AGENDA #1b
MEMORANDUM
TO: Mayor and Town Council
FROM: Roger L. Stancil, Town Manager
SUBJECT: Public Forum on the Annual Budget, Capital Program, Use of Grants and Related Items and Potential Legislative Requests
DATE: March 28, 2007
INTRODUCTION
The purpose of this memorandum is to provide background information for the Council’s public forum tonight.
Tonight, the Council will hold a public forum at which we will submit a status report on preparing the 2007-2008 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 2007-2008.
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
An additional public hearing on the budget and related items will be held at 7:00 p.m. on:
May 16 - Recommended budget for the service year beginning on July 1, 2007; use of transit grants; recommended 15-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.
TOPICS FOR THE PUBLIC FORUM AND HEARING
Information on each topic for the forums tonight is provided below.
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Page |
Topic |
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A. Annual Budget: preparing the budget for the service year beginning on July 1, 2007. |
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B. Capital Program: capital improvement needs for 2007-2022. |
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C. Community Development Grant: use of the 2007-2008 Community Development grant. |
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D. Housing Capital Funds Program: use of the 2007-2008 federal Housing Capital Funds Grant for public housing improvements, renovations and services to public housing residents. |
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E. HOME Program: use of 2007-2008 federal HOME grant for housing and community development services in Chapel Hill and Orange County. |
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F. Public Transportation Grants: use of 2007-2008 federal and State grants for transit capital projects, operating costs and transportation planning. |
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G. Downtown Service District: potential changes in services for the year beginning on July 1. |
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H. Potential Legislative Proposals: suggestions for legislation that might be sought in the 2007 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.
A. Annual Budget for 2007-2008
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 2007-2008 budget and service year will begin on July 1, 2007 in accord with State law.
Purpose
The annual budget includes funding for 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 April 23rd, we will submit a recommended budget for the Council's consideration and invite comments by citizens at a public hearing scheduled for May 16th. The Council's adopted budget process, with amendments proposed on January 31, 2007, includes consideration of adopting a budget on June 11th.
The purpose of this forum is to receive citizens' suggestions and comments regarding capital projects proposed for the next 15 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 15 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 15th 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 15th 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.
2007-2008 Funding
In the current 2006-2007 budget year, $1,176,000 was allocated to the annual capital improvement fund. In 2007-2008, $690,000 will be required to make finance payments for projects already under contract. The 15-year plan included in the 2006-2007 budget projected a capital improvement need in 2007-2008 of $2.8 million. We have identified priority options totaling $1.56 million for 2007-2008.
Next Steps
We will submit a recommended capital program on April 23rd for a public hearing on May 16th.
The Council normally adopts a Capital Improvements program in June as part of overall decisions on the budget.
C. 2007-2008 Community Development Grant
The purpose of this forum is to receive citizens' comments on how the Town should use $596,282 of Federal Community Development grant funds and $44,026 of residual funds in 2007-2008.
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.
Interested parties should contact the Planning Department for an application for funding.
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.
2007-2008 Funding
The U.S. Department of Housing and Urban Development has allocated $596,282 of Community Development funds to the Town in 2007-2008. The 2006-2007 Community Development grant was $598,310.
Current 2006-2007 Program
On April 24, 2006, the Council adopted a plan for using 2006-2007 Community Development funds. The 2006-2007 plan focuses on public housing rehabilitation, community services activities and affordable housing initiatives with EmPOWERment and Orange Community Housing and Land Trust.
For more information on Community Development legislation and a related list of services and projects, see Attachment 1.
Next Steps
Citizens will have an opportunity to comment on a proposed 2007-2008 Community Development Plan at tonight’s public forum.
On April 23, 2007, we plan to recommend that the Council consider a 2007-2008 Community Development Plan.
D. 2006-07 Housing Capital Funds Grant
The purpose of this forum is to receive citizens’ comments on using the 2007-2008 Housing Capital Funds Grant.
Purpose
The Town may use the annual Housing Capital Funds Grant for renovating and otherwise improving 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 2007-2008
The 2006-2007 grant was $541,361. We have not received notice of the amount for 2007-08, but estimate that it will be somewhat lower.
Current grant funds are being used primarily for renovations of 11 apartments in the North Columbia Street neighborhood.
For more information on the preliminary proposal for the 2007-2008 Capital Fund Program for Public Housing Renovations and Resident Services, see Attachment 2.
Next Steps
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 11, 2007, we plan to recommend that the Council consider a 2007-2008 plan for using these funds.
The forum tonight provides an opportunity for citizens to comment on how to use 2007-2008 federal HOME program funds in Chapel Hill and throughout 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.
2007-2008 Funding
The U.S. Department of Housing and Urban Development awarded the HOME Consortium $661,229 for 2007-2008. There is a local match requirement for these funds of $148,776. The Town’s portion of this match is $60,998. As in past years, we will propose to use funds from the Housing Loan Trust Fund for the Town’s portion of local match. We also propose to reallocate $560,027 of funds from previous years.
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 2006-2007 HOME Program and Funding
In 2006-2007, the HOME program in Orange County totaled $950,580. This amount includes the grant award ($666,560), 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 percent
· Orange County 40 percent
· Carrboro 14 percent
· Hillsborough 5 percent
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. Each year, the participating jurisdictions update the Plan to include an annual Community Development and HOME Program Plan, establish priorities for use of funds, and also include a description of housing and community development initiatives and programs in Orange County. The Plan is submitted to the Department of Housing and Urban Development in May of each year. This year’s Plan will be submitted on May 15, 2007.
For more information on the uses and objectives of HOME Program funds, see Attachment 3.
Next Steps
The 2007-2008 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.
On April 23, 2007, we will ask the Council to consider a plan for use of these funds.
F. 2007-2008 Public Transportation Grants
The forum tonight is an opportunity for citizens to comment on transit services and projects in 2007-2008 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 2007-2008, federal funding for transit services is estimated to be about $1.1 million and State funding is estimated to be about $3.4 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.
2007-2008 Services
Chapel Hill Transit provides:
Next Steps
The Manager will present a recommended budget to the Town Council on April 23, 2007.
A public forum to receive citizens' comments on transit operations is scheduled for May 16.
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 2007-2008;
· 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 2007-2008
We estimate that funding will remain about the same for the Downtown Service District in 2007-2008 as in 2006-2007, at $134,000.
Downtown District Services
Currently, downtown district funds are allocated to the Chapel Hill Downtown Partnership, to a grounds maintenance employee for the downtown and for a reserve for possible parking alternatives.
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 a public hearing on May 16th.
The Council normally adopts the downtown district tax rate in June with the overall budget and makes decisions concerning services 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 2007 legislative session of the North Carolina General Assembly. The time has passed for submitting local bills, but comments are welcome regarding statewide initiatives.
ATTACHMENTS
Community Development (p. 11).
Housing (p. 25).
HOME Program (p. 31).
3. Uses and Objectives of HOME Program funds and summary of 2006-2007 HOME Program.