AGENDA #1(a-h)
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
DATE: January 29, 2002
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 26 - Status report on development of budget, preliminary capital program and proposed grant applications related to housing and community development.
May 8 - Recommended budget for the service year beginning on July 1, 2002; 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 and hearing were published in the Chapel Hill News on January 23 and 26. We mailed notices to community groups on January 23. An ad regarding Community Development funds was published in the January 13 edition of the Chapel Hill Herald.
TOPICS FOR THE PUBLIC FORUM AND HEARING
Information on each topic for the forums tonight is provided below.
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Page |
Topic |
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3 |
Annual Budget: preparing the budget for the service year beginning on July 1, 2002. |
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4 |
Capital Program: capital improvement needs for 2002-2017. |
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5 |
Community Development Grant: use of the 2002-2003 Community Development grant. |
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7 |
Housing Capital Fund Program : use of the 2002-2003 federal Housing Capital Fund Grant for public housing improvements, renovations and services to public housing residents. |
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8 |
HOME Grant: use of 2002-2003 federal HOME grant for housing and community development services in Chapel Hill and Orange County. |
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9 |
Transportation Grants: use of 2002-2003 federal and State grants for transit capital projects, operating costs and transportation planning. |
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10
11 |
Downtown Service District: potential changes in services and tax district boundary for the year beginning on July 1.
Legislative Proposals: suggestions for legislation that might be sought in the 2002 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.
A. Annual Budget for 2002-2003
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 2002-2003 budget and service year will begin on July 1, 2002 in accord with State law.
In addition, we invite citizens' comments on the preliminary budget outlook for 2002-2003, which is attached.
Purpose
The annual budget includes primarily operating costs for police and fire protection, street maintenance, refuse collection, various other public works services, recycling, 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 capital projects such as sidewalks, greenways, street paving, etc.
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.
Current 2001-2002 Budget
Copies of the current 2001-2002 budget, which includes key service objectives for each Town department, are available for reading and copying at the Town 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 March 25th, we will submit to the Council a status report on preparing the 2002-2003 budget. This report will include preliminary costs and revenue estimates for services in 2002-2003.
The Council has scheduled a public forum for March 26th.
On April 22nd, we will submit a recommended budget for the Council's consideration and comments by citizens in a public hearing on May 8th. The Council's adopted budget process includes consideration of adopting a budget on June 10th.
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.
Chapel Hill's capital programs have include a list of capital projects with cost estimates, a potential schedule and priorities for fifteen years, and existing or potential future funding methods for each project.
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.
2002-2003 Funding
As indicated in the initial 2002-2003 budget outlook, we have assumed in our financial projections that about $1,050,000 may be allocated for small capital projects.
2002-2017 Capital Program
A summary of the current capital program and long-range projections as adopted by the Council is attached as background information.
Next Steps
On March 25th, 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 and recommended that you do so this year..
A public forum to receive citizens' comments on the preliminary capital program is scheduled for March 26th.
Various boards and commissions will make recommendations to the Council regarding capital projects. We will submit a recommended capital program on April 22nd for a public hearing on May 8th.
The Council normally adopts a Capital Improvements program in June as part of overall decisions on the budget.
C. 2002-2003 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 2002-2003.
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.
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
after school programs.
Attachment 4 provides a summary of the ways in which Community Development grants can be used.
Estimated 2002-2003 Funding
We have received notice that the 2002-2003 grant will be $445,000.
The 2001-2002 grant was $441,000. In addition, the Town budgeted $35,000 of Community Development program income for community development activities.
Current 2001-2002 Program
On April 23, 2000, the Council adopted a plan for using the 2001-2002 Community Development grant. The 2001-2002 plan focuses on public housing rehabilitation and neighborhood revitalization in the Northside and Pine Knolls neighborhoods.
Please see the attached summary of the Town’s 2001-2002 Community Development activities (Attachment 5).
2000-2005 Consolidated Plan with Orange County
In May 2000, the Town and Orange County submitted to the U.S. Department of Housing and Urban Development a 5-year consolidated plan addressing the housing and community development needs of Chapel Hill and Orange County, and prioritize these needs for use of Community Development and HOME funds. A one-year Community Development plan was also included. The purpose of the consolidated plan is to enhance coordination of community development and affordable housing programs between the Town and County.
On May 15, 2002, we will submit the 2002-2003 Community Development program approved by the Town Council, and the 2002-2003 HOME program approved by the Town Council, the Orange County Commissioners, and the Hillsborough and Carrboro Boards of Aldermen.
Next Steps
On March 25th, we will submit to the Council a proposed 2002-2003 Community Development Plan. Citizens will have an opportunity to comment on the proposed plan at the public hearing scheduled for March 26th.
We will also ask the Housing and Community Development Advisory Board to develop recommendations to the Council.
On April 22nd , we plan to recommend that the Council consider a 2002-2003 Community Development Plan. The Consolidated Plan is due to the Department of Housing and Urban Development by May 15, 2002.
D. 2002-2003 Housing Capital Fund Program
The purpose of this forum is to receive citizens’ comments on using the 2002-2003 Housing Capital Fund.
Purpose
The Town may use annual Housing Capital Fund 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:
Estimated Grant for 2002-2003
The 2001-2002 grant was $ 611,585. We have not received notice of the amount for the coming year, but estimate that it will be about the same as this year.
Adoption of Plan for Using Housing Capital Grants
In April, 1998, the Council adopted a five-year plan for public housing improvements. This year, renovation of 9 units in the Lindsay Street neighborhood is expected was completed, and renovation of 15 units in the Pritchard Park neighborhood is expected to begin in this Spring.
Next Steps
We will submit an updated five-year plan for public housing improvements and a proposed plan for using the 2002-2003 Capital Fund Grant for citizens’ comments at the public hearing on March 26, 2002.
The Housing and Community Development Advisory Board and other interested boards will develop recommendations to the Council. On April 22, we plan to recommend that the Council consider a 2002-2003 plan for using these funds. A plan is due to the Department of Housing and Urban Development by June 1.
E. HOME Program
The forum tonight provides an opportunity for citizens to comment on how to use 2002-2003 federal HOME program funds in Chapel Hill and Orange County.
Purpose
Congress established the HOME program in 1992 to fund various housing and community development 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.
2002-2003 Funding
We have received notice that the 2002-2003 federal grant will be $481,000. 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. We estimate that the Town’s share of the match will be approximately $44,300.
Orange County Local Governments' Consortium
In 1992, the governing boards of Carrboro, Hillsborough, Chapel Hill and Orange County formed a consortium to receive HOME funds. Orange County is the lead agency in carrying out the HOME program.
Current 2001-2002 HOME Program and Funding
In 2001-2002, the HOME program in Orange County totaled $743,475. This amount includes the grant award, the local matching funds and funds reallocated from previous years.
In accord with an agreement in 1993, the local matching funds are shared as follows:
Locality Share
· Orange County 42%
· Chapel Hill 41%
· Carrboro 12%
· Hillsborough 5%
This year these funds have been used primarily for property acquisition, and new construction projects. Please see Attachment 7 for more detailed information.
Next Steps
The recently formed HOME Program Review Committee that consists of elected officials and staff representatives from Orange County, Chapel Hill, Carrboro and Hillsborough will prepare a proposed plan for using HOME funds. On March 25th, we will submit to the Council a proposed 2002-2003 HOME Program Plan. The Council will hold a public hearing on the proposal on March 26th. On February 5th, the County Commissioners will also hold a hearing to receive citizen comment on the proposed plan.
We will ask the Housing and Community Development Advisory Board to make recommendations to the Council.
On April 22nd, we will ask the Council to consider a plan for use of this grant.
Approval by the governing boards of each locality in the Orange County consortium would be necessary to submit a joint plan to the U.S. Department of Housing and Urban Development for use of the HOME funds.
Consolidated Plan with Orange County
As the lead agency of the consortium, Orange County would compile material and citizen comments from each locality, and submit the annual update to the 2000-2005 Consolidated Plan for Orange County to the U.S. Department of Housing and Urban Development. The Consolidated Plan will include an update to the 5-year plan for addressing housing and community development needs in Orange County established last year, and a one-year spending plan for the use of HOME and Community Development funds. The plan will be submitted to HUD on May 15, 2002.
F. 2002-2003 Public Transportation Grants
The forum tonight is an opportunity for citizens to comment on transit services and projects in 2002-2003 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 2002-2003, federal funding for transit services is estimated to be about $900,000, and State funding is estimated to be about $1,550,000.
Sharing of Local Costs
The University and Towns of Carrboro and Chapel Hill have agreed to share the local cost for transit services. The cost-sharing formulas are set forth in separate contracts with the University and Carrboro.
2002-2003 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 2002-2003;
· 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 2002-2003
The present downtown district tax rate is 6.2 cents per $100 of value. This rate generates about $62,000.
2001-2002 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.
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 and district boundary as part of the budget process this spring.
The Council will hold an additional forum on March 26th and a public hearing on May 8th.
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 Requests
Tonight’s forum is also an opportunity for citizens to speak on any potential legislative requests for the upcoming 2002 legislative session of the North Carolina General Assembly. 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 29th forums (p. 12).
2. Updated financial forecast and budget outlook dated January 18, 2002 (begin new page 1)
Capital Program
3. Summary of 2001-2016 capital program (p.34).
Community Development
4. National objectives of Community Development legislation and related list of services and projects which can be funded (p35).
5. Summary of 2001-2002 Community Development activities (p.36)
HOME Program
6. Summary of 2001-2002 HOME program (p.38)
ATTACHMENT 1
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PUBLIC FORUM AND HEARING ON TOWN BUDGET BY THE MAYOR AND TOWN COUNCIL OF CHAPEL HILL 7 p.m., Tuesday, January 29, 2002 Council Chamber, Town Hall 306 North Columbia Street |
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 Tuesday, January 29th, regarding:
The forum on January 29th is an initial step in the Mayor and Council's process for developing the 2002-2003 budget and related items listed above.
An initial report by the Town Manager regarding the financial forecast for the 2002-2003 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 26 - (Status report on development of budget; preliminary 15-year capital program; use of Community Development, HOME and Comprehensive grants, etc.); and
May 8 - (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 Chapel Hill
306 North Columbia Street
Chapel Hill, NC 27516
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 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, send a fax or e-mail as indicated above, or write to:
W. Calvin Horton, Town Manager
306 North Columbia Street
Chapel Hill, NC 27516
By phone:
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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) |
Attachment 4
National Objectives of Community Development Legislation
Congress established the Community Development program in 1974 by consolidating a number of grant programs into one “block grant”. The primary objective is:
“development of viable urban communities, including decent housing and a suitable living environment and expanding economic opportunity, principally for persons of low and moderate-income.” (Housing and Community Development Act of 1974)
To receive future Community Development Block Grant funds, Chapel Hill must certify that its overall program carries out this primary objective. In addition, each Community Development Block Grant activity must:
1. Benefit low- and moderate-income persons; or
2. Aid in the prevention or elimination of slums and blight; or
3. Treat urgent needs posing an immediate threat to public health and welfare.
Eligible activities for Community Development Block Grant funding
(from Federal Regulations)
Community Development Block Grant funds may be used for the following types of activities (provided national objectives are also met):
· acquisition of property
· disposition of property
· public facilities and improvements
· clearance, demolition and removal of buildings
· some public services (subject to some limits in regulations)
· relocation
· housing rehabilitation, preservation and code enforcement
· economic development activities
· new housing construction (subject to some limits in regulations)
· planning and administrative costs
Alternatives that are generally not eligible include:
· buildings used for the general conduct of government
· general government expense
· political activities
· purchase of equipment and personal property
· operating and maintenance expenses
Attachment 5
2001-2002 Community Development Program
On April 24, 2001, the Chapel Hill Town Council approved the following activities for the 2001-2002 Community Development Block Grant program:
Rehabilitation of Public Housing: $170,000
The Council budgeted $115,000 of Community Development funds for the rehabilitation of fifteen units at the Pritchard Park public housing community. Funds will be used for renovation expenses and for a portion of the Assistant Housing Director’s salary for oversight of the public housing renovation projects. Together with Comprehensive Grant funds, the 2001–2002 Community Development funds will be used to renovate the fifteen-unit community. Proposed renovation work includes the abatement of lead-based paint and asbestos, replacement of windows and screens, replacement of interior and exterior doors, replacement of furnaces, replacement of floor tiles, replacement of bathtub liners and surrounds, bathroom fixtures, plumbing and electrical upgrades, and interior and exterior painting.
The Council also budget $55,000 of Community Development funds to continue the public housing refurbishing program. This program includes minor repairs of public housing units.
Meadowmont Affordable Townhomes $80,000
The Council budgeted $80,000 of Community Development funds to Orange Community Housing and Land Trust to help pay a portion of the costs associated with constructing thirty-two townhomes in Meadowmont. The Council previously budgeted $80,000 of 2000–2001 Community Development funds and $30,000 from the Housing Loan Trust Fund for this project. The townhomes will be developed for first time homebuyers currently living or working in Orange County that earn less than 80% of the area median income. Funds will be used for development of the site and infrastructure improvements. We note that the 2001–2002 HOME Program includes $80,000 for this activity.
Neighborhood Revitalization: $80,000
The Council budgeted $80,000 of Community Development funds to continue neighborhood revitalization activities. In previous years, funds were used in the Pine Knolls, Northside and public housing neighborhoods. This year funds can be used Town-wide to assist with the activities of local non-profit affordable housing developers including EmPOWERment, Inc. and Orange Community Housing and Land Trust. Funds could be used for second mortgage assistance, property acquisition or renovation, public improvements, or community service activities. Activities must serve households earning less than 70% of the HUD published area median income. The Council has authorized the Manager to approve specific projects for use of funds.
The Council budgeted $50,000 to Habitat for Humanity to acquire property adjacent to property Habitat currently owns on Rusch Road located off of Rogers Road. Habitat intends to develop sixteen houses on the land for households earning less than 50% of the area median income. Acquisition of the additional property will allow Habitat to develop a larger subdivision.
The Council budgeted an additional $50,000 from the Housing Loan Trust Fund for development costs including site improvements, architectural and engineering costs and infrastructure development).
Community Services: $20,000
The Council budgeted $11,000 to the Chapel Hill–Carrboro YMCA to continue operation of after school programs for children living in the Pine Knolls neighborhood and the South Estes Drive public housing community. We note that $4,000 of funds from the 2000-2001 after school programs will also be used toward this program.
The Council also budgeted $9,000 to the Orange County Literacy Council to operate computer-based literacy programs to public housing residents and other lower income Chapel Hill residents.
Program Administration: $76,000
The Council budgeted $76,000 for administration of the Community Development program. Funds will be used for the Community Development Coordinator’s salary, a portion of the Long Range Planning Coordinator’s salary, and overhead costs.
Attachment 6
The HOME PROGRAM
In 1990, Congress enacted the HOME Investment Partnerships Act, better known as the HOME Program, in an effort to provide a new approach to housing assistance at the federal level. This federal housing block grant will afford state and local governments the flexibility to find a wide range of housing activities through creative and unique housing partnerships among states and localities, private industry, and nonprofit organizations.
In order to receive future HOME Program funds, each housing activity must fall in line with the following goals of the HOME Program:
1. To expand the supply of decent, safe, sanitary and affordable housing, with emphasis on rental housing, for very low- and low-income citizens;
2. To strengthen the abilities of state and local governments to design and implement strategies for achieving adequate supplies of decent affordable housing; and
3. To encourage public, private and nonprofit partnerships in addressing housing needs.
Eligible activities for HOME Program funding include (from the Federal Regulations):
· acquisition of property (including assistance to homebuyers)
· new construction
· reconstruction
· conversions
· moderate rehabilitation of non-luxury housing with suitable amenities
· tenant-based rental assistance
· relocation of displaced persons, families, businesses, or organizations
· site improvements, acquisition of vacant land and demolition (under special conditions)
· project soft costs
· administration / planning
· operating expenses for community housing development organizations