MEMORANDUM
TO: Mayor and Town Council
FROM: W. Calvin Horton, Town Manager
SUBJECT: Public Forum on the Status Report of Developing the 2001-2002 Budget, Preliminary Capital Improvements Program, Preliminary Grant Proposals, and Other Budget Related Items
DATE: March 28, 2001
INTRODUCTION
The purpose of this memorandum is to provide background information for the Council’s public forum and hearing 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 Town Council makes decisions on the level and types of services to citizens. The Town’s service year begins on July 1st 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 January 23rd. A public hearing on the Manager’s recommended budget and capital improvements program will be held at 7:00 p.m. on May 9th.
Citizens may also make comments to the Mayor and 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
Comments are also welcome by electronic mail to:
Notices of the budget forum and hearing were published in the Chapel Hill News on Sunday, March 25th and Wednesday, March 28. Letters inviting citizens to attend and speak at the forum were 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, at the reference desk of the Chapel Hill Public Library and posted on the Town’s website.
TOPICS FOR THE PUBLIC FORUM AND HEARING
Information summarizing each topic fof the forums tonight is provided below.
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Page |
Topic |
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3 |
A. Status report on development of the 2001-2002 budget. |
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4 |
B. Preliminary report on the 2001-2016 Capital Improvements Program. |
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5 |
C. Proposed Community Development Plan for 2001-2002. |
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6 |
D. Proposed 2001-2002 HOME program for housing and community development programs in Chapel Hill and Orange County. |
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E. Proposed 2000-2002 Housing Capital Grant program for public housing renovation and resident services. |
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9 |
F. Proposed Use of Transportation Grants in 2001-2002. |
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9 |
G. Use of Downtown Service District tax funds. |
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10 |
H. Proposed Changes in Privilege License Fees. |
That the Council refer comments and questions to the Manager for consideration in the budget development process.
A. Status Report on Development of the 2001-2002 Budget
Purpose
This forum provides an opportunity for citizens to comment on the Manager’s status report on development of the 2001-2002 budget and on any aspect of the Town's budget, including services which should be reduced, added, eliminated or changed. (See Agenda #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 cash financed small 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 2000-2001 Budget
Copies of the current 2000-2001 budget, which includes key service objectives for each Town department, are available for reading and copying at the Library Reference Desk and at the Clerk's Office in Town Hall.
Quarterly and annual reports, which are also available at the Library and Town Hall, provide additional background information on Town services.
Next Steps
On April 23rd, we will submit to the Council a recommended 2001-2002 budget.
The Council has scheduled a public hearing for Wednesday, May 9th.
Additional budget work sessions are scheduled for April 4th and April 25th.
Under State law, a budget or interim budget must be adopted by June 30th.
B. Preliminary 2001-2016 Capital Improvements Program
Purpose
The purpose of this forum is to receive citizens' suggestions and comments regarding capital projects in the next fifteen years. (See Agenda #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
park improvements;
Chapel Hill's capital improvements programs have normally included a list of capital projects with cost estimates, a potential schedule and priorities, and existing or potential future funding methods for each project. This year we are taking another step forward in planning for long-range capital needs through a fifteen-year Capital Improvement’s Program, as directed by the Council.
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.
Projects in the second through fifteenth years are normally not funded, although some may be financed through past bond issues, lease-purchase or installment plans. Funding for projects in the second through fifteenth years is considered in future annual budget processes.
2001-2002 Funding
As indicated in the preliminary budget report, we have assumed in financial projections that $1,035,000 may be allocated for capital repair and maintenance projects. Of this amount, $980,000 is from the General Fund, and $55,000 is revenue from cell tower leases. We have submitted a preliminary plan for 2001-2016, with specific funding for the projects in the 2001-2002 fiscal year and in future years for projects involving installment financing.
Current Capital Improvements Program for 2000-2005
Copies of the current capital improvements program as adopted last spring are available for citizens to read in the Clerk’s office at Town Hall and at the Chapel Hill Public Library at 100 Library Drive.
Next Steps
We will submit a recommended capital improvements program on April 23rd for a public hearing on May 9th.
The Council generally adopts a capital improvements program in June as part of overall decisions on the budget.
C. Proposed Community Development Plan for 2001-2002
Purpose
The purpose of this hearing is to receive citizens' comments on a proposed plan for use of 2001-2002 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.
Estimated 2001-2002 Funding
The Department of Housing and Urban Development has informed us that the Town will receive $441,000 in Community Development funds for 2001-2002. In addition, we are including $35,000 in program income that we anticipate receiving in Fiscal Year 2001-2002 in the proposed budget, for a total of $476,000.
Current 2000-2001 Program
Last April, the Council adopted a plan for using 2000-2001 Community Development funds. The 2000-2001 plan focuses on public housing rehabilitation, neighborhood revitalization,
development of the Meadowmont affordable condominiums and community services.
Proposed 2001-2002 Program
The Town proposes to use $170,000 of 2001-2002 Community Development funds for public housing renovations (primarily at the Pritchard Park community), neighborhood revitalization, the development of the Meadowmont affordable condominiums, land acquisition for a Habitat for Humanity development, community services, and administration.
Consolidated Plan with Orange County
In May, 2001, the Town and Orange County will submit to the U.S. Department of Housing and Urban Development an update to the 2000-2005 Consolidated Plan. The Consolidated Plan identifies housing and community development needs of Chapel Hill and Orange County, and establishes priorities among these needs.
The annual update will reflect the 2001-2002 Community Development Plan. The consolidated plan will also include the 2001-2002 HOME plan when approved by the Town Council, Orange County Commissioners, Carrboro Board of Aldermen, and the Hillsborough Commissioners and will show how the 2001-2002 activities will address needs identified in the 2001-2005 Consolidated Plan.
Next Steps
On April 23rd we plan to recommend that the Council consider a Community Development plan for 2001-2002. We plan to recommend an update to the consolidated plan to the Council on April 23. The consolidated plan is due to the U.S. Department of Housing and Urban Development by May 15, 2001.
D. Proposed 2001-2002 HOME program
Purpose
Tonight’s hearing provides an opportunity for citizens to comment on a proposed plan for use of HOME program funds in 2001-2002 in Chapel Hill and Orange County. (See Agenda #1d.)
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.
2001-2002 Funding
We have received notice from the U.S. Department of Housing and Urban Development that the 2001-2002 grant will be $483,000. Local governments will contribute a local match of $108,675. Therefore, the total available for the program is $543,375. In addition, $130, 250 of previous funding is proposed reprogramming. The Town’s share of the match is $44,557. We propose to use the local Housing Loan Trust Fund to pay the match.
The preliminary plan for using the 2001-2002 HOME Program funds is attached. The plan proposes using funds for property acquisition, land acquisition, site development, new construction activities,home buyer’s 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 2000-2001 HOME Program and Funding
In 2000-2001 funds were budgeted for comprehensive property acquisition, new construction activities and rehabilitation.
Next Steps
On April 23rd, we will ask the Council to consider a plan for using this grant.
Approval by the governing boards of each locality 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 locality to submit a joint Consolidated Plan to the U.S. Department of Housing and Urban Development by May 15th.
E. Proposed 2001-2002 Housing Capital Grant Program
The purpose of this forum is to receive citizens' comments on using the 2001-2002 Housing Capital Grant. (See Agenda #1e.)
Comprehensive Grants
The Town may use annual Housing Capital Grants 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.
· renovations to meet the needs of disabled citizens.
Estimated Grant for 2001-2002
We have not received notice of the amount for the coming year. However, a preliminary proposal for 2001-2002 has been prepared based on last year’s funding amount of $599,512. Funding for 2001-2002 would go toward renovations in the Pritchard Park neighborhood, administration and professional services fees. We plan to recommend that the Council consider a 2001-2002 Comprehensive Grant Program on April 23rd.
F. Proposed Transportation Grants
2001-2002 Funding
The purpose of this forum is to receive citizens comments on proposed use of State and federal transportation grants for 2001-2002. Preliminary recommendations are as follows.
These funds would support services of the public transit system in the Chapel Hill/Carrboro area, which currently operates fifteen bus routes, demand responsive shared ride service and service for elderly and handicapped people.
The estimated amount of federal and State operating assistance to be requested for 2001-2002 is $1.95 million, or about 25% of the cost of the transit system.
Up to $1,468,928 of federal funds would be requested. In addition, State grant funds would be requested to help cover matching costs. Proposed uses of grants are:
-replace two lift-equipped vans;
-begin engineering and design work and acquire land for the construction of the 15-501 North park and ride lot facility;
-purchase intelligent transit system stop annunciators and automated passenger counters for a portion of the fleet; and
-purchase associated capital maintenance items including air conditioning compressors, bus tires, and engine rebuilds.
· Planning
About $171,340 of federal funds would be requested for short-range transit planning projects.
G. Downtown Service District
Purpose
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 2001-2002. (See Agenda #1g).
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.
Estimated Funding in 2000-2001
The present downtown district tax rate is 6.2 cents per $100 of value. This rate will generate about $52,000 in the current year. Based on preliminary property revaluation data, the equalized tax rate for 2001-2002 that would generate the same amount of revenue as in the current year ($52,000) would be 4.6 cents. We will make a recommendation on April 23rd on the district tax rate.
2000-2001 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 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.
H. Proposed Changes in Privilege Licenses Fees
This purpose of this public form is to provide citizens with an opportunity to comment on proposed changes to the Town’s privilege ordinance and fees in 2001-2002 for the Town’s miscellaneous businesses. The attached report (agenda item 1h) provides information on alternative changes to the privilege license fee for these businesses. The alternative proposals are to base the fee on the gross receipts of each business or to charge a flat fee of $50 annually per business. The Manager’s preliminary recommendation is to charge fees based on gross receipts, with a proposed rate of .50 cents per $1,000 in gross receipts, with a minimum fee of $25.
(Note: Copies of the attachments 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.town.ci.chapel-hill.nc.us).
1a. Status report on development of the 2001-2002 budget.
1b. Preliminary report on the 2001-2016 capital improvements program.
1c. Proposed Community Development Plan for 2001-2002.
1d. Proposed 2001-2002 HOME Program Funding.
1e. Proposed 2001-2002 Housing Capital Grant program for public housing renovation and resident services.
1f. Proposed Transportation Grants for 2001-2002.
1g. Proposed use of Downtown Service District tax funds.
1h. Proposed Privilege License Changes.