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 28, 2004
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 24 - Status report on development of a budget, preliminary capital program and proposed grant applications related to housing and community development.
May 12 - Recommended budget for the service year beginning on July 1, 2004; use of transit grants; recommended fifteen-year capital program; potential 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.
Notices of the
budget forum were published in the Chapel
Hill News on January 21 and 25. We mailed or emailed notices to community
groups on January 21. An ad regarding
Community Development funds was published in the January 16 edition of the Chapel Hill Herald.
TOPICS
FOR THE PUBLIC FORUM AND HEARING
Information on each topic for the forums tonight is provided below.
|
Page |
Topic |
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3 |
Annual Budget: preparing the budget for the service year beginning on July 1, 2004. |
|
4 |
Capital Program: capital improvement needs for 2004-2019. |
|
5 |
Community Development Grant: use of the 2004-05 Community Development grant. |
|
7 |
Housing Capital Fund Program : use of the 2004-05 federal Housing Capital Fund Grant for public housing improvements, renovations and services to public housing residents. |
|
7 |
HOME Grant:
use of 2004-05 federal HOME grant for housing and community development
services in Chapel Hill and |
|
9 |
Public Transportation Grants: use of 2004-05 federal and State grants for transit capital projects, operating costs and transportation planning. |
|
10
11 |
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 2004 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 2004-05 budget and service year will begin on July 1, 2004 in accord with State law.
In addition, we
invite citizens' comments on the preliminary budget information for 2004-05
included as Attachment 2. This
information provides an outline and summary of preliminary costs estimates for
a base budget for 2004-05, 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 2004-05 and the
difference between estimated revenues and costs. In addition, Exhibit 5 to Attachment 2
provides a Preliminary Overview for Debt Issuance and Repayment Options with a
discussion of current General Obligation debt repayment,
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, etc., 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 24th, the Council will hold a public forum at which we will submit to the Council a status report on preparing the 2004-05 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 2004-05.
On April 26th, we will submit a recommended budget for the Council's consideration and invite comments by citizens at a public hearing scheduled for May 12th. The Council's adopted budget process includes consideration of adopting a budget on June 7th.
B. 2004-2019 Capital Program
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.
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, 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.
2004-05 Funding
As indicated in the initial 2004-05 budget information, we have assumed in our financial estimates that about $1.7 million may be allocated for capital projects.
2004-2019 Capital Program
A summary of the current capital program and long-range projections as adopted by the Council is attached as background information (please see Attachment 3).
Next Steps
On March 24th, we will submit a preliminary capital program for fifteen years to the Council. Attached are preliminary comments from several advisory boards that considered the Capital Improvements Program over the past month. 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 24th.
Various boards and commissions will make recommendations to the Council regarding capital projects. We will submit a recommended capital program on April 26th for a public hearing on May 12th.
The Council normally adopts a Capital Improvements program in June as part of overall decisions on the budget.
C. 2004-05 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 2004-05.
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.
Please 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
· Youth employment programs.
Attachment 4 provides a summary of the ways in which
Estimated 2004-05 Funding
The U.S. Department of Housing and Urban Development has informed us that the Town may receive $711,000 of Community Development funds for 2004-05.
The 2003-04 grant was $723,000. In addition, the Town
budgeted $5,250 of reallocated
Current 2003-04 Program
On April 28, 2003, the Council adopted a plan for using the 2003-04 Community Development grant. The 2003-04 plan focuses on public housing rehabilitation and neighborhood revitalization in the Northside and Pine Knolls neighborhoods.
Please see Attachment 5 for a summary of the Town’s
2003-04
2000-2005 Consolidated Plan with
In May 2000, the Town and
On May 15, 2004, we will submit an annual update to the 2000-2005 Consolidated Plan that will include a 2004-05 Community Development program approved by the Town Council, and a 2004-05 HOME program approved by the Town Council, the Orange County Commissioners, and the Hillsborough and Carrboro Boards of Aldermen.
Next Steps
On March 22nd we will submit to the Council a proposed 2004-05 Community Development Plan. Citizens will have an opportunity to comment on the proposed plan at the public hearing scheduled for March 24th.
We will also ask the Town’s Housing and Community Development Advisory Board to develop recommendations to the Council.
On April 26th, we plan to recommend that the
Council consider a 2004-05 Community Development Plan. The Consolidated Plan is
due to the Department of Housing and Urban Development by
D.
2003-04 Housing Capital Fund Grant
The purpose of this forum is to receive citizens’ comments on using the 2003-04 Housing Capital Fund.
Purpose
The Town may use annual Housing Capital Fund 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 2004-05
The 2003-04 grant was $ 453,453. We have not received notice of the amount for 2004-05, but estimate that it would be about the same as this year.
Current grant
funds are being used primarily for renovations at the
Next Steps
We will submit a proposed plan for using the 2004-05 Housing Capital Fund Grant for citizens’ comments at the public hearing on March 24, 2004.
The Housing and Community Development Advisory Board and other interested boards will submit recommendations to the Council. On April 26, we plan to recommend that the Council consider a 2004-05 plan for using these funds.
The forum tonight provides an opportunity for citizens to
comment on how to use 2004-05 federal HOME program funds in Chapel Hill and
Please contact the Chapel Hill Planning Department or
the Orange County Department of Housing and
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.
2004-05 Funding
The U.S. Department of Housing and Urban Development has informed the HOME Consortium that the 2004-05 grant may be $757,000. 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 this level of funding is received, we estimate that the Town’s share of the match may be approximately $69,800.
In 1992, the governing boards of Carrboro, Hillsborough,
Chapel Hill and
Current 2003-04 HOME Program and Funding
In 2003-04, the HOME program in
In accord with an agreement in 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 and second mortgage assistance. Please see Attachment 7 for a summary of the 2003-04 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
We will ask the Town’s Housing and Community Development Advisory Board to make recommendations to the Council.
On April 26th, we will ask the Council to consider a plan for use of this grant.
F. 2003-04 Public
Transportation Grants
The forum tonight is an opportunity for citizens to comment on transit services and projects in 2004-05 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 2004-05, federal funding for transit services is estimated to be about $1.0 million and State funding is estimated to be about $1,566,000.
Sharing of
Local Costs
The University
and Towns of Carrboro and
2004-05 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 2004-05;
· 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, etc.
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 2004-05
The present downtown district tax rate is 6.2 cents per $100 of value. This rate generates about $70,000 of revenue.
Downtown District Services
Currently, downtown district funds are allocated for marketing and promotion of downtown, supplemental sidewalk cleaning, assistance and communication to downtown businesses.
The non-profit Chapel Hill Downtown Commission, Inc. is responsible for providing these services through a performance agreement with the Town.
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 24th and a public hearing on May 12th.
The Council normally adopts the downtown district tax rate in early 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 2004 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 28th forums (p.12).
2. Updated budget and financial information dated January 15, 2003 (p. 14).
Capital
Program
3. Summary of 2004-2019 capital program (p. 19/20).
Community Development
5. Summary of 2003-04 Community Development activities (p. 28).
HOME Program
6. Uses and Objectives of HOME Program funds (p. 31).
7. Summary of 2003-04 HOME program (p. 32).
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PUBLIC FORUM ON TOWN BUDGET BY THE MAYOR AND TOWN COUNCIL OF CHAPEL HILL 7 p.m., Wednesday, January 28, 2004 Council Chamber, Town Hall |
You are invited to express your views at a public forum by the Mayor and Town Council of Chapel Hill at 7 p.m. on Wednesday, January 29th, regarding:
Town services and projects for the budget for July 1, 2004 through June 30, 2005;
Capital improvement needs for 2004-2019;
How to use the 2004-05 Community Development grant to address housing and other community needs of lower income households and areas;
How to use the 2004-05 federal Housing Capital Fund grant for improvements, renovations and related items in public housing neighborhoods;
How to use the 2004-05 federal HOME grant in Orange County to address housing needs of lower income households;
How to use the 2004-05 federal and State transit grants for capital projects, operating costs, and transportation planning; and
The Downtown Service District boundary and services in the year beginning on July 1, 2004; and
Potential Legislative requests to 2004 session of North Carolina General Assembly.
The forum on January 28th is an initial step in the Mayor and Council's process for developing the 2004-05 budget and related items listed above.
An initial report by the Town Manager regarding the 2004-05 budget is available for citizens to review in the Town Manager's and Clerk's offices in Town Hall and at the reference desk at the Chapel Hill Public Library.
Additional hearings and forums will be held on:
March 24 - (Status report on development of budget; preliminary 15-year capital program; use of Community Development, HOME and Comprehensive grants, etc.); and
May 12 - (recommended budget and capital program).
If you would like to express your views in writing at any time, please feel free to send a letter to:
Mayor and Town Council
Town of
You may also send a letter by fax to the Town at 919-967-8406 or by electronic mail to [email protected]. Town staff will forward your letter or comments to the Mayor and each Council Member.
If you would like to have additional information, please feel free to visit the Town Manager's Office at Town Hall, send a fax or e-mail as indicated above, or write to:
W. Calvin Horton, Town Manager
By phone:
|
Annual budget |
Finance Department (968-2706) |
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Capital improvement program |
Planning Department (968-2728) |
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Community Development grant |
Planning Department (968-2728) |
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HOME grant |
Planning Department (968-2728) |
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Transit grants |
Transportation Department (968-2755) |
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Housing Capital Fund Grant for public housing renovations and related items |
Housing Department (968-2850) |
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Downtown Service District |
Manager's Office (968-2743) |
BUDGET ISSUES AND PRELIMINARY ESTIMATES
FOR 2004-05 BUDGET
GENERAL FUND
Brief Update on Current Year Budget 2003-04
Revenue in the current year is on target with budgeted amounts except:
We will do our best to limit expenditures to a total that is $800,000 under the budgeted amount in the General Fund as planned. If we are able to attain this goal, we should be able to maintain a balanced budget this year and use $800,000 for next year, consistent with practice in previous normal years.
Overall Budget Issues for 2004-05
Key issues for the upcoming budget for 2004-05 include:
Assumptions and Preliminary Estimates of Major Revenues
in the General Fund for 2004-05
In summary, we estimate total General Fund revenue of about $41.3 million, including normal use of $800,000 in fund balance and $491,000 in additional fund balance accumulated from prior year savings that the Council set aside to offset any potential tax rate increase in 2004-05.
General Fund Cost Issues and Preliminary Estimates for 2004-05
Considering the issues notes above, attached is a summary of our preliminary cost estimates for a base budget for 2004-05, and estimates for potential additions to the base budget.
Beyond 2004-05
The Council will need to determine
a potential schedule for the issuance of General Obligation bonds authorized in
November 2003, while planning for debt repayments necessary for design and
construction of the
General Fund Conclusion
TRANSPORTATION FUND
Brief Update on 2003-04 Budget
Revenue in the current year is on target with budgeted amounts except:
·
We received an increase of approximately
$889,000 in State operating assistance during 2003-04. This increase was the result of the General
Assembly’s decision to make a distribution on a one time basis of additional
State Maintenance Assistance Program (SMAP) funds to municipalities. It is anticipated that this additional
revenue would allow a transfer to the Transit Capital Reserve Fund to be used
toward the
Preliminary Revenue Estimates for 2004-05
· A major issue for the Transportation Fund each year is the level of federal operating and capital grants and State operating assistance available for transportation services.
· Our preliminary estimate of federal operating assistance includes an increase of about$93,000 in preventative maintenance funds.
· We anticipate that State operating assistance will continue at the budgeted level for 2003-04 (approximately $1,574,000).
·
Our preliminary estimate assumes continued
participation by the University and Carrboro at current levels and an
allocation of fund balance of about $535,000 in fund balance. Our preliminary
estimate of total revenues available for next year would be about $10.5
million.
Preliminary Cost Estimates for 2004-05
· Our preliminary estimate of costs to continue current routes and fare-free service and provide funding for compensation adjustments, expected medical and workers’ compensation increases, and matching funds for capital expenditures would total about $11 million next year. Expenditures at this level would require an allocation of fund balance of about $535,000 for 2004-05.
· Potential additions to the base budget include:
o Paying full year costs of pay increases authorized for 9 months in 2003-04.
o Providing for moderate increases in operating costs.
o Providing funds for a projected increase in medical insurance and workers’ compensation costs.
o Increase in General Fund charge for management services.
OTHER FUNDS
Parking Funds
Initial review of parking revenues and parking activity for the Town’s off-street parking lots this year indicates that parking revenues would be adequate to cover parking expenses and debt service.
Public Housing Fund
For the Town’s public housing
program, we anticipate a continuing level of federal support sufficient to ensure
that revenues cover costs.
EXHIBITS