AGENDA #1

 

MEMORANDUM

 

TO:                  Mayor and Town Council

 

FROM:            W. Calvin Horton, Town Manager

 

SUBJECT:       Public Hearing on the Recommended Budget and Capital Program 

 

DATE:             May 9, 2001

 

INTRODUCTION

 

The purpose of this memorandum is to provide background information for the Council’s public hearing on the recommended 2001-2002 budget, the 2001-2016 capital program and on use of transit grants and downtown service district taxes in 2001-2002.

 

We suggest that the Council receive comments tonight in a combined hearing format in which citizens may make comments regarding any one or more of the topics.

 

OVERVIEW OF THE TOWN’S BUDGET

 

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 1 in accord 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 functions and responsibilities of the Mayor and Council, and a key opportunity for citizens' participation in Town government.

 

BACKGROUND

 

Process for Participation by Citizens

 

In addition to the public hearing tonight, initial budget forums were held on January 23^rd and March 28^th. 

 

Citizens may make comments to the Mayor and Council by letter, fax, etc. at any time in the budget process.

 

Notices of the budget forum and hearing were published in the Chapel Hill News on May 6 andin the Chapel Hill Herald on May 4.  Letters inviting citizens to attend and speak at the forum were mailed last week to about 200 community organizations and community leaders. A copy of the notice is attached.

 

Council’s Budget Process

 

The Council held budget work sessions on February 14^th, 23^rd and 28^th.  A public forum on the preliminary budget report was held on March 28, followed by additional budget works sessions on April 4^th and 25^th , and on May 2^nd. The next work session is scheduled for May 16^th and the Council may hold additional work sessions as needed.

 

The budget process adopted by the Council in September includes consideration of adopting a budget on June 11^th. Under State law, the Council must adopt an annual budget or an interim budget by July 1^st.

 

SUMMARY OF THE RECOMMENDED BUDGET

 

Under the recommended 2001-2002 budget, most services would continue as at present.  The proposed budget also assumes the second phase implementation of once-weekly curbside collection of refuse using rollcarts, resulting in second-year savings of $168,000 next year.

 

The General Fund tax rate would be decreased by 4.7 cents from the present 53.5 cents to 48.8 cents, and the Transportation Fund tax rate would increase by .3 cents to 4.6 cents, resulting in a total tax rate of 53.4 cents (a reduction in the total actual rate from 57.8 cents to 53.4  cents).  However, based on the estimated equalization tax rates for both funds as a result of revaluation, the proposed General Fund tax rate of 48.8 cents would be an effective increase of 4.2 cents for the General Fund.  For the Transportation Fund, the increase in the actual rate from 4.3 cents to 4.6 cents would be an effective increase of 1.0 cent above the estimated equalization rate for the Transportation Fund.

 

Key factors influencing the proposed tax rates are:

 

General Fund

 

·        Continuation of most current General Fund services.

·        Continuation of the pay plan and system approved by the Council in the last two years ($816,000)

·        The full-year cost of pay increases funded for only eight months in 2000-2001 ($250,000)

• An increase in the allocation for capital improvements ($590,000).
• Higher costs for workers’ compensation, and medical insurance (180,000).

·        Continuing the vehicle and computer replacement programs established by the Council in

prior years ($150,000).

• Installment financing the purchase of land for relocation of public works facilities necessitated by end of the University land lease in 2006 ($135,000).

• Funding the first phase of information technology improvements recommended by the Technology Committee ($81,000 net additional costs, plus $54,000 of costs covered by transfer of funds from the Police Department; total $135,000).
• A $2.00 per ton increase in tipping fee charges at the Orange Regional Landfill ($50,000).
• An allocation for higher fuel costs ($40,000).

 

Transportation Fund

 

• Funding the initiation of fare-free transit services on all routes beginning January 2002, with the University paying a significant portion of the additional costs ($660,000)

 

• Additional transit services requested by and to be paid for by the University next year and in succeeding years ($561,000)

 

• Extension of service hours on the F Route that we understand is likely to be requested by the Town of Carrboro.  Costs would be paid by Carrboro next year and may be eligible as a system cost in future years ($45,000)

 

• Funding pay adjustments to continue the pay system established by the Council over the past two years ($198,000)

 

• The estimated increase in costs for group medical insurance programs ($35,000) and workers’ compensation insurance ($20,000)

 

• Estimated additional costs resulting from higher prices for motor vehicle fuels ($128,000)

 

PROPOSED USE OF TRANSPORTATION GRANT FUNDS

 

Operating Assistance

 

These funds would support services of the public transit system in the Chapel Hill/Carrboro area.  We currently operate 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 22% of the cost of the transit system.

 

Capital Projects

 

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:

 

·        Replacing two lift-equipped vans

·        Buying major spare parts such as engine and transmission rebuilds, air conditioning compressors, and bus tires.

 

·        Begin engineering and design work and acquire land for the construction of the 15-501 North park and ride lot.

·        Purchase intelligent transit system stop annunciators and automated passenger counters for a portion of the fleet;

·        Purchase additional buses for expansion services and fare-free service

 

Planning

 

About $171,000 of federal funds would be requested for short-range transit planning projects such as service analysis and monitoring of public transportation activities.

 

SUMMARY OF THE RECOMMENDED CAPITAL PROGRAM

 

This year, the Town has made the transition from a five-year to a fifteen-year Capital Improvements Program that includes a schedule of proposed projects for the years 2001-2016.  Highlights of the program are below.

 

·        $1,047,500 of capital projects with cash financing in 2001-2002 as part of the annual budget, including maintenance and renovations of Town facilities, continuation of improvements and expansion of sidewalks and bikeways, small parks and greenways, maintenance at cemeteries, and a joint project with the County for updating aerial topographic maps.

 

·        Ten-year installment financing is included for five capital renovation projects initially  approved in the current year’s 2000-01 Capital Improvements Program: Fire Station Number 2, A.D. Clark Pool and Bathhouse, Hargraves Center, the Inter-Faith Council Shelter (Phase I), and the Post Office/Courthouse (Phase I).  For 2001-02, funding is included to begin the following new 10-year installment-financing renovation/maintenance projects: Tennis Courts, Community Center, Bridge Replacement (Bolinwood), and the Inter-Faith Council Shelter (Phase II).  Phase II of the Post Office/Courthouse renovations is to begin in 2004-05.

 

·        Projects funded with bonds approved by the voters include:

 

            Public works improvements

            Police facility improvements

            Downtown streetscape improvements

            Buying land for open space and greenways                                                            

            Sidewalk and curb and gutter installation 

            Drainage improvements

            Replacing bridges

 

The Capital Improvements Program also includes money from the 1996 Parks and Recreation bond issue to fund a portion of a proposed Community/Aquatics Center.

 

USE OF DOWNTOWN SERVICE DISTRICT TAXES

 

The Town Council established the Downtown Service District in 1989-90 to provide supplemental services in a special district under procedures in State law. Most property with Town Center zoning is in the service district. A few properties used only for residential purposes have been excluded through the Council’s decisions on the district boundary.

 

The current tax rate for the downtown district is 6.2 cents. The Downtown Commission has requested that the tax rate for 2001-2002 remain at 6.2 cents. Based on revaluation estimates, the rate of 6.2 cents would produce about $68,000 in revenue for the district next year.

 

State law requires using the district tax funds in accord with the Council's service plan for the downtown.  The plan as amended in 1995 allows the Council flexibility to use these funds for any service permissible under State law for the Downtown Service District.  For example, district tax funds could be used to supplement police protection or pay for additional streetscape projects or to purchase holiday decorations.  These funds are now allocated for

 

•           promotional events and publications,

•           marketing,

•           supplemental sidewalk cleaning, and

•           downtown welcome center operations.

 

These services are provided through a performance agreement with the Chapel Hill Downtown Commission. 

 

MANAGER’S  RECOMMENDATION 

 

That the Council refer comments and questions to the Manager for consideration and follow-up reports as needed in the budget process.

 

ATTACHMENT

 

1.         Copy of notice mailed to citizens regarding public hearing (p. 6).

 

ATTACHMENT 1

 

 

 

 

 

 

 

PUBLIC HEARING

BY THE MAYOR AND TOWN COUNCIL OF CHAPEL HILL

ON THE PROPOSED BUDGET AND CAPITAL PROGRAM

 

7:00 pm, Wednesday, May 9, 2001

Council Chamber, first floor

Town Hall, 306 North Columbia Street

 

 

 

 

Dear Citizen:

 

You are invited to express your views at a public hearing by the Mayor and Town Council of Chapel Hill at 7:00 pm on Wednesday, May 9^th, regarding:

 

·         the Town Manager’s recommended budget for Town services and projects in the service year from July 1, 2001 through June 30, 2002.

·         the Manager’s recommended capital program for 2001-2016.

·         how to use Downtown Service District taxes in the year beginning on July 1, 2001

·         how to use the 2001-2002 federal and State transit grants for public transportation services, capital projects and transportation planning.  (Note:  If no comments are received the proposed Program of Projects may become the final Program of Projects).

 

The Town Manager’s recommended budget for the 2001-2002 service year and the proposed capital program for 2001-2016 are 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.

 

Due to the revaluation of property effective next year, the Manager’s Recommended budget proposes a reduction of 4.7 cents in the General Fund tax rate for 2001-2002, from 53.5 cents to 48.8 cents.  Based on the revaluation, the proposed rate of 48.8 cents would be an effective tax rate increase of 4.2 cents in the General Fund. 

 

For the Transportation Fund in 2001-2002, the Recommended budget proposes a tax rate of 4.6 cents.  The proposed rate is an increase of .3 cents over the current actual rate of 4.3 cents, and is an effective increase of 1.0 cent, considering the effects of revaluation.

 

The recommended budget includes the following key issues for 2001-2002

 

·         Continuation of most current services.

·         Continuation of pay adjustments in accord with the pay plan and system approved by the Council last year.

·         Continued implementation of the second phase of curbside garbage collections.

·         Increased funding for capital maintenance and renovations of Town buildings.

·         Expansion of Transportation services as requested by the University and Carrboro.

·           implementation of fare-free service effective January 1, 2002.           

 

 

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 Chapel Hill

                306 North Columbia Street

                Chapel Hill, NC  27516

 

                You may also send a letter to the Town:

 

·         by fax at 919-967-8406 or

·         by electronic mail to [email protected].

 

Town staff will copy and distribute your letter 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 or to write to:

 

                W. Calvin Horton, Town Manager

                306 North Columbia Street

                Chapel Hill, NC  27516

 

Or to call:

 

Annual budget	Finance Department                           (968-2706)
Capital improvement program	Planning Department                          (968-2728)
Downtown Service District	Manager’s Office                               (968-2743)
Transit grants	Transportation Department                  (968-2755)

 

or visit our website:  www.ci.chapel-hill.nc.us

 

We look forward to receiving your comments and questions.

 

Sincerely,

 

 

W. Calvin Horton

Town Manager