SUMMARY MINUTES OF A BUDGET PUBLIC FORUM

OF THE CHAPEL HILL TOWN COUNCIL

Wednesday, March 26, 2003 at 7:00 p.m.

Mayor Kevin Foy called the meeting to order at 7:00 p.m.

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

Mayor pro tem Pat Evans was absent, excused.

Staff members present were Town Manager Cal Horton, Assistant Town Managers Sonna Loewenthal and Florentine Miller, Town Attorney Ralph Karpinos, Assistant to the Manager Bill Stockard, Housing Director Tina Vaughn, Principal Community Development Planner Loryn Barnes, Finance Director Jim Baker, Police Chief Gregg Jarvies, and Acting Town Clerk Vickie Hackler.

Announcements

Mayor Foy announced the new advisory board members as a result of the votes from the Council’s March 24, 2003 business meeting.

Appointments:

1. Human Services Advisory Board: Earnest Roberts, Jr. appointed.

Council Members

Human Services Advisory Board Applicants

Foy

Bateman

Evans

Harrison

Kleinschmidt

Strom

Verkerk

Ward

Wiggins

TOTAL

Ernest Roberts, Jr.

2. Stormwater Utility Policy Review Committee: Philip Burke, Donald Brewer, David Brower, Mia Burroughs, Mark Cate, Jeff Cobb, Milton Heath, Ed Holland, Barbara Levine, Julie McClintock, Philip Post, Scott Radway, Alan Rimer, and Judith Weseman were appointed.

Council Members

Stormwater Utility Policy Review Committee Applicants

Foy

Bateman

Evans

Harrison

Kleinschmidt

Strom

Verkerk

Ward

Wiggins

TOTAL

Philip Berke

Donald Brewer

David Brower

Mia Day Burroughs

Mark Cate

Jeff Cobb

Milton Heath

Ed Holland

Barbara Levine

Julie McClintock

Charlie Nelson, Jr.

Jack Olin

Philip Post

Scott Radway

Alan Rimer

Michael Wall

Judith Weseman

3. Transportation Board: Anup Dashputre was appointed.

Council Members

Transportation Board

Applicants

Foy

Bateman

Evans

Harrison

Kleinschmidt

Strom

Verkerk

Ward

Wiggins

TOTAL

Anup Dashputre

Marie Eldridge

Leslie Johns

R.L. Juliano

Gary Kayye

Jessica Kem

Christine Khoury

Mayor Foy congratulated the new members and noted that there still was one vacancy for the Stormwater Utility Policy Review Advisory Committee.

Public Forum on Status of 2003-04 Budget

Town Manager Cal Horton explained that he would present the status reports tonight and a budget on April 28, which would be followed by a public hearing on May 14, 2003. Mr. Horton listed the upcoming Council work sessions and noted that the public was welcome to attend. He explained that the Council must adopt a budget, or an interim budget, by June 30, 2003. Mr. Horton said the Council had asked him to submit a base budget with additional options for consideration.

Mr. Horton estimated a base budget for 2003-2004 of about $38.3 million. The funds that the Council could reasonably expect from revenues, plus about $1 million reserved for use next year, would result in a surplus of about $2.6 million, he said. Mr. Horton outlined optional additions to the budget, which included general market and pay adjustments for Town employees, additional adjustments for some classes that seem to be out of sync with the market, and range adjustments for employees that are below the job rate for their grade.

Mr. Horton said the base budget would recommend continuation of contributions that the Council had made in support of human services programs, a modest increase in the budget as requested by the Orange Community Housing and Land Trust, and an adjustment of the Capital Improvements Program (CIP) that would raise it to at least the level it would have been if there had been no shortfalls resulting from the State’s budgetary difficulties. If the Council does these things, he said, the budget will approximately equal foreseeable revenues. Mr. Horton explained that these estimates assume the sales tax revenue will be flat and that not much will happen that will be positive.

Mr. Horton indicated a list of department head requests that the staff feels are justified. He said the Town would have to come up with an additional $1.3 million to address those requests and challenges. Mr. Horton explained that the staff was a long way from having a budget recommendation. They would continue to work toward constraining the base budget, he said, and would specify options as the Council so desires.

Mr. Horton noted that the staff would look at a number of budget elements, including the preliminary report on the 2003-2018 CIP. At the Council’s urging, he said, they had established a 15-year CIP that is fiscally constrained. Mr. Horton explained that the budget proposal includes three different levels for the Council’s consideration. He said $576,000, the base amount required to carry out contracts to which the Council is committed, was reflected in Scenario A. Mr. Horton noted that Scenario B proposes approximately $1.4 million to meet the 2002-2003 budget forecast. He explained that the $2 million in Scenario C would meet all of the projects in Scenarios A and B.

Mr. Horton explained that the Council must act on the 2003-2004 Community Development budget by April 28, according to federal guidelines, and must submit it to the federal government by May 15. Mr. Horton outlined his preliminary proposal: $221,000 for Public Housing, $150,000 for Comprehensive Housing Rehabilitation, $115,000 for Neighborhood Revitalization, $80,000 for Property Acquisition in support of Affordable Rentals, and $41,000 for Community Services, including allocations for the Family Resource Center, Orange County Literacy Council, and the YMCA. He explained that he was not involved in the last consideration because he is a board member of the YMCA. Mr. Horton noted that the Community Development budget provides funds for administration and that the staff was recommending budgeting for additional bookkeeping assistance.

With regard to the HOME Program, Mr. Horton said the list of key issues for the Council’s consideration totals more than $900,000, with $277,000 recommended for Comprehensive Rehabilitation, $188,000 for Property Acquisition, $32,000 for support of the Town’s Transitional Housing Program, $150,000 to Habitat for Humanity for second mortgage assistance, $75,000 reserved for other agencies for similar purposes, $100,000 in down payment assistance, $10,000 in additional operational support to the Orange County Community Housing and Land Trust, and $74,000 reserved for administration.

Mr. Horton explained that the Council had proposals for Public Housing Capital Fund monies as well. The amounts had increased gradually over the years, he said, so the staff's proposal was based on $584,000 from Housing and Urban Development (HUD). In addition, grants from the Federal Transit Administration are estimated at $932,000, he said, and grants from the N.C. Department of Transportation (NCDOT) should be about $1,573,000. Mr. Horton explained that the Town also expects to receive continuing support from the University and Carrboro. He noted that the fare free bus systems had been a success and that ridership was about 50% higher than last year.

Mr. Horton pointed out that the Council would hear from persons interested in using the Downtown Service District tax fund. He said the Council had, for many years, contracted with the Chapel Hill Downtown Commission to provide special services in the Downtown Service District. Mr. Horton's preliminary recommendation was to continue the tax rate of 6.2 cents per $100 of property value and to continue contracting with the Downtown Commission to provide $70,000 of services to the Town.

Mayor Foy commented that the Council would be addressing development of the General Budget, the Capital Improvements Program, the Community Development Program, the HOME Program, the Capital Fund Program for Public Housing, and Transportation grants. He pointed out that some budgetary uncertainties remained because of difficulties in the general economy. Mayor Foy suggested that the Council focus, individually and as a group, on giving specific guidance to the Manager regarding priorities, since there is not enough money to cover everything.

Colin Bissett, Executive Director of the ArtsCenter of Carrboro, Chapel Hill and Orange County, explained how the annual grant from the Town of Chapel Hill had been used to benefit residents and visitors to the region. He reported that the ArtsCenter had reduced its deficit from almost $100,000 to just over $32,000 in less than three years. This includes $50,000 in depreciation, Mr. Bissett said. He listed the many schools, centers and programs with which the ArtsCenter collaborates and noted that the ArtsCenter School offers more than 400 classes per year as well as after school and summer programs for children.

Mr. Bissett described annual festivals and performances, and noted that the ArtsCenter offers scholarships to disadvantaged people and strives to increase diversity. Chapel Hill represents 34% of the ArtsCenter's audience, he said, with the next highest representation being 16% from Durham. Mr. Bissett expressed gratitude for Council support now and in the future.

Susan Levy, Executive Director of Habitat for Humanity, addressed Habitat’s request for $40,000 in Community Development Block Grant (CDBG) funds for design and engineering costs for property on Sunrise Road. Ms. Levy said Habitat had recently learned that predevelopment costs were not eligible for funding under current federal guidelines. The staff suggested that funding might come instead from the Chapel Hill Housing Trust Fund, she said.

Ms. Levy thanked the Mayor and Council members for supporting the $50,000 loan that helped Habitat purchase the Sunrise Road property. She expressed particular appreciation to the Mayor and the four Council members who were working with Habitat and the Sunrise Road neighbors as they begin planning the project. Ms. Levy said Habitat had issued a set of guidelines to follow in developing the property. These are as follows:

· To build a maximum of 68 owner-occupied homes on the property, using a cluster design to minimize environmental impacts and maximize open space and buffers;

· To have a mix of incomes from Habitat’s lower floor of 25% up to 80%, and possibly some market rate housing to provide economic diversity and strengthen that community;

· To explore the possibility of building two-thirds of the units as single-family homes and possibly one-third of those as Townhomes; and

· To explore the possibility of a cooperative relationship with other affordable housing providers to build for those families whose income exceeds the 50% of median income guidelines.

Patrick Conway addressed allocations to special populations within the Parks and Recreation Department's budget. This includes Special Olympics and a Therapeutic Recreation Specialist, he said. Mr. Conway provided Council members with an interim report and stated that services were good but were not reaching enough people. He stated that he understood why there had been little action in terms of broadening the base, but asked Council members to encourage the Parks and Recreation Department to pursue that goal. Mr. Conway urged the Council to give this program another year because the demand is there, and it is the Parks and Recreation Department's responsibility to serve that demand.

Chris Moran, Director of the Interfaith Council (IFC), gave an update on Project Homestart and asked Council members to consider the IFC's request for a $75,000 allocation. Chapel Hill’s poverty rate exceeds both Durham County and Chatham County, he said, adding that homelessness was expanding, particularly among children and women. Mr. Moran explained that the US Department of Housing and Urban Development (HUD) had decided not to fund Project Homestart in the next fiscal year. The HUD grant will run out in March, he explained, so the IFC is asking the Town and others to help continue those services after June. The project will look very different after June, he said, because the IFC cannot locate $366,000. Mr. Moran noted that there would be a continuing partnership with Orange County regarding the land and the facilities paid for. He explained that non-personnel costs were approximately $65,000 to $68,000 per year for insurance, utilities, upkeep, and service contracts for equipment.

The IFC after June 30th will cost less to operate, Mr. Moran said, since it will be a volunteer-run program to the homeless. He added that there would be reorganizing within the IFC in order to make this happen. The IFC is absolutely committed to continuing this project, Mr. Moran said, explaining that the IFC had requested funding from the United Way and other groups. He noted that the program would serve more people and will have additional levels of service. The goal will be to have people move on to affordable housing, he said, but pointed out that a moratorium on the Section 8 program will make that difficult.

Delores Bailey, representing the Northside and Pine Knoll communities, thanked the Town Council for allotting money to them through the Police Department. She reported on several joint ventures by the neighborhood and the Police Department, including a Mary Norwood Jones Day proclamation, a summer work program for rising high school juniors and seniors, and a Tae Kwon Do training program. Ms. Bailey asked the Council to continue the same allotment in the 2003-04 budget. She explained that she had received 30 applications for the $175,000 in CDBG funds that the neighborhood had requested for household repairs.

Yukon Drive resident Rob Nelson responded to Habitat for Humanity's request for CDBG funds. Mr. Nelson stated that the last thing he wanted to do was stand before the Council asking questions about an affordable housing project, since he and his wife had actively worked to support Habitat's efforts. He said he spent 24 years working in public budgeting and finance, including at the NC Budget Office, to disperse special appropriations to non-profits and local governments. Mr. Nelson said he had learned during his professional career to ask follow-up questions, adding that 200 of his neighbors had follow-up questions as well, regarding Habitat's Sunrise Road project. These questions relate to zoning, the number of buildable acres, buffers and streams, impact on schools, access to the site, noise, and the sewer pump location, he said.

Mr. Nelson explained that he was the Treasurer of a newly formed organization called The Sunrise Coalition. He expressed appreciation for the Mayor's Committee that would address this issue, adding he hoped to meet with them again. Mr. Nelson suggested that the Council withhold a decision on further financial support until ambiguities and controversies concerning Habitat's project have been resolved. The Sunrise Coalition hopes to offer support for the project if certain assurances can be secured from the developer, he said. Mr. Nelson said it would be premature for the Council to act on funding requests before mediated negotiations have ended. He asked the Council to withhold allocations until the Mayor's Committee had completed its work.

Tommy Gregory, President of the Chapel Hill Firefighters Association, encouraged the Council to approve the requested additions to the Department's staff for the upcoming budget year. He specifically requested approval of the full-time dedicated training officer position and the additional personnel on fire trucks. Mr. Gregory noted that safety would improve as staffing levels increase. He noted that increased staffing would lessen dependence on mutual aid agencies, which cannot provide the same level of service as paid departments since they are largely volunteer departments, and unfamiliar with the Chapel Hill community. Mr. Gregory noted that firefighters carry the burden for the Council's decisions. He asked Council members to help firefighters do their jobs in the best and safest way possible.

Council Member Verkerk, noting that the country was on high alert due to its war with Iraq, asked Mr. Gregory if the training officer would be a liaison with the federal government. Mr. Horton replied that the Fire Chief would primarily have that responsibility.

David Sasser, representing the Chapel Hill Firefighters Association, presented statistics from Concord, Gastonia, Rocky Mount, Greenville, Hickory, Goldsboro, Wilson, and Burlington, which have more firefighters relative to their populations than Chapel Hill. He pointed out that all but Chapel Hill have at least one training officer. Mr. Sasser noted that the Town’s Fire Department should have 36 more employees, but were asking only for three firefighters and a training officer.

Allison Quillin expressed concern about friends and family of those who work for the Chapel Hill Fire Department. She said she was deeply concerned about the citizens of Chapel Hill as well. Ms. Quillin explained that she worries each day that her fiancée goes to work, not only because fighting fires is a dangerous occupation but because Chapel Hill's firefighters work overtime due to the personnel shortage. As an example, she stated that her fiancée had been on duty for 36 hours during the recent ice storm, and after getting a 12-hour break, he was asked to return for 24 more hours, after which he reported directly to work in the Emergency Operations Center where he spent an additional 12 hours dispatching emergency calls. Ms. Quillin stated that Chapel Hill's firefighters were overly strained and overly extended at work. She asked Council members to consider the welfare of those who serve so selflessly when making this year's budget decisions.

Sandra Cummings expressed support for the Fire Department's request. She also supported the Community Development Program as outlined, and applauded Mr. Horton's formulation of it. Ms. Cummings praised the allocation of funds to renovate Northside and Pine Knolls. She said the Community Services money would help address the School System's goal of addressing the achievement gap. As an individual citizen and a member of the Sunrise Coalition, Ms. Cummings also urged Council members to suspend further decisions regarding funding for the Habitat project until they have exhausted the publicly available information and obtained results from the Mayor's Committee.

Northside resident Edwin Caldwell expressed support for the Fire Department's request. He also complimented the Police Department for trying to get a handle on crime and drugs in the Northside community. Mr. Caldwell described the Manager's preliminary budget as a good plan, and said that EmPOWERment, Inc. was doing an excellent job. He expressed utmost respect for Mr. Horton who, along with the Council, had helped his community. Mr. Caldwell said he feels good as he walks through Northside, and commented that the Manager, Mayor and Council had listened, the Town was on the community's side, and was working to save the community.

Doug Schworer described the CDBG, as proposed, as an excellent accomplishment that a lot of thought and effort had gone into. He suggested that the Town give the Fire Department whatever it needs. Mr. Schworer, a Sunrise Coalition board member, opposed giving any money to the Habitat project, however. He asked Council members to wait until the Mayor's Committee made recommendations, the Council openly discussed those recommendations, and the surrounding community and developer agreed on what the project would be.

Alex Asbun, Executive Director of Affordable Rentals, thanked the Town staff, Mayor and Council members for supporting the 318 McMasters affordable rental project. He reported that Affordable Rentals had also purchased from EmPOWERment, Inc., a property at 316 McMasters Street, using a combination of 2002 HOME Program money and local financing. Mr. Asbun stated that each dollar the Council has approved for affordable rental subsidy has translated directly into lower rates for lower income families. He encouraged Council members to continue supporting affordable rental housing in the area.

Mark Chilton, Director of EmPOWERment, Inc., pointed out that the HOME Consortium had designated three different line items, which are essentially second mortgage funds, with different non-profits attached to those particular line items. He suggested continuing to have one second mortgage pool that all can draw down on a schedule that they would coordinate among themselves. Mr. Chilton also suggested re-lumping that into a one line item of a total of about $325,000. He pointed out that the $40,000 in CDBG funds would not be available for Habitat to spend on the Sunrise Road project for several months.

Morgan Kenney, Executive Director of the Chapel Hill Museum, noted that the Museum had grown during the three years that he has been there. He requested funds from the Hotel/Motel Tax Fund for help with a James Taylor exhibit opening on April 26, 2003, and explained that the total budget was $35,000, with a high portion of that being for the dedication. Mr. Kenney said the NCDOT, which had historically paid for such things, was not participating in this project. He pointed out that the Museum had only asked the Town for money once before, for the Lincoln High School exhibit and reminded Council members that James Taylor is considered a native. The exhibit will include all of James' Grammy awards, his Rock and Roll Hall of Fame trophy, a guitar, and information from when he lived in Chapel Hill, including his 7^th grade report card, Mr. Kenney explained. He requested $20,000 for the exhibit and a permanent theater.

Mayor Foy remarked that the Council had been discussing the budget since January and they are expecting a budget proposal by the end of April. He invited Council members to comment, noting that they would receive 40-50 staff reports at the next meeting in response to questions the Council had raised during discussions. Mayor Foy asked Council members to notify him or the Manager in advance which reports they want to discuss.

Council Member Bateman inquired about a change in the Home second mortgage fund. Principal Community Development Planner Loryn Barnes replied that the staff was responding to requests from Habitat and the Orange Community Housing Corporation and Land Trust for projects that were underway.

Council Member Wiggins asked Mr. Horton to include firefighter David Sasser's research in the staff's report. Mr. Horton agreed, noting that Fire Chief Dan Jones had prepared similar materials.

Council Member Strom asked when the Council would receive the staff's feedback on citizen comments received tonight. Mr. Horton replied that the staff would make recommendations on April 28 regarding items related to Community Development and HOME programs. They would make recommendations related to the general budget at one of the upcoming budget work sessions, he said, adding that some of the more complex items would come back on April 28.

Council Member Strom ascertained that information on service fees would come back on April 28, and asked Mr. Horton to discuss whether the $200,000 proposed for a one-time adjustment for employees would address hiring rates in the Police Department. Mr. Horton replied that the staff's preliminary aim was to provide merit increases so that employees could make a normal movement based on their experience and the additional competencies that they gain over time. A portion of that is done by market adjustment for those who are below the job rate, he said, and there will have to be some adjustment for classes that are not matching up well with the market rate. Mr. Horton explained that the staff was not far enough along in this work to list all of those classes. He said they would try to address areas of concern expressed by department heads as they verify that the data support the need for those extra steps.

Council Member Strom pointed out that the number of police officers in the downtown had not increased since 1984. He said this, combined with the spirited conversation the community had recently had about downtown, was compelling information. Council Member Strom suggested receiving formal comments from Chief Jarvies on how the Town might address the downtown environment. Mr. Horton agreed to address that.

Council Member Wiggins responded to Mr. Chilton's suggestion that housing agencies have one sum of money to distribute among themselves. She commented that staff had been doing much to coordinate this and recommended keeping it as it is set up now. Each agency needs to be accountable for the monies that are allocated, Council Member Wiggins said, adding that the lump sum approach might make it easier for some to be less diligent. She also pointed out that some agencies have a backlog of funds that they need to spend. Mr. Horton underscored Council Member Wiggins' point, noting that the federal government requires agencies to use money within a certain period of time. If you fail to do that they will start withholding funds in the future, he said.

Council Member Kleinschmidt asked about the requirement to show cause if an organization is not using funds. Mr. Horton replied that the Town monitors this and has taken funds back and allocated them to other purposes when they have not been used.

Council Member Bateman inquired about the status of EmPOWERment's allocations. Council Member Wiggins replied that EmPOWERment had submitted an application for a 2003-2004 allocation, but has a backlog of money allocated from past years. Mr. Horton pointed out that EmPOWERment had been undertaking projects that have "horrendous" challenges. He understands why they have difficulty meeting all of their schedules, he said, but added that this does not change the fact that unspent money might be taken away.

Mayor Foy pointed out that the Manager had offered three potential scenarios for the Capital Improvements Program, as well as options for the base budget and potential additions to the Transportation budget. The Council has a base budget, which is what they had asked for, he said, and they are being asked to prioritize potential additions to that budget.

Council Member Harrison ascertained from Mr. Horton that the Council may begin stating its priorities at the next meeting. Mr. Horton recommended that the Council adopt R-1 tonight and refer the preliminary report on the CIP to all boards and commissions.

Council Member Strom wondered if the $30,000 photography item belonged in the Engineering Department budget rather than the Capital Improvements Program. Mr. Horton replied that it would be moved into the Operating Budget and the Council would not see it in future Capital Improvement Programs.

COUNCIL MEMBER HARRISON MOVED, SECONDED BY COUNCIL MEMBER WARD, TO ADOPT R-1. THE MOTION WAS ADOPTED UNANIMOUSLY (8-0).

A RESOLUTION REFERRING THE PRELIMINARY REPORT ON THE CAPITAL IMPROVEMENTS PROGRAM (2003-03-26/R-1)

WHEREAS, the Council of the Town of Chapel Hill has received a Preliminary Report on developing a 2003-2018 Capital Improvements Program;

NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council hereby refers the Preliminary Report for comment and recommendations to the following advisory boards:

· Bicycle and Pedestrian Advisory Board;

· Community Design Commission;

· Greenways Commission;

· Historic District Commission;

· Housing and Community Development Advisory Board;

· Library Board;

· Parks and Recreation Commission;

· Planning Board;

· Public Arts Commission; and

· Transportation Board.

BE IT FURTHER RESOLVED that the Council requests that the advisory boards complete their review and recommendations for consideration at the Council Public Hearing on Wednesday, May 14, 2003, regarding the Budget and Capital Improvements Program.

This the 26^th day of March, 2003.

The meeting adjourned at 8:23 p.m.