MONDAY, FEBRUARY 24, 2003 at 7:30 a.m.
Mayor Kevin Foy called the meeting to order at 7:55 a.m.
Council members present were Pat Evans, Ed Harrison, Mark Kleinschmidt, Bill Strom, Dorothy Verkerk, Jim Ward and Edith Wiggins.
Council Member Flicka Bateman was absent, excused.
Staff members present were Town Manager Cal Horton, Assistant Town Managers Sonna Loewenthal and Florentine Miller, Town Attorney Ralph Karpinos, Assistant to the Manager Bill Stockard, Finance Director Jim Baker, and Town Clerk Joyce Smith.
Legislators present were Representatives Verla Insko and Joe Hackney, and Senator Eleanor Kinnaird, who arrived at 8:10 a.m. Also present were NC League of Municipalities General Counsel Andrew Romanet, UNC Local Relations Officer Linda Convissor, Assistant to the Mayor Emily Dickens, and Town Clerk Joyce Smith.
Mayor Foy thanks the delegation for joining the Council for this morning’s meeting, as well as Mr. Romanet and Ms. Convissor. He noted that the Council meets annually with the Legislative delegation to express its concerns and to listen to their views.
Mayor Foy noted he would like to begin the discussion with issues identified by the Council.
Common Funding Source for Transportation Infrastructure Needs
Mayor Foy stated that over the last year, the Metropolitan Planning Organization (MPO), the Mayors of Chapel Hill, Raleigh, and Durham, and the Regional Transportation Alliance have been trying to devise a method to increase funding, and realize how difficult that is. He said the Council supports some new source of revenue, such as the half cent sales tax that Mecklenburg County received.
Equity of Funding for Orange County within Highway Division 7
Mayor Foy called attention to Graph 3 in the handouts. He said that Orange County has been included in Division 7 for purposes of administering the allocation of federal and State transportation funding as part of the State Transportation Allocation Formula. The draft State Transportation Improvement Program would provide 70 cents per capita in funding to Orange County, he said, which is below the Division average of $1.58 with Highway Trust Fund, and $.99 without those fund. Mayor Foy said that Orange County is well below the average, and the Council believes it would be reasonable to seek a larger proportion of funding in the Transportation Improvement Program, using the district’s average per capita revenue as a goal. He asked the delegation to assist in achieving this goal.
A Funding Mechanism to Convert Overhead Power Distribution Lines to Underground Lines
Mayor Foy stated that if the Council were to pursue burial of electrical or other utility systems underground, special enabling legislation would be necessary in order to finance the project. The funding mechanism could involve formation of a Utility Tax District and/or the creation of a Municipal Service District, he said, with a special property tax. Mayor Foy noted that the Utilities Commission and Duke Energy officials have stated that a “requesting party” is responsible for the cost of burying utility lines.
Discussion
Council Member Strom noted that he was the Chapel Hill representative on the Triangle Transit Authority (TTA) Board, and that the Department of Transportation and the State had been very supportive as well as the Legislature, by freeing up and earmarking TTA needs. It is clear, he said, that the two sources of income for TTA will barely get TTA through Phase I. Council Member Strom said the two options for Phase II will require additional capital on a consistent basis, and since Phase II will directly affect Chapel Hill, we want to emphasize how important it is to have that additional source of funding.
Representative Insko asked if Chapel Hill would be bringing forward a request. Mayor Foy answered that all parties involved were attempting to come to some agreement regarding that. He added that what the Regional Transportation Alliance is doing now is identifying significant projects, so that the General Assembly can see exactly what is proposed. Mayor Foy said the hold up was whether Wake County could get support.
Representative Hackney asked if Wake was separate and distinct. Council Member Strom answered that TTA is in the process of prioritizing the next phase, and since they will get only one shot at funding they are trying to put a dollar figure on those projects. He stated it was important that correct estimates be put on the table. Council Member Strom commented that the Airport link is an option, and Highway 54 is looking like a good option particularly if DOT moves forward with the High Occupancy Vehicle (HOV) concept. He noted that if I-40 were a fixed guideway, then it would be more cost effective.
Representative Insko asked if TTA’s proposal could be rolled into this process. Council Member Strom said generally everyone is trying to coordinate and cooperate.
Mayor pro tem Evans said that the mandatory recycling bottles and cans, of which many states are well ahead of us, is a way in which we could reduce the cost of recycling by letting people who buy and use the product do the recycling themselves. She added this would be advantageous for our State.
Mayor pro tem Evans noted that UNC students have their cars registered in their home counties, so Chapel Hill gets no benefit for those cars using our streets and highways. She said that requiring students to register their cards would generate revenue and benefit the Town.
Council Member Wiggins asked if the delegation could give the Council an idea of what the climate in the Legislature would be this year, and their prediction of what the key issues are that would impact Orange County. She asked are they hearing anything that pertains to these topics, and what are the hot topics in the legislature this year. Representative Hackney said that the real answer is that it is too early to know. Putting that aside, he said, in terms of taxation and raising new revenue, the General Assembly is in an overwhelming new place. Representative Hackney said that many Democrats are not interested in posing new taxes, and that would be a tough sell. He said he does not see any appetite in the General Assembly to increase Chapel Hill’s revenue base, and will probably stay away from that. Representative Hackney said there were many new faces in the General Assembly, and there was a general sense of not imposing new taxes.
Senator Kinnaird said on the Senate side there is great concern about the Governor’s taking of revenue last year. She said Dillon’s Rule is a method of keeping flexibility in the revenues on the local level, and that was being looked at to support Home Rule. She said the House would stop any tax increase, but there is a lot of talk about a tobacco tax. Mr. Romanet added that simply stated Dillon’s Rule says that when you are given a power it will be very narrow, that you can do only those things necessary to carry out that power and no others.
Senator Kinnaird said she did not know if that would pass, because powers can be interpreted broadly.
Representative Insko said she was optimistic that progress would be made on discussing flexibility on this issue and it is important to move forward on this, adding she was supportive of local flexibility.
Representative Hackney asked if she was saying that there was support for this in the Senate. Senator Kinnaird said there was some favorable support. She added that a lot of pressure had been placed on representatives by the local governments for additional revenues.
Mayor Foy said that regarding overhead distribution lines, how would we proceed and what would be the logistics. Representative Hackney asked who would be responsible. Town Attorney Ralph Karpinos said that Dare County had a local bill passed.
Representative Hackney said there was some precedent then, and it would appear that Chapel Hill would have to define the area. He noted that Dare County’s bill was generally written, so the same language could be used.
Regarding the equity in transportation funding issue, Representative Insko said that this is not about raising revenues, rather Chapel Hill was asking for equity in funding of available funds. She said that was important to note. She wondered why this was allowed to happen. Senator Kinnaird responded that there was some upheaval in the membership several years ago, and the district lines were suppose to be redrawn but were not. So, that is an issue that needs to be looked at, she said.
Mayor Foy said we are raising this issue with our MPO, and wanted the delegation to be aware of what was happening. Senator Kinnaird said we need to go back and find out why there is such an inequity in the distribution of funds. She stated that she saw a connection to the Division system used by DOT to apportion funds across the state.
Council Member Harrison said the issue of revising the Division system had been brought forward by DOT staff in recent years, but the Board of Transportation had declined to act on it. Representative Insko and Senator Kinnaird said there needed to be some reorganization.
Mayor Foy noted there was some talk about combining the MPOs, but that is a separate issue from the equity issue.
Council Member Harrison commented that Council Member Strom had brought up the issue of providing increased State staffing for Sedimentation and Erosion Control enforcement. Representative Hackney said there was a bill in the last session that met a roadblock in the Appropriations Committee. The bill got through the House, he said, but it was too late in the year for the Senate to take it up. Representative Hackney said a fee increase would be necessary to increase the staffing. But when the bill got to the House, he said, it met some difficulty for various reasons so did not get through.
Council Member Harrison said because of the many projects it was important to get more staffing. Representative Hackney agreed, adding hey would again work hard on this issue.
Mayor Foy asked was there anything Chapel Hill should do, or just wait. Representative Hackney said Chapel Hill could provide support in any way they choose to get the State-wide organization to push it.
Representative Insko said that regarding the State-wide organization, it might be successful to get the freshman group of Representatives to support this. Mr. Romanet replied there was some interest in the freshman group to set aside partisan feelings on many issues, adding he believes there is an opportunity to get some support. He said he was optimistic, but time would tell. Mr. Romanet said that Representative Hackney knew far more about the process, but last year was the worst year he had ever known for lobbyists and pushing issues forward.
Mr. Romanet said he was not sure what the League’s agenda would be, that the prior year’s agenda was aggressive. He noted that the League would support Chapel Hill in their transportation needs, and commented that water and sewer needs would never go away. Mr. Romanet stated that the food tax needed to be pushed forward, but there would be strong opposition.
Mr. Romanet said he had watched Mecklenburg County push their transportation tax forward, stating that they had a definite and well defined plan. He said that to be successful, Chapel Hill needed to do the same. Representative Hackney added that Mecklenburg County had unanimity from their delegation, and Chapel Hill needed the same. Mr. Romanet said he hoped that they could somehow turn around the idea that giving local governments additional sources of revenue gives away the Legislature’s flexibility. He said that was not correct, since the Legislature would define the parameters of how the resources would be conducted.
Senator Kinnaird asked if a shift in the district lines would benefit Chapel Hill. Representative Hackney said many legislators, especially the democrats, would vote for education taxes rather than transportation taxes, particularly those representing more rural areas. Mr. Romanet said that they would support taxes that would not conflict with other more general State-wide taxes, and that local taxes should be supported. Representative Hackney said that the argument is that the local governments are not using what they have appropriately.
Council Member Ward asked the delegation to address how they would help Chapel Hill regarding providing tax credits for developers who build affordable housing. Representative Hackney said anything that is a tax credit would have a difficult time this year, because it takes away from State revenues. He noted there are always several tax proposals of various kinds, and only those that appear to have firm support would be moved forward to the House. Representative Hackney said the question was whether the State’s revenue could take the “hit.”
Representative Insko asked Representative Hackney to comment on the concept of streamlining. Representative Hackney said that you cannot tax out-of-State sales because of Supreme Court decisions. The streamline system, he said, creates a central authority that keeps the tax base of all 6000 tax jurisdictions in North Carolina streaming into one place for distribution, and that point of distribution would define the types of taxes, for instance what is a food that should be taxed and what is not.
Council Member Wiggins said she hoped that a tobacco tax would get approved this year, and asked that it be the highest priority. She added her hope that State employees would receive a significant pay increase this year, noting that many Chapel Hill citizens work for the State. Council Member Wiggins said she is a strong advocate of doing that and getting the funds from a tobacco tax. Senator Kinnaird said she believes the Governor would put forward a tobacco tax this year. But, he said, it has got to be high enough to be beneficial, because it would be quite some time before another one would be proposed. Senator Kinnaird said that just a nickel would do no good, and that health lobbyists may propose as much as 75 cents.
Senator Kinnaird said that the teachers and State employees are pitted against each other, vying for pay raises. She said that unfortunately this has caused them to work against each other in the lobbying process.
Mayor Foy thanked the delegation for meeting with the Council.
The meeting adjourned at 8:50 a.m.