AGENDA #1
MEMORANDUM
TO: Mayor and Town Council
FROM: W. Calvin Horton, Town Manager
SUBJECT: Public Forum on the Status Report on Developing the 2004-05 Budget, Preliminary Capital Improvements Program, Preliminary Grant Proposals, and Other Budget-Related Items
DATE: March 24, 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 one or more of the forum topics.
OVERVIEW OF THE BUDGET PROCESS
Through the Town's annual budget process, the Council makes decisions on the level and types of services provided to citizens. The Town’s service year begins on July 1 in accordance with State law.
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 responsibilities of the Council and a key opportunity for citizens' participation in Town government.
BRIEF BACKGROUND
Process for Participation by Citizens
In addition to the public forum tonight, an initial budget forum was held on February 2004. A public hearing on the Manager’s recommended budget and capital improvements program will be held at 7:00 p.m. on May 12, 2004.
Citizens may also make comments to the Mayor and Town Council or the Town Manager by letter or fax at any time in the budget process at the following address and fax number:
306 North Columbia Street
Chapel Hill, North Carolina 27516
FAX: 919-969-2063
Comments are also welcome by electronic mail to: [email protected] or
Agenda items and budget information are also posted on the Town’s website at: www.townofchapelhill.org.
Notices of the budget public forum and hearing were published in the Chapel Hill News on Sunday, March 14. Letters inviting citizens to attend and speak at the forum were e-mailed last week to about 200 community organizations and citizens. A copy of the notice is attached.
Copies of the status report on the development of the budget, capital program and plans for using grants are available for citizens to read at Town Hall, the Chapel Hill Public Library at the reference desk, and posted on the Town’s website.
TOPICS FOR THE PUBLIC FORUM
Information summarizing each topic for the forum tonight is provided below.
Page Topic
3. A. Status report on Development of the 2004-05 budget.
4. B. Preliminary Report on the 2004-2019 Capital Improvements Program.
5. C. Proposed Community Development Plan for 2004-05.
6. D. Proposed 2004-05 HOME Program for Housing and Community
Development Programs in Chapel Hill and Orange County.
8. E. Proposed 2004-05 Housing Capital Grant Program for Public
Housing Renovation and Resident Services.
8. F. Proposed Use of Transportation Grants in 2004-05.
9. G. Use of Downtown Service District Tax Funds for 2004-05.
MANAGER’S RECOMMENDATION
We recommend that the Council refer comments and questions to the Manager for consideration in the budget development process.
A. Status Report on Development of the 2004-05 Budget
Purpose
This forum provides an opportunity for citizens to comment on the Manager’s status report on development of the 2004-05 budget and on any aspect of the Town's budget, including services which should be reduced, added, eliminated, or changed (see Agenda Item #1a).
Annual Budget
The annual budget includes 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, housing, engineering, legal, and administrative services.
The annual budget includes funding plans for capital projects such as sidewalks, greenways, street paving, renovation of Town buildings and other 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, transit, development review, inspections, recreation services, and other Town services as part of the budget.
Current 2003-04 Budget
Copies of the current 2003-04 budget, which includes key service objectives for each Town department, are available for reading and copying at the Library Reference Desk and at the Town Clerk's Office in Town Hall, and are available on the Town’s website.
Quarterly and annual reports, which also are available at the Library, Town Hall, and on the website, provide additional background information on Town services.
Next Steps
On April 26, 2004, we will submit to the Council a recommended 2004-05 budget.
The Council has scheduled a public hearing for Wednesday, May 12, 2004.
Additional budget work sessions are scheduled for March 30, April 28, and May 19, 2004.
Under State law, a budget or interim budget must be adopted by June 30. The property tax rate must normally be established by June 30.
B. Preliminary 2004-2019 Capital Improvements Program
Purpose
The purpose of this forum is to receive citizens' suggestions and comments regarding capital projects proposed to be carried out or paid for in the next fifteen years (see Agenda Item #1b).
Capital Improvements Program
A capital improvements program is a plan for major projects and purchases including:
Construction, renovation, expansion and improvement of Town buildings,
Buying land for parks, open space or other Town services,
Sidewalks,
Bikeways,
Greenways, and
Infrastructure and Park improvements.
The Capital Improvements Program includes a list of capital projects with cost estimates, a potential schedule and priorities, and existing or potential future funding methods for each project.
Funding sources may include current general revenues, money previously reserved for capital projects, installment financing contracts, grants and bond issues.
Projects in the first year of a capital improvements program are normally funded as part of the annual budget.
Funding for projects in the second through fifteenth years is normally not determined except for those that are financed through past bond issues, lease-purchase or installment plans. Specific funding for projects in the second through fifteenth years is considered in future annual budget processes.
Current Capital Improvements Program for 2003-2018
The current Capital Improvements Program has been incorporated in the 2003-04 Town Budget document; copies of the Budget are available for citizens to read in the Town Clerk’s Office at Town Hall and at the Chapel Hill Public Library at 100 Library Drive.
2004-05 Funding
We have submitted a preliminary plan for 2004-2019, with specific funding for the projects in the 2004-05 fiscal year and in future years for projects involving installment financing. As indicated in the preliminary budget report, we propose a capital program budget of an estimated $1,659,000 for the 2004-05 fiscal year.
·
Next Steps
We will submit a recommended Capital Improvements Program on April 26, 2004, for a public hearing on May 12, 2004.
The Council generally adopts a capital improvements program in June as part of overall decisions on the budget.
C. Proposed Community Development Plan for 2004-05
Purpose
The purpose of this hearing is to receive citizens' comments on a proposed plan for use of 2004-05 Community Development grant funds (see Agenda #1c).
All citizens' comments received in writing and at public hearings will be compiled and addressed in a consolidated plan to be submitted to the Department of Housing and Urban Development in May.
Community Development Grants
The Town receives a federal grant each year to benefit low to moderate income households through activities such as:
Community services,
Housing repairs,
Property acquisition,
Neighborhood revitalization,
Economic development, and
Capital improvements.
Current 2003-04 Program
During the 2003-04 program year we received $723,000 of Community Development funds. In addition, the budget included $5,250 of reallocated funds, for a total of $728,250.
On April 28, 2003, the Council adopted a plan for using 2003-04 Community Development funds. The 2003-04 plan focuses on public housing rehabilitation, neighborhood revitalization, housing rehabilitation, and community service activities.
Estimated 2004-05 Funding
The U.S. Department of Housing and Urban Development has informed us that the Town will receive $711,000 of Community Development funds in fiscal year 2004-05. Our preliminary recommendations are to use Community Development funds for public housing renovations (primarily at the Airport Gardens community), neighborhood revitalization, housing rehabilitation, community service activities, and program administration.
Consolidated Plan with Orange County
On May 15, 2000, the Town and Orange County submitted to the U.S. Department of Housing and Urban Development a five-year Consolidated Plan covering fiscal years 2000–01 through 2004–05. The purpose of the Plan is to identify and prioritize the housing and community development needs for Chapel Hill and Orange County. The Plan also suggests how the Town and the County will address the needs over a five-year period.
Each year, we are required to submit an update to the 2000-2005 Consolidated Plan that would include an annual plan for spending Community Development and HOME Program funds. The Plan for use of Community Development funds is approved by the Council and the HOME Program Plan is approved by the Council, the Orange County and Hillsborough Commissioners, and Carrboro Board of Aldermen.
This year’s update to the Consolidated Plan will include the 2004-05 Community Development and HOME Program Plans as well as updates on housing and community development initiatives and programs in Orange County. We will prepare a draft Consolidated Plan for the Council’s consideration on April 26, 2004.
Next Steps
On April 26, 2004, we plan to recommend that the Council consider a Community Development plan for 2004-05. We also plan to recommend an update to the consolidated plan to the Council. The Consolidated Plan is due to the U.S. Department of Housing and Urban Development by May 14, 2004.
D. Proposed 2004-05 HOME Program
Purpose
Tonight’s hearing provides an opportunity for citizens to comment on a proposed plan for use of HOME program funds in 2004-05 in Chapel Hill and Orange County (see Agenda #1d).
The HOME Program
The HOME program was established to fund various types of housing programs to benefit low and moderate income families. HOME Program funding is in addition to Community Development grants, federal rental assistance, and grants for public housing operations and improvements currently received by the Town and Orange County. Normally, there is a local match requirement for this program.
2004-05 Funding
The U.S. Department of Housing and Urban Development has awarded the Orange County HOME Consortium $739,050 for fiscal year 2004-05. In addition, the participating municipalities are required to contribute a 25% match of the grant funds after subtracting administration costs of $73,905. The total match requirement is $166,286. The Town’s contribution to the matching funds is 41% or $68,177. Orange County, Carrboro, and Hillsborough will contribute $66,515, $23,280, and $8,314 respectively. Therefore, including program administration (allocated to the Orange County Department of Housing and Community Development), the Council will be planning activities for a total of $905,336.
The preliminary plan for using the 2004-05 HOME Program funds is attached. The plan proposes using funds for property acquisition, rehabilitation, second mortgage assistance and administration.
Orange County HOME Consortium
In 1992, the governing boards of Carrboro, Hillsborough, Chapel Hill and Orange County formed a Consortium to receive federal HOME Program funds. Orange County is the lead agency, and administers HOME program activities.
Current 2003-04 HOME Program Funding
In 2003-04, funds were budgeted for property acquisition, land acquisition, site development, new construction activities, second mortgage assistance, and administration.
Next Steps
On April 26, 2004, we will ask the Council to consider a plan for using the 2004-05 HOME Program grant.
Approval by the governing boards of governments in the Orange County Consortium is necessary to submit a joint plan to the U.S. Department of Housing and Urban Development for use of the HOME Program grant.
As the lead agency, Orange County would compile material from each government to submit a joint Consolidated Plan to the U.S. Department of Housing and Urban Development by May 14, 2004.
E. Proposed 2004-2005 Housing Capital Grant Program
Purpose
The purpose of this forum is to receive citizens' comments on using the 2004-05 Housing Capital Grant (see Agenda Item #1e).
Housing Capital Fund
The Town may use annual Housing Capital Grant funds 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:
Testing for and removing or otherwise controlling lead-based paint,
Testing for and removing or otherwise controlling asbestos, and
Renovations to meet the needs of disabled citizens.
Estimated Grant for 2004-05
We have not received notice of the amount for the coming year. However, a preliminary proposal for 2004-05 has been prepared based on last year’s funding amount of $453,500. Funding would be used for renovations in the Airport Gardens neighborhood, and administration and professional service fees. We will recommend a 2004-05 Housing Capital Fund Program for the Council’s consideration on April 26, 2004.
F. Proposed Use of Transportation Grants in 2004-05
2004-05 Funding
The purpose of this forum is to receive citizen comments on proposed use of State and federal transportation grants for 2004-05. Preliminary recommendations are as follows.
Operating Assistance
These funds would support services of the public transit system in the Chapel Hill/Carrboro area, which currently operates twenty two bus routes, demand responsive shared ride service and service for elderly and mobility impaired people.
The estimated amount of federal operating assistance to be requested for 2004-05 is about $1,025,000 and State operating assistance is estimated to total $1,566,000. Combined, these comprise about 29% of the operating cost of the transit system.
Capital Projects
Up to$718,664 of federal funds would be requested. In addition, State grant funds (10%) would be requested to help cover matching costs.
Proposed uses of grants are:
· Replace two shared ride vehicles, four supervisory vehicles, and nine vans for the mobility impaired services. Funds for ten expansion buses have also been requested and if funds are received may also be purchased.
· Technology funds for the bus fleet will include mobile data terminals for the demand response services and a new radio system.
· Purchase associated capital maintenance items, including air conditioning compressors, bus tires, and engine rebuilds.
Planning
About $180,000 of federal funds would be requested for short-range transit planning projects.
G. Use of Downtown Service District Funds
Purpose
The purpose of this forum is to receive comments and suggestions from downtown business operators, property owners and other interested citizens regarding the use of Downtown Service District taxes in 2004-05 (see Agenda Item #1g).
Downtown Service District
In 1989, the Council established a Downtown Service District in response to requests from downtown business and property owners. State law allows the Council to establish a service district and to apply a supplemental property tax to promote the economic vitality of downtown and enhance Town services in the downtown district.
2003-04 Downtown District Services
In the current service year, downtown district funds are allocated for marketing and promotion of downtown, operation of a Welcome Center, supplemental sidewalk cleaning, assistance and communication to downtown businesses, and support of promotional events.
The Council has set aside $10,000 of the current year’s $70,000 revenues. The Council has not yet determined how these funds are going to be used.
The Mayor’s Downtown Steering Committee is working on further recommendations that would affect the use of the Downtown Service District funds. A separate report will be forthcoming.
The non-profit Chapel Hill Downtown Commission, Inc. is responsible for providing these services through a performance agreement with the Town. The Downtown Commission has indicated they wish to continue performing these services for the Town in 2004-05.
Estimated Funding in 2004-05
The present downtown district tax rate is 6.2 cents per $100 of value. This rate will generate about $70,000 in the current year. We will make a recommendation on April 26, 2004, on the district tax rate for 2004-05.
ATTACHMENTS
(Note: Copies of the attachments have been provided to Council and are available in the Clerk’s Office in Town Hall, the reference desk of the Chapel Hill Public Library, and posted on the Town’s website, www.townofchapelhill.org).
1a. Status Report on Development of the 2004-05 Budget.
1b. Preliminary Report on the 2004-2019 Capital Improvements Program.
1c. Proposed Community Development Plan for 2004-05.
1d. Proposed 2004-05 HOME Program Plan.
1f. Proposed Use of Transportation Grants for 2004-05.
1g. Proposed Use of Downtown Service District Tax Funds.