MINUTES OF A WORK SESSION HELD BY THE MAYOR AND COUNCIL OF THE TOWN

OF CHAPEL HILL, NORTH CAROLINA, THURSDAY, MAY 10, 1990, 7:30 P.M.

Mayor Howes called the work session to order.

Council Members in attendance were Julie Andresen, Joyce Brown, Joe Herzenberg, Alan Rimer (arrived at 8:58 p.m.), Arthur Werner and Roosevelt Wilkerson (arrived at 7:45 p.m.). Mayor Howes observed that Council Members Preston and Wallace were both out of town and were absent excused.

Also in attendance were Assistant to the Mayor Lisa Price, Interim Town Manager Sonna Loewenthal, Assistant Town Manager Florentine Miller, Public Safety Director Cal Horton, Finance Director James Baker, Transportation Director Robert Godding, Police Captain Ralph Pendergraph, Police Chief Arnold Gold, Public Works Director Bruce Heflin, Police Planner Jane Cousins, and Town Engineer George Small.

Interim Town Manager Loewenthal reviewed the scheduled topics for discussion this evening, including: recycling, transit fares, capital projects and bond issues, and solid waste. Council Member Werner observed that the Council had received a large amount of new information concerning solid waste earlier in the evening. Mayor Howes suggested that the Council discuss solid waste and recycling matters on Tuesday evening, May 15th. Mayor Howes suggested that the Council conclude its discussions by no later than 10:00 p.m. this evening. Mayor Howes noted that there would be no formal actions or votes taken by the Council this evening.

Interim Town Manager Loewenthal stated that she had provided the Council with several alternatives for the Town's proposed capital improvement program and the issuance of bonds. Council Member Werner observed that the authorization for open space acquisition was over an unspecified time period. Council Member Werner said that given the clear support for open space, he would not be opposed to proposing a referendum including $4 million or more for open space acquisition. Ms. Loewenthal observed that bond authorization is for a maximum of seven years. Council Member Werner said no one was certain of exactly how much bond authorization was needed for open space. Council Member Andresen inquired about potential future tax rate impacts due to the sale of bonds. Mayor Howes said the maximum impact would occur if all the bonds were sold at the same time. Finance Director Baker noted that there had been a one cent rate increase attributable to the sale of $1.5 million in open space bonds. Mr. Baker said that next year's tax rate equivalent on these bonds would be three cents. Council Member Andresen inquired about the average tax rate on these bonds. Mr. Baker said it was difficult to hypothesize on this matter. Ms. Loewenthal said it would be considerably more than one-half cent.

Mayor Howes inquired about the Council's reaction to Council Member Werner's suggestion concerning open space bonds. Council Member Andresen said she felt uneasy about the proposed bond package in light of a possible tax increase to fund the general operations and transit budgets. Council Member Andresen said she had received a number of calls from retirees trying to live on low and moderate incomes. Council Member Andresen said that seemingly small increases could be a principal determinant of whether or not people choose to live in the Town. Council Member Werner noted that holding fewer, larger bond issues would not necessarily me?n that funds would be expended more quickly. Council Member Andresen stated that the community might not be able to afford bond issues due to tightening economic conditions. Council Member Brown said she was particularly concerned about low and fixed‑income residents. Council Member Brown added that she was especially concerned about the potential for consistent property tax increase proposals.

Council Member Herzenberg said he was annoyed by the perception that money is not consistently spent on the items it is allocated for.

Mayor Howes observed that only two bond issues had met with voter disapproval. Mayor Howes stated that there was a critical need to respond to open space demands in the community by providing voters the opportunity to vote on a bond proposal. Mayor Howes cautioned that proposing a large bond issue might be inadvisable. Mayor Howes suggested that the Council might be best advised to follow the Manager's recommended bond proposal. Mayor Howes inquired about the status of the 1989 open space bond account. Ms. Loewenthal noted that $3.5 million of $5 million had not been issued to date.

Council Member Wilkerson said he had received telephone calls from a wide array of Town residents concerned about economic matters. Council Member Wilkerson stated that he was concerned about proposed future tax increases and proposed bond issues. Council Member Wilkerson stressed the importance of prioritizing needs of the Town. Council Member Wilkerson concluded his remarks by noting that some major expenditures, such as those for meeting new solid waste regulations, were unavoidable.

Mayor Howes requested a clarification of Council Member Andresen's position on the proposed bond issue. Council Member Andresen said it might be advisable to hold no bond referendum at all in the current year. Mayor Howes observed that there was a significant shortfall for the proposed library which would necessitate a future bond referendum. Council Member Andresen responded that it would be necessary to expend many additional dollars on solid waste programs in the next budget year. Council Member Herzenberg said he recently attended the eightieth birthday party of a local organization. Many of the participants at the function had inquired when library site work would commence. Council Member Herzenberg said he provided assurances that the work would be initiated in the near future.

Library Director Kathleen Thompson noted that the new facility would occupy 23,000 square feet contrasted with 12,000 square feet in the present facility. Ms. Thompson noted that American Library Association standards recommend that the Town have a 24,000 square foot facility. Ms. Thompson observed that a 47,000 square foot facility would be recommended for the year 20?0. Council Member Andresen stated that the Town's library facility had been of inadequate size for many years. Ms. Thompson noted that American Library Association size standards were based on area populations and expected service levels. Ms. Thompson observed that the current facility had been inadequate for at least ten years. Mayor Howes noted that the Library Committee had recommended that additional funds were needed to supplement currently available funds.

Mayor Howes inquired about additional capital and operating costs associated with the new library facility. Ms. Loewenthal responded that operation of a 46,000 square foot facility would result in additional annual costs of $660,000, principally due to the need for significant additional staffing. Ms. Loewenthal noted that the library's current budget is approximately $800,000 per year. Council Member Herzenberg noted that there was a significant difference in library demands by Town and County residents.

Council Member Andresen said she would find it easier to recommend a bond referendum than a tax increase. Council Member Werner said it would cost more to meet all the additional demands of residents. Council Member Herzenberg observed that Orange County commission candidates who had recommended spending controls fared poorly in chapel Hill. Council Member Wilkerson said he thought there were many other factors involved in the decision making process of these voters. Council Member Herzenberg stated that no candidate ever wins on a platform of proposed tax increases. Council Member Andresen said she felt strongly about the need to minimize additional expenditures to protect the interests of low and moderate income residents. Council Member Werner said that the Council had recently seen strong support in the community for continued funding of the library, parks, open space and bikeways and related programs. Council Member Werner said there appeared to be little enthusiasm for spending funds in the downtown area.

Council Member Brown observed that the Town's estimated debt service cost in the next year was $1.8 million.

Council Member Wilkerson said he would have difficulty in recommending a $9 million bond issue. Council Member Wilkerson suggested that priorities be assessed to arrive at a lower figure.

Mayor Howes observed that Council Members Herzenberg, Werner and himself appeared to support the Manager's recommended bond package, while Council Members Andresen and Brown opposed the package, and Council Member Wilkerson favored a smaller bond package.

Ms. Loewenthal noted that the proposal for transportation bonds had been reduced to include only funding for bikeways and sidewalks.

Council Member Andresen said she favored the types of items being proposed in the proposed bond package, but desired a more democratic way to decide on the ultimate tax rate. Council Member Werner suggested that future budget discussions begin prior to the Council's retreat in January. Council Member Herzenberg noted the importance of council members serving as the elected representatives of their constituents. Council Member Herzenberg stressed the need for citizens to decide on a proposed bond referendum for future community needs.

Mayor Howes said that compromise is the essence of the Town budget. Mayor Howes stressed the need for finding some grounds for compromise. Mayor Howes stated that there was obvious support for library, bikeway, open space and sidewalk programs. Council Member Andresen raised the possibility of investigating a real property tax transfer program.

Council Member Wilkerson said he was especially concerned about items such as stormwater management and water and sewer extensions, which had not been fiscally quantified in the proposed budget. council Member Wilkerson said it was incumbent upon the Council to bring these matters to the community's attention. Mayor Howes concurred that it was the Council's responsibility to bring a comprehensive picture to the community within the proposed budget.

Council Member Werner inquired about the proposed time frame for adoption of the proposed capital improvements program. Ms. Loewenthal said that as a practical matter, the program would need to be adopted in June in order to initiate a bond education campaign. Ms. Loewenthal noted that the mechanics of the budget process would not be affected if the capital improvement program were not adopted during May.

Mayor Howes stated that there were a variety of opinions on the Council concerning the proposed budget and capital improvements program. Mayor Howes said the business of government begins when issues cease being rhetorical and begin to become hard choices.

Ms. Loewenthal introduced Transportation Director Robert Godding to provide an overview of the proposed transit fund budget. Mr. Godding said that there were two current major transit funding issues: proposed increases in transit fares and the need for contingencies to address reduced federal funding of mass transportation. Mr. Godding said the funding situation could alternately be addressed by increasing fares, reducing service, or increasing non‑operating contributions. Mr. Godding noted that the Council had approved a one‑cent transit tax increase in 1988. He added that a $360,000 shortfall was projected in the 1990‑91 transit fund. Mr. Godding stated that a ten cent fare increase, the first in seven years, was proposed to take effect on July 1, 1990.

Council Member Andresen inquired about the possible effect of the fare increase on ridership. Mr. Godding said a three percent maximum ridership reduction was anticipated. Mr. Godding added that elasticity of demand for ridership was difficult to judge.

Council Member Werner inquired how often schedules were evaluated for ridership. Mr. Godding said that routes and schedules were evaluated on a continuing basis. Mr. Godding added that schedules are adjusted on an annual basis. Mr. Godding stated that the majority of changes occur at the direction of the Transportation Board. Council Member Werner asked whether the transit system was well optimized. Mr. Godding stated that the system was responsive to most demands, with occasions when demand exceeds supply. Council Member Werner inquired about the status of Smith Center shuttle operations. Mr. Godding said that the operation went smoothly on balance. Mr. Godding noted that money was lost on some events but, overall, revenues exceeded expenditures. Mr. Godding added that a threshold of 8,000 attendees was required to initiate the availability of shuttle service.

Council Member Herzenberg inquired about the impact of reduced price bus passes. Mr. Godding said that pass discounting reduced the level of system revenues. Mr. Godding noted that most systems do not reduce their annual pass prices to the same extent as the Town.

Council Member Werner inquired about the status of park and ride lots in the area. Mr. Godding said that service would ultimately be provided at twenty minute headways during the day and fifteen minutes at peak hour demand.

Council Member Andresen requested information about the cost of the shared ride system. Mr. Godding said the annual contract cost was $135,000. including evening and Sunday service. Council Member Andresen inquired whether the service area was for those with special needs or all riders. Mr. Godding stated that the service was intended for those with special needs. Mr. Godding said that the service is an important supplement to the normal operating system, especially on Sundays.

Council Member Andresen noted that some citizens had suggested the use of half-size buses. Council Member Andresen asked for Mr. Godding's thoughts on this proposal. Mr. Godding noted that a recent study by a graduate student in operations research recommended that the Town add ten new forty foot buses (five feet longer than standard buses) to the system. Mr. Godding adding that the chief operating system cost is that of bus operators. Mr. Godding said that lower wages were not paid to drivers of smaller vehicles.

Council Member Brown inquired how Mr. Godding would respond that some buses operated without passengers. Mr. Godding stated that most buses are empty or nearly empty at some point along their route. Mr. Godding added that normal bus ridership during the university semester is 14,000 per day, contrasted with 4,000‑4,500 riders per day during the summer.

Mayor Howes requested that Mr. Godding summarize the Transportation Board's discussions leading up to their recommending the adoption of the Manager's recommended budget to the Council. Mr. Godding noted that the Transportation Board shared the Council's concerns about proposed bus fare increases. Mr. Godding said that the Transportation Board did not wish to take any steps which would decrease bus ridership. Mr. Godding stated that alternative funding sources were being explored in anticipation of reduced federal funding for mass transportation.

Mayor Howes inquired about the feasibility of increased parking fees at the Town's parking lots. Mr. Godding said that despite relatively high parking fees, there is relatively inelastic demand in the Town's lots. Mr. Godding stated that the average stay in a Town parking lot is ninety minutes. Council Member Herzenberg said this statistic appeared to contradict the perception that many students park in the downtown lots all day.

Council Member Andresen inquired about the operation of lot number three. Mr. Godding said that this lot lost money when it was staffed by a collector. Mayor Howes inquired about the possibility of using automated collection systems in order to reduce personnel costs. Mr. Godding said that the issue had not been studied completely. Mayor Howes noted that personnel costs in the parking lots were substantial.

Council Member Andresen inquired whether any action was taken against repeat parking violators. Police Captain Ralph Pendergraph said that the General Assembly permitted fines of $5 for overtime parking and $25 for more serious violations. Captain Pendergraph said that repeat violators could be taken to small claims court to recover overdue fines. Council Member Andresen inquired whether this course had been pursued. Captain Pendergraph said no, adding that many violators are non-Town residents who could not be pursued under State statutes.

Council Member Brown inquired about the reaction of the Town of Carrboro and the University to proposed parking fee increases. Mr. Godding said that Carrboro Board of Aldermen was also meeting this evening. Mr. Godding said he was uncertain of their reaction to the proposed fee increases. Mr. Godding added that the Town of Carrboro might not favor the increase due to difficulties in balancing its own budget. Mr. Godding noted that the University had instituted a student transit fee within the last year.

Council Member Herzenberg said that those who benefit from transportation services should be willing to pay slightly more for this convenience. Council Member Andresen said she would support the proposed fare increase subject to maintaining fairly stable current ridership levels. Council Member Andresen inquired whether it would be possible to discount the cost of park and ride service from Plantation Plaza. Mr. Godding said this was possible, noting that most systems charge a premium above normal fares for park and ride services. Mr. Godding noted that the Interim Town Manager was not recommending any immediate increases in parking fees.

council Member Rimer said he did not see why parking fees could not be raised now and in the future on the basis of supply and demand. Council Member Rimer inquired what percentage of bus riders use passes. Mr. Godding said that approximately sixty‑five percent of riders use passes. Council Member Rimer observed that approximately thirty.five percent of bus riders would be paying the additional ten cent fare each time they rode the bus. Mayor Howes observed that actual costs to riders had gone down, when inflation factors are taken into account. Council Member Wilkerson said he favored the Manager's recommended ten cent fare increase. Mayor Howes said there appeared to be a wobbly consensus in favor of the proposed fare and pass increases. Mayor Howes said he was unsure of the Council's stance on parking fees.

Council Member Andresen inquired about the impact of the ten cent fare increase on the bus system's exact change policy. Mr. Godding said that no problems had been encountered with the exact change policy had been encountered to date and few were anticipated in the future.

Mr. Godding noted that any changes in metered parking fees would require significant changes to existing equipment. Council Member Werner requested that the Town Manager provide an analysis of how an additional $40-$80,000 in parking revenues could be raised. Ms. Loewenthal said it would not be difficult to incorporate such a fee increase following budget adoption. Mayor Howes said it appeared to be the Council consensus that it was a good time to raise parking fees.

Council Member Werner suggested that the Council discuss solid waste matters at its May 15th work session.

Council Member Werner observed that only Pittsboro and Hillsborough had lower tax rates than the Town in a six‑county region.

The work session concluded at 9:37 p.m.