SUMMARY MINUTES OF A PUBLIC FORUM AND HEARING

OF THE CHAPEL HILL TOWN COUNCIL

TUESDAY, JANUARY 29, 2002, AT 7:00 P. M.

Mayor Kevin Foy called the meeting to order at 7:00 p.m.

Council members present were Pat Evans, Ed Harrison, Mark Kleinschmidt, Bill Strom, Dorothy Verkerk, Jim Ward, and Edith Wiggins.  Council Member Flicka Bateman was absent, excused.

Staff members present were Town Manager Cal Horton, Assistant Town Manager Florentine Miller, Town Attorney Ralph Karpinos, Assistant to the Manager Bill Stockard, Finance Director Jim Baker, Community Development Planner Loryn Barnes, and Acting Town Clerk Sandy Cook.

Item 1:  Initial Public Forum and Hearing on Budget and Related Items

Town Manager Cal Horton explained that the Town Council had instructed the staff to bring forward a budget proposal that would allow no change in the tax rate, but to list additional options for consideration that would be above that and would continue basic services.  Mr. Horton noted that a number of community needs would be identified as the public process unfolds.  He said that tonight's comments would address the operating budged and also the fifteen-year Capital Improvement Program (CIP).  He listed the items on the agenda tonight and recommended that the public be allowed to comment on any of them. 

Mayor Foy then invited comments from citizens on any of the following agenda items:

a. 2002-2003 Annual Budget.

b.   2002-2017 Capital Improvements Program.

c. 2002-2003 Community Development Grant.

d. 2002-2003 Housing Capital Fund Program.

e. HOME Program.

f. 2002-2003 Public Transportation Grants.

g. Downtown Service District.

h.    Potential Legislative Requests.

Susan Levy, Executive Director of Habitat for Humanity in Orange County, requested funds from the Community Development Block Grant (CDBG) and HOME programs for roads, water and sewer at a new development that Habitat plans to build in the Rogers Road area.  She said that Habitat would be building its 100^th home in Orange County this spring.  Ms. Levy noted that this home would be in Effland, adding that Habitat was eager to start building in Chapel Hill again.

Ms. Levy explained that Habitat for Humanity provides homeownership for people who earn 50% of the median income or less.  Habitat does that through volunteer labor, government support, private contributions and the hard work of habitat homeowners, she said. 

Ms. Levy explained that Habitat resident's monthly payments, with taxes and insurance, and a zero interest mortgage and broad community support, average $350 a month, less than half the average rental in Town.  She said that they would come forward with a concept plan in March and would ask the Town Council for the Town's residential special standards conditional zoning district for affordable housing.  She requested approximately $200,000, noting that would cover about two-thirds of the estimated infrastructure costs.  She stated that Habitat would come back to the Council with a detailed request before the staff's March 1^st deadline.

Reverend Robert Campbell, representing the Rogers Road community, requested funding from the CDGB, Capital Funds Program, the HOME program, and the Public Transportation Grants.   He requested this for water lines to run from meters to the homes in the Rogers Road neighborhood.  Reverend Campbell explained that the funds would help families that cannot afford infrastructure for the water pressure that goes into their old homes.  The Transportation Grant, he said, would help those who work in Chapel Hill, adding that buses leaving the Eubanks Road park and ride lot sometimes come down Rogers Road when Airport Road is congested.  Reverend Campbell pointed out that buses traveling to Chapel Hill High School or the Homestead Community Center could easily come down Rogers Road.  He stressed that this would allow children in the neighborhood to get to the public library and recreational facilities in Chapel Hill.  Reverend Campbell also asked the Town Council to use some of the grant money to bring sewer lines to his neighborhood.

Mayor Foy asked Mr. Horton if he planned to respond to Reverend Campbell's requests in his report.   Mr. Horton replied that the staff might even bring back an earlier report on issues such as the request for additional bus service.  He added that he would refer that to the Transportation Board so that they can take it into account when making recommendations for the Council's consideration during the budget process.  Mr. Horton said that the staff would comment in some fashion on anything that citizens report to the Town Council. 

Bob Schreiner, Chair of the Chapel Hill Public Library Board of Trustees, said that he would come back on February 11th with more lengthy comments about the library consultant's recommendation for expansion of the physical facility.  He asked the Town Council to put library building expansion on the CIP schedule with a specific date not too far in the future.  He also requested that the staff estimate costs and that the Council begin to identify funds for Library expansion.  Mr. Schreiner noted that the Library could also use some of its gift funds.  He stated that the Library's shortfall was not yet critical, but said that it was preventing some new services, such as expansion of the overcrowded children's area, Mr. Schreiner asked the Council to renew its commitment to funding a library building consultant, a request which he said was tied into getting an actual target date for expanding the Library.

Nerys Levy, representing the Cultural Arts Group and the Community Dinner Committee, asked for continued support in 2003 for the Community Dinner.  She explained that the goal was to reach out to more ethnic and socioeconomic components of the community.  Ms. Levy asked for continued support at the present level of $500, adding that $1,000 would really help move the project along.

Eva Metzger, Chair of the Pedestrian and Bicycle Advisory Board, suggested that the Town increase funding for sidewalks, intersection safety improvements, and crosswalks on major roads.  She said the Board was again asking for a bond specifically for sidewalk construction, and would explore other sources of funding as well.  Ms. Metzger noted that the Board had asked for these measures for the past two years, and requested that this be included in the new CIP and heavily funded in the first five years.  She added that the Board would return with an estimate of these costs in the months to come even though they are limited in staffing.

Robert Dowling, Executive Director of Orange Community Housing and Land Trust, requested an additional $8,000 in operating money as part of the $20,000 that he hopes to get from all funding.  He also asked for $77,000 of HOME money to be used for 22 OCHC homes in the Homestead Development and maybe the Lockspur Development too, if the Council approves that.  The cost would be $3,500 per home, Mr. Dowling explained, noting that this is less than OCHC typically asks for developments.  He said the money would be used to assist with down payments and closing costs for homebuyers.

Jessica Treat, representing the Sykes Street Steering Committee, reminded Council members about the intersection realignment that the Committee had discussed at a previous meeting.  She pointed out that the Committee also had made suggestions about speed bumps and speed limit signs around the Hargraves Community Center.

Joe Herzenberg, representing the Greenways Commission, recommended that the Council continue funding the greenways at current levels, adding that there are many projects awaiting funding.  He expressed eagerness to start using the $1 million of bond money, adding that the Commission hoped to also receive funding from State grants.

Council Member Strom asked Mr. Herzenberg if the Greenways Commission had considered talking with the University about improvements to the Battle Branch Trail.  Mr. Herzenberg replied that they had done so and were grateful to the Council for its role in having the University agree to proceed with that.  Mr. Herzenberg described this as a "big breakthrough."

Nancy Milio, a former member of the County Commissioners Committee on Affordable Housing, urged the Council to give priority in HOME monies to affordable rental housing.  She said that 47% of renters in Chapel Hill cannot afford a two-bedroom apartment at a fair market rate.  Ms. Milio added that UNC's Chapel Hill campus employs 22% of its staff at below $29,000 annually and that UNC Healthcare employs 40% of its staff at that level.   Noting that most of these employees cannot afford to live in Orange County, Ms. Milio listed the advantages of having them living in Town.  She asked the Town Council to create, buy, rehabilitate and manage affordable rentals for these families and to allocate funds to the organizations that are able to do this.

Patrick Conway, identifying himself as a parent of a developmentally delayed child and a volunteer with the Special Olympics and other similar programs, noted that there was an ongoing demand for recreational programs in the summer for children with special need.  He asked the Town Council to reallocate the one-time contribution to the Parks and Recreation Department for the same program the Town funded last year.  He also asked Council members to consider funding the staff position for special populations.  Mr. Conway offered to talk with Council members about other ways that this population could be better served by the community.   

Lucy Lewis, Executive Director of the Orange County Literacy Council, thanked the Council for providing funds for its Computer Literacy Program, which she said had allowed the Literacy Council to expand opportunities for public housing and low and moderate income residents in Chapel Hill.  With CDBG funds, she said, they had been able to establish literacy labs in neighborhoods and to do ongoing community outreach and organizing to work with the neighbors.  Ms. Lewis said that the Literacy Council would request approximately $11,500 this year to continue these labs on a year-round basis and to explore adding additional ones. 

Terry Tyson, representing the Parks and Recreation Commission, explained that the Small Parks Improvement Program had remained at $50,000 for more than ten years. She recommended that funding levels continue at a minimum of $50,000 and expressed hope that it would be increased to $75,000 for 2002-2003.   Ms. Tyson said that some projects would need to be completed immediately for safety reasons.

Regarding the concept of maintenance of Parks and Recreation public buildings, Ms. Tyson noted that the appearance of these buildings was important to newcomers, visitors, and citizens.  She pointed out that regular maintenance prevents large, expensive repairs in the future, adding that the Commission feels that funding for upkeep of indoor facilities is very important and advocates for long-term funding to preserve buildings. 

Wendy Trueblood, Executive Director of The Arc of Orange County, noted that the Town had increased summer services last year for special needs children.  She asked the Council to continue what it had already established, but noted that some children would not be included because of their specific needs.  Ms. Trueblood explained that The Arc would advocate for a stand-alone recreation program in the summer to be run collaboratively with the Parks and Recreation Department.  She said she would look for funding from several sources, and that this program would be presented for the Council's consideration as an add-on to the Parks and Recreation Department's budget.

Reverend J. R. Manley explained that items in his last year's budget had been underestimated, such as the increase in insurance, which went from $6,000 to $9,000 this year.  He introduced  Ms. Hanson and Ms. Wellington of Excel Property Management, to explain the situation on his behalf.  Ms. Hanson said that the church had found itself with unanticipated expenses.  She said that its budget had been strapped by increased cost of orders, utilities and insurance.  Explaining that there would be a shortfall in operations, Ms. Hanson asked the Council to consider allocating funds to furnish the property.  Reverend Manley added that the first year is the most delicate for this kind of operation.  He said that they would make a more formal proposal for CDC funds.

Mayor Foy, noting that Reverend Manley was asking for funds for this budget year, pointed out that this request would be treated differently.  Mr. Horton added that the staff would need much detail and as quickly as possible to determine what options the Council might have if it determines that it can assist in this matter.

John Anderson spoke in support of Ms. Tyson's comments.  He said that the Town should include more maintenance costs for public facilities.  Mr. Anderson also commented that the Parks and Recreation Department could provide more details if those in tonight's handout were not sufficient.  He urged Council members to think about the long haul, pointing out that the cost of maintaining facilities gets more and more expensive.

Council Member Wiggins commented that she thought the Town had already funded a position in Parks and Recreation to work with special populations.  Mr. Horton replied that there was an employee available to take on that work as soon as his present position was filled. 

Mayor Foy reminded the Council that Potential Legislative Requests was listed on the agenda even though it was not really related to the budget.  He then asked Mr. Horton if there would be a presentation made regarding the Downtown Service Area.  Mr. Horton explained that the Council had requested a special presentation by Downtown Commission and the Visitors Bureau, and that those would be done in March. 

Mayor pro tem Evans encouraged the State legislature to pass the Bottle and Can Bill, to consider supporting a beer and wine tax.  She also suggested that the Town work with the legislature to gain their support for working with the University toward a permitting process for cars that come into the community for more than six months and use the infrastructure. 

Council Member Strom suggested asking State legislators to look at the State tax code for any way to create investment tax credits and/or tax incentives for developers who participate in affordable housing.  He objected to the idea of shifting inventory tax revenues to a new one-half cent local option tax, noting that this ultimately means shifting the burden from businesses to consumers.  Council Member Strom recommended pursuing the real estate transfer tax again, adding that the Council should ask legislators to make that a high priority.  Regarding the issue of sedimentation and erosion control, he stated that it looks as though the Town has a severe shortage of inspectors given the potential for disturbance in our area.

Regarding the budget, Council Member Strom noted that there might be a significant amount of unallocated CIP funds at the end of the year.  He asked the Manager to present a draft option showing all of those funds being used in the sidewalk category.  Council Member Strom also asked to see what a Town bond would look like this year or next to make a significant contribution to pedestrian infrastructure.  And he asked if it would be within the rules to add some of the CDBG or HOME money to the recently created revolving loan fund for affordable housing.   Mr. Horton commented that the Council might not have the flexibility it wants to have if it did that, but agreed to investigate it.

Council Member Strom asked if any money from the Public Transportation grants could go toward pedestrian infrastructure.  Mr. Horton replied that he thought the answer was no, but said he would find out for sure.

Mayor Foy noted that sometimes when the Town reallocates money from the CIP to the following year it does so because the Town is accumulating money as part of its fifteen-year planning process.  Mr. Horton added that sometimes it is because the Town has not been able to initiate a project, such as the old Post Office renovation.  In some cases, Mr. Horton said, projects are underway but all the funds have not been spent.  In others, there are bond funds that have not been fully expended.  And there also are some in which there is an accumulation of funds over a period of several years, Mr. Horton said.   He agreed to identify funds that are not so encumbered so that the Council could decide what it wishes to do with those funds.

Council Member Wiggins noted that the Council might be interested in using that money for projects other than sidewalks.  She asked for information on the total amount as well as what percent it represents of the tax rate.  Council Member Wiggins pointed out that if the Town is striving for no increase in the tax rate then it will have to reallocate some funds, such as those for expenses that it cannot avoid.  She recommended that the Council discuss priorities and needs before asking the Manager to spend time exploring how much of that money could be used for sidewalks.

Mr. Horton said that he understood that there might be many potential uses for that residue, adding that he would identify what flexibility the Council might have.  It would then be up to the Council, he said, to decide what to do with the money.  Council Member Wiggins replied that it is difficult to add in additional options later on, adding that she preferred a discussion of what things the Council is interested in if there are available CIP funds.  She noted that this would be respectful of everyone who has an interest in what happens with that money.  

Council Member Harrison asked if a real estate transfer tax would apply to the corporate limits including Durham County.  Mr. Horton replied that it would apply throughout the Town limits.  Council Member Harrison asked if there had ever been a bond issued for transportation.   Mr. Horton explained that there had been for streets, bridges, sidewalks and associated facilities, and greenways and open space.  He noted that all of those were transportation related.  Mr. Horton stated that there had never been a bond issue that focused solely and comprehensively on transportation modes.

Council Member Harrison noted that parameters of the bond almost could be constructed from the Comprehensive Plan, adding that this was a good reason to spend some time with it.  Mr. Horton qualified what he had previously said, noting that the Town Attorney might have a different opinion as to how a transfer tax would be fashioned.  He added that he could think of several ways that it might leave out the Durham County part of the community.  

Council Member Wiggins expressed interested in knowing how the Town could saturate the Sykes Street area with security policing.  If there was any extra money in the CIP, she said, she would like to spend it on that.  She described crime and drugs in that neighborhood as one of the most pressing people-related Town needs.  Mr. Horton replied that he would identify any funds that could be reallocated and work that information into options that the Council would decide on.  He said that the staff is pursuing grants that would assist in the Sykes neighborhood.  Council Member Wiggins noted that the solution would require a great deal of money, adding that applying for grants takes time.  Mr. Horton pointed out that the amount of matching funds, if available, would decrease until the Town was paying the full tab.

Mayor Foy summarized Council Member Wiggins’ request for a proposal from the Manager that would address the public safety needs of the Sykes Street area.  Mr. Horton replied that, due to an earlier request, the staff already intended to make such a proposal.

Council Member Strom clarified that appropriating some of the CIP funds to address Council concerns would not tie the staff's hands in creating a budget.  He asked if some of the new appropriations could be pushed back in order to create that reservoir of funds.  Mr. Horton replied that this was possible, but added that it is also possible that the staff would recommend significant cuts in capital improvements in order to fill the gap between expected needs based on the normal plans and the zero base budget. 

Council Member Strom explained that he was asking for various CIP spreadsheets to come back to the Council so that they could see three of four different scenarios.   Mr. Horton replied that it would help if the Council would say which areas it wants to see greater or lesser attention given.

Mayor Foy suggested that Council members begin discussing an approach to the legislative delegation with regard to regional transit funding needs.  He noted that, over the next year or two, they will need to address how the Town will pay for the Triangle Transit Authority's plans and how it will be included in those plans.  Mayor Foy stated that Council Member Strom's request about the real estate transfer tax might be one way to raise funds for transportation infrastructure.  He suggested that Council members think about what kinds of taxing issues they want to bring up with legislators over the long run.

With regard to the budget, Mayor Foy asked for a specific recommendation from the Manager about what to do with the $800,000 in terms of specific allocations.  He asked should it be held in reserve, or would the Council be wise to do something else with it?  Mr. Horton replied that if the Council decides to spend the $800,000 there will be an automatic 2% tax increase.  He advised the Council to reserve the ability to carry forward the CIP money so that they would not start of with that 2% tax increase on top of the four or five percent that already had been projected.  Mr. Horton recommended that the money be left where it is, at least for this year, noting that the recession would not last forever.  Next year is likely to be better, he said, and there probably will be a year with a far better circumstance for reducing the amount of carryover by half, or maybe even entirely, and work toward a budget position without dependence on carry over.

Council Member Verkerk requested more information about the reasons for keeping that $800,000.  Mr. Horton explained that by not spending it the Town reduced taxes by that amount. 

Council Member Strom asked Finance Director Jim Baker for a timeframe in which he would be able to tell the Council if his revised projections were holding true.  Mr. Baker replied that it would be when the Town received the next quarterly distribution of the sales tax revenue on February 15th.   Mr. Horton added that the State's budget picture was starting to unfold much like the Town had speculated.  He added that he thought it would get worse. 

Mayor pro tem Evans pointed out that by slowing down applications for development the Council had slowed down the revenue from those application fees.  She asked if the staff could anticipate how much might be lost, adding that this could apply to the Inspections Department as well.  Mr. Horton, referring to the Council's action of the previous evening, said slowing down hearings would not prevent people from applying for a development or a building permit.  He said he would consult with Planning Director Roger Waldon and bring back a more detailed answer.

Council Member Wiggins asked Town Attorney Ralph Karpinos about the list of potential legislative items that he usually provides.  Mr. Karpinos replied that he would bring forward that list and then the Council would have an opportunity to identify what it wanted to talk to the delegation about and what it wanted to call a public hearing about.  Mr. Karpinos noted that the delegation generally likes to see that the Council has had a public hearing on items that it requests in the way of legislation.  He said that all of that would come to the Council within the next few weeks.

Council Member Wiggins asked if the list could be split into controversial and non-controversial categories.  Mr. Karpinos agreed to try and do that, but pointed out that much of this is learned while going through the process.  Mr. Horton speculated that almost anything that involves revenues or significant expenditures will be considered controversial.  Matters that principally facilitate things in local communities and that have State-wide significance probably would not be controversial, he said.

Council Member Wiggins asked if there was a way to do a bond without raising taxes, noting that the State said they had done it.  Mr. Horton replied that he was not aware of any way to issue bonds without incurring debt payments, adding that the only way to pay debts is with cash.  He said he did not know of any way to do this without raising taxes or eliminating something else. 

Mayor Foy asked if the Manager would be giving the Council the projected rate to pay off current bonds.  Mr. Horton said that the projection would be simple arithmetic and that they could easily bring something back to the Council.  Mayor Foy noted that bonds were being retired periodically.  Mr. Horton agreed, adding that they retire in increments of one-twentieth for most purposes each year.  He agreed to bring back the bond repayment schedule.

COUNCIL MEMBER STROM MOVED, SECONDED BY MAYOR PR TEM EVANS, TO REFER COMMENTS AND SUGGESTIONS TO THE MANAGER AND THE ATTORNEY.  THE MOTION WAS ADOPTED UNANIMOUSLY (8-0).

The meeting adjourned at 8:20 p.m.