MINUTES OF A REGULAR MEETING OF THE MAYOR AND COUNCIL OF

THE TOWN OF CHAPEL HILL, MONDAY, MARCH 4, 1991 AT 7:30 P.M.

Mayor Howes called the meeting to order. Council Members in attendance were Julie Andresen, Joyce Brown, Joe Herzenberg, Nancy Preston, Alan Rimer, James C. Wallace and Arthur Werner. Council Member Roosevelt Wilkerson was absent excused. Mayor Howes noted that the Council was meeting on the first Monday of the month since the National League of Cities Conference was being held in Washington, D.C. on March 11th, the second Monday of the month. Mayor Howes stated that the Council would hold a joint meeting with the Orange County Commissioners on Wednesday, March 6th to discuss proposals for an impact tax and the establishment of a visitor development bureau.

There were no ceremonies or hearings.

Petitions

Grainger Barrett, representing Capricorn-Isler, requested that contractual agreements for Tandler use the same definition of affordable housing as the one contained in Culreth Park agreements.

Council Member Rimer requested the compilation of current year tax and budget information into a single notebook.

Council Member Rimer noted that the Senior Center Task Force had recently met to consider the assessment of space for such a facility. Council Member Rimer said that Parks and Recreation Director Mike Loveman and Orange County staff had put together a tentative budget for facilities and staff for the proposed center.

He stated that the Council and Orange County Commissioners had a prime opportunity to initiate an important new program for local residents. Council Member Rimer stated that rental and operating capital were the two greatest needs of the proposed program. He emphasized the Town's primary role would be to provide additional staff support for a satellite senior activity center.

Council Member Rimer urged the Council to provide venture capital for the program. He noted that the amount of money to be advanced was open to negotiation, with senior programs being self-funded through user fees. Council Member Rimer requested that the Council grant the staff the authority to continue working with the Senior Center Task Force in development of the proposal.

Mayor Howes inquired about timing needs for the proposal. Council Member Rimer emphasized the importance of acting on space needs by the end of March. Mayor Howes noted the importance of determining staffing implications as soon as possible. Council Member Rimer said that the staff would attempt to provide information on this at the Council's March 25th meeting.

Council Member Andresen stated that due to budget constraints, it would not be possible to add new staff positions for the Senior Center program. She said that the current year was not the right one to enter into this type of enterprise or program. Mayor Howes said the question before the Council this evening was whether the Town staff should continue its current discussions with the Senior Center Task Force and Orange County officials. Council Member Rimer emphasized the importance of working with County officials to establish an operating framework. Mr. Horton said it would be possible to put together a brief report for the Council's March 25th meeting. Mayor Howes suggested that the matter be further reviewed at the Council's March 25th meeting.

Town Manager Horton requested that agenda item 10c, concerning the Culbreth Park development agreement, be removed from this evening's consent agenda, due to possible inconsistencies with Orange County's Community Development Block Grant program. Mr. Horton requested deferral of the item to a later date. Mayor Howes concurred with the request.

Minutes of February 19, 21 and 22, 1991

COUNCIL MEMBER HERZENBERG MOVED, SECONDED BY COUNCIL MEMBER PRESTON, TO ADOPT THE MINUTES OF FEBRUARY 19TH AS PRESENTED. THE MOTION WAS ADOPTED UNANIMOUSLY (8-0).

Council Members Andresen and Herzenberg requested modifications to the minutes of February 21st.

COUNCIL MEMBER RIMER MOVED, SECONDED BY COUNCIL MEMBER BROWN, TO ADOPT THE MINUTES OF FEBRUARY 21ST AS REVISED. THE MOTION WAS ADOPTED UNANIMOUSLY (8-0).

COUNCIL MEMBER PRESTON MOVED, SECONDED BY COUNCIL MEMBER HERZENBERG, TO ADOPT THE MINUTES OF FEBRUARY 22ND AS PRESENTED. THE MOTION WAS ADOPTED UNANIMOUSLY (8-0).

1991-1992 Preliminary Budget Report

Town Manager Horton noted that the Council had set up an extensive schedule for review of the proposed budget. Mr. Horton said that this evening's report was preliminary in every sense of the word. He expressed hope that the report was responsive to the wishes of the Council to date.

Mr. Horton expressed the prevailing atmosphere of austerity concerning the proposed budget and an estimated one million dollar gap in the Town's General Fund. He briefly reviewed departmental proposals and anticipated revenues. Mr. Horton noted that it would be possible to present a budget proposal with no property tax increase. He added that the current and next budget year would be critical and difficult due to the uncertainty of the economy and possible budget reductions by the State Legislature and Governor. Mr. Horton noted that a reduction of $345,000 was anticipated in 1991-92 General Fund revenues.

Mr. Horton stated that Town departments could continue to provide current service levels without a property tax increase. He briefly reviewed proposals to eliminate one million dollars in budget outlays for fiscal year 1991-92, including: elimination of four and one-half positions at a savings of $190,000; elimination of $60,000 for market adjustments; and savings of $435,000 by postponing new debt service for open space bonds until after December, 1991. Noting the significant contribution of Finance Director Jim Baker in preparing the preliminary budget document, Mr. Horton said that many other budget options could be drafted for the Council's consideration.

Mr. Horton said that it would be very difficult to add eight proposed public safety officer positions without a tax increase. He noted that the positions were strongly needed to reduce the community's service recommended utilization rate of forty percent.

Mr. Horton also suggested that the Council consider appropriating $25,000 for a part-time legal advisor in the Police Department. He noted that the work load of the Town Attorney had increased significantly. Mr. Horton added that the legal advisor could provide regular training to the Police Department on a continuing basis. Mr. Horton also outlined several other potential cost-saving programs including the elimination of other positions or further reducing the allocation to the small capital improvements program.

In reviewing the Transportation Fund, Mr. Horton said the Town was very reliant on State and Federal officials for the continuation of substantial funding. He noted that the Urban Mass Transit Administration would gradually provide lesser matching percentages over time. Mr. Horton added that the City of Durham had also recently become a significant competitor for operating and capital funding for its mass transportation system. He briefly reviewed a series of options for narrowing a projected two cent tax rate gap in the Transportation Fund, including deferral of improvements to the NC 86 park and ride lot and the Town's bus garage. Mr. Horton added that an increase of up to $1.50 per ton might be needed in landfill tipping fees, to offset increased operational costs of the landfill facility. He also noted that the Town's Parking Fund was in fairly good condition, with adequate funds to seek bonds for the new parking facility at the present Parking Lot Number One site.

Mayor Howes expressed the Council's appreciation for the Manager and staff's work on the preliminary budget to date. Mayor Howes noted that current economic conditions would make the budget formulation process one of the most challenging in recent memory, necessitating tough choices by the Council. Mayor Howes thanked the Manager for presenting a zero tax increase budget proposal, complemented by a variety of options.

Mayor Howes noted that a public forum on the Manage's preliminary budget report would be held on Tuesday, March 19th. He also noted that the Council would hold three work sessions during April on the budget proposal.

Mayor Howes noted that one of the more challenging aspects of the proposed budget was the estimation of revenues, given the State of North Carolina's significant budget problems. Mayor Howes said he had written to Governor Martin and members of the State Legislature, urging them not to pass budget burdens on to local governments.

Council Member Preston thanked Mr. Horton for a well laid-out and easily understood preliminary budget report. She noted that the report provided a good ground work for the Council's decision-making process concerning property tax rates. Council Member Preston inquired why fines and forfeitures collected had declined so significantly during the current fiscal year. Mr. Baker said that fines and forfeitures had not decreased significantly, but the funds had been transferred from the General Fund to the Parking Fund. Town Manager Horton said he would recommend that the Council consider transferring parking fine adminstration from the Police Department to the Parking Services Division of the Transportation Department.

Council Member Preston inquired about estimated General Fund balance for the current fiscal year. Mr. Baker said the figure was approximately $1,250,000. He noted that this was consistent with previous years' levels. Mr. Horton noted that the projection was based on continued stable funding by the State of North Carolina.

Council Member Preston inquired about the basis for a 98% estimated property tax collection rate. Mr. Baker said this was a rather conservative estimation base, adding that the current year collection rate was 98.5%. Mr. Horton said he suspected that the collection rate in FY 91-92 would not exceed 98%.

Council Member Preston inquired whether the community's public safety needs would be adequately addressed by less than eight new public safety officer positions. Mr. Horton said that the addition of eight new positions would restore public safety services to an optimum level. He noted that it would be possible to operate adequately with fewer public safety officers, if necessary.

Council Member Herzenberg requested that the Manager provide information concerning utilization rates and public safety officer staffing levels in his budget follow-up report to the Council.

Council Member Werner asked how the proposed personnel reductions would impact current service levels. Mr. Horton briefly reviewed the impacts of eliminating the four and a half positions, noting the major impact would be that some tasks would be accomplished more slowly. Council Member Werner inquired about the current status of the positions. Mr. Horton said that the recommended positions were either vacant or would become vacant in the near future.

Noting that the preliminary budget report proposed eliminating market adjustments, Council Member Werner inquired about average merit percentages. Mr. Horton responded that merit increases of 4.5 to 5% were standard. Council Member Werner inquired about the possible implications of less money for the fund balance and small Capital Improvements Program. Mr. Horton said that there were potential long-term ramifications for the fund balance, while lesser funding of the small CIP would have little effect. Council Member Werner requested that the Manager report on how sales tax revenues were estimated in his follow-up budget report to the Council. Mr. Horton said he would do so.

Council Member Andresen inquired about the status of $150,000 set aside for affordable housing programs. Mr. Horton responded that the Council had made no obligations to date for the next fiscal year. Council Member Andresen inquired whether there was an estimated one and one-half cent gap in the Transportation Fund. Mr. Horton said this was correct, noting that this gap could be elminated by postponing some major capital expenditures. Council Member Andresen noted that forestalling one-time expenditures could have long-term impacts. Council Member Andresen inquired about the possibility of reducing average merit increases to four percent. Mr. Horton noted that this was possible, adding that a reasonable reward system is very important to continued high levels of service. He expressed hope that the Council would preserve the merit-based compensation system.

Council Member Andresen inquired about the level of fiscal participation by various entities for the purchase of park and ride lots. Mr. Horton said the Federal Government paid sixty percent, and twenty percent each was contributed by State and Local governments. Council Member Andresen inquired about the extent of possible cuts in State funding. Mr. Baker responded that cuts in the range of $450,000 to $550,000 were possible.

Council Member Rimer noted that no funds were included in the preliminary budget plan for drainage programs. Council Member Rimer inquired how much was allocated for street reconstruction on an annual basis. Mr. Baker said approximately $200,000. Council Member Rimer inquired whether this amount could be reduced by $50,000. Mr. Horton said yes, noting that this was the largest portion that could be extracted while leaving a reasonable program in place. Council Member Rimer inquired why the street reconstruction program could not be reduced to a $150,000 allocation every year. Mr. Horton noted that the Town's street system continued to grow in size each year. Council Member Rimer noted the importance of well-maintained roadways as a long-term investment.

Council Member Brown inquired about the maximum merit increase. Mr. Horton said that merit system provided a maximum increase of nine percent. He noted that a small percentage of employees achieved this level each year. Mayor Howes thanked the Manager for his preliminary budget report. He noted that a public forum on the proposed budget would be held on Tuesday, March 19th in the Council Chamber.

Capital Improvements Program

Assistant Town Manager Florentine Miller said that the Town staff was pleased to present the proposed 1991-1996 Capital Improvements Program. She noted that a public forum on the proposal would be held on March 19th. Ms. Miller noted that the program proposed Town funding of $2.4 million over a period of five years. She noted that deferral of some programs was recommended beyond FY 1995-1996. Ms. Miller briefly reviewed categories in the Capital Improvements Program, referring to programs such as downtown streetscaping, stormwater management and maintenance of Town-owned buildings.

Ms. Miller briefly reviewed the proposed capital needs for public safety and transportation, noting that an outlay of $490,000 was recommended to acquire an aerial fire truck, to replace an existing unit. She added that the proposed Southern fire station would not be needed until after 1996. Ms. Miller said that $50,000 of capital reserve funds were proposed for individual sidewalk projects. Ms. Miller concluded her remarks by reviewing the schedule for the proposed CIP, including a public forum on March 19th and submittal of the Manager's Recommended Capital Improvements Program on April 22nd.

Mayor Howes expressed the Council's appreciation for a very good preliminary report.

Council Member Andresen inquired about the basis for determining the priority of roadway improvement projects. Ms. Miller said the prioritization was based on a historical data base of projects. She noted that it would be possible to reprioritize the projects if the Council chose to do so.

Council Member Brown inquired about the viability of creating an entrance to the proposed Southern Community Park along U.S. 15-501, rather than realigning Dogwood Acres Drive. Ms. Miller said the staff was in the process of exploring alternative entrances to the site. Council Member Werner requested a map of all Town-owned parcels of land. Ms. Miller said such a map would be provided to the Council in the future.

Council Member Preston inquired how much had been spent on sidewalks during the last year. Ms. Miller said approximately $19,000. Council Member Preston inquired how much was proposed for the current year. Ms. Miller said $50,000. Council Member Rimer stressed the need to carefully examine the proposed reallocation of capital funds.

COUNCIL MEMBER HERZENBERG MOVED, SECONDED BY COUNCIL MEMBER PRESTON, TO REFER THE MATTER TO BOARDS AND COMMISSIONS. THE MOTION WAS ADOPTED UNANIMOUSLY (8-0).

Council Member Rimer suggested that a representative from the Finance Department or Manager's Office attend each of the board and commission sessions concerning the proposed Capital Improvements Program, to further emphasize the importance of the document as a planning tool. Mr. Horton said that this was a point well-taken.

Mixed-Use/Master Plan Regulations

Mayor Howes noted that the first reading of Ordinance 3 had been approved by a vote of 5-2 on February 25th, necessitating a second vote on the matter.

THE QUESTION WAS CALLED AND ORDINANCE 3 WAS APPROVED BY A VOTE OF 6-2, WITH COUNCIL MEMBERS ANDRESEN AND BROWN VOTING NO.

Mayor Howes stated that Ordinance 4c concerning proposed sign provision modifications was on the floor.

Council Member Andresen expressed her support for the Appearance Commission's and Manager's recommendations concerning signage for movie theaters in mixed-use developments.

THE QUESTIONWAS CALLED AND THE MOTION, ORDINANCE 4C WAS PLACED ON THE FLOOR. THE MOTION WAS ADOPTED BY A VOTE OF 6-2, WITH COUNCIL MEMBERS ANDRESEN AND BROWN VOTING NO.

Wendy's Special Use Permit Modification

Mayor Howes inquired whether any speakers not previously sworn wished to address this matter. Hearing none, Mr. Horton requested that the agenda item and its attachments be entered into the record of the hearing. Mayor Howes concurred with the request.

Planning Director stated that approval of the applicant's request was recommended, since it was a reasonable one which would result in a net benefit for the site. He added that the staff memorandum included responses to questions raised at the public hearing.

Mayor Howes noted that there were no additional comments by citizens.

Errol Simon, representing Hakan and Corley Architects, said that the applicant agreed to all conditions outlined in Resolution A.

COUNCIL MEMBER PRESTON MOVED, SECONDED BY COUNCIL MEMBER RIMER, TO ADJOURN THE PUBLIC HEARING. THE MOTION WAS ADOPTED UNANIMOUSLY

(8-0).

COUNCIL MEMBER PRESTON MOVED, SECONDED BY COUNCIL MEMBER ANDRESEN, TO ADOPT RESOLUTION 1A. THE MOTION WAS ADOPTED UNANIMOUSLY

(8-0).

Delta Sigma Phi Fraternity Special Use Permit

Mr. Horton requested that additional agenda materials and attachments be entered into the record of the hearing. Mayor Howes concurred with the request.

Planning Director Roger Waldon briefly reviewed the memorandum before the Council. He noted that the staff was recommending flexibility concerning roadway improvement requirements. Mr. Waldon added that the applicant had provided a proposal for roadway improvements and cross-sections. Mr. Waldon noted that the staff recommendation had been modified to mirror that of the Planning Board concerning reservation of right-of-way, rather than outright dedication. Mr. Waldon also briefly reviewed proposed requirements for roadway improvements on Finely Golf Course and Prestwick Roads. Mr. Waldon said that the adoption of Resolution 2A was recommended.

Mr. Post expressed his appreciation for the change in recommendation concerning right-of-way conditions. He noted that there continued to be disagreement about the need for improvements to Prestwick Road. Mr. Post stated that the existing gravel roadway was working well to handle low volumes of traffic. Mr. Post noted that the applicant was willing to build enhanced roadway shoulders on Prestwick Road.

COUNCIL MEMBER HERZENBERG MOVED, SECONDED BY COUNCIL MEMBER RIMER, TO ADJOURN THE PUBLIC HEARING. THE MOTION WAS ADOPTED UNANIMOUSLY (8-0).

Council Member Wallace said he did not think that the applicant should have to pay one-half of the roadway improvement costs, since the traffic impact by the occupants of the house would be minor. Council Member Andresen noted that the Council often required other developers to provide roadway improvements. She noted that the onus for improvements should not fall on taxpayers at large.

COUNCIL MEMBER RIMER MOVED, SECONDED BY COUNCIL MEMBER HERZENBERG, TO ADOPT RESOLUTION A, REVISING THE PROVISION CONCERNING THE PAVING OF PRESTWICK ROAD.

Council Member Andresen noted that she would not support the resolution with this change. Mayor Howes noted that he support the motion enthusiastically, since the University Village Shopping Center would be responsible for paving the roadway.

THE MOTION WAS PLACED ON THE FLOOR AND ADOPTED BY A VOTE OF 7-1, WITH COUNCIL MEMBER ANDRESEN VOTING NO.

Proposed Legislative Program

Mr. Horton briefly reviewed the proposed program, including vehicle registration fees and a statewide admissions tax, noting that

the Council had met with the local State Legislative delegation on February 22nd to discuss matters of mutual interest. He also noted the utility of supporting the efforts of the Triangle Transit Authority.

Wayne Jones, representing the University of North Carolina, noted that Chancellor Paul Hardin had written a memorandum to the Council concerning the proposed entertainment tax. Mr. Jones said that the Town was an attractive place to live and work, with many exciting cultural and educational activities. Mr. Jones expressed concern that an entertainment tax would single out University events. Mr. Jones said the proposed tax was a direct levy on event patrons and an indirect levy on the University. He also expressed concern that promoters might be inclined to site concerts elsewhere if an entertainment tax were enacted. Mr. Jones urged the Council not to move ahead with the proposal for an entertainment tax.

Roland Giduz expressed hope that the Counicl would endorse the entertainment tax proposal. Mr. Giduz said that the proposed tax would not pose a hardship on anyone. He also noted that various forms of entertainment taxes were well established in other parts of the nation. Mr. Giduz said that the State was not utilizing its opportunity to collect a tax which would lighten the proportional loading of taxes. He expressed hope that the Council would endorse the entertainment tax proposal in concept. Mr. Giduz also expressed hope that the merits of the proposal could be discussed by the State Legislature. Mr. Giduz said he was confident that legislators would believe merits of the proposal once discussions were underway.

Mayor Howes briefly reviewed the proposed resolutions before the Council. He noted that Mr. Giduz and Mr. Jones had carried the debate on an entertainment tax beyond the status of proposals. Mayor Howes stated that the proposed resolutions would authorize moving ahead with consideration of the matters by the State Legislature.

Mayor Howes said he supported the first resolution with enthusiasm, while he more strongly favored a local payroll or other similar tax to an entertainment tax. He expressed concern that an entertainment tax would be inequitable. Mayor Howes also noted that the overall outlook for local enabling legislation was not very good.

COUNCIL MEMBER HERZENBERG MOVED, SECONDED BY COUNCIL MEMBER WERNER, TO ADOPT RESOLUTION 3.

Council Member Wallace noted that Resolution 3 included a proposal on adopting a statewide entertainment tax. He inquired whether this offered the greatest opportunity for passage. Mr. Giduz said that both resolutions were excellent proposals. He noted that chances of passage of either measure were not very good in the current legislative session. Mr. Giduz stated that Council endorsement of both measures would have a strengthening effect in future legislative sessions. Mayor Howes noted that the University would likely continue to oppose the concept of an entertainment tax. Council Member Andresen inquired whether the University would oppose a statewide proposal for an entertainment tax. Mayor Howes said he did not believe the University would oppose such a bill.

THE MOTION TO ADOPT RESOLUTION 3 WAS PLACED ON THE FLOOR AND ADOPTED UNANIMOUSLY (8-0).

COUNCIL MEMBER ANDRESEN MOVED, SECONDED BY COUNCIL MEMBER PRESTON, TO ADOPT RESOLUTION 4.

Council Member Andresen expressed agreement with Mr. Giduz that prospects for success of either proposal were not very good in the current legislative session. Council Member Andresen said she sympathized with the fact that the University might want to use the entertainment tax as an alternative revenue source in the future. Council Member Preston said it was unfortunate that the University was not comfortable with the entertainment tax proposal. She emphasized the importance of a continuing dialogue between Town and University officials on this matter.

THE MOTION TO ADOPT RESOLUTION 4 WAS PLACED ON THE FLOOR AND ADOPTED BY A VOTE OF 7-1, WITH MAYOR HOWES VOTING NO.

Consent Agenda

Noting the presence of Martin Feinstein, a strong supporter of the new gross land area definition, Council Member Werner requested that agenda item 10a be considered separately from the balance of the consent agenda.

COUNCIL MEMBER HERZENBERG MOVED, SECONDED BY COUNCIL MEMBER WERNER, TO ADOPT THE CONSENT AGENDA EXCLUDING ITEMS A AND C. THE MOTION WAS ADOPTED UNANIMOUSLY (8-0).

COUNCIL MEMBER WERNER MOVED, SECONDED BY COUNCIL MEMBER ANDRESEN, TO ADOPT AGENDA ITEM 10A AS PRESENTED. THE MOTION WAS ADOPTED UNANIMOUSLY (8-0).

No executive session was needed.

COUNCIL MEMBER PRESTON MOVED, SECONDED BY COUNCIL MEMBER RIMER, TO ADJOURN THE MEETING. THE MOTION WAS ADOPTED UNANIMOUSLY (8-0).

NP, JA--Res. A-- (8-0).

JA--6.1A--