MINUTES OF A BUDGET WORK SESSION HELD BY THE MAYOR AND COUNCIL OF THE TOWN OF CHAPEL HILL, WEDNESDAY, MAY 11, 1994 AT 7:30 P.M.

Mayor Broun called the work session to order. Council Members in attendance were Joyce Brown, Joe Capowski, Mark Chilton, Pat Evans, Lee Pavão, Barbara Powell, Jim Protzman and Rosemary Waldorf. Also in attendance were Town Manager Cal Horton, Assistant Town Managers Sonna Loewenthal and Florentine Miller, Public Works Director Bruce Heflin, Library Director Kathleen Thompson, Finance Director James Baker and Long-Range Planning Coordinator Chris Berndt.

Item 1 Landfill Issues

Mr. Horton briefly reviewed the proposed Landfill Fund budget, noting that no increase in tipping fee was proposed by the Town staff. He noted that if the Council desired a tip fee increase, staff would try to meet the Council's goal of a no tax increase budget.

Mayor Broun inquired what new programs would be possible as a result of increased landfill tipping fees. Council Member Chilton, the Council's Landfill Owners Group representative, briefly reviewed the options, noting that the constituencies benefitting varied by the types of programs involved. He noted that specific programs included pedestrian-oriented recycling containers for urban areas, the potential to rebid the urban curbside recycling contract, expansion of the County's rural curbside collection program, the acquisition of a salvage shed and provision of additional reserves for development of the next regional landfill.

Mayor Broun requested information concerning the source reduction program. Public Works Director Bruce Heflin said $46,000 was to be used for source reduction programs. He added that staff could provide additional information in a follow-up report. Council Member Brown requested additional information about option 3 in the staff's report. Mr. Heflin said staff had presented the Landfill Owners Group with a number of options. He stated that the collective wisdom of the Group was to go forward with source reduction programs.

Council Member Chilton stated that the Town of Carrboro and Orange County representatives on the Landfill Owners Group favored increasing the landfill tipping fee by $2 per ton. Council Member Chilton said his recommendation had been an increase of $.50 per ton, with a compromise of a $1.50 per ton increase having been reached among the three partners. Mayor Broun inquired which services were not needed. Council Member Chilton said he favored adding items one, four and six from option 2 as new programs or services.

Mr. Heflin said one option would be not to rebid the Town's urban curbside program contract.

Council Member Waldorf inquired whether the new contract would involve expending additional funds. Mr. Heflin said an anomaly of public sector bidding was that the maximum amount of money available was announced prior to receipt of bids. He stated that BFI, Inc. might raise it prices on basic services. Mr. Horton said that staying with the same firm might provide some flexibility in contract negotiations.

Council Member Protzman inquired what Council Member Chilton would have recommended absent direction from the Council. Council Member Chilton said he did not oppose the Council's initial direction. He stated that a tipping fee increase of $.50 to $1.50 per ton appeared to be reasonable. Council Member Chilton said it would be interesting for the Council to provide additional funding for source reduction programs.

Council Member Protzman said it would be desirable for the Town to move towards a "pay as you throw" refuse collection system. He added that raising landfill tipping fees was philosophically in alignment with this type of program. Council Member Capowski asked whether a $1 per ton tipping fee increase would be equivalent to a 1/8 cent tax increase. Mr. Heflin said this was correct. Council Member Capowski asked how many pedestrian-oriented recycling containers could be purchased for $12,000. Solid Waste Planner Blair Pollock said five to eight containers could be purchased using these funds. He added that the first two containers would be built using a State solid waste reduction grant. Council Member Capowski said although he favored the concept, the estimated price tag of $1,200 to $1,500 was too high for the amount of recycling involved. Mr. Pollock stated that the estimate of recycling usage was purposefully conservative.

Council Member Capowski asked whether the estimated cost of $139 per ton for 1,200 homes in the rural recycling program was a worthwhile investment. Council Member Chilton said this cost estimate was very competitive compared to other area collection programs. He added that there was an outer limit for the minimum density for which collection services could be provided. Council Member Chilton also said it would be unfair to provide collection service to some rural subdivisions while not providing it to others. Mr. Heflin said at present 4,500 homes were served, with fiscal considerations, distance and density playing a role in determining which subdivisions received service.

Council Member Brown suggested examining the Town's entire solid waste collection system. She also inquired whether Orange County's proposal for a staffed collection system was moving forward. Mr. Heflin said this was correct. Council Member Brown suggested that the Council comprehensively examine equities in solid waste programs. Council Member Waldorf inquired whether the solid waste study consultant would be examining these concerns. Mr. Heflin said the consultant would examine a variety of problems and suggest some options for handling equity and other concerns.

Council Member Brown emphasized the importance of coordinating matters among the four entities having solid waste concerns. She emphasized the importance of encouraging local and regional businesses such as Sunshares and Orange Recycling. Council Member Brown also inquired about the ending date for the Town's current curbside recycling contract. Mr. Heflin said the contract concluded at the end of the fiscal year. Council Member Brown said it would be preferable for a local firm to provide these services. Mr. Horton said that State law required the Town to accept bids from all qualified bidders, regardless of whether or not they had local offices.

Council Member Brown said it would be helpful to have information on Orange County's plans for handling solid waste. Mr. Horton said staff could provide this information. Council Member Brown inquired about the staff's evaluation of recycling programs to date. Mr. Heflin said staff had completed a draft analysis earlier in the day. Mr. Horton noted that this analysis was subject to change given its draft status.

Mayor Broun requested additional information on the proposal to provide $46,000 for source reduction education programs. Council Member Chilton stated that source reduction education programs in Greensboro had been very successful in reducing waste volumes. Council Member Brown inquired how much the Greensboro program cost and the source of funds for the program. Mr. Heflin said staff could get this information and pass it along to the Council. Council Member Brown inquired about the possibility of receiving a grant for this type of program. Mr. Heflin said staff could investigate this possibility. Council Member Powell noted the need to move ahead with solid waste reduction education programs as soon as possible.

Council Member Evans asked whether residents of rural areas who recycled had access to staffed collection areas. Council Member Chilton said all County residents had access to the collection areas. Council Member Evans asked whether the County's greenbox sites were paid for using recycling funds. Mr. Heflin said yes. Mr. Horton added that Orange County currently provided six convenience sites for refuse disposal and recycling.

Council Member Capowski noted that current total landfill tonnage was about 125,000 tons per year. Mr. Heflin said this figure included about 30,000 tons of ash. Council Member Capowski said the Landfill Owners Group was considering a proposal to spend $139 per ton to save 1/500th of the waste stream. Council Member Chilton said it was also possible to make similar arguments against the Town's curbside recycling program. Mr. Horton said Orange County's curbside recycling program was very important to the Orange County Commissioners and their constituents.

Mayor Broun inquired about the advisability of spending funds on new programs in light of possible changes in collection systems. Council Member Chilton said this was a fair point. He added that proposed program changes would not necessarily interfere with the consultant's study going forward.

Council Member Brown reiterated the importance of comprehensively examining how solid waste was dealt with throughout the County.

Council Member Powell inquired when the study would be completed. Mr. Heflin said the proposal was to begin the study in June and for the study to be completed by May, 1995.

Council Member Waldorf said she was hard-pressed to think why there would be additional costs associated with a source reduction program. Council Member Waldorf also said she favored a "pay as you throw" system in the future. Council Member Chilton said although curbside recycling programs tended to be expensive, their return on investment was generally quite good.

Council Member Protzman said he did not think that the Council could continue not to act on solid waste matters just because of the consultant's pending study. He also expressed concern that the proposed pedestrian-oriented recycling containers might blend in too well with their surroundings, limiting their use. Council Member Protzman expressed concern that too much emphasis was being placed on container's appearance at too high of a cost. Council Member Chilton asked whether two trial containers were being constructed with State funds. Mr. Pollock said this was correct.

Council Member Brown said she had recently spoken to a citizen who was interested in learning more about solid waste reduction. She stated that there were many misconceptions about solid waste and education was important to correct this. She added that the City of Greensboro's program had reduced solid waste by up to 23% in the pilot area.

Mayor Broun said he was concerned about any increase in the landfill tipping fee on several levels. He stated that although some of Orange County's program proposals were appealing, other proposals could wait. Mayor Broun also said although he very strongly favored source reduction, he did not recommend expending funds until more information about program specifics was available. Council Member Chilton suggested that the Council consider allocating $46,000 for solid waste reduction education programs subject to Council review once the Landfill Owners Group had a specific proposal. Council Member Capowski asked whether the proposed tipping fee would increase. Council Member Capowski said the proposed fee would increase by $0.50 per ton, at a total estimated cost to the Town of $24,000.

Council Member Powell said she concurred with Council Member Chilton's recommendation. She noted that the Council needed to know more about the proposed solid waste reduction programs prior to approving program funding. Council Member Powell also said if people knew that they had to pay to throw things out, fewer things might get thrown away.

Council Member Pavão emphasized the importance of having good solid waste reduction education programs. He added that communities with successful solid waste reduction programs spent considerable funds on these efforts. Council Member Pavão said he supported Council Member Chilton's proposal.

Council Member Capowski inquired whether the Landfill Owners Group was becoming a victim of its own success in reducing the landfill budget and related tipping fees. Council Member Chilton said this was correct. Council Member Capowski said although he agreed with the proposal to increase tipping fees by $0.50 per ton, he did not think $46,000 for solid waste reduction education programs would have much impact. He added that real source reduction would get underway when a "pay as you throw" program was initiated. Council Member Capowski asked whether the Appearance Commission had any sense of pedestrian-oriented recycling container costs when they reviewed them. Mr. Pollock said no, noting that the Commission was purely concerned with appearance matters. Council Member Capowski said he favored reducing the cost per container markedly. Council Member Chilton said the Council might have a better sense of how the containers would work once the two pilot containers were put in place.

Council Member Evans said she was interested in seeing information about the Greensboro solid waste reduction study.

Mayor Broun said he would support Council Member Chilton's proposal about waste reduction programs. Mayor Broun also said he sensed that the Council would approve a $1 per ton increase in the landfill tipping fee with the possible exclusion of pedestrian-oriented recycling containers. Council Member Brown asked whether funds were needed for rebidding of the Town's curbside recycling program. Mr. Horton said staff recommended renegotiation of the existing contract with BFI, Inc. Council Member Brown inquired about the length of the new contract. Mr. Horton said one year.

Mr. Horton reviewed the Council's general direction, noting that the Council appeared to support adding $46,000 for a source reduction program, $10,000 for waste reduction grants and $23,000 for a rural curbside recycling program. Council Member Powell asked whether the $46,000 for source reduction programs could be increased. Mayor Broun said yes, in the event that extra revenues were available from tipping fees. Council Member Brown said waste reduction grants did not necessarily achieve the kinds of waste reduction which were needed and advocated adding all grant funding to the education program. Council Member Chilton said he was open to increasing the waste reduction grant program either by $5,000 or $10,000. Council Member Brown said the initial suggestion had been to add $10,000 to the initial $46,000 proposed. Council Member Chilton said his revised proposal was to add only $5,000, increasing the amount to $51,000 and adding only $5,000 to the waste reduction grant program. Council Member Protzman said he supported a $1 per ton landfill tip fee increase instead of a $0.50 per ton increase.

Item 2 Library Funding

Mr. Horton briefly reviewed the materials before the Council concerning Orange County funding of Town library services.

Mayor Broun noted that the Town had requested that Orange County provide additional funding for library services on several occasions. He inquired the impact of rejecting Orange County funding for library services. Library Director Kathleen Thompson said that the Town currently received $143,000 per year from Orange County for library services. She said approximately one-third of one staff member's time per year, at a cost of about $5,000, would be necessary to issue cards to Orange County residents if Orange County's library funding were rejected. Mayor Broun inquired about estimated cost per card for Orange County residents. Ms. Thompson said about 7,500 patrons would have to purchase cards at a cost of $18 per year if Orange County funding for Town library services were rejected. She noted that this cost would need to increase if not all 7,500 chose to buy a library cared. Ms. Thompson stated that out-of-county residents currently paid $30 annually for Town library cards.

Mayor Broun inquired about maintenance of effort for State library funding. Mr. Horton stated that existing State library funding rules for maintenance of efforts did not make much sense. Ms. Thompson stated that these rules were currently under review.

Council Member Capowski inquired about the level of fair share library subsidy payment by Orange County. Mr. Horton said based on proportion of library patrons, this would be approximately 40% of expenses. Council Member Capowski suggested that Mayor Broun forward a letter to the Orange County Board of Commissioners concerning review of the County's funding of the Town's library. Council Member Capowski asked why the book purchasing budget had been reduced by $15,000 in the proposed budget. Ms. Thompson stated that this reduction would be offset by additional funding for a significant new magazine and newspaper collection on microfilm.

Council Member Waldorf asked whether municipalities or counties were mandated to provide library services. Ms. Thompson said no.

Council Member Waldorf suggested that Mayor Broun forward a persistent but polite letter to the Orange County Board of Commissioners concerning funding of Town library services. She suggested that the current effort to examine growth management concerns could also examine funding equity matters.

Council Member Evans inquired about library staff concerns about provision of service on public holidays. Mr. Horton stated that the Council had requested that staff provide a cost estimate for operating on holidays. He added that some money could be saved by not operating on holidays. Council Member Chilton said he continued to have objections to this possible addition to the budget. He noted that offices were currently closed on Labor Day to recognize the hard work of people. Noting that the Town's Parks and Recreation Offices were open on this day, Mr. Horton said Parks and Recreation staff would likely request that their offices be closed on Labor Day.

Council Member Brown said she favored the Library staff's suggestion that Town offices be closed on public holidays. Ms. Thompson stated that the policy being considered by the Library Board of Trustees recommended that the library be open on all but two days per year. Noting that she appreciated the library staff's suggestion and that access to the new library would be better than the old library, Council Member Waldorf said she did not think the library needed to be open on major holidays. Mayor Broun asked whether the Library Board had a recommendation on the matter. Ms. Thompson said the Library Board would continue discussion of the matter at its next meeting.

Council Member Protzman said he thought the Library and Parks and Recreation Department should be closed on all regular holidays.

Council Member Capowski said a function of the Town was to provide services to its citizens. Saying he appreciated the concerns of Town staff, Council Member Capowski said it was also important to provide services to customers, the Town's citizens. Noting that he too respected the feelings of Town employees, Mayor Broun suggested that the Council receive recommendations from applicable boards and commissions prior to changing any policies concerning provision of services on holidays. Council Members Protzman and

Evans expressed their concurrence.

Item 3 Senior Center Performance Agreement

Mr. Horton said the Senior Center on Elliott Road provided much needed services to Town residents. He stated that the Town had provided some grants to the Senior Center in the past. Mr. Horton also said the services to senior citizens were also provided at the ArtsCenter, Northside Senior Center and Hargraves Center. He also stated that counties traditionally provided services to aged community residents.

Council Member Pavão said the Center's current annual budget was $114,000. Council Member Pavão also said he strongly recommended that the Council increase the Town's cash funding to the Senior Center from $12,000 to $20,000 per year plus janitorial services. He also noted that the Center received a number of grants from private corporations and raised approximately $8,000 from a recent yard sale and weiner roast.

Mayor Broun inquired about the amount of County fiscal support for the Senior Center. Council Member Pavão said the County's current annual subsidy was $72,000 plus staffing. Council Member Capowski said he supported an increase of the Town's support from $12,000 to $20,000 per year as a good leveraging of private funds.

Council Member Capowski asked whether the Town currently provided janitorial for any other non-Town owned buildings. Mr. Horton said the only current exception was the Lincoln Center. Council Member Capowski inquired about the logic for the Town to provide janitorial services at the Senior Center. Council Member Pavão said the Town could likely receive a better price since it already had favorable contractual arrangements for janitorial services.

Council Member Evans inquired why only $5,825 was budgeted for janitorial services during the current year, while $10,000 was being requested for the next fiscal year. Council Member Pavão said current janitorial services were not adequate to meet the Center's needs. Mayor Broun inquired about the source of $18,000 in Town funding for the Senior Center. Mr. Horton stated that contingency funding of $84,000 was available for a variety of smaller program needs as specified by the Council.

Council Member Powell inquired about the extent of Town services provided to other senior centers. Mr. Horton said limited leadership was provided at Hargraves Center while no services were provided at the Northside Center or ArtsCenter. Council Member Powell inquired about the level of Town annual funding for JOCCA services. Mr. Horton said this varied from year to year. Council Member Chilton noted that one philosophy of the Town's human services funding allocation process was to eventually eliminate the need for individual agencies to receive the Town's funding. Council Member Pavão said the Senior Center would be grateful for any funding received from the Town.

Council Member Protzman said he believed that the Senior Center would be able to use its negotiating skills to attain a good price for janitorial services. Council Member Powell asked whether the increase in allocation from $12,000 to $30,000 would be a one-time expense for the Town. Mr. Horton said unless otherwise instructed he would recommend the same level of expense ($30,000) in the Town's next budget. Council Member Powell said the Town only gave a small amount of annual funds to JOCCA compared to funding of similar agencies in other communities.

Item 4 World Trade Center Funding Request

Mr. Horton said staff had been unable to reach a conclusion about the benefits to be derived from the Town undertaking a membership with the World Trade Center.

Noting that the Town was trying to encourage clean, non-polluting industry, Council Member Capowski asked whether the World Trade Center had approached the University of North Carolina about membership with the World Trade Center. Public Relations Director David Thomas said although the World Trade Center did not receive direct contributions from the University, some University-related programs did maintain memberships with the Center. Council Member Capowski asked who would benefit from Town membership. Mr. Thomas said the principal emphasis of Town membership would be to support the center to make individual memberships available. He added that the Town's suggested membership fee of $4,200 per year would not be enough to provide memberships for individual Town residents.

Council Member Waldorf inquired about the level of the Center's annual operating budget. Mr. Thomas said it was approximately $395,000.

Council Member Brown although she believed in supporting small local businesses and regional efforts, she was not enthusiastic about the possibility of the Town undertaking a Center membership.

Mayor Broun said although an argument could be made that foreign businesses could eventually employ more Town residents and local businesses might be able to better market their goods in the international arena, these benefits were indirect. Mr. Thomas noted that the individual member cost of $325 was kept low due to the support of local municipalities.

Council Member Pavão said the Trade Center provided information on markets and technology and services. He added that if the choice was for the Center to exist or not exist, he would rather that the World Trade Center continue to exist.

Council Member Protzman said although he supported the World Trade Center, he did not think that the government should be in economic development activities at their current level. Noting that he found it philosophically difficult not to support the Center, he did not think it was the proper role of government to be involved in these types of activities.

Noting that she had not decided whether or not the Town should be a member of the Center, Council Member Powell inquired about the Town's role in the World Trade Center and whether the Town's membership would assure the Center's continued existence. Stating that the Town's proposed contribution would only be $4,000 out of a $400,000 budget, Mr. Horton said he was unable to determine any direct services that the Town would receive from a World Trade Center membership. Mayor Broun said although he was a fan of the World Trade Center, there were a number of competing priorities which precluded him from supporting Town membership with the Center. Stating that the Town had 9% foreign-born residents, Council Member Capowski said $4,000 was a relatively small amount to pay for support of small businesses. An informal straw poll of Council Members found that 3 members supported the membership while 6 members did not support the membership. Mr. Thomas thanked the Council for their time and consideration of the request.

Item 5 1994-1999 Capital Improvements Program

Mr. Horton presented an overview of the proposed 1994-1995 budget for capital improvements. Mr. Horton said he was pleased to report that the Geographical Information System was finally producing beneficial maps and other products. He added that emergency power generators for the Town's fire stations were proposed in the Capital Improvements Program. Mr. Horton also said funding for Americans with Disability Act improvements, $30,000 for sidewalks and pedestrian projects and $20,000 for traffic signals were proposed in the Program. He said staff welcomed Council advice on adjustments to the proposals.

Council Member Protzman asked whether any capital projects were being deferred due to the Council's direction of a no property tax increase budget. Mr. Horton said no items were being postponed which would result in greater costs or deterioration of existing assets. Council Member Protzman inquired about funding for bridge replacement projects. Mr. Horton said the State had recently given the Town a $250,000 grant for bridge replacement projects.

Council Member Waldorf inquired about the possibility of funding for improved projection equipment in the Council Chamber. Mr. Horton said staff would pursue this matter in the context of the current year budget.

Council Member Capowski inquired about funding for bicycle commuting improvements. Mr. Horton said the State Bicycle Fund was the principal possible funding source for these projects, although there was no guarantee that these funds would be received. Council Member Protzman inquired about the Council's flexibility in assigning capital improvement project priorities. Mr. Horton said the Council always had flexibility on locally-funded projects unless they were already obligated by a contract.

Council Member Waldorf inquired about capital funding of greenways projects including Phase III of the Bolin Creek Greenway. Mr. Horton noted that at its May 2nd work session the Council had indicated its consensus to proceed with the issuance of additional bonds for several parks and greenways projects, with several Council Members indicating that Bolin Creek, Phase III was a lower priority project.

Council Member Waldorf said she was sorry that there was only $30,000 for sidewalk projects. She also requested additional information about the recent traffic signal system upgrade.

Mr. Horton said the staff's objective was for the signals to make traffic flow 10% more efficient. Town Engineer George Small said an information report would be presented to the Council in early summer once the system had been in operation for a few months.

Council Member Waldorf inquired whether any additional employees had been hired to maintain the system. Mr. Horton said although some staff members had been hired to maintain and operate the system, as much work as possible was privatized on a project basis. Mr. Small said three technical staff and a traffic engineer hired by the Town provided fairly significant local ability to handle maintenance of the system. He added that the State of North Carolina reimbursed the Town for a portion of maintenance costs.

Council Member Evans asked whether reappropriated funds from previous budget years could be used for capital projects. Mr. Horton said yes, noting existing commitments to specific capital improvement programs, including street reconstruction and beautification projects at the old cemetery. Council Member Pavão suggested that some of the reappropriated funds could be used for improvements in the downtown area. Council Member Brown said she supported using reappropriated funds for cemetery beautification projects.

Council Member Evans inquired about the amount of money expended in recent years for cemetery projects. Mayor Broun said staff could provide a follow-up report. Mr. Horton said staff would do so.

Council Member Capowski said the Town owned a second cemetery along U.S. 15-501. Mr. Horton said this was correct, adding that the Town also owned a third cemetery near the Village West apartments.

Council Member Powell suggested allocating $28,000 for cemetery improvements as an investment for the future. Noting that the cemetery was included in the National Historical Register, Council Member Evans suggested the possibility of attaining outside funding for cemetery improvements.

Council Member Protzman inquired about the possibility of additional topics for future budget work sessions. Mayor Broun said he would discuss this process a little later in the meeting.

Council Member Capowski said he believed that the Council was seeking improvements to South Columbia Street, rather than its widening. Mr. Horton said staff would review this language.

Mayor Broun noted that a public hearing on the proposed budget was scheduled for May 17th, with an additional work session possibly occurring on May 24th and budget adoption contemplated for a special meeting on June 6th. He noted that it was possible that the Council might be comfortable with adopting the budget on May 23rd, following the May 17th hearing, eliminating the need for the May 24th work session and June 6th special meeting. Council Member Protzman said he thought the budget process was greatly improved in terms of its clarity and direction. Mayor Broun suggested that it would be useful for Council Members to think about possible discussion topics for the May 17th work session and provide these topics to the Manager and himself. He added that the lists might be expanded upon after the May 17th hearing.

The work session concluded at 10:35 p.m.