SUMMARY OF A JOINT MEETING BETWEEN THE CHAPEL HILL TOWN COUNCIL AND MEMBERS OF THE GENERAL ASSEMBLY LOCAL LEGISLATIVE DELEGATION, FRIDAY, MARCH 3, 1995, 7:30 A.M., SIENA HOTEL, CHAPEL HILL

Mayor Broun called the joint meeting to order at 7:54 a.m. Legislative delegation members in attendance were Senators Fred Hobbs and Teena Little and Representatives Anne Barnes and Joe Hackney. Council Members in attendance were Joyce Brown, Joe Capowski, Pat Evans, Lee Pavão, Barbara Powell, Jim Protzman and Rosemary Waldorf. Council Member Mark Chilton was unable to attend. Also in attendance were Town Manager Cal Horton, Assistant Town Managers Sonna Loewenthal and Florentine Miller, Finance Director James Baker, Planning Director Roger Waldon and Town Attorney Ralph Karpinos.

Mayor Broun expressed the Council's appreciation for the delegation's efforts to date. He noted that the Town had a great need for a continued funding commitment from the State of North Carolina

Mayor Broun expressed the Council's appreciation for the assistance of the legislative delegation to date. He also noted the need for continued funding commitments from the State of North Carolina through reimbursements such as the intangibles tax. Mayor Broun said the Town Council hoped that it would be possible to accommodate the growth in replacement funds. Representative Barnes stated that the House was currently considering a bill with a growth provision. Senator Hobbs noted that the Senate's proposed revenue bill did not contain a growth provision. He said the Senate was discussing the possibility of distributing funds on a proportional basis, with less wealthy areas receiving a greater share of revenues. Mayor Broun inquired about the possibility of the Senate restoring the growth that would have occurred in the intangibles tax revenue. Senator Hobbs said this was a highly speculative matter which was difficult to predict.

Representative Hackney noted that he served on the House Finance Committee. He noted that the North Carolina League of Municipalities (NCLM) was attempting to find a sponsor for a growth amendment. Representative Hackney said he believed the Senate version of the replacement funds bill would be enacted without a growth provision.

Representative Hackney also reported that he had received an entirely negative reception, from fellow members and the Finance Committee Chair, to the concept of granting the Town authorization to impose impact taxes. Representative Hackney noted that any proposal pertaining to inclusionary zoning would need to be supported by the local homebuilders association. Finally, he noted that no bills had been introduced to date concerning increased motor vehicle license fees.

Council Member Brown inquired whether the unavailability of growth in revenues would increase the likelihood of the Town receiving authorization for an impact tax. Representative Hackney said he did not believe the Town would receive such authorization in the current session. Noting that both the Orange County and Chapel Hill-Carrboro School systems were generally overcrowded, Council Member Capowski inquired about possible mechanisms for the Town to address school facility problems. Representative Barnes noted that local governments in North Carolina did not provide direct fiscal support to school districts.

Senator Little noted that she had consulted with a number of senators concerning possible support for an impact tax. Senator Little indicated that there had been no support for such a measure.

She also stated that there appeared to be no support for changing the State's constitution concerning stricter gun regulations. Senator Little inquired about the history of fire protection funding to local governments. Representative Barnes stated that there had been no increase in the level of fire protection funding to local governments since the program's inception. She said there might be some efforts, as there had been in the past, to eliminate these funds from the budget altogether during the current session. Senator Little expressed concern about the Town's cost for providing fire protection services to the University. Representative Hackney said although it was too early to judge whether or not continuation of fire protection funding would take place, he would closely monitor the situation in consultation with members of the local legislative delegation.

Representative Barnes said subcommittees had been instructed to make minimum three percent cuts in current budgets. She stated that this guideline made it difficult to determine where cuts would actually take place. Noting that increased budgets appeared to be out of the question, Representative Barnes said it would be very challenging to maintain current budgets. Representative Hackney noted that in almost every session, the General Assembly had been asked to make some preliminary level of budget reductions. Noting the relatively large number of new legislators, Senator Hobbs said there appeared to be some confusion and disarray in budget-related matters. He added that there was no great sentiment to expand the existing budget given the Governor's preliminary guidance. Senator Hobbs stated that the local legislative delegation was attempting to develop a strategy to prioritize their legislative priorities.

Representative Barnes said it did not appear that new gun-related regulations would be enacted. She also stated that many new members of the legislature felt they had received a mandate to cut taxes and repeal existing regulations. Representative Barnes said it would be useful to find out the number of communities around the State with a $15 motor vehicle license fee. Mr. Karpinos said the City of Charlotte currently had the authority to assess a $25 fee, $5 of which must be reserved for transit-related items.

Mr. Karpinos stated that existing statutes permitted the Town to regulate the consumption of alcoholic beverages on Town property, although a Police Officer would need to see the consumption take place in order to charge an individual with a violation He also said Town staff was not certain whether existing regulations permitted Police Officers to enforce the rules on Town streets and sidewalks. Mr. Horton noted that the NCLM Legislative Committee had supported this type of legislation. Senator Hobbs inquired whether staff had drafted any proposed legislation. Mr. Karpinos said yes, noting that this information could be forwarded to the legislative delegation. Council Member Waldorf said the Town was principally concerned with having the ability to keep impromptu street parties in line. Noting that the beer industry did not favor the proposed changes, Council Member Waldorf said the Town would appreciate any assistance from the local legislative delegation.

Representative Barnes said she did not foresee any problems with amending the Town Charter concerning vacancies on the Town Council. Mr. Karpinos noted that it would be useful for potential candidates to know how many positions would be open for the next Town Council election.

Representative Barnes requested clarification of the Town's sidewalk dining proposal. Mr. Horton said he thought sidewalk dining would be clearly permitted under existing regulations. He noted that the Town would seek the North Carolina Department of Transportation Secretary's concurrence with the Town's interpretation of regulations. Mr. Horton said if the Department of Transportation did not concur, it would be necessary to request assistance from the local legislative delegation.

Noting that the general tenor of the current legislative session appeared to be fairly discouraging, Council Member Brown inquired about the possibility of passing legislation concerning downzoning as the taking of property and unfunded mandates related to environmental protections. Representative Barnes said she was not familiar with any downzoning provisions having been submitted during the current legislative session. Representative Hackney said the session to date had been relatively bad for environmental protection concerns. He stated that the majority of House members appeared to favor the rollback of environmental protections. He also stated that it was likely that some sort of property takings legislation, such as billboards, was likely to pass during the current legislative session.

Representative Barnes suggested that the Town keep up its guard on annexation matters. Council Member Evans inquired in what regard. Representative Barnes said it was likely that the legislature would attempt to make it more difficult for municipalities to annex. Mayor Broun noted that the League of Municipalities had taken a strong stand in this regard.

Mr. Horton said the Landfill Owners Group was nearing the end of a process to select a new landfill site. He stated that current statutes did not permit the use of special obligation bonds to pay for the acquisition and land for a new landfill. Mr. Horton also thanked the local legislative delegation for its past fiscal support of the Chapel Hill-Carrboro transit system. He noted that the current year funding was about $482,000. Representative Barnes asked whether this funding was in the State's recurring budget. Mr. Horton said half of the funding was in the recurring budget. He also said staff could provide additional detail on the matter. Representative Barnes said this would be very helpful. Mr. Horton also thanked the delegation for its support of efforts to restore growth in beer and wine franchise taxes.

Representative Hackney inquired about differences between special obligation and revenue bonds. Mr. Horton said although the two were quite similar, there were some differences. He noted that revenue bonds included a pledge of all the revenues of the financed facility to repay the bonds, while general obligation bonds can not use such a pledge, but any other revenues except tax moneys may be used to pay off the bonds. Mr. Horton added that special obligation could currently be used for any purpose other than to buy land for a landfill.

Mr. Horton noted that Senator Little had a prior obligation at the Friday Center necessitating her early departure from the meeting.

Mayor Broun noted that the chances of passage of legislation for new fees or taxes were little or none. Representative Barnes said the local legislative delegation would make its best efforts to protect fire protection funds.

Council Member Brown inquired whether it was best to hold off on or to submit bills which were unlikely to pass in the General Assembly. Representative Hackney said although all matters would receive serious consideration, he did not think it was advisable to send any bill forward which had no chance for passage. Representative Barnes said it was up to the Council to judge which matters should be introduced. Senator Hobbs said the local legislative delegation would work hard to determine a priority listing of local bills.

Mayor Broun inquired about the viability of passing a bill concerning inclusionary zoning. Representative Hackney said he could check into the likelihood of passage. Senator Hobbs requested additional specifics on the proposal. Planning Director Roger Waldon said the majority of the Town's growth was in the high end of the residential market. He stated that the Town hoped to offer incentives to developers to provide additional affordable housing units. Senator Hobbs inquired about proposed minimum tract sizes. Mr. Waldon said staff did not yet have a specific proposal in this regard. Mr. Horton stated that home builders had expressed their willingness to move ahead on the matter if all developers were required to do likewise, and their was no objection from the Homebuilders Association in doing so. Representative Barnes said it would be helpful for the local delegation to receive a copy of a draft bill on inclusionary zoning.

Council Member Waldorf inquired whether an increased motor vehicle tag fee merited investigation. Representative Barnes said a proposal of this type might run into obstacles. She noted that it would be helpful to have additional information concerning the proposal.

Council Member Protzman requested the delegation's guidance concerning the role of local government elected officials in seeking new legislation. Representative Barnes stated that the

current political barometer was sending mixed signals, with the devil being in the actual details of local decision-making.

She noted that long-range planning for the State House of Representatives was quite difficult since members only served two year terms. She noted that the situation for local elected officials, who serve four-year terms, was somewhat better.

Representative Hackney noted that North Carolina was eighth in the nation in the percentage of State and local revenues collected at the State level, largely due to the fact that school teachers are paid by the State of North Carolina. He added that North Carolina ranked 32nd in terms of tax burden and 44th in terms of the number of governmental units. Representative Hackney noted that the State was below average in terms of compensation for State and local government employees. He also stated that the State collected a large amount of revenues, such as beer and wine taxes, and distributed these funds to local governments. Representative Barnes said that most other states provided far more local funds for operating schools. Representative Hackney said although State taxes were relatively high, if state and local taxes were put together and compared nationally, North Carolina compared very favorably to other states.

The meeting concluded at 8:57 a.m.

AGENDA #5.1a

MEMORANDUM

TO: Mayor and Town Council

FROM: W. Calvin Horton, Town Manager

SUBJECT: Minutes of February 27, March 1 and 3 Council Meetings

DATE: March 27, 1995

Attached are minutes of the Council's February 27th regular meeting, March 1st public hearing and March 3rd joint meeting with the local legislative delegation.