AGENDA #6a(1)

MEMORANDUM

TO:	Mayor and Town Council
FROM:	Roger Stancil, Town Manager
SUBJECT:	Recommended Budget Ordinance for the 2007-08 Fiscal Year
DATE:	June 11, 2007

PURPOSE

The attached budget ordinance would approve a final budget and set the tax rate for the 2007-08 fiscal year at 47.4 cents for the General Fund and 4.8 cents for the Transportation Fund for a combined tax rate of 52.2 cents, the same rates as in 2005-06 and 2006-07.  The tax rate for the Downtown Service District would be set at 9.0 cents, the same rate as in 2006-07.

The attached budget ordinance would approve a final budget with changes authorized by the Council in budget work sessions. 

COUNCIL DECISIONS AT BUDGET WORK SESSIONS

The attached budget ordinance presents a budget which is largely the same as the Manager’s Recommended Budget.  Changes to the Manager’s Recommended Budget include the following:

1. The tax rate was established at the 2006-07 level of 47.4 cents in the General Fund.
2. Use of appropriated Fund Balance was increased by $519,000 to a total of $4,315,000.
3. The Code Enforcement Officer position ($72,086) and related revenue ($8,500) was removed.
4. The initial contribution towards retiree health liability ($100,000) was removed.
5. Of the $180,000 recommended for Town Hall and Courthouse improvements, $150,000 has been removed.
6. One Police Officer II position ($52,000) has been frozen.
7. Council Contingency was reduced by $12,414 to $47,816.
8. Funding for gasoline was left at $2.20 per gallon.

The Council proposed reviewing the budget for the year mid-year to see if mid-year adjustments should be considered.

General Fund

The recommended final budget for the General Fund includes additions to a base budget as presented in the Manager’s Recommended Budget:

Personnel Costs

• 4 percent pay adjustments, effective October 2007 ($775,947)
• Staff development training expenses ($100,000)
• Reallocate the funds for the Traffic Program Supervisor position to two positions: Traffic Signal Technician and Administrative Technician

Operating Costs

• Planning consultants for Carolina North, high density development, sustainability and tree planning ($100,000)
• Youth Council ($35,000)
• Reverse Notification Development Plan ($22,000)
• IT website development ($21,500)
• IT support services at the TOC ($46,250)
• Housing subsidy - overhead costs ($176,000)
• Visitor’s Bureau - additional contribution ($15,000)
• Homelessness Initiative ($24,600)
• Land Trust Operating Assistance ($50,000)
• Performance Agreements with other agencies:

Human Services
	Human Services Advisory Board Recommendation	$250,000
	Friends of the Chapel Hill Senior Center	30,000
	Joint Orange/Chatham Community Action Agency	18,900
	Orange County Senior Center	46,700
	Orange County Retired Senior Volunteer Program	12,300
Arts
	Cultural Arts Dinner	500
	Chapel Hill Public Arts Commission	150,000
	Arts Center	10,000
Affordable Housing
	Orange Community Housing and Land Trust	174,000
	Affordable rentals	13,500
	Homelessness Initiative	24,600
Economic Development
	Chapel Hill Visitors Bureau	100,000
	North Carolina Athletics Association	30,000
	Downtown Partnership	70,000
	Orange County Economic Development Commission	6,000

Capital

• Transfer for Capital Improvements ($1,120,950) (See “Capital Improvements Fund” below for details.)

Transportation Fund

For the Transportation Fund, the final budget would include additions to base budget discussed by the Council and presented in the Manager’s Recommended Budget:

Personnel

• 4 percent pay adjustments, effective October 2007 ($240,081)
• One Mechanic (12 months) ($53,577)
• One Mechanic (6 months) ($31,587)
• Admin. Receptionist (12 months) ($49,162)
• One Parts Clerks (12 months) ($43,457)

Route and other service adjustments will be arranged after a public hearing to help determine the allocation of current resources.

Additional service requests may be made by the University or Carrboro.  Any additions to the budget would be handled through amendments to the adopted budget, with funding for additional service being provided by the requesting party in accord with previous funding agreements.

Capital Improvements Fund

The final Capital Improvements Fund budget totals $1,296,200 and includes the following:

Project	2007-08 Budget
Debt Service	$	689,900
Municipal Operations Facilities
Extraordinary Maintenance, Emergency Repairs		90,000
Police Dept HQ - Capital Maintenance		80,000
Fire Station # 5 Capital Maintenance		7,000
Town Facilities Leased by Others
Courthouse Renovation or Design for Relocation of Facilities		30,000
Sport Art Gymnastics Building and Grounds		14,000
Infrastructure
Curb Cut Improvements - Americans with Disabilities Act Compliance		25,000
Jay Street Paving		6,000
Capital Repairs - Parking Lots/Bike and Pedestrian Paths/Greenway Trails		75,000
Cameron Avenue Railroad Crossing Improvements (Town Share)		9,000
Communications and Technology
Fiber Optic Network		50,000
Parks and Other Public Use Facilities
Small Park Improvements		60,000
Greenways		20,000
Cemetery Beautification		20,000
A.D. Clark Pool - Capital Maintenance		17,300
Tennis Court Light Replacement		73,000
Parks Maintenance Assessment		30,000
Total		1,296,200

Other Funds

Off-Street Parking Fund

The Off-Street Parking Fund has a budget of $1,436,505 and includes seven months of revenue for Lot 5, because of the plans for the Downtown Initiative. If construction is delayed, then both costs and revenues will need to be adjusted mid-year.

Housing Fund

The Housing Fund has a budget of $1,833,013 and includes a subsidy from the General Fund of $176,000.

Grants Fund

Grants already accepted by the Council for 2007-08 are included in the Grants Fund and total $514,136. 

Other funds have been adjusted to allocate the proposed pay adjustments and the revised increase in medical insurance.  No other changes have been made in other funds.

RECOMMENDATION

That the Council enact the attached budget ordinance.