MINUTES OF A BUDGET WORK SESSION HELD BY THE MAYOR AND COUNCIL OF THE TOWN OF CHAPEL HILL, WEDNESDAY, MAY 31, 1995 AT 5:30 P

MINUTES OF A BUDGET WORK SESSION HELD BY THE MAYOR AND COUNCIL OF THE TOWN OF CHAPEL HILL, WEDNESDAY, MAY 31, 1995 AT 5:30 P.M.

Mayor Broun called the meeting to order at 5:37 p.m. 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 Manager Sonna Loewenthal, Finance Director James Baker, Transportation Director Bob Godding, Fire Chief Dan Jones, Personnel Director Pat Thomas and Town Attorney Ralph Karpinos.

General Budget Matters

Mr. Horton presented an overview of Council options concerning

possible adjustments to the staff's budget recommendations for the Transportation and General Funds.

Mayor Broun said staff was seeking the Council's guidance this evening concerning possible adjustments to the recommended budget. He noted that page three of the staff's memorandum outlined General Fund revenue adjustments totalling $291,000 and potential cost adjustments totalling $199,000. Mayor Broun also noted that the Council was only being asked this evening to identify a total amount of funds available for human service grants. Mr. Horton noted that the Human Services Advisory Board would make its annual report and recommendations to the Council on June 5th.

Council Member Waldorf inquired whether $37,000 was earmarked in the recommended budget for the Phillips and Culbreth Middle School after school programs. Mr. Horton said this was one of the adjustment options offered for the Council's consideration. Council Member Waldorf said this was a human services expenditure which might be needed.

Council Member Capowski asked whether it was correct that it was possible for the Council not to increase bus fares without the need to raise the Transportation fund tax rate. Mr. Horton said this was correct, if the Council chose to eliminate trolley service. Council Member Capowski inquired about the staff's recommendation concerning bus fares. Mr. Horton said he recommended increasing bus fares. He noted that if the fares were not raised during the next fiscal year, very strong consideration would need to be given to raising bus fares in the future.

Council Member Chilton said he favored keeping bus fares down. He noted that the additional $24,000 in projected savings from eliminating trolley service could be returned to taxpayers or committed to other programs.

Council Member Brown said she favored keeping bus fares down. Noting that staff was recommending that the Council utilize $20,000 of annual greenway funding for the Triangle Land Conservancy's New Hope Corridor land acquisition program, Council Member Brown inquired about the possibility of allocating an additional $20,000 for greenways programs. She also inquired about the possibility of funding the DARE program for only one-half year, while alternative youth intervention programs were explored by staff. Mr. Horton said this course of action would mean the elimination of some Police positions. Mr. Horton stated that he would not recommend this course of action. He noted that some alternative programs might possibly meet objectives similar to the DARE program.

Noting that the level of bus fares impacted many community residents, Council Member Chilton said it was desirable not to raise bus fares or pass prices. Council Member Protzman said he concurred with Council Member Chilton's and Capowski's comments about bus fares. Council Member Protzman also said he strongly supported the University carefully examining its parking rate structure in comparison to the market place. Council Member Brown noted that staff would report back on this matter in the future. She also said it would be desirable for the Town to evaluate inexpensive or free parking at Town facilities some time in the future.

Council Member Evans said she supported keeping bus fares at their current pricing level. She noted that the President of the UNC student body was exploring creative mechanisms to increase bus ridership among students.

Mayor Broun said there appeared to be Council consensus to maintain bus fares and pass prices at their present levels. He also said there appeared to be consensus to eliminate trolley service in its present form, leaving open the possibility of other uses for the trolleys. Council Member Waldorf said any further use of the trolleys should not have costs to the Town.

DARE Program

Council Member Powell said she was not convinced that the DARE Program was not a good one. Council Member Powell also said she had heard nothing but positive comments from students participating in the DARE program. She emphasized whether DARE or an alternate program was used for intervention purposes, the program needed to fit the needs of all students.

Council Member Waldorf said it was very important for positive interactions to take place between students and police officers.

She inquired whether youth services officers had responsibilities beyond the DARE program. Mr. Horton said this was correct. Mayor Broun said staff could prepare a follow-up report on the DARE program and similar alternative programs. Council Member Waldorf asked that the report address the range of youth services which were being offered or could be offered.

Council Member Pavão said he urged the Council to support $26,000 in increased funding for the purchase of library books and materials. He also noted that the Council may also wish to further investigate requesting additional library funding from Orange County, since approximately forty percent of the library's patrons resided outside of Town limits. Council Member Pavão suggested that the Council wait to receive a recommendation from the Library Board of Trustees about bookmobile service before deciding how to proceed in this matter. Mayor Broun said he strongly concurred with Council Member Pavão's guidance in these matters. Council Member Evans said she strongly supported providing additional funds for library books and materials.

Council Member Capowski inquired about possible ramifications if the Council chose to have a $50,000 contingency fund, rather than $193,000, as initially proposed. Noting that this allocation had been $50,000 annually in recent years, Mr. Horton said he did not believe this would pose any special difficulties. Citing dwindling revenue sources for a variety of programs, Council Member Capowski said he believed that the Council might receive more mid-year funding requests from worthy organizations than in recent years.

Concerning funding for human service performance agreements,

Council Member Chilton suggested that the Council consider compromising between the total funding levels recommended by the Human Services Advisory Board and the Manager. He stated that JOCCA was unlike the other agencies reviewed by the Board since it was a community action agency, dependent on receiving annual funding from local government units. Council Member Chilton suggested that the Council consider handling JOCCA as an individual budget line item on annual basis. He also said this would provide the Human Services Advisory Board with a little more flexibility in terms of allocating funds to other human service agencies.

Council Member Powell said she concurred with Council Member Chilton that JOCCA provided important services to low-income persons. Council Member Powell also expressed her support for having a separate line item in the Town budget for annual funding of JOCCA.

Mayor Broun inquired what distinguished JOCCA from other human service agencies. Council Member Chilton said although there were many worthy organizations seeking funding, only JOCCA was established by a Federal legislative mandate. Stating that he had served as the Council's representative on the JOCCA Board for the past four years, Council Member Chilton said all requested funds were expended prudently for essential services.

Noting that he served on the Board of Directors of four of the agencies seeking human services funding from the Town and his appreciation of the services provided by JOCCA, Council Member Protzman said he was not sure why the Council needed to treat JOCCA any differently than other human service agencies in terms of funding reviews. Council Member Chilton suggested that the Council could possibly discuss this matter with the Human Services Advisory Board. Mayor Broun inquired whether it was correct that the Board would make funding recommendations to the Council at the June 5th Council meeting. Mr. Horton said this was correct. Mayor Broun suggested that the Council receive the Board's comments about overall funding recommendations and JOCCA funding at the June 5th meeting.

Council Member Waldorf said she concurred with Mayor Broun's remarks about receiving guidance from the Human Services Advisory Board. Council Member Waldorf suggested that the Council explore possible support for the Orange-Chatham Alternative Sentencing Program. Council Member Evans inquired whether other agencies were in the same realm as JOCCA. Mr. Horton said staff could prepare a follow-up report on this matter. He added that one possible course of action would be for the Council to agree on a funding base of $104,000 for agencies, with contingency funds being earmarked for possible funding of additional agencies.

Noting that agencies such as the Senior Center and Arts Center had recently made substantial supplementary funding requests to the Town, Council Member Capowski said he was hesitant to have contingency funding of only $50,000. He inquired whether contingency funds were earmarked for the Hargraves Gymnasium project. Mr. Horton said although this project budget would be tight, staff believed adequate contingency funds would be available, if necessary. Council Member Brown noted that the Council had a good deal of flexibility in establishing the amount for contingencies.

Mayor Broun noted that based on the adjustments outlined in the staff's memorandum, there was approximately $116,000 to be allocated by the Council. Council Member Brown asked whether additional funding increases would be needed for the proposed new Solid Waste Management Department. Mr. Horton said no additional funding increases would be necessary.

Council Member Chilton asked whether staff would recommend reclassifying the Solid Waste Administrator position even if a new Solid Waste Department were not proposed. Mr. Horton said he believed his recommendation would remain unchanged.

Mayor Broun noted that it might not be necessary to use all contingencies relative to landfill tipping fees. Council Member Chilton said he hoped it would not be necessary to have a tipping fee of $31 per ton.

Mayor Broun noted that the Downtown District Tax would provide funding of approximately $50,000 for streetscape improvements.

Mr. Horton stated that Town staff might be challenged in terms of staffing to complete all requested sidewalk and streetscape projects during the next fiscal year. Council Member Brown said she thought there had been prior Council agreement to hold streetscape funds in abeyance, pending a report from staff. Mr. Horton said there was a legal requirement for the Council to adopt a proposed plan in order to impose a Downtown Service District Tax. Mayor Broun noted that staff would report back to the Council on the wishes of business owners for using Downtown Service District Tax funds.

Mayor Broun inquired about the Council's wishes concerning the possible allocation of an additional $26,000 for library books and materials. Council Member Protzman said he supported the library's efforts. He also expressed his support for the after schools program proposal. Council Member Protzman stated that comparatively speaking, the bookmobile was a little less mission critical than other programs.

Council Member Evans said she believed increasing the visibility of visitor services through use of hotel-motel tax funds was a good idea.

Noting that long-term personnel expenses tended to be significant, Council Member Capowski inquired about the importance of three possible new positions included in the Council's options for budget additions. Mr. Horton stated that compared to other priorities, he could not argue that these were more important or were central to the objectives of the Council's discussions. Council Member Capowski inquired whether it was correct that safety in downtown bars would not be sacrificed if a new Fire Inspector were not hired. Mr. Horton said this was correct.

Council Member Waldorf suggested that the Council focus on possibly allocating funds for non-recurring expenses. Council Member Waldorf said she liked the idea of eliminating the outdoor nature program. Noting that near-term facility expansions were proposed at the Northern Community Park and Hargraves Center, Council Member Waldorf stated that people could likely find outdoor nature activities offered by private concerns or otherwise on their own.

Noting that local hoteliers he had recently spoken to felt that the Orange County Visitors Bureau was doing a very good job, Council Member Pavão suggested that the Council establish a practice of committing a percentage, perhaps 20%, of hotel-motel tax receipts for support of the Bureau's programs. Mr. Horton noted that based on last year's proceeds this would be approximately $78,000. Council Member Capowski inquired whether this would hurt other groups applying for hotel-motel grant funds. Council Member Chilton stated that 90% of the Town's hotel-motel tax receipts went into the General Fund. Mr. Horton noted that Town's budget currently contained a line item of $30,000 for the Orange County Visitors Bureau. He added that this amount would continue to be allocated on annual basis until other direction was provided by the Council. Council Member Brown said she preferred not to increase this amount. Stating that approximately ninety percent of the hotel beds in Orange County were in the Town, Council Member Pavão said the Town stood to gain the most from increased marketing activities by the Visitors Bureau. Mr. Horton noted that the staff recommendation was to allocate hotel-motel tax funding of $30,000 to the Orange County Visitors Bureau, $20,000 to the Arts Center and $28,000 in total among a number of other agencies, for a total allocation of $78,000.

Mayor Broun said he personally felt uncomfortable spending as little as ten percent of hotel-motel tax revenues on visitor and cultural programs. Mayor Broun said he thought it made sense to allocate a greater portion of funds to the Bureau's activities.

Council Member Capowski asked whether Mayor Broun was suggesting that no additional funds be provided to other hotel-motel tax agencies than in the present year. Mayor Broun said this was correct. Council Member Chilton suggested that the concept of large and small grants programs could still be in place. Mayor Broun noted that it was the Council's option to make more or less funds available for other agencies. Council Member Capowski asked whether the Town knew the level of receipts when allocations were made. Mr. Horton said no, noting that estimates were used. Council Member Capowski said it was a good idea to key allocations to the amount of income collected. Council Member Pavão stated that the Visitors Bureau actively sought to recruit conventions and sales meetings to the Town and Orange County.

Council Member Capowski inquired about the possibility of dividing funds among agencies by percentages, rather than dollars. Council Member Chilton said this caused problems for agencies such as the Arts Center.

Council Member Waldorf inquired whether Council Member Pavão would find a fifteen percent allocation acceptable. Council Member Pavão said yes.

Council Member Chilton suggested providing $26,000 for library books and materials, holding $14,000 in reserve for human service needs, allocating $18,000 for the after schools program, $28,000 for the Orange County Visitors Bureau and $25,000 for Hargraves Gymnasium contingencies. Council Member Powell said she strongly disagreed with the proposals to cut back funding for the after schools program and Hargraves Gymnasium allocation.

Mayor Broun inquired whether there was a contingency amount in the Hargraves Gymnasium bond issue. Mr. Horton said this was correct.

Council Member Capowski suggested setting aside $10,000 for a bicycle safety/small roadway projects fund. Mr. Horton said $10,000 could be set aside for this purpose.

Council Member Evans said although she very much favored the after schools program, she also wanted to hear the Human Services Advisory Board's recommendations concerning the program. Council Member Powell expressed her concurrence. Council Member Waldorf suggested that the Town conduct an evaluation of the after schools program.

Council Member Waldorf asked whether there was any support for eliminating the outdoor nature program. Council Member Evans said she would be supportive if these funds could be used for the after schools program. Council Member Pavão expressed his concurrence.

Council Member Capowski requested additional information concerning the option to expend $30,000 for cemetery capital improvements. Mr. Horton said although several hundred thousand dollars of cemetery improvements could be made, funding of $30,000 would permit significant projects to move ahead.

Council Member Brown expressed concern that the Town's budget was not examined in sufficient detail. She also said that although a lot of policy decisions were decided by the staff, this was not necessarily the way things should be done. Council Member Brown suggested that the Council examine the budget in greater detail next year. Mayor Broun said he thought the Council looked at the budget carefully and had a good budget review process.

Noting that funding of $125,000 was proposed for a new greenways project next year in addition to standard annual allocations of approximately $50,000, Council Member Evans stated that a lot of money was being spent on greenways. Council Member Chilton inquired about the level of Town greenways funding for next year. Mr. Horton said $50,000, including $20,000 for the New Hope/Triangle Land Conservancy project. Council Member Chilton noted that $125,000 grant referenced earlier was a State grant for Phase II of the Bolin Creek Greenway. Mayor Broun said he was willing to have additional funding (up to $20,000) set aside for greenways if the outdoor nature program were eliminated.

Mayor Broun inquired whether it was the consensus of the Council to hold $51,000 in abeyance for human service programs (including after schools), allocate $28,000 of additional funding for the Orange County Visitors Bureau, $26,000 for library books and materials, $20,000 for greenways, $10,000 for bicycle improvements

and realizing $24,000 in savings from eliminating the outdoor nature program. There was Council concurrence on these points.

Council Member Capowski inquired whether it was correct that the Manager's recommended budget would not increase the number of Town employees. Mr. Horton said the budget recommended adding one part-time position. Council Member Capowski inquired about the assumption made about Parking Services employees in the budget. Mr. Horton said the budget assumed that the Town would continue to operate the Parking Services Division. Council Member Capowski inquired whether the proposed hiring of an Environmental Engineer for the Landfill operation was balanced elsewhere in the budget in terms of number of employees. Mr. Horton said this was correct. Council Member Capowski asked how many new positions were needed by virtue of creating the Solid Waste Department. Mr. Horton said none were necessitated solely by virtue of the creation of the new Solid Waste Management department.

Off-Street Parking Operations

Transportation Director Bob Godding presented an overview of the process for evaluating the management of off-street parking operations. He noted that a private consulting firm had concluded that a significant portion of savings from transferring parking operations to a private firm would be realized in lower wages and fringe benefits for employees.

Stating that the provision of adequate benefits and wages for employees was very important, Council Member Brown said she had real concerns with proceeding with privatization of the operation.

Stating that parking deck operations rarely paid for themselves, Council Member Capowski said it was sometimes necessary for local governments to subsidize some services for the public good. Expressing concern that the private firm proposed to pay full-time employees approximately $12,000 per year, Council Member Capowski inquired about the possibility of the private contractor paying higher wages. Mr. Godding noted that the Town's wage rates for contract and full-time parking lot attendants were somewhat higher than those of private contractors.

Noting that the Council had asked the Manager to examine the possibility of privatizing parking operations at its January planning retreat, Council Member Waldorf stated that private sector costs were principally less due to lower wages for employees. Stating that the Council was striving for greater efficiency and

cost-effectiveness, Council Member Waldorf said she supported the privatization proposal.

Council Member Evans asked whether parking rates would remain unchanged. Mr. Godding said this was correct. Council Member Evans said she was glad to see that the consultant agreed that the Town's parking fines were too low. She asked whether the Town currently contracted for part-time parking lot attendants. Mr. Horton said these individuals were part-time employees on the Town's payroll. Council Member Evans inquired whether staffing the lot at the corner of Church and Rosemary Streets had been discussed. Mr. Godding said there were possibilities for staffing a number of parking lots. Council Member Evans asked whether private firms would provide additional security at the Rosemary Street parking deck. Mr. Horton said the Town's own security monitors and Police personnel would be used to patrol the parking deck area.

Expressing her general support for the concept of privatization, Council Member Powell said she did not favor privatization efforts which had disproportionate negative impacts on lower-income persons.

Council Member Chilton said cutting salaries was not the only way to save money through privatization. He stated that it was unfair to equate slashing wages with achieving governmental efficiency. Council Member Chilton also said that on balance he did not think it was worth proceeding with the plan if it only reduced employee wages.

Council Member Pavão expressed his concurrence with Council Members Brown, Chilton and Powell's remarks. Council Member Pavão expressed disappointment that the proposed operational cost reductions would be at the expense of lower-paid employees. Mayor Broun said he was persuaded that it was not a good idea to proceed with the proposal. Mayor Broun said he thought it might have been possible to streamline operations and be more efficient without lowering wages.

Council Member Brown inquired whether it was correct that the Town's parking lots had paid for themselves in the past, with funds left over to support a portion of bus operations. Finance Director James Baker said this was correct. He stated that typical annual allocations to the Transportation Fund had averaged approximately $80,000 per year. Council Member Brown inquired about the impact of refinancing on the Rosemary Street parking deck. Mr. Horton

said the Town might realize a small return during the next fiscal year.

Council Member Brown said she thought it was a good idea to get general information about the concept of privatizing Town operations such as off-street parking facilities.

Council Member Waldorf suggested that the Council consider giving more explicit direction to staff when making information requests in the future.

Mayor Broun said although there did not appear to be Council interest in privatizing off-street parking operations, the staff had done a good job of reporting back to the Council on options.

Council Member Pavão said although he was interested in privatizing, it should not be at the expense of employees.

Council Member Chilton said it was encouraging to note that the private sector did not see tremendous efficiencies beyond existing Town operations.