miss a revenue or a new revenue comes in that we need to put in.

That's what happened with the top blue. There's $126,000 more we need to give prek to hold them harmless to what we were planning on doing. And there's a $300,000 revenue that we uh that do that popped up on our screen between the managers recommended and today. So those are administrative changes that it nets out to a positive to the county savings, whatever you want to call it, of hundred plus thousands that has to be done.

It's not really arguable. Just letting you know the purple area of the table you're looking at is where we the manager just set up where discussions have been had between the board members about additional funding. And the majority of

57 million? That's the list you're going to see in red and the revenues. One way we're doing it is we're reducing expenditures for DPS and current capital. They had been recommended for 6 million.

We are recommending 5 million or the manager is proposing in the ad delete list giving them 5 million instead of 6 million. 57 million. But we still got a million plus to go. A million five to go to get in back in balance. 5 million? Well, we talked there was discussion yesterday and from the board members after a presentation from Hay Thai Reborn that Hay said they needed $500,000 for

operational spending and $1 million for additional expansion of programs or new programs. The county budget recommended $1 million. You could take $500,000 of that recommended 1 million, still meet Hayatai's $500,000 operational needs as they presented yesterday, and take the other 500,000 and begin to offset the cost for DPS. Everyone following me here on this?

All right. 5 million that we're trying to find money for. Another way we could do it and uh the manager was nice enough to come down and have a pow-wow with the budget office yesterday afternoon after these meetings. We sat around and racked our brains trying to find ways to save dollars so we don't have to potentially increase the property tax rate. One couple of small areas that we could find funding, there's manager contingency. We always every year budget a couple of hundred,000 in the manager's office for

unknown, unplanned needs. It gives her a little bit of freedom or the manager's office a little bit of freedom to enter into contracts real quickly or do things like that. She's willing with tightening of the belt to decrease that amount by $100,000. That will leave the manager's contingency down to $100.

I saw your email, Wendy. It's a little bit different, but it's $100,000. That leaves her commission uh manager's contingency budget at 100,000, but it's down from 200,000. So that's saving $100,000 in expenditures.

Now, I want to give an example. If you may recall, um about two two meetings ago, we approved the the nine the the communications plan. It was a joint plan that was approved by the board for um about $100,000. So versus appropriating fund balance, we uh used the dollars that was in the manager's contingency. The next one will be very similar. Um, you know,

when you start talking about moving money from your boss's line, that's kind of a slippery slope. So, um, but I I did, in the spirit of the spending patterns for the board of commissioners contingency um amount, looked at reducing that by $50,000. A Stephen, I thought I would say that versus you. Um and so based on the spending, it had not been used at the fullest amount and so this would um also be a small adjustment as well.

And Stephen, you can explain. Yes. I also just had a question. The idea of taking a million away from the DPS's ongoing capital, um are there any concerns about that? No, it's not because in the we we gave them authority for $10 million um through our payo funds or the

use of lobs. Um typically those funds are used for you know one-time capital projects. So they have a larger funding screen stream available to them based on what we saw uh we've seen and heard in recent months about HVAC issues um other school um climate issues. So that's why I sort of preemptively put that in the budget based on what we were hearing and knowing what we've done in the past um years you you were here during that period when we put a placeholder of $10 million in the budget and it allowed them for planning for future bonds but also to address most pressing repair renovations. And so from our perspective, this does not reduce their ability to complete work. It also um optimizes other dollars they already

have um from ARPA funds that we presented to them last year. They're still spending that down as well as access to their lottery fund. So we don't see this presenting a major issue. Um, but we can work throughout the year if something arises, but we we don't anticipate anything arising above what we've put in the the pay go/obs category.

So, they they are covered. And that intent was for multiple years, but if they need it all in one year, then that is available. But our intent is to make sure that those areas that are climate related, roof, etc. that it's the last style they use, but that's another cushion for them.

So, we feel very comfortable with this strategy. Okay. I just want to be clear about that cuz I other people might see that and be

concerned. Oh, absolutely. So, we went above. Yes, ma'am.

And I and we've not I don't think that's got picked up as much. So, I'm glad you brought it up that we went above what was asked when it related to capital because our our understanding of where they are and how we've handled those things in the past. Yeah. Yeah.

That's what I figured that we because we're giving the what um 10 million and you know an extra that that could offset what they got in the um in their occurring capital that 6 million. So yes and we we would work over the next few years to restore it to the 6 million. though it's a part of their base. But um if if the intent is not to raise tax is above what's recommended, which I I truly support, we felt this was a way a win-win for them to have access to additional dollars in their

current expense budget, but still achieve those um capital related coverage. [Music] Yeah. I just want to say I really appreciate the efforts to not raise taxes. Um I just came from the housing for new hope breakfast and a lot of conversation about just the interplay about federal funding not only for us at the local level but also at the state level. Um, Senator Murdoch and Representative Austin were on a panel and um, you know, I think they said 50% of the funding come I don't want to get that quite right, but the amount of money that comes into the state budget that is federal funding as well. Um, and so I think making sure that we are putting ourselves in a position that we're able to be able to respond to what

may come um and give us some flexibility and resiliency to um meet the needs that may arise over the next year. Um, I appreciate that. Thank you. Michelle.

Yeah, I have a question and this was brought to my attention um about Alliance Health and they have there's money allocated to them for DPS and that money is not being used. I believe it's a little over a million dollars. And I want to know why can't we take that money since they're not using it? Um, yeah.

So, if you can clarify that. Yeah, sure. That's a great question. We, uh, uh, Alliance in in looking at their budget, their expenditures, their budget

4 million. I may have it off a little bit. Um, their projected expenditure use for this current year is close to $2 million. There's about $4 million difference.

Part of the reason it's lower is because of the dollars made available through Medicaid expansion. So, they do the best practice. They use other dollars first and so they did not have to use local dollars. Um, it was it's a two-part um issue with their budget.

5 million. Okay. And so, but um we recognize there are some key areas that still need to be um supported. We are allowing them to carry forward the dollars that are not spent in the

current year into next year's budget. and some of those strategies were to support Durham public schools. So, we will in fact support Durham public schools through that through the alliance budget. The question is because that is a one-time um adjustment is what happens in outlying years.

And so, I know that's a concern of theirs. We want to see what the patterns are um so that we can come up with a a longer term solution. But some of those dollars will support Durham public schools and some are other community um partner areas that have high need. So that thank you uh manager.

Yes sir. Go ahead. Thank you vice chair man. Just to uh piggyback off of uh commissioner Burton's comments. It's also come to my attention that with respect to uh the services that uh Alliance will provide for DPS, they

haven't actually even engaged in a uh memorandum of agreement just yet with regards to what those services will look like, which is a concern for me at this particular moment. Yes, sir. there there were some delays in the um the agreement being finalized and so um the intent last year was for the services to occur um for the current fiscal year 2425. The great news is is that um the agreement is close to being finalized and we'll give the board an update on that status.

Um the uh the services as as I I do understand are scheduled to happen early um next fiscal year. So we are further along um and the great uh part of all of it as well. There are some best case examples that they're following. Wake County does

this effort with the alliance and and so it's not like they're starting from scratch. So we do feel like once they finalize the agreements which are very close um we will see that work coming together. So is my so is the takeaway here today that uh theou is forthcoming? Yes sir.

Okay. Yes. And we will give you an update. alliance is is coordinating some responses to questions for us.

Okay. And also uh uh chair Allam is online and she has her hand up. So Netta uh would you like to um chime in here? Yeah.

Good morning. Can y'all hear me? Yep. We sure can.

Wonderful. Um yeah, I just want to echo the sentiments. Thank you so much to the budget. I'm sorry.

Can you speak up, Chair Long? No. Can you hear me now? Yes. All right. Thank you so much uh Manager Hager and the budget team for you know working with us to be creative and minimize the tax

impact on our residents. I really appreciate that. Um I feel really comfortable with what's on this spreadsheet um and moving forward with it as such. I did have one additional thing though wondering um because I was talking with the city council and I know that there's been conversations and like this has been ongoing about you know an additional role to support the work of NAIO that would be split between the city and county.

Um, and I know council member Caviierro is um, having conversations on the city side and talking to manager um, Bo about it there. And I was wondering cuz we don't have it in our proposed budget as it is right now. Right. So what for that effort, what I was proposing, going to propose is that we realign an existing position um to support outreach and so we can um formally um do

that but um have my commitment because additional alignments and realignments will be happening um because we are looking at all program areas um and workloads. So that is the intent for for that work to happen. Right. So the money is there then in this budget for the that we will realign.

Yes ma'am. We will realign a um it's not on our list as an adjustment but we Yes ma'am. We do we have approximately 370 vacancies and the intent is to address that additional workload through um a realignment of a position. Thank you, man.

You're welcome. Commissioner, I'm sorry. I don't know what Chair Alam is talking about. What position is this and what Yeah. Can you be more clear about what this is? This is um related to some community outreach that's happening in cooperative

extension and we have some workload issues. Um and so this is one that we would address through um realignments of an existing position. Yes, ma'am. Thank and I I will say that right now uh we're just at a tricky time.

There are several um programmatic areas that are on the radar um for potential um reductions from federal dollars. So over the next few weeks and months um we will look at workload and see where we may need to bolster that support. Thank you. U uh chair alone, did you have any other questions or comments?

Did other commissioners go ahead? Um I just wanted to mention about the alliance discussion. Um that's why I had asked

for them to be a part of the budget work sessions which I know we we couldn't do but um I I do look forward to them coming and I want just wanted to give a little background to my colleagues um because this came up last year. So this funding from Alliance is a program that they're doing in Wake County where kids who are identified who have severe um behavioral health needs and who really need um assistance with getting um resources and getting connected to care um outside of what may be normally available um and supporting their families. um that that's what this program is about. So um I do think it's needed. Um we especially see this with DSS. Um we see increasing numbers of families that have children with severe behavioral health

issues. And so this is this would be an example of I think an upstream support um to help with some of the challenges that families are facing. So looking forward to that to that getting going. I just want to share a little background about that program.

Thank you. Okay. Anyone else? Any any comments here?

Uh well, so I'll just go on regular and saying I don't ne I don't agree with the reduction of $500,000 from Nida Allam. I'm one commissioner. I get that. So that's just my my position here.

I want us to think about um vice chair just just for the record. I'm not opposed to the one million staying in um but I was willing to to uh to compromise in order to get us across the finish line if that were necessary. But I fully support them. Point taken. I mean that I mean I wasn't supportive of

the 1 million staying in. You know I was it was the 500,000 that we're talking about here. Uh here I guess what I guess what I meant just is that the additional 500,000, right? Yeah. that additional 500,000 is um um you know it's it's said that if you look at an organization's budget you know what their priorities are and um I want to make sure that my time on this board is cloaked in um support for whatever we can do for for the people who mo who who most need it. Um I understand that there were some challenges around how the organization

was started and um some of the things moving forward and you know how we how we get them independent and um independent of the county count's contributions. Um but I um so yesterday, you know, it was there was a comment made saying, you know, well, we have a staff that does similar things. And I I find that really interesting because there's a lot of organizations that we support where we have staff that do similar things. We have a workforce and development committee here, but we support programs like M and Durham that do the same thing.

Um, I also find it uh kind of difficult to say if the work is enough or not while also saying we can't fund for more, right? " But then um when we come to decide what how we increase those types of services, we um we have we have challenges with that. This is not a hill that I will die on. There's other priorities. There's other things.

Um, but even let's look at the the DPS line item here. Uh, everyone here knows I'm a huge supporter of DPS. 5 million, they were concerned. There were there was concern because we had to add the charter supple the charter piece.

" Instead of saying, "Well, we wanted $2 million. " When I had conversations because I couldn't make it to the meeting, it was transportation and EC. Those are two things. Commissioner Burton,

uh, Commissioner Jacobs, it was those are two things we want to add for DPS. 5 million. " But now we're at 2,574,000. And the and the thing to do that is to take away another program that actually handles challenges on the other end of what DPS does for adults that are going through situations and we want

to get them back into the education system, whatever it may be. So we cut that $500,000 essentially to make up that 500,000 difference here. I'm I'm troubled by that. I'm I'm I want to go on record saying I'm troubled by that.

And I don't feel that what we want to accomplish as a county and as a board from what I've from our conversations I don't think we head in that direction when we cut programs like that. We've already lost Bull City United. Whatever problems they had, I get it. I get it.

I was not a big supporter on the campaign trail. I said, you know, we need to relook at that. We need to look at goals and metrics. But it's really hard to

not have opinion. is it's really hard to not let opinions rule a b a a budget when there aren't measures to see if the programs that were funding are actually benefiting in the direction that we want. And that's what it feels like in some of these smaller conversations is happening is we're allowing opinions and feelings about history or whatever it is to happen to make decisions on the budget. And I just don't necessarily agree with that.

That's not how I govern. And that's why I ask the questions that I do. 5 million for a uh hat reborn JM

HRJM, but I supported the county manager's budget. for $1 million for them and I still support that. Um, I know I'm in the minority here and I will leave it at that. But as we exit this budget cycle and I look look into the future for the next three at least three that I'll be a part of.

I need you all to know, I need you all in the community to know that um I work really hard not to have not to let my feelings or opinions or like just thoughts govern the way I budget. I want figures. I want numbers. And this year it this year for me is about collecting upfront what those

numbers should be and next year so it can inform me of how we should go, what is success, what is failure, what needs improvement. That's that's what this year is for. So, I was not interested in taking away funding for anyone because I hadn't seen any previous questions about goals or success or what that may be. Let me give you an example with Hay Thai Reborn Justice Movement.

I was talking to Commissioner Burton yesterday and she knows I always love our conversations cuz we talk for so long uh every day. Um almost every day. And I was saying a measurement that I would be interested in doing for HRJM is if we were to fund the $1

million, one of the criteria would be, you know, there would have to be a development officer kind of built in built into this and they would be responsible by the time they come back for the budget next year to raise $250,000. That means they've built an apparatus to raise money and become self- sustaining. So instead of us just ripping money away, we're saying look, we want you to be successful. We want you to develop to to get off of the need for the um county money each year, but you need to start developing this apparatus to fund raise.

We're going to help you this year. We're going to give you this money to help you do that. You have new board members who are by all accounts excellent in this sort of thing. And so, all right, were you able to do were you able to create an

apparatus to raise 250,000 next year? Because we can't fund you if you don't do that. Those are the types of things we need if we want the programs that we support to succeed. instead of ripping money away and saying too bad.

So again, um I know I'm in the minority of this. I don't want to raise taxes. I get that. But I mean, I don't.

But I just needed to go on record saying that I disagree with taking from a program like this and uh taking from a program like this in general. Wherever the money ends up going, I just disagree with that. Okay. So that's was that's what I needed to say. Uh, Nida,

did you Nida, do you have Yeah. Okay, there you are. Thank you. Uh, thank you, Dr.

Lee. Um, I just wanted to respond to your comments. I appreciate your comments and also recognizing that you know I personally I know it may not be your intention from this but you know find offense to dismissing you know criticisms that someone may have as feelings about a program rather than you know evaluative thought process of coming to a decision that of cutting of providing five 500,000 rather than the 1 million. So I just wanted to point that out that I don't think it's a fair assessment to just play it out to be feelings about uh a program rather than an evaluative um thought a thoughtful evaluation of a

program. Um, and also recognizing that again in their presentation yesterday, they asked for 500,000 and like I know manager Hager put 1 million as her recommended. They asked for 500. So 500 was extra that was going to them.

So it is not going to cut their programming. They are going to continue to be able to provide the services with what is being recommended in this spreadsheet right here. So there is not a cut to the services that they are going to provide. And I think it's also important to note that you know none of us wanted to cut services and programmings on in any sphere really this budget cycle but it has been a budget cycle where we have made cuts where manager Hager asked every single department and office that receives funding from the county to come and when they submit their budget requests to have a cut in their budget. And that's why every

department did make cuts. Um, and even though we don't necessarily see it on this spreadsheet because it was already taken into consideration in the manager's budget, that doesn't mean those cuts haven't been made. Um, and we all are, you know, we all have to carry that and it's difficult. Um, but it's not something that any of us, I would say, have done based on feelings.

It's because we have to be stewards of these tax dollars that the residents of Durham have entrusted us with. And for me coming to this decision about the 500,000 is with that great responsibility that I carry on my shoulder that each of us carries on our shoulders that there is a program that the bridge program that they have the graduates from is really meaningful work and also assessing the holistic space of where we're in at this budget cycle and what we have capacity to fund. And again, just reiterating, it is not

feelings and it is not a cut to their programming. Well, I'd really love to see that evaluation that you all did because I haven't seen one yet. All right. Uh, Commissioner Burton.

Yeah. I just want to make a comment. Um, and I appreciate, you know, what you're saying, um, Dr. Lee.

Um I in that conversation that we had yesterday, I think this is a bigger conversation as to how we evaluate nonprofits, right? Um this six months on the job for me, for three of us, and understanding there are a lot of nonprofits here in Durham County and they're all wanting resources, right? um listening to the two leaders of Hay Thai Reborn Justice Movement, I really got their vision of what they're trying to do um and what they're really are trying to accomplish, but I also understand that it takes um you know,

how much can we keep funding nonprofits, right? And I think that um having this discussion I think the work that they're are trying to do is important trying to help individuals get back into the mainstream of life. Um it's touching human beings. What I did as an educator I think this is a bigger discussion with the city like how do we work collaboratively together to help people to rebuild their lives, right?

Um, and how do we help nonprofits secure the funding that they need to do really, really important work? Um, because it's been kind of challenging for me as a new commissioner trying to figure out, okay, where where do nonprofits get support and funding if they're doing good work? So, I just wanted to put that out there. And I think it's important for us as commissioners moving forward that we

have very strong metrics of how we evaluate programs and really communicating that to our county manager so she can therefore communicate it to staff. Um so these when these issues come up we'll have a really true blueprint as to how we want to go forward. So I want to say thank you Dr. Lee for your com comments.

Okay. anyone Wendy? Yeah, I just want to say I I respect everything that everybody has said. Um uh this is a very difficult um budget and a very difficult time as I started out this morning thinking about our state budget as well. And um you know to Commissioner Lee's point, we when we get the budget recommended from the county manager, you know, we had $60 million worth of requests this year. So we don't

see all of the hard choices that our staff have already had to make when they've come forward to us. Um, the fact that we are giving trying to give increased funding to Durham public schools is because we have always prioritized investing in education and investing in our children in Durham County. That that has always been our priority. And so that's why we're trying really hard um to do what we can.

Um and I think that um you know so we we have we really have not been looking at expansion in any area except for public safety where things like we've seen the numbers with the EMS response have been scary. Um, and then you know on the other side we have people on fixed incomes who we have we cannot forget when we think about budget increases. So I really

appreciate the staff looking at that. Um I I I think um Commissioner Burton hit the nail on the head when she said that we we are this coming year with the ARPA funding cliff. We're going to have to um come up with a way to move forward. When I first came on the board, we didn't have a a process.

We had about 70 nonprofits that we were funding a million dollars and they were very very small amounts like $10,000. And we realized that that was not effective. We also re thought realized it was a political decisionmaking where commissioners were just putting forward different nonprofits and then we moved into before co a process where we the staff did come up with a really good decision-making rubric we had we tied the nonprofit funding to our strategic plan to county

departments and I really think that we came up with a good process. I think going what we need to build into it is the kind of things that vice chair um Dr. Lee talked about which is what are the metrics and how do we really also support the nonprofits to getting there. I think one of the recent models we have in our community now is around collaboration trying to get nonprofits to also work together um and recognizing the collective impact of that.

But you know so everybody's brought up really really good um points as we move forward because we don't have we have very limited resources and tremendous needs. Um, and I think that will really help us. Um, and I want to lift up what Commissioner uh, Chair Lom said. Um, I don't make decisions based on

feelings. I mean, I probably drive people nuts because I ask for so much information. Uh, I want to recognize that I can go overboard on that. So I I'm try to be very deliberate um and ask for a lot of information when and how I make decisions and just mentioning the city I think understanding what is everyone doing because the city has a program called welcome home and their program is around re-entry and connecting just as involved residents to housing and jobs and transportation and resources and so and we do our re-entry council So I think understanding what our whole ecosystem is because we probably don't even totally have a grasp on that. Um and then lastly I want to address I think that is confusing and with the way it's listed in the notes where it says master's supplement etc. Um so I want to acknowledge that um

vice chair Dr. ly. Um, I think that what we talked about last week is that we were hoping that the master's pay and the supplement pay could be covered in what the county manager had already recommended, which was an additional $4 million and that we were talking about that the 4 million should probably be able to cover that and that the two an extra two million would cover the bus drivers and the EC staff. So, I just want to clarify that. And also we can talk about this later, but how do we include in our budget ordinance language saying that we are our intent is for the funding the count the funding the county is providing outside of the continuation budget is for we our intent is for this to fund supplement mast's pay EC sta EC

and bus transportation staff. So, we could talk about that knowing that they of course can do whatever they want. I I would like to make one comment. And um I almost wanted to u in the notes section take off what those categories were um from the standpoint to get in the practice of of not directing because the board can't and and so um they are also facing some some unknowns and we know that once the dollars get there they can can ship them as they see highest um priority.

One other point I'd like to to bring up and ACM Pierce, I'll um have you and possibly Crystal share. The city and the county has um been working for the past several years to look at what can we do in intervention services. Um the efforts

that at one point we collaborated on with Bull City United. um then pivoted um we collaborate with project build there are efforts in the city and some other spaces and there's a very new um approach that we're trying to to do to make sure from the heart initiative to existing county initiatives there is that synergy and planning that's um coordinated not only with the city county but with our community partners and Joan and do you mind just um talking for a couple of minutes about what will be coming to the board within the fall um as an update? Good morning, Joanne Pierce, assistant county manager and I see the director who actually is working very closely with our um justice services department director, uh the community safety director with the city of Durham and also of course with our um city and

county u managers. Um, and if I may, uh, Manager Hager, if I may call, uh, Crystal Harris up to talk about that collaboration that will include, um, our mapping of what what services do we have? Um, what programs and services and interventions do we have in our county? We did this type of mapping for um, within justice, the justice services department, and it really uh, revealed a lot of where our gaps were.

We we kind of thought we had gaps, but u mapping it out and coming up with a strategy to fill the gaps that we know exist really will have an impact on um our effectiveness. But I will turn it over to uh Crystal Harris because she is part of this uh collaborative that really is quite um uh hope hopeful and has been proven in other areas. Crystal Harris, good morning. And I'll be brief. Um so Rashana Parker who's the justice services director and myself and Ryan Smith have been working for the last

couple of months and we actually visited the Vera Institute in New York. Um Ver Institute of Justice in New York and we will be working with them in collaboration with the city. Um they're going to come and basically provide technical assistance to us to help us identify what resources we do have. Um we actually planning to meet on Friday um as the three of us to look at what are the committees, the task force, um what are the groups, what are the nonprofits that are all that are all doing work but they're doing work in silos so that we can kind of pro um provide like a comprehensive safety plan for the county and the city of Durham.

And so that is to kind of help identify where are some of the gaps in services, but we think it's a gap, but there is somebody else in the community that may be doing this work who in the county is doing the work. The welcome home pro um program is a part of how Ryan and Rashana started working together and then I had my own work with Ryan. So, we just decided to collaborate together and partner together. We're going to also be working with University of Maryland to come and do kind of like an executive 5day um intensive training and that will

also be including those um nonprofits, those um community organizations as well as um county and city leadership um because it takes everybody to do this work. So, we're going to work with them as well, kind of in concert together to help build that ecosystem so people will know this is who's doing this work. This is where I can go and they don't have to keep going to every different place asking the same questions. We'll be able to develop this one resource of where people can find the help that they're needing for as an adult or for a youth.

So, that's what we're working together on. We're actually meeting every two weeks. Um, and so we do work kind of individually and then we come back together as a collective. So, we are planning to have that work session um together on Friday to be able to start mapping out um what we have going on in the county of Durham. Thank you so very much. Um and and the intent is to figure out where the gaps are, who are the partners, and from a um accountability perspective, who's doing

it best so we can fill in those gaps. Um just wanted to share that so that you will have some additional context. Valentine, did you have something? Yes, vice chair.

Thank you. So, let me just say that I appreciate uh the nature in which you have centered um our processes um during this uh collaborative period around the budget. And it's clear to me that uh this time next year things will be a lot different uh with regards to our decision-m and those those uh measures uh that will guide our our decisions. But this this conversation both personal ones with the other commissioners and collectively uh here on the dis um have been healthy and hearkens back to a conversation on yesterday when we talked about being uncomfortable and in that space of being uncomfortable is where change occurs. And I feel that here today. And I think that

uh um to point out something uh Commissioner Lam said with regards to our responsibilities regards to being good stewards. I think uh we haven't said it to one another, but I think we all aim to be good stewards. And uh this uncomfortable tension around the budget and how we arrive at decisions is one that I think is healthy for all of us here on uh the DAS. Um so we are in an environment where there are limited uh resources and tough decisions sometimes have to be made and uh that's sort of the space that that we're in. Um but another thing that I think is important and not uh pointing back to you Dr. Lee with regards to um pushing us on what we say we value and budgets are value documents.

And so um I think that we're um experiencing some of that here uh this year. And so thank you for that. this this tension was needed particularly as we um grow together as a new board. Thank you.

Okay. Um um just wanted to check in with a chair Allam if you had any other Okay. She just messaged me. She said she doesn't.

Okay. So, um was there any other part of this? Yep. I'm sorry.

There's one last um Yeah, I was going to wrap up the the net difference. Okay. We had gotten through manager's contingency being dropped by $100,000, commissioner contingency being dropped by 50,000. That goes from 100,000 to 50,000.

It's exact same sort of it's usually money budgeted in the commissioner's accounts that you use for some of the same things, unplanned expenses. Still have 50,000. It's a

little bit of skin in the game by reducing that from 100,000 down to 50. We still were out of balance. How are we going to find it? Well, the budget office and and the manager scoured some of our revenue sources and we're going to bump up our interest income.

This is money we earn on our cash in the bank. We were conservative in that revenue estimate when we initially did it. So, we're bumping it up $300,000. We're talking about a $7 million revenue source.

So, $300,000 is not a huge increase on that number. So, we're bumping up that revenue by $300,000. We're still $400,000 out. How are we going to find that $400,000?

We're going to appropriate a little bit more of our fund balance, $425,000. 57 million largely for schools without a tax rate increase. So to sum it up, a couple of revenue increases, a number of expenditure decreases, some of which you have discussed, some of which

I just relayed to you and the manager relay to you. 3. So, just quick question, um, will taking the money out of our fund balance, will that give us a negative? Like, no, that's a great question.

and um the the amount our intent is never to use fund balance. Okay, that's number one. And there are a couple of places that uh we will that we can soften the impact of the use one. Yesterday we talked about the potential of looking at leasing some of the cars versus um buying all of them. And so that is one place but one I

didn't feel comfortable putting on the list and saying because we haven't done our due diligence on that. Uh as managers and as department heads we can always control um how spending happens. So, it's either on one side you're you're spending either through controlling vacancies or controlling other types of operating expenses um priorities in areas that may um spending in areas that may not be as of um high priority. So um this year will be like none other and I think I've shared it with board members that every budget allocation will be given with an aster that um entities will need to be prepared for shifts based on unknowns in our federal and state budget revenue stream as well as the economy. there just lots of unknowns in ways we've just

not seen but we will get through and so um so I I I do appreciate you um asking the question because we've talked about our fund balance and where we need to be and as a matter of fact um we will um have you know more conversations of how do we continue to stay in the um healthy position that we're in in some upcoming meetings so I do appreciate you asking the question, but it is one that we do feel comfortable. As I mentioned earlier, we have about um 370 vacancies and and so that does give some comfort as well with that um slight uptick. Well, to Stephen and David and your budget team, thank you. Thank you.

Thank you. You're welcome. I would last little bit of education. These numbers in effect are makebelieve. We are projecting revenues that we haven't collected and

we'll not know how much we've collected until June of next year. So saying thank you, this is the relatively easy part. Let's see where the year ends up. And this is where Wendy talks.

We do a lot of hard work and trying to project out. So yes, thank you maybe a little bit earlier. It made the math work. We see how Thank you.

Well, I thank you for all your hard work. Thank you, Manager Hager. Um, I must celebrate our first budget as a county commission. So, thank you.

Thank you. Well, I also want to say thank you. And I mean, this is what governing is all about. I think to me this represents the best in government is when you have the staff and um elected officials working together uh to problem solve and come up with solutions. And I think this shows a lot of creativity

um and due diligence and and hard making hard decisions uh as Commissioner Valentine said. Um, but we can't do this work without our staff. And this is exactly a case in point. So, I appreciate you all.

Appreciate you, county manager. Um, and um, I think that we've tried to balance a lot of different things and I'm I'm I am proud of where we ended up. Thank you, Vice Chair. Uh, I guess I join my my colleagues in saying uh thank you uh to the budget staff for the long hours uh that they put into this to this effort.

Uh hopefully we can get this thing across the the finish line. Uh thank you for your leadership. uh county manager and uh to my colleagues uh the work continues and uh it is clear that uh that we're marking the way forward and so I hope to be a

constructive part of that effort. I wanted to check in to see if uh chair lum before we ended this part here if she wanted to make comments as well. Okay. She said she'll save her comments from Monday.

Okay. Fantastic. All right. And so also as well, thank you.

Thank you all very much. This is hard work listening to us and going back and forth and throwing in numbers here, taking out numbers there and all that to make it all work um with no tax increase. That is just exceptional. So to you, the staff, the budget office, county manager, thank you all.

Okay, this is great. Yeah. Uh Wendy, I did have one question related to the language in the budget ordinance because now Stephen and the budget staff are going to go and and write up the ordinance. Right.

Right. Do does the board want to include any language about intent? The manager shaking her head.

We have a version for you to consider. Oh, okay. We're going to go over. That's a great segue into our next topic.

Just to let you know that the manager and I have been at the long this a long time. I think this is our 24th. It's my 24th or 25th right budget. I was hired by Wendy when we were both youngsters in 2000, the year 2000 as a senior budget analyst for Durham.

So I think I'm on my 25th one. I don't know how many more we have in us, but I don't know. They are quite exciting. It should be two pages that I passed out to you.

And um Stephen, I don't know if I if you have a copy of this, but you have it on the screen. David has it up on the screen. All right. Great. And so um and and Stephen and his sort of re uh reminiscing of when we started as

working together years ago, there are some components of this ordinance that have not changed since then. And so uh we we will highlight u the the areas that we're going to recommend some minor tweaks. There is one that we will come back to you in August to talk a little back or July um to talk about further and um but we can start at the top um David to talk through the ordinance uh just so that uh they get a sense of all the nuances and Stephen did you want to walk through that or I can. Yeah, we can.

Well, just so everyone knows, the budget document is basically just an extended conversation of this document. This eight-page document is the legal ordinance that the board of county commissioner sets. The budget document is just filler information explaining details of the budget ordinance. So, this is the thing you're approving. Uh, we can go through

it. It's a couple of whereas statements tells you when you're approving it. It tells that you went through some state mandated by state law steps. You had a the manager has to by a certain date produce the recommended budget.

Then the county has to have a public hearing. And then there's a a date that you approve the budget which is June the 9th. And then you have to set the tax rate in this document. David, as you well the next page you're looking at here sort of shows how we budget.

And this is a these tables while they're simple sort of establish a pattern of when you are notified that you need to approve budget amendments. If you see this page, each one of those columns where it says general fund, swap fund, capital, those are individual funds that you're approving as a part budget you're approving as a part of this budget ordinance. The key is is that you look at the function that says general government, public safety, transportation, and so on. Look at the biggest budget by far is the general fund budget. This is last year's budget even though it says 2526. We haven't

updated these tables yet because you haven't decided until today what the numbers were going to stop being. But to give you an example, the general fund budget 652 million, but it's split up between these functions. Why is it put in functions? This is where the board has made a decision and it's been 20 plus years where you said you wanted to be notified through a budget amendment when money moves from public safety function to general government.

What does that mean? If there's sheriff dollars that are unspent that are needed in the county manager's office for us to move that money means we would have to move it from the public safety function to the general government function and you all would need to approve that move. If however the manager wants to move money within her own budget, you all don't need to be improved. If however she wants to move money between uh uh the county manager's budget which is in general government and the budget office there's a certain amount she can move without letting you know and there's a maximum amount which you all I'm not

going to go into detail but that's why this is set up that way if that makes sense because you all have said how you at what level you want to be notified and discuss smaller jurisdictions do it down at the line item level literally every budget transfer in department goes to the board and they approve it. Other places may only do it at the fund level and say, "You got it, county manager Hager. " This is just the level we're at. If there are any questions about that, feel free to break in.

But just kind of giving you an update. David, can we scroll on? Then we start talking about a few separate funds. If you look at section three, we talk about the risk management fund and the benefits plan fund.

Just like the table up above showed you at the function level, these two funds don't talk about function levels. This gives the manager the flexibility to move money in these two funds between functional areas without letting you know. If the fund changes, you are know that's just the difference in setup here. This hasn't changed in 20 years,

but just giving you a quick education. After that, it starts going through the tax rates for the county notified and the and the fire district tax rates and the research production is the RTP service district. That's that whole page. Again, these are last year's numbers.

They'll be updated. 87. 42 cent tax rate increase for 2526. David, scroll on.

Here's where we're going to talk start making some changes. We'll talk to you. These are some exceptions to the budget that the board by passing this ordinance gives the manager the right to do. It clarifies some of the things she he whomever the manager is can carry out with notification to the board or without notification to the board.

So let's go through section 8. This is where it gets you can read section 8 abc. Let me talk about the first one. Everything highlighted in yellow are some changes to the to the old

ordinance. They're not major changes. Section 8 A, letter A, really only adds the words between departments. The way it it it just clarifies the intent of this, which says the county manager can move money between departments in a function up to 15% cumulatively without reporting to the board.

That gives the manager the flexibility to move money from her office to our office in the general government up to 15% of the total general government functional budget. It's technical, but it just it's you all giving her a little bit more room to maneuver. Does that make sense? Moving money from the sheriff to OES. Go ahead, Wendy. Now, what I was going to say is we actually started looking at the ordinance um last year with legal finance and myself um in in trying to see how can we streamline processes, how can we reduce the number of actions uh

that don't necessarily um that don't compromise internal controls because we want always want to make sure the board is informed. we have internal controls, but in looking at other jurisdictions, there were some places that they had u modified that allowed for items to go through more quickly. Um, so again, the other reason we're making sure with some of these that is that we clarify intent. You know, some of us as with turnover, new people on board, we want to make sure that we um link it to a statue if we need to, but if it's not ex um clear, adding language to make sure that it is clear.

Yes. Yes, ma'am. Yeah. I'm just reading what's in section 8. And I would say that I would like to have board discussion about this because

I don't think I don't recall our board having an open discussion about these changes. So you haven't? Yeah. I don't think we have.

Have we? No. No. This is this is we're we're introducing it to you for conversation.

Okay. Yeah. So definitely section 8 I would like the board to discuss. We're going to highlight the changes then you you can discuss them.

Okay. So really the the letter A was just a clarification of the intent of that item to begin with. All that was added was between the departments because that's how it's always been understood. It just never said it.

And as she said with turnover, just wanted to make sure the board understood. It's just a simple clarification of the language because this is what's happening anyway, right? This just expressly states that's what's happening. What has been changed in section 8 letter B is the amount the county manager may transfer amounts up to $100,000 between functions of the same

fund with a report to the board at the subsequent meeting rather than it being a budget amendment that you have to approve. It's been $20,000 for 25 years. But the budget amounts inflation makes everything we do a little bit more expensive. Does that make sense?

$20,000 20 years ago is now this amount. That's all we're sort of doing is updating the number amount, not the intent of what that statement has been saying forever. And David, can you go to section one so we can um help everyone understand what the functions I'm at table? Yeah.

So the function for a general fund in that um for general government is $181 million. Okay. Um for public safety, if you see that first column is $89 million. So basically what we're saying if we need to do a transfer

between general government to public safety at a hundred um thousand you can do up to $100,000 and report it to the board and report it to the board. If it's $100,0001 we have to come to you as a budget amendment and you have to approve it. Yeah. We're trying to balance how much mundane technical work you all have to approve versus trusting the manager to do that mundane.

But there is a level at which you should and this is part of the discussion want to be identified and you weigh in with your approval that numerical amount. Yeah. Yeah. And you know, I was going to ask this question when we were discussing the budget a few minutes ago about like what was your authority in, you know, before um of transferring money or executing contracts before it had to come to the board and I knew it was like a small amount. So, I'm glad we're having this discussion. Section 8 explains the manager's authority for those types of

decisions. So, if we'll go back to section, we'll go to that particular one and it's highlighted as well. The next one highlighted is D. That's an entirely new section.

And this is a this has not been seen by the board yet. It it is a proposal that gives the manager the opportunity to designate someone else to sign in his or her absence when they're out. It just makes the transition to a deputy manager or ACM allowed to sign things smoothly. Wendy.

So if I am out for a day, I send a note stating I've delegated that responsibility. And so this formally adds it into the ordinance. It happens anyway, but again in looking at other jurisdictions, we saw it formally there. So this this is that note and then section 8 E only adds the word

or a design as related to D for the next several things. So now we get into section E and if you look at subsection two or I I this is where it's exactly what you brought up Commissioner Burton. This changes the amount. Execute leases.

This gives the county manager or designate may enter into the following agreements within funds. Execute leases up to $100,000. It used to be $15,000 for normal and routine business within budget appropriations. This is a county as a tenant. We don't do a whole lot of leasing in general, but again, it's an amount that's been $15,000 for 20 plus years. There's very little leasing that we would do that would be less than $15,000 has now it allows the manager to do it up to $100,000 without notifying you over $100,000 has to come to you all to be

approved. Move to section 8 letter E triple I enter into consultant professional maintenance or other service agreements. This is this basically the signing of contracts. We're moving it up from a minimum $40,000.

Anything over $40,000 currently has to go to you. You do see a lot of these in your in your agendas. Contract approvals of $40,500 because it's over 40. The manager is recommending changing that and moving it up to $100,000.

It's been $40,000 for 20 plus years. Every contract we do deal with of any significance is well over 40,000. So they all come to you and as part of every agenda you approve on consent agenda, four or five contracts that are above 40,000. This isn't saying that we're taking away every contract. If it's above 100,000, it will continue to go to you all to see and approve, but it gives the manager and staff a little less administrative work they have to do because they don't have to come to you

for approval of those. And and this is um an efficiency um measure. Uh I I know we've had a c where we really get challenged is for is during those emergency type activities and in this environment as well with um the prices of of different items going up faster than normal. Um it is also important to to have it.

I think there was an item recently that um there were questions about why did it take so long to um I can't remember if it was the senior the center for senior life and HVAC repair. There was a bid process and then it was a component with the timing of getting it on the board agenda and the timing um sometimes can present some challenge. We will always have a a component where we can um have a

reporting um back to the board of anything that's over a certain threshold. But this is is done just for efficiency purposes. We'll go to section 8 letter E and a Roman numeral I if you want to call it that. Um that is entirely new and that is a technical one that the manager can explain.

Yeah, this this particular one um this the department of social services and public health currently have the authority to execute contracts because statutoily that is delegated um to them. So, there are some contracts that go through the public health board and the department of social services board. And I did uh present the various um statutes that are referenced with with these items. We can um I'll talk about them more. I think

you probably want to look at it and and vet it uh amongst yourselves and send me questions or you can talk we can talk about it further and I'll move to the next one which I'm proposing to bring back in um July. This is looking at um contracts with other agencies. Um, this is one again trying to streamline how we uh do various contracts and this impacts our construction area. And David, I sent you a slide.

You may or may not have have seen it. What we're trying to do and as you know, we're we are soliciting a non um we're soliciting right now an entity to help us with process improvements, reviews, etc. in finance IS&T. One of the basic ones that we can do on our own is is benchmarking what does the state allow for um approvals and crosswalking those with what our practices are because again

most of these have not changed in the past 25 years. Um it's a I did it in an email. Yes, that's it sir. Yes, sir.

Yes, sir. and you could just go to so it's just two quick slides. One uh what we will be doing over the next several weeks before we come back to the board is crosswalking our guidelines with what this um what the state guidelines are and there are various st thresholds when we have to do bids when things are informal when they're formal etc. And um we've heard quite uh frequently from some areas, especially in our construction and repair um projects, the need to move differently so that we can get better pricing. and and some of those thresholds are not necessarily on the board approval because they will be

above 100,000 but what our policies are as it relates to thresholds for biz and then what is done internally this is a little bit more involved and so I just want to come back to the board later to discuss further if you look at the other slide Stephen I mean David um you'll see what those thresholds are for um procurement construction compare and in other areas and we have lower um guidelines and so we've benchmarked what um other jurisdictions have done but need to come um have more time to discuss those with the board before we bring them forward at all times we're making sure that we um are not increasing any of our um risk factors but we just need to make sure we're efficient um and how we do our our work. So, we can um go leave this screen and and go back to the other one.

So, those are the changes to the to the manager's what what sort of the budget ordinance gives the manager allows he or him or her to do or in this case. So section 9 and section 10 are where we sort of identify funding specifically for Durham Technical Community College and section 9 and there's some laws we have to follow and this hasn't changed in section 10 the top part hasn't changed but section 10 letter A is sort of important here. It's been in the budget ordinance for a while but we have never really discussed it. The board hasn't asked Durham public schools to follow these things.

At least come back to the board. Want to go over it with you. Let me read it. In addition, Durham public schools budget. This is the commissioner basically telling Durham public schools their budget should reflect local appropriations by state purpose and function. The state, every school

district in North Carolina has to give their budget to the state and the state has its own sort of general accounting session. There's purpose and function. And some of you that have been on the BOA may know exactly what it looks like. There's a 5,000 which is instructional services, 6,000 which is called systemwide support services that do that for state funding.

And the state also says you have to translate local funding into these state codes. What we're proposing is to be added to the ordinance is we're asking DPS to take the county funding 200 and whatever million dollars we're giving them and translated into these codes, these state codes. They have to do that anyway. But we're asking it could we add it to the ordinance and go back to the letters David because the key part is the second part of that statement where it says once adopted that resolution that table you're looking at that will take local funding at that state codes such resolution shall not be amended at the DPS level without prior approval of the

board of county commissioners if the commu cumulative effect of such amendment would be to increase or decrease the amount of county appro appropriations allocated by purpose or function by purpose. So what we're saying is if DPS wants to move 15% of their instructional services budget that's county funding to systemwide other 6,000 you all need to be notified and approve it. This is different than Commissioner Jacob said intent. You can write intent all day in a budget ordinance.

doesn't really mean anything other than it says it's your intent. This is telling the board of education if they move county dollars that they had for instructional services that for some reason they didn't need $10 million of county money in instructional service and they moved it to systemwide one of those other codes they would have to let you know and you would have to approve it. It gives you a

little more oversight and communication with them. And it's important to note this language has um been here um we're streamlining it um but we're also adding the chart so that from an accountability perspective you're clear what those categories are. We in looking at other jurisdictions this model was shown and so that's why we said you know this would would be great. I know our board desires more um information or just communication of sort of where the dollars are flowing.

So, we didn't see this as a a new burden. Um and we're streamlining it. Um but from a accountability perspective, um just like for the county's component with the 15%, we're still keeping that language there with the transfer. So, um, we're streamlining it and we're adding the charts so it's clarity as to what those

categories are. And the last thing we're we're adding is under where you see the annual local appropriation, including debt service, exceeds the required merger agreement rate of $1,960 per pupil. That is a number that was established when the city school district and the counties combined into one way back in 90 something n 1992 and that's a hold out sort of statement but we added to it just for in information in the budget ordinance what the budgeted per pupil expense is for each year. So for 2025 it is 5,496.

57 million to schools. That's the recommended number. So, that number will change, but that statement is just being added. I had a quick question. I don't know if you know this, um, County Manager Hager, what is the state amount for I know the 5,496 is the local per pupil

expenditure, but do you know what the state amount is for local per pupil expenditure for DPS? We can get that for you. Um, we have we can pull it together. Has the state budget been approved or for the current year?

We can get that information. I believe we shared it. You just want it for your knowledge. Yes, we can get that information.

I believe. Okay. Yes, ma'am. And those are highlighted in yellow are the changes that are being proposed to the budget ordinance that you can talk about now that if you agree to them will be what you approve on June the 9th.

And and I will say that these, you know, we've been living with this ordinance for over 30 years. So if there are pain points, we definitely can work to refine those areas um in upcoming meetings. Again, the intent is to streamline operations, um, strengthen controls,

and, um, make sure that there's just that transparency. Okay. I'm going to come to you in just a second, uh, Commissioner Bert, uh, um, Jacobs. Um, but I'll say when we when we talk about the changes to the um the manager's approval levels, this is something I I the staff could correct me on this, but this is something I said almost immediately when I started.

I was like, why are we saying $24,000 expenditures in our consent agree? And and then I I I learned about the limits that the county manager had. Just for reference, the superintendent of the schools has $100,000 as well. It's something like that in the city for the city manager as well. So I was confused as to why the county manager has such low like authority, a spending

authority. And I I asked for this very s very quickly. How do we get that increased? Because um we have a bill over a billion dollar budget.

I don't necessarily think we need to see $50,000 transactions um at this level. This that's my opinion as a as a board. We need to look at things strategically, not in the weeds. And I feel when we start to look at lease agreements that are $19,000 and this and that, I think that starts to um the scope of a board member starts to starts to creep when we're um looking that deeply into transactions. So, this is I appreciate you all bringing this. This has been a little while coming and I really I'm excited about the possibility of us um considering this because I do think there needs to be some flexibility and and uh agile natures to some of these transactions

that could be done. Commissioner Jacobs. Yeah, I guess I personally would have preferred this come to us before the budget adoption process because these are significant changes in terms of the oversight of the board. And just, you know, going back to um North Carolina statute 153A, which is all of the responsibilities and authorities and power of um county commissioners related to county government.

We ultimately the bucks does stop with us um related to fiscal responsibility and accountability. We we have the authority to delegate that to the county manager and to staff. So I I'm concerned about just our role in terms of us being um informed and ultimately um because you know we are the body that would be held accountable if I'm just in

speaking in very general terms. I also would like to just have more benchmarking information. Obviously these numbers like 20,000 15,000 are low. There's no doubt about that.

But I I would like to see I would like to know benchmarking data like what does the city of Durham do and then the counties that we do compare ourselves to. Um that I mean that that would be helpful for me to have that type of context. And the other thing is looking at um you know we're I'm always interested in just even being informed. Um, so for instance, is there a way if I'm just saying, you know, if we're going to change make some of these changes that normally, you know, a lot of these things, you know, you just read them in on our consent agenda, but what I appreciate personally is that's how I

kind of know what's happening and what's going on and how I feel like I'm informed and is there a way to replicate that? And there is still a reporting mechanism to us so that we're aware you know so those are just some of the thoughts that come to mind for me. um you know so for for instance for B um again I would like to know what is the benchmarking around that um to where the that number came from and then also the um is there a way that there's still you know these are some of the transactions or decisions that have been made where it's still it's just informative as a part of our agenda or whatever. I don't know. Whatever makes sense. And then for D um again, is there

um you know, I I just because it says these the people who will be informed are the clerk, the county attorney, blah blah blah, but it doesn't say anything about the board of county commissioners being informed. Um and then for for um section E on execute leases um again I I just feel like we should know what's going on. Um same thing with um number four I mean four under E and then for number eight I think similarly the board of because those departments are governed by the board the DSS board and the board of public health where there's some way that they would be notified. So I'm just that's what I'm concerned about those two issues.

Okay. Yeah. So for for one, we definitely can um share with the board contract, share

as much information as the board desires. Um the county manager right now is responsible. The board does not with the signature authority. That's a manager's role.

That's not a board role. Um so who signs off on contracts. This formalizes it and states it in the ordinance. And that's the practice that we saw with other counties, but this is the same practice that we've always done.

And so I think that's the part that we can come back and note what has been historical practice and what's best practice from a continuity of service. Our concern is you have folks who are new to the organization. There may be some gray areas. Let's take away all the gray and make sure we codify in the ordinance what our practices are where we follow because you're not going to have every general statute that you're following in the ordinance. You we have

other um administrative documents that guide us in what we do. Um so I mean so for instance for that we can take it out because we're but we're already doing it from the standpoint if we look at D the county manager does that. Um so um the with the leases for an example it would be a very um low probability that we would have a lease that's you know less than 100 grand. But definitely would report it to the board because we are you know transparent. Um and then the one the the number five the number Roman numeral eight um that one is is a practice that we're doing because DSS the board does their contracts that don't require a bid that the public health department and the the department of social

services they're signing off on them and they're not coming to the board. So we're already doing that. We're just trying to make sure that although it's the law and they can do it, we also put it in the ordinance and we're just trying to sync those up. Um so, but we definitely can um talk further about it.

Uh the the items uh we usually talk about the ordinance towards the end of the process and but this is one of the times we've actually um had some some changes. I just had a question around the Durham public schools um with the section 10A. I just wondering about the language. Um in addition, the Durham public schools budget should reflect local appropriations by purpose and function. I don't know the word word reflect seems I don't really know what that word me means or would it be it

better to use a word like designate or I I don't know just the word reflect I it just kind of but what I just wasn't sure what that word means well we've used it for 30 years we have we've always used that word yes ma'am the only word that is different okay is if you look at this statement although it's in yellow and although you know we have it's the underlined um we probably should have made that and yeah we cut out objects right put your mic going please Stephen thank you we're not asking the board DPS to show their budget down to the line item level that's not how you are identifying our budget Purpose is instructional services the way the state defines it and function are the subsections under purpose.

Regular instructional services, special population services and so on. Now in the school budget in the state there are many hundreds of object codes underneath regular instructional services. Not unlike how we say personnel services, personal cost for the county is a grouping of commitment items that include salary and there's one for benefits and there's one for 40k. Those are 401k payments.

Those are all line items. But we don't ask you to look at all of that detail because there literally thousands of them. So we added purpose and function, took out object because that's too much detail and then did the same thing at the second the last sentence in that where we took out function or object. We're basically letting the schools giving them more room to let us know at a higher level.

So they're not coming to you every meeting as they make changes. They make changes to their budget just like we do. If I'm understanding correctly and some of the board members can former board of education member example, you have to do

budget amendments where they're you they move state dollars around or they get state dollars and then they use county dollars and they move it around to fill holes where necessary because there's a lot more freedom with the county dollars the way we budgeted than there is the state dollars. This is allowing them that freedom up to a certain level. Then you all need to be notified and it's the 15%. We budget at a current expense and capital outlay.

We're just asking in a to also reflect that budget in a state related way which is that attachment that we showed you. That's why we use the word reflect which has been in there because we're not asking you to follow that because we're budgeting at current expense funding of 200 plus million and current current capital which is going to be 5 million which you approved. Remember you took a million from it. But we're asking them to also reflect that same budget in the state form and then notify us as they move that money around at a certain level 15% in a state form. I'm trying to shorten

this down and simplify it but maybe create more confusion. Yeah, I understand what you're trying to say because, you know, I taught in the buildings for 30 years and so they can move money from, you know, it was like number one was state, number two was local, number three was federal and they would kind of move money between those levels to achieve what they want. And what I'm hearing you all say is if they do that with local money up to a certain amount what 15% then they have to come to us to get approval. It for example so they have you have money intent you want for bus drivers that money is going to be allotted in their general ledger in one of those state functional areas. If for some reason they were to move that money and it was up to 15% and do something else than fund the bus drivers with it for whatever reason, not saying they're going to do this, then if it met that 15% threshold, you would all be

" And you would have a lively discussion about that and they might explain to you why. That's how that might work. If suddenly state money were to fall off a cliff and they said, "Oh, we were going to do supplements with it. you approving one plus million dollars of supple and they couldn't do it for supplements because they didn't get state money.

I'm these are pure hypotheticals here and they move that money around to something else to keep the lights on. They might have to notify you at a certain level. Does that make sense? That's all you're asking them to do.

If they're doing foundationally different things with the money that you're giving them, you're asking to be notified. And it's important to note this is not a new requirement. We're lifting the threshold so it is at a higher level. I just don't want folks to get that part confused.

Okay. Uh yes, thank you vice chair. So let me just say that I appreciate that uh at least it would have seemed to me

that practices are now coming in line with the with the ordinance. So I can appreciate that and uh vice chair I do remember very early on having the discussions about this very subject. And so in an ideal world, uh, Commissioner Valentine would have loved to have those conversations in real time. Um, but, uh, we are where we are and it would appear that we're in the correct time and place to address it.

And so, uh, I hear my my good friend Commissioner Jacobs has some concerns about liability, but I think these numbers, uh, reflect, you know, where we are in the world and our responsibilities on this board. And so, I'm okay with these threshold amounts um, in the name of efficiency uh, and governance, quite frankly. And so, um, I'm I'm okay with the what's presented here. I did have one uh concern which has sort of been raised. Um the the budget director, Mr. Lane, uh talked

about how we can uh ask DPS to to sort of explain what they've done with uh the money if they decide to do something above what they said or shift it into another line. Can we really do that? I guess this is a question for uh the the attorney. Can Can we do that?

I'm sorry. So, um, this part of the the ordinance allows us to um essentially have DPS come back and report to us about a change in, you know, what our what our intent was essentially um and come back to report to us. I mean, essentially once we appropriate the money, I mean, they can essentially do whatever they want to do with that money. And so, this seems to suggest that we can come back and have them explain to us what their their change was.

Like, can we do that legally? I believe that they can. Mike, I believe that they can microphone. Yeah.

Yes. I believe that we can if we're just asking them to come back and report what the change is is my understanding, right? Yeah. So, I don't have any um concerns about that.

Okay. And and this language and the the ordinance that we showed you or that table is quite similar to what Meckllinmberg County does with the Charlotte Meckllinburgg School District and Wake County does the exact same thing. So, you talk about benchmarking. We are not paving new ground here.

And the ordinance says generally the the county has the right to budget at the level the way we're budgeting at current expense funding and current capital or it can budget by purpose code that the state does. We don't budget by purpose code but we're asking to see it both ways. We budget at current expense which is section 10 and then an A is say we also want to see it this other way as well because the state gives us the right to look at it both ways. So towards the end of the school year,

there are budget amendments almost every single meeting, every single one. But I I see this as a um a pressure release, right? Um if there's if they're moving large sums of money from one place to another, we probably we probably already understand what the problems are already because there there would have to be some really big issues. Something major would have had had to happen.

And so I um I don't see this as an invasion of their authority to spend the to spend money how they they choose. But if it is something like this 15% like a 15% move that is that's a big problem that we probably should be aware of anyway. So instructional services is going to be for DPS a hundred million plus. So it would take a $15 million move before you of county funding, right? Before you would be acknowledged and let to known

it's not small money we're talking about. Otherwise, you're saying you're doing your business. You got to move money around as you see fit to do the operations DPS. But as stewards of county money, if it's big enough or the cumulative effect is big enough, we'd like to know.

That's effectively what's being asked here. Yeah. Um and I we we are fortunate to have the former state budget director for um the Department of Public Construction. And I know he just loves when I say that cuz he and and so we're always weighing on his his legal hat and and all his his statewide hat.

And he can also speak to just um a couple of the questions. Yeah, I can. So I can speak to a little bit about what's in the North Carolina general statutes when it comes to your oversight authority for the school boards around their budget. So we have two basic functions that we can do. One is a is a reporting authority, right? We can require them to

share any information as to their finances that you would like to have. Now that can be and you can decide whether that's something that where they present to you which is they do periodically or we can do more frequent more detailed reporting. Um that's something that you guys have discretion but effectively we have access to their books entirely. So, um, we have that type of oversight authority.

That's different than your question, Commissioner Valentine, as to what is it that we have the ability to approve. If we have something like this in our ordinance where we establish that they have to budget local funds. I mean, they have to use the local uniform local school chart of accounts, which is the purpose function object structure. They have to do that under the uniform education reporting system for the state. So they already have all of that done for all of their fund sources, state, federal, and

local. Under the general statutes, we can limit their ability to move to move money without board approval down to the function level. What this does is basically says we are limiting their ability to move money to at the purpose level which you know the function level there's going to be a lot to commissioner Lee's point of view there's going to be a lot of movement at the functional level um there will be a decent amount of movement at the purpose level particularly because it flows from fund to purpose and they're moving stuff back and forth from state federal and local pretty frequently especially on the personnel side Um, but that's so that's kind of we do have the authority to require that we approve shifts at the purpose level. They that we can actually write that into the ordinance and but we have to enforce it um to basically have them come and and to request through the agenda action form process the same way

we do with our budgets if they want to make an amendment above the purpose level. But that's that's at the discretion of the board. We are not doing that for every move. We're doing it at a cumulative.

Our says if it hits 15% or above, that's when you come and ask the board. And I would say just just from knowledge like it going below the purpose level, you would basically spend almost every meeting doing significant budget amendment reviews for Durham public schools. It's I mean with the way because of the funding of positions that the general assembly does, it's the budgets are in flux throughout the entire school year pretty constantly. It's it's a tremendous balancing effort that the DPS finance office does on a regular basis when it comes to their budget and their expenditures. Thank you. part part of the reason that I felt it was important that we put the table in

because we against I started this with my partner Mr. Curtis last year and because of timing we didn't um bring forth some of these items but we just felt in this climate that it would be helpful for the boards um to understand what's happening so that we could have triggers earlier in knowing how um we support them um because they are one of the largest areas in in in our our budget and so we need to understand what's happening if there are shifts so that we can be prepared accordingly. And so this again is a minor tweak. We're reducing the threshold that they've had from the past and adding the table. So just don't want folks to get that piece confused. It it may be worth you all bringing a part of the quarterly meetings you have with the board of education and

reviewing changes to their budget particularly for local dollars. That's what you you want to be aware of. And you could just say that as a part of every agenda, what's changed and where the key areas. You're just going to have to learn the uniform state code of accounts that get used to that function area.

The way they think of our budget. It's a little different than how we think of it. And I just want to say that yeah, that's what makes the school budget. I mean, it's not complicated, but people just don't understand because you got all these, you know, codes, right?

And it's just like, you know, every item is coded. And I remember being a school media coordinator and I wanted to buy um technology, but it was in my library books and I had to do a budget change to put it. It's Yes. Thank you, Commissioner Jacobs.

Well, thank you. Yeah, we're very lucky to have you with us, John. Yes. Yes. Yes, we're very lucky. Um and you

were you and your team are invaluable through the ARPA funding process. Thank you. Um yeah, I [Music] um I I agree. I was going to ask what you said um Stephen about having the um that the reporting that John mentioned as an as another um tool that we have or something that we're allowed to do um to have that aligned with our quarterly meetings. Um and I'm also wondering you you went away too quickly, John. uh is because I what I what I am perceiving that the new CFO who's fantastic um for Durham public schools I'm hearing a lot of conversation about you know when our in our meetings with them how they're really trying to align dollars with what is actually

um supported at the state level what the allotments are at the state level and getting away from some of the positions that are just completely locally funded because unfortunately that is not necessarily sustainable for us anymore. Um, so with that chart that that chart that you had up before about the purpose, um, how would how would it that work with, um, funding that is being used for things that are aren't like would everything that we are providing local funding for be under all of those purposes anyway? Well, everything that you're providing local funding for has to be budgeted by purpose fund object. Okay. Right. So whether you know I I don't know enough about the details of their budget to know whether they'll have local items

in every purpose code that we have or purpose purpose area that we have and function area that we have listed up here. Um but they will be able to populate once they adopt their budget. they would be able to populate a similar table that would be able to show you the purpose the various purpose areas within the chart of accounts and the function areas within the chart of accounts. It's just whether or not they use local funding for every single one of those.

I I haven't looked that closely at their budget in a long time or not a long time but in several years. So I wouldn't I can't remember off the top of my head if you know exactly how they distribute their local versus their state funding. " And we'll go back and write an email to them today and say,

57 million more is going to be added to your budget. " Now add that and make that total amount show up here. For example, the payment to charter schools will be 40 plus million dollars. That one where it says non-program charges, there'll be a $40 million number there.

And then regular instructional services will be where there's 900 plus positions the county supports amongst other things. Be a lot of money local funds in that one. And then as John said, I can't tell you which one of those will be filled. I'm betting almost all of those broad areas will have some local funding in it that you will see.

Yeah. I mean, usually there's going to be local funding in pretty much every purpose code except I think there's a few that might like there's a purpose code that can be used for indirect costs on federal grants and things. So, I mean there's a few little things uh or functional code, sorry. Um, so there's like a few little things within the chart of accounts that may be missing on the local side, but I would imagine

they'll probably have a decent Yeah. distribution. " Like that could be the EC funding for example that you that you're that you're intending to provide them could be split amongst four, five, six, seven potential per uh functional lines or it could all be in one, right? like there's different ways for them to approach their budget um and the way that they code and charge different services.

Like it's it's the chart of accounts is clean, but there is some subject matter overlap. U and so there's there's only a certain level of detail you're going to be able to get no matter what from the the budget within the that's structured in using the the uniform local school chart of accounts. I appreciate that. And before I became a county commissioner, I was on the superintendent's budget advisory committee and I know how complicated the

school funding is. I think that doing the doing this and having this at our quarterly meetings will will be beneficial to all of us and also to the public. What we heard last year when we were facing an unprecedented crisis, we heard from the community that they wanted the county to be more involved with helping support financial accountability and transparency. And so I think this will help everyone achieve those goals.

Thank you. All right. Great. Thank you so much.

And um I believe that covers the the items that we had um the major items with the ordinance. Again, let us know if there are additional questions. We will follow up with some documentation and we have time. So this is 30 years in the making and so um

we're grateful. Our intent is to be more efficient, transparent, and accountable, which is always in the forefront. And we heard the board members um shifting now from this topic to others loud and clear about um key performance indicators, program evaluation, and in my message, I spoke about that those are areas that are of high importance. And um next year, we'll be in a different position in telling our story.

So, and that is a commitment for me. Well, I thank you all for your patience and um it's hard to believe we're at this stage and almost 30 years in the making from this standpoint having been a a budget guru, policy person, etc. this being my first budget. Uh I am grateful to have a a commitment from the board over the years to be supportive in whatever capacity I've been in. I'm

especially grateful and how you have trusted us in this process and um will walk alongside us as we try to move forward with a season of unknowns. Um, I want to especially thank the budget team for their hard work and always going above what's required. Um, thank you so much to all of you. Um, the U deputy and assistant county managers, u all the other department heads and staff because it is a a shared role.

uh and the community members that have shared their concerns and have worked with us as well um as we've tried to partner to bring forth our best effort knowing that we can fill all the gaps. So again, thank you and I just want to say I'm just so happy I we got through our first budget together. Thank you. Thank you. Thank

you. Yes. Well, actually, I'd like to take a moment of personal privilege and just say uh Chair Alam, I hope that uh you're resting and recovering, and we hope to see you back in the chamber uh here soon. Uh and again, I'll just say thank you to everyone who played a pivotal role in getting to uh getting us to this point.

And so, we're looking forward to the next step. Wendy. All right. Thank you everyone.

Um, I'm excited as well, Michelle, that we made it through a budget. So, what Okay. Yes. So, Monday night we will have the adoption.

We'll also celebrate the young lady who um did the cover. So, we're excited about that and and honoring her. And so, if there are questions, please let us know. We will get those responses to you.

Thank you. Okay. All right. All hearts and minds settled. We are adjourned.