SUMMARY MINUTES OF A PUBLIC HEARING

OF THE CHAPEL HILL TOWN COUNCIL

WEDNESDAY, MAY 12, 2004, AT 7:00 P.M.

Mayor Kevin Foy called the meeting to order at 7:00 p.m.

Council members present were Sally Greene, Ed Harrison, Cam Hill, Mark Kleinschmidt, Bill Strom, Dorothy Verkerk, Jim Ward, and Edith Wiggins.

Staff members present were Town Manager Cal Horton, Deputy Town Manager Florentine Miller, Assistant Town Manager Bruce Heflin, Town Attorney Ralph Karpinos, Town Information Officer Catherine Lazorko, Deputy Fire Chief Robert Bosworth, Human Resources Director Pam Eastwood, Interim Finance Director Kay Johnson, Engineering Director George Small, Transportation Director Mary Lou Kuschatka, Police Chief Gregg Jarvies, Assistant Human Resources Director Anissa Graham-Davis, Assistant Transportation Director Kurt Neufang, and Town Clerk Joyce Smith.

Item 1 - Public Hearing on the

Manager's Recommended 2004-2005 Annual Budget,

2004-2019 Capital Improvements Program,

Proposed Use of 2004-2005 Transportation Grant funds,

and the 2004-2005 Downtown Service District Tax

Mayor Foy explained that the Council had previously asked the Manager to review some of his recommendations in light of the tax implications of this budget.  This was not a revised budget, Mayor Foy explained, but there might be some revisions to the budget based on what the Council had already discussed. 

Town Manager Cal Horton stated that he would not repeat his prior budget presentations tonight, but would set the stage for citizens who had not been able to follow the previous meetings.  He offered a base budget for continuation of present services and recommended a series of priority additions based on the staff's understanding of the Council's objectives and community needs, he said.  Mr. Horton noted that the budget had also taken staff and advisory board recommendations into account as well as citizens' requests. 

Mr. Horton said that the staff's original budget proposal would have a base budget of about $40 million.  He noted that he had originally recommended a budget of about $43 million, which would require a tax rate increase of about 3.5 cents.  Based on the Council's earlier discussion, Mr. Horton explained, he had been working to minimize the tax rate increase.  He emphasized that his highest priority was to retain the competitive pay adjustments that he had recommended and presented to the Council.  Employees are the Town's most important resource, Mr. Horton said, pointing out that the Town had been able to retain excellent work in exchange for good pay.  When looking for possible ways to adjust the budget, he would look at limiting program expansions and minimizing investments in capital improvements in order to preserve the pay recommendations, he said.

Mr. Horton mentioned other priorities in the General Fund.  These include: building the Town Operations Center; issuing $4 million in General Obligation Bonds; contracting with human service agencies; promoting tourism; continuing downtown economic development; and, protecting the Town's investment in its properties, he said.  Mr. Horton noted that the staff had proposed creating a Stormwater Management Fund, which would be funded by an equivalent rate unit (ERU) fee based on each 2,000 square feet of impervious surface for residential, institutional and commercial lots.  At the Council's request, the staff had worked hard to reduce the original fee and now had it at $39, he said.  Mr. Horton explained that most residential properties in Chapel would pay between $39 and $117 per year.  This would also apply to property owners who were normally considered to be tax exempt, he pointed out.

Mr. Horton said that establishing the Stormwater Funds would gain an advantage for the General Fund by repaying more than $400,000 to the General Fund that had been invested in studying stormwater management.  He noted that the Stormwater Management Fund would pay costs that were being paid by the General Fund and that all of this together would have a positive effect of about $1.2 million to the General Fund. 

Mr. Horton stated that the Transportation Fund would continue to pay the costs necessary to preserve the fare free bus service.  He recommended a budget of about $11.4 million, which would require an .8-cent tax rate increase.  Mr. Horton said that the Council had already adopted the Housing Department budget, which had been set at a level to continue the Town's basic operations.  He recommended using tax revenues from the Downtown Service district to partially support the new economic development entity for the Downtown. 

Mr. Horton mentioned that potential debt service could lead to an additional .8-cents on the 2005-2006 tax rate.  He pledged to do everything he could to minimize that increase and noted that the Council would have to decide how to proceed on key issues.  Mr. Horton pointed out that the Council had scheduled a budget work session for May 19, 2004, and that the staff would give their best advice on how to reduce costs and minimize the tax rate increase.  He said that the Council was scheduled to adopt the new budget on June 14, 2004.

Engineering Director George Small told Council members that general statutes required the Town to hold a public hearing on the Stormwater Enactment Ordinance that the Council would consider later tonight.  The staff was recommending that the Council consider a $39 annual fee per ERU that would apply to all zoning lots and tracts within corporate Town limits except those with less than 200 SF of impervious surface, he said.

Mayor Foy pointed out that the Council had already held several meetings to discuss the budget.  The primary purpose of tonight's meeting was to hear from the public, he said.

Bob Schreiner, Chair of the Library Board of Trustees, thanked the Council for recommending use of some of the 2003 Library expansion bond funds for a substantial part of the planning process.  He expressed disappointment, however, that the Council was contemplating pushing the construction date to 2008-20009.  Mr. Schreiner proposed that doing so would deny a service to citizens who had voted and had agreed to pay for it through the referendum.  He encouraged the Council to reconsider that schedule.  Mr. Schreiner expressed enthusiasm about beginning the planning process and urged Council members to create a Mayor's committee to help with that endeavor. 

Alan Rimer, representing the Technology Committee, commented that a one-cent increase on the tax rate appeared to eliminate every request that the Committee had put forward for the coming year.  The 3.5-cent budget would keep two of the three positions they had requested, he said, and it would eliminate the proposed capital investment.  Mr. Rimer stated that the Technology Committee had been trying to find ways to help the community make strategic decisions with respect to technology that would save money over time, and stated that the Town should not take a "minimalist view" with regard to technology.

Terri Tyson, Vice Chair of the Chapel Hill Parks and Recreation Commission, requested that the Council include funds in the budget for winterizing restrooms at Town parks and facilities.  She said that this was the chief complaint the Parks and Recreation staff receives from citizens.  Ms. Tyson asked the Council to move this item to the top of their budget priority list for the Parks and Recreation Department. 

Jon Wilner, Executive Director of the ArtsCenter, noted that this was the ArtsCenter's 30^th anniversary year.  He said there was no greater resource than arts and culture when building a sustainable community.  Mr. Wilner told Council members that the ArtsCenter receives federal, State, regional and county contributions and had been placed in Carrboro's recommended budget for next year, but they were not in Chapel Hill's budget.  He presented copies of the ArtsCenter's business plan and asked the Council to reconsider contributing to the ArtsCenter.

Hal McKeel, a volunteer coach with the Orange County Special Olympics, agreed with the Manager's statement that employees are the Town's most important resource.  He spoke in support of Colleen Lanigan, a part-time coordinator for the Special Olympics for Orange County.  Mr. McKeel said that Ms. Lanigan works full time hours and is the person who deserves the credit for having kept the program together year after year.  He worried about the Town 's "minimalist mindset to programs," Mr. McKeel said, and he asked Council members to make it economically possible for Ms. Lanigan to continue her work by giving her a full-time position.

Candy Holtzman described the Orange County Special Olympics Program as a bright shining star in the Chapel Hill universe, but it is likely that the Town would lose a rare gem if it does not support Ms. Lanigan.  She expressed agreement with the previous speaker's remarks, adding that Ms. Lanigan works much more than full time but at a part time salary.  Ms. Holtzman stated that having only a half-time coordinator was absurd for a program that was so important and successful, and which reflects so well on Chapel Hill.

Faith Nager, mother of an 11 year-old autistic boy, requested that the Council turn Ms. Lanigan's position into a full-time one.  At the same time that there had been an increase in new schools, new homes, new parks and new shopping areas, there had been a decrease in the staff for Special Olympics, she said.  Ms. Nager pointed out that the program had once been staffed by a full-time administrator who had two part-time assistants, one of whom was Ms. Lanigan.  Ms. Lanigan then inherited all of the administrative requirements, kept the program going strong, and expanded it without the benefits of the full time job, Ms. Nager explained.

Kelly Ronnow, a Special Olympics volunteer, stated that she had worked in Special Olympics programs in Illinois, Ohio and Maryland.  The scope of the Town's program compares to the one in Columbus, Ohio, she said, and she pointed out that the Columbus program has two full time staff people.  Ms. Ronnow mentioned several benefits that Chapel Hill gets from the Special Olympics.  She said that Ms. Lanigan had built a program that integrates athletes and volunteers into the community and creates such a family atmosphere that the volunteer retention rate was almost 100%.  The program breaks down barriers, eliminates stereotypes, and fosters a sense of pride in the athletes, Ms. Ronnow said.  She argued that the current level of programming could not be maintained part-time and would not continue if Ms. Lanigan were to leave.

Maggie Burnett, Office Manager of the Town Public Works Department, stated that she had worked for Chapel Hill for 28 years.  She expressed concerns about trends that she said were affecting the Town's workforce.  Ms. Burnett said that many, if not most, Town employees must live outside Town limits because they cannot afford to live in Chapel Hill., and many must work second jobs.  She objected to the Council considering not following the Manager's recommended pay plan.  Ms. Burnett also expressed concern about employees' retirement benefits, stating that those benefits were based on pay.  She said that there was an overall feeling of pessimism among her co-workers who know that the governing body of their employer is concerned that a 4% pay adjustment is unacceptable.  Ms. Burnett urged Council members to allow the Town Manager to reward Town employees.

Larry Conte, father of a four year-old autistic boy, described Ms. Lanigan as an angel of wellness and hope, and said that she does the work of seven people.  He said that making the position a full time one was a no-brainer, since she does an incredible job.

Rob Pruitt, a Fire Department employee speaking on behalf of Town employees, said that he had felt appreciated eight years ago when he first started working for the Town.  Employees feel recognized when they are adequately compensated for what they do, he said.  Mr. Pruitt expressed concern about his retirement being compromised by changes in the employee pay plan. 

Virginia Knapp, Associate Director of the Chapel Hill-Carrboro Chamber of Commerce, stated that commercial garbage pickup was one of the basic services that people expect for the taxes they pay.  She said that the tiered fee structure of commercial garbage collection essentially was a pay-as-you-throw system.  There is a concern in the community that commercial haulers pick it up would lead to uncoordinated hours of pickup, more garbage trucks on the roads, less cleanliness in dumpster areas, and a significant economic impact on businesses, Ms. Knapp said.  She said Town pickup was the most efficient and cost-effective way to deal with trash in the community and local businesses would appreciate it if the Town would keep that as a service. 

Anthony Stevenson, a member of the Special Olympics, told Council members that he was trying to find a new job and to understand how to manage his money so that he could move from a group home to an independent living situation.  Mr. Stevenson explained that he had won three gold medals for track and would be paying softball in the State games on June 4, 2004. 

Craig Tate supported making the Special Olympics coordinator position a full time position.

Tony Beauchaine praised Colleen Lanigan and asked Council members to let her have a full time job.  

Ronald McKoy supported making the Special Olympics coordinator position a full time position.

Tommy Gregory, president of the Chapel Hill Firefighters Association, encouraged the Town Council to hire 18 more firefighters.  Chief Jones had first requested this in December 2002, he said, and he had addressed the Council for the past two years with regard to this matter.  Mr. Gregory explained that 18 additional personnel would allow two engines to handle additional call volume.  He noted that last year Mayor Foy had said that the Fire Chief had given the Council something to think about for the next budget year.  Council Member Ward had spoken in favor of pursuing grant money for additional officers, Mr. Gregory recalled.  He urged the Council to follow the Human Resources Department's recommendations regarding pay raises for Town employees.

Eugene Farrar, a Town employee in the Landscape Division of the Public Works Department, stated that he and his coworkers were always the ones to be cut off when it comes to pay raises.  He asked Council members to consider that much of the work that Public Works employees do is dangerous.  Mr. Farrar said that the Department tries to make Chapel Hill a nice, safe place to live and visit.  He suggested that the Town make it one of the better paying areas.

David Sasser, secretary of the Chapel Hill Firefighter's Association, supported the request for increased Fire Department staffing.  He said that firefighters understand the need to fund other programs, but they wonder about the wisdom of building up a wonderful infrastructure and not protecting it with a sufficient number of firefighters.

Adam Smith said that he was one of the few Town employees who actually lived in Chapel Hill.  But that was because his wife had a better paying job than he did, he said.  Mr. Smith explained that he performed additional tree work in his off time, at $50-75/hour, to make enough money to live in Town. He mentioned his various degrees and licenses and said that the Town did not pay him what he is worth.  Mr. Smith asked Council members to think about Hurricane Fran when they vote.  He suggested that they consider all the storm removal that took place in the past several years and remember the employees who came to work in harsh conditions. 

Stanley Norwood, a Chapel Hill Transit bus driver speaking for the Transit Drivers for Change Committee, told Council members that working split shifts meant that drivers must be present for 12 hours in order to work only eight.  They need more 40-hour straight runs, he said, where they can come in and leave at a decent time.  Mr. Norwood stated that some drivers sign up for the Tar Heel Express just to get 40 hours of work each week.  The way things are set up, drivers cannot find time to further their education, he said.  Mr. Norwood complained that drivers were not being adequately compensated for split shifts.  He stated that the Transportation Department's rules were different from those in the Town 's handbook, and he asked which rules employees should abide by.

Council Member Verkerk pointed out that UNC employees could take courses at UNC for free. Bus drivers are UNC employees in a sense, she said, since UNC is one-third of the transit system and owns some of the bus runs.  Mr. Horton offered to pursue that idea.  He commented that the request might be broaden to other employee groups as well.

Firefighter Mary Blevins stated that the issue was one of decency.  The Town should compensate employees for what those employees have given to keep the Town as beautiful as it is, she said. Ms. Blevins explained that she was just ending a 36-hour shift.  Firefighters regularly work 24, 36, 48, and sometimes even 72-hour straight shifts to provide the Town with minimal protection, she said.  Ms. Blevins asked Council members to understand that firefighters were not looking out for themselves but were looking out for the Town.

Mayor pro tem Wiggins asked for background information regarding the Town's allocation to the ArtsCenter.  Mr. Horton explained that the ArtsCenter had been in the midst of financial difficulties about 10 years ago.  There had been concern that they might lose their facility, he said, so the Council had made a long-term commitment to help them purchase the building.  Mr. Horton recalled that the Council had agreed to make a $20,000 contribution each year for 10 years.  The Town had kept that good faith promise, he said, and the ten-year term has been completed.  Mr. Horton explained that he had not recommended continuing contributions to the ArtsCenter but had suggested increasing the contribution to the NC High School Athletic Association instead.  Mayor pro tem Wiggins said, in summary, that the Town would not technically be taking the ArtsCenter out of the budget but had merely fulfilled a $200,000 commitment.

Mayor pro tem Wiggins asked what Mr. Pruitt had meant when by a comment he had made earlier in the meeting.  Mr. Horton replied that Mr. Pruitt had been referring to a provision in the Town's pay system whereby a merit increase for an employee who has reached the top level of performance can be a one-time payment rather than a pay increase.

Mr. Pruitt explained that receiving a "percentage raise," a one-time check for reaching the outstanding level during an annual evaluation, does not help employees in retirement because retirement benefits are based on an employee's overall base salary. He said that the Town had been rewarding employees with money, which they appreciate, but that cash bonuses do not improve their retirement benefits.

Mayor Foy asked if that was the case only at the top of the pay grade.  Mr. Pruitt replied that it could happen at any level.  Mayor Foy asked if this meant employees never get pay increases.  Mr. Horton explained that they receive pay increases when they receive merit increases.  But the Council had not authorized merit increases in two years, Mr. Horton said.

Mayor Foy asked Mr. Horton about the $700,000 in pay increases for last year.  Mr. Horton explained that the Council had authorized changes in compensation but only in the form of raising pay grades.  The Council had not authorized merit increases, he said.  Mr. Horton stated that virtually all employees have had increases in pay, which has counted toward their retirement.  In the past, employees could receive grade changes and merit increases and those who were considered outstanding would receive an additional one-time bonus, he said.  But there had been no bonuses because there had been no merit increases in the last two years, Mr. Horton explained.  There had only been adjustments to pay grades.

Mayor pro tem Wiggins asked Mr. Pruitt if this had happened to him last year.  Mr. Pruitt replied that last year they had been told they would not receive a raise.  But in November or December all employees did receive an across-the-board same percentage raise, he said.   Mayor pro tem Wiggins clarified that the one-time check that Mr. Pruitt had received last year was in addition to the base. Mr. Horton explained that last year almost all employees received across-the-board pay adjustments as authorized by the Council.  This employee was saying that a couple of years ago the pay system worked the way it was intended to.  But the Town had not operated that way for two years in a row, Mr. Horton said. 

Council Member Ward asked how new firefighters would be used if the Town were to hire a portion of the requested number.  Mr. Horton replied that the Fire Chief would consult with his command staff and determine how to assign the six positions that he had requested in order to obtain the most effective increase in fire protection coverage.  It would depend greatly on the nature of the equipment the Town had at the time, Mr. Horton said.  He added that it would depend as well on the kind of exposures the Chief is most concerned about and the present staffing at the various stations.  If there were fewer new firefighters then the Chief would make a different decision, Mr. Horton said.

Council Member Ward asked how Hillsborough, Carrboro and Orange County participate in funding the Special Olympics program. Mr. Horton stated that Parks and Recreation Director Kathryn Spatz could answer that at the Council's next work session.  Council Member Ward requested that Ms. Spatz also provide figures on the relative distribution of participants throughout the County. 

Council Member Greene commented that she had posed those questions to a member of the Parks and Recreation Commission and had been told that about 50% of Special Olympics participants come from outside Chapel Hill.  The Special Olympics is an Orange County program and no money comes from any of the other jurisdictions, said Council Member Greene.

Council Member Verkerk verified with Mr. Horton that the last time the Council had not given a raise had been several years ago.  She wanted to clarify that the Council had never discussed not giving any raises, she said.

Council Member Ward requested information on what it would take to winterized all or some of the Town parks' restroom facilities.  He also asked for feedback on which ones were the most important.

Mayor pro tem Wiggins requested information on the split shift bus driver situation. How is it organized and what would the cost be to do straight shifts, she asked.  Mr. Horton offered to have Transportation Director Mary Lou Kuschatka come before the Council to discuss that. Mayor pro tem Wiggins also requested information on whether Ms. Lanigan had received overtime pay.  Mr. Horton replied that Parks and Recreation Director Kathryn Spatz could discuss that when she comes.

Council Member Harrison spoke in support of the request for information on where park bathrooms were most needed.  He would also like to discuss the split shift issue, he said. Mr. Horton pointed out that the split shift issue has pay and cost implications.  Split shifts were a fact of life of almost all transit systems, he said, adding that one of the goals was to minimize the number as well as the effect on employees.  Mr. Horton said that Ms. Kuschatka would discuss that more effectively, adding that the issue had been of concern for some time.  

Council Member Kleinschmidt determined that funding for the ArtsCenter had always come from the Hotel/Motel Tax allocation.  He expressed concern about not providing any funding for something that really was not purely a Carrboro unit.  Council Member Kleinschmidt noted that Chapel Hill also provides facilities for the larger community and asks for contributions from others. It behooves the Town to support the ArtsCenter if it wants to adhere to its stated commitment to public art, he said.

Council Members Verkerk and Greene agreed with what Council Member Kleinschmidt had said.  Mr. Horton pointed out that the Council controls the money and makes those decisions.  Whether or not to continue funding the ArtsCenter was a decision for the Council to make, he said, but commented that his recommendation would not change. 

Council Member Ward asked how the Town would determine the square footage of a parcel to determine its ERU.  Engineering Director George Small explained that the staff was using aerial photography and measurements using the GIS system.  Council Member Ward asked what the rationale had been for not doing increments of 500 and 1,000 square feet.  Mr. Small explained that a large number of parcels had fallen within the 2,000 SF breaking points.  The Town could, of course, arbitrarily pick a number, Mr. Small said, but then the Town would have to go back through the whole database and reanalyze it.

Mr. Horton advised the Council to address that issue during the following year, noting that it took a lot of work and consulting fees to develop the database and the system that had lead to the current proposal.  The Town might not have enough time to do an adequate job of revising it, he said. 

Council Member Ward asked for Council support in asking the staff to look at the ERU’s with the intent of making the divisions more precise than 2,000 SF.  He pointed out that someone with 2,001 square feet of impervious surface would pay the same amount as someone who had just under 4,000 square feet.

Mayor Foy remarked that 2,000 square feet represents only $39.  He expressed concern about spending more money to get a more discreet breakdown.

Council Member Hill noted that the fee could be based per square foot.  He said he could not imagine that it would take anyone more than an afternoon to look at it in that way.  Mr. Horton replied that it would take considerably more time because it would require much higher precision in the use of the GIS tool and the aerial photography.  Council Member Hill explained that he had meant that the Town could determine in an afternoon whether it was more trouble than it was worth.

Council Member Harrison agreed that using the 1,000 square feet increment would be a more proportional measurement.  The Town is using high technology and its measurement system is very accurate, he said, agreeing that it would be too time-consuming to rework that now.  However, he would make using 1,000 square feet a goal, Council Member Harrison said, because the charge would be more proportional to the actual impact of each property.

Council Member Kleinschmidt proposed adjusting this during the first year.

Council Member Hill commented that it translates to .0195 per square foot, if the square footage is known, you could do it that precisely.

COUNCIL MEMBER WARD MOVED, SECONDED BY COUNCIL MEMBER HARRISON, TO MAKE LOOKING INTO A FINER GRAIN OF ERU A HIGH PRIORITY GOAL FOR THE FIRST YEAR OF THE STORMWATER UTILITY AND THAT THE STAFF BRING BACK SOME INFORMATION ON WHAT THAT INCREMENT SHOULD BE.  THE MOTION WAS ADOPTED UNANIMOUSLY (9-0).

Mayor pro tem Wiggins verified that the amount of an employee's retirement benefit is based on his/her highest years of income.  Mr. Horton stated that it did not matter what their pay rate was, it is based on what they had earned.

Mayor Foy noted that the Council would not make any budgetary decisions this evening but would have another work session on the following Wednesday.  The vote on the budget is scheduled for the regular business meeting on June 14, 2004 at 7:00 p.m., he said.

The meeting adjourned at 8:45 p.m.