AGENDA #1g

 

MEMORANDUM

 

TO:                  Mayor and Town Council

 

FROM:              W. Calvin Horton, Town Manager

 

SUBJECT:             Consideration of Downtown Service District Funds

 

DATE:              March 28, 2001

 

INTRODUCTION

 

The purpose of tonight’s hearing is to receive citizen comments on potential uses of Downtown Service District funds.

 

BACKGROUND

 

In July 1989, the Council established a Downtown Service District in response to requests from downtown business and property owners for enhanced promotional activities and supplemental services.  The Downtown Service District includes most properties with Town Center-1 and –2 zoning.  The Council has excluded property used only for residential purposes. 

 

State law allows either the Town or an organization under contract with the Town to provide the supplemental municipal services funded from service district taxes.  Currently, the non-profit Chapel Hill Downtown Commission, Inc., provides services funded from the Downtown Service District tax through a performance agreement with the Town.

 

DISCUSSION

 

On February 21, 2001, the Manager conducted an informal administrative hearing on the Downtown Service District at the Old Post Office, for the purpose of receiving public comment on the potential uses of Downtown Service District tax funds for 2001-2002.  (Attachments 1-2).

 

The present Downtown Service District tax rate is 6.2 cents per $100 of property value.  However, the revaluation has resulted in the following changes:

 

• Due to a small increase in valuation in the current year, the current 6.2-cent levy now generates approximately $52,385, an increase from the previous figure of $46,000.  This figure is calculated on the 2000 base of $84,500,000 in valuation.

 

• The new, revaluated base for 2001 is estimated to be $112,500,000.

 

• Based on the revaluation, the equalized tax rate for 2001-2002 that would generate the same revenue in the next budget year would be 4.6 cents.

 

• If the district rate is left at 6.2 cents on the new base of $112,500,000, the district tax will generate $69,750.

 

We understand that the Downtown Commission may wish to keep the tax rate at 6.2 cents.  We also understand that Downtown Commission representatives may wish to comment on this issue with the Council tonight.

 

SERVICES

 

The Downtown Commission proposes to continue operations and to provide the following services:

 

• Marketing and promotion of the downtown.
• Operation of a Welcome Center
• Promotional materials, including brochures, a business directory, and newsletters
• Assistance and communication to downtown businesses
• Supplemental sidewalk cleaning.

 

DISTRICT BOUNDARY

 

We know of no boundary changes that are necessary at this time.

 

RECOMMENDATION

 

We recommend that the Council refer comments from tonight’s hearing to the Manager for consideration in development of a budget proposal.

 

ATTACHMENTS

 

1. Informal Public Meeting Notice, February 21, 2001 (p. 3).
2. Quick Report of the Annual Informal Meeting, February 23, 2001 (p. 7).