SUMMARY MINUTES OF A MEETING OF THE
CHAPEL HILL TOWN COUNCIL AND THE
LEGISLATIVE DELEGATION
FRIDAY, FEBRUARY 16, 2001, AT 8:30 A.M.
Mayor Rosemary Waldorf called the meeting to order at 8:30 a.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 Managers Sonna Loewenthal and Florentine Miller, Town Attorney Ralph Karpinos, Assistant to the Manager Bill Stockard, Assistant to the Mayor Alice Joyce, Finance Director Jim Baker, Planning Director Roger Waldon, and Town Clerk Joyce Smith.
Members of the legislative delegation present were Senator Howard Lee, Senator Ellie Kinnaird, Representative Joe Hackney, and Representative Verla Insko.
Others present were Dee Freeman, Director of the Triangle J Council of Governments, and Ellis Hankins, Executive Director of the League of Municipalities.
Mayor Waldorf welcomed those present to today’s meeting.
Protection of Town Revenues
Representative Hackney noted that he had brought copies of an updated budget outlook to give the Council an idea of where the State is now with its budget difficulties.
Mr. Horton said one concern of his is any forecast that might be made about the coming year and the year after that. He said he would like to hear the best prognostication that can be made about the coming year. Senator Lee said the State had two years of “red” staring it in the face, depending on what the Finance Committee does. He said this might change the way business is conducted. Senator Lee said certain items would be looked at that may affect local governments. He said that is where the State is now, and it is a serious situation. Senator Lee said he was not willing to talk tax increases now, but there are a number of options to be considered.
Mayor Waldorf said if the Legislature is not willing to talk about a tax increase, are we then in a situation that means there is no chance that the shortfall can be covered with new taxes. Senator Lee said he would not say unwilling, rather they are looking at other options. He said the State needed to go after funds owed to the State but never paid, as well as other options.
Representative Insko said two bills had been introduced in the House on this issue with menu options, and expects to see even more of those.
Representative Hackney said that he believes there is more willingness in the Senate to discuss options for new revenues. Senator Kinnaird agreed, adding that she believes the Legislature is more open to new options now they ever before.
Senator Lee said even if we move into new directions on how we flow revenues to local governments, he questions if there is a willingness to give something else to local governments that has not been done in the past, such as Home Rule.
Senator Kinnaird said that it may not be as palatable this year as next year, but agreed there was more willingness next year, possibly during the long session. She said there was a document that lists $2 million in tax loopholes, and there was a serious effort underway to close those loopholes. She also noted it may be time to take another look at the tax code.
Council Member Strom said it was encouraging to hear that both the House and the Senate are looking at some local options more favorably. He said he is not a member of the Smart Growth Committee, but believed that the reliance on property taxes was making many people anxious. Council Member Strom said he hoped that the delegation would continue to use their positions in leadership to improve this situation.
Mayor Waldorf said that over the next several weeks Wake, Orange, and Durham Counties were going to support another ˝ cents of sales tax to be used for transportation and schools. Representative Hackney said there was no way to know how a bill such as that would be looked at. Another factor, he said, is that when you get down to facts and figures, the fact is that our income tax is one of the highest in the southeast, the sales tax is also relatively high, and the property tax is still relatively low when compared to the national survey. Representative Hackney said people tend to complain about property tax rather than sales tax.
Senator Kinnaird asked except for Orange County, whose property taxes are relatively high compared to other counties. Representative Hackney said that when you look at it Statewide, that the sales taxes are relatively high while property taxes are lower. When comparing tax burdens and breaking them down, he said, there is a worry about the differences from state to state.
Mr. Hankins said they were hearing more positive talk about the funding for local governments, and the willingness to provide flexibility in addressing revenue issues. He said they were working with the cities and counties to achieve some additional flexibility.
Mayor Waldorf said the Town was very interested in local option sales taxes, and asked how to proceed with that. Representative Insko said that all cities and counties, not just the Triangle, should approach their delegations to express its interest.
Council Member Brown said that she believed that Home Rule was very interesting, and asked the delegation to look closely at that. She said she believed it would take some burden off the local governments to have that flexibility.
Senator Lee said that he and Senator Hackney had been looking at the report coming out of Smart Growth, which includes a number of these approaches. He said he is meeting with Governor Easley soon to get the Governor’s input and see where he stands. After that, he said, some of these could be crafted into legislative. Senator Lee said in his mind the chances of getting many of these concepts through the Legislature is far greater this year that in past years.
Mr. Horton said that his main concern was to hang on to the revenues already available. He said he had notified the Council that Chapel Hill was in a difficult situation, if the State comes after some of the Town’s revenues. Mr. Horton stated he was concerned, based on rumors and things read in the newspapers, that the Governor may put forth proposals and members of the Legislature may put forth proposals to keep some of those funds. He asked if the delegation had any insights into that. Otherwise, he said, he would be forced to prepare a budget with a large hole in it.
Senator Lee said the House and Senate budget committees were working together, and are all on the same page. He said there are no “sacred cows” as they move forward in this budget. Senator Lee said they have talked about phasing out some revenue sources, with the exception of the home financing funds. He said if they are forced to move in that direction, it would happen over a five-year phase out. Senator Lee said he did not think they would do anything that would leave local governments naked. He said they were thinking of how to keep local governments whole if they do move in that direction, but nothing is certain right now. Senator Lee said they do not know precisely where they are going or how they will get there. Senator Lee said he did not expect the Governor’s budget until about March 15, so the delegation would not be able to tell Chapel Hill anything until that time.
Mr. Hankins said he was not surprised to hear the first part of Senator Lee’s comments, but was pleased to hear the last part. He said the League was concentrating on reimbursement of revenues that had been withheld in the past. Local governments, he said, must have adequate, stable, growing revenues to replace those revenues that had been withheld, and those revenues withheld were a concern. He said there might be opportunities to look at new sources of revenues that could be dedicated to local governments while the phasing plan mentioned by Senator Lee was taking place.
Opposition to Preferential Treatment for Groups of Employees
Mr. Horton said the Town was against any preferential treatment of particular groups of employees. He said Chapel Hill had a long history of providing equal benefits to all Town employees, and believed that this is an issue that is best left to local governments to decide.
Opposition to State-mandated Disciplinary Procedures for Law Enforcement Officers
Mr. Horton said the Town had good policies in place, and again believes that this is an issue for each local government to decide. Mr. Hankins said that because all local governments and employees had contributed the funds to the retirement system, the League did not believe that one group of employees should benefit.
A Mandatory Statewide Program for Returning Bottles and Cans
Senator Kinnaird asked if this was a system where bottles and cans would be turned in. Mr. Horton said yes. Senator Kinnaird said there was a great deal of interest in this, adding that the bottling industry had been able to kill this issue each time it was brought up.
Representative Hackney said he was not sure if this was the year to make a big push for it. He said the he and Mr. Hankins would try to determine if there was some interest in doing so.
Mayor Waldorf said the Town needed the delegation’s advice on how to get such new sources of revenues. Representative Hackney said no one was in favor of taking revenues without replacing them in some other way.
Representative Hackney said Senator Lee was one of the chairs of the Senate Appropriations Committee, a very high position, and he is now able to be very instrumental in replacing revenues.
University Development Plans
Mayor Waldorf said she believed that the Legislature had been given a presentation by the University on its plans for the Horace Williams tract. She said the Town is engaged in a discussion process with the University, and have formed a Town-Gown Committee to look at an array of issues. Mayor Waldorf said one issue is what amendments or modifications might be made in the growth of the University, especially since the bond issue was passed. But, she added, the Town is concerned about fiscal issues, about whose going to pay the cost of this growth since University properties are exempt from property taxes, and other fiscal issues that are of great concern to the Town. Mayor Waldorf said the Town does not yet have data on traffic projects, projected stormwater impacts, and other environmental impacts. She said the Town does have a list of what the University anticipates to build over the next 8 to 10 years.
Council Member Bateman said school impacts were also a concern. If the Town and the University reach an impasse, she said, and the University goes to the Legislature to have the Town’s regulatory authority revoked, how would the Legislature react? Senator Kinnaird said she did not believe that any local government had any control over the State.
Mr. Karpinos said that local governments could regulate State buildings. Mr. Hankins said there was a statutory provision that gave local governments the authority to regulate zoning of State buildings.
Representative Hackney said that since they have not been asked to do anything like that, that it would not be appropriate to address that question. He said he believed that the University would work with the Town, and encouraged the Town to avoid such a fight in the Legislature over this issue.
Senator Lee agreed, saying that he supports the University and the Town continuing their dialogue and the Legislature staying out of it. He said the Mayor and the Chancellor had assured him that they were committed to continuing to work together.
Representative Insko said she believed the Legislature interfering in this issue would be a mistake, and that it would have Statewide repercussions.
Council Member Strom said he agreed it was clear that it was in the best interest of the Town and the University to continue to creatively address the challenges they are facing. But, he added, the Town had not been given any significant information by the University to respond to. Council Member Strom said the future of Horace Williams and the time frame for its development is not that far out. He said the University appeared to be actively trying to address some environmental concerns, but from presentations to the Town, the University intended to be developing the Horace Williams site over the next 8 to 10 years, which is not really in the future.
Council Member Strom said that gives an idea of the impact and the scale that the Town will have to deal with. He said that development of Horace Williams and new development on the central campus would mean an additional 14 million square feet, and it may mean another 35,000 potential new jobs/people coming into the Town. Council Member Strom said this is potentially an RTP project being built right in the center of the Town. He said the Town must consider this very carefully and slowly, and how it would impact the area. Council Member Strom said the Town was attempting to be reasonable and needed the support of the Legislature as it considers the effect on the Town.
Representative Insko asked if the University was answering any other questions. Council Member Strom said some attempt was being made, but mostly maps were what had been offered.
Mayor Waldorf said on the central campus, the University’s master plan calls for net new space of 5 million square feet. She said development on the Horace Williams tract would account for an additional 8 million square feet of new space. Senator Lee said that other older buildings were being torn down, which should reduce that figure. Mayor Waldorf responded that the new, net additional square footage would be 5 million above what now exists.
Mayor pro tem Pavăo said that the effect was an additional 5.5 million square feet in new buildings, even with other buildings being removed.
Representative Insko said she was particularly interested in stormwater runoff, and would be interested in receiving the University’s proposal on that.
Dee Freeman said that in September of last year the Board of Delegates convened an annual planning retreat, and at that retreat attempted to develop goals and objectives. Out of that process, he said, a legislative committee was formed to assist local governments in forming their legislative agendas. Mr. Freeman said that they had developed a regional legislative agenda and were attempting to represent what the local governments want from the legislative session. He said it was not their intent to be a lobbying arm, but on Monday, February 26 at 7:30 a.m. at the Governor’s Inn at the Research Triangle Park they would have their first legislative breakfast and would put forth their first regional legislative agenda.
Mr. Freeman said it all comes down to the additional funds that are needed in the Region J area to deal primarily with growth. He added that in concert with that is the issue of Smart Growth. Basically, he said, we have interlinked those to identify what additional sources of revenue are needed to keep up with growth. Mr. Freeman said the idea and concept is that what funding mechanisms are available today should be available to all local governments. He said the number one priority was to seek those additional sources of revenues. Mr. Freeman said they wanted to protect the revenue sources that already exist.
Mr. Freeman said there have been a number of local government revenue sources repealed over the last 10 to 15 years, so it was Triangle J’s goal to protect those sources. He said that was the reason for attending today’s breakfast. Mr. Freeman said he was glad to hear this morning that there is a sense that local governments would not be left bare. He said his concern was to make sure that if revenues were deleted or repealed, that other revenue sources were put in place that would at least equal what was repealed.
Mr. Freeman said another issue was Smart Growth. He said local governments and the Triangle J Council of Governments have a joint interest in new populations and where that takes us. Mr. Freeman said they have worked for a long time on this issue and would offer to the legislative delegation their expertise and data on how to create a vision and policy on Smart Growth. If regionalism is a solution, he said, then there is an existing mechanism to address it.
Mr. Freeman said the last major priority is transportation. He said people in the communities get energized when they are directly affected by what government is or is not doing, and that is usually in the pocketbook. Mr. Freeman said with transportation, when the average citizen gets in a car and drives out on the highway, they directly feel what the government is or is not doing, and transportation in the Triangle J area is a very serious issue. He said that thanks to Mayor Waldorf and others, there is a real focus on that issue now.
Mr. Freeman stated that they do not know what the answer is to these priorities, particularly if tax revenue is removed. He said we must work on these broad issues as we move forward.
Mr. Freeman said that one last issue he would like to share with the Town and the delegation was to encourage the legislative delegation to look at the issue of loopholes and how the State could maximize its budget by dealing with those issues. He said the number was as much as $1 billion in loopholes that might be addressed. Mr. Freeman said others say it is about $300 million. He said he realized that may affect special interest groups, but we may be at a point where rather than addressing new revenues, we need to look at the tax code and closing loopholes.
Council Member Ward asked about the Town’s resolution on a moratorium on the death penalty. Representative Hackney said there was a major effort in both houses to pass such legislation.
Council Member Brown said the believed Chapel Hill was the first in the State to pass such a resolution.
Mayor Waldorf said that she had always felt that Chapel Hill’s legislative delegation was very responsive to the Town’s needs. The delegation thanked her for her remarks.
Mayor Waldorf called attention to the materials handed out at today’s meeting that included a summary of a meeting between Mayors and other leaders from towns and cities in North Carolina where campuses of the University of North Carolina system are located. She said the meeting revealed many issues of common interest, and urged the delegation to read over the materials.
The meeting was adjourned at 9:50 a.m.