SUMMARY MINUTES OF A PUBLIC FORUM AND HEARING
OF THE CHAPEL HILL TOWN COUNCIL
WEDNESDAY, MARCH 28, 2001, At 7:00 P.M.
Mayor Rosemary Waldorf called the meeting to order at 7:00 p.m.
Council members present were Flicka Bateman, Joyce Brown, Pat Evans, Kevin Foy, Lee Pavăo, Jim Ward, and Edith Wiggins. Council Member Bill Strom arrived at 7:10 p.m. from an Orange County Bond Needs Committee meeting.
Staff members present were Town Manager Cal Horton, Assistant Town Manager Florentine Miller, Town Attorney Ralph Karpinos, Assistant to the Manager Bill Stockard, Finance Director Jim Baker, Assistant Finance Director Kay Johnson, Revenue Collector Sandra Perkins, Housing Director Tina Vaughn, Community Development Planner Loryn Barnes, and Sanitation Superintendent Harv Howard.
Town Manager CalHorton reported that the cost of services in the General Fund would total about $35,846,000 for 2001-2002, based on estimates at this stage of the budget process. He explained that a budget of this level would require a potential General Fund tax rate of 45.4 cents, and noted that this was a decrease of 4.1 cents from the current rate. The effective tax rate increase at this level would be about 4.8 cents over the estimated General Fund equalization rate, he said.
Regarding the Transportation Fund, Mr. Horton explained that current transportation services could be continued with a tax rate of 3.6 cents, which would be a reduction of .7 cent from the current rate. He added that the combined potential tax rate for next year would be 53 cents, based on these preliminary estimates. Mr. Horton stated that the estimated cost for continuing most services for 2001-2002 is about $2.3 million higher than in the current fiscal year. He said that this increase includes the following:
· $816,000 for pay adjustments to continue the pay system and policies approved by the Council over the last two years.
· $590,000 for an increase in General Fund costs for the Capital Improvements Program.
· $250,000 to pay the full year cost of pay increases, which had been funded only for eight months last year.
· $150,000 to continue the Vehicle and Computer Replacement Programs.
· $130,000 for an estimated cost increase in group medical insurance.
· $135,000 to begin the installment financing contract on land being purchased for development of a new public works center.
· $100,000 for the anticipated increase in tipping fees at the landfill.
· $90,000 for Workers Compensation Insurance and Property and Liability Insurance, both of which have increased.
· $81,000 to pay the first year of improvements proposed in the Technology Plan.
· $54,000 additional cost for transfer of a position in the police department.
· $40,000 for additional fuel cost.
Regarding the Transportation Budget, Mr. Horton noted that the staff continues to confer with the University and with Carrboro regarding bus services for next year. He explained that these discussions include the possibility of free service and other service options. Mr. Horton said that the level of State and federal funding, estimated at about $1.95 million, would not be known until late spring. He noted that the Town also expects to seek support of about $1.46 million for Capital Funds, expecting about $171,000 of that to be for transit planning.
Mr. Horton noted an estimated Housing Fund total of about $1,465,000. He stated that the Debt Service Fund would require about $2.4 million of scheduled payments of principal and interest and the Capital Improvements Fund would total about $1,035,000 in annual funding. He said that the On-Street Parking Fund should be strong enough to allow a transfer of about $360,000 to the General Fund. Mr. Horton noted that the Off-street Parking Fund was self-balancing, and said that the Housing Loan Trust would be funded as the Council directed.
Mr. Horton pointed out that there would be a transfer from the Gift Fund to the General Fund of about $36,000. He proposed no changes in services in the Downtown District, and said that the equalized tax rate would be about 4.6 cents next year to bring in the same amount of revenue as the current year, which was about $52,000. The Downtown Commission might propose to continue the same tax rate in order to continue services that they themselves would provide, he said.
Mr. Horton explained that the Town had begun developing a 15-year Capital Improvements Plan last year, which included longer-range projects. He said that the staff had made that transition and would present a preliminary report for 2001-2016. Mr. Horton expressed appreciation to the Council for its guidance with this work, which he described as very significant. He noted that it would be helpful to the community to understand the needs as they are forecast and to prepare to deal with them. Mr. Horton said that the list of improvements that do not have identified sources of funding over the next 15 years runs at about $45 million.
Mr. Horton explained that this year’s proposed program focuses directly on repair of major facilities. He said that the staff had used the 2000 Facility Condition Assessment Program that the Council authorized as a guide. He noted that they had relied on installment financing to address maintenance needs, and pointed out that this would spread costs to those who will benefit by the improvements in the future.
Mr. Horton reported that the Town would receive $441,000 in HUD Community Development funding next year. In addition, he said, the Town expects about $35,000 in program income. Of those combined funds, he said he proposed using $170,000 to support public housing renovation, $80,000 for the Meadowmont affordable condominiums, $80,000 for neighborhood revitalization throughout the community, $50,000 for the Habitat for Humanity Rush Road subdivision, $20,000 for community services, and $76,000 for administration.
Mr. Horton noted that the HOME Review Committee had proposed a program for use of HOME funds that would total $721,000 next year. He said the Committee recommended allocating $343,000 for property acquisition, $130,000 for land acquisition, $100,000 for new construction, $100,000 for a buyer assistance program, and $48,000 for administration.
Regarding the Public Housing Capital Management Program, Mr. Horton said that the Town had not yet been notified about the amount that HUD would allocate. However, the staff had developed a preliminary program of $590,000, he said, based on receiving the same amount as this year. Mr. Horton noted that tonight’s forum would give citizens an opportunity to comment on the proposed increase in the privilege license fee, and said that the staff welcomed those comments.
Comments by Citizens
Will Alexander, representing Community Cuisine, asked the Town Council to consider funding Community Cuisine again next year. Mr. Alexander stated that Community Cuisine also had applied for funding from the Human Services Department.
Pam Alexander, co-owner of Alexander Insulation Company, objected to some of the privilege license requirements, such as having to provide income tax information and being charged on gross income when only 18% of it was generated in Chapel Hill and only 4.5% of that was profit. Ms. Alexander argued that it did not seem right that her “miscellaneous” company would be charged $100-$200 on gross income while companies such as Blue Cross/Blue Shield would pay $10 for the same license. She added that a privilege license based on gross income would be more than some large companies would make doing business in Chapel Hill. She noted that there were four categories that could pertain to her company and that she would like to know which one she was in.
Kim Grooms, youth director with the Chapel Hill-Carrboro YMCA, thanked the Council for its continued support. She reviewed the development of the YMCA’s outreach program since it began at Pine Knolls in 1994, and explained that the Estes Hills program presently includes tutoring. Ms. Grooms stated that the YMCA would continue its outreach program with the goal of developing strong children and families.
Joanne Shirer-Mitchell, representing the Residents’ Council, reported that the Residents’ Council was not requesting new capital funds for the coming year because they had not spent all of last year’s allocation. She asked that the remaining funds be reallocated to them rather than given to Resident Services. Ms. Shirer-Mitchell explained that the Residents’ Council had applied for several grants and had received a $100,000 Resident Opportunity and Self-sufficiency federal grant. She explained that this would be put toward organizing public housing communities, and to hiring a contract administrator, a public accountant, and five resident representatives. Ms. Shirer-Mitchell stated that there would be no duplication in uses of funds.
Bob Ross, representing Colony Lake Homeowners Association, discussed options for commercial dumpster services, which he said is used by 85% of their homes. Mr. Ross noted that three options for commercial enterprises were being considered: leave the status quo, remove the commercial dumpster service, or charge various fees. He explained that Colony Lake was concerned about this because it might fall into the commercial category since it includes high density residential such as condominiums.
Mr. Ross argued that getting rid of the service entirely would require residents to go out and find private service, which would amount to double taxation since they already pay for that in their property taxes. He explained that residents were also concerned that they might be charged a fee. Mr. Ross argued that taxpaying residents should get their fair share of the benefits, especially with something as basic as trash collection. He said that hiring a commercial service would cost them approximately $20,000 a year, or about $85 per residence per year.
Marc Pons, representing Chapel Hill Tire Company, a 50 year-old, family-owned business in Chapel Hill, pointed out that many of the businesses listed under B of the proposed privilege tax schedule were large enough to lobby the Legislature. This leaves the mom and pop businesses having to pay this tax, he said, adding that these were the types of businesses that the Town had said it wanted. Mr. Pons asked if the Council fully understood the implications of what it was proposing, noting that fees for some businesses could rise from ten to thousands of dollars. He took issue with raising privilege license fees and abolishing trash collection at the same time. He stated that the whole complex package of ordinances and restrictions makes it difficult for businesses to exist in Chapel Hill. Mr. Pons suggested that the Town get more in touch with what is going on in the local business community.
Charlie Nelson, president of Carolina Cleaners and a Chamber of Commerce Board member, explained that he pays a $50 fee in Carrboro, Durham and Raleigh, $10 for each of his three locations in Chapel Hill, and nothing in Chatham County. The $10 would increase to $50 under the new fee schedule, he said, for a total of $150. Mr. Nelson pointed out that dry cleaners will not be required to report their gross sales under the new system, but argued that if they were it would be impossible to get the required information verified from tax returns. He noted the cost of natural gas and electricity had increased and said that it will cost $200 a month for trash removal if the Town drops that service.
Alan Cohen, owner of Office Supplies and More, listed drawbacks (high rents, little parking, sidewalk repair) of owning a business in the downtown. He said that increasing the licensing fees would make it even more difficult for small businesses such as his.
Nina Ligh, a massage therapist in Chapel Hill, said that she had been notified that her fee would be $50 even though the Town had not yet decided what the fees would be. She explained that most massage therapists make between $15,000 to $30,000. She said that adding another form would add cost, and asked the Town Council to make it simple. Ms. Ligh said that she would be happy to pay a fee, but not a tax based on income.
Robert Dowling, representing Orange Community Housing (OCH), reiterated his request for $90,000 for operating funds for OCH and the Community Land Trust. He explained that this would be $3,000 more than the current fiscal year. Mr. Dowling said that he had asked for $80,000 in CDBG funds for Meadowmont, that the HOME Council had recommended $80,000, and that they were trying to reduce their need for subsidy at Meadowmont by getting some assistance from the developer. He noted that OCH was collaborating with EmPOWERment Inc. and Habitat for Humanity on two homes that had been placed in the Land Trust. Mr. Dowling said that it would be helpful if they could receive $50,000 for site planning and engineering on the rental project on Town-owned land on Erwin Road.
Aaron Nelson, Executive Director of the Chapel Hill/Carrboro Chamber of Commerce, read the Chamber’s mission statement and expressed concern about the privilege license and the proposed sliding scale based on gross receipts. He noted that some organizations would go from $10 to a $2,000 fee. Mr. Nelson said that the Chamber’s greatest concern was over how the fee would be increased and implemented and whom it would impact. He explained that most businesses calculate their taxes for the calendar year and that having to do it for the fiscal year would be difficult, as would having to segregate which towns their revenues come from. Mr. Nelson noted that some companies are not sure which or how many categories they fall into. He stated that gross revenue is not always an indication of how profitable a company is, and complained that the draft ordinance seemed to target some businesses. Mr. Nelson asked Council members to bring such ideas to the Chamber in advance so that they and the Town can work out an agreement.
Council Member Kevin Foy pointed out that Carrboro already had a sliding scale fee system, and commented that it would seem that the Chapel Hill/Carrboro Chamber would have reconciled these issues. Mr. Nelson pointed out that Monday had been his first day as the Chamber’s executive director, but added that it unclear when you go through the exemptions exactly who has to pay.
Nelda Lay, co-owner of The Persian Carpet, described herself as having been “a little bit taken back” when she got the letter saying that she would have to pay a fee based on gross receipts. Ms. Lay noted that she pays salaries and sales and property taxes, and that people who come to her store spend money in Chapel Hill. She expressed hope that there would be no new tax burden for commercial establishments, which she said would discourage new commercial endeavors in Town. Ms. Lay stated that $10 was too low, $50 was reasonable, but an accelerated sliding scale based on gross sales would be unfair.
Laurie Flowers, director of government relations for the Chamber of Commerce, said that she was speaking as a resident of Colony Lake and a mother. Ms. Flowers explained that her neighborhood was serviced by commercial trash pickup, which she described as efficient, effective, fast, and safe. She said that if the Town were to eliminate this service the neighborhood would have to contract with people who would be more concerned with the bottom line than the safety of her neighborhood. She argued that the Town would be saving money by putting her and her family and neighbors in jeopardy. Ms. Flowers requested that the Council refrain from eliminating commercial trash pickup, which she said she pays for in taxes.
Briggs Wesche, General Manager of A Southern Season, said that a Town-imposed privilege tax based on gross receipts could for create a tax rate for some businesses that is larger than the federal or State tax on their net profits. She pointed out that A Southern Season is made up of a variety of businesses and that its tax return includes all those receipts. Ms. Wesche stated that she would have to invent a new accounting system just to report the privilege license, adding that this could cause some businesses to go elsewhere. She advised the Town Council to put a cap on the fee because, she said, no business of any significant size would report their gross receipts and stay in Town.
Mauricio Castro, president of El Centro Latino, requested $10,000 for operating expenses. He explained that his non-profit organization provides social services, which includes job placement, immigration assistance, legal help, healthcare, housing, banking, education, ESL classes, and driver’s education. Mr. Castro explained that El Centro depends on volunteers and has only one full-time and two half-time employees. By supporting El Centro, he said, the Town of Chapel Hill would be showing support to the Latino community and others who benefit from their services. He quoted census figures showing the rise this year in the percentage of Latinos in Orange County, Carrboro, and Chapel Hill. Mr. Castro said that the number of Latinos in North Carolina in general had increase by 400%.
Mayor Waldorf asked if El Centro Latino had received support from Carrboro. Mr. Castro replied that they had.
Tracy Dudley, who is Vice Chair of the Housing and Community Development Advisory Board and also a Town employee and resident of Chapel Hill public housing, expressed the Board’s support for the HOME program and the Community Development proposals and the Capital Fund Program for Housing. She stated, however, that there is a lack of housing services for people in a certain income range. Ms. Dudley said that she respected the Town Manager and Council and the various groups that were concerned about affordable housing. But, she said, her household was not being served by Orange Community Housing or Habitat for Humanity because she makes too much for Habitat and too little for OCH. She expressed strong support for the Transitional Housing Program of the Town’s Housing Department. Ms Dudley asked the Council to support the Transitional Housing Program as well as the HOME and CD programs.
Jared Resnick, owner of the West End Wine Bar, said that he was speaking for six businesses from the West End of Franklin Street. Mr. Resnick objected to the privilege fee, even though it would not affect him directly, because it meant that the Town was “once again” coming to businesses for money. He pointed out that even though the Town says it wants businesses in Chapel Hill it hits business owners with another problem “every time they turn around.” Mr. Resnick described himself as vehemently against the privilege tax changes. He suggested that the Council go after some of the businesses that are not already paying the fee.
Lucy Lewis, representing the Orange County Literacy Council, said that CDBG funding for computer-based literacy instruction is a significant investment in educational and economic achievement for Chapel Hill residents. She noted that the program helps residents develop literacy skills, work toward the GED exam, and bridge the “digital divide” that is furthering the gap between Chapel Hill’s more educated and affluent residents and the 26% who have significant literacy needs. Ms. Lewis expressed disappointment that the staff did not recommend full funding for an intern to sustain this work. She said that she understood, however, that the emphasis of CD money should be on affordable housing programs.
Tearra Saunders asked for financial support for Youth Creating Change, a program dedicated to providing a safe and creative environment for youth between the ages of 13 and 18. She proposed starting a YCC-sponsored Arcadia Club, which would run from 4:00-10:00 p.m. on weekdays, 4:00-11:00 p.m. on Fridays, and 1:00-11:00 p.m. on Saturdays. Ms. Saunders explained that the club would provide job opportunities for teenagers, a safe place for them to hang out, and a functional and stable environment where they can meet other young people from surrounding communities. She said that the Club would also provide investment opportunities for youth, a mechanism for reinvestment back into the community through a scholarship program, and a cutting-edge business venture for Orange County youth.
Dominique Reid, public relations officer for Youth Creating Change, said the YCC was hoping to house the Arcadia Club in a 504 square-foot space at the Midway Business Center in Chapel Hill. She noted that this location would have easy access to public parking and is located near the bus line. Ms. Reid noted that there already is a teen club located in Downtown Chapel Hill, which is 1.5 miles away from the proposed site, and another at South Square Mall in Durham, which is 10 miles away. She said that another problem might be that the police will reject the proposal and that some elderly community residents might oppose it. Ms. Reid said that there would be rules that guests and members must follow, adding that they would show the police their business plan.
James Oldham presented YCC’s marketing plan. He said they would target 13-18 year-olds - 50% African American, 5% Hispanic and 10% Caucasian. Mr. Oldham predicted a 100% increase in revenues by 2030. He said they would advertise through churches, local and school newspapers, community flyers, radio and TV, the Internet, and by word of mouth.
Aisha Chambers presented the management plan. She explained that there is an Advisory Committee of five adults and two youths. She then outlined the goals: to increase money that will remain in the community, to develop ownership, and to provide job opportunities for youth throughout Orange County.
Maxine Mitchell explained that there would be a membership fee of $6.00 every six months and that families with more than one child would get a discount. She added that there would be a cover charge for non-members of $2.00 during the week and $3.00 on weekends. Ms. Mitchell explained that the Arcadia Club would sell T-shirts and snacks, and would have video games, table hockey, and other games available for use. She said that YCC anticipates generating at least $4,408 in gross receipts, and that the goal of the business is to create a scholarship fund focusing on low-income African American youth. Ms. Mitchell asked the Council to support the request for $18,000 to start up this first youth-owned business in Orange County.
David Thompson, president of YCC, said that the program would empower youth to create a positive change in the community. He noted that this would be a powerful tool for addressing the issues of youth in the community. Mr. Thomas pointed out that the Arcade/Entertainment Center would be a viable business that would encourage young people to be the best they can be in a positive environment.
Mayor Waldorf thanked the group for coming and for their work. She said that the Council would try to be supportive.
Joseph Mack, owner of Austin Tech LLC, explained that he had started his business as a hobby. He said that his income from LLC last year was $760. Mr. Mack commented that he had been surprised when the Town asked him to apply for a license to run a business from his bedroom. He noted that none of the information he had received had told him what the money was for. Mr. Mack predicted that if the Town let people know what the fee was for then they would be glad to pay it.
Susan Levy, representing Habitat for Humanity, spoke regarding Habitat’s 2001-2002 CDBG funding request to build another subdivision in the Rogers Road community. She thanked the staff for recommending funding to purchase property, but noted that Habitat had also requested $50,000 to begin the planning process. Ms. Levy explained that the staff had recommended that the Council consider taking that money from the Housing Trust Fund. She asked the Council to take that recommendation seriously so that they could get started this spring. Ms. Levy added that the HOME funding proposals might be leveraged to do more.
Aaron Nelson, speaking again on behalf of the Carrboro/Chapel Hill Chamber of Commerce, expressed concern about the proposed elimination of commercial waste removal services. He said that private haulers had provided conservative estimates of $2,400 per year per dumpster. This would mean that a multi-family neighborhood such as Finley Forest, which has 24 dumpsters, would pay $58,000 per year, he said. Mr. Nelson pointed out that communities with dumpsters would be facing the equivalent to an increase on their tax rate while houses that roll out their carts would not. He described the current system as efficient, reliable and responsible, and warned that once you stop a service it is extraordinarily difficult to start it up again.
Mark Chilton endorsed the CDBG budget and supported the HOME Committee’s recommendations. He noted that each year the rules regarding second home mortgages become more restrictive with the HOME program, which he said has become the program of last resort for homebuyers because of the burdens placed on them. Mr. Chilton pointed out that these rules were identical to the County’s but not the Town’s adopted rules, and stressed that the HOME program money does not belong the County alone, but to Hillsborough, Carrboro and Chapel Hill as well. He suggested having a serious discussion about this with the County and the other partners. Mr. Chilton also remarked that eliminating multi-family and commercial trash collection would be a bad idea. He described it as unfair and shortsighted to do so at the expense of businesses and those who live in multi-family housing.
Robert Humphreys stated that several recent Council initiatives had been “anti-business.” If the Council goes through with its proposals, he said, then it will substantially increase the cost of doing business in Chapel Hill, force out smaller businesses, discourage new ones, and make it so that only corporate “big boys” can afford to do business in Town.
Mr. Humphreys explained that the Downtown Commission had been working on an expensive plan to minimize the negative effects of the new Southpoint shopping mall in Durham. For that reason, he explained, they had planned to ask the Council to maintain the current level of 6.2 cents per hundred for the Downtown service district. Mr. Humphreys said that they are holding off on proceeding with that, however, until they see how the Council decides to treat its businesses. He stated that most businesses agree that a flat rate is the fair way to collect the privilege license and that a fair way of raising it would be to do so in stages, increasing it each year to a level that is fair and just.
Mayor Waldorf acknowledged and welcomed the people from the Pubic Works Department who were in the audience. She said that the speakers had made some excellent comments in a way that was calm and rational and easy to absorb. Mayor Waldorf noted that there would be a budget session the following Wednesday where the Council would address these issues.
COUNCIL MEMBER PAVĂO MOVED, SECONDED BY COUNCIL MEMBER EVANS, TO ADJOURN THE PUBLIC HEARING. THE MOTION WAS ADOPTED UNANIMOUSLY (9-0).
The meeting adjourned at 8:45 p.m.