SUMMARY MINUTES OF A PLANNING RETREAT

OF THE CHAPEL HILL TOWN COUNCIL

THURSDAY, JANUARY 12, 2006 AT 8:30 A.M.

 

Mayor Kevin Foy called the meeting to order at 8:37 a.m.

 

Council members present were Laurin Easthom, Sally Greene, Ed Harrison, Cam Hill, Mark Kleinschmidt, Bill Strom, Bill Thorpe, and Jim Ward.

 

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, Planning Director J.B. Culpepper, Development Planning Coordinator Gene Poveromo, Long Range and Transportation Coordinator David Bonk, Principal Long Range Planner Gordon Sutherland, Housing and Neighborhood Services Coordinator Loryn Clark, Finance Director Kay Johnson, Budget Analyst Aaron Gallagher, Information Technology Director Bob Avery, Mayoral Aide Adam Shaefer, and Town Clerk Sabrina Oliver.

 

Item 2 – Budget Issues

 

Ms. Johnson began with a brief update on the current year budget. She said that revenue in the current year was on target with budgeted amounts, with the following exceptions:

Ms. Johnson said the General Fund expenditures appeared to be reasonable in comparison with the budget. She added that the Town imposed limits on department costs in recent years’ budgets that made it less likely that there would be significant unused funds at the end of this year. Ms. Johnson said that in the past, the Police Department had often been able to return a substantial amount in lapsed salaries back to the General Fund. Because of recruitment and retention efforts undertaken this year, she noted that she did not anticipate a material under-expenditure relative to the budget this year. In addition, as fuel prices have increased, Ms. Johnson said the Town might face the need to take the budget originally allocated for other purposes to cover the fuel cost increases in the General Fund.

 

In the Transportation Fund, personnel costs, fuel costs and maintenance costs were running higher than normal at this time of year, Ms. Johnson explained. She said that personnel costs might be under-budgeted because of overtime needs. Unusually low maintenance costs in 2004-05 had not recurred in 2005-06, Ms. Johnson added. She said that maintenance costs had increased due to the failure of three bus engines. The volatility of fuel prices significantly impacts the Transportation budget, and there was concern that costs might exceed the original estimates for 2005-06, she added. However, she said, these possible additional costs would be covered by the increased amount of State subsidy.

 

Overall Budget Issues for 2006-07

 

Ms. Johnson outlined key issues for the upcoming 2006-07 budget. She said the issues were as follows:

Assumptions and Preliminary Estimates

of Major Revenues in the General Fund for 2006-07

 

Ms. Johnson outlined the following revenues:

Concerning fire protection funds, Mr. Horton noted that the State had made no distribution of funds and staff did not know what that figure might be. Council Member Hill said he wanted to see a report on fire protection and the insurance value of UNC buildings.

 

In summary, Ms. Johnson said that the estimated total General Fund revenue in 2006-07 was about $47 million. She said staff also anticipated a normal use of $800,000 in funds carried forward from 2005-06.

 

General Fund Cost Issues and Preliminary Estimates for 2006-07

 

Ms. Johnson said the base budget includes revenues and costs to continue current Town programs at the current level of service. She listed the following:

Ms. Johnson said potential additions were:

Mr. Horton said that 10 percent of the total hotel/motel room tax had to go to visitor services. He said staff had been instructed not to put grants to other agencies in the base budget. He noted that a total of $800,000 went to grants to other agencies.

 

Mr. Horton added that proposals from departments had not been received. He said he knew that the Police Department and the Fire Department would request additional personnel.

 

Fund Balance in the General Fund

 

Ms. Johnson said that changes in accounting and reporting regulations caused the fund balance to increase by almost $2 million at the end of 2004-05. She said the Town no longer had to maintain a reserve equivalent to the value of employee leave balances. As a result of that, she said, the fund balance was at 18 percent of the 2005-06 budget. Ms. Johnson added that that was higher than the Town’s policy recommendation of 12 percent.

 

Mayor Pro Tem Strom said it was fantastic that the Town had this extra cash. However, he cautioned that it would create a huge hole in next year’s budget if the Council was not careful. He said he recommended that the money be set aside and treated separately.

 

Mr. Horton said the Council should consider it as a one-time occurrence.

 

Mayor Foy added that the Town’s bond rating was enhanced by this figure. Ms. Johnson said the Town had a wonderful rating that was valuable when they needed to borrow money.

 

Mayor Foy said the money could be used on one-time capital improvements.

 

Ms. Johnson said that 13.5 percent in fund balance was a reasonable number to maintain the bond rating. Mr. Horton said the Town had started out at 6 percent years ago, and then it had gone to 8, 10, and 12 percent. He said 13.5 percent would be prudent because the Town’s debt service payments were high in comparison with total expenditures.

 

Mr. Horton explained that the fund balance was at 18 percent and if the Council used the $2 million, it would reduce the fund balance to 13.5 percent and that was what staff was recommending.

 

Beyond 2006-07

 

Mayor Pro Tem Strom said the Town needed to be very cautious not to create an obligation that was hard to meet next year. He said the newspapers had said citizens could expect no tax increase in the upcoming year.

 

Ms. Johnson said the Council would need to continue to review the plan for the issuance of the remaining General Obligation debt of $25 million that was authorized in November 23, along with issuances for  planned capital improvements. She said if the Council proceeded with the planned bond sale in fall 2006, an additional debt service payment of about $800,000 was anticipated in 2007-08. She added that existing debt would also increase by about $326,000 from 2006-07 since the Town had elected to pay reduced principle on the Town Operations Center debt in the first two years, in order to ease debt service payments in 2005-06 and 2006-07.

 

Council Member Harrison requested a schedule for the Town Operations Center debt.

 

Mr.Horton reiterated that the budget amount did not include departmental requests. He said he doubted that they’d be able to meet all requests from departments without a tax increase.

 

General Fund Conclusion

 

Ms. Johnson noted that one cent of the General Fund tax rate in 2006-07 would generate about $535,000.

 

Mayor Pro Tem Strom noted that the General Fund base budget was estimated to be about $45.1 million and could be funded with estimated total revenues of $49 million including appropriated fund balance and $2 million in one-time use of the fund balance, leaving about $3.9 million for potential additions to the base budget.

 

Mayor Pro Tem Strom noted the potential additions Ms. Johnson had explained earlier.

 

A question was raised about the contribution in lieu of taxes made by Carol Woods. Mr. Horton said that the Carol Woods donation was budgeted. He said they give the Town an estimate and it is budgeted.

 

Council Member Ward asked if there were any unforeseen items. Mr. Horton said that departmental requests had not been received.

 

Ms. Johnson said that the total preliminary estimate of costs to continue current routes and fare free service was about $13.2 million next year. She said the expenditures at this level could require about $460,000 in additional revenue of which about $154,000 would need to come from the Town with the balance from the transit partners.

 

Ms. Johnson said potential additions to the base budget for transportation included general market and merit adjustments beginning in October 2006 of about $233,000. With those adjustments, she said costs exceed revenues by about $683,800. She said if the additions were funded the Town would need to contribute about $228,000 and the balance would need to come from the transit partners.

 

Mayor Foy asked where the money for the Long Range Transit Plan was budgeted. Mr. Horton said it had not been budgeted yet, and they may try to fund it from current year funds.

 

Mr. Horton noted that some trips from the Town Operations Center would be shorter, and they would have the budget analyst determine this. He said he also thought they would be buying hybrid engine vehicles to further reduce fuel costs.

 

Mr. Bonk said some funds were explicitly dedicated to buying hybrid buses. He said the Town had a request into the State for replacement of 28 buses, and he said hybrid and electric buses would certainly be considered. Mr. Horton noted that it would be a year or so before those buses were purchased.

 

Council Member Ward said that perhaps the $2 million could be used for buses. Mayor Foy said it would cost $15 million to buy the buses. Mr. Bonk added that the Town had no expectation of receiving funding for 28 buses. Mayor Foy asked if the Town could get a 20 percent match. Mr. Bonk said that was possible.

 

Mayor Pro Tem Strom said combining services needed to be looked at. He explained that yard waste and leaf pick up could be scheduled services instead of weekly services. He said this would demonstrate the Town was taking the fuel crisis seriously.

 

Council Member Easthom asked if the Town had considered bio-diesel fuel.

 

Mr. Horton said the Council had set policy to buy bio-diesel whenever it could and staff had made reallocation of monies for that purpose.

 

Mr. Heflin said they were at or below budget for fuel and they continued to buy standard diesel while the budget was based on bio-diesel.

 

Council Member Ward said the Council should have a discussion about funding the difference so they could buy bio-diesel.

 

Mr. Heflin said they had informed Council that the policy was to stay within budget and that they would buy the best fuel the budget would allow.

 

Council Member Ward said they should put in a larger cushion for fuel to weather those increases in fuel so they could buy bio-diesel.

 

Mr. Horton said there would have to be a discussion with the transit partners as well.

 

Council Member Greene said it would be easy to make the switch by setting a reserve to buy bio-diesel. She said the option would be to buy bio-diesel as long as it did not exceed diesel by a certain percentage.

 

Mayor Foy asked that a policy to this effect be put before the Council. He also asked that Council Members Easthom and Ward convey this information to the transit partners.

 

Budget Development Process

 

Mayor Foy asked Mr. Horton to go over the process, noting that Option Three had been recommended. He noted that the plan could be modified given their experience and what is most effective. He said that was why he thought that Option Three was the best. He said it gave advisory boards a chance to bring requests to the Council.

 

Council Member Ward asked that advisory board presentations be moved up to February instead of late March.

 

Mayor Foy said the boards would give brief presentations about specific issues.

 

Council Member Hill said that the boards should make presentations at the January forum. It was the consensus of the Council that the boards would not be ready in January.

 

Council Member Kleinschmidt said it was important that the departments and boards have time to get their presentations together.

 

Mayor Pro Tem Strom said they could invite the boards to submit requests in writing, then wait until later when the figures were more accurate.

 

Mayor Foy requested that advisory board presentations be moved to early March. He asked staff to have the proposed schedule for the Council at the January 23 meeting.

 

Review of Status of Comprehensive Plan Implementation

 

Mayor Foy said that Ms. Culpepper would give highlights on Council Goals so that the Council would know what their work plan was for the year and where they were headed.

 

Ms. Culpepper said the goals were divided into three tiers - first, second and third priority - with each goal’s current status.

 

Ms. Culpepper made brief comments on the Highest Priority goals. Following are the goals and their current status:

 

1)      Downtown Initiative: Development of Parking Lots 2 and 5 Initiative making progress and is currently in peer review.

2)      Martin Luther King Recommendations Implementation: Almost complete.

3)      Additional Neighborhood Conservation Districts: Work underway and reports on Green Wood, Morgan Creek, Pine Knolls, and Coker Creek due in April. When reports come in Council will be considering overlay zoning districts.

4)      Horace Williams: Making progress.

5)      Transit Master Plan: Making progress.

6)      Clean Water Actions: Work continuing.

7)      Comprehensive Plan Affordable Housing Goals: Making progress.

8)      Small Area Planning Process for Rogers Road Residential Area and Greene Tract: Multijurisdictional approach. Preliminary work has begun, and full process to begin in June.

9)      Advisory Board Recruitment for Diversity: Progress being made.

10)  Monitor/Evaluate Land Use Management Ordinance Phase II: January public hearing, changes based on Legislative changes, list of text amendments.

11)  Evaluate Feasibility of Downtown Transit Transfer Center: Funding identified to proceed with consultant effort, request for qualifications, transit partners meet in February.

12)  Ten-Year Plan to End Homelessness: Steering committee met in fact gathering mode, information to be presented to community.

13)  Tree Ordinance: Related to Goal #10.

14)  Solid Waste: Mayor Pro Tem gave update.

 

Mayor Pro Tem Strom said the Solid Waste Management Plan Work Group was formulating a series of recommendations on solid waste. He said they would be discussing those in January and February and in spring a draft recommendation would come forward. He said there was an atmosphere of competition in Orange County and that the process had been interesting but not particularly easy.

 

Mayor Pro Tem Strom said all the issues were on the table and that the group would be dealing with this in more detail in the coming year.

 

Council Member Ward said there were concerns that our garbage would be transported far away. Mayor Pro Tem Strom said the group was going category by category and looking into that.

 

Council Member Greene asked if there were any questions about recycling Styrofoam. Mayor Pro Tem Strom said there were but it was not economically feasible. He added that some items actually cost money to recycle.

 

Council Member Ward said this issue should be brought to the table at the Assembly of Governments meeting. He noted that the Town of Chapel Hill was organizing the next meeting and this could be the single item of discussion.

 

Mayor Pro Tem Strom said there needed to be an open discussion on solid waste with Orange County and Carrboro.

 

Mr. Horton said they could work on a tentative agenda for the meeting that could be sent out well in advance.

 

Council Member Kleinschmidt said the meeting was a sink hole of discussion that never accomplished anything. He said it was a waste of three hours and was not a functioning meeting.

 

Mayor Foy said they could make the decision to cancel it, but it should not be discussed at this meeting.

 

Ms. Culpepper returned to the Highest Priority goals.

 

15)  Park and Ride 15-501: Mr. Bonk elaborated.

 

Mr. Bonk said he was surprised to see that there had been funds earmarked for the park and ride lot on US 15-501. He said funding had been spread over a three-year period and they were looking at possible sites and criteria.

 

Council Member Harrison said it was linked to the Transit Plan and asked if funds could be used for more than one site. Mr. Bonk said they could.

 

Mr. Horton said they were looking at a site at the underpass on I40. He said they could use money to fund a park and ride lot when the development proposal comes forward.

 

16)  Transfer of Development Rights: Orange County hired consultant to work on this.

17)  Elections Financing:

 

Mr. Karpinos said there was a short legislative session, and the bill was not likely to come up until next year.

 

Mayor Foy asked if anything could be done with the law or should they resubmit the bill.

 

Council Member Hill said the committee would meet one time and report to the Council.

 

18)  Communications with Orange County: Mr. Horton elaborated.

 

Mr. Horton recommended that this be modified because he detected zero interest. He said Chatham County was willing to meet but not on a regular schedule. Mayor Foy said the Council could consider moving the goal to a lower priority.

 

19)  Comprehensive Parking Strategy: Proposal for strategy.

20)  Advisory Board Review of Comprehensive Plan: Proposal before Council, recommending process for revision of the plan.

 

Proposed Process for Development of Small Area Plan for the Rogers Road Neighborhood

 

Ms. Culpepper described the location of the Rogers Road area and Greene Tract. She said the resolution that was adopted began this process and initiated discussion with Orange County and Carrboro. She said the resolution would come to the Council at a business meeting.

 

Mr. Horton said if the Council had interest in this, staff could have the item for the January 23 meeting.

 

Council Member Thorpe said he would volunteer to work with Mayor Foy on the committee to develop the process.

 

Mr. Horton said the committee would outline the process and make a recommendation to the Council. Mayor Pro Tem Strom said the guidelines and time schedule needed to be followed.

 

Ms. Culpepper said the process would take from 18 months to two years to complete.

 

Council Member Greene said the Council needed to make a commitment to the conservation easement, that had not been done in the past.

 

Mayor Pro Tem Strom said the public process was the biggest time commitment. Mayor Foy said they needed to establish a start date of July 1, 2006. He instructed staff to bring a resolution to the Council on January 23 regarding the timeframe.

 


Update on Neighborhood Conservation District Process

 

Ms. Culpepper said there were four neighborhoods that were previously mentioned that were being considered for Neighborhood Conservation Districts. She said they would go through the public hearing process.

 

She said a consultant should be hired for the Mason Farm subdivision in July.

 

Mayor Pro Tem Strom and Council Member Easthom said they were pleased with the work by Clarion.

 

Process for the Development of the Horace Williams Property

 

Ms. Culpepper said they were working on a process for Council consideration identifying points in the process where public hearings and forums would be appropriate. She said it was number four on the priority list and that the Horace Williams Citizens Committee had provided recommendations.

 

Mayor Foy said the Council needed to decide how it was going to participate in the process. UNC will develop a plan, as will the Town, and then the two will converge, he said. He said they knew it took a long time to develop a zone. And he added that it was possible that the airport would not be closed.

 

Council Member Easthom said she wanted to know the end result of what the University wanted out of the committee. She said she saw the Town starting the process now, and that they needed to proceed.

 

Mayor Pro Tem Strom said he agreed. He added that the Citizens Committee had done a great job and he agreed that all that the Town controlled was the process. He said it was an issue of zoning authority with UNC, and it was unclear if the Town should proceed. Mayor Pro Tem Strom said he believed they should embrace the work of the Citizens Committee and develop a zone.

 

Council Member Ward said it was premature to put another zone on land if they thought the current zoning suited the Town. He said they should let the University know that.

 

Mayor Foy said they had an interest as a community in seeing a Master Plan. He said he didn’t believe the Town had a zone for that property and that it would have to develop one.

 

Council Member Hill said developing a zone would be easier if they had a transit plan and that completion of the zone in 18 months was unrealistic.

 

Mayor Foy said they needed unbiased information.

 

Mr. Horton said the process they recommended was the fiscal equity model, done by a consultant, and then the Town and UNC would decide if the model was acceptable.

 

Mayor Foy said they were stuck at the foundational level.

 

Mayor Pro Tem Strom said they could not proceed until they had a response to the committee’s report and foundational studies.

 

Council Member Kleinschmidt said that the priority was movement of the transit plan and fiscal equity plan.

 

Mayor Foy said the committee has gone as far as it could go without further information. He added that the committee should not have to stick to the plan.

 

Council Member Hill asked if they were going forward in good faith.

 

Council Member Ward said the next stage needed to be a meeting of the minds, and the foundational studies.

 

Mayor Pro Tem Strom said he agreed that they did not have enough data and they needed it in writing.

 

Mayor Foy said they should ask how this was going to fit into their goals, how do they go about developing a zone and then work on development of a zone.

 

Council Member Easthom said she would like to see a detailed charge and timeframe for this committee.

 

Linda Convissor, Director of Local Relations, University Relations, said Ken Broun would be the leader of the committee and it would evolve over a short time.

 

Mr. Horton said that Carrboro had an interest in this too and they should be included. He said they needed to push for transit studies, and fiscal equity.

 

Mr. Bonk said the process would be as follows: draft scope of work, develop budget, Request for Qualifications, review, interviews with consultants, with work to begin in mid-summer or fall. He added that the study would take at least a year, and then they would seek feedback.

 

Ms. Miller said that once the scope of work was discussed, the information would go back to UNC, Chapel Hill and Carrboro for discussion.

 

Mayor Pro Tem Strom asked about the process for creating a zone. Mr. Horton said services were in place. He said it would come concurrently beginning with a starter zone, transit issues, fiscal equity, land conservation, etc.

 

Mayor Foy asked if they would develop a zone that could be expanded. Mr. Horton said you could expand the density, and change the floor area as transit was developed.

 

Mayor Pro Tem Strom said he liked the master plan approach, to know what was going to develop then put the scope of the whole project out to the public.

 

Mayor Foy asked what the timeframe would be. Mr. Horton said creation of the last zone took a year. Mayor Foy asked if they could say it would take 18 months.

 

Council Member Ward said they had the information to create a zone to protect their infrastructure and if the University wanted them to move faster they could provide the Town with the information. He said he didn’t know why there was any reason for the University to mistrust the Town. He said the Town had been a good partner. Council Member Ward said the fact that the University had not said that they respect the Town’s zoning authority made him think they mistrusted the Town.

 

Council Member Easthom said they should engage in the Long Range Transit Plan, engage the University on land conservation, fiscal equity and the Horace Williams Citizens Committee, and use that as part of their contingency.

 

Mayor Pro Tem Strom said he wanted staff guidance on Recommendations #1 and #2 in the Horace Williams Citizen Report. He said he wanted to send a special thank you to the committee.

 

Julie McClintock, Chairman of the Horace Williams Citizens Committee, said the committee would present the report to the Council at their meeting on January 23.

 

The Council adjourned the meeting at 12:33 p.m. for lunch. The meeting was reconvened at 1:08 p.m.

 

2005 Legislative Update

 

Mr. Karpinos told the Council that the General Assembly had a short session and would not convene again until May. He said since the session had been short the Legislature generally limited the matters they discussed.

 

Mr. Karpinos said that the Town’s requests for legislation, both local and state-wide, with the exception of efforts to obtain improved State funding for protection of University facilities, were generally not well received last year.

 

Mr. Karpinos said that the local legislation requested by former Council Member Dorothy Verkerk, regarding per-ticket event fees to be earmarked for public transportation, could be submitted again in March or April.

 

Council Member Ward asked if any key legislation had passed. Council Member Harrison said that the DWI bill had passed.

 

Council Member Hill said he wanted to know the distribution of the 7 percent sales tax.

 

Ms. Johnson said that the tax was based on population. Council Member Hill said he wanted to know what the statewide distribution was per person. Mr. Karpinos said that could be explored through the League of Municipalities.

 

Council Member Hill said he had spoken to Carrboro Mayor Mark Chilton about the undeveloped property at the terminus of Cameron Avenue and the need for the road into that property to line up with the existing street. He said the two towns needed to put together a street plan and a joint development plan.

 

Council Member Hill said an analysis also needed to be done concerning parking fees.

 

Council Member Ward said the parking needs of nearby retail needed to be identified in the downtown area. He said they needed to identify where they were going to fit in the parking spaces they would lose from Parking Lot 5.

 

Mr. Horton said he had discussed that with Steve Allred and with RAM and that RAM was willing to construct parking if the University would pay for it.

 

Council Member Kleinschmidt said they needed to develop ways to recoup money for parking.

 

Council Member Easthom said they needed to discuss shared parking on Rosemary Street and Lot 5.

 

Mr. Horton said Council goal #19 could combine downtown parking and development of a parking strategy.

 

Update on Explanation of WiFi Issues

 

Mr. Avery gave a Power Point presentation outlining wireless technology-based strategies for providing community-wide wireless service.

 

Mr. Avery said that there were a number of ways to expand local wireless development. He said there could be “hotspots” of service. He said there could be inside buildings access, outside access, neighborhood coverage and coverage within schools.

 

Mr. Avery said it might also be possible to provide service through a traffic signal fiber optics project. He explained the option offered by a variety of vendors.

 

Council Member Easthom said small towns that considered this service had potential partners. She said ideally, Chapel Hill would involve the schools and the university. Council Member Easthom said service could be provided through a public private partnership without a tax increase. She said a committee should be formed to explore its feasibility and then follow through with the public hearing process.

 

Council Member Ward said he would like to hear from the experts.

 

Mr. Avery said the Technology Committee could come back with a recommendation in the next couple of months.

 

Mayor Foy said the wireless initiative should be prioritized as a goal and developed over the next couple of months.

 

Other Issues

 

Mayor Pro Tem Strom recommended adding an economic development position. He said the Town had been successful with the Comprehensive Plan, and its goals and issues. He said the Council needed to look at its opportunities. He said the person would represent the Council’s interests. He recommended funding the position in this budget cycle.

 

Council Member Ward said he supported the idea and would serve on a committee to investigate the position. Council Member Easthom said she was supportive of the position.

 

Mayor Foy said he was skeptical of the idea. Council Member Greene said she was also skeptical of the position. Council Member Harrison said he too was skeptical but that he was willing to serve on the committee.

 

Council Member Kleinschmidt said he shared their skepticism and that the position would need justification.

 

Council Member Ward said he wanted to see reports on the following items:

Council Member Ward said the Town was well poised to do something about the green house emissions issue. He recommended that the Town allocate staff and resources to work with Doug Crawford-Brown at UNC.

 

Council Member Thorpe recommended that the Town approve five internships.

 

Mayor Foy asked Mr. Horton if there was a possibility of changing the Town Center zoning district to permit the building envelope to be filled. He asked if this could be done through amendment of the Land Use Development Ordinance.

 

Mr. Horton said there was a need for additional investment in downtown properties. He said staff was recently looking at some of the buildings that were in need of repair. He said the property owner might be favorable to making investment in the property if there was greater certainty in the process.

 

Mr. Horton said you could achieve that if you were to allow the owner certain increases in density and allow the owner to proceed on the basis of a permit and allow full building build-out. He said you might be able to set up a process where the building could be completely renovated.

 

Mayor Foy said it was an effort to spur reinvestment in downtown in these aging structures.

 

Mr. Horton said by amending the Land Use Development Ordinance accordingly, it might allow some of these building to be renovated and not demolished.

 

A brief discussion followed concerning changing the appearance of buildings.

 

Council Members then took the 2005 Council Goals priority list and suggested various changes, updates and additions for the 2006 Council Goals. This discussion is reflected in the 2006 Council Goals and Implementation Plan.

 

The meeting adjourned at 3:35 p.m.