SUMMARY MINUTES OF A BUDGET WORK SESSION

OF THE CHAPEL HILL TOWN COUNCIL

WEDNESDAY, APRIL 3, 2002, AT 5:30 P.M.

Mayor Kevin Foy called the meeting to order at 5:30 p.m.

Council members present were Flicka Bateman, Pat Evans, Mark Kleinschmidt, Bill Strom, Dorothy Verkerk, Jim Ward, Ed Harrison and Edith Wiggins.

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, Police Chief Gregg Jarvies, Parks and Recreation Director Kathryn Spatz, Planning Director Roger Waldon, Inspections Director Lance Norris, Traffic Engineer Kumar Neppalli, Library Director Kathy Thompson, Engineering Director George Small, Housing Director Tina Vaughn, Public Works Director Bruce Heflin, Finance Director Jim Baker, Fire Chief Dan Jones, Fire Marshal Caprice Melon, Information Technology Director Bob Avery, Transportation Director Mary Lou Kuschatka, Field Operations Superintendent Richard Terrell, Public Works Administrative Analyst Randy Ballard, Parking Services Superintendent Brenda Jones, Assistant Inspections Director Bobby Pettiford, Sanitation Superintendent Harv Howard, Internal Services Superintendent Bill Terry, Assistant Fire Chief Lewis Atwater, and Town Clerk Joyce Smith.

Mr. Horton explained that the staff had distributed a summary listing of the condition of all the Town's accounts in response to a Council member's inquiry about fund balances.  He noted that the balances in the General Fund and Transportation Fund are just at the minimum to meet the Local Government Commission requirements.  The Town has smaller reserves in most funds than in prior years because of Council-authorized transfers to address this year's financial difficulty, he said.   Mr. Horton pointed out that the Library Gift Fund had been left off the list.  He determined from Finance Director Jim Baker that the balance there was approximately $400,000.

Council Member Ward inquired about the vehicle replacement figure of $460,000.  He asked what flexibility the Town had, such as modifying the payment and/or the replacement schedule.  Mr. Horton replied that the Town could either make no equipment purchases next year or refinance the existing debt next year to stretch it out.  He said that he could not recommend either measure, because the Town would ultimately pay more for vehicle maintenance and receive less when the vehicles were sold.

Public Works Director Bruce Heflin commented that payments on new purchases for the first year were generally about $275,000.  He said that the Department was planning to significantly reduce the number of new purchases next year because of budget issues.   Mr. Heflin explained that the Town makes a half payment during the first year on anything it buys and the balance is then financed over three to seven or more years.  He pointed out that the payments then are for equipment already purchased.

Mayor Foy asked if a request by the Council to transfer money from the Equipment Fund to the General Fund would affect vehicle replacement for next year.   Mr. Baker replied that it would affect what the Town would need to finance from the General Fund in future years, noting that the $460,000 Vehicle Replacement Fund had been reduced by about $300,000 because that much less had gone into it from the General Fund.  Mr. Baker explained that each year the Town increases the General Fund contribution toward debt payments.  If the Town takes a big chunk of that $460,000, he said, then that affects what the General Fund will have to contribute to make the total level of lease purchase payments that the Town has committed to in future years. 

Mr. Horton added that the Town must spend about $750,000 annually to maintain vehicles needed to provide services.  If the $460,000 were used this year, he said, the Town would have to come up with $750,000 next year.    Mayor Foy inquired about the amount of this year's contribution from the General fund.  Mr. Baker replied that it was $500,000.

Council Member Strom asked if money in the off-street parking fund had been earmarked against debt.  Mr. Baker replied that it was not, but pointed out that it is the only seed money the Town has for developing parking lots.   Mr. Horton commented that the Council had agreed to transfer $100,000 this year.  He added that the Council could use some funds in the coming year as well.  Mr. Horton advised the Council to maintain some fund balance to pay for the regular maintenance at that facility, which ordinarily runs between $50,000 and $70,000.  He pointed out that bond rating agencies look at reserves to pay debt that has already been issued.  Mr. Horton also noted that replacement of parking and income stream would become issues if the Council decided to do any construction on parking lots #5 or #2. 

Council Member Strom determined that the Certificate of Participation would pledge revenues toward the payment, but would not pledge the full faith and credit of the Council.  Mr. Horton emphasized that the Town would be in a lot of trouble if it skipped a payment.  Council Member Strom asked if that fits into the Town's planned bond reorganizations in a way that might free up the funds and allow the Town to refinance it.  Mr. Baker replied that it is not related to any financing on the General Obligation Bonds, adding that there might be an opportunity the year after next to refinance the bonds.  Mr. Baker said that the Town already had replaced the parking revenue bonds with Certificates of Participation and had, in effect, refunded those bonds once.  They can only be "advance refunded once," he said, adding that in two years the Town might consider refinancing again.

Council Member Bateman asked whether the recommended change in the formula used for vehicle replacement intervals would be for this budget crunch only or become the baseline from now on.  Mr. Horton replied that the schedule probably could be stretched out on a permanent basis.

Council Member Bateman requested a comparison of the number of vehicles and staff that were working within Town Hall.  She said that it appeared to be an excess of vehicles located at Town Hall, adding that most field work is engineering related.  Mr. Horton stated that they were all Engineering and Inspections vehicles and were all used by field people.  Council Member Bateman asked whether each person was assigned a vehicle.   Mr. Horton explained that most were, but that a surveying vehicle, for example, might be used by more than one person.

Mayor pro tem Evans inquired about the source of money in the Library Gift Fund.  Mr. Horton replied that the Fund was composed of gifts from individuals who designated that the money be used for library purposes.  Mayor pro tem Evans commented that donors should be made aware that the Library Gift Fund was not being used for anything but library costs.  Mr. Horton replied that using a portion of it for the library made more sense than reducing library services.

Mayor Foy asked how much had already been allocated for that purpose.  Mr. Horton replied that the Town Council had routinely allocated about $45,000 each year.  He said that there had been an additional $50,000 allocated this year so that the Town would not have to reduce staff or other operations at the library.  Mr. Horton reminded the Council that they also had allocated $58,000 to the Capital Improvements Program to pay for repainting the interiors. 

Council Member Ward requested information on who was using which vehicles, and Mr. Horton agreed to provide a full report.

Mayor Foy asked what was meant by, "the remaining balance of $170,000 is restricted for sewer assistance programs" under the Capital Reserve Fund.  Mr. Horton explained that there had once been a program that had made money available for improvement of water and sewer systems.  It had been possible under certain circumstances, he said, to obtain a waiver if you could show that you did not need to spend the money on water and sewer purposes.  Mr. Horton explained that the Town had obtained a waiver and that those funds had been used for sewer improvements at a time when a group of citizens had petitioned for that.  The $170,000 is the remaining amount of those funds, he said, which by State law can only be used for water and sewer improvement purposes.

Council Member Strom ascertained from Mr. Horton that the Town could subsidize petitions that go through OWASA for hook-ups and that this remaining balance could be used for those subsidies.  Mr. Horton explained that the Council's general policy had been that the Town provides assistance of about $4,500.  In turn, OWASA waives portions of their fees to lower the cost for lot owners, he said.  Mr. Horton noted that there continues to be cases where the high cost of sewer is an impediment to citizens.  He pointed out that the Council had recently heard from one such citizen.

Noting that it was a "guideline," Council Member Verkerk asked what the consequences would be for using some of $4,250,000 in the General Fund.  Mr. Baker replied that the Town takes the Local Government Commission’s fund balance guidelines very seriously and recommended maintaining an 8%-12% reserve in the General Fund.  Chapel Hill is at about the 12% level, he said, adding that the Town had the lowest fund balance of anyone in its group, the average of which is between 12% and 20%.  Mr. Baker said that the guidelines recommend maintaining additional amounts for emergencies and other unforeseen circumstances.  He noted that the Town Council would receive a letter from the Local Government Commission if its reserve fell below the guideline.  Mr. Horton added that "when the godfather makes a suggestion it's a good idea to comply," since this is who determines whether or not the Town may issue bonds.

Council Member Wiggins asked if the $170,000 in the capital reserve for sewer assistance was committed to any particular neighborhood.  Mr. Horton recalled that a large portion had been earmarked several years ago for the Morgan Creek area, and offered to check on the status of that.  Council Member Wiggins asked for assurance that money could be moved into this fund if areas other than Morgan Creek needed it.  Mr. Horton agreed to check on that as well, noting that Council Member Wiggins had made a good point.  He also pointed out that there might not be anything else to reallocate.

Council Member Ward noted that taking $100,000 during such extraordinary times would still leave the Town above 8% in the fund balance.  Mr. Horton advised against doing that, noting that the Town might need cash in an emergency.  He also cautioned that there could be circumstances where revenues might not be coming in and the Town would need a balance to keep its AAA bond rating.  Mr. Baker added that the most important question that bond rating agencies ask concerns the level of fund balance.  Mr. Horton stated that he would like to see the balance at 15%-20%.

Mayor Foy asked Mr. Horton to give his annual briefing "on that $800,000."   Mr. Horton explained that each year the Council tries to end up with $800,000 so that next year it will not have to raise the tax rate, which is the equivalent of about two cents.

Council Member Strom asked Mr. Horton to comment on the probable State budget picture for next year.  Mr. Horton predicted that the State situation would get a worse and that the shortfall probably will be in the $1.3 billion to $1.5 billion dollar range.  He noted that the State might make adjustments and adopt budget reductions that would address that, but said that he had not seen any evidence yet that the State would do so.

Mr. Horton recommended that the Council proceed cautiously toward making a final decision about the budget until it sees what the State legislature does.  He predicted that the State would have difficulty accepting the human cost of some of the reductions it is considering, noting that cutting the mental health and education funds further would pose challenges.  Mr. Horton expressed dismay over the State's continuing expectation that cities and counties should "share the pain" even though they did not create the problem.  He remarked that local money is easy to take, adding that the State would likely take that money again to solve its problems.

Mr. Horton explained that the Town would ask the Council in a couple of years to consider a bond or some form of installment debt to pay for the construction of new public works and transit facilities.  He said that debt service on that would run around $1-1/2 million a year, another 4 cents on the tax rate.  Mr. Horton noted that the Town Council was faced with a very substantial tax rate challenge this year and that it would not go away next year or the year after that.

Item 1 - Update on Budget Options for the 2002-03 Fiscal Year

Mr. Horton said that the staff is already scheduled to bring information to the Council at its next budget work session on the potential for charging a fee for collection of commercial refuse.  Mr. Heflin explained that there had been some price fluctuations in what the private sector had been charging its customers.  He said that private sector prices were getting lower and that increased competition might undercut the price threshold that the Town had been analyzing.  Mr. Heflin stated that the Town had begun losing some of its customers to private sector recycling companies, which are taking refuse to transfer stations rather than the Orange County Landfill.   This has lead to a lot of uncertainty, he said.

Mayor pro tem Evans noted the irony of the Town having created a void that allows market forces to come in and become competitive.

Council Member Bateman pointed out that it might be good to reduce what was going into the landfill since space there was running out anyway.   Mr. Horton replied that there is a need for revenue stream at the landfill because the recycling program is funded by landfill receipts.  Mr. Heflin added that the Town's waste stream represents about 30% of the garbage/waste revenue stream, and about two-thirds of that is commercial garbage.  To abandon the service altogether, he said, would mean that private haulers would take the majority, if not all, of the commercial waste that now goes to the landfill.  Mr. Heflin pointed out that while that would extend the life of the facility it would negatively affect the revenue stream. 

Mayor Foy stated that one of the primary reasons the Town had transferred its solid waste operations to the County was because this situation was coming.  Noting that this was not a problem that the Town could solve, he recommended getting a serious answer to Council Member Bateman's question from Orange County.

Council Member Kleinschmidt asked what segments of the private sector had been turning to private haulers.  Mr. Heflin replied that they were apartment complexes, restaurants, and others that produce high volume and for whom "the nature of their users is hard to control."  Council Member Kleinschmidt asked what percent were doing this now, and Mr. Heflin replied that the number was small.  He noted that there had recently been an abrupt 15% reduction in cost and that other companies probably will follow suit.

Council Member Strom proposed directly subsidizing the recycling program through tipping fees rather than extending the life of the landfill.  Mr. Horton offered to find out how much of the tipping fee is spent on recycling service.

Regarding item #15 in the memorandum, Council Member Bateman asked if having crossing guards at schools had been mandated by State law.  Mr. Horton replied hat it had not been.

Mayor pro tem Evans noted that money generated by the University in parking fines and fees goes toward public education.  She asked whether the school system could pay for 100% of its crossing guards with funds from that newly determined money stream.   Mr. Horton replied that the school system had not even agreed to pay for 30%.  He added, though, that the Town had recommended that they do so and then gradually assume the full cost.  Mr. Horton said that he could not comment on Mayor pro tem Evans's idea because he did not have enough information on what potential revenues might be.

Mayor pro tem Evans inquired about school resource officers, and Mr. Horton explained that the school system now pays for 100% of that program.

Council Member Ward verified that the Town paid only for Chapel Hill's crossing guards.

Council Member Harrison clarified that "reducing" part-time work in stormwater management testing does not mean eliminating it, and asked how much would be cut back in services.  Engineering Director George Small explained that the Town hoped to get its own staff to fill.   

Mayor pro tem Evans wondered if hanging UNC banners really needed to be eliminated, as proposed, since it was such a small amount and it helped the Downtown area.  She inquired about reducing brush collection on Saturday.  Mr. Horton explained that the Town had been setting aside money in each year's budget for weekend collection of brush that it had not been able to pick up during the week.  He noted that they had recently been able to collect it during the week most of the time, however, so he had recommended eliminating the Saturday collection.

Mayor pro tem Evans wondered if collecting compost material once a week was a good direction to have taken.  Mr. Horton replied that it was in terms of appearance, street safety and drainage.    Sanitation Superintendent Harv Howard noted that the number of complaints when it had not been picked up on schedule had been unreasonable for the Public Works Department.  He repeated what Mr. Horton said about safety and drainage, adding that he would not recommend doing away with that collection.  Mayor pro tem Evans explained that she was looking for ways to cut costs.  Mr. Heflin replied that the Town could not reduce routes simply on the basis of yard waste.  There would still be the problem of garbage collection once a week, he said, adding that the Town would have to achieve a large savings to justify reducing an entire route including three positions.

Regarding Item #18, Mayor pro tem Evans argued that this year was the wrong time to eliminate the fourth of July celebration in this community.   She suggested trying to find corporate sponsors or contributions to help finance it. 

Regarding street resurfacing, Mr. Heflin explained that most studies had concluded that resurfacing dollars are the best street maintenance money spent because it protects streets and improves safety and drainage.  He said that the staff had tried to fund the streets systematically, even though the Town cannot usually meet the national goal of resurfacing once every 10-12 years.  The Town had been able to stretch resurfacing dollars to extend the life of streets, he said.  Mr. Heflin pointed out that not doing this might save money in the short run but would be more costly in the long run.

Council Member Bateman asked if eliminating any of these services would result in loss of jobs.  Mr. Heflin replied that it would not.  Mr. Horton pointed out that the majority of resurfacing was done under contract, noting that the Town does not maintain equipment to do large scale resurfacing.  For street reconstruction projects, he said, Town employees do a portion of the work and contractors do the rest.

Council Member Wiggins asked if anyone actually looks at streets and determines that they need to be resurfaced.  Mr. Heflin replied that a contractor drives over every street every year and rates it.  Then the Town visits the worst streets and checks with OWASA and others to make sure that there are no projects scheduled to tear those streets up in future years, he said.

Council Member Wiggins asked why Kingston Drive had been resurfaced, since it looked so good.  Field Operations Superintendent Richard Terrell explained that Kingston Drive had received a slurry seal, which costs a fourth of the traditional overlay, to extend the life of the existing pavement.  Council Member Wiggins asked if that was used often, and Mr. Terrell replied that the Town had been using it for about four years.  Mr. Heflin added that slurry seals were used where asphalt is beginning to fail but the streets do not have large cracks or stress on the surface.

Mayor Foy requested a list of roads scheduled for resurfacing and reconstruction next year.   Mr. Terrell said that the Department was revising the list and would provide that information.  Mr. Horton acknowledged that roller-bladers do not like slurry seals because the road is less smooth afterward.  But it protects the roadway and makes it possible to avoid a full resurfacing for a longer period of time, he said. 

Council Member Ward, noting that bicyclists had also complained about slurry seals, wondered if there was a way to improve the product.   Mr. Heflin replied that there was much variation in quality, adding that there is a period of time when there is a friction problem for cyclists in certain conditions.  He recommended continuing to use slurry seals, however, because of the financial advantages.  Mr. Horton mentioned a technique called crack sealing, but noted that some people do not like its appearance.  Mr. Heflin explained that the Town also mills streets to remove asphalt that has accumulated.

Council Member Kleinschmidt inquired about the lack of crosswalks in the newly reconstructed area near Timberlyne Shopping Center.  Mr. Terrell explained that crosswalks were budgeted separately, in the traffic budget.  Mr. Horton asked Council Member Kleinschmidt for details regarding that situation.

Council Member Bateman asked if the Town still coordinated its resurfacing schedule with OWASA.  Mr. Heflin replied that it did.

Mayor Foy pointed out that the Manager would need some specificity from Council members regarding the issues that are not recommended.  He pointed out that the Council would have to come to some resolution among themselves regarding the undesignated fund balances so that the Manager may take that under advisement.  Mr. Horton agreed that it would be helpful to have as much guidance as the Council could provide, but stressed that it would not be prudent to use any more of the fund balance.  Mr. Horton pointed out that the Council did not have to make such decisions that evening.  Mayor Foy agreed, but commented that he did not want it to wait until June either.

Regarding Item 24, Council Member Strom recommended that the projected $210,000 increased revenue from off-street parking rates go into the General Fund this year and possibly next year.  He expressed a preference for using that money to reduce tax complications rather than to rebuild the fund balance.  Council Member Strom asked if the rates that the staff was recommending also coordinated with UNC's rates.  Mr. Horton replied that they were above UNC's rates.  Council Member Strom asked the staff to recheck the 1/2-hour rate, which he thought was 60cents as opposed to UNC's 75cents.  Mr. Horton suggested not establishing an on-street parking rate that would make it difficult to use quarters. 

Council Member Verkerk asked if the $312,000 was included in the $475,000.  Mr. Horton replied that it would be in addition to it.

Mayor pro tem Evans objected to the proposal to increase parking fees, since so many of the downtown merchants were already struggling.  She advised making it less rather than more expensive for people to use the retail centers.

Mayor Foy asked if the Town had ever discussed downtown merchants providing subsidized parking for patrons.  Mr. Horton replied that the staff would be glad to work with the Downtown Commission and merchants on that, noting that they could provide tokens to customers, for example.  He added that the Town could also sell ticket books for parking in the deck, or provide tokens.  Mayor Foy asked if this could be done at a subsidized rate.  Mr. Horton replied that it could be done at any rate the Council thought reasonable.  Mayor Foy suggested exploring that with the Downtown Commission as well.

Council Member Verkerk mentioned "HOV parking spaces," which she said discourages long-term parking.  Mr. Horton expressed interest in learning more about that.

Council Member Harrison asked if the Town was paying the annual street inspection survey.  Mr. Heflin replied that it was, and Mr. Terrell said that the cost was $7,000 per annual survey.

The Council determined that there would not be a public hearing specifically on this set of options but that it might come up at the next public hearing. 

Regarding Items #8, #9 & #10, Council Member Ward asked how much less than the "not recommended" totals the staff could recommend.  Mr. Horton explained that the figures were his best judgement.  He commented, though, that the Council could reduce those by 10%-30%, since it was just his judgement call.

Mayor Foy asked about changing the allocation reduction on Item #9, for example, by 10% rather than 35% to result in greater savings.  Mr. Horton repeated that he could not in good conscience change his recommendation.

Council Member Ward asked if the figures for Items #8, #9 & #10 were full funding.  Mr. Horton replied that the figures represented typical funding but were not as high as he would have recommended if there had been a better budget picture.  Council Member Ward suggested that the Council fund even less than that. 

Mayor pro tem Evans noted that purchasing tokens would mean that the merchants would have to pay for it.  She suggested stamping instead.  Mr. Horton replied that stamping would work for the staffed lots, but not for the metered lots.  Mayor pro tem Evans commented that rates did not necessarily have to be raised.  Mr. Horton expressed willingness to work on any set of objectives that the Council wished to assign.  He said that the objective had been to offer ideas on ways to raise revenues.   

Mayor Foy noted that there had been a specific question from Council Member Strom regarding the $210,000 and a request from Council Member Ward.  He then suggested moving on through the agenda, noting that this was not the last opportunity to address these items.

Item  2 - Parks and Recreation Departmen

a. Response to ARC Request regarding Parks and Recreation Programs.  Parks and Recreation.

Parks and Recreation Director Kathryn Spatz explained that this was in response to petition from ARC and from citizens urging the Town Council to expand programming for individuals with disabilities.  Ms. Spatz said that the Department had met with the petitioners and explained their plans.  She said they hope to have the inclusion money as part of the base budget for mainstreaming into summer day camps, sports camps, cooking camps, and the teen drop-in camp at Street Scene.  Ms. Spatz added that the Department would reach out to the disabled community and would research alternative funding sources.

b.    Information on Adopt-a-Trail Funding and Process.

Ms. Spatz responded to a Council member's previous question about whether the Department had applied for Adopt-a-Trail grants.  She said that they had done so and that it had been successful.  Ms. Spatz noted that the Department's written response lists other funding received.  She pointed out that the largest grant comes from the Department of Transportation.

c.  Information on User Fee Policy and Policy on Qualifying for Fee Waivers.

Ms. Spatz explained that this was in response to an inquiry about how to waive the fee for programs.   She stated that the Department had changed its publicity and brochure to include this information.

Council Member Bateman ascertained that the Parks and Recreation Department was working with the Residents' Council, who will convey this information to the groups that they work with.  Ms. Spatz replied that they were, adding that there also will be on-site registration in the communities.

Council Member Ward suggested eliminating the word "extraordinary" from "extraordinary circumstances" in the promotional literature.  Ms. Spatz agreed, explained that there had been no intent to restrict participation.

Item  3 - Engineering Department

a.  Report on Traffic-Calming Request from Various Neighborhoods.

Mr. Small explained that the Council had generated this report specifically regarding Perry Creek Drive.  He noted, however, that there were a variety of requests on the books, and that several were still under study.  Mr. Small reported that the Department had a modest amount allocated for traffic calming and expects to use all of it on the Oakwood, Hamilton Road, Burning Tree Drive, and Cleland Drive neighborhoods.  He said that the total cost of the measures that petitioners had requested was $40,000.

Mayor Foy inquired about the money that Meadowmont had agreed to pay for traffic-calming measures, and Mr. Horton agreed to check on its status.

Council Member Harrison commented that the traffic circle on Pinehurst had not been designed.  Mr. Small replied that it had been designed by the Town's Engineering Department and was the basis on which they were planning to do others.  Council Member Harrison remarked that it was a basic traffic circle as opposed to a roundabout.

Mayor pro tem Evans wondered if there was a sign available that would encourage people to reduce their speed in neighborhoods.  Mr. Small agreed to research some passive traffic control measures.

Council Member Kleinschmidt suggested that the sign say, "This is your neighborhood.  These are your children.  Slow down."  Mr. Small speculated that many neighborhoods would want such a sign and suggested treating them as the Town treats neighborhood watch signs.

Council Member Verkerk mentioned a national organization, called "Keep the Kids Alive.  Drive 25." Which she said provides inexpensive signs.

Item 4 - Public Works Department

Regarding annual stormwater management costs, Mr. Heflin explained that this report repeated numbers first given to the Council in November 2001 in a report about the stormwater utility proposal.  He said that he did not have much to add to that.

Mayor pro tem Evans asked if the cost could be reduced at all.  Mr. Horton replied that it depended on the kind of outcomes that were acceptable to the Council.  He said that the National Pollution Discharge Elimination System will require that the Town do more of these things.   Mr. Horton explained that it would be difficult to cut back and still be able to say that the Town is making progress toward compliance with that law.

Mayor Foy inquired about the date for compliance, and Mr. Small explained that the Town should apply for a permit in March 2003, although some are trying to set that date back.  In response to a question by Mayor Foy, Mr. Small explained that the Town had been keeping data on water quality in about 14 streams and can demonstrate that it is at least not degrading.

Council Member Strom determined that the $250,000 engineering fee was being used for Town engineering services.

Mayor Foy asked how it was being used in the Department, and Mr. Small explained that it went toward consulting fees and normal maintenance costs.  Mr. Horton noted that this was significant but not the largest portion of the $920,000 engineering budget.

Item 5 - Transportation Department

a. Cost Comparison of Regular Buses to Small Buses, including 12-year Small Bus Options.

Transportation Director Mary Lou Kuschatka outlined the advantages and disadvantages of different size buses.  She pointed out that the ridership on most of the Town's routes is very high and requires an even bigger bus than the Town has.  Ms. Kuschatka said there are a few areas where the Town could use a small bus.   She suggested using a small bus that has a 12-year lifespan, noting that the operating cost of small buses is higher because more is spent on maintenance.

Mayor Foy commented that the Department does intend to continue using small buses in some areas of the Town and prefers that they not be the buses they currently use.  Ms. Kuschatka added that they would like to replace these in 2005-2007 with the more standard 12-year vehicle.

Council Member Harrison expressed support for the standard bus.

Council Member Ward asked if there were national figures that would help determine the maintenance cost per mile for standard buses.  Ms. Kuschatka offered to find a property that operates them and request those statistics.  Mr. Horton noted that quality numbers should be available from other agencies that benefit by grants from the federal government.

Council Member Verkerk asked if there were plans to purchase the larger standard bus.  Ms. Kuschatka replied that they intended to order 40-foot buses with the next replacements. 

b. Proposed Parking Rate Increases.

Mayor Foy asked if it would be possible to give people a few extra minutes on the meter before ticketing.  Mr. Horton replied that Parking Superintendent Brenda Jones had been working with the Town Attorney on an ordinance that would put that into effect.   Ms. Jones explained that there would be a grace period of about six minutes after the meter hits zero before it actually shows expired.  Mr. Horton noted that this would deal with those who say, "It's not fair.  I came back only a minute late."   

Council Member Strom asked Ms. Jones about a machine that might help citizens convert dollars or credit into coins for parking meters.  Ms. Jones replied that there were two such options (pay and display station, and pay on foot station), and she described each briefly.  Mr. Horton said that Ms. Jones had done good research on this and that the staff planned to write a report and bring it to the Council on April 24^th.

Mr. Horton noted that the staff had been asked to consider reconfiguring parking lot #5 and move the metered parking to the portion of the lot on Franklin Street.  He said that it would be feasible to do that, and that it would let people enter from both Church and Rosemary Streets.  

Council Member Kleinschmidt remarked that he found if frustrating that the Town meters do not accept nickels.  

Item 6 - Human Resources Department

a. Report on Town's Workers' Compensation Experience.

Mr. Baker said that there would be a large increase in Workers' Compensation this year.  He said that actuaries for the Workers' Compensation pool had recommended a 25% rate increase last year, related to medical inflation cost, and that the remaining increase this year is 13%.  In addition, he said, raising payrolls through Town adjustments each year causes the rates to increase, as did this year's major annexation which added almost a million dollars worth of salaries.  Next year, Mr. Baker said, the total gross premium for all funds will increase from $552,000 to $706,000.  He pointed out that the Town allocates that to various funds based on categories and rates.   About 73% of that cost is for the General Fund, he said.   Mr. Baker noted, on page two of his memo, the other factors that went into reducing the gross premium from $984,000 to $706,000.

Mayor Foy determined that the General Fund cost was $515,000.  Mr. Horton added that medical insurance cost increases probably will be in the range of 15-16%.  Mayor Foy asked if the deductible system meant that the Town had a deductible on all Workers' Compensation claims.   Mr. Baker replied that the Town does have a deductible but that this was referring to the Town's participation in the program based on the overall level of fund balances.  He added that the Town gets back each year a portion of what it paid in over previous years and that $299,000 is the amount for this year that reduces the gross premium.   

Item  7 - Town Clerk Department

a. Cost/Time Savings to Provide Council Minutes and Other Documents Electronically.

Mr. Horton thanked Town Clerk Joyce Smith and Information Technology Director Bob Avery and their staffs for helping the Town learn how to send more things to Council members via email rather than hard copy.   Ms. Smith noted that her report was in response to a Council member's request for information at a budget work session on February 27^th.  She said that she and her staff had made much progress over the past month in eliminating paper.  Ms. Smith called Council members' attention to the proposed increase in user fees (attachment #2) for persons requesting paper copies of documents.  Mr. Horton reported that he had received a thank you from a UNC  official who was now able to review all of the Council's materials on the web. 

Council Member Strom asked Ms. Smith if her staff had made those who had been paying for packets aware that this was available on the web.  Ms. Smith replied that only one citizen was still purchasing a packet and that he had indicated that he would not continue doing so.

Council Member Ward wondered if hard copies could be made available at senior centers, community centers, and other places where those without computers could read them.  Ms. Smith replied that the staff would provide them in any way the Council wished.  She noted that when the Clerk's Office gets calls from citizens who do not have online access, and copies of materials are provided without charging a fee. 

Mr. Horton wondered about providing kiosks in various places around Town.  He said that businesses might help with the cost of this and could advertise it as a convenience for their customers.

Council Member Ward said that he was open to all suggestions, but pointed out that some people might not know how to use a kiosk.

Mayor Foy commented that the real cost of producing packets was significantly higher than that listed in Ms. Smith's report.  Mr. Horton agreed, adding that under State law the Town can only charge the media cost and not the cost of time, labor, etc.  Mr. Horton offered to provide options to the Council.

Council Member Strom said that the Skills Development Center and the Southern Human Services Center already had public internet sites.

Council Member Harrison thanked Ms. Smith and her staff for the time they had devoted to answering his inquiries and helping him with research.

The meeting adjourned at 7:49 p.m.