AGENDA #1
MEMORANDUM
TO: Mayor and Town Council
FROM: W. Calvin Horton, Town Manager
SUBJECT: Initial Public Forum on the Annual Budget, Capital Program, Use of Grants and Related Items and Potential Legislative Requests
DATE: January 25, 2006
INTRODUCTION
The purpose of this memorandum is to provide background information for the Council’s public forum tonight.
We suggest that the Council receive comments tonight in a combined forum format in which citizens may make comments regarding any of the forum topics.
OVERVIEW OF THE BUDGET PROCESS
Through the Town's annual budget process, the Town Council makes decisions on the level and types of services provided to citizens with local, State and federal funds.
Adoption of a budget determines in many respects the level of resources to be available for Town services over the coming budget year. Normally, there are limited options for adding to the budget after it is adopted.
The budget process is both one of the most important functions and responsibilities of the Council and a key opportunity for citizens' participation in Town government.
BRIEF BACKGROUND
Process for Participation by Citizens
Additional public forums and hearings on the budget and related items will be held at 7:00 p.m. on:
March 22 - Status report on development of a budget, preliminary capital program and proposed grant applications related to housing and community development.
May 10 - Recommended budget for the service year beginning on July 1, 2006; use of transit grants; recommended fifteen-year capital program; Downtown Service District program.
Citizens may also make comments to the Mayor and Council by letter, fax, or e-mail at any time in the budget process.
Notice of the budget forum was published in the Chapel Hill News on January 15th and 22nd (see attachment 1) as was additional notice specifically concerning Community Development funds. We mailed or emailed notices to community groups on January 19. Notice has also been provided on the Town’s web-site beginning on January 17th.
TOPICS FOR THE PUBLIC FORUM AND HEARING
Information on each topic for the forums tonight is provided below.
|
Page |
Topic |
|
3 |
Annual Budget: preparing the budget for the service year beginning on July 1, 2006. |
|
3 |
Capital Program: capital improvement needs for 2006-2021. |
|
5 |
Community Development Grant: use of the 2006-07 Community Development grant. |
|
6 |
Housing Capital Fund Program: use of the 2006-07 federal Housing Capital Fund Grant for public housing improvements, renovations and services to public housing residents. |
|
7 |
HOME Grant: use of 2006-07 federal HOME grant for housing and community development services in Chapel Hill and Orange County. |
|
9 |
Public Transportation Grants: use of 2006-07 federal and State grants for transit capital projects, operating costs and transportation planning. |
|
10
10 |
Downtown Service District: potential changes in services and tax district boundary for the year beginning on July 1.
Potential Legislative Proposals: suggestions for legislation that might be sought in the 2006 session of the General Assembly. |
MANAGER’S RECOMMENDATION
That the Council refer comments and questions to boards and commissions and to the Manager for consideration and recommendations in the budget process.
This forum provides an opportunity for citizens to comment on any aspect of the Town's budget and budget documents, including services that should be added, eliminated or changed. The Town's 2006-07 budget and service year will begin on July 1, 2006 in accord with State law.
In addition, we invite citizens' comments on the preliminary budget information for 2006-07 included as Attachment 2. This information provides an outline and summary of preliminary costs estimates for a base budget for 2006-07, and potential additional costs to the base budget considering information currently available. Both the base budget and potential additions to the base are shown relative to total revenues estimated to be available in 2006-07 and the difference between estimated revenues and costs.
Purpose
The annual budget includes primarily operating costs for police and fire protection, street maintenance, refuse collection, various other public works services, parks and recreation, public transit, the public library, planning, building inspection, engineering, legal and administrative services.
The annual budget includes one year's funding for cash-financed small projects such as sidewalks, greenways, street paving, as well as debt service payments on other capital projects.
In addition to setting Town service levels and property tax rates, the Council makes decisions on whether to adjust or adopt service fees for refuse collection, recreation programs, transit, development review, inspections and other services as part of the budget.
Next Steps
On March 22nd, the Council will hold a public forum at which we will submit to the Council a status report on preparing the 2006-07 budget. After presentation of the report, the forum will provide an opportunity for comments and requests from citizens or community groups regarding the budget status report, or any aspects of the Town’s budget for 2006-07.
On April 24th, we will submit a recommended budget for the Council's consideration and invite comments by citizens at a public hearing scheduled for May 10th. The Council's adopted budget process, with amendments proposed on January 23, 2006, includes consideration of adopting a budget on June 26th.
The purpose of this forum is to receive citizens' suggestions and comments regarding capital projects in the next fifteen years.
Purpose
A capital improvements program is a plan for major projects and purchases including:
· buying land for parks, open space or other Town services;
· sidewalks;
· streetscape;
· bikeways;
· greenways;
· park improvements;
· construction, renovation, expansion and improvement of Town buildings; and
· road, bridge and related improvements.
The Town’s capital programs have typically included a list of capital projects with cost estimates, a potential schedule and priorities for fifteen years, and existing or potential future funding methods for each project.
Identified funding sources may include current general revenues, money previously reserved for capital projects, grants, gifts and bond issues.
Many projects in the first year of the capital program normally are funded as part of the annual budget. Projects in the second through fifteenth years are normally not funded in the budget for the next year, although some may be financed through past bond issues, installment purchase contracts and other sources. Funding for most projects in the second through fifteenth years is considered in future annual processes.
Planning Process
Each year, the Town Council, citizens, boards and commissions, and staff consider the Town's capital project needs and possible funding sources for needed projects.
This process results in decisions by the Town Council regarding capital improvements that the Town may undertake as funding becomes available and is appropriated.
2006-07 Funding
As indicated in the initial 2006-07 budget information, we have assumed in our financial estimates that up to $2.192 million may be allocated for capital projects. Of this amount, $283,000 is for projects under contract (Base Budget) and $1,909,000 is for projects not currently under contract (Potential Additions to Base).
2006-2021 Capital Program
A summary of the current capital program and long-range projections as adopted by the Council for 2005-2020 is attached as background information (please see Attachment 3).
Next Steps
On March 6th, we will submit to the Council a preliminary capital program for fifteen years. The Council normally refers the preliminary capital program to various Town boards for review and comment. We recommend that you do so this year.
A public forum to receive citizens' comments on the preliminary capital program is scheduled for March 22nd.
Various boards and commissions will make recommendations to the Council regarding capital projects. We will submit a recommended capital program on April 24th for a public hearing on May 10th.
The Council normally adopts a Capital Improvements program in June as part of overall decisions on the budget.
C. 2006-2007 Community Development Grant
The purpose of this hearing is to receive citizens' comments on how the Town should use federal Community Development grant funds in 2006-2007.
All citizens' comments received in writing and at public hearings will be compiled and addressed in a Community Development plan to be submitted to the Department of Housing and Urban Development in May.
Purpose
The Town receives a federal grant each year to benefit low- to moderate-income families through projects such as:
· Housing repairs;
· Property acquisition;
· Neighborhood revitalization;
· Capital improvements; and
· After school programs.
Attachment 4 provides a summary of the ways in which Community Development grants can be used.
2006-2007 Funding
The U.S. Department of Housing and Urban Development has informed us that $598,309 will be available in Community Development funds for 2006-2007. The 2005-2006 Community Development grant was $666,392. A decrease in funding had been anticipated.
Current 2005-2006 Program
On May 9, 2005, the Council adopted a plan for using 2005-2006 Community Development funds. The 2005-2006 plan focuses on public housing rehabilitation, community services activities and affordable housing initiatives with Orange Community Housing and Land Trust and Habitat for Humanity.
Please see the Attachment 5 for a summary of the Town’s 2005-2006 Community Development program.
2005-2010 Consolidated Plan
In May 2005, the Orange County HOME Consortium consisting of the Town, Orange County, Carrboro and Hillsborough submitted a new Consolidated Plan to the U.S. Department of Housing and Urban Development covering fiscal years 2005-2006 thorough 2009-2010. The purpose of the Plan is to identify and prioritize the housing and community development needs for Chapel Hill and Orange County, and to suggest how the Town and the County will address the needs over a five-year period. The Plan includes a 2005-2006 Community Development and HOME Program Plan, establishes priorities for use of funds, and also includes a description of housing and community development initiatives and programs in Orange County.
As the lead entity of the HOME Consortium, Orange County hired a consultant to develop the Plan. The consultants held four focus group meetings to receive input from affordable housing and community service providers, citizens, and government staff on how to prioritize the affordable housing and community development needs in the County. Comments from these sessions are incorporated into the Consolidated Plan.
Next Steps
Citizens will have an opportunity to comment on a proposed 2006-2007 Community Development Plan at a public hearing scheduled for March 22nd .
We recommend the Council refer this program to the Town’s Housing and Community Development Advisory Board for comments and recommendations.
On May 8, 2006, we plan to recommend that the Council consider a 2006-2007 Community Development Plan.
D. 2006-07 Housing Capital Funds Grant
The purpose of this forum is to receive citizens’ comments on using the 2006-07 Housing Capital Funds Grant.
Purpose
The Town may use the annual Housing Capital Funds Grant for renovating and otherwise improving the public housing neighborhoods, and for services to public housing residents.
Federal rules give priority to work needed to meet requirements such as:
Estimated Grant for 2006-07
The 2005-06 grant was $601,728. We have not received notice of the amount for 2006-07, but estimate that it would be somewhat lower.
Current grant funds are being used primarily for renovations at the Airport Gardens public housing neighborhood. This year, renovation is expected to begin in 11 apartments in the North Columbia Street neighborhood.
Next Steps
We will submit a proposed plan for using the 2006-07 Housing Capital Fund Grant for citizens’ comments at the public hearing on March 22, 2006.
We recommend that the Council refer this program to the Housing and Community Development Advisory Board and other interested boards for comments and recommendations. On April 10, 2006, we plan to recommend that the Council consider a 2006-07 plan for using these funds.
The forum tonight provides an opportunity for citizens to comment on how to use 2006-2007 federal HOME program funds in Chapel Hill and Orange County.
Please contact the Planning Department or the Orange County Department of Housing and Community Development for an application for funding.
Purpose
Congress established the HOME program in 1992 to fund various housing services to benefit low-income families. HOME funding is in addition to Community Development grants, federal rental assistance, and grants for public housing operations and improvements.
Attachment 6 provides a summary of the ways under which HOME Program funds can be used.
2006-2007 Funding
The U.S. Department of Housing and Urban Development has not yet informed the HOME Consortium of the amount of the 2006-2007 grant. There will be a local match requirement for these funds. As in past years, we will propose to use funds from the Housing Loan Trust Fund for the Town’s portion of local match. If we receive funding of the same amount for 2006-07 as in the current year, we estimate that the Town’s share of the match could be approximately $65,000. However, it is possible that federal funding will be reduced for 2006-07.
Orange County Local Governments' Consortium
In 1992, the governing boards of Carrboro, Hillsborough, Chapel Hill and Orange County formed a consortium to receive HOME funds. Orange County is the lead agency in administering the HOME program.
Current 2005-2006 HOME Program and Funding
In 2005-2006, the HOME program in Orange County totaled $978,896. This amount includes the grant award ($707,949), the local matching funds and funds reallocated from previous years.
In accord with an agreement signed in 2002, the local matching funds requirements (in accordance with 2000 Census population figures) are as follows:
Locality Share
· Chapel Hill 41%
· Orange County 40%
· Carrboro 14%
· Hillsborough 5%
This year HOME funds have been budgeted primarily for property acquisition, homeownership assistance, new construction, rental assistance and second mortgage assistance. Please see Attachment 7 for a summary of the 2005-2006 HOME Program Plan.
Next Steps
In 2000, the participating governments established a HOME Program Review Committee that consists of elected officials and staff representatives from Orange County, Chapel Hill, Carrboro and Hillsborough. This Committee will prepare a proposed plan for using HOME funds. The Council will hold a public hearing on the proposal on March 22nd. In February, the Board of Orange County Commissioners will also hold a public hearing to receive citizen comment on the proposed plan. The 2006-2007 HOME program must be approved by the Town Council, the Orange County Commissioners, and the Hillsborough and Carrboro Boards of Aldermen prior to submission to the U.S. Department of Housing and Urban Development.
In May 2005, the Orange County HOME Consortium, consisting of the Town, Orange County, Carrboro and Hillsborough, submitted a new Consolidated Plan to the U.S. Department of Housing and Urban Development covering fiscal years 2005-2006 thorough 2009-2010. The purpose of the Plan is to identify and prioritize the housing and community development needs for Chapel Hill and Orange County, and to suggest how the Town and the County will address the needs over a five-year period. The Plan includes a 2005-2006 Community Development and HOME Program Plan, establishes priorities for use of funds, and also includes a description of housing and community development initiatives and programs in Orange County.
We recommend that the Council refer this program to the Town’s Housing and Community Development Advisory Board for comments and recommendations.
On May 8th we will ask the Council to consider a plan for use of these funds.
F. 2006-07 Public Transportation Grants
The forum tonight is an opportunity for citizens to comment on transit services and projects in 2006-07 including the use of federal and State grants for transit operations, capital projects and transportation planning.
Purpose
Transportation services, projects and planning activities are intended to provide alternatives to the use of single-occupant vehicles, reduce traffic congestion, reduce air pollution and assist people with disabilities affecting their mobility.
Estimated Funding
For 2006-07, federal funding for transit services is estimated to be about $1.1 million and State funding is estimated to be about $2.9 million.
Sharing of Local Costs
The University and Towns of Carrboro and Chapel Hill have agreed to share the local cost for transit services. The cost-sharing formulas are set forth in separate contracts with the University and Carrboro.
2006-07 Services
Chapel Hill Transit provides:
G. Downtown Service District
The purpose of this forum is to receive comments and suggestions from downtown business people, property owners and other interested citizens regarding:
· the use of Downtown Service District taxes in 2006-07;
· the scope of projects and programs in the service plan for the Downtown District.
Purpose
In 1989, the Council established a Downtown Service District in response to requests from several downtown businesses and property owners.
State law allows the Council to establish this service district and to apply a supplemental property tax to promote the economic vitality of downtown, enhance Town services in the downtown district and other related activities.
Most of the property in the Town Center-1 and -2 zones is in the district. Several properties used only for residential purposes are not in the service district.
Estimated Funding in 2006-07
We estimate that funding will remain about the same for the Downtown Service District in 2006-07 as in 2005-06, at $70,000.
Downtown District Services
Currently, downtown district funds are allocated entirely to the Chapel Hill Downtown Partnership.
Next Steps
We will develop recommendations for use of the downtown district funds and for any changes in the service plan as part of the budget process this spring.
The Council will hold an additional forum on March 22nd and a public hearing on May 10th.
The Council normally adopts the downtown district tax rate in June with the overall budget and makes decisions concerning services and the district boundary during June.
H. Potential Legislative Proposals
Tonight’s forum is also an opportunity for citizens and Council Members to propose potential legislative requests for the upcoming 2006 legislative session of the North Carolina General Assembly.
Next Steps
After hearing ideas from the public, the Council will have the opportunity to discuss these and any additional Council requests among themselves, and to share the ideas and requests with our local legislative delegation before submitting them for consideration by the General Assembly.
ATTACHMENTS
Budget
1. Notice of January 25th forums (p.12).
2. Budget Issues and Preliminary Estimates, dated January 12, 2006 (p. 13).
Capital Program
3. Summary of 2005-2020 Capital program (p. 34).
Community Development
5. Summary of 2005-06 Community Development activities (p. 39).
HOME Program
6. Uses and Objectives of HOME Program funds (p. 40).
7. Summary of 2005-06 HOME program (p. 41).