SUMMARY MINUTES OF A BUDGET WORK SESSION
OF THE CHAPEL HILL TOWN COUNCIL
WEDNESDAY, MAY 17, 2000, AT 4:00 P.M.
Mayor Rosemary Waldorf called the meeting to order at 4:00 p.m.
Council members present were Flicka Bateman, Joyce Brown, Kevin Foy, Lee Pavăo, Bill Strom, Jim Ward, and Edith Wiggins. Council Member Pat Evans was absent, excused.
Staff members present were Town Manager Cal Horton, Assistant Town Manager Sonna Loewenthal, Town Attorney Ralph Karpinos, Assistant to the Manager Bill Stockard, Interim Police Chief Gregg Jarvies, Interim Transportation Director Scott McClellan, Inspections Director John Davis (Retired), Finance Director Jim Baker, Fire Chief Dan Jones, Personnel Analyst Bunny Spadaro, Planning Director Roger Waldon, Parks and Recreation Director Kathryn Spatz, Public Works Director Bruce Heflin, Housing Director Tina Vaughn, and Town Clerk Joyce Smith.
Mr. Horton introduced Dr. Steve Condrey of Condrey and Associates, consultant for the continuation of the next phase of the Pay Plan improvements and Senior Associate and Program Director in the Human Resource Management Technical Assistance Program at the University of Georgia’s Institute of Government. Mr. Horton listed Dr. Condrey ‘s many accomplishments and honors and said Dr. Condrey had interviewed nearly 500 Town employees during his research.
Dr. Condrey said the Council should seriously consider implementing the recommended Pay Plan, which it had begun and adopted the year before. He said most of the recommended amount was for employees at the lower end of the pay scale, for whom there was competition in the labor market. Dr. Condrey said this was similar to a capital improvement to the pay system, which would not be a yearly expense, but only about every ten years. He stated the actual cost to get to a new scale would be near 2%, much less than most jurisdictions would need for increases.
Dr. Condrey noted that moving the pay system to the 75th percentile of the market was a very smart move to undertake in both the short and long term. He said if the Town could find the money to implement some version of the Plan, it would be a wise decision. Dr. Condrey added that the Plan struck a balance between the demands of protecting the taxpayers and obtaining and keeping good employees.
Mayor Waldorf asked Dr. Condrey to explain why the Town would save only 1% if it started at the 50th percentile rather than at the 75th percentile. Dr. Condrey said there was minimal savings between the two percentiles because there was not that much differences in the salaries between the two.
Council Member Strom asked what the difference was between the approach which would have cost $600,000 and directly aimed at “compression,” and the approach being suggested in this Pay Plan. Dr. Condrey said originally it was recommended that all employees be placed at the minimum of the new classification, and to move them, after one year, to the first step, which is essentially the Pay Plan in existence. He said to move those in service 4-6 years would cost, as an additional step, an additional 3.2% of the budget.
Council Member Ward asked for comment on how to handle merit increases on the basis of a salary percent increase versus a bonus. Dr. Condrey said he would like to see employees’ salaries gain a bit over inflation each year, and, if not added to the salary, employees actually lost ground while working for the Town. He added a step system was more appropriate than just a bonus, where the salary would lag in the market after a few years.
Council Member Brown asked Dr. Condrey to explain the reason for calling 4.75% a merit increase rather than base pay. Personnel Analyst Bunny Spadaro said the recommendation was for a 4.5% average increase, which would be base pay. Mr. Horton added that the 4.75% was what occurred during this fiscal year, and was a combination of base pay plus merit increase.
Council Member Ward asked how the Town could continue to move forward in the Pay Plan within a tight budget year, caused by unforeseen expenditures, such as this past winter’s 20-inch snow storm. Dr. Condrey said he would rather see the Council delay implementation of the Pay Plan for a couple of months, rather than to cut the scale. Mr. Horton said he thought it could be done either way, and delaying implementation would keep everything intact, and the information already shared with employees would still be accurate. He said the disadvantage of shaving the increase back, would be that the Town would not be as competitive in the market, and it would change communications to employees. Mr. Horton said the advantage was that it was an imperceptible amount of change in the market and the Town would save money.
Mayor Waldorf listed the outstanding issues to be considered this evening:
· Pay Plan
· School Resource Officers
· Increases in the Development Fees
· Curbside Collection
· Cuts in the Departments
· Issues raised by Council Members Evans and Strom
· The Transportation Issue
Mayor Waldorf asked what the status was of the decision made at the Transit Summit to look at the possibility of increased service. Mr. Horton said they had met today and reached a tentative agreement on some options to pursue. He said they would meet again tomorrow with the hopes of resolving the issues. Mr. Horton said the proposal favored was to increase the hours of service by eliminating the reduced service periods and by providing a more dependable service throughout the year, Monday through Friday. He noted that the University would be willing to make a contribution to pay for some additional evening services hours. Mr. Horton added that there were some issues to work out with Carrboro, and there should be a report to the three individual boards by Friday of this week.
Mayor Waldorf suggested structuring the remainder of the work session by discussion of the Pay Plan, the possible reductions brought to the Council, discussion of the other issues, and any others added by the Council.
Council Member Bateman asked Dr. Condrey to comment on the benefit package that Chapel Hill offered to employees in comparison to what other municipalities offered. Dr. Condrey said it was a competitive benefits package, but it was not out of the ordinary and was in line with other municipalities.
Mayor pro tem Pavăo said he felt the Council should adopt the new compensation plan, and he was in favor of moving in a forward direction.
Council Member Wiggins observed that this was the first year the Council did not have several employees from various departments lobby the Council for salary increases, and she felt it was because they had their hopes that the Council would follow through on the Pay Plan adjustment.
Council Member Bateman observed that part of good management was to do what had been said would be done, and she supported continuing the Pay Plan adjustments, but with some “belt tightening” in other areas of the budget. She asked Dr. Condrey whether the vacancy rate was low, average or high in the positions listed as vacant. Dr. Condrey speculated that it was about average, but in the departments with several vacancies, there should be decreases, with the increases in salaries.
Council Member Foy said that a tax increase of 1˝% should be a goal for the Council. He said he was in favor of the Pay Plan, but suggested it should be implemented on October 20th, a delay of one pay period, with a .25% decrease, for a gross savings of $77,000. He said this would not disrupt the grade system the Council had established, was an implementation process not unduly burdensome on either the Town or the employees, and .25% was almost imperceptible.
Council Member Strom asked Ms. Spadaro to explain the memo she had placed before the Council because one .25% decrease saved $32,000 and another saved $22,000. Ms. Spadaro answered that, in one of the options, the performance range was kept at 4˝% average, and, in the other option, it was dropped to respectively 4.25 or 4%. Mr. Horton added that the number the staff would offer as the correct number would be $32,913, which would total $87,203.
Council Member Wiggins asked Council Member Foy if the Council could consider his suggestion as one of the options for a decrease. Council Member Foy agreed.
Mayor Waldorf said that would be an $87,203 adjustment to the Pay Plan. Mr. Horton said only a portion of that would apply to the tax rate, the portion that applied to the General Fund and the Transportation Fund.
Item 2 – Follow-up Reports on 2000-2001 Budget
a. Mayor/Council/Manager/Clerk
Mr. Horton said the departments had been asked to prepare more than one set of options for budget cuts. He noted that the Public Works Department did not come out on the same schedule as the other departments because they were working on other issues, and the Transportation Department was late because of a misunderstanding.
Comments on the Mayor/Council budget cuts:
Council Member Bateman said she was comfortable with reducing the costs for food and for the Council Retreat.
Council Member Brown said she would be willing to cut the travel expenses, and the Council might consider communicating with each other about travel and meetings.
Council Member Wiggins asked for an explanation of the two columns in the chart the Council received today. Mr. Baker explained that the chart noted the recommended budget and its percentage over current year, the amount necessary to reduce the recommended budget to a zero increase, and the amount necessary to reduce the current year budget by 2%.
Mr. Horton said, in the chart on page 1 of the Agenda #2a (1), to reduce the Mayor and Council budget to the zero level would total $5,042, and to reduce it to a 2% reduction of the current budget would be $6,694. He said he allowed some adjustments, which did not include the basic personnel costs based on what the Council requested from the staff. Mr. Horton norted that it also did not include the Northern Community Park which the Council had requested and the public approved in voting the bonds.
Mayor Waldorf was opposed to reducing the food budget, and felt the Council deserved a meal during some of its long meetings.
Council Member Foy suggested leaving the proposal on the table and going on to the next item.
Council Member Wiggins asked about the long-distance telephone calls listed in the Council Budget. Town Clerk Joyce Smith said there were four telephone lines, one in each of the Council four offices. She added that the charges included both local and long distance charges. Council Member Wiggins noted she placed many Town business calls from her personnel residence. Mr. Horton said Council Member Wiggins could put in a requisition for reimbursement of long distance calls she made from her home.
Council Member Brown asked about the charges of $4,450 for telephone charges. Ms. Smith said all of the phones had previously been budgeted in the Mayor’s budget, and now they were separated.
Council Member Bateman said the Council should set the tone for the rest of the departments. Mr.Horton said the Council could pick any of the options it chose to.
Ms. Smith said she could live accommodate any of the options made for the Manager and Clerk’s office, but added the options were listed in order of preference in the materials.
Council Member Bateman said she did not want to second-guess any of the options.
Council Member Foy suggested keeping it on the table at the 2% cut. He said he wanted to look at each of the department’s options.
b. Personnel
Council Member Strom suggested that the Council simply respond “Yes” to the 2% proposed cut. There was no objection.
c. Finance
Council Member Foy said he was not in favor of either of the offered options, because it was all reductions in technologies needed to aid the other departments. The Council agreed.
The Council agreed to keep the reduction at 2%.
e. Planning
Council Member Ward suggested keeping the reduction at 2%.
Mayor Waldorf asked Mr. Waldon about the reduction in the GIS-related equipment and printers. Mr. Waldon said the Department had planned to be more aggressive in the training of staff and in production of the maps for the Council’s information.
Council Member Bateman asked if the County had GIS equipment, and if so, was it available for the Town’s use. Mr. Horton said the Town already used the County as the main supplier of data for properties and for other sources, but the County would not produce reports for the Town.
Council Member Bateman asked about leasing the equipment. Mr. Horton said he did not believe leasing would have a substantial reduction in costs.
Council Member Brown asked whether the Town had tried to work with the County with the GIS system. Mr. Horton said the County was the key to making the GIS system work and paid for the original creation of the system and the data files, but most of what the Town needed the County had no interest in. He said there were people in the Engineering Department who were able to work with the system and do a good job. Mr. Waldon added that if the software was not
purchased it would not set the Department back in the way it produced the maps, but the Department was hoping to improve the quality of the maps for the Council with the additional software.
f. Inspections
Mayor Waldorf asked if that was just a reduction in the conferences. Mr. Davis stated that was correct.
The Council agreed to leave the reductions at 2%.
g. Engineering
The Council decided to leave the option for reduction up to the Department Director and the Manager.
h. Public Works
Mr. Horton urged the Council to look at this budget carefully because the implications were more serious than in some of the other department budgets, because this department delivered a different kind of service.
Public Works Director Bruce Heflin reviewed the Department’s budgetary cut options. He said a 2% reduction below the Department’s base would require the Department to reduce the recommendations by about $234,000, and in order to achieve that reduction the result would be an overall net decrease of 7% from the recommended budget. Mr. Heflin said the bulk of those were increases due to increased gasoline prices, increased cost of asphalt, increased garbage to the landfill, and computers added to the Department.
Mr. Heflin said the first issue was the collection of commercial waste. He said if the Town was not responsible for collecting commercial waste it would be collected by commercial haulers, who could take the waste to any place for dumping, thereby bypassing Chapel Hill’s commitment to Orange County to reduce the amount of waste going to the landfill. Mr. Heflin said if the Town was successful in not collecting commercial waste, the offsetting cost reduction would be about $950,000
Mr. Heflin said his Department also provided options in a number of categories of expenditures throughout the Department, based on what the year’s expenditures typically were. He said one option was to eliminate two of the remaining three construction positions that had been added to the Department in order to allow the Department to build sidewalks and streetscapes in-house. Mr. Heflin said this would necessitate more contractual agreements to complete those tasks, which would mean a higher building cost, with fewer feet built.
Mr. Heflin said the second option would be to eliminate side-loading commercial garbage service, with 175 of these commercial areas being serviced by other means, but there were about 30-50 other areas where it was difficult to pick up garbage because of narrow alleys. He said reducing that service would cut about $53,000.
Mr. Heflin noted that smaller options had been offered for cuts. He said there were some service reductions options, some being minor and some major.
Council Member Brown asked where the commercial collectors would come from. Mr. Heflin said the private haulers would come if the Town got out of the commercial collection business. He said one option would be to franchise the collections.
Council Member Brown asked what the difference would be if the businesses had their garbage picked up by a private hauler. Mr. Heflin said there would be a much higher cost than they now are paying in taxes, and the private haulers did not have side-loading trucks that were able to get into difficult areas. He said if the businesses wanted any additional services from private haulers they would have to pay for that as well.
Council Member Strom asked for a report of the rates charged by the Town for additional pickup, as compared to private commercial pickup rates in the area. Mr.Heflin asked Mr. Karpinos if it would be legal to charge higher fees for the commercial pickups. Mr. Karpinos said the fees could be set to collect the costs of service, but could not be used as a way to collect more than the cost of service. Mr. Horton said the Town could probably justify a modest increase in the cost of service. Mr. Karpinos said the cost of service could include capital costs, but could not be used to raise money for other purposes. Mr. Heflin said there might be some options on this issue that still hadn’t been explored.
Council Member Foy suggested looking into the commercial collection issue for next year’s budget, in order to give businesses some lead time, and for the Town to explore the options. He said he believed the cuts in the Public Works Department’s budget should be significantly less than $234,000.
Council Member Brown asked if the commercial sector had any idea that this cut in service option was being discussed. Mr. Horton said Council Member Brown’s concerns about this being a public process were justified, and he did not think the commercial sector was very aware that this might be an option for budget cuts. He said the staff would need some time to explore the options.
The Council agreed that the option of commercial collection reduction should be explored for the next budget year.
Mayor Waldorf agreed with Council Member Brown that franchising sounded like a way to go, which would provide quality of service. She said she was emphatically opposed to reducing the construction crew.
The Council agreed to set aside the Public Works budget cut options until a later time.
i. Police
Mr. Horton said this budget was also another area where large cuts could have large consequences.
Interim Chief of Police Gregg Jarvies reported that the 2% option cuts for his Department were for programs now contracted out. He said the $44,000 proposed cut did not reflect any equipment costs. Interim Chief Jarvies said that the options for cutting represented items, in some cases, that could affect health and safety issues, but with the lack of programs to cut, the Department had to look at other areas.
Council Member Bateman asked Interim Chief Jarvis if he would rather eliminate some of the vehicles and delay buying uniforms. Chief Jarvis said to get to a 10% cut in the Department’s operating budget, the Animal Control budget and the Vehicle Replacement Program were the only two large ticket items available, unless the Department made dozens of small cuts. He stated he did not believe that was appropriate. Interim Chief Jarvies said the Vehicle Replacement Program was the largest program in the Department’s budget, adding that cutting that would not be a preference.
Council Member Foy asked what the medical exams were. Chief Jarvis said all public safety personnel received medical exams on a scale, depending on age, from a five-year physical to an annual physical.
Council Member Ward asked why the uniform replacement and delay in the purchase of bullet-proof vests were lumped together, and could they be separated. Chief Jarvis said they could be separated.
Council Member Ward asked what the cost implications would be if only the uniform purchase was delayed. Interim Chief Jarvis said the cost of a set of three uniforms per officer was $24-29,000 per year, and the cost of a ballistic vest was about $360 dollars, the cost of a uniform.
Council Member Ward asked what kind of impact delaying the purchase of the uniforms would have on the personnel in the Department. Interim Chief Jarvis said if the choice was between uniforms and vests, the personnel would want the uniforms, as the uniforms received a lot of wear during the year, and the personnel took pride in looking professional. He said there were other areas he would recommend cutting, rather than the uniforms.
Council Member Ward asked what the dollar figure would be for cutting the replacement of the uniforms. Chief Jarvis said it would be approximately $28,000, but it would not have a significant impact on the replacement cycle, but would have more of an impact on this year when the uniforms were ready to be replaced.
Council Member Ward said he would like to see the delay in uniform replacement put into the budget cut options.
Council Member Wiggins asked if the old uniforms were turned in. Chief Jarvis said they were usually thrown away, but if there was one set that was still wearable, it was retained. He said there was an incentive program, whereby the officer had the option of keeping his/her uniform, and buying a winter coat, instead, with the $300 allotment.
Council Member Strom asked if eliminating the purchase of 17 police vehicles would in any way put any of the officers at risk from a safety or operational view. Interim Chief Jarvis said he believed it would, at a certain level of maintenance any additional wear and tear raised some concern of the operating officer’s safety. He recommended the lowest number of vehicles be eliminated from the cost reduction replacement policy.
Council Member Brown asked if the Chief had thought of Orange County Recycling for recycling of the uniforms. Interim Chief Jarvis answered that if the clothes were wearable, patches were removed and they were offered to the PTA Thrift Shop for resale.
Council Member Foy suggested a recommended figure for the Department to cut, and the Department could choose the cuts to make.
Mayor pro tem Pavăo asked about the vehicle replacement cycle. Mr. Horton said the Council allowed the staff to establish a capital equipment replacement program to even out the long-term expense on equipment, to ensure that the Town had the vehicles needed, and to reduce maintenance costs. He said if the police vehicles went off the replacement schedule it would mean that vehicles would be on the road longer than their actual useful life, and would result in increased maintenance costs, which he did not believe was a good management policy. Mr. Horton said the consultants had told the Town that there were vehicles on the road that were beyond their useful life because the Town did not have an adequate replacement system.
Mayor pro tem Pavăo agreed with Council Member Foy regarding a symbolic cut, to be decided upon within the Department. He said he did not agree with Council Member Ward about the uniform replacements, and added that the Town’s police always looked good.
The Council agreed to request that Interim Chief Jarvis work out a $25,000 cut in his budget. Interim Chief Jarvis said he could work with that.
j. Fire
Mr. Horton said Chief Jones had asked for and received the blessing of the Council to have some unusual resources which were needed to respond to new needs in the community, so the Fire Department’s figures were lower than some of the other departments.
Fire Chief Daniel Jones said the Department had presented the Manager with a zero increase budget. He said most of the Department’s costs were personnel, and the overhead costs were mostly utility costs, so about 25% of the budget had the flexibility to manage a 2% cut. He said the options offered were in order of preference, with the least painful being option #1.
Mayor pro tem Pavăo said he did not like to tinker with public safety and the cut was so minimal he would not bother with it.
Council Member Ward said he seconded that idea.
The Council agreed to a zero increase budget for the Fire Department.
k. Parks and Recreation
Mr. Horton said Ms. Spatz had some additional management costs because of the Homestead Park, and had made one shifting cost from a personnel line to a contract line, which meant that her budget began with a zero base.
Parks and Recreation Director Kathryn Spatz said most of the Department’s budget, other than personnel, went to programming, most of which had some offsetting revenues. She said, of the options, the first one would be the Department’s preference.
Council Member Foy suggested the budget cut of 2% should remain on the table, with the preference to where the cuts were made being up to the Department.
Mayor Waldorf commented on option #3, and said she did not want to eliminate any of the scholarship opportunities the Town gave to children who have financial need.
The Council agreed that the 2% cuts should be left up to the department.
l. Library
Mr. Horton said there was a Library Board meeting this evening and Library Director Kathleen Thompson needed to be present, so he would take any comments back to her.
Mayor Waldorf said the Library Board worked very hard to get outside sources of funding.
Mayor pro tem Pavăo said the Board put together a good report each year, and they go to the County Commissioners seeking additional funds, adding the Library is a very good one. He said the Library Foundation was not supposed to make up for budgetary limitations, the Town was supposed to fund the Library through taxes.
Council Member Bateman said she wondered why there were no administrative cuts, like subscriptions, professional dues, travel, etc., and she would encourage the staff to look at things like that for cuts. She said she did not want to cut the Outreach program. Mr. Horton said the Department did encourage staff to attend professional conferences, and those things could be cut back.
Council Member Ward asked for clarification on the first option, reducing the materials budget account by $2,200. He asked what percentage of the cut that was. Mr. Horton said the materials budget was presented at the bottom of page 167 in the Budget. He said the materials would be a combination of audio-visuals, adult materials, and gift books, periodical, and microfilm—about one quarter of a million dollars. He said the Library did have a Foundation whose monies were working to earn additional revenues and were disbursed on a planned basis to the Library, and there were also some accumulated monies in the Library Gift Fund, which was managed by the Town. Mr. Horton said the Council could use some of the Gift Funds to add additional revenue to the Library budget.
Council Member Strom said if the microfilm reader/printers were working, and could be delayed for one year, that would be his choice for a cut and would be close to 2%.
Council Member Ward suggested that Ms. Thompson be asked to come up with the 2% reduction with the microfilm reader and the reduction of the materials budget, or reductions somewhere else.
Mayor Waldorf roughly calculated what the reductions made so far would add up to—about $84,000 on budget reductions and $87,000 on the Pay Plan.
m. Transportation
Mr. Horton said one of the challenges in the Transportation budget was if a quarter of a million dollars was cut from the budget, not all of that would flow back to the Town.
Interim Transportation Director Scott McClellan said the Manager’s proposed budget for the new year included operating expenses that were approximately $222,000 higher than the current year. He said the vast majority of the increases were associated with fuel costs and contributions to the General Fund. Mr. McClellan said that other increases were associated with the opening of a new Carrboro Plaza Park and Ride Lot, and some other operational expenses. He said a 2% reduction would be a target amount of about a quarter of a million dollars, which would mean a savings of $.44.5 per dollar cut, because of the cost-sharing arrangements the Town had.
Mr. McClellan said there were not a lot of options for cutting except in service reductions. He said one reduction could be reducing the hours of service by eliminating weekday service on the A route and all weekday evening services after 7:00 p.m. Mr. McClellan said the other option would not involve cutting services, but would affect the Capital Reserve program. He said this year the Department had programmed, in the Capital Reserve program, $165,000, and $54,000 for two maintenance positions. Mr. McClellan said by combining those two reductions the Department would get to almost $220,000, short of the target of $250,000 by $40,000, which could be looked at for more cuts. Mr. McClellan said elimination of the Capital Reserve Fund would put the Department in jeopardy in staying on the replacement cycle scheduled for the buses, which would have to be deferred.
Mayor Waldorf suggested that discussion of this budget reduction should wait until the report of the increased services, so the two matters could be discussed together.
Council Member Brown asked if staff had talked to the other transportation partners about reductions. Mr. Horton said the staff had not talked to them about cuts.
Council Member Ward suggested that the Department should not feel restricted by the $250,000, in only looking at large ticket items, but to look at some smaller items to get some savings.
Council Member Strom asked if Winston Salem was doing something different in order to have two less employees for maintenance of the buses. Mr. McClellan said he did not know, but they could be contracting out some of the maintenance.
Council Member Strom asked who did the maintenance on the buses. Mr. McClellan said the Department did all the maintenance on its own equipment.
Council Member Strom asked if there would be a possibility of shifting some of the maintenance to Public Works to avoid the additional employees, or could they think about that suggestion. Mr. McClellan said the main concern was keeping the bus fleet operating safely and reliably, which was one of the issues that the Federal Transit Administration raised in the Triangle Review, that Chapel Hill was not keeping up with the scheduled maintenance as it was supposed to.
Council Member Strom asked if 26 cars being maintained were eliminated, would the Department be able to better maintain the buses. Mr. McClellan said he would like some time to think about that suggestion and to talk with the maintenance superintendent about options. He said the whole fleet had to be maintained and he did not know if Public Works would have the capacity to take on another 26 vehicles.
Mr. Heflin said it was not a huge number of vehicles in addition to those the Public Works Department already maintained, but he would like to consult with the fleet supervisor and the supervisor first. Mr. Horton said the key was that the Town was starting to get into trouble with the federal government about the condition of the buses and it was a warning sign. He said the staff would check into the possibilities suggested and also into the Winston Salem issue.
Mayor pro tem Pavăo asked if the Town was contemplating exchanging some of the larger buses for smaller buses. Mr. McClellan said the investment schedule was based on replacing one large bus for one large bus twelve years down the road, and an inflation factor was built in. Mr. Horton said research had recommended large buses, but the Town would be experimenting with small buses, and would be able to report later. He said the cost was more for personnel than for the size of the bus.
Council Member Brown asked what the schedule was for the smaller buses. Mr. McClellan said there were three, at present, waiting to be outfitted—probably a month to six weeks.
Maintenance Superintendent Don Wells addressed some of the Council’s questions. He said in Winston Salem there was a large fleet of 90 vans, and the bus fleet was less than Chapel Hill, and they did farm out some of the work.
Council Member Brown asked if the Department was considering alternative fuels. Mr. McClellan said the Department had some federal grant funds with which it hoped to purchase two hybrid electric coaches in the next year or two. He said there were dramatically higher costs per vehicle, than in the traditionally diesel-powered bus.
Council Member Brown asked what Mr. Horton meant when he said the Town was getting into trouble with the federal government. Mr. Horton said one of the deficiencies was in maintenance of the buses. Mr. McClellan added that one of the finding issued last year at the federal inspection was that Chapel Hill was not maintaining its maintenance program on preventive maintenance. He said the Department did not have enough help to keep up with the preventive maintenance.
Council Member Brown asked about getting a grant for a natural gas fueling station, which the Council had talked about before. Mr. Horton said a number of years ago this had been pursued by the Town, the University, Carrboro and the County, but the person in charge had moved on and the interest had not been pursued.
Mr. Heflin said the Public Works Department took delivery of the first compressed natural gas vehicle, and the quick fill stations were located at the Public Works and at the Parks and Recreation. He said the rest of the vehicles would be coming in over the next weeks to a month. Mr. Heflin said the Department was also waiting delivery of electric vehicles in the near future.
Council Member Bateman said Council Member Evans had asked where the $500,000 windfall was that the Transportation Board had said would be coming to the Town, and how was it being used. Mr. McClellan said the General Assembly adopted a budget during the current fiscal year that had a $5.2 million supplemental allocation for the State’s Public Transportation Program, which consisted of $4.9 million for urban transit systems, and $300,000 for rural capital. He said Chapel Hill’s share of that allocation was a little over $600,000 for the current fiscal year. Mr. McClellan said when the budget was adopted during the last long session, the General Assembly did not include the amount in the second year, so that money would not be included in the new budget. He said the Memorandum of Understanding with the Town’s partners called for all federal and State funds to be used to reduce the amount of local contributions, so the allocation will be used to reduce the system at cost and would effectively be shared between the three partners. Mr. McClellan said it reduced the amount of fund balance the Town needed to use during the present year.
Council Member Foy said he thought the Town had sold the trolleys. Mr. McClellan said the Town had attempted to, but was asked to hold on to them and to increase the fees charged for chartering them in the hope of keeping up with the costs of maintenance. Mr. Horton said the agreement had been that the Town would keep the trolleys until such time as they were producing less in revenue than the costs to maintain them, and the Town had reached that point and would sell them.
Council Member Ward said if all the return for the Transportation savings were only going to be $.44 on the dollar, the budget would have to be looked at very carefully, because it was not as big a savings as it had appeared. Mr. Horton said it would be necessary to talk with the University and Carrboro before those kinds of service cuts were made. He said because the Transportation Fund was an Enterprise Fund, the Transportation Fund would be charged for the services of the Public Works Department for the maintenance of the 26 cars.
Council Member Strom asked if the Town was out of compliance for the whole three years of the Federal Transportation audit. Mr. McClellan said he would get back with the answer to that. Mr. Wells added that the audits were done on random vehicles and the Town was out of compliance over the three years, possibly in and out, but not all maintenance was done on time.
Mayor Waldorf said the Council could consider transferring $200,000 into the Capital Reserve Fund instead of $300,000, in order to keep the tax rate down.
Mayor Waldorf noted that an additional Budget Work Session was scheduled for June 5, 2000 from 4 to 7 p.m.
Mr. Horton said if the Transportation Department reached agreement on recommendations and options for the Town, and for Carrboro and the University, Carrboro would probably want to discuss this.
Council Member Foy asked if the increased fees were in the budget. Mr. Horton said they were put in at 75% of what had been estimated.
Council Member Wiggins asked if there could be estimates of freezing some vacant positions for a designated time period.
Council Member Bateman asked how much money would not be realized if the increased development fees were not imposed on non-profits. Mr. Horton said he would get a report to the Council of both governance and non-profits, such as churches.
Council Member Bateman said she would represent the Council at the retirement ceremony for Provost Richard Richardson of the University, if her schedule allowed.
Council Member Strom asked if the Council could get an updated tally sheet of the budget so far.
The meeting adjourned at 6:15 p.m.
The minutes from May 17, 2000 were adopted on July 5, 2000.
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