AGENDA #1
MEMORANDUM
TO: Mayor and Town Council
FROM: W. Calvin Horton, Town Manager
SUBJECT: Public Forum on the Status Report on Developing the 2003-2004 Budget, Preliminary Capital Improvements Program, Preliminary Grant Proposals, and Other Budget Related Items
DATE: March 26, 2003
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 Council makes decisions on the level and types of services provided to citizens. The Town’s service year begins on July 1 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 29, 2003. A public hearing on the Manager’s recommended budget and capital improvements program will be held at 7:00 p.m. on May 14, 2003.
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
Chapel Hill, North Carolina 27516
FAX: 919-967-8406
Comments are also welcome by electronic mail to:
or
Agenda items and budget information are also posted on the Town’s website at:
Notices of the budget public forum and hearing were published in the Chapel Hill Herald on Friday, March 21, 2003, and Sunday, March 23, 2003. Letters inviting citizens to attend and speak at the forum were e-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, the Chapel Hill Public Library at the reference desk, and posted on the Town’s website.
Information summarizing each topic for the forum tonight is provided below.
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Page |
Topic |
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3 |
A. Status report on development of the 2003-2004 budget. |
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4 |
B. Preliminary report on the 2003-2018 Capital Improvements Program. |
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5 |
C. Proposed Community Development Plan for 2003-2004. |
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6 |
D. Proposed 2003-2004 HOME Program for housing and community development programs in Chapel Hill and Orange County. |
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8 |
E. Proposed 2003-2004 Housing Capital Grant Program for public housing renovation and resident services. |
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8 |
F. Proposed Use of Transportation Grants in 2003-2004. |
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G. Use of Downtown Service District tax funds for 2003-2004. |
MANAGER’S RECOMMENDATION
We recommend that the Council refer comments and questions to the Manager for consideration in the budget development process.
A. Status Report on Development of the 2003-2004 Budget
Purpose
This forum provides an opportunity for citizens to comment on the Manager’s status report on development of the 2003-2004 budget and on any aspect of the Town's budget, including services which should be reduced, added, eliminated, or changed (see Agenda Item #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 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 2002-2003 Budget
Copies of the current 2002-2003 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, and are available on the Town’s website.
Quarterly and annual reports, which also are available at the Library, Town Hall, and on the website, provide additional background information on Town services.
Next Steps
On April 28, 2003, we will submit to the Council a recommended 2003-2004 budget.
The Council has scheduled a public hearing for Wednesday, May 14, 2003.
Additional budget work sessions are scheduled for April 2, April 30, and May 21, 2003.
Under State law, a budget or interim budget must be adopted by June 30. The property tax rate must normally be established by June 30.
B. Preliminary 2003-2018 Capital Improvements Program
Purpose
The purpose of this forum is to receive citizens' suggestions and comments regarding capital projects proposed to be carried out or paid for in the next fifteen years (see Agenda Item #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,
Infrastructure, and
Park improvements.
The Capital Improvements Program includes a list of capital projects with cost estimates, a potential schedule and priorities, and existing or potential future funding methods for each project.
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.
Current Capital Improvements Program for 2002-2017
The current Capital Improvements Program has been incorporated in the 2002-2003 Town Budget document; copies of the Budget 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.
2003-2004 Funding
We have submitted a preliminary plan for 2003-2018, with specific funding for the projects in the 2003-2004 fiscal year and in future years for projects involving installment financing. As indicated in the preliminary budget report, we have suggested for Council consideration three options for Capital Improvements Fund projects in 2003-2004:
· Option A: Contractual obligations only, $576,000
o Five capital projects currently under contract would require new allocations in the 2003-2004 fiscal year.
· Option B: $1.438 million
o This funding level is based on the $1.438 million Capital Improvements Fund capital program originally forecast for the 2003-2004 Budget.
· Option C: $2 million
Next Steps
We will submit a recommended Capital Improvements Program on April 28, 2003, for a public hearing on May 14, 2003.
The Council generally adopts a capital improvements program in June as part of overall decisions on the budget.
C. Proposed Community Development Plan for 2003-2004
Purpose
The purpose of this hearing is to receive citizens' comments on a proposed plan for use of 2003-2004 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.
Current 2002-2003 Program
During the 2002-2003 program year we received $445,000 of Community Development funds. In addition, the budget included $12,000 of program income received in the 2001-2002 program year, and we anticipated that we would receive an additional $4,000 of program income during 2002-2003 from repayment of mortgages and a small business loan. Therefore, total the budget was $461,000.
On April 24, 2002, the Council adopted a plan for using 2002-2003 Community Development Funds. The 2002-2003 Plan focuses on public housing rehabilitation, neighborhood revitalization, and community service activities.
Estimated 2003-2004 Funding
The U.S. Department of Housing and Urban Development has informed us that the Town will receive $723,000 of Community Development funds in fiscal year 2003-2004. Our preliminary recommendations are to use Community Development funds for public housing renovations (primarily at the Airport Gardens community), neighborhood revitalization, community service activities, and program administration.
Consolidated Plan with Orange County
On May 15, 2000, the Town and Orange County submitted to the U.S. Department of Housing and Urban Development a five-year Consolidated Plan covering fiscal years 2000–2001 through 2004–2005. The purpose of the Plan is to identify and prioritize the housing and community development needs for Chapel Hill and Orange County. The Plan also suggests how the Town and the County will address the needs over a five-year period.
Each year, we are required to submit an update to the 2000-2005 Consolidated Plan that would include an annual plan for spending Community Development and HOME Program funds. The Plan for use of Community Development funds is approved by the Council and the HOME Program Plan is approved by the Council, the Orange County and Hillsborough Commissioners, and Carrboro Board of Aldermen.
This year’s update to the Consolidated Plan will include the 2003-2004 Community Development and HOME Program Plans as well as updates on housing and community development initiatives and programs in Orange County. We will prepare a draft Consolidated Plan for the Council’s consideration on April 22, 2003.
Next Steps
On April 28, 2003, we plan to recommend that the Council consider a Community Development plan for 2003-2004. We also plan to recommend an update to the consolidated plan to the Council. The Consolidated Plan is due to the U.S. Department of Housing and Urban Development by May 15, 2003.
D. Proposed 2003-2004 HOME Program
Purpose
Tonight’s hearing provides an opportunity for citizens to comment on a proposed plan for use of HOME program funds in 2003-2004 in Chapel Hill and Orange County (see Agenda #1d).
The HOME Program
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.
2003-2004 Funding
The U.S. Department of Housing and Urban Development has awarded the Orange County HOME Consortium $739,591 for fiscal year 2003-2004. In addition, the participating municipalities are required to contribute a 25% match of the grant funds after subtracting administration costs of $73,959. The total match requirement is $166,408. The Town’s contribution to the matching funds is 41% or $68,227. Orange County, Carrboro, and Hillsborough will contribute $66,564, $23,297, and $8,320 respectively. Therefore, including program administration (allocated to the Orange County Department of Housing and Community Development), the Council will be planning activities for a total of $832,040.
The preliminary plan for using the 2003-2004 HOME Program funds is attached. The plan proposes using funds for property acquisition, rehabilitation, second mortgage 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 2002-2003 HOME Program Funding
In 2002-2003, funds were budgeted for property acquisition, land acquisition, site development, new construction activities, second mortgage assistance, and administration.
Next Steps
On April 28, 2003, we will ask the Council to consider a plan for using the 2003-2004 HOME Program grant.
Approval by the governing boards of government 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 government to submit a joint Consolidated Plan to the U.S. Department of Housing and Urban Development by May 15, 2003.
E. Proposed 2003-2004 Housing Capital Grant Program
Purpose
The purpose of this forum is to receive citizens' comments on using the 2003-2004 Housing Capital Grant (see Agenda Item #1e).
Housing Capital Grant
The Town may use annual Housing Capital Grant funds 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, and
Renovations to meet the needs of disabled citizens.
Estimated Grant for 2003-2004
We have not received notice of the amount for the coming year. However, a preliminary proposal for 2003-2004 has been prepared based on last year’s funding amount of $584,000. Funding would be used for renovations in the Airport Gardens neighborhood, and administration and professional service fees. We will recommend a 2003-2004 Housing Capital Grant Program for the Council’s consideration on April 28, 2003.
F. Proposed Use of Transportation Grants in 2003-2004
2003-2004 Funding
The purpose of this forum is to receive citizen comments on proposed use of State and federal transportation grants for 2003-2004. Preliminary recommendations are as follows.
Operating Assistance:
These funds would support services of the public transit system in the Chapel Hill/Carrboro area, which currently operates twenty two bus routes, demand responsive shared ride service and service for elderly and mobility impaired people.
The estimated amount of federal operating assistance to be requested for 2003-2004 is about $932,000 and State operating assistance is estimated to total $1,573,000. Combined, these comprise about 27% of the operating cost of the transit system.
Capital Projects:
Up to$1,638,800 of federal funds would be requested. In addition, State grant funds (10%) would be requested to help cover matching costs.
Proposed uses of grants are:
· Replace four shared ride vehicles, three supervisory vehicles, and five vans for the mobility impaired services. Expansion vehicles may also be purchased including four shared ride vehicles and four lift-equipped vans for services to the mobility impaired.
· Technology funds for the bus fleet will include mobile data terminals for the demand response services.
· Purchase associated capital maintenance items, including air conditioning compressors, bus tires, and engine rebuilds.
· Acquire land for the construction of a new transit/operations facility and begin engineering and design work.
Planning:
About $180,000 of federal funds would be requested for short-range transit planning projects.
G. Use of Downtown Service District Funds
Purpose
The purpose of this forum is to receive comments and suggestions from downtown business operators, property owners and other interested citizens regarding the use of Downtown Service District taxes in 2003-2004 (see Agenda Item #1g).
Downtown Service District
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.
2002-2003 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 in 2003-2004.
Estimated Funding in 2003-2004
The present downtown district tax rate is 6.2 cents per $100 of value. This rate will generate about $70,000 in the current year. We will make a recommendation on April 28, 2003, on the district tax rate for 2003-2004.
ATTACHMENTS
(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.townofchapelhill.org).
1a. Status Report on Development of the 2003-2004 Budget.
1b. Preliminary Report on the 2003-2018 Capital Improvements Program.
1c. Proposed Community Development Plan for 2003-2004.
1d. Proposed 2003-2004 HOME Program Funding.
1e. Preliminary Proposal for the 2003-2004 Housing Capital Grant Program for Public Housing Renovation and Resident Services.
1f. Proposed Use of Transportation Grants for 2003-2004 .
1g. Proposed Use of Downtown Service District tax funds.