MINUTES OF A BUDGET, CAPITAL IMPROVEMENTS AND COMMUNITY DEVELOPMENT

PUBLIC HEARING HELD BY THE MAYOR AND COUNCIL OF THE TOWN OF CHAPEL

HILL, NORTH CAROLINA, TUESDAY, MARCH 16, 1993 AT 7:30 P.M.

Mayor Broun called the hearing to order. Council Members in attendance were Julie Andresen, Joyce Brown, Joe Capowski, Mark Chilton, Joe Herzenberg, Barbara Powell and Arthur Werner (arrived at 7:45 p.m.). Council Member Alan Rimer was absent excused. Also in attendance were Town Manager Cal Horton, Assistant Town Managers Sonna Loewenthal and Florentine Miller, Finance Director James Baker and Town Attorney Ralph Karpinos.

Mr. Horton presented an overview of the budget proposal and the proposed budget review schedule. He noted that expenditures and revenues to date were within target ranges. Mr. Horton stated that property taxes and state-shared revenues were the Town's two largest revenue sources. He said that approximately $250,000 would be needed for additional staff and operating expenses at the new library, $50,000 was recommended for automation equipment in the Police Department and $805,000 for funding a 4.75% pay increase for most Town employees. Mr. Horton also noted that the preliminary budget did not anticipate any additional bond sales during fiscal year 1993-94. He stated that although federal transportation operating assistance would be reduced by about thirty percent, no fare increases were proposed. Mr. Horton said it appeared appropriate to undertake a complete review of the Town's fixed bus routes and transportation services in the near future. Mr. Horton added that he recommended initiation of a reserve fund to accumulate $700,000 for the purchase of twenty-eight new buses in 1995-96.

Mr. Horton also briefly reviewed the status of the Landfill Fund, noting that significant costs would be associated with closing and permanently monitoring the existing landfill site. He added that increases of $1 per ton for mixed solid waste and $2 per ton for ash were proposed. Mr. Horton said that the proposed Capital Improvements Program would emphasize maintenance of existing facilities. He noted that the staff looked forward to receiving comments and suggestions on the proposed 93-94 budget. Council Member Andresen inquired whether it was correct that debt service reserve was not customarily used for balancing operating budgets. Mr. Horton said this was correct.

Noting that she had been either a federal, state or city employee most of her working life, Sandy Brownstein said she did not think that Town employees should receive much, if any, pay raise during the next fiscal year. Ms. Brownstein said she had not received a pay raise as a state employee in a long time. She also expressed concern that property taxes might increase this year due to revaluation. Ms. Brownstein urged the Council to consider basic needs in preparing the proposed budget. She also suggested that the Council follow the lead of federal and state politicians by providing small or no pay increases for Town employees.

Erwin Shatzen, owner of Pepper's Pizza, said the concept of an across the board pay increase for Town employees was not good business since it provided no incentive for employees to do good work. Mr. Shatzen suggested that the new library facility be furnished and staffed incrementally, as services were needed and additional funding became available. He added that some services such as fire ladder trucks could be shared by Carrboro and the Town. Mr. Shatzen suggested spreading out the use of the hotel/motel tax to more programs and services. He also suggested staffing Town parking lots on Sunday mornings and afternoons to collect additional revenues.

John Lattimer said the proposed preliminary budget would necessitate a 10.5% increase in property taxes. He expressed concern that property taxes would double in approximately seven years. Mr. Lattimer urged the Council to control personnel costs. He stated that a pay increase for Town employees was out of line with the rest of the world. He also stated that the Manager could provide suggestions to combine and eliminate some jobs. Mr. Lattimer suggested that volunteers could be utilized for some positions at the library. Mr. Lattimer expressed his support for roll-out refuse collection carts as a means of saving up to $400,000.

Donald Boulton said the Orange Community Housing Corporation (OCHC) received $35,000 each from the Town and Orange County and $10,000 from the Town of Carrboro annually for affordable housing programs. Mr. Boulton said OCHC effectively leveraged federal and private financing to help meet the community's affordable housing needs.

He reported that the OCHC board and staff was continuing to develop the Dobbins Hill and Erwin Village affordable housing programs.

Mr. Boulton said the corporation was aggressively pursuing private funding and looked forward to continuation of its good working relationship with the Town.

Josh Busby of the Greek Recycling Awareness Committee said he appreciated the Town's new multi-family recycling program which had recycled 15,000 pounds in glass and aluminum. Mr. Busby also expressed his support for expansion of the recycling program to all multi-family housing developments in the Town and the proposed $1 per ton increase in the mixed solid waste tipping fee.

Mickey Ewell, Chairman of Tax Watch, said he had examined the preliminary budget document and found it to be confusing. Mr. Ewell said he supported the acquisition of a computer for the Police Department and the incremental implementation of the streetscape plan. He said that Tax Watch supported expenditure of funds for things like energy efficient lights that would reduce costs in the long run. Mr. Ewell stated that he was truly concerned about the proposed 4.75% pay increase for Town employees. He said the Town's only major employment competitor, the University, was far behind the Town's benefit and compensation package. Mr. Ewell also said that the proposed addition of eighteen people was grossly excessive.

Noting the reduction of the Assistant to the Mayor position to half-time, he suggested that the positions of Wellness Coordinator and Manager's Assistant be phased out of the budget. Mr. Ewell said the Town did not need separate Engineering and Public Works Departments. He also suggested that the Town's contribution to the 401-(k) retirement benefit program be reduced by one percent per year for the next five years. Mr. Ewell said that single Town employees should pay for one-half of their insurance coverage premiums and persons with family or dependent coverage should make similar contributions for their insurance.

Bill Oppold, a member of Tax Watch, noted that there were a number of Tax Watch members in attendance this evening, with a variety of budgetary concerns and suggestions.

Wayne Pein, Chairperson of the Bicycling Advisory Committee, showed the Town's proposed 1976 and 1988 bicycle facility plans and contrasted them with an exhibit of existing facilities. He added that the majority of existing bicycling facilities were substandard. Mr. Pein stated that many more bicycle-related projects could be funded, including the installation of bike racks along Franklin Street, and construction and dedicated maintenance of bikeways.

Toni Karres, a member of Tax Watch, said she and her husband had built their own home and raised two children in the Town. Ms. Karres said her property taxes in 1965 were $567 per year compared to $3,300 annually at present. Noting that she was a UNC employee, Ms. Karres said although Town employees provided valuable services, pay increases did not appear necessary. Ms. Karres stated that fiscal belt-tightening was needed all over.

Dolph VanLaanen inquired what guidelines were given to the Manager in preparing the budget. Mayor Broun said the Council had held a work session during which a great many guidelines were outlined. Mr. VanLaanen inquired whether a zero property tax increase guideline had been proposed. Mayor Broun said no such guideline had been stated this year. Mr. VanLaanen said he had heard many other speakers calling for the need to restrict tax increases. He urged the Council not to increase taxes by percentages greater than salary increases for Town taxpayers. Mr. VanLaanen expressed concern that some homeowners were being forced to cut back on essential such as home repairs.

Betty Smith, representing the Kings Mill/Morgan Creek Association,

said she was very annoyed by the proposed increase in property taxes and decrease in services. Ms. Smith said she and her neighbors did not want roll-out refuse collection carts. She also expressed concern about the proposed expenditure of approximately $25,000 for bicentennial-related stone monuments.

James McEnery stated that the Town's Board of Aldermen had adopted an ordinance requiring the registration of all bicycles. Mr. McEnery also stated that a bicycle registration fee was also adopted, although the fee was repealed in 1981. Mr. McEnery said citizens were willing to assist with implementation of a five dollar bicycle registration to pay for bicycling facilities.

James Goldstein said he did not favor the proposed 4.75% salary increase. Mr. Goldstein said cost-of-living increases over the last three years for University employees were much less than those for Town employees. Noting that the University was recommending a 2% cost-of-living adjustment, Mr. Goldstein said he was particularly concerned about the proposed addition of eighteen new positions. He added that Town management needed to examine duplication of employee services. Mr. Goldstein also stated that the five percent 401-(k) contribution by the Town was above University employee perks. He requested that the Council consider reducing the amount of the proposed pay increase for Town employees.

Brad Barker, a Town bus driver, said most Town bus drivers had to work two jobs to meet their expenses. Mr. Barker noted that Town employees had not had a pay raise in two years. He stated that the Town had one of the best bus services in the nation, with buses typically running within one or two minutes of their schedule. Mr. Barker stated that bus drivers were under stress all day long, driving through dense traffic. Mr. Barker said employees were asking for a small raise. He also stated that many employees could not afford to pay for a portion of their health insurance benefits. Mr. Barker emphasized the importance of continuation of the 401-(k) program as a supplementary retirement benefit program. Mr. Barker said he hoped that the Council and Town residents would support its highly skilled and dedicated staff of bus drivers.

Charlie Zimmerli emphasized the importance of maintaining quality products while balancing budgets. He expressed concern that the proposed Town budget appeared to be business as usual. Mr. Zimmerli said he supported a merit-based system rather than market adjustments for most Town employees. He added that turnover among Town employees should not be feared. Mr. Zimmerli said savings were possible from installation of an automation system in the Police Department. He also suggested that the new library facility be operated on the same budget level as the current year. Mr. Zimmerli said it was unacceptable that Town employees were not matching contributions to the 401-(k) retirement program. He added that persons in the lowest part of the economic ladder were most impacted by property tax increases. Mr. Zimmerli urged the Council to stop spending increases.

Jim White, a Lake Forest resident of over thirty years, noted that budget growth tended to occur exponentially. Mr. White suggested that the Council place a cap on the Town's personnel budget and number of personnel.

Ken Jackson expressed his appreciation to the Council for its response to the proposed Streetscape Plan. Mr. Jackson said downtown merchants, organizations and other individuals were willing to assist with the proposed plan. He also requested that

a portion of proceeds from the hotel-motel tax be used to fund North Carolina High School Athletic Association activities.

Robert Humphreys said although funds were tight and tough, the Council had found provided funding for a variety of worthwhile projects. He urged the Council to identify funds for implementation of the Streetscape Plan.

Mary Dexter, a Town bus driver, homeowner and taxpayer, said that Town services were highly touted. She added that good Town employees made this possible. Ms. Dexter noted that lower-paid Town employees paid the same utility rates and grocery prices as persons with higher incomes. She stated that Town employees were willing to provide good services in return for a living wage.

William Coleman, a Town bus driver and tax payer, said bus drivers and other Town employees had not received a merit or market increase in two years. Mr. Coleman said he had received a forty-seven cent per hour increase in four years of service to the Town.

He added that bus drivers provide good service to Town residents and bus riders. Mr. Coleman also expressed appreciation to Mr. Horton for his concern for Town staff salaries.

Esphur Foster expressed concerned that Hargraves Park and the A.D. Clark Pool were not recommended for funding in the proposed Capital Improvements Program. Ms. Foster said that Hargraves Park needed major improvements and additional structures.

Stanley Norwood, a Town bus driver and Town resident for thirty-five years, said the area's cost of living was quite high. He stated the proposed pay increase for Town employees was a positive step.

Council Member Chilton thanked James McEnery for his earlier remarks on bicycle safety. Noting that comments on both sides had been received this evening concerning rollout refuse collection, Council Member Chilton said a new financing approach needed to be considered. He also thanked Transportation staff members for their comments this evening. Council Member Chilton noted that he had formerly lived next to a Town bus driver who had worked hard to make ends meet financially. Mayor Broun expressed the Council's appreciation for comments by all speakers this evening.

COUNCIL MEMBER CHILTON MOVED, SECONDED BY COUNCIL MEMBER WERNER, TO REFER COMMENTS TO THE MANAGER. THE MOTION WAS ADOPTED UNANIMOUSLY (8-0).

Item 2 Preliminary Community Development Plan

Mr. Horton briefly reviewed the proposed three-year community development plan. He stated that staff welcomed proposals from citizens this evening. Mr. Horton said staff recommended setting aside approximately $247,000 for public housing renovations, $80,000 for administrative costs and approximately $50,000 each for economic development activities and transitional housing programs.

Vernessa Taylor, representing the Rural Opportunities Corporation (ROC) program, said ROC was requesting $50,000 per year of Community Development Block Grant funding for the next three years.

Ms. Taylor said she did not support a decrease in funding for transitional housing or other programs to benefit the homeless. Ms. Taylor urged the Council to increase funding for economic development programs.

Charles Paddock, Chairperson of the Town's Housing and Community Development Advisory Board, said the Board was generally housing-oriented. He noted that the Board generally agreed with the proposed allocations outlined in the staff's recommendation to the Council. Mr. Paddock said one of the Board members recommended building a home each year, selling it and using these funds to build additional homes. He stated that the board supported initial economic development funds of $30,000 to $50,000 per year. Mr. Paddock also noted the importance of maintaining and renovating existing public housing units.

Ted Parrish said the Knolls neighborhood supported low-income homeownership opportunities rather than the construction of additional rental units. Mr. Parrish said it was possible to build quality homes in the range of $50,000 to $60,000.

Mack Thompson, representing the Midway Development Commission, said although the majority of community development funds were targeted for housing programs, economic development programs were also very important. He requested that the Council provide funding for the Midway Development Commission's proposed programs.

Harvey Reid, President of the Midway Development Commission,

said economic development was extremely important to the community. He said the Commission and Town could play a major role in providing economic development stimulus to the Midway area and the entire community. Mr. Reid stated that investing in economic development programs to encourage creativity and innovativeness was very important.

Maxecine Mitchell, a former public housing resident and ROC program participant, urged the Council to allocate funding for public housing renovation and economic development programs. Noting that she planned to own her own business, Ms. Mitchell emphasized the importance of increasing people's incomes to enhance their chances of homeownership. Ms. Mitchell said she planned to attend the Housing and Community Development Advisory Board's next meeting to suggest that funds budgeted for administrative costs be redirected to transitional housing programs.