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June 15, 2004 Page 515 Richard Schmidt asked the Board to maintain the current tax rate and supported funding for education. Liz Poole, Chair of the Cabarrus County Board of Education, presented statistical information concerning the following items: school system size, per capita income ratings, funding ranking, graduation percentages, class size and course size. She stated Cabarrus County ranks 12 in per capita income and funding of the school system ranks 107. Cathy Floyd, Cabarrus Arts Council, spoke in support of funding for the Arts Council. She stated the County's appropriation of $26,000.00 helps to enrich the lives of local citizens and school age children as well as maintain the quality of life in Cabarrus County. Cindy Fertenbaugh, Cabarrus County Board of Education, recognized the assistant principals in attendance and spoke in support of the assistant principal positions. She stated support of the budget as proposed by Mr. Day. Also, she urged the Board to address the urgent facility needs of the school system. Grace Mynatt, Cabarrus County Board of Education, provided information regarding the use of State and local funds by the schools. She discussed local expense funding percentages from across the State for school administrators, teachers and other school personnel salaries. Carla Black, Principal of R. Brown McAllister Elementary School, shared with the Board the tremendous impact her childhood teachers had on her life. She urged the Board to support the Cabarrus County School System. Steve Smith of Charlotte opposed the 56-cent tax rate and excessive educational spending. He reported senior citizens and people living on fixed incomes would not be able to afford a tax increase, which would result in more foreclosures. There was no one else who wished to address the Board; therefore, Chairman Freeman closed the public hearing at 9:36 p.m. Mr. Day reported that the County's financial advisor had found that restructuring the County's debt from a fixed rate to a variable rate was not possible at this time. He also reported that the financial consultant had advised against using fund balance to balance the budget as it would cause the fund balance to dip below 15 percent of the County's expenditures. Mr. Day stated that one of the County's bond rating agencies had told the financial advisor that should the County dip below the 15 percent level to balance the budget they would lower the rating because the County would be violating its own policy. There was lengthy discussion regarding the FY 2005 County Budget, the tax rate and fund balance. The Board addressed the following issues: (1) No cuts to be made in County services or positions; (2) Continued support of the school systems; (3) 56-cent tax rate versus a 53-cent tax rate; and (4) Amount of fund balance. Arguments in favor of the 53-cent tax rate and use of fund balance included the following: (1) Taxpayers will still see an increase in taxes as property values increased an average of 20 to 25 percent during revaluation; (2) A large number of County residents have lost their jobs and there has been an increase in the number of foreclosures; (3) Low tax rate will help promote economic development and growth, including a comparison of Iredell county's fund balance ($12 million) and tax rate ($0.435); and (4) Revenue from the sale of the former fairgrounds property can be used to replace funds in fund balance. Reasons cited against the 53- cent tax rate and use of fund balance included the following: (1) Importance of being fiscally responsible; (2) Negative impact on the quality of life and the quality of the education system; (3) Reducing fund balance below the 15 percent level would result in a lower bond rating, thus increasing the County's cost to borrow money; and (4) 53-cent tax rate would result in savings of only $2.50 to $5.00 per month for a majority of County taxpayers. Commissioner Carpenter reviewed a list of reductions that would decrease the tax rate by one cent. These included reductions in such line items as travel along with the removal of $1.25 million for the purchase of voting equipment. She cautioned that funding for the voting equipment would have to be budgeted next year. UPON MOTION of Vice Chairman Suggs, seconded by Commissioner Privette with Vice Chairman Suggs, Commissioner Privette and Chairman Freeman voting for and Commissioners Carruth and Carpenter voting against, the Board set the