MINUTES OF A BUDGET WORK SESSION HELD BY THE MAYOR AND COUNCIL

OF THE TOWN OF CHAPEL HILL, WEDNESDAY, MAY 15, 1991 AT 5:30 P.M.

Mayor Howes called the meeting to order. Council Members in attendance were Julie Andresen, Joyce Brown, Joe Herzenberg, Arthur Werner and Roosevelt Wilkerson. Council Member Alan Rimer joined the proceedings by telephone. Council Members Nancy Preston and James C. Wallace were absent excused. Also in attendance were Assistant to the Mayor Lisa Price, Town Manager Cal Horton, Assistant Town Managers Florentine Miller and Sonna Loewenthal, Finance Director James Baker, Personnel Director Pat Crotts and Town Attorney Ralph Karpinos.

Mayor Howes noted that the Council would likely adopt a budgetary resolution of intent at its May 28th, since the state legislature would not have concluded its budget deliberations at that point.

Mayor Howes said that the resolution would outline the Council;s intent regarding expenditures, property tax rates, user fees and related budget matters. Mayor Howes added that a special meeting would also likely be held on July 1st to adopt an interim budget.

Council Member Andresen inquired whether it would be possible to adopt an intermim budget on July 1st if the state had not completed its budget deliberations. Mr. Horton responded that it would be possible to schedule additional work sessions after July 1st if necessary. Mr. Horton said that the staff would keep the Council informed about state budget negotiations. Council Members Andresen, Werner and Wilkerson noted that they would be unable to attend a Council meeting on July 1st. Mr. Horton suggested that the Council be polled to find an agreeable alternate meeting date. Mayor Howes concurred with this suggestion.

Council Member Rimer joined the proceedings telephonically at

5:40 p.m.

Mayor Howes requested an overview of the budget development process. Mr. Horton stated that there had been an estimated $312,000 shortfall at the start of the May 8th work session. He noted that there was Council consensus to reduce the resurfacing budget by $50,000 and to project additional revenues of $90,000 from the increased automobile registration fee. Mr. Horton added that the Council had agreed to transfer $50,000 from the fund balance and $32,000 from the contingency fund, reducing the projected gap to $90,000. Mr. Horton said it was possible to reduce the allocation for telephone accounts by $23,000, reducing the projected shortfall to $67,000. Mr. Horton said a number of other options to further reduce this gap were outlined in his memorandum to the Council.

Mayor Howes suggested that the Council work through a list of options to reduce the shortfall, beginning with the merit pay pool.

Council Member Wilkerson expressed his support of item three in category one, providing $354,000 including benefits. Council Members Andresen, Brown, Herzenberg, Rimer and Mayor Howes expressed their concurrence with this alternative. Mayor Howes said there appeared to be consensus on this matter.

Mr. Horton said that funding for the proposed NC 86 park and ride lot could be cut from the Transportation Fund. Council Member Brown expressed the importance of funding projects of this type. Mayor Howes said the funding could possibly be deferred to the 1992-93 budget. Council Member Werner noted the increasing difficulty of receiving matching federal and state funds for these types of projects. Council Member Brown stressed the need to support park and ride lots to mitigate traffic impacts. Mayor Howes emphasized the need to address area commuting patterns. Council Member Werner said that park and ride lots would play an integral role in future traffic planning in the Triangle.

Mr. Horton noted that maintenance of a gravel lot would be much more expensive than a paved lot. He noted that very heavy vehicles such as buses and recycling trucks frequently used the lot. Mr. Horton said the staff recommended that the lot be paved.

Council Member Werner inquired whether it was correct that the Chesley subdivision was providing land for expansion of the Cedar Falls parking lot. Ms. Loewenthal said this was correct. Council Member Werner inquired about the proposed schedule for expansion. Mr. Horton said there was no specific time frame. Council Member Werner suggested that expansion of the lot should take precedence over repaving. Mr. Horton noted that it would cost approximately $250,000 to expand and repave the parking lot. Council Member Andresen said the central issue was whether or not to expand the lot. Council Member Werner said the expenditure of $100,000 for repaving would not address the issue of inadequate parking. Mr. Horton suggested allocating $100,000 for implementing expansion and setting aside $100,000 in future years to improve parking at the facility.

Council Member Andresen inquired about the specific use of the $100,000 allocation. Mr. Horton said the funds would be used to expand and pave the lot over a two to three year period. Council Member Brown emphasized the importance of the Town following its own Development Ordinance. She encouraged the Council to consider saving money on the paving proposal. Mayor Howes inquired about the timeframe for the project. Mr. Horton said it was best to handle the project incrementally over a two to three year period.

Mayor Howes said he understood the concept of spreading out the project, but noted that there were short-term needs for parking at the facility. He encouraged the staff to develop other solutions consistent with the Development Ordinance. Council Member Andresen suggested that a compromise could perhaps be made concerning a bus turnaround. Mr. Horton said that current development standards were several years old and could be reviewed. He noted that drainage and curbing facilities at the site would be completed during the next year. Council Member Werner stressed the need to expand the lot to stop people from parking along Weaver Dairy Road. Council Member Brown said she thought the $100,000 allocation was for paving, not expansion. Mr. Horton said the funds could be used for either purpose.

Council Member Rimer cautioned that the Council was possibly setting a precedent for developers who would want to develop their parking lots in stages. He suggested that the Development Ordinance be revisited relative to alternative paving systems.

Mayor Howes suggested that the Council discuss proposed public safety officer positions. Town Manager Horton noted that although was a need for six new firefighter positions, he was not able to recommend these positions and eight public safety officer positions. Council Member Werner inquired about comparative budget impacts of fire fighters and public safety officers. Mr. Horton said there was a small salary differential between the two types of positions. Mr. Horton said the overall assessment was that the Town would be better served by public safety officers. Noting that the Town was not locked into the public safety officer concept, Mr. Horton said a report on the public safety system would be presented to the Council in September.

Mayor Howes inquired whether the Council's commitment to hire eight public safety officers committed the Town to stay with a public safety system. Mr. Horton said it did not. He added that as vacancies occurred in the Fire Department, public safety officers had traditionally taken voluntary demotions to move into these vacancies.

Council Member Rimer inquired about cost differences between training public safety officers and firefighters. Mr. Horton said fire personnel received ten weeks of training, while public safety officers received twenty-seven weeks of training. Council Member Rimer inquired about the impact of the timing of hiring on training of the officers. Mr. Horton said that if the officers were hired in July, they would be part way through their training in September. Council Member Rimer inquired whether it would be possible for the officers to move into fire training if necessary. Mr. Horton said this would be difficult to accommodate. Council Member Brown asked whether changing the system would cause problems for persons hired as public safety officers. Mr. Horton said that serious deficiencies could arise if anticipated vacancies were not filled promptly.

Mayor Howes noted that the principal concern of most citizens was rapid response to emergency situations, regardless of whether a public safety or more traditional system were used. He emphasized the need to commit to another review of the public safety system. Mr. Horton noted that the review of the system would include employee assessments.

Council Member Wilkerson said the Reston report had indicated that the Town had outgrown a public safety officer system. Council Member Wilkerson said he had suggested that six officers be pulled out of the fire rotation to serve as public safety officers.

Council Member Andresen suggested that the Council not second guess the Manager on his recommendation. Council Member Wilkerson said that the Council often deviated from the Manager's recommendations.

Council Member Wilkerson said the Council's role to establish policy. Council Member Wilkerson said the Town needed to change the direction of the public safety system. Mayor Howes said he did not concur with this observation, noting that the Reston report was not as specific as outlined by Council Member Wilkerson.

Mr. Horton said there was room for disagreement in interpreting the report's conclusions. Council Member Werner said that since the majority of the Council was questioning the current public safety system, it might need to be refined or changed. He suggested that any change to the system be made following the Manager's report to the Council in September. Mayor Howes suggested that the Council support the recommendation for the eight new positions in concert with the Manager's forthcoming report to the Council.

Senior Activities Center

Mayor Howes noted that Council Member Rimer had distributed a memorandum to the Council on this topic. Council Member Rimer said that the Senior Center Task Force was requesting funding of $12,000 to defray out-of-pocket expenses for the new program. Council Member Rimer stated that the Town was also being asked to provide staff assistance and contract staff as needed. Council Member Rimer said it was important to note that program costs would be offset by fees charged, with excess fees being reinvested in the senior center. He said that the center's long-range goal was to become tax-free. Council Member Rimer said that the new senior center needed support from Orange County and the Town. He requested that the Council give the proposal their serious consideration.

Council Member Werner requested a review of the center's budget. Council Member Rimer said that aggregate expenses for rent, staff, utilities and other expenses totalled $112,000, with the seniors requesting $12,000 from the Town. Council Member Werner inquired whether there was a clear understanding concerning program administration responsibilities. Mr. Horton said yes, noting that principal administrative responsibility would be in the hands of the Orange County Department of the Aging. Mr. Horton said the Town could help the center to develop high quality services for senior citizens. Council Member Werner said he had no argument with providing the requested $12,000. Council Member Andresen said the funding request appeared reasonable. She inquired whether the proposal was really a break-even proposition. Town Manager Horton noted that the Town already had a recreational specialist focusing on senior programs. He said it would be necessary for program charges to offset non-staff expenses.

Council Member Rimer said the primary issue appeared to be continuing funding for rent, utilities and senior programming. Council Member Rimer said that the County was committed to providing three years of rent for the center. He expresssed hope that the $12,000 funding request would be approved by the Council as a show of commitment to a senior center. Council Member Rimer said the program was an entrepreneurial activity, with the $12,000 serving as seed money for a long-range project. Council Member Brown expressed concern that subsequent funding requests for future funding might grow in scope. Council Member Herzenberg noted that the Council always had the option concerning future funding levels.

Council Member Herzenberg said he supported Council Member Rimer's proposal. Council Member Herzenberg noted that he had recently attended a luncheon for three hundred and fifty senior citizens. He noted that none of the participants appeared to oppose the proposed senior center. Council Member Werner asked whether the new center would make existing facilities available for new activities. Mr. Horton said this was possible, since some programs might be moved from the community center to the senior center. Council Member Werner said the proposal seemed like a relatively inexpensive way to possibly gain more space. Council Member Wilkerson said the new program should be viewed as cultural enrichment. Council Member Brown expressed her concurrence, noting that funding could possibly be identified from the hotel-motel tax. Town Manager Horton noted that this funding would not be available until after budget adoption. He suggested that a performance agreement could be drafted between the Town and the senior activities center. Council Member Rimer said he would be disappointed if the seniors were required to enter into such an agreement.

Mayor Howes said there appeared to be consensus that $12,000 was a reasonable amount of funding and that hotel-motel tax funds might be used as the program funding source. Council Member Werner inquired whether the visitor's center had been required to enter into a performance agreement. Mr. Horton noted that no formal allocation had been made for the visitor's center. Mayor Howes noted that a performance agreement had been required for the Junior Olympics. Mr. Horton noted that funding for this program was needed before July 1st. Council Member Herzenberg said he was greatly concerned about the funding source, although the proposed senior center did not appear to be a cultural activity. Mr. Horton noted that the programs were broad and could be culturally enriching. Council Member Andresen inquired whether the commitment was to begin on July 1st. Mr. Horton said yes. Mayor Howes said there appeared to be consensus to provide funding of $12,000. Council Member Andresen inquired about the estimated gap in the budget. Mr. Horton said approximately $28,000.

Mayor Howes suggested that the Council discuss funding for travel and training. Mr. Horton reviewed the percentages for types of travel and training, noting that a total of $89,000 was earmarked in the General Fund for Town staff. Mayor Howes noted that $10,000 was allocated for travel in the Mayor's Office, while only $4,000 had been expended to date. Council Member Andresen inquired about the impact of a thirty percent cut in travel and training. Mr. Horton said this would effectively cut all out-of-state travel. Mayor Howes said a thirty percent cut was excessive. Council Member Werner said that the provision of $23,000 for the Mayor and Council was not an equitable distribution of funds. He stressed the importance of funding professional conferences. Mayor Howes suggested reducing the Mayor's travel budget to $7,500.

Council Member Herzenberg noted the benefits from conferences such as the National League of Cities conferences. Council Member Andresen expressed concurrence that good ideas were garnered at these meetings. She noted that it was still possible to reduce expenditures for travel by the Mayor and Council. Mayor Howes maintaining the Council travel budget at $11,270, while cutting the Mayor's to $7,500. Council Members Andresen and Brown suggested that the Council's travel budget also be reduced. Council Member Wilkerson inquired how many professional staff attended out-of-state conferences. Mr. Horton responded that department heads, assistant managers and the manager were permitted to attend national conferences. He added that some additional staff attended out-of-state workshops to receive professional certifications. Council Member Wilkerson said he supported cutting the Council's travel budget by ten to fifteen percent. Council Member Werner suggested cutting the budget from $23,000 to $15,000.

Council Member Brown inquired about the number of staff attending in-state professional conferences. Mr. Horton responded that several staff members sometimes attended workshops and conferences for training purposes. He noted that registration fees were generally the greatest costs for these conferences. Mayor Howes said there appeared to be a consensus to reduce the Mayor and Council travel budget to $15,000, while maintaining the budget for staff at $89,000. Mr. Horton noted that this closed the projected gap to $20,000.

Mayor Howes said he did not feel comfortable continuing the session since Council Members Werner and Wilkerson had other commitments. Mayor Howes said the Council could possibly hold another work session during the week of May 20th. Mr. Horton noted that he could find an additional $20,000 in reductions, if directed to do so by the Council. Council Member Werner said the Council could further discuss the budget at its May 28th meeting, since the resolution of intent did not bind the Council to a specific course of action. Mr. Horton said he could identify options by the May 28th meeting.

Council Member Andresen inquired which additional budget items had not been discussed in detail. Mayor Howes said items such as the Town's membership in the Public-Private Partnership and Chamber of Commerce could be discussed at the May 28th meeting. Council Member Brown stressed the need to discuss matters outlined in budget memos to the Council. Mayor Howes asked whether the Council wished to have another work session or to take the matters up at the May 28th meeting. Council Member Andresen said she would be unable to attend the May 28th meeting. Council Member Herzenberg suggested that Council Member Andresen could outline her views in a memorandum to the Council. Mayor Howes suggested that the Council discuss remaining items at the May 28th regular meeting. Mayor Howes noted that citizen comments could also be reviewed at that time. Mr. Horton said that citizen's comments and letters had been forwarded to the Council. Mayor Howes noted that if the current course were followed, there would be no need for an increase in the property tax rate.

Mayor Howes said that citizens such as members of Tax Watch had made helpful suggestions which were appreciated by the Council. Mr. Horton also thanked Tax Watch and citizens for their involvement in the budget process.

The session concluded at 7:05 p.m.