SUMMARY OF A BUDGET WORK SESSION OF THE MAYOR AND COUNCIL

OF THE TOWN OF CHAPEL HILL, MONDAY, APRIL 29, 1996 AT 6:00 P.M.

Mayor Waldorf called the work session to order. Council Members in attendance were Julie Andresen (arrived at 6:15 p.m.), Joyce Brown, Joe Capowski, Mark Chilton, Pat Evans, Richard Franck and Lee Pavao. Council Member Barbara Powell was absent excused. Also in attendance were Town Manager Cal Horton, Assistant Town Managers Sonna Loewenthal and Florentine Miller, Finance Director James Baker, Personnel Director Pat Thomas, Transportation Director Bob Godding, Public Works Director Bruce Heflin and Town Attorney Ralph Karpinos.

Mayor Waldorf said there were a lot of large dollar items on this evening's agenda. She noted that the Council's next budget work session, a meeting with a number of advisory boards and commissions, would be held on May 6th.

Pay Related Matters

Personnel Director Pat Thomas said the base recommendation was for an average market and merit increase of 3.75%, with an additional 1% increase for employees making less than $30,240 per year. Ms. Thomas briefly reviewed several other options for adjusting pay levels, noting that an emphasis had been placed on making the pay plan as easy as possible to understand and administer. Referencing the recommendations of the Black Public Works Association (BPWA) made at the March 29th budget forum, Ms. Thomas said it would cost a total of $98,000 to $394,000 to fund these recommendations. Ms. Thomas also stated that it would cost an additional $77,000 per month for each month earlier than October 1st that a pay increase was put into effect.

Council Member Capowski asked whether the Council was being asked to make a decision on this matter this evening. Noting that there were a number of major items on this evening's agenda, Mayor Waldorf said the Council could decide on the matter this evening or wait until after the next public hearing on May 15th.

Council Member Brown said her preference was to wait to make a decision until after the hearing. Council Member Chilton suggested that the Council give staff some guidance on the matter this evening. Council Member Chilton inquired what percentage of the Town's work force was currently earning less than $30,240 per year. Ms. Thomas said approximately sixty three percent.

Council Member Franck suggested that the Council go ahead with proposal 1a as a first step in helping employees wishing to live within Town limits.

Noting that at the Council's January planning retreat he was the only one who supported a possible tax increase of up to one cent, Council Member Capowski expressed concern that the Council might be getting into too much detail in this matter. Council Member Capowski also urged the Council to keep the proposed salary increase plan as simple as possible.

Stating that she had reviewed the alternatives in the Manager's proposal, Council Member Andresen said having a flat dollar market increase might be a good approach. Council Member Andresen said she favored a simple plan, possibly composed of three quarters market and one quarter merit.

Council Member Capowski said he thought merit increases were a good idea, because all except those who were not performing well would receive these increases.

Council Member Evans inquired about the possibility of implementing adjustments for lower paid Town employees over a longer time period such as five years, rather than taking one major step this year.

Council Member Brown suggested that possibility of a merit and bonus system, with the bonus component not going into base pay.

Mayor Waldorf inquired how cost of living increases were based. Mr. Horton said such increases were based on either the consumer price index or the local labor market. He added that the merit component was based on the individual performance of employees. Mr. Horton stated that if merit increases were never built into base pay of individual employees, eventually all employees in the same grade would make the same pay rate, regardless of experience and their tenure with the Town. Mr. Horton said he would strongly recommend against such a system.

Council Member Franck said he refused to agree with Council Member Evans' characterization that the Manager's proposal was a giant first step. He stated that the proposal to adjust salary ranges to the seventy-fifth percentile, rather than the midpoint, would make up for past inequities relative to the Town's lower paid employees. Council Member Franck said he thought it was appropriate for the Council to take this action.

Stating that an effort was being made to correct past inequities, Council Member Pavao said he thought that Council Member Capowski's idea about having a simple pay plan was a good one. Noting that higher salaried employees were hard to replace, Council Member Pavao urged the Council to also keep these employees in mind relative to pay increases. He requested that staff provide specific information about what, if any, tax adjustments would be needed to fund various pay increase levels.

Mayor Waldorf said she was intrigued by alternative 3b, tied to flat dollar increases at the midpoint of salary ranges. Mr. Horton said if staff had known about this approach two months ago, staff would have recommended this as the base proposal. Expressing his support for this proposal, Mr. Horton said it was well justified and within the Council's means.

Council Member Pavao said he was very interested in this proposal, believing that it had a lot of merit. He said the only missing element was a mechanism for the payment of incentive awards to single out outstanding performances.

Council Member Andresen requested a clarification regarding payment of merit increases. Ms. Thomas said the staff's recommendation was that employees rated below expected level receive nothing, employees needing improvement would receive 1.5%, employees meeting or exceeding requirements would receive 3.75%, and employees rated as outstanding would receive 5%.

Council Member Andresen said she would like to see a proposal for on the spot rewards which could be presented at the Manager's discretion. Noting that a small amount of money had been allocated to purchase coffee mugs as recognition this fiscal year, Mr. Horton said he would develop more specific proposals for on the spot rewards by the next Council budget work session. Council Member Andresen said that the State Division of Environmental Health and Natural Resources had just completed a report on this type of system and might offer some interesting ideas to Town staff.

Council Member Franck said he endorsed the midpoint range proposal reviewed by Ms. Thomas. Stating that this proposal looked fine, Council Member Brown suggested that the Council not make a final decision on the matter until after the Council's public hearing.

Mr. Horton said staff could provide a brief summary on pay matters, possibly a one page chart, for the next Council work session. Council Member Capowski requested that the staff's report contain several charts, tied to tax increases ranging between zero and one and a half cents. Council Member Franck said he did not think that pay increases were necessarily soundly tied to property tax increases. Stating that the Council had already had a philosophical discussion about the fiftieth and seventy-fifty percentiles, Council Member Capowski said the Council could not ignore the size of the pot of money needed for pay increases.

Mayor Waldorf said there appeared to be Council consensus to do as much as possible for lower paid employees in the Manager's proposal, establish a pot of money for bonuses and possibly make further adjustments in salaries of lower-paid employees.

Stating that a salary increase should be a salary increase, Council Member Capowski said he was not supporting a bonus plan.

Council Member Andresen said she would generally be inclined to support a bonus system, rather than greater salary increases for outstanding performance.

Council Member Brown said she favored having a bonus award which would be separate from the base pay of employees. Council Member Franck said it was likely that employees who were consistently performing at the outstanding level were probably being promoted and consequently not staying in the same job.

Council Member Chilton inquired who made determinations regarding the performance levels of individual employees. Mr. Horton said these determinations were principally made by department and division heads. Mr. Horton added that he personally reviewed all recommendations for outstanding level performances. Noting the possibility of disagreements in merit pay systems, Council Member Chilton inquired whether or not there was an appeals process. Mr. Horton said yes, noting that there were a few appeals each year. He also noted that the bulk of employees rated as outstanding were in the Town's larger departments or divisions.

Noting the importance of paying good salaries to good employees, Council Member Brown said it was also important for the Council to keep in mind that citizens with fixed and lower incomes would find an increased tax burden very difficult. She urged the Council to keep this in mind when considering whether or not to maintain the current property tax rate.

Mayor Waldorf inquired about the estimated total cost of the Manager's proposed pay increases. Mr. Horton said $689,220. Mayor Waldorf noted that this was equivalent to approximately three cents on the property tax rate. Council Member Andresen asked whether or not the cost projections included vacant positions. Ms. Thomas said yes, noting that there were typically fifteen to twenty vacant positions in the Town at one time.

Council Member Evans inquired whether it was necessary to offer higher starting salaries for upper echelon jobs in the Town. Mr. Horton said this was almost always the case. Council Member Chilton asked whether the proposal addressed salary compression matters. Mr. Horton stated that some compression occurred whenever the floors of salary ranges were raised. Council Member Chilton said he favored pursuing options 1a1 and 1b3 and receiving a report from staff on bonus pay issues.

Transportation Matters

Council Member Franck inquired whether it was correct that there were no services changes were recommended and that discussions between Town and University officials were ongoing. Mr. Horton said this was correct. Council Member Evans requested that staff prepare a breakdown of Tarheel Express ridership by basketball, football and other events. Mr. Horton said staff would do so.

University Revenue Sources

Council Member Capowski inquired how much the Town charged per month for parking spaces in the downtown area. Mr. Godding said $55 per month. Noting that the University's parking permit charge, $240 per year, was about one-third the per space parking rate charged by the Town, Council Member Capowski said he hoped that the University would raise its parking rates significantly. Council Member Franck said the University charged its employees for parking spaces, while the Town did not.

Council Member Brown asked whether or not all student transit fees went to the Town's transit system operations prior to the establishment of the University Point-to-Point (PTP) system three to four years ago. Mr. Horton said he did not know. Stating that the University's charges for bus related items, the Point-to-Point system and parking spaces all related to the Town's actions, Council Member Capowski said it was not possible for the Town to make decisions which were disjoint from the University's operations. Noting that the Town had raised it parking fines last year to bring them in line with the University's fines, Council Member Evans said the Town should consider raising them again this year if the University raised its fines again.

Blue Line Bus Service

Council Member Franck inquired whether or not Blue Line service was effected by student schedules. Mr. Godding said he thought the demand for the Blue Line would likely decline over the summer. Council Member Franck said it was a shame that Blue Line service was not available during the reduced service period. Council Member Andresen agreed. Council Member Franck requested that staff prepare a report on the costs of providing year-round Blue Line service, including Saturdays. Ms. Loewenthal said staff would do so.

Council Member Chilton asked whether the Town had complete discretion about where and when Blue Line service was provided. Mr. Godding said these matters were coordinated with the City of Durham and the Triangle Transit Authority. Noting that he had ridden the Blue Line on a number of occasions recently, Council Member Chilton suggested the possibility of reducing the number of stops on the route in order to increase the route's level of convenience to riders. Mr. Godding stated that the main challenge in this regard was trying to interface the schedules of Chapel Hill Transit, the Durham Transit Authority (DATA) and the Triangle Transit Authority (TTA). Council Member Chilton said the DATA system did not appear to be as faithful to its posted schedule as Chapel Hill Transit. Mr. Horton noted that DATA had experienced some equipment-related problems.

Council Member Evans noted that an ultimate transit objective was to provide regional service. Council Member Chilton inquired whether or not there was sufficient demand for the Triangle Transit Authority to operate the Blue Line. Council Member Franck noted that there were different cost and overhead considerations relative to the provision of regional transit service.

Effects of Fare Increase on Ridership

Stating that bus riders generally did not have transportation alternatives, Council Member Franck said he did not think that the decline in ridership would be as high as five percent. Council Member Capowski said he did not think that there would be a significant decrease in ridership as a result of the possible fare increase. Council Member said she concurred, so long as there was not a decrease in the number of routes offered. Council Member said she thought there would be a ridership decrease of five percent or more. Council Member Franck said previous cuts in service had paralleled ridership cuts.

Council Member Evans noted that despite the availability of new facilities such as park and ride lots in the southern part of the Town, some students and administrative staff at the University continued to complain about parking on campus.

Mayor Waldorf said it would be a good idea to get a general sense about whether an increase in bus fares was supported by the Council. Expressing his belief that the burden for system costs should be shared, Council Member Franck said he would grudgingly support a fare increase. Noting that the approximate ratio of fare to subsidy was one to two, Council Member Capowski said he did not see any practical alternative to raising the regular bus fare to seventy-five cents.

Stating that he was never predisposed to raising bus fares, Council Member Chilton said he would grudgingly support a fare increase. Council Member Evans inquired when the Town would have a better sense regarding the funding picture for mass transit. Mr. Horton said during the first legislative session after the November, 1996 elections.

Council Member Pavao said matters had reached the point where, although no one liked to do it, it was necessary to raise fares to realize increased costs of providing transit services.

Distribution of Additional Revenues

Council Member Capowski inquired whether or not all three partners were receiving reasonable treatment relative to the allocation of revenues from local transit operations. Mr. Horton said modest changes were being proposed in the allocation formula, to shift more net costs to the University. He added that staff from all three entities were working on a revised allocation agreement which hopefully be agreeable to all parties.

Council Member Capowski asked whether the University charged the same price for bus passes as the Town. Noting that prices had varied in the past, Mr. Godding said that the Town and University currently charged the same price for a pass. Mr. Horton noted that the University could choose to subsidize bus passes if it wished to do so.

Council Member Capowski said that the allocation was quite intricate, making it difficult to understand how the transit system operations were being paid for. Mr. Godding said staff could explain the process in detail, if the Council wished. Council Member Franck said the main objective was to find a way to meet service costs. Council Member Brown said the information provided appeared to indicate that the University was not paying its fair share.

Noting that the current transit agreement had been extended for a period of two years, Council Member Evans inquired about the length of the original agreement. Mr. Horton said the agreement length was five years. He said it was likely that negotiations would be completed by the same time next year.

Service Productivity and Standards; Operation of Smaller Buses

Council Member Franck said historical information relative to bus operations indicated that smaller buses were not needed.

Council Member Andresen inquired when "evening" bus service commenced. Mr. Godding said generally after 6:00 or 6:30 p.m. Mayor Waldorf noted that the Council consensus was not to make any reductions in service levels.

Council Member Evans suggested that there might be some cost savings from a collaborative Town/schools effort to put school children on Town buses. Mr. Godding said although the Town welcomed school children riding on Town buses, school schedules were not a primary focus when developing Town bus schedules. He added that staff would welcome the opportunity to work with the schools on the matter. Council Member Franck noted that as a member of the Transportation Board, he had found that school officials were not very progressive on the matter of students driving to school.

Mayor Waldorf inquired whether the Council wished to have formal follow-up on this matter. Council Member Evans suggested that Mr. Horton and Mr. Godding talk to the Superintendent of Schools and School Board Chair about the possibility of cooperative and collaborative efforts relative to transit efforts. Council Member Franck said one possible avenue for handling the matters was through annual transportation management plans for schools.

Council Member Andresen said it would be helpful for members of the two elected boards (the Council and School Board) to discuss these matters further. Mr. Horton said the Council might wish to authorize the Mayor to forward a letter to the School Board Chair on the matter and to the Manager to talk to the Schools Superintendent about options. Mayor Waldorf noted that there was Council consensus on both of these matters.

There was no discussion on items I and K.

Mr. Horton noted that communities needed to be located in non-attainment areas in order to receive CMAQ (Congestion Management and Air Quality grant) funding.

Parking Lots Number Three and Five

Mr. Horton presented a brief overview of enforcement relative to parking meters in the two lots after 5:00 p.m.

Mayor Waldorf and Council Member Evans said they favored discontinuation of enforcement of the meters after 6:00 p.m. Council Member Franck asked whether the budget assumed that this policy would be implemented. Mr. Horton said this was correct. Council Member Franck inquired whether or not it was correct that the Town would forego an estimated $28,000 of parking meter revenues from implementing the suggested policy. Mr. Horton said staff could review these figures for logic and accuracy.

EZ Rider Services

Council Member Franck said the level of service for EZ Rider service had slowly decreased due to increased service demands and a limited number of drivers. Mr. Horton said staff would present a more formal report to the Council on EZ Rider service at the May 13th meeting. Mr. Godding said the average EZ Rider trip was taking a little longer, principally due to the increased number of patrons in wheelchair. Council Member Franck inquired about the possibility of converting one or two part-time drivers to full time status. Mr. Horton said option would be included in the staff's May 13th report.

Council Member Capowski inquired whether federal regulations required the Town as a fleet operator to start buying electric cars. Mr. Horton said staff could research this matter.

Capital Improvements Program

Council Member Franck said he was not sure that expending capital funds for a park and ride lot on U.S. 15-501 North was the best use of funds. Council Member Andresen inquired about the utilization rate of the Eubanks Road park and ride lot. Mr. Godding said there were forty to fifty daily users along with a dozen or so monthly renters. He added that the proposed U.S. 15-501 North park and ride lot would possibly serve as an important junction between Chapel Hill Transit, DATA and TTA.

Council Member Chilton inquired whether a ten percent local match was required for park and ride lots. Mr. Godding said this was correct. Mayor Waldorf suggested that the Council could discuss park and ride lots and other capital projects at a future meeting.

Solid Waste Matters

Curbside Refuse Collection/Once Weekly Rearyard Collection

Public Works Director Bruce Heflin presented an overview of various refuse collection options, noting that staff would be pleased to answer questions by the Mayor and Council.

Council Member Pavao inquired whether or not it was correct that staff projected annual savings of $183,000 by the sixth year of a curbside collection program. Mr. Heflin said this reflected estimated net personnel savings.

Noting that a long awaited consultant study on solid waste would be released in the near future, Council Member Brown suggested that it would be in the community's best interest to wait for the release of the proposed integrated solid waste management plan. Council Member Capowski expressed his concurrence with this plan of action. Expressing his concurrence with Council Member Brown's suggestions, Council Member Franck noted the importance of addressing equity-related matters. Council Member Brown said that the equity issue was a very important one.

Bulky Items

Mr. Heflin said policies regarding the pick-up of bulky items had recently been changed to permit payments to collectors or by mail.

Council Member Evans inquired how staff found out where there were bulky items requiring pick up. Mr. Heflin said drivers, supervisors and neighbors notified Public Works about these matters. Stating that she favored the new procedure, Council Member Evans suggested that landlords and occupants needed to be apprised of the new pick-up procedures.

Council Member Andresen noted that the Town of Carrboro had recently conducted a "white goods day". Mr. Heflin noted that the Town of Carrboro had recently instituted a fee for the collection of white goods. Council Member Andresen inquired about the possibility of having no fees for the pick up of one or two bulky items.

Council Member Capowski said it was important to educate as many residents as possible about policies relative to pick-up procedures and fees for bulky items.

Mayor Waldorf inquired what constituted a "bulky item". Mr. Heflin said "bulky" items were those which could not be easily loaded on to a truck by one person. Mayor Waldorf expressed appreciation for all the work that the staff had done to make the bulky items program work well. Mr. Heflin said the new system allowed staff to more or less tell citizens whether their items would be picked up in the morning or afternoon of a particular day. Council Member Capowski asked whether or not it was correct that estimated revenues from the service would total about $6,000 per year. Mr. Heflin said this was correct. Mr. Horton said the real resource cost of changing the bulky item system was the loss of a two-week cycle on the pick-up of yard wastes.

Mayor Waldorf said it was not desirable for bulky items to sit outside uncollected for too long. Mr. Heflin said staff was doing the best it could in identifying items for pick up as soon as possible. Council Member Andresen said she had problems with the bulky item collection fee. Mr. Heflin noted that the fee was $15 for the first three items and $5 for each additional item. Taking a straw poll of the Council, Mayor Waldorf said the informal vote indicated a strong desire to keep the current fees in place.

Council Member Pavao asked why some bulky items went uncollected for seven to ten days. Mr. Heflin said some persons were reluctant to pay pick-up fees. Council Member Evans asked whether bills were forwarded to property owners in these cases. Mr. Horton said no, noting the difficulty of proving who had put items out for collection. Council Member Evans suggested that an emphasis be placed on the pick-up of bulky items, rather than yard waste.

Work Schedules

Council Member Chilton inquired about the number of hours worked by sanitation collectors. Mr. Horton said a standard work week was forty hours, with collectors going home at the end of their shift, whether it took two or ten hours. Council Member Evans asked whether it ever took collectors ten hours to complete a route. Mr. Heflin said yes,

noting that this occurred principally after holidays. Council Member Andresen said although the incentive system was a good one, it was important to take into account safety related considerations. Mr. Heflin said that a great deal emphasis was placed on safety and accident prevention. Mayor Waldorf asked whether or not commercial and residential collectors were equally compensated. Mr. Heflin said commercial collectors worked at night and received higher levels of compensation.

Commercial Cardboard Ban

Mr. Horton said he was recommending the inclusion of $50,000 in the proposed budget to pay for an additional cardboard inspector position or sufficient funds to pay anticipated fines and penalties. Council Member Franck said he favored having a second inspector to enforce the proposed ban on residential cardboard.

Council Member Capowski inquired about the possibility of fining persons who put cardboard in dumpsters. Mr. Horton said it was sometimes possible to locate these persons. Council Member Capowski inquired whether sufficient fines would be collected to pay for an additional inspector position. Mr. Horton said although this would not be possible in the first year, it was likely that this could occur in succeeding years. Council Member Andresen said it would be useful to get a staff report on landfill space savings from implementation of a residential cardboard ban. Mr. Horton said Solid Waste Director Gayle Wilson could provide specifics on this at a future Council meeting.

Council Member Brown asked whether it would be economical to use fines collected to purchase cardboard compactors. Mr. Horton stated that shared containers and apartment containers posed problems relative to the collection of fines. Council Member Brown asked whether cardboard compactors would help with collections. Mr. Heflin said it would still be necessary to separate wastes.

Mayor Waldorf suggested that the matter come back before the Council near the end of the budget process. Mr. Horton said he was confident that the Town would have to pay $25,000 to $50,000 in penalties unless a new inspector position was added. Mayor Waldorf said it appeared to be the Council's wish to give this matter some more thought.

Town-Owned Land

Council Member Evans noted that one relatively large lot in the Laurel Hill Road area appeared to be a good candidate for sale, possibly yielding proceeds of about one-half cent on the tax rate. Council Member Andresen suggested the possibility of preserving the parcel as open space. Stating that she agreed about the need for open space, Mayor Waldorf suggested examining the relationship of the lot with the rest of the neighborhood. Council Member Capowski asked whether the lot was suitable for a pocket park. Council Member Evans said the lot was too steep for a park. Mr. Horton said the lot was a good candidate for sale.

Mayor Waldorf suggested discussing the bond item at a future Council meeting.

Council Member Andresen inquired how level of service questions could be placed on the Council's docket for discussion. Mayor Waldorf suggested that such requests be forwarded to the Manager and Mayor and Council in memorandum form.

Council Member Capowski said he wanted to have a substantial discussion on the bond matter in the near future. Mayor Waldorf inquired about the possibility of a discussion on May 13th. Noting that the May 13th agenda was quite heavy, Mr. Horton suggested the possibility of an initial discussion on May 6th, following discussions with advisory boards and commissions.

The work session concluded at 8:42 p.m.

MEMORANDUM

TO: Mayor and Town Council

FROM: W. Calvin Horton, Town Manager

SUBJECT: Draft Minutes of April 29, 1996

DATE: May 24, 1996

Attached are draft minutes of the Council's April 29th budget work session. Please

forward suggested revisions to Peter Richardson by 3:00 p.m. on Monday, June 3rd.