SUMMARY MINUTES OF A WORK SESSION
OF THE CHAPEL HILL TOWN COUNCIL
WEDNESDAY, APRIL 4, 2001, 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, Pat Evans, Bill Strom, and Edith Wiggins. Council Member Jim Ward arrived at 4:06 p.m. Council Member Kevin Foy arrived at 4:26 p.m. Mayor pro tem Lee Pavăo arrived at 5:18 p.m.
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, Finance Director Jim Baker, Public Works Director Bruce Heflin, Sanitation Superintendent Harv Howard, Public Works Administrative Analyst Randy Ballard, Urban Forester Curtis Brooks, Field Operations Superintendent Richard Terrell, Fire Chief Dan Jones, Transportation Director Mary Lou Kuschatka, Human Resources Director Pat Thomas, and Town Clerk Joyce Smith.
Town Manager Cal Horton said this was developing into a very difficult budget year and it was not yet known how much revenue normally distributed to the Town the Legislature would be retaining. He said that in the formal budget proposal the staff would identify funds that could be deferred from spending in case this revenue was not received. Mr. Horton said the staff had been working on the annexation issues to make sure there was a clear understanding of, and to be able to present to the Council, how the annexation costs interrelate to the General Fund and the Transportation Fund budget costs. He said there would be a formal presentation regarding the annexation costs on the following Monday evening. Mr. Horton noted that in the end, the annexation costs would move closer to being balanced because of the way the tax rate proposal was working. He said some of the key issues in the budget were:
· The Pay System—the proposal will come before the Council for full discussion on April 25. The recommendations will include a pay increase in keeping with policies adopted by the Council, estimated at about 4.4% of payroll, which will be in keeping with payroll costs increases that other employers are planning.
· Operations generally—departments are being asked to hold operations expenses to no more than 1.5% higher than the past year.
· Major capital outlay expense items include equipment and computers.
· Other equipment—the consultant team, which had done the original work on the Capital Equipment Replacement Program, will be present on April 25th so the Council can review the proposals.
· Capital Improvements Program—a key piece of the budget. Staff has been working on the 15-year plan requested by the Council. The key is the need for scheduled maintenance on the buildings and the amount of deferred maintenance accumulated on some of the buildings. This has made the Capital Improvements Program budget more complex in appearance, because there are many more items. The Town is working on slightly over $1 million in Capital Improvement Funding at this point.
Council Member Evans asked if the Southern Village projections included contracting out yard-waste pickup. Mr. Horton said Public Works Director Bruce Heflin would be discussing this in his report.
Council Member Evans asked how many personnel positions were unfilled, and, of those, how many could be kept unfilled. Mr. Horton said he would have those numbers for the next budget meeting. He said that currently the number of employees noted in the present budget were 571 full-time, counting Solid Waste, reduced to 551 without Solid Waste.
Council Member Evans said she felt that the estimation of a 4.4% pay increase was high, especially looking at the situation in the State. Mr. Horton said he believed that the data would show the 4.4% increase was right in the market, both private and public.
Council Member Evans noted that the upkeep for some of the Town’s lease properties was high, and asked if the costs could be shared. Mr. Horton said that would be a policy decision by the Council. He said the Town received a small amount of income for use of the Courtroom and did not receive any income from the Post Office.
Council Member Bateman asked if the lease on the Lincoln School gym and the Center was to continue after a certain date. Assistant Town Manager Sonna Loewenthal said the lease continued until 2007, and if the lease were not extended the Town would not be spending money on this item. She said it was listed as one of the unfunded properties. Mr. Horton said, at this point, there was absolutely no money for improvements to the Lincoln Center, but in order to keep the property for community use it will be necessary to make some expenditure for its upkeep. Ms. Loewenthal pointed out that several of the numbers in the unfunded table were projections as to where and when they would be needed.
Council Member Strom asked how the Capital Improvements Program bond schedule on page 9 of the Council’s materials related to funded programs, specifically on sidewalks and bicycle facilities. He asked if this money came straight from the bond into the sidewalks budget for the active programs. Ms. Loewenthal said these monies would be spent directly for the purpose issued. Mr. Horton pointed out that the bond funds were not the funds showing on the first page.
Council Member Strom asked about some of the line items in the Capital Improvements Program, and asked if they were all committed to under a contract, or could the Council change its mind about some of the items. Mr. Horton said the Town had a contract for a few years, and in future years the recommendation was that the Town continue to keep a contract.
Council Member Strom asked the staff, in the next round of discussion, to indicate when a contract ended and what the benefit would be to go into a 24-month rotation as opposed to a 12-month.
Council Member Strom said, in regard to pay policies and salary increases, he had asked for some cut-off between the federal poverty and the affordable housing wage in Orange County, in order to consider a higher increase for some of the lower paid employees. Mr. Horton said that information was scheduled for a report at the April 25th meeting, along with the other pay information. He added that when that policy had been attempted earlier, it became one of the difficulties the Town had with its pay system.
Council Member Strom asked about his questions regarding the Vehicle Fleet and possible reductions. Mr. Horton said the consultant would be present on May 2nd for discussion. He requested that if there were any additional information needed by the Council regarding questions they had made pertaining to the CIP, they should let the staff know.
2a. Curbside Implementation Report
Council Member Ward asked what the exemption rate was and how that part of the program was going. Mr. Heflin responded that exemptions were running about 5% and had not changed since the first two weeks of the program. He said there had been no problem collecting the exemptions, and there had been few complaints.
Council Member Ward asked how many households were represented by the 5%. Mr. Heflin said 228 households were represented.
Council Member Bateman asked if the Council needed to take action on establishing rules and regulation to enforce compliance on residents who did not remove their trash carts from the street. Mr. Horton said the staff would like to go ahead with recommendations for some rules and regulations, but wanted to be sure that was the direction the Council wished pursued.
Council Member Ward said that rules and regulations did not always change behavior, and asked why the staff felt this was the step to take at this time. He suggested that there might be an educational vehicle that would be effective. Mr. Horton said the staff’s goals always were to try to obtain volunteer cooperation, but health, sanitation, and appearance issues needed to be backed up by some law, so in extreme cases compliance could be required. Mr. Heflin said that by having rules, it would give the staff a tool to encourage people to do the right thing.
Council Member Brown stated that the neighborhoods listed where some of the chronic problems with trash cart removal were not exactly the same kinds of neighborhoods, but close, noting that Coolidge Street was in the Westwood neighborhood. She said her sanitation collector had asked her if there was going to be privatization of residential trash removal. Mr. Heflin said the Department had not been authorized by the Council to present options to privatize residential service, and said he would not recommend it at this point. He said some of the concerns were about the possibility of eliminating commercial service, and there was anxiety among the workforce of the possibility of layoffs.
Council Member Evans asked whether people who wished to voluntarily roll out their trash to the street could be provided with the carts earlier than when the program was to begin in their neighborhoods. Mr. Heflin said that the staff was considering starting the street collections earlier, and he was working on some proposals, but there were some caveats identified: (1) because of the University schedule people would have to be notified in August about the change to come in October, and many people/students would be out of town, (2) other forces within Public Works would be needed to assemble and distribute the carts, which would be in a peak work season for other programs within Public Works, and (3) the major savings are with reductions in work force, but the turnover within the Department was very low, and the job reductions through attrition might not result in cost savings. Mr. Heflin said the staff was still assessing final recommendations.
2b. Discussion of Options for Yard Waste Collection
Council Member Evans said she was surprised that the Town was going to schedule weekly yard waste pickup, because an earlier memo had discussed the costs, and the Council had voted not to go in that direction. She asked if it was necessary, and, since the Town would probably have to raise taxes anyway, she did not see this as a high priority. Mr. Heflin said the Department was achieving scheduled collection in half of the Town at present because of additional efficiencies related to curbside collection, and the same reductions in work force will be achieved with the additional second phase of curbside collection conversion. He said what had been achieved was a greater level of collection efficiency than hoped, with the curbside collection, so the drivers were able to collect the trash and still pick up yard waste, once a week. Mr. Heflin said the peak brush collection period had not been experienced yet, so he was not sure these achievements would continue. He said when the Town went to the second phase of curbside collection the extra hours might not be available as they are now. He said they were trying to achieve what Council Member Strom had requested, that there be a certainty of the times of collection within the Town, without adding to the costs.
Council Member Evans asked what was being proposed for yard waste collection in Southern Village. Mr. Heflin said, as far as savings might be, there had to be a complete cycle of garbage collection and yard waste to see what the savings options might have been.
Council Member Evans said she wondered if savings could be made with every other week yard waste collection. Mr. Horton said that once the system has gone through the whole cycle, then it would be understood how the routes needed to be arranged in order to carry out the primary mission of collection of garbage, and the second half of the on-street garbage collection might be more of a challenge than the first half. Mr. Heflin said the Department intended to collect yard waste with its own force at Southern Village. He said they were in negotiations with the Southern Village Homeowners’ Association to locate places for collection, and there would have to be some compromises since the trucks cannot go into some of the alleys, and locations would have to accessible to both the trucks and the residents.
Council Member Ward encouraged Mr. Heflin to keep the options open in terms of schedules, and as long as the schedules were consistent, they could be two weeks instead of every week, and still meet the needs of the community. He said he would like to see an emphasis on education of the citizens, on uses of waste for compost, instead of relying on the waste being picked up.
Council Member Brown, returning to the discussion of personnel reductions, asked if the reductions were caused by attrition, and why only $34,000. Mr. Heflin said the original projections of position reductions were based on the number of positions, not on who might leave their positions, and the salaries were based on a mix of all employees, long-term to newly-hired. He said the employees who resigned during the year were heavily weighted toward the newer employees with lower salaries, so the salary savings were not as much as expected. Mr. Heflin said for next year’s projection the mix would be based on the lower salaries.
Council Member Evans asked if there was a tipping fee for yard waste. Mr. Heflin said it was $13 per ton. Council Member Evans said then the more people the Town could get to compost their yard waste, the better off the Town would be in collection and the tipping fee. Mr. Heflin said the Department had always provided information on composting, but yard waste collection had been a tradition in the Town. Council Member Evans said the more people recycled and composted yard waste, the less the Town would have to raise the taxes, because collection of yard waste and garbage was a large part of the Town’s budget.
Council Member Strom thanked the Public Works Director and the Public Works Administrative Analyst for the job they had done with on-street collection and said it was obviously successful beyond expectations. He said he appreciated the hard work.
Mayor Waldorf said she wanted to thank them as well, adding it was well planned. Mr. Heflin said the drivers, themselves, were the ones who had helped the program, figuring out how it could be done more efficiently.
Council Member Wiggins also thanked the Department, and appreciated that the neighborhoods where problems had been pointed out were neighborhoods where problems had existed before curbside collection had been implemented.
Mayor Waldorf said she was not interested in any modification that would cause the Town to have to lay off long-term employees. The Council agreed.
Council Member Ward asked if any layoffs would only be with newly hired personnel, and, if there were cuts, would it start with the newly hired. Mr. Heflin said he was not sure and he would have to get together with the Human Resources Director as to how it would apply. He said the Department might be looking at demotions of some Department employees, especially if the Department did not perform commercial collections, which would cut back on the Department responsibilities. Mr. Heflin said this was a problem the Department had never experienced.
Council Member Ward said he was not interested in options that would cause the Town to lay off employees.
2c. Possible Change in Commercial Garbage Collection Policy.
Council Member Brown requested that Mr. Heflin address the issue of whether elimination of commercial collection would have some repercussions in the residential collection. Mr. Heflin said he did not have any definitive answers as to how cutting the commercial collections would affect the residential work force. He said the Department did not have experience in this type of situation, and many of the employees were long-term employees who would not be going elsewhere, therefore reduction in the work force could not be achieved with attrition, but would have to be done with layoffs. Mr. Heflin said that would be something the Council would have to decide when the time came, and the Department would have to bring back options as to how layoffs would be achieved.
Council Member Foy asked Mayor Waldorf if she wanted to table Option #2. He said the Town would not know what the implications would be. Council Member Foy said he did not think the Town should get out of the business of refuse collection, especially in residential area.
Mayor Waldorf said that Option #2 was removed.
Council Member Evans said she did not want to follow through on any of the options, and the idea of stopping garbage collection was unthinkable. She said that many of the institutions covered in these options, such as churches and schools, probably did not know anything about these discussions. Council Member Evans asked what the tipping fees were. Mr. Horton said the staff recommendation was $2.00 per ton.
Council Member Brown asked for a presentation of the Options.
.
Mr. Heflin outlined the Options that the staff had presented to the Council:
· Option 1 – Continue present commercial refuse collection services. Cost in the proposed budget of slightly more than $1 million, reduced net to the Town with revenues of $57,400 for premium service.
· Option 2 – Tabled.
· Option 3 – Establish a basic service at no charge and set fees to recover cost of additional refuse collection and disposal services. This would be based on providing a basic service level of one container collected once each week per business and fees for optional services including number of containers, frequency of collections or both.
· Option 4 – Establish fees to cover all commercial service costs.
Mr. Heflin said that currently the Town provided commercial garbage collection to businesses, apartments and selected condominiums/townhomes, and the basic service was twice weekly pickups, with an option of two additional collections per week for an annual fee of $1,200 per container. He said there were currently 699 total containers.
Mr. Heflin said the current system, of which 59% is commercial collection, used about 36% of the Department’s budget. He said it was a relatively efficient collection system, generally well liked by the service population and understood by the work force, involved expensive equipment and was a high-maintenance operation. Mr. Heflin said if changes were made based on fees, all of the fees projected in the memorandum were illustrative, not definitive. He said with possible reductions of businesses requiring collection, it would add more administrative difficulty, adding that the Department had no billing or collection ability on the scale for the various fees and categories which might be needed. Mr. Heflin said that, under any of the options, the staff would suggest that the Department would have a role in sanitation enforcement in the commercial areas. He said the Department already had the authority, even if a tiered fee system might result in reduced costs and the work force might be somewhat reduced, and the Department would still like to maintain that capability for sanitary concerns.
Mr. Heflin said that under the fee options the staff had provided illustrations of how the option might work, based on the number of containers, the size of the containers, and the frequency of collection. He said the biggest cost was getting to each site, and the marginal cost of each additional can was fairly small, although there was a cost involved in exposing the contents of each can. Mr. Heflin said that each option included some “Pay-As-You-Throw” characteristics, and each option did present some complication in terms of the payee and the Department in understanding what is required and how the system would be implemented. He said the Department would need time in transition under any of the fee options and he requested setting a minimum of three months, or more, for implementing a billing system.
Mayor Waldorf asked, assuming that the Council voted on an additional fee, since the option chosen would not be implemented by July 1, if there was a ball-park figure of what the savings would be for the first year’s savings. Mr. Horton said it would probably take six months to have everything in place to do it with adequate notice, in a smooth manner, and to have the opportunity to address the questions that would come up. He said the savings would be something less than one-half a year’s savings.
Council Member Brown had a question on the Table on page 15, asking if the communities that did not provide commercial garbage collection provided residential collection. Mr. Heflin said that most cities in North Carolina provided single-residential garbage collection service, and multi-family units would be considered commercial.
Council Member Bateman said she would be in favor of something that looked at a basic service, once a week, and charges for additional collections per week, and asked why it would be more complicated to charge for three times a week, rather than the two already in place. Mr. Heflin said some complexes could decide to add boxes for the regular collections, in addition to what they already had. He said this was an unknown, the billing would be more complicated, and a separate billing system would have to be structured for the different kinds of situations, such as frequency of collection and size of containers. Mr. Horton said once it was all settled out the billing system would not be a big problem, and there were options to hire out that part of the operation service to the private sector.
Council Member Foy, looking at Option 3, asked why, if a citizen had 2 containers and paid $24.25 picked up once a week, but only 1 container picked up twice a week, the charge would be $50. Mr. Heflin said this was because a second trip was required.
Council Member Wiggins asked what would happen if the Council decided to defer this particular budget item for another year for further study and request input from those businesses, schools, churches and the like, with a possible buy-in on their part for whatever the change would be, making sure that these users understood the budgetary implications. She said she was particularly concerned about the groups that did not know that this item was being discussed and what its impact would have on them.
Council Member Strom asked what recycling responsibilities, if any, commercial companies had. Mr. Heflin said the only thing they were bound to recycle was corrugated cardboard, and other than that it was voluntary.
Council Member Strom asked that when the issue came back to the Council for further discussion would it be possible to require certain recycling, such as glass, as mandatory. Mr. Heflin said it could, but the recycling programs were County programs, and the Council could certainly make suggestions to the County Commissioners. Mr. Horton said the Council could accomplish this directly by resolution, or it could be done indirectly by communicating with the appointees to the Solid Waste Advisory Board. Mr. Heflin said that voluntary programs and incentive-based programs would be more effective than punitive bans, because of the difficult nature of seeing inside containers, and the difficulties of enforcement.
Council Member Strom said he felt that Option 3 had a lot of potential, and the Council should proceed in developing this option more carefully, but he did not want to put this off until next year, adding he thought there should be more discussion about recycling and how non-residential recycling could be increased. Council Member Strom remarked that he thought once-a-week collection was fair and in line with what was being offered to residential neighborhoods.
Council Member Brown said that nothing was mandatory for recycling, except items banned by the State from trash containers and the mandate was not within the purview of the Council, although she believed recycling should be encouraged. She stated that she wished to go forward with looking at Option 3, and not delay the decision. Council Member Brown felt that if people had not been notified of the consideration of the option, they should be.
Council Member Wiggins said she did not wish to drop Option 3 but felt it needed more work, and asked if once-a-week collection for all the commercial customers was equitable as far as how much in taxes they paid.
Mayor Waldorf reminded the Council that the churches did not pay any taxes, and they get their garbage collected.
Council Member Evans said that properties that the Town managed should also be taxed, rather than have the costs spread around. She asked what might the true cost to the Town, and questioned the number of pick-ups needed by residents versus the number needed by businesses. Council Member Evans remarked that she felt that businesses would probably need twice-a-week pickup. She questioned the fairness of requiring dumpsters in development projects, if the charges were to be added for additional pickups.
Council Member Foy said that the chart on page 15 was informative about some major municipalities that did not perform commercial trash pickup service in any capacity, but more interesting were the charges that were made by municipalities that did perform commercial trash pickup. He said he was comfortable that the staff could bring back to the Council Option 3 structured in an implementation schedule and with the equity issues addressed.
Mr. Heflin said if the Council did not have preferences for fees it would like to see implemented or kinds of additional fees, the staff could develop options for different circumstances, such as large complexes versus small complexes and how many dumpsters would be needed.
Council Member Wiggins asked about building in some kind of special consideration for non-profits. Mayor Waldorf said she was not in favor of that, of raising fees for everybody else, but exempting non-profits.
Council Member Wiggins said she did not say exempt, but asked for some kind of difference, since so many of them performed many services to the community. Mr. Horton said, given enough time, the staff could look at a list of the sites known to be non-profits and see how many would be covered by once-a-week service already in place.
Council Member Ward said the incentive to reduce trash should be part of the study that the staff would be bringing back to the Council, and that suggesting two times a week might not be pushing hard enough the incentive to reduce.
Council Member Brown said that the Solid Waste Reduction Task Force had recommended a number of ways to reduce waste, and the consultant and a citizens technical committee had worked on that issue. She said there was a plan endorsed by all the governing bodies in Orange County for five listed means of reducing waste, including “Pay-As-You-Throw” and bans, education, and incentives. Council Member Brown said the Town should continue to work on this, but the work had been done and was awaiting implementation of the Integrated Solid Waste Management Plan. She said the Town had not yet heard from the County about implementing the part of the plan for Chapel Hill.
Mayor Waldorf said that the County was working on the plan for Chapel Hill.
Mr. Horton asked what kind of publicity the Council wished the staff to generate. He said that up to this point, the agenda materials had been published on the web site, the newspapers had been kind enough to pick up the items, and the Chamber of Commerce and the Downtown Commission had been active in notifying people associated with them of some of these issues. Mr. Horton said the next level up would be to give specific notice to those people on the Town’s e-mail and on the large budget mailing list, and to purchase an ad in the newspapers. He said the level beyond that would be much more expensive, involving sending notice to many people who used collection.
Council Member Evans said that somehow the Town needed to let people who would be affected know that this commercial trash collection item was under discussion. She suggested the list she had previously read, condominiums, apartments, churches and schools, should all be notified, and renters should be notified because the cost of their rents would increase. Council Member Evans said she had difficulty understanding this fee charge because the costs would be passed on to owners and renters. She said she did not support it because the cost of notification would be expensive, and businesses would be hurt because of the cost of doing business in the Town of Chapel Hill.
Council Member Bateman asked if, when the option was written, it would give another option for the smaller non-profit organizations to roll out their trash. She wanted people to know that the Council was looking at a range of options and that they wanted feedback from people.
Council Member Foy said he felt it would be sufficient to give notice in the newspapers that the Council was considering this, and to do the kind of mailing proposed by Mr. Horton said could be done without major input of time and effort.
Council Member Wiggins said the issue had already been in the newspapers and that a lot of people did not realize the impact it would have on them. She asked that the staff do the best they could for notification of the people who would be impacted.
Council Member Evans asked if this impacted all the people who use dumpsters. Mr. Horton said the people most directly affected were those responsible for the dumpsters, and one of the things the staff could do was to hand a notice to the site manager who was responsible for the dumpster, thereby getting the information to all the people responsible in the end.
Council Member Brown felt it would be premature to give notice about something not yet decided. She said that when the staff brought back options and the Council had narrowed them down, that would be the time for notification.
Council Member Wiggins said that in the past the Council had said it wanted to hear from citizens while they were trying to develop and design a program. Mr. Horton said it would be consistent with normal practices to send something to all the people on the e-mail list and the budget mailing lists to inform them that the Council was considering this set of issues. Mr. Horton said it would be practical to deliver this notice to the site manager.
Council Member Brown said that what Mr. Horton had described sounded reasonable.
2d. Report on Potential Garbage Collection in Southern Village.
Mr. Horton said the staff continued to be in discussion with the contractor who was now providing that service. Mr. Heflin said that the staff was proposing that the Town contract with the contractor currently providing the once-a-week collection service, and at the end of the first year evaluating the service to bring to the Council a proposal for the purpose of determining whether to continue the service or discharging the contractor and making other arrangements. He said the cost estimates had to be revised upwards due to the staff’s use of an incorrect house count that had not been updated. Mr. Heflin said the contractor and the staff were in disagreement of what his basis of cost was, and the numbers initially given to the staff were raised as he has reassessed what his costs and profits were. He said the staff was working on this issue. Mr. Heflin said the commercial trash collection would be carried out by the Public Works Department, as well as the special waste, such as yard waste.
Mayor pro tem Pavăo asked if the staff had any idea how the County intended to handle recycling at Southern Village. Mr. Heflin said the County proposed collecting at the curbside throughout the area as a weekly service.
Council Member Evans asked what would be included in the term “refuse.” Mr. Heflin said all the costs were included in the term. Council Member Evans asked him to explain how the Department proposed to provide services to Meadowmont. Mr. Heflin said once the single-family houses were built, the Department would have to look at its routing and the work load. He said before the Meadowmont development was finished it would require additional staffing in the Department. Mr. Heflin said the larger commercial developers were using compactors that the Department did not serve. He said there would probably be some commercial sites that the Department would be serving. Mr. Heflin said the alleys were being built to Town standards, so the Department could serve the homes to be occupied soon.
Council Member Evans noted that the Department did serve compactors in the 100 Block of downtown. Mr. Heflin said the service was contracted out. Council Member Evans said she had hoped the Town could move to more use of compactors.
Item 3 – Human Resources Issues
3a. Comparison of Town Benefits to those of Area Employers.
Council Member Strom said the Town based its pay package on the 75th percentile, and looking at the comparison table, it looked like the Town was paying more than any of the other towns in the area when the overall benefits package was considered. He asked if the 75th percentile was just for salary. Human Resources Director Pat Thomas said the 75th percentile was used to set the salaries, and did not reflect benefits.
Council Member Strom said he felt it would be useful to set the 75th percentile in terms of the overall package, because the numbers indicated that the figures were above the 75th percentile. He said that on the chart on page 8 it appeared that Chapel Hill was at the top. Ms. Thomas said Chapel Hill was second to Durham City, on one chart, and second to Durham County on the other.
Council Member Ward agreed that the 75th percentile should include not just salaries but the benefits.
Council Member Foy said the information would be useful to the Council when it considered how much money to allocate for salary increases this year. He asked how complex it would be to get the figures for the total package, and asked if that factor could come back to the Council. Mr. Horton said the staff might be able to do this by taking a series of benchmark positions, and make the same kind of analysis, if the staff could get the data from other employers.
Council Member Evans asked if the salary fund included any incentive program and 4.5% pay increase. Mr. Horton said it was included, and if the salary program continued the compression would be alleviated. Ms. Thomas said the items to come before the Council would not be changing the structure, but just updating market.
3b. Information About Council Member Salaries and Benefits.
Council Member Strom said Council compensation should be adjusted to 2001 dollars and then implement a system of CPI or Employment Cost Index to maintain the Council compensation at a reasonable rate . He added that the job was demanding and the increase could be a potential to add diversity to the Council makeup, especially for those who might need health care benefits.
Council Member Foy said the longer the Council deferred looking at this issue the more difficult it would become. He said it put the Council in an awkward position, and they should make a decision and tie it to something reasonable on an ongoing basis.
Council Member Evans suggested that the Council vote on the issue and have it acted upon at some future date. She said she was not comfortable with voting herself health care benefits, when some part-time employees received half or none.
Council Member Foy said he felt that $12 a meeting or $15 a meeting would be considered greedy. He suggested that the Council:
· Keep it at $10, 633 for Council Members, $17,722 for the Mayor, and
· Include health insurance access for group rates for everyone.
Council Member Wiggins said that all government bodies act on their own salaries, and by making a decision to be effective at a later date would be preempting the Council sitting at that point. She believed that the sitting Council could only make budget decisions effective at the time they were sitting on the Council. Mr. Horton reminded the Council that one Council could not bind another Council.
Mayor pro tem Pavăo said he felt it was reasonable to put this into the budget, since there had not been an increase since 1989 and the Council should face reality and make a decision based on this reality.
Council Member Strom said it was reasonable, and access to health care was reasonable.
Council Member Ward asked about the cost-of-living and salary increases. Mr. Horton said that the cost-of-living usually increased at a slower pace than the wage index, particularly in areas where the unemployment rate was abnormally low as it was in the area. Mr. Horton said if the Council looked at this rate as work and it was based solely on the cost-of-living as a basis of change, it would be far less than the employment market would suggest as to the value of the work.
Council Member Wiggins asked if what Council Member Foy was suggesting was a 40% increase. Council Member Foy said it appeared to be. Council Member Wiggins said she had no problems with this increase, since it was based on such a low amount of pay to begin with.
Council Member Bateman asked if employees working less than 20 hours per week had any access to health insurance. Ms. Thomas said they were considered temporaries and did not. Council Member Bateman said if the health insurance access was made for the Council, then it would be offering itself something not available to some employees. She added that the tax deduction, which could be claimed, would be under $13.48, by State law.
Council Member Strom asked if, at 20 hours, the Town paid for half of the employee’s health insurance. Ms. Thomas said yes. Council Member Strom said that offering health insurance could be a possible incentive for diversity on the Council, if one of the spouses did not have health insurance at his/her job. He said it was a benefit and might achieve the goal of diversity. Mr. Horton said access would mean literally that, but if the Council member chose this access he/she would have to pay the cost of 100% participation.
Council Member Evans said the pay for Council members was not $12 per meeting, but depending on how many meetings per year, it was more like $100 plus per meeting.
Item 4 – Transportation Issues
Mayor Waldorf recognized Carolyn Efland of UNC, who had been deeply involved in the transportation issues.
4a. Discussion of Transit Options
Transportation Director Mary Lou Kuschatka said that the Chapel Hill Transit Task Force had several meetings and had developed options for the Council’s consideration. She said the service improvements and funding options developed were:
· Implementing a fare free system for all passengers for a portion of next year and for 2002-2003.
· Adding service requested by the University.
· Extending the hours of evening service on some bus routes and at the park and ride lots. Carrboro had requested more service.
· Adding service to the anticipated areas to be annexed.
Ms. Kuschatka said that the cost allocation formula—federal funds, Town of Chapel Hill, the University of North Carolina, and the Town of Carrboro—was a population-based formula that divided the net cost of the transit service among the partners. She said the percentage division was 44% for Chapel Hill, 39% for the University, and 16% for Carrboro. She said that the Memorandum of Understanding required that any of the partners requesting more service would pay for that service in its entirety for the first year, and if the service meets the system’s standards and is a successful service, the partners would share the costs for that service in subsequent years, based on the percentage formula. Ms. Kuschatka said some of the options the Task Force looked at were:
· Fare free system—increase in ridership will be anticipated. All the buses are currently in use, so more buses would be needed to expand the system. No additional buses will be available until October, so the system could not be expanded prior to that time.
· Increase service to park and ride lots until 8:00 p.m.
· Increase service on the F route until 8:00 p.m.
· New service to Southern Village/Meadowmont could be done with existing resources.
· Additional campus shuttle EU—recommendation that this service start as a mid-day (off-peak) service initially and a full day service as additional buses become available, when the buses could run at peak time.
· Other services requested by the University, which could be implemented after the first of the years, if additional buses were purchased:
· Potential service to the proposed Jones Ferry Road park and ride lot.
· Friday Center/Hedrick Building Express
· EU Campus shuttle—peak hour service.
Ms. Kuschatka reviewed the cost estimate for 6 months fare free to start on 1/1/02. She said the University had agreed to pay for all its services that are primarily University services. Ms. Kuschatka said after those services costs were deducted, the remaining costs would be divided with the population-based formula. She described the fare free scenario including additional service on the A route which would result in the elimination of the P route, becoming the Airport Road Express route.
Mayor Waldorf asked if the figures on top of page 5 had been agreed on by Chapel Hill, Carrboro, and the University. Ms. Kuschatka said it was an agreement.
Council Member Strom asked if the formula on page 5 was an ongoing formula. Ms. Kuschatka said the formula for the full-year fare free service had been established last year through negotiation of the fare free scenario. Mr. Horton pointed out that any participants who desired a change could give notice of this desire, which would include the Council. He said it was everyone understands that this formula would be the basis of working for the future. Ms. Kuschatka added that any of the partners requesting additional service would pay for it for the first year, except that the University requested services would be paid for in full by the University for each year.
Council Member Foy asked if Ms Kuschatka was comfortable with fare free service starting in January. Ms. Kuschatka said the Department would be well positioned in January.
Mayor Waldorf asked if buses were leased and there were enough drivers, could the fare free service start in August. Ms. Kuschatka said that leasing buses was always an option but it would complicate the procedure, specifically from where the buses were leased, additional driver training, and hiring additional drivers fairly quickly. Mr. Horton added that one of the disadvantages was cost, and the preliminary budget did not include any money for this kind of change. He said if the Council did want to proceed with this change, the current budget projection would have an additional cost of either one of the scenarios the Council wished to pursue.
Mayor Waldorf asked if the budget included any of the options that could be pursued this year. Mr. Horton said none of the options were included in the budget projections.
Council Member Foy asked if the numbers shown on page 6 for the park and ride lots were to be shared by the partners. Mr. Horton said those would be University costs for the first year, and, if the bus service was express from the park and ride lots to the University, the University would continue to pay the costs.
Council Member Foy asked what would the Meadowmont service cost. Mr. Horton said the Southern Village/Meadowmont service was the one exception, and was being considered in the budget projection because of the annexation issue.
Council Member Foy asked about the other options, and which of the partners would bear the costs. Mr. Horton said increase to park and ride lots until 8:00 p.m. would be the University’s; increased service on the F route until 8:00 p.m. would be Carrboro’s; new service to Southern Village/Meadowmont would be Chapel Hill’s; additional campus shuttle EU would be the University’s; Jones Ferry Road park and ride would be the University’s; Friday Center/Hedrick Building Express would be the University’s; Airport Road Express would be the University’s; and, reconfiguration of the A route would be the system’s under the scenario, because it would be replacing the P route. Mr. Horton said the staff felt that all of the options had merit, and would be interested in providing the service if the Council so wished.
Mayor Waldorf summed up what the options would cost and not cost. Ms. Kuschatka said if the Town did not go to fare free service all the costs would be divided among the partners. Mr. Horton said everything hinged on the fare free option.
Council Member Brown asked Mayor Waldorf what she meant by the word “afford” in reference to the costs. She asked if she meant no additional tax increase.
Mayor Waldorf said that in terms of the Town’s budget for this year, the options listed on pages 2 and 3 did not cost the Town any extra money beyond what Mr. Horton had already put into his preliminary estimate for Meadowmont/Southern Village. Mr. Horton said it all hinged on fare free service, so the Council had to start off by assuming either a full-year cost of $177,000, or a full-year cost of $70,000 for fare free service, before the other options were a deal.
Ms. Kuschatka said what the staff was trying to do was to lay down the foundation of whether the Town would cost-share all the services in subsequent years, or cost-share only some of the services.
Council Member Brown asked if the numbers would be an increase in the tax rate the Manager was recommending. Mr. Horton said it would.
Council Member Strom said the fare free service was a great way to expand the transit service, the students had overwhelmingly endorsed the proposal, and there had been an excellent outcome to the negotiations regarding cost allocations and how they affect the Town. He said a similar amount was spent last year just on service expansion. He said after a year and a half the Council would certainly know how this service was working out and what the impacts were in the Town and on the budget. Council Member Strom said he was comfortable tying together the additional services with fare free service, and aiming for a January 2002 start.
Council Member Evans asked if there was going to be only fare free service until 9:00 a.m. Ms. Kuschatka responded that two routes operate fare free from start to finish all day and into the evening, and three of the routes additionally operate fare free in the morning to ease the overload from the park and ride lots onto the campus.
Council Member Evans said she agreed with Council Member Strom, but she would like to see the service operate by the fall. She said she thought that the momentum started by the students would be lost if this fare free service was not implemented. Council Member Evans asked Mr. Horton if, on the Transportation Fund, he had recommended reducing the tax that goes into transportation. She said citizens would support better and more bus service. Mr. Horton said that as the Town was beginning to allocate the annexation costs in revenues, it was likely to have the tax in the Transportation Fund move up slightly, with a reduction in the General Fund tax.
Finance Director Jim Baker said right now one cent on the tax rate was worth, not including the annexation, about $374,000, but once the annexation was adopted it would be about $396,000.
Council Member Ward said one of his concerns with adoption of the fare free service was what it would do to the Town’s ability to expand beyond the core set of routes. He asked if the staff could give some indication, looking toward the future, what the costs would be for the Town with or without the fare free service. He said he did not want to get into a situation where it would be more difficult for the Town to expand beyond the core set of routes into the future by going fare free. Mr. Horton said that historically fares had generated somewhere around 25-30% of the costs, shared by the partners, which would be 44% of the costs of the 25-30%. Mr. Horton said a fare free system might create a stronger system that was more attractive to riders, and that would make it possible for the Town to get a greater share of the federal and State support, and generate more local civic support for the system.
Council Member Ward asked if all the University routes were basically express routes. Ms. Kuschatka said most of the routes were entirely on campus, or were the express portion or entirely express routes, for which the University would pick up the full cost. She said the outside routes were shared by the partners, and the expanded costs would be paid for by the partner requesting the change.
Mayor pro tem Pavăo asked if the formula for the cost-sharing and for expanded service being paid for by the partner requesting the change would still remain in place. Mr. Horton said that would stay the same, and after the change met system standards after the first year the costs would be shared by the partners.
Mayor pro tem Pavăo said that would take care of, and not curtail, expansion in the future. Ms. Kuschatka said if the expanded service was agreed upon by all three partners then it went into the basic system. She added that most of the people who came to the Transportation Board Forum were not affiliated with the University, and stated they liked the system but were looking for expanded nighttime service and a weekend service.
Mayor Waldorf said she supported the fare free system, and the Town could really maximize a good investment with what the University was prepared to bring to the table.
Council Member Foy said he was in favor of the fare free system, also.
Council Member Ward stated his support of the fare free, noting the fact that the University would remain a full-time partner made him support the system.
Mr. Horton said he would like to publicly thank Carolyn Efland for the good work she had done for the past two years in helping to create the possibility of a fare free system.
Council Member Wiggins asked if #3 on page 6, Increase Service on F route, was the only request by Carrboro. Mr. Horton said Carrboro had been a full participant in all the discussions, and that was the only request particularly made by Carrboro.
Council Member Strom asked Finance Director Jim Baker about Section 2, Property Taxes Original Estimate. He said there was a lot of construction going on, and asked if Mr. Baker was confident that this would be as good as it gets. Mr. Baker said the estimate included in the preliminary budget report was based on information that he received from Orange County about what the actual tax base was shaping up to be. Mr. Baker said he relied on this information as being accurate.
Council Member Strom asked if Mr. Baker perused building permits and other types of building activities. Mr. Baker said he got his information directly from Orange County, which got its information from the database for property taxes.
Council Member Evans asked for help in understanding the Transportation Fund Revenue History chart on page 7, under Vehicle License Fees. She asked about the number $125,000. Mr. Baker said that was the $5 additional vehicle fee instituted in the current budget year.
Council Member Evans asked if the issue of refinancing the Town’s debts, since interest rates had declined, had been addressed. Mr. Baker said that all of the General Obligation debt that was above 6% had been refinanced. He said there were not further opportunities at this point. Mr. Baker said most of the debt right now would be equal to what the General Obligation bond debt would be today.
Council Member Foy asked what the $135,000 number was, which was listed on the last page of the report under Transfers & Contributions. Mr. Horton said that was the first of the annual payments to finance the new land bought for the Public Works Facility. He said the $2.8 million was considered the base costs and included all of the payment for debt service for all of the bonds.
Council Member Foy asked if the $440,000 was for additional CIP Projects. Mr. Horton said it was additional. He added that last year the Town was able to go back and use $300,000 on a one-time basis, and this year that had to be replaced, and some additional replacement had been recommended.
The meeting was adjourned at 6:45 p.m.