SUMMARY OF AN ASSEMBLY OF GOVERNMENTS MEETING, THURSDAY,

SEPTEMBER 29, 1994 AT 6:30 P.M., ORANGE COUNTY HOMESTEAD CENTER

Orange County Commission Chair Moses Carey called the meeting to order. Elected officials in attendance were Carrboro Mayor Eleanor Kinnaird, Carrboro Alderpersons Hank Anderson, Jay Bryan, Jackie Gist, Randy Marshall and Frances Shetley, Chapel Hill Mayor Kenneth Broun, Chapel Hill Council Members Joyce Brown, Joe Capowski, Mark Chilton, Pat Evans, Barbara Powell, Jim Protzman and Rosemary Waldorf, Hillsborough Mayor Horace Johnson and Board Member Evelyn Lloyd, and Orange County Commissioners Alice Gordon and Verla Insko. Also in attendance was Institute of Government Professor Jake Wicker, Carrboro Town Manager Bob Morgan, Chapel Hill Town Manager Cal Horton, Chapel Hill Finance Director James Baker, Chapel Hill Assistant to the Manager Greg Feller, Hillsborough Administrator Eric Swanson and Orange County Manager John Link.

Commissioner Carey inquired whether there were any questions about the report from elected officials. Alderman Gist said she wanted to talk about larger equity issue matters at some point in the future. Alderman Gist also said she wanted to discuss philosophical matters about effects on landowners in the future.

Institute of Government Professor Jake Wicker stated that multiple levels of government added to the complexity of dealing with equity matters. Mr. Wicker said he had examined any inequities between levels of government solely in terms of taxes and had not attempted to decide whether any particular type of taxes were good or fair ones. He also noted that it was fairly common for persons living in cities or towns to believe that they were doubly taxed, paying county and municipal taxes. Mr. Wicker added that some citizens also felt that they were not fully rewarded for County property taxes.

Mr. Wicker stated that although most revenues were raised by state and federal government agencies, the majority of these funds were expended at the local level. He briefly reviewed an exhibit concerning the distribution of local sales tax proceeds, stating that his analysis found that Town residents tended to receive more return for their per capita tax dollars than residents of unincorporated areas in Orange County. Mr. Wicker said another complicating factor in determining tax equity matters was the overlap of jurisdictions. He noted that both the Orange County Commissioners and the Chapel Hill Town Council represented the interests of the Town's residents. Mr. Wicker emphasized the important role of local elected officials in coming up with fair methods to treat all citizens in a fair manner. Stating that no adversarial positions between local government levels were appropriate, he said that any concerns about matters of County equity should be addressed to the County Commissioners, rather than local councils.

Mayor Kinnaird asked whether the Town of Hillsborough paid Orange County for inspection services. Mayor Johnson stated that these costs were passed through administratively. Mayor Kinnaird inquired whether the Town of Carrboro charged an extra recreation fee for Orange County residents. Mr. Morgan said no. Mayor Kinnaird asked whether the Orange County sheriff provided patrol services to "donut hole" annexation areas. Mr. Morgan said yes. Mayor Kinnaird inquired about law enforcement costs outlined on page ten of Mr. Wicker's report. Mr. Wicker said these dollar transfers had not been specifically examined in his analysis.

Mr. Horton called upon Mr. Baker to present an alternate analysis of equity matters. Mr. Baker said it was quite difficult to determine tax attribution at the local level. He stated that it was virtually impossible to sort out how tax dollars were paid and received. Mr. Baker noted that the distribution formula for sales taxes was enacted by the General Assembly, with two one-half cent sales taxes collected on a statewide basis and distributed locally on a per capita basis. Alderman Bryan asked whether Mr. Baker had any comments about net transfers. Mr. Baker said the same amount of taxes was being assigned twice. He added that the decision on how to distribute tax revenues was made on a statewide basis by the General Assembly.

Council Member Capowski requested additional information about per capita income figures for Orange County and local towns. Mr. Feller said the average income of Chapel Hill Town residents was 19.3% higher than for other Orange County residents. He stated that there was no way to perform such as an economic analysis for town and non-town residents. Council Member Capowski said although the University of North Carolina had a large payroll and budget, it did not pay property taxes to the Town. He inquired how these factors were included in Mr. Wicker's analysis. Mr. Wicker stated that taxes paid to Orange County offset the cost of local services consumed by University employees. Commissioner Carey said although the University and Hospital did not have to pay local property taxes, they both contributed to the local economy with expenditures from their respective budgets. Council Member Evans noted that the Town also received tax revenues from the sale of beer and wine.

Commissioner Carey inquired whether local elected officials were interested in continuing discussions about funding of recreation and library programs. Council Member Protzman inquired whether all governments felt that they were getting the short end of the stick in terms of revenues. Alderman Gist stated that a principal role of local elected officials was to protect the best interests of their constituents. Commissioner Carey stated that some residents of unincorporated areas had strong feelings that the world appeared to revolve around Chapel Hill. He said Orange County Commissioners placed a consistent emphasis on providing equitable services to all County residents. Alderman Gist said she was not trying to cast stones. She added that residents of unincorporated areas in Orange County appeared to be getting the short end of the stick in terms the provisions of services.

Commissioner Insko said she agreed with the general presentations this evening about the difficulty of determining overall local tax equities. She stated that the primary questions were where efficiencies could be achieved in local government services

and how each government could receive its fair share of tax revenues. Mayor Broun said it was difficult to make these types of determinations about service efficiencies. He stated that libraries and parks and recreation facilities came to mind as possible programs for achieving some levels of greater efficiency.

Alderman Anderson said seventeen years ago the Town of Carrboro had executed an agreement with Orange County concerning the provision of recreation services. He suggested that the Town of Carrboro consider the possibility of exploring greater County funding for Town recreation services. Alderman Anderson asked why OWASA was not included in Mr. Wicker's analysis. Mr. Wicker said OWASA was not a general government service.

Commissioner Carey said residents of Cedar Grove did not feel they were as well treated as residents of Chapel Hill regarding library services. He also stated that residents of unincorporated areas did not feel that they fared as well as residents of incorporated areas in terms of governmental services received.

Council Member Waldorf said she hoped that the Assembly of Governments could reach a conceptual agreement for long-range planning of recreational facilities as a means of achieving savings and efficiency.

Mayor Johnson said the Town of Hillsborough wanted to work with Orange County to create smaller community parks.

Alderman Gist said it was a good idea to examine the possibility of achieving efficiencies in the provision of recreation facilities and services. She proposed that an equity committee, consisting of representatives from local governments, be established to examine a variety of equity-related issues. Mayor Broun stated that it was a very good idea to examine both equity and efficiency issues, possibly achieving efficiencies in purchasing, especially of recycled goods. Commissioner Insko said she liked the idea of attempting to find more service efficiencies. Mayor Broun noted that local government staff members were exploring ways to achieve efficiencies and save money in areas such as purchasing. Council Member Powell said she also favored cooperation between local governments to achieve tax savings and efficiencies in the provision of services such as parks and recreation and housing.

Commissioner Carey suggested that it might better serve all local government units to consider the possibility of joint capital and operating plans for some services. Alderman Anderson expressed his support for undertaking this effort as soon as possible. Alderman Gist said she favored having a guided principle of fairness and equity for all Orange County residents.

Mr. Link suggested that the Assembly of Government consider having the Chapel Hill-Carrboro and Orange County School Boards included in the proposed process. Commissioner Carey said this was an excellent suggestion.

Commissioner Insko said consideration of the fairness issue was important. Council Member Powell said although she believed in fairness and equity, she wondered who would decide what was fair and equitable.

Mayor Johnson emphasized the importance of local elected officials responding to the concerns of constituents about the provision of local services.

Mayor Kinnaird said Mr. Wicker's analysis had concluded that tax equity was a complex subject with many subtleties and uncertainties. She noted that it was difficult to achieve complete equity in providing services.

Mayor Broun suggested that staff of the local governments make a proposal about ways of working together in terms of possible joint recreation programs and capital matters. He also suggested that local government staffs make a recommendation to their elected boards on these items. Mayor Broun stated that staff might also make recommendations concerning purchasing matters at some time in the future. Noting that a recent bond election for recreational facilities in the Town of Carrboro had failed, Mayor Kinnaird stated that the lack of adequate recreational facilities posed a very serious problem in the community. Council Member Evans said she hoped that local government bodies would continue efforts to develop regional greenways and major habitat corridors.

Mayor Johnson stated a new school planned in Hillsborough would have a gymnasium and playing fields which would offer recreational opportunities for young people.

Commissioner Carey said there appeared to be a consensus among elected officials to ask the local government staffs to make recommendations to their governing bodies about opportunities for joint planning and capital for recreation services.

Council Member Brown said the matter of who determines fairness criteria was very complicated. She emphasized the importance of elected officials assuring a continuing balance between the provision of good quality services for a livable community while maintaining property tax rates which were as low as possible.

Commissioner Carey said he hoped that local government staffs were constantly working on ways to make their operations more efficient.

Mayor Kinnaird said she was interested in having staffs examine possibilities for future joint purchasing opportunities.

Carrboro Town Manager Morgan said it was a good idea to include the two local school districts in these equity matters. Mayor Broun said this was the consensus of the Assembly of Governments.

Alderman Anderson expressed concern about gaps in existing recreation programs for young people. He suggested that the local governments of Orange County work together to address these concerns. Mayor Kinnaird noted that the Youth Committee of the Violent Crime and Drug Abuse Program was attempting to develop programs to address these concerns. Council Member Waldorf said she was somewhat encouraged by some existing programs directed toward addressing the needs of community youth. Council Member Evans added that a number of smaller youth-oriented programs were having positive community impacts. Alderman Anderson said it was important to explore starting additional good quality programs for young people. Commissioner Carey stated that the best model was to provide after-school programs for youth. Council Member Powell said it was important to note that not every young person or teenager wanted to be involved in team sports activities.

Mayor Broun thanked Mr. Wicker for his presentation. He also noted that the Council was in the process of forming a University Land-Use Plan Advisory Committee concerning the possible future development of the Mason Farm and Horace William tracts. Mayor Broun suggested that the Town of Carrboro and Orange County might wish to be represented on the committee.

The session concluded at 8:13 p.m.