MINUTES OF A WORK SESSION HELD BY THE MAYOR AND COUNCIL OF THE

TOWN OF CHAPEL HILL, NORTH CAROLINA, MONDAY, FEBRUARY 5, 1996

Mayor Waldorf called the meeting to order. Council Members in attendance were Julie Andresen, Joyce Brown, Joe Capowski (arrived at 6:28 p.m.), Mark Chilton, Pat Evans, Richard Franck, Lee Pavão and Barbara Powell. Also in attendance were Town Manager Cal Horton, Assistant Town Managers Sonna Loewenthal and Florentine Miller, Public Works Director Bruce Heflin, Solid Waste Director Gayle Wilson, Solid Waste Planner Blair Pollock and Finance Director James Baker.

Mr. Horton presented a summary of Town operations related to the recent snow and ice storm. He noted that the Town Hall, Library and other Town operations were open on a regular schedule today. Mr. Horton stated that reduced transit operations were offered. He also said that about a half dozen neighborhoods were without electricity at some point during the storm. Mr. Horton said he was very sorry for the family and friends of two people had perished in a fire early on Saturday morning. Public Works Director Bruce Heflin said that Town staff had worked closely with DOT staff on creating and maintaining good road surfaces on main thoroughfares and through streets. He noted that it was very challenging keeping streets cleared of snow and ice due to refreezing at night.

Item 1 "Pay as You Throw" Collection Options

Mr. Horton said the memorandum before the Council outlined six possible questions for focusing this evening's discussion about policy objectives, including how to involve public in the overall process, how the landfill operation might be organized and how the program could be handled for commercial, residential and multi-family units.

Council Member Brown said it was very important to include public education in the Council's decisionmaking process. Noting that all four local government bodies had adopted solid waste related goals, Council Member Brown suggested that additional goals could be adopted relative to unit-based pricing. She also suggested that the existing goals should be used to the fullest extent possible.

Council Member Andresen said it was important to understand the economic impact on tipping fees in the event that a lesser amount of waste was produced. Council Member Franck said it was important to examine the options for lost revenues due to reduced solid waste volumes at the regional landfill.

Council Member Brown noted that options for reducing solid waste volumes would be included in the consultant's report to the Landfill Owners Group. She added that there was generally growing interest in governmental units to examine "pay as you throw" solid waste collection options.

Council Member Andresen said she believed that it was important for the Town to balance its roles producing and reducing waste.

Council Member Brown said over a long period of time, less and less landfill space would be needed as the amount of waste generated was reduced.

Noting that the report before the Council referenced setting solid waste collection fees "sufficiently high" to encourage composting, Council Member Evans inquired whether money was the only incentive to reduce waste. Council Member Chilton said he did not think that fees would have to be very high in order for people to change their habits. Council Member Franck noted that if the Town initiated a solid waste billing system, people could see how much they were actually paying for these services. Council Member Evans inquired about the possibility of reducing property taxes by a like amount, if citizens were to be billed directly for solid waste collection. Council Member Franck said this seemed to be the right thing to do.

Mayor Waldorf noted that the Council did not have a lot of cost figure related information concerning solid waste collection options. Council Member Pavão inquired whether staff had any idea about possible pricing structures for unit-based pricing. Mr. Horton said actual fees would depend upon the actual mix of services provided.

Council Member Chilton inquired about the number of single-family residences currently receiving Town refuse collection services. Mr. Heflin said approximately 8,400 households. He added that collection costs were approximately five times more than disposal costs.

Council Member Brown noted that one way to keep administrative costs low would be not to having a billing system for "pay as you throw". Mr. Heflin stated that systems oriented toward tags or bags had relatively minor additional administrative burdens.

Council Member Brown inquired whether the five to one cost ratio referenced by Mr. Heflin earlier pertained to tipping fees only. Mr. Heflin said this was correct. Stating that tipping fees in Orange County had tended to be fairly low, Council Member Brown noted that there were a number of very large costs associated with disposal, including the purchase of land, landfill liners and leachate collection systems.

Noting the potential for providing variable levels of solid waste collection services, Council Member Andresen said that program administration would be the absolute key to making the programs work well.

Council Member Pavão asked whether start-up costs for a new landfill were prorated into the tipping fee. Mr. Horton said for the most part this was not the case. He noted that the one exception was legal and land acquisition fees. Mr. Horton added that present landfill tipping fees were substantially lower than they would likely be in the future.

Council Member Franck said he thought the Council should establish a fairly solid numerical goal, such as a forty percent reduction in waste, compared to the 1989 baseline. He also suggested a recycling diversion goal of perhaps eighty to ninety percent. Council Member Brown said the Landfill Owners Group had set a goal of reducing waste by fifty percent compared to the 1989 baseline. Mayor Waldorf inquired about the current recycling diversion rate. Mr. Heflin said the countywide rate was 16.6%, with the Town's residential rate currently being about 39%.

Council Member Powell said it should be a major goal to educate the public about recycling programs.

Council Member Andresen said it would be a good idea for the Council to receive more information about recycling, since some types of recycling processes contributed significantly to pollution.

Stating that she had heard that some companies manufacturing goods from recycled products did not pay property taxes, Council Member Evans requested a clarification about this information.

Solid Waste Planner Blair Pollock said that the State of North Carolina offered tax credits and exemptions to companies which directly made recycled products.

Noting that the current residential diversion rate was about 39%, Council Member Evans suggested that the Town focus its energies on non-residential settings. She also noted that "pay as you throw" systems did not work as well in non-residential settings. Council Member Evans also suggested the possibility of offering separate bins for chipboard, white paper and plastics. She noted that the estimated costs of enforcement had not been discussed by the Council.

Council Member Brown suggested that the Council review the Landfill Owners Group's goals relative to this evening's discussion.

Council Member Pavão inquired about the Town's annual estimated recycling costs. Mr. Horton said these were about $1.2 million, with $12 of the $31 per ton landfill tipping fee being for recycling programs. Mr. Heflin stated that the total Town cost for residential landfill tipping fees was about $630,000 per year. Council Member Evans said it would be helpful for the Council to have solid waste related costs all in one spreadsheet. Mr. Horton said staff could provide this information.

Mayor Waldorf inquired how a "pay as you throw" system could accommodate multifamily and commercial settings. Council Member Brown noted that a number of other communities were examining this same question to find solutions. She noted that some possible approaches included by units, buildings, groups or individuals.

Mayor Waldorf said if waste reduction was desired, it was important for the Council to look at the best and most practical way to achieve reductions in the commercial and multi-family sectors. Council Member Brown said it was important not to discount possible additional significant reductions in single-family residential settings.

Council Member Franck said it appeared that waste attribution would be somewhat less difficult for commercial situations, as opposed to multifamily settings.

Council Member Chilton said it would be very feasible to have a bag type "pay as you throw" system for multifamily units. He added that the only multifamily units in Orange County not receiving recycling services were ones which had chosen not to do so.

Mayor Waldorf inquired whether it would be best to first address multifamily related concerns. Council Member Chilton said he thought it would make more sense to initiate an education program for the entire residential sector (single and multi-family residences).

Council Member Andresen inquired whether or not the existing policy concerning recycling services to multifamily units could be changed. Council Member Chilton stated that in some cases, there were specific physical constraints, while other apartment complexes simply chose not to offer recycling services.

Council Member Capowski inquired how multifamily "pay as you throw" systems could be best administered. Council Member Chilton stated that one approach would be not to pick up from customers who were not complying with existing regulations. Mr. Heflin added that although it was time-consuming to inspect loads, periodic and spot enforcement would help to mitigate many problems.

Council Member Evans inquired about the status of compliance with the corrugated cardboard ban. Mr. Heflin stated that there was voluntary compliance at present, with enforcement to commence on March 1st. Mr. Horton noted that improper disposal of a few or more pieces of cardboard in a dumpster would mean that the dumpster's owners would be charged twice the usual tipping fee.

Noting that most people would never even think about throwing car oil or batteries in their trash can, Council Member Chilton said he believed that people's behavior would change over time regarding the disposal of corrugated cardboard.

Mr. Horton noted that additional staff time allowances would need to be made for the prosecution of cases. He also noted that it might be necessary for the Town to seek additional enforcement authority in the future.

Council Member Brown said it was very important to have public education programs relative to recycling.

Council Member Pavão inquired about the staff's thoughts on the matters before the Council. Mr. Horton said that staff did not have ready answers at this point about how to meet the Council's goals relative to meeting the community's needs and desires. Mr. Horton added that staff could begin development of options for the Council's consideration.

Council Member Brown stated that options to be considered included variable-sized cans and services tied to a unit-based pricing system. She expressed hope that the majority of the Council was ready to receive information about a unit-based pricing system. Noting that such a change in systems would be a significant one, Council Member Pavão said the Council needed to receive detailed information about costs and staffing considerations of such a possible changeover.

Council Member Evans said it was essential to have a public education program about solid waste collection matters. She noted that during the recent Council campaign, none of the citizens she had spoken had with had expressed a desire for a "pay as you throw" system. Council Member Evans stated that some citizens had expressed a preference for once weekly rearyard refuse collection.

Council Member Andresen inquired about the type of equipment needed for a "pay as you throw" system compared to a front or rear yard collection system. Mr. Heflin said this would depend upon the system actually used. He stated that garbage was most efficiently collected at curbside.

Noting that refuse collection was a small factor in most people's lives, Council Member Capowski suggested that it was important to keep the Town's refuse collection system very simple. Council Member Capowski also said he very much supported providing economic incentives to achieve reduction of solid waste volumes.

Mayor Waldorf suggested that the Council ask the Manager to produce a follow-up report outlining options for the Council's review. Council Member Powell requested that the follow-up report contain information about personnel-related cost impacts.

Council Member Chilton suggested that the Council might wish to provide the staff with a bit more direction. Mr. Horton said it appeared that the Council desired a refuse collection system which would be straightforward and easy to communicate to citizens, easy and inexpensive to administer, offer public convenience and keep overall program costs at the lowest possible level. He added that single family, multi-family and commercial scenarios could be incorporated into the staff's analyses.

Council Member Brown said that the staff's analysis needed to take into account the needs of elderly and infirm persons.

Noting that she liked the idea of options and building models, Council Member Andresen asked that the staff's analysis include information about what some of the practical options might mean to citizens.

Mayor Waldorf requested that the staff's report include an overview of how systems had been implemented in other communities, as well as how successful these communities had been in attaining their program objectives.

Council Member Capowski asked staff to research whether or not other utilities (gas, electric, telephone, etc.) offered special rates to elderly, low-income and handicapped persons. Mr. Horton said staff would be glad to check on this. Mayor Waldorf asked whether or not it was possible for the matter to come back before the Council in three weeks or so for further refinement. Mr. Horton said it might be helpful for the staff to come back to the Council with a preliminary outline in about three weeks.

Council Member Powell said it was very important to be mindful of the needs of low-income persons when considering possible changes in solid waste collection systems.

Council Member Brown said it was also important that the Council be mindful about how long it would take to possibly implement a "pay as you throw" refuse collection system.

Item 2 Continuation of Budget Discussion

Noting that several Council Members had submitted memorandums outlining budget-related ideas, Mayor Waldorf stated that the principal purpose of this evening's discussion was to provide additional direction to the Manager regarding budget matters.

Council Member Andresen inquired whether the three percent budget reduction suggested at the Council's January 29th public forum was a given. Mayor Waldorf noted that this was only a proposal. She inquired whether any Council Members had specific suggestions relative to reducing or eliminating services.

Council Member Pavão inquired about the staff's methodology for

identifying possible reductions in the Town budget. Mr. Horton said that identifying potential cost reductions and service efficiencies were an important part of the staff's overall budget development and review process. Council Member Pavão suggested that the staff investigate the possibility of providing some relief to property taxpayers. Mr. Horton said that the staff could report back to the Council on possible changes in service levels and anticipated impacts on property tax rates. Council Member Pavão said it was a good idea for the Council to know its policy and budget-related options. Council Member Pavão also said he did not think that his suggestion would be an onerous task for the staff to undertake.

Council Member Powell said it was important for the Council to have a clear purpose relative to requesting a certain percentage reduction in the Town's budget. Mayor Waldorf said she believed that it was important for the Council to ask whether or not existing budget priorities were appropriate for the present time. Noting that she thought that the Council usually did this, Council Member Powell inquired why a three percent reduction was proposed. Mayor Waldorf noted that no one was advocating a specific percentage reduction in the budget. Council Member Pavão said the adjustment could be a reduction of 1/2% or some other percentage, or no change at all. Council Member Powell inquired about the purpose of seeking a reduction in the budget.

Noting that she had reflected on the proposal, Council Member Andresen suggested that staff not spend a lot of time investigating this matter. Council Member Andresen suggested that the staff focus its energies on determining whether or not Town services were being provided in the most efficient manner possible.

Noting that an across the board budget reduction would result in punishing Town departments with very efficient operations, Council Member Chilton said he was a little reluctant to have staff put time into exploring ideas which had been previously rejected. Noting the importance of not making budget decisions in a vacuum, Council Member Chilton said it was important to make cuts in one area, independent of where these funds might be expended elsewhere in the organization.

Council Member Capowski said it was very important for the Town to take a long view in this matter, taking care not to postpone maintenance related items. He also urged staff not to focus on contingency fund changes. Expressing his concurrence with these points, Mr. Horton noted that the Council had worked very hard to make certain that all Town operations were run as efficiently as possible.

Council Member Brown inquired about ways which staff had found to reduce departmental budgets during the budget review process. Mr. Horton said an example of increased efficiency occurred in the Public Works Department, when the Town's Maintenance and Landscaping operations were combined into one division, rather than being decentralized in several Town departments. Council Member Brown said she was attempting to get a sense of the form of the staff's follow-up report. Mr. Horton said he hoped that the Council would understand that it was giving staff permission to examine all current Town service delivery levels. Council Member Andresen said she thought the emphasis should be on fine-tuning, rather than cutting back, existing Town services. Council Member Pavão said it might be necessary to cut or eliminate some services in order to achieve efficiencies.

Mr. Horton said one example of a changing an existing service to achieve efficiencies and reduce costs would be eliminating the bookmobile and utilizing another method to get books into the hands of children and others. Council Member Pavão said the other obvious step would be to reduce staffing levels. Mayor Waldorf said it was always important to look for efficiencies in government, including identifying marginal programs.

Mayor Waldorf inquired whether the Council wished to provide any specific direction beyond that offered at the January 13th and 29th Council meetings. Council Member Franck requested that the proposed salary plan concentrate on lower-paid employees and a "living wage" ordinance. He also suggested the possibility of the Council holding a work session on the UNC campus to discuss possible changes in bus fares and bus system routes. Noting that she agreed for the need for salary increases for lower-salaried employees, Council Member Evans said that many students riding buses did not live on campus. She suggested that the proposed work session be held in the Council Chamber.

Council Member Andresen asked whether Council Member Franck's proposal would be distinct from the merit pay plan. Council Member Franck said he was suggested that the pay plan be all inclusive. Mayor Waldorf suggested looking at alternatives for employees in the lowest paid job categories.

Council Member Capowski suggested earmarking some funds for communications between the Town and citizens, using tools such as the Internet to distribute information. He also suggested placing an emphasis on the installation of computers and hiring a technologist. Council Member Pavão expressed his concurrence that the Internet offered good opportunities for disseminating information to the public. Council Member Evans said it would be desirable to read some Town reports on-line, rather than needing to generate so many paper-based reports. Council Member Powell said that the technologist position suggested by Council Member Capowski should be established on a contractual basis. Council Member Andresen asked whether Town staff was on local area computer network. He noted that it was possible that a "skinny" network might be in place later in the year, possibly including electronic mail capabilities.

Council Member Andresen suggested possibly expanding swimming pool facilities. Noting that a major swimming facility had recently been opened in northern Orange County, Mr. Horton said it might be worthwhile to explore the possibility of Orange County offering a similar facility in the southern part of the county. Council Member Pavão noted that several years ago the Parks and Recreation Commission had investigated the possibility of putting a bubble over the A.D. Clark pool.

Council Member Brown suggested the possibility of exploring whether or not the Town was administratively top heavy.

Council Member Andresen said the Council needed to talk about possible administrative efficiencies throughout the Town's organization. Mayor Waldorf said it appeared that the Council wished to receive a staff report on this matter.

Council Member Evans suggested the possibility of adding currently Town-owned land to the property tax base by selling some of the properties. Stating that she did not see tremendous gains from selling land which might serve as buffers or for other purposes, Council Member Andresen said she would be happy to review a list of Town-owned properties.

Noting that the entire refuse collection system was currently under review, Council Member Brown suggested that the possibility of once weekly backyard refuse collection not be examined separately by staff. Council Member Powell said she was not interested in the option of once weekly backyard refuse collection.

Noting that a number of citizens had concerns relative to the frequency of collection of yard waste, Council Member Evans said she believed it was possible that some entrepreneurs might be interested in picking up yard waste at curbside, mulching it and then selling it.

Council Member Andresen inquired whether or not there had been any agreement by the Council on conveying possible changes in service levels to citizens. Mayor Waldorf noted that the Manager would identify and spotlight any such changes in the budget message.

Council Member Brown said she thought that the Council had agreed at its January 13th retreat to look at scheduled pick-ups for leaves, yard waste and white goods. Mr. Horton said he recalled that there had been agreement about yard waste pick-ups. Council Member Brown expressed concern that bulky items remained at curbside in some neighborhoods for long periods of time. Mr. Horton stated that this sometimes occurred because no one stepped forward to pay for their collection. Council Member Capowski asked whether or not residents had to pay upfront for the collection of bulky items. Mr. Horton said this was correct.

Council Member Capowski said he believed that this system was not working. Council Member Powell noted that there had been a number of large, broken items left on Mitchell Lane since last June.

Mr. Horton said it was difficult for him to imagine a leaf collection system which was more scheduled than the Town's existing service. He added that enhanced scheduling might be possible if residents were required to containerize their leaves.

Council Member Andresen suggested that two Council Members might meet with Jack Vogt at the Institute of Government about possible improvements in the format of the Town's budget document. Mayor Waldorf and Council Member Brown said they would like to participate in this process. Council Member Evans suggested that a staff member attend also. Council Member Pavão said this was a good idea. Council Member Powell inquired about the purpose of this exercise. Council Member Andresen said the purpose would be to review the utility of the existing format. Council Member Evans said it would be a good idea for a staff member to attend the meeting. Council Member Chilton expressed appreciation to the Council Members willing to participate in this review process.

Council Member Andresen suggested that a Council budget subcommittee, in consultation with outside experts, might look into some budget matters such as merit pay in greater detail.

Council Member Evans inquired about the possibility of constructing a fire station in the southern part of the Town. Mr. Horton said there were a number of funding options for such a project, dependent upon the amount and timing of development buildouts in this part of the Town.

Council Member Pavão reported that Council Member Evans, some Town staff members and himself had recently returned from a planning workshop in Charlotte. Council Member Pavão said this conference was one of the best planning-related conferences he had ever attended. Council Member Pavão encouraged Council Members to attend a similar conference to be held in Charleston in May.

The meeting concluded at 8:37 p.m.