SUMMARY MINUTES OF A WORK SESSION

OF THE CHAPEL HILL TOWN COUNCIL

WEDNESDAY, MARCH 5, 2003, 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, Ed Harrison, Mark Kleinschmidt, Bill Strom, Jim Ward, and Edith Wiggins.

Council Member Dorothy Verkerk 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, Principal Community Development Planner Loryn Barnes, Senior Long Range Planning Coordinator Chris Berndt, Planner Phil Hervey and Town Clerk Joyce Smith.

Item 1 - Chapel Hill-Carrboro Downtown Commission

Commission Chair Charles House distributed a final report analyzing the Downtown area.  The report included recommendations for the future, he said, adding that the Commission would implement some of those recommendations and reserve others for the future.

Mr. House described the following groups and committees:  Services to Owners and Business, Community Pride Committee, Communications and Public Relations, Membership Committee, and Events and Promotion.

Mr. House explained that the Services to Owners Committee would address economic development issues, such as Town government relations, communications, and marketing.  He said the Downtown Commission helps to recruit new businesses and maintain and expand a complimentary business mix downtown.  This will include making downtown business owners aware of the competition, Mr. House said, and the Commission would also work to bring businesses up to code and to attract quality new businesses.  Another goal, he said, was to maintain a database of current property owners and expand dialogue with them about the importance of maintaining a healthy business mix.

Mr. House outlined a plan to create strategic partnerships with the Town's other business districts so that all can refer customers back and forth, keeping tax dollars within Chapel Hill.  He expressed appreciation for the Town's plan to provide better lighting along the sidewalks, and said the Commission was encouraging business owners to provide better lighting inside and outside the stores as well.  Mr. House explained that the Commission would assist new businesses with set up, compliance issues, and problem solving.  They would continue their advertising on National Public Radio, radio station WCHL, and other local media, he said.  Mr. House noted the cooperative advertising by merchants, explaining that they had recently shared the cost of a $575 add in the News and Observer.

With regard to parking, Mr. House recommended improving signs and letting the public know that there is plenty of downtown parking available, and asked for the Council's guidance on how to publicize that.  He emphasized that the Commission wished to actively work with the Town and Orange County to make local governments aware of property and business owners' concerns and to find positive solutions.

Mr. House stated that cardboard recycling had been one of the most cost-effective programs for merchants.  Recycling had netted a slight income and saved about $30,000 for individual businesses that do recycle, he said.  Regarding Service to Community/Community Pride, Mr. House explained that he had grown up in Chapel Hill and felt pride in the downtown area, which he described as the heart and soul of Chapel Hill.  He mentioned steps that the Town had taken to improve safety, and offered to help address some of the root causes of those safety problems.  Mr. House noted that the Commission would maintain the existing beautification project, including murals, streetscapes, plantings, and cleanup efforts.  He mentioned a possibility of providing bronze plaques on some buildings in a joint project with the Historic District Commission. 

Mr. House noted the mini welcome centers now act as information distribution stations and point visitors to the larger walk-in centers.  He said the Commission had also been considering putting ambassadors on the street to greet and direct people during times when there are many visitors in Town.  Mr. House stated that Commission members plan to work constructively with the Inter-Faith Council (IFC) and to help with the services they provide.  In addition, he said, they want to expand cultural arts events to include citizens and visitors.

Mr. House explained that the Communications and Public Relations Committee would address information sharing, publications, database building, and public relations.  The Commission plans to update its publications, maintain its database, and enhance graphics on its website, he said.

Mr. House stated that the Membership Committee would address weekly networking forums for downtown businesses to interact and share ideas, and listed networking opportunities. 

The Events and Promotions Committee will create “fun” events, Mr. House said, which will include concerts, movies and other performances.  He expressed gratitude for the Commission's close association with the Orange County Visitors Bureau.  Mr. House described the joint effort to promote Orange County and Chapel Hill as a wonderful collaboration.

Council Member Harrison requested that copies of the Commission's publications be sent to Council members.  Mr. House agreed, noting that copies of the annual report would be sent as well as soon as it is complete. 

Mayor pro tem Evans praised the Commission's attempt to improve the appearance of storefronts.  Downtown Commission Director Robert Humphreys noted that they had been encouraging merchants to take pictures of their own storefronts and look at them objectively. 

Council Member Ward inquired about the value of free parking during the holiday season.  Mr. Humphreys described it as incredibly valuable, considering that the December 4, 2002 the ice storm had shortened the season.  Being able to advertise that parking was free added to the invitation to come downtown, he said.  Mr. Humphreys stated that about 400 of the 1500 parking coupons had been redeemed.  He suggested printing 5,000 coupons next year since a third of them would likely be redeemed.

Missy Jullian-Fox added that free Christmas parking went a long way to let merchants know that the Council feels they are important and is making efforts to help them.  One small step can make a huge impact, she said, as far as perception, partnership and good feelings are concerned.

Council Member Ward suggested that the Manager factor some version of that program into next year as well. 

Council Member Bateman agreed with Council Member Ward.  She inquired about the Commission's operating budget, specifically what the Town contributes.  Mr. Humphreys replied that the total budget was about $90,000 and that the Town contributed about 40% of that.  He said the Commission also receives sponsorships and donations in kind for events such as concerts and the holiday parade.  

Mr. Horton stated that the Town provides about $75,000.  Mr. Humphreys explained that the Town provides about 75% of the cash but about 40% of the overall budget. 

Council Member Wiggins ascertained that the Commission representatives would stay for the Visitors Bureau's presentation later in the meeting.  She said she wanted to better understand the interaction between the two, specifically the importance of the Visitors Bureau to the Commission's efforts. 

Mr. Humphreys noted that the Visitors Bureau had moved out of the Post Office/Court Building basement and had become much more accessible and welcoming.  He said the Commission and Bureau continue to cooperate with each other and with the Chapel Hill-Carrboro Chamber of Commerce, to the mutual benefit of all. 

Council Member Strom noted that the Town was actively seeking a pay and display method for parking.  The Council had also requested a staff recommendation for a media consultant for Parking Lots 2 and 5, he said, adding that the planned renovations at those lots would create a renaissance downtown.  Council Member Strom noted that the Council had approved a 2025 Transportation Plan that includes a fixed guideway intersection at Franklin and Columbia Streets.  He said that he was personally focused on creating that crossroads in the center of Chapel Hill. 

Council Member Harrison asked Mr. House to expand on the attempt to get businesses to analyze the appearance of their own storefronts.  Mr. House explained they had recently brought many of the property owners together for the first time.  These property owners realize that something needs to be done to attract quality merchants, he said, and they understand that competing with surrounding shopping areas means presenting a good image.  Mr. House pointed out that this was the first time that many of them have had to do this. 

Council Member Ward mentioned the Council's preliminary discussions on funding a July 4^th celebration this year.  Both Mr. House and Mr. Humphreys expressed support for the idea.  Mr. House invited Council members to come to the Commission's annual meeting on March 27, 2003.

Item 2 - Chapel Hill-Orange County Visitors Bureau

Visitors Bureau Chair Creston Woods reviewed the history of their 10-year partnership with the Town.  He outlined how the Bureau had grown and was now funded by a 15% grant from the Town's Hotel Occupancy tax receipts.  Mr. Woods said the Visitors Bureau had received $93,000 from the Town in 2001-2002.  He explained their mission to develop and coordinate services in Orange County and to implement marketing programs that enhance the economic activity and quality of life in the community.  Mr. Woods listed the Bureau's main purposes:

· Work with partners to achieve a coordinate marketing program.

· Serve as a leader in developing strategies for providing quality visitor services.

· Identify unmet needs of visitors and develop ways to meet those needs.

· Encourage longer stays, increased visitor spending, and repeat visitors.

· Position the area as a desirable meeting or travel destination. 

He then listed the benefits to the Town of having a Visitors Bureau:

· Brings new dollars to our community.

· More jobs for our people.

· More income for our businesses.

· More tax revenue for local government thereby reducing the burden on citizens.

Executive Director Joe Blake noted that the Bureau had adapted programs and services to prevailing market conditions as well as the desires and needs of the visitor industry businesses.  This includes everything from accommodations and restaurants to the Chapel Hill Museum and the Botanical Garden, he said.  Mr. Blake reported that the Visitors Bureau's website had experienced phenomenal growth, with more than 20,000 unique visitors per month.

Mr. Blake noted that summers and winters were slow periods.  "Wonderful, Whimsical Winter" took place for the fourth year in 2002, he said, and there had been a 15% growth in hotel occupancy during the month of December.  Mr. Blake added that "Great Summer Getaways" had taken place for the second time in 2002, and the Bureau had produced a visitor’s guide and map, a brochure, a calendar of events, and a meeting and event-planning guide.  Mr. Blake said they deliver brochures to more than 60 sites throughout the County each month.

Mr. Blake explained that the Bureau works to attract small to medium size meetings and conferences with 450 or fewer attendees.  They try to get positive media exposure, he said, and they hold popular classroom hospitality programs and run an annual bus tour.  Mr. Blake pointed out that $107.36 million had been spent in domestic travel in Orange County in 2001.  He reported that travel expenses were down less than 1% from 2000 even though travel had come to a virtual standstill for 2-1/2 months following the September 11, 2001 tragedy.  Mr. Blake attributed the Bureau's success during that period to letting people know that Chapel Hill is a great drive destination.

Mr. Blake reported that expenditures were $8.77 million in local and State tax revenues, which accounted for a tax savings of $74 for each County resident.  Because of the events of September 11, 2001, hotel occupancy receipts where down 11% for the first six months of fiscal 2002, he said, adding that they were down by only 7% by the end of the fiscal year.  Mr. Blake pointed out that this was just about what the Bureau had predicted last year.

Mr. Blake pointed out that the Visitors Bureau had not cut advertising and marketing when reducing their budget.  He explained that they had stretched their funds through alliances with the N.C. Association of Visitors Bureaus, the N.C. Division of Tourism, Film, and Sports Development, the Chapel Hill-Carrboro Chamber of Commerce, the Alliance for Historic Hillsborough, the Downtown Commission, and the UNC Visitors Center.

Mr. Woods then gave an update on the Visitor’s Center, which opened to the public on October 9, 2002, in the storefront at 501 East Franklin Street.  In the five months since its opening, he said, the new Visitor's Center had served about 900 visitors.  Mr. Woods thanked the Council for its past support and asked them to continue the partnership with a 15% grant from the 2003-2004 Hotel Occupancy tax. 

Council Member Strom asked what percentage of the overall budget the Town's $93,000 contribution constitutes.  Mr. Blake replied that it made up 17-20% of the total budget.  Council Member Strom inquired about other sources.  Mr. Blake explained that the main additional source of funding was the Orange County “bed” tax.  Council Member Strom determined that Carrboro does not make a direct contribution.

Council Member Harrison clarified that the total tax was 6%, consisting of a 3% Orange County bed tax and a 3% Chapel Hill Hotel Occupancy tax. 

Council Member Bateman asked if the Bureau had explored her suggestion last year regarding working with visitors to UNC Hospitals.  Mr. Blake replied that the Hospital and the University were among the Bureau's 60 distribution sites and they give a huge portion of their publications to Patient Services.  He added that the Hospital had contracted with a private company to do some of these services.  Council Member Bateman urged him to do more with the Hospital. 

Council Member Wiggins determined that the Bureau distributes publications to the University’s Morehead Center.  Mr. Blake pointed out that the Bureau's visitors guide and map are among the University's primary pieces.

Mayor Foy, referring to the year-end totals in the annual report, noted that hotel occupancy had gone down every year since 1977.  He remarked that the hotel occupancy receipts had been relatively flat since then and asked why that was.  Mr. Woods replied that it was a function of supply and demand and the decline had occurred across the country.  The Chapel Hill area had been able to compensate because the average daily rate had continued to go up marginally to offset the decline in occupancy, he said.  Mr. Woods pointed out that 2002-2003 had been the lowest and that the Bureau was hoping to ratchet up from there.  Both Mr. Blake and Mr. Woods explained that there had been excess demand in 1997 from Research Triangle Park, but the increase in hotel units throughout Durham County was now filling much of that demand. 

Mayor pro tem Evans noted that three hotels built since 1997 have Chapel Hill addresses but do not pay Chapel Hill-Orange County occupancy tax.

Item 3 - Orange Community Housing and Land Trust

Chair Wayne Kunce introduced members of the Board and explained that Orange Community Housing and Land Trust (OCHLT) was in the midst of redefining its mission and its guiding principles.  Six of the 18-member Board were Land Trust homeowners or future homeowners, he said, adding that all but two of them had been new since June 2002.  Mr. Kunce noted that the Council had been given the Board's current work plan.  He mentioned several projects that had been planned or were underway, noting that OCHLT had recently had their first resale of a Land Trust property.  Mr. Kunce referred to the operating budget and highlighted the Board's request for an increase in funding to $100,000, noting their projected income and expenses for the next three years.

Mr. Kunce pointed out that the Board had tried to minimize their request for local funding.  He said that doing so requires OCHLT to earn substantial income from development fees and to diversify their sources of funding.  Therefore, Mr. Kunce said, the projected budgets include modest amounts for operational funding from HOME funds, a source that OCHLT had not used in the past.  He pointed out that OCHLT had not requested an increase in funding from the Town last year, even though local governments have always been its chief source of funding.  He noted the danger of relying on development fees and the importance of ensuring the long-term viability of the Land Trust.  Mr. Kunce stated that the Board would have to diversify its funding through sources such as HOME funds and fundraising.  He thanked Council members for their efforts to provide affordable housing, particularly for the requirement that developers provide 15% affordable housing.

Council Member Ward asked if the resale of Land Trust property had been a positive experience.  Mr. Kunce replied that the first resale had taken longer than expected.  OCHLT Executive Director Robert Dowling added that the selling price of that house had been based on a formula designed to withhold appreciation.  The price had come out on the high side, he said, so OCHLT had put $7,000 of its own money in as a second mortgage, which brought the buying price down to $99,000.  Mr. Dowling remarked that the Land Trust requires a discount to the market value and that OCHLT was learning how big that discount needs to be.  Council Member Ward requested that the process be written out so that all can understand the expectations.

Mayor pro tem Evans pointed out the difference between funding from Chapel Hill and Orange County had grown from $250 to $10,000 since 1999.  She suggested it ought to be equal.  Mayor pro tem Evans wondered if the Town should anticipate higher operating costs for the Land Trust, to compensate for the additional $7,000 and the real estate transaction costs, and asked if this had been included in the budget.  Mr. Dowling replied that OCHLT was learning as they go along.  They need to build the transaction costs into the transaction itself, he said, explaining that OCHLT was trying to recoup costs by increasing the cost of the house.

Council Member Bateman pointed out that there had been no requests from Orange County to partner in any of these projects.  She said past thinking had been that the one who generates the project should support the staff. 

Mayor pro tem Evans commented that the County might be more interested in affordable housing if they had to pay more toward it.

Council Member Strom described the Board as having been especially valuable to the Council during Special Use Permit (SUP) hearings.  He asked if they might use some of the Revolving Acquisition Loan Fund to respond to market opportunities and keep some houses affordable over the long term.  Mr. Dowling replied that it was part of their plan to work with the private sector, to consider new developments, and to recapture houses and make use of the Town's money.

Council Member Strom noted that it made sense to subsidize a house if the subsidy is less than the cost of building a new project. In principle, he said, it might even be a more valuable contribution to diverse housing.  Council Member Strom inquired about the Chapel Ridge approval, asking if OCHLT had anything to report on that.  Mr. Dowling replied that he had planned a meeting with the local nonprofits who would supply Section 8 clients for those 24 units.  Council Member Strom asked Mr. Dowling to send the Council a letter regarding that, as the information would be very valuable to have with respect to another proposal that will be coming up shortly for the Council’s consideration.

Council Member Wiggins pointed out that the Council was in the habit of asking OCHLT to provide information, so whoever will be responsible for those units should write the letter.  Council Member Wiggins described OCHLT's request for funds as modest, given the amount of work that the Council passes on to them.  She asked how they had arrived at the amounts they were asking for from the different funding sources.  Mr. Dowling explained that he had tried to make modest requests because the Land Trust will be part of Orange County forever.  It has to be sustainable, he said, but added that he understood the Town's budgetary pressures and did not want to ask for more than was needed.  Mr. Dowling pointed out that relying on development fees can be difficult and that he had once had to ask for money in the middle of the fiscal year.  He expressed confidence that his request would provide enough revenue to get through the next three years.

Mr. Kunce noted that if OCHLT quickly doubles or triples the number of houses, they might need to ask for funding for additional staffing and more rental space. 

Council Member Wiggins explained that operating funds become eligible for HOME grants only if they are directly tied to the project that was funded.  Mr. Dowling pointed out that, by definition, any money that OCHLT uses for projects would be forever involved in those projects.

Council Member Harrison asked why Carrboro had had so few affordable housing opportunities until now.  Mr. Dowling replied that the Council's policy had been clear for several years.  Carrboro had talked about asking for 15%, he said, but had not been clear in their town policy. 

Council Member Harrison asked for a definition of "Land Trust administration."  Mr. Dowling explained it was a functional model whereby OCHLT gets involved in every aspect of the homeowner's life, from their tax assessment, to their bank, to the attorney and title insurance, because it is so new that they have problems and questions.  It happens with every homeowner, he said, and OCHLT is the organization that clears that up.  Mr. Dowling added that they also get involved with collecting fees, with homeowners' association issues, and with developers.  The administration role redefines itself with each new project, he said. 

Mayor Foy remarked on the fine line in OCHLT between implementation and advocacy, but encouraged them to impress upon Orange County, Hillsborough and Carrboro the importance of having a policy of some sort in place.  He noted that Chapel Hill was the least likely of all three to grow.  To the extent that this is a problem that all have in common, Mayor Foy said, the others can benefit from Chapel Hill's experience.  He expressed hope that OCHLT would help the Town move that idea along. 

Council Member Bateman inquired about what kinds of models there were for charging the other governments.  Council Member Strom replied that the paradigm could not be changed but that it seemed equitable to have one fee come through the County.  Mayor pro tem Evans agreed, commenting that those who have done the most toward affordable housing might also have paid the most. 

Council Member Kleinschmidt stated that the present model could not be sustained 15 years from now.  Carrboro, by itself, would not be able to pick up the difference when all the activity shifts to them, he said. 

Council Member Strom pointed out that Chapel Hill would not have been able to do what it was doing without the vision and support from Orange County.  He suggested that this might be a topic for discussion at the upcoming Assembly of Governments meeting.

Mayor Foy said all parties should see this as a warning that the three-year model is not sustainable and that everyone needs to figure out how to proceed with more precision. 

Council Member Wiggins remarked on the difficult task of trying to sell one house in the middle of a neighborhood in which people are not eager to own a home.  She asked if OCHLT had discussed renovating and marketing an entire block.  Mr. Dowling replied that they were attempting to do that in cooperation with EmPOWERment, Inc.  He agreed that it would be easier to operate that way, but pointed out that owners are not always willing to sell.

Item 4 - Chapel Hill Public Arts Commission

Commission Co-Chair Rene Piechocki reviewed the Commission's background and its mission to enhance and enliven the community through art in public places.  She explained how the Commission had obtained feedback and refined its goals for the next five years.  Ms. Piechocki said that Public Arts Commission programs create a platform for dialogue and exploration throughout the community.  She noted that these programs have included exhibitions at the Library and Town Hall, an NAACP reception, a Chapel Hill employee exhibition, and an exhibit to commemorate the September 11, 2001 tragedy.     

Ms. Piechocki also discussed the Commission's Performing Arts program, noting that it had included 20 individual performers this year.  She outlined plans for an "Arts 'Round Town" event and described "Sculpture Visions" as the Commissions premier program for installing temporary public artwork throughout Town.  Ms. Piechocki attributed the success of the Percent for Art program to the time and dedication of the Public Arts Commission and Town staff as well as the guidance and support of the Council. 

Ms. Piechocki discussed new projects at the Hargraves Center and the Interfaith Council shelter.  She said Chapel Hill had been continuously sited by the North Carolina Arts Council as a model public art town within the State.  Ms. Piechocki discussed the "Artist-in-Residence" program, pointing out that it was helping to develop the next generation of artists and had received much positive feedback from parents and teachers.  She said Commission members were creating a website and were developing partnerships with advisory boards, civic organizations, and community groups.   

Commission Treasurer Janet Kagan explained that the Commission had received $7,000 from the Town each year from 1998 to 2000.  They had stretched every one of those dollars to extend the range of venues and opportunities for public art, she said.  Ms. Kagan stated that the budget had been increased to $30,000 in fiscal year 2001-2002 and the Commission had expanded programs and introduced new ones.  She noted that the Town had enacted the "One Percent for Art" ordinance last year, and the Town's first commission under this program had been placed at the new fire station.  Ms. Kagan pointed out that Commission volunteers had contributed more than 3,000 hours.

Ms. Kagan explained that the Commission was requesting $69,750 for fiscal year 2003-2004.  She said general expenses of $24,050 includes money for conservation and maintenance of the Town's art collection, postage, copying and office supplies, design of the website, and other charges incurred in the performance of administrative duties.  Ms. Kagan noted that the Town was not the Commission's only source of financial support; they expect to receive $1,200 in application and commission fees, as well as $2,500 in individual support, and $7,200 to $28,700 in outside grants, which had been submitted for consideration.  She said the Commission also hoped to increase its level of grant funding from local, county, State and federal sources, but this is a “catch 22” because some funding sources will not consider giving support until the Commission has demonstrated a three-year history of managing an annual budget of more than $50,000.

Council Member Wiggins determined that Ms. Piechocki would be leaving North Carolina in May and that Karen Slotta would move to Italy as soon as the Commission replaces her.  Ms. Piechocki pointed out that Andrew Ross would continue as Co-Chair and Janet Kagan would replace her until elections are held in July. 

Mayor pro tem Evans suggested that all of the Town's websites be connected with each other.  Ms. Piechocki replied that the Commission does plan to link with the other sites.  Mayor pro tem Evans remarked that doing so might help reduce the cost of some events.  Ms. Piechocki agreed, adding that they had been emailing their newsletter and eliminating postage costs. 

Council Member Harrison commented that Town art exhibitions were fun to attend and recommended that more people do so. 

Council Member Kleinschmidt praised the Percent for Art program, pointing out the extra work that it had put on the Commission.  He determined that Commission guidelines and policies had been given to the staff and the Council would soon receive copies for review.  Council Member Kleinschmidt underscored the need to have the full picture of how the Commission's work will integrate with other projects.  Ms. Piechocki noted that Commission members would present that information at an upcoming Council meeting. 

Council Member Strom praised Commission members for their work, describing it is an example of how money is necessary to turn visions into reality.  He praised Commission members for what they had done for the community.  Council Member Strom commented that the Triangle Transit Authority had instituted a model for station art that was very similar to that in Chapel Hill.  He expressed support for the Commission's budget proposal and for providing the requested level of funding in this budget cycle.

Mayor Foy noted the economic impact that the arts have on the community.  He said that knowing about the required three-year track record for other funding was useful to Council members in determining the level of support that they need to provide and sustain.

Council Member Bateman determined total income for 2002-2003 was projected at $50,000.  Ms. Kagan pointed out, however, that the Commission was waiting for its other funding sources own budgets to be approved.

Item 5 - Million Solar Roofs Committee

Tom Woods explained that the proposed budget had been approved last year but the funds had not been released because of the Town's financial concerns.  He requested $3,000 to purchase materials to install a water heating system at the Community Center.  Mr. Woods described the proposed system, which would become part of the Committee's tour and would publicly illustrate how the system works.  He pointed out that the $3,000 would be recouped in gas savings over a period of seven to ten years.  Mr. Woods asked the Council to release those funds, which would supplement donations and volunteer installation labor from Committee members.

Mayor pro tem Evans asked if water tanks and pumps would be enclosed.  Mr. Woods replied that they would be contained in a storage room where the present water heaters are located.  Mr. Horton suggested that the Council instruct him to bring back a recommendation at the March 24 meeting if they wish to proceed with this project.  He said there probably was adequate funding for the project. 

COUNCIL MEMBERS AGREED BY CONSENSUS TO HAVE THE MANAGER BRING BACK A REPORT AND RECOMMENDATION REGARDING THE MILLION SOLAR ROOF'S COMMITTEE'S REQUEST FOR FUNDS. 

The meeting adjourned at 7:58 p.m.