SUMMARY OF A BREAKFAST WORK SESSION OF THE CHAPEL HILL TOWN COUNCIL AND THE STATE LEGISLATIVE DELEGATION, FRIDAY,

FEBRUARY 28, 1997 AT THE CAROLINA INN ALUMNI ROOM, 7:30 A.M.

Mayor Waldorf called the meeting to order at 7:41 a.m. State Senators Howard Lee and Eleanor Kinnaird and State Representatives Joe Hackney and Verla Insko were in attendance along with Council Members Julie Andresen, Joyce Brown, Joe Capowski, Pat Evans, Richard Franck, Lee Pavao and Edith Wiggins. Council Member Mark Chilton was unable to attend. Also in attendance were North Carolina League of Municipalities Executive Director Ellis Hankins, Chapel Hill Town Manager Cal Horton, Assistant Town Managers Sonna Loewenthal and Florentine Miller, Transportation Director Bob Godding, Town Clerk Peter Richardson and Town Attorney Ralph Karpinos.

Representative Joe Hackney said that the Orange County legislative delegation was working well together.

Senator Ellie Kinnaird said that Governor Hunt’s two primary goals in the legislative session were increasing teacher salaries and additional funding for the Smart Start program. Senator Kinnaird noted that she was serving on the General Government Committee, Children and Human Resources Committee, Pensions, Retirement and Insurance Committee, Agriculture and Environment Committee and the Rules and Operations Committee.

Representative Verla Insko said she served on the Education, Human Resources, Capital and Budget Appropriations and Campaign Finance Committee. Representative Insko noted that her office was located next to Representative Hackney’s office. Representative Insko said she looked forward to working with the Town Council on legislative matters.

Senator Howard Lee said he was delighted to be serving in the State Senate again. Senator Lee noted that he served on the Finance, Judiciary and Commerce and Industry Committees. Senator Lee also said he served as Vice Chair of the Transportation Committee and was co-chair of the entire Education Committee.

Mayor Waldorf inquired about the status of the tax situation at the General Assembly. Representative Hackney said the anti-tax mood had abated somewhat, with local bills on occupancy and meals taxes really evolving. Senator Lee reported that the outlook in the State Senate was similar, with the outcome on the occupancy tax being difficult to project. Senator Lee said he did not think that the session in the Senate would be as confrontational as the last session.

Mayor Waldorf said the Council did not want any changes to existing annexation laws and supported the recommendations of the Transit 2001 Commission. She also said that the Council was disappointed that the Governor was only recommending funding of $36 million to implement the commission’s recommendations. Mayor Waldorf stated that the Council supported their legislators supporting these two items.

Senator Kinnaird said she had spoken to Council Members Brown and Franck about the possibility of forming a coalition of cities to request that the Legislature use funds from the Highway Trust fund for mass transit related needs. Council Member Brown inquired how voter-approved highway bonds would fit into this arrangement. Senator Kinnaird and Representative Hackney said the bonds would be separate and unconnected. Senator Lee said this was correct, adding that the bond funds had already been directed. Council Member Andresen asked whether the Department of Transportation unilaterally determine which highway projects would be put forward in a bond referendum. Senator Lee said this would be jointly determined by the Department of Transportation and the General Assembly. Representative Insko said she had voted against the bond referendum in her legislative capacity because it effected the ability to maneuver.

Council Member Capowski inquired about the possibility of establishing a stable funding mechanism for State transit programs. Representative Hackney said that the Transit 2001 Commission’s efforts were a good start in this regard. Senator Lee said it was important not to downplay the Transit 2001 plan and the Governor’s funding commitment for rail transit systems. Referencing Council Member Capowski’s inquiry about the establishment of stable funding sources, Senator Lee said it was very important to be patient and vigilant had to be convinced of the merits of putting mass transit systems in place. Mr. Hankins noted that the North Carolina League of Municipalities was working with Department of Transportation staff to identify local option revenue sources. He added that it would not be an easy task to get such a bill passed by the General Assembly. Council Member Brown inquired whether or not the General Assembly giving options to local governments would make things easier for the State. Representative Hackney said this was not really the case. Representative Insko said this would be a function of how much control the General Assembly would be willing to give to local governments.

Mayor Waldorf inquired what the Council could do to get a local bill option and support for the Transit 2001 plan through the General Assembly. Representative Hackney suggested that the Council continue its efforts of working with other local governments to build unified support. Senator Kinnaird likewise encouraged the Council to work on such grassroots efforts.

Council Member Brown inquired about the possibility of Governor Hunt supporting a menu of local revenue options. Mr. Hankins said although he believed that the Governor would be generally supportive of these efforts, he did not know the extent of such support. Mr. Hankins also said it was a generally good sign that the Governor had asked Department of Transportation staff to work with the North Carolina League of Municipalities in the drafting of an agency bill.

Representative Insko inquired which, if any, items the Council would prefer cutting out of its package of legislative requests. Noting that the matter of local autonomy was involved, Council Member Franck said he believed it was best to leave the package as a whole in tact. Council Member Andresen added that the entire Council was concerned about any potential erosion of local government rights in existing laws regarding annexation. Mayor Waldorf noted that several bills on annexation had recently been introduced. Mr. Hankins several “bad” annexation bills (from the standpoint of local governments; HB 92 and 94) had recently been introduced and were in committee. Noting that he had flagged these bills as Rules Chair, Senator Lee said he would vigorously monitor these bills before they went anywhere for possible adoption.

Mr. Hankins noted that Governor Hunt had expressed his intention to veto any harmful annexation bills. Mr. Hankins said he would keep Town staff informed about the status of annexation bills. Mr. Horton said the Town received virtually daily updates on the legislative session from the League of Municipalities.

Council Member Andresen inquired about the likelihood of passage of local enabling authority relative to real estate transfer, impact, occupancy and meals taxes. Senator Lee said it would be hard to get the Senate to pass a development impact tax due to opposition by builders and realtors. He also said it would be necessary to be patient relative to the passage of an entertainment tax. Senator Lee stated that occupancy and prepared meals taxes had greater chances of passage, since many other communities around the state had already received such authority from the General Assembly. Council Member Andresen noted that the Chamber of Commerce had agreed to work with the Town on the possible implementation of a local meals tax. Mayor Waldorf noted that the Council had not asked the staff to research this potential funding source.

Council Member Brown said she was glad that that local legislative delegation was open to the possibility of examining a local entertainment tax. Mayor Waldorf noted that in the past the University had not supported the concept of an entertainment tax. She suggested the possibility that revenues from a ticket tax could be used to support the local bus system operated by the University, Town and Carrboro. Council Member Andresen said this was a good proposal which should be pursued further. Senator Kinnaird encouraged the Council to continue its grassroots efforts relative to authorization for a real estate transfer tax.

Council Member Capowski inquired what the Town could do to get better maintenance and repair of state-maintained roads such as Airport Road. Representative Hackney said that Department of Transportation officials and the Governor responded expeditiously to these types of concerns. Senator Lee concurred, noting that he would be willing to assist if necessary.

Council Member Brown inquired about the possibility of an impact tax allowing more flexibility than an impact fee.. Senator Kinnaird said although this was possible, funds from impact taxes would go into the undesignated General Fund at present, not directly dedicated to building affordable housing. Council Member Brown inquired about the likelihood of authorization for an impact fee or tax. Representative Hackney said he did not think that such measures had any realistic chance of passage. Mr. Hankins expressed his agreement with this observation. Representative Insko said she believed that the introduction of bills could possibly serve educational purposes, even though they might not be passed during the current legislative session. Stating that a statewide effort could be undertaken relative to impact fees and taxes, Council Member Andresen said that Representative Insko had made a good point. Representative Insko said she personally preferred an impact tax over an impact fee. Senator Kinnaird noted that the School Board in Moore County was very concerned about rapid growth in their county and working to get support of impact fees or taxes.

Noting that the deadline for filing local bills was March 27^th, Mayor Waldorf said the Council needed to decide what approach it wished to take relative to legislative requests. Council Member Franck said he believed that one of the best uses of the Council’s resources would be to strongly support the recommendations of the Transit 2001 Commission.

Council Member Andresen asked whether or not the Council needed to determine a legislative support package today. Stating that the matter was scheduled to come before the Council on March 3^rd for possible action, Mr. Horton said the item could be postponed to March 24^th . Senator Lee said it would be best if the Council could make its conclusive recommendations on the legislative package as soon as possible. Council Member Brown said it was important for the Council not to close out any options.

Council Member Capowski inquired about leaving the matter in the legislative delegation’s hands relative to local revenue options. The delegation uniformly noted that this would not be a desirable course of action. Council Member Capowski inquired whether or not credibility was lost if some of the items in the Council’s legislative package were not adopted by the General Assembly. Noting the number of proposed bills and the number of legislators, Senator Kinnaird said she suspected that this would probably not even be noticed by many members.

Council Member Andresen inquired how the Council would best handle the fact that the University went around the existing road building process. Senator Kinnaird suggested that the Council adopt a resolution of objection and forward it to Governor Hunt. Representative Insko suggested the possibility of the Mayor or some Council Members getting an appointment to meet with Governor directly about these concerns. Noting the importance of maintaining good working relationships between all parties concerned, Senator Lee suggested setting up a joint meeting with representatives from the Towns of Carrboro, Chapel Hill and Orange County and the Department of Transportation, and possibly the University, to discuss these matters. Senator Lee said he would be willing to assist in these efforts if necessary. Stating that she was not sure that the Department of Transportation was very flexible in these matters, Senator Kinnaird said she believed that the overall process itself needed to be revisited.

Representative Hackney said he thought that holding a joint meeting about roadway maintenance and resurfacing matters between concerned parties was a good idea. Mayor Waldorf suggested that representatives from Orange County and the Town of Carrboro, possibly Alice Gordon and Alex Zaffron, be invited to attend such a meeting. Council Member Andresen said she thought that such a meeting had some possibilities. Mayor Waldorf said she would follow up on the suggestion.

Council Member Brown inquired about the legislative delegation’s perspectives relative to inclusionary zoning. Senator Kinnaird said she hoped that the Council would be supportive of a proposed statewide initiative relative to the establishment of a loan fund for low-income housing. Senator Kinnaird said she was also interested in the concept of inclusionary zoning. Representative Insko noted that at least one Town developer was interested in the concept of inclusionary zoning. Council Member Brown suggested that the Council include a request for inclusionary zoning authorization in its legislative package for the current session.

Council Member Franck said he believed that requirements for transportation management plans and supporting the recommendations of the Transit 2001 Commission were two of the items which the Council should strongly support in a legislative package. He expressed hope that the legislative delegation and Council Members would have an opportunity to look through possible legislation regarding transit matters.

Noting that she had attended a meeting on water advisory issues this week, Council Member Evans said she hoped that a representative from the Triangle area would be appointed to the Board of Trustees of the State’s Clean Water Trust Fund. Representative Hackney said he thought that there was a representative from the Triangle area on this advisory board.

Senator Kinnaird said she would send information to the Council about a proposal to increase tax credits for land given to smaller land conservancies.

Mayor Waldorf asked the members of the legislative delegation to keep an eye on the Town’s fire protection funding of approximately $296,000.

Mr. Horton noted that the four uppermost legislative priorities from the staff’s standpoint were: annexation, transit funding, flexibility on revenue sources and the provision of a menu of revenue options. He also said there were a few important solid waste matters including continuation of the tire and appliance taxes.

Senator Lee said he was really delighted that Council Members Brown and Franck had taken the opportunity to participate in recent hearings at the General Assembly. Senator Lee also said he personally appreciated these efforts and hoped that Council Members would continue to visit the General Assembly and local legislative delegation.

Mayor Waldorf said that Council Member Brown and herself had been working hard to lobby the legislature regarding the recommendations of the Transit 2001 Commission.

Representative Hackney said that the League of Municipalities staff did a very good job of putting out alerts of the moment to local government members. Senator Lee said he also relied heavily on Mr. Hankins and his staff to be kept apprised of pending legislation.

Senator Kinnaird reported that the situation regarding the status of the intangibles tax was uncertain and somewhat chaotic.

The meeting concluded at 9:00 a.m.