MEMORANDUM
TO: Mayor and Town Council
FROM: W. Calvin Horton, Town Manager
SUBJECT: Public Hearing on 2003-2004 Recommended Budget and 2003-2018 Capital Program
DATE: May 14, 2003
INTRODUCTION
The purpose of this memorandum is to provide background information for the Council’s public hearing on the recommended 2003-2004 budget, the 2003-2018 capital program and on use of transit grants and downtown service district taxes in 2003-2004.
We suggest that the Council receive comments tonight in a combined hearing format in which citizens may make comments regarding any 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
Citizens may 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 Herald on May 9 and 11. Letters inviting citizens to attend and speak at the forum were e-mailed last week to about 200 community organizations and community leaders. A copy of the notice is attached.
The Council held budget work sessions on February 12 and 19 with the Town’s Advisory Boards, and held a work session for presentations by Town Departments on February 26 and 28th. Public forums on the preliminary budget report were held on January 29 and March 26, followed by additional budget works sessions on April 2 and 30. The next work session is scheduled for May 21 and the Council may hold additional work sessions as needed.
The budget process adopted by the Council includes consideration of adopting a budget on June 9. Under State law, the Council must adopt an annual budget or an interim budget by July 1.
SUMMARY OF BUDGET OPTIONS
The Manager’s recommended budget for the General and Transportation Funds for 2003-2004 is presented as a base budget that would continue most General and Transportation services as in past years, and includes recommended additions to the base budget for the Council’s consideration.
The General Fund base budget for 2003-2004 and recommended additions to the base would be balanced by estimated revenues available for next year. The recommended Transportation Fund base budget would require an increase of .6 cents in the current Transportation Fund tax rate. Recommended additions to this base budget would require and additional increase of .2 cents. Attached is a summary of the base budget and options for the Council’s consideration. The summary indicates a total of $437,000 in available revenues in the General Fund that could be used by the Council for additional options.
Alternative options are presented for the Council’s consideration that would allow a reduction in the General Fund tax rate to offset the recommended increases in the Transportation tax rate for 2003-2004, so that there would be no change in the current combined tax rate of 55.3 cents.
Key factors influencing the proposed budget and tax rates include the following:
· Estimating revenues based on the assumption we will continue to receive full State-shared revenues next as in the current year, including a full year of revenue from the new ½ cent sales tax initiated in the current year.
· Continuation of most current General Fund services, with increases in the base budget reflecting significant increases in the cost of employee medical and workers’ compensation next year.
· Funding the full-year cost of pay increases funded for only seven months in the current year.
· Increasing the recommended allocation for capital improvements to a level of $1,225,000.
PROPOSED USE OF TRANSPORTATION GRANT FUNDS
Operating Assistance
Operating assistance funds would support services of the public transit system in the Chapel Hill/Carrboro area. We currently operate nineteen 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 2003-2004 is $932,000 and $1,573,000 respectively, or about 24% of the 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.
· Cost of acquiring land for the construction of a new transit/operations facility and continuing engineering and design work.
Planning Projects
· About $190,000 of federal funds would be requested for short-range transit planning projects.
SUMMARY OF THE RECOMMENDED CAPITAL PROGRAM
For 2003-2004, we propose a capital improvements program that includes three optional levels of funding. The first level included in the base budget would total about $576,000 and would limit costs to funding current installment debt payments and contractual obligations. This base level would include the following:
· 126,000 annual installment payment on public works land purchased last year.
· 175,000 annual installment payment on renovations at Hargraves Center and A. D. Clark Pool.
· 9,000 estimated annual payment on proposed installment contract for repairs at the Inter-Faith Council shelter and at the Chapel Hill Museum.
· 28,000 annual payment on current installment contract for infrared cameras.
· 238,000 payment to the Chapel Hill-Carrboro school system as part of an agreement providing the Town access to the gym at the Rashkis Elementary School in Meadowmont.
Funding for a capital improvements program at this minimum level would require a transfer of $521,000 from the General Fund, and would be supplemented by $55,000 in estimated cell tower revenue in the Capital Improvements Fund.
The additional funding that would be required from the General Fund to restore this program to Option B-1 as shown in the capital improvements section of the recommended budget would be about $649,000, with a total Capital Improvements Fund budget of $1,225,000 for 2003-04. Additional projects at this level of funding would include the following:
· 53,000 installment debt payments on emergency generators for the Town Hall and Police Department.
· 65,000 installment debt payments on IFC Shelter repairs and improvements.
· 50,000 extraordinary maintenance and emergency repairs.
· 45,000 installment debt payments on roof repairs at Fire Stations #2 and #3.
· 225,000 installment debt payments on Post Office/Courthouse capital repairs.
· 25,000 curb repairs: ADA compliance.
· 50,000 sidewalk and bicycle facilities.
· 20,000 small park improvements.
· 20,000 feasibility study for traffic signal system upgrade.
· 55,000 greenways.
· 41,000 installment debt payments on tennis and basketball court repairs.
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 2003-2004 remain at 6.2 cents. The tax rate of 6.2 cents would produce about $70,000 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, and supplemental sidewalk cleaning. These services are now provided through a performance agreement with the Chapel Hill Downtown Commission.
OTHER FUNDS
For other operating funds, service levels in the recommended budget for 2003-2004 would remain about the same as in the current year, including services for the Town’s public housing program and parking programs.
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 emailed to citizens regarding public hearing (p. 6).
2. Summary of General and Transportation Base Budgets and Recommended Options (p. 8).
3. Copy of Funding Request from North Carolina High School Athletic Association (p. 12).
PUBLIC HEARING
BY THE MAYOR AND TOWN COUNCIL OF CHAPEL HILL
ON THE PROPOSED BUDGET AND CAPITAL PROGRAM
7:00 pm, Wednesday, May 14, 2003
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, May14th, regarding:
· the Town Manager’s recommended budget for Town services and projects in the service year from July 1, 2003 through June 30, 2004.
· the Manager’s recommended capital program for 2003-2018.
· how to use Downtown Service District taxes in the year beginning on July 1, 2003.
· how to use the 2003-2004 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 2003-2004 service year and the proposed capital program for 2003-2018 are available for citizens to review in the Town Manager’s and Clerk’s Offices in Town Hall, at the reference desk at the Chapel Hill Public Library and at the Town’s website.
Under the recommended 2003-2004 budget, most services would continue as in past years. Estimated revenues available would be sufficient to fund the recommended General Fund base budget and priority additions to the base recommended for the Council’s consideration, with no change in the General Fund tax rate of 51 cents.
The Transportation Fund base budget and recommended additions that continue fare free services for all routes would require an increase of .8 cents in the Transportation tax rate for 2003-2004. However, alternative options are presented for the Council’s consideration that would allow a reduction in the General Fund tax rate to offset the recommended increases in the Transportation tax rate for 2003-2004, so that there would be no change in the current combined tax rate of 55.3.
The recommended budget includes the following key issues for 2003-2004:
· Funding additional debt service of about $300,000 on the final issuance of bonds authorized in 1996.
· Continuation of fare free Transportation services and routes next year.
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:
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
You may also 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.townofchapelhill.org
We look forward to receiving your comments and questions.
Sincerely,
W. Calvin Horton
Town Manager