SUMMARY MINUTES OF A WORK SESSON
OF THE CHAPEL HILL TOWN COUNCIL
WEDNESDAY, APRIL 6, 2005 AT 4:25 P.M.
Mayor Kevin Foy called the meeting to order at 4:25 p.m.
Council members present were Sally Greene, Ed Harrison, Cam Hill, Mark Kleinschmidt, Bill Strom, Dorothy Verkerk, Jim Ward and Edith Wiggins.
Staff members present were Town Manager Cal Horton, Deputy Town Manager Florentine Miller, Assistant Town Manager Bruce Heflin, Town Attorney Ralph Karpinos, Town Information Officer Catherine Lazorko, Parks and Recreation Director Kathryn Spatz, Police Chief Gregg Jarvies, Finance Director Kay Johnson, Transportation Director Mary Lou Kuschatka, Housing Director Tina Vaughn, Assistant Director of Parks and Recreation Bill Webster, Library Director Kathy Thompson, Information Technology Director Bob Avery, Engineering Director George Small, Public Works Director Bill Letteri, Fire Chief Dan Jones, Inspections Director Lance Norris, Human Resources Director Pam Eastwood, Planning Director Roger Waldon, Assistant Finance Director Jeannie Erwin, and Town Clerk Sabrina Oliver.
Item 1 – Work Session on the 2005-2006 Budget
Mayor Foy stated he asked that the material distributed to the Budget Review Advisory Committee be provided to the Council so that they would have something to work from. He asked the Manager if he had anything in particular to present at this time. Mr. Horton responded he did not, noting the Council had scheduled this time for discussion as it wished and he and staff would provide assistance as needed.
Mayor Foy suggested that they proceed by reviewing the materials from the Budget Review Advisory Committee, but that any member of the Council should bring forward any item they wanted to discuss. He said what they had before them now was the General Fund, review and cost estimates for next year in base categories, the base budget, and some priority options. Mayor Foy said also provided was the preliminary Capital Improvements Program.
Mayor Foy said he believed it would be useful for the Council and the staff to proceed by asking questions, gathering information, and having an exchange. He said the Manager had arranged for senior staff to be present today in case the Council needed help with clarification, but did not think it would be useful nor did the Manager expect that any decisions would be made today. Mr. Horton responded that he hoped that no decisions would be made today since he would not have had an opportunity to present recommendations to them.
Council Member Strom said regarding the priority option budget, what did the $2,945,000 translate into in terms of a penny’s increase on the tax rate. Finance Director Kay Johnson responded that amount taken with the base budget comes to a 5.4 cent increase on the tax rate.
Council Member Strom said we had received extra funds due to the overwhelming success of Chapel Hill Transit, of which we were all incredibly proud of this year. He asked if that additional contribution was already factored in. Ms. Johnson noted that the Transportation Budget was shown as Attachment 2 in the budget document from the March 23 meeting. She said that the place where you see the effect of the budget amendment that we added the Transportation Fund to allow extra money to go to Reserve was shown in the base budget of the Transportation budget, and it was shown as an allocation to reserve Chapel Hill’s portion of approximately $283,000. Council Member Strom said then it was shifted into the General Fund already. Mr. Horton replied that money was already in these figures, and in fact it was that money that had made it possible to bring the Council a preliminary Transportation report that did not require a tax rate increase.
Mayor Foy asked if the Council had already taken action on that. Mr. Horton said yes, that it had been presented to the Public Transit Committee for its consideration, and they had endorsed the numbers. Mayor Foy said that affected the Transportation tax rate, which was 4.9 cents after evaluation, by keeping it the same.
Council Member Strom asked if we had made an assumption of any State increase in fire protection contributions. Mr. Horton said as of now we assume we would continue to receive the amount received this year, with no assumption of an increase. Council Member Strom asked when the Manager would feel comfortable adjusting that figure. Mr. Horton replied after the State budget was approved, which may occur before or after July 1. Council Member Strom said that meant that it would not be a factor. Mr. Horton responded it could be, noting that it appeared the Legislature was working more smoothly now than in prior years and it was possible there would be a budget approved prior to July 1 in which case it could be taken into account.
Mayor Foy asked did we have an idea of how much it might be. Mr. Horton replied it could be a 25 percent increase, noting that now the contribution was $800,000 so it could increase by as much as $200,000.
Council Member Strom asked if we had received the final assessment figures from the tax assessor, and would that number change. Ms. Johnson responded that the figures were expected the latter part of April, noting that the estimated numbers had remained steady over the past two years. She said there may be a change, but she believed it was unlikely. Council Member Strom asked did she find it likely that there would be a change. Ms. Johnson replied she did not find it likely that their estimate would change based on the numbers they expected to receive the end of April.
Council Member Strom asked if the annexation on the Council’s agenda for next year included in these numbers. Ms. Johnson said the annexation was shown in the priority additions, and was not shown in the base budget as both a cost and revenue. Council Member Strom said his understanding was that in the priority options, a fund balance of 11.4 percent was recommended. Ms. Johnson responded that was what the fund balance would be taken to under these assumptions. Council Member Strom said his calculation was that a 1 percent shift in fund balance equaled about $470,000. Ms. Johnson responded it was a little over $470,000.
Council Member Strom asked what was the source of the $280,000 proposed for the Town Hall HVAC system in the priority options in the Capital Improvements Program (CIP). He asked if it came from the Energy bond or from the General Fund. Assistant Town Manager Bruce Heflin responded the $280,000 came from a CIP contribution, with an additional amount coming from the Energy bond for the energy control system previously discussed. Council Member Strom asked what was the source of the funds coming from the CIP. Mr. Horton responded it came from the General Fund. Council Member Strom reasoned, then, that by delaying that $280,000 expenditure we would save not only $280,000 in the General Fund but the Energy bond money was well. Mr. Horton responded that was correct.
Council Member Strom said we have a reserve of $204,000 for event clean-up. Mr. Horton replied that was correct, adding that they would not have the final figures for that for another week. Council Member Strom said we also don’t have a firm figure on what the UNC Chancellor proposes to contribute. Mr. Horton responded that was true, noting it would be more than a week before we had that information. Council Member Strom said should they assume the $204,000 was already spent? Mr. Horton said that was the assumption he was making, and that any recovery we would receive would be from the Chancellor agreeing to reimburse some of the expense.
Mayor Foy asked where that $204,000 had come from. Mr. Horton replied from savings accumulated during the current year. Mayor Foy asked if we did get a significant contribution from the University, how that would affect the budget next year. He guessed we would know a figure by July 1, but asked would it go to replenish these funds. Mr. Horton said assuming the University was generous in its contribution, that contribution could be used to offset costs in next year’s budget. He said that would be “one time” money.
Council Member Strom asked for more information on the new hire to operate the jet-vac machine and why we need it? Engineering Director George Small said the equipment was used to upgrade our routine maintenance of stormdrains and catchbasins. He said it was their plan to upgrade that maintenance in an attempt to avoid periodic flooding from clogged areas.
Council Member Strom said the contribution coming from that Stormwater Utility Fund was based on some demonstrated need or work performed. He said if we trained an employee to operate that machine rather than making a new hire, would that reduce the amount of money we would receive from the Stormwater Utility Fund. Mr. Horton responded it would reduce the expense to the General Fund but it would not reduce the expense ultimately charged to the Stormwater Utility Fund. Council Member Strom asked the Manager if he would consider shifting an employee rather than hiring a new employee. Mr. Horton said they were always glad to consider such an option, but did not have an answer at this time.
Council Member Strom said considering that some significant changes may be made to the Wallace Parking Deck, was there a way to assess the expenditure for parking deck repairs to see if some of that maintenance could be deferred. Mr. Horton stated that several years ago he had asked Mr. Small to conduct a review of the parking deck and to assist in developing a maintenance schedule for it. He said Mr. Small as well as Public Works Director Bill Letteri and Internal Services Superintendent Bill Terry were all present and could comment on that.
Mr. Small said that there had been some moisture problems associated with the Wallace Deck, and reminded the Council that a membrane was not included in the upper surface of the deck which saved the Town about $50,000 10 years ago but was costing us now. He said we had tried some interim measures to stop the leakage which we must stop in order to prevent structural damage over time. Mr. Small said the conclusion they had come to after trying “stop gap” measures was that a regular maintenance cycle was necessary. He said any cost savings we would receive from delaying maintenance would not be significant and he would not recommend it.
Mr. Letteri said the funds were used not only for maintaining the cleanliness of the Deck, but for its structural integrity as well. He said it was important to maintain the Deck now in order to avoid much higher capital expenditures in the future.
Council Member Strom commented that he had asked in a previous meeting that we consider setting the out-of-County user fee for the Library at a level that would generate meaningful revenue, but the Library Board had not responded. He said we should set the fee at a rate that more truly reflected the cost of providing services to out-of-County users. Mr. Horton said the Library Board would receive and comment on recommendations from the Library Director as to fees as part of the budget preparation process. He said not only would the Council receive a recommendation from the Manager, but would receive comments from the Library Board as well.
Council Member Verkerk asked what was the present fee for out-of-County users? Library Director Kathy Thompson responded it was $50.00 for an annual out-of-County family library card.
Mayor Foy wondered if there was a way to establish the average cost to serve a patron, including overhead, maintenance, the CIP, and anything else. He said if that was $500 the Council needed to know that, not that we would want to change that. Ms. Thompson said that could be figured and she would provide that to the Council.
Council Member Hill asked how many out-of-County cards were sold each year? Ms. Thompson said between 300 and 400. She added that because of a State law and the fact that the Town received funding from Orange County, Library cards to County residents must be free of charge.
Council Member Harrison said from his conversations with a member of the Library Board, that many people travel from out of the County to use the Library’s internet access, which was at no charge. He said he believed it was worth looking at charging a fee for that service. Ms. Thompson responded that the Town’s Internet Service Policy states that it supports the American Library Association’s various policies regarding service to patrons, and those policies state that they encourage charging no user fees for basic information services. She said that Internet service was perceived to be a basic service in the same way as if a patron came in and used a hard-cover encyclopedia.
Mr. Horton noted that even though we have increased the number of available computers for Internet use, we have had no decrease in the demand. Ms. Thompson said there were always people waiting to use a computer. She noted that even though it was perceived to be a basic service, the Council could choose to charge a user fee for that service. Ms. Thompson said that the Library does issue Computer Use Only Library Cards to out-of-County residents just to track how many people there are, and currently there are about 700 people who have out-of-County cards that are for computer use only.
Council Member Hill asked how much those computer use only cards cost. Ms. Thompson replied they were free.
Council Member Harrison asked could the Town charge for them. Ms. Thompson responded the Council could choose to do that if it wished.
Council Member Kleinschmidt said what triggered the use of the card, asking was it necessary to have it in order to queue up a computer. Ms. Thompson replied that was correct, that because of the automated system they have to have a bar code. She added it also helped them to track the demographics of the user.
Council Member Greene said she was curious if a person was homeless, would they be able to use the computers at the Library. She said in the past a person was required to give an address in order to qualify for a Library card. Council Member Greene said she liked the notion that use of the computers was a basic service and that it was available to persons who were homeless. She said she wanted the Council to think about that and what a resource it would be to homeless people.
Mayor pro tem Wiggins said the Manager had heard the Council’s sentiments regarding its desire to have as low a tax increase as possible, that we had a citizen’s group looking at the budget, and that we had to balance being responsible about the tax rate with some of our core values of the Council and our citizens. She said when the Manager begins to develop a recommended budget, how does he use all of that. Mayor pro tem Wiggins asked if he developed his recommendation based on what he believed was best for the organization and operation of the Town, and did he use some of his own values. She asked to what extent at this point in the process it would be helpful to him to hear the Council’s priorities. Mr. Horton said it would be helpful to have any information that the Council was able to provide about the priorities it would like to see in the budget. He said in the end the budget was intended to reflect the values of the community as determined by the Council.
Mr. Horton said we start the budget process by attempting to make sure that we have reflected the values that the Council has identified based on our experience in prior years and in the current year, and any feedback, data, or advice that the Council provided would be helpful.
Mayor pro tem Wiggins asked the Council to what extent did they want to have a discussion, if not now then something in the future, about what we would like to have the Manager focus on and what we consider to be important. She said her list included capital projects, personnel and work force issues and enhancements, service enhancements, customer satisfaction, technology and human services. Mayor pro tem Wiggins said all of these issues had importance and a value that goes with them. She wondered if the Council was going to wait for the Manager’s Recommended Budget, or do we desire to say that these are some of the areas we feel are important and want them enhanced or protected.
Mayor Foy said we needed to begin giving some shape to where we believe the budget should be heading. He stated we would have to be careful, noting the Council had not yet received the citizens’ committee report and the Manager’s preliminary budget was due May 9. Mayor Foy said we would continue to shape it as we moved forward.
Mayor Foy said the reason he had asked that the materials given to the Council be distributed was so it would provide a starting point for just such a discussion. He said when looking at the material, one of the big numbers was the transfer for capital improvements, at $290,000. Then, Mayor Foy said, when you go to priority options, it jumps to over a million dollars. He said that equated to over $1.2 million or more than 2 cents on the tax rate, and all of those dollars were discretionary.
Mayor Foy said if you looked at the Manager’s March 23 memorandum regarding capital improvements, it set out the specifics of that $1.2 million. He said he thought the Manager would be glad to hear from the Council about what was important or less important. Mayor Foy said the base budget showed a difference of about $300,000, but it did not include a lot. He said it would be helpful to the Council in making decisions to make sure that we understand why certain priorities were priorities, and what we would get for them.
Council Member Harrison said regarding the 11 or 12 projects listed under Contractual Obligations on page 3 and 4 of the March 23 memorandum, did the total equaled the $1.5 million shown in the table. Mr. Horton responded that there were contractual obligations on the first five on the list. He said the next four were Council-approved projects, and the remainder was identified needs. Mr. Horton said it would be easier to look at page 12 of the CIP document that showed the CIP base budget. He said the items in the shaded column were the ones for which we had contractual obligations.
Council Member Harrison asked what projects were the source of the $290,000 shown as the transfer. Mr. Horton responded it was just for the contractual obligations, the first five on the list.
Mayor Foy said the remainder of the list totaled $1.2 million. Mr. Horton said Table 1.b contained the list of items recommended for consideration.
Mr. Heflin stated that Table 1.b was the preliminary CIP which totaled $1.745 million. He said that included the $290,000 of obligations, as well as the almost $1.2 million of Council-approved items and items recommended for consideration. Mr. Heflin stated that the $1.745 million was the same figure listed in the current year budget as the projected amount for the 2005-2006 budget.
Mr. Heflin said the list included projects that were approved by the Council such as the Town’s share of the Traffic Signal System upgrade, cemetery beautification funds, and generators for the Town Hall and Police Department. He said it included other identified needs, some of which were regularly scheduled such as a multi-year building assessment that we conduct every five or so years and was the backbone of the large building renovation and maintenance projects we have had. Mr. Heflin said it also included replacement of systems such as telephone and HVAC systems in Town Hall, ongoing projects such as bike paths and paved areas, curb repairs to ADA compliance requirements, fire station maintenance projects, the Community Center capital repair projects, greenway construction, and others of that type.
Council Member Verkerk said with the personnel costs, we have the base salaries at a little over $28 million, and the potential cost of competitive pay adjustments was $750,000. She asked how that amount translated into percentages. Mr. Horton responded that at this point recommendations had not been completed and believed there would be some job series such as in the Police Department that would require a greater portion of these funds. He said he was not able to answer specifically at this time, but had placed that dollar figure in the budget based on available information. Mr. Horton said a firm recommendation would be offered in the next few weeks and would be provided in detail. He added that the $750,000 figure could move up or down somewhat.
Council Member Verkerk asked did that have anything to do with the incentives to retain police officers. Mr. Horton said that would be a separate amount for educational incentives, in an attempt to attract and retain officers with college and graduate education.
Council Member Verkerk said Mr. Horton had mentioned at yesterday’s meeting that he was close to the point where he was ready to turn our traffic signal system back over to the State if the State refused to assist the Town with the upgrade. She asked how that would impact the Council-approved projects if that happened, noting there was $90,000 allocated for that. Mr. Horton said last evening he stated that we could “see” that point but had not yet reached that point. He said he was worried that it was coming, and they had held conversations with DOT engineers and others to let them know that we are seeing that point arriving, and believe it would arrive unless they contribute money to the replacement of the traffic signal system. Mr. Horton said the $90,000 needed to stay in the budget to show our good faith and that we expect to be able to meet our end of the bargain so that we can push them to meet their end of the bargain.
Council Member Verkerk said regarding increasing the part-time recreational specialist to full time, asked what was driving the need for a full-time Special Events position. She noted a similar issue had come up last year regarding the Special Olympics Coordinator, and asked what was generating that need. Parks and Recreation Director Kathryn Spatz replied that regarding the Special Events position, that two years ago the Street Fair Review Committee had been formed and eventually made recommendations to the Council, noting that most were accepted. She said that one of the things that happened as a result was the Apple Chill Street Fair was doubled in size and now demands significantly more time.
Regarding the Special Olympics position, Ms. Spatz stated the program continued to grow and people do not “age out” of it. She said it was a total County program. Council Member Verkerk said if it was a County program, did the County contribute funds to it. Ms. Spatz responded that no one who participated in Special Olympics by definition was allowed to pay a fee. She said the County did contribute a fee towards parks and recreation services in the amount of approximately $86,000 in recognition of County users of Chapel Hill’s parks and recreation services and facilities.
Mr. Horton remarked that amount was for all recreation services, noting that Ms. Spatz had demonstrated year after year that it was not at the level it should be. Ms. Spatz commented that in previous years the Parks and Recreation Commission had presented a recommendation to the County Commissioners detailing the usage by County residents in our programs and facilities. She said percentage wise that usage was significantly higher than the $86,000 contributed by the County.
Council Member Verkerk said we were getting to a point with the Town’s budget that it was apparent that the Town provided wonderful festivals, parks, and a library. She said when we were able to do that, Chapel Hill residents were gracious about it since it benefited them as well. Council Member Verkerk said that now we were almost at a point where we must seriously ask ourselves to look at all of the services we provide and say that we could not afford a “free ride” any longer. She said we could no longer subsidize these programs. Council Member Verkerk said we needed to look at all of these issues within the budget, because we just could no longer afford not to.
Council Member Greene said she could not remember what was done about the part-time Special Olympics position, and asked what had happened to it. Ms. Spatz replied that the Council did not elect to increase the position to full time. Council Member Greene said then we were back to the same issue as last year. Ms. Spatz replied that was correct.
Mr. Horton said with the blessing of the Council the Mayor had sent a letter to the County Commissioners asking that they contribute $16,000 specifically earmarked for increasing the hours of the Special Olympics position. He said he had been contacted today by a representative of citizens who had worked on this issue in the past who indicated they would be contacting the County Commissioners to let them know they believed the County should be contributing more.
Mayor pro tem Wiggins said he hoped the Manager could bring back a recommended budget that protected Human Services funding, noting the difficulties agencies were experiencing. She said she believed one of the core values of the Council was that they recognized there were needs they could assist in meeting.
Mayor pro tem Wiggins said she had no words to express the value she placed on Town employees, the importance of work place environment. She said she hoped that the recommended budget would reflect how important the employees were to the organization, because they were the ones that deliver the services and the ones that were primarily responsible for the quality of life that our citizens say they enjoy in Chapel Hill. Mayor pro tem Wiggins said enhancement of their relationship with the Town was “extremely important,” noting that if the Council had to cut other areas of the budget the employees were the ones who would make it work. She added she was not speaking for other Council members, but was speaking only for herself.
Council Member Hill said regarding the Library, 700 out-of-County Computer Use Only Cards issued for free and lines at the computers appeared to be an opportunity lost. He commented that charging $50 for those cards as we do for other cards would bring in an additional $35,000 in revenue. Council Member Hill said that might also reduce the lines.
Council Member Hill said regarding Council Member Greene’s remarks regarding offering those services to the homeless for free, he said he agreed, but added that most homeless people use the Shelter’s address for their own. He said the purpose of his support of charging for this service was not to deprive people without an address from using the computers. Council Member Hill commented that if we had 300 or 400 out-of-County persons with a $50 library card, and 700 out-of-County persons with free Computer Use Only cards, then it appeared that we were offering free computer services with books “on the side.” He said that appeared to be an appropriate place to gain some revenue, noting that we spent money out of the County and this was an opportunity to bring some back in.
Council Member Hill said he had purchased health insurance for 33 years and had always “detested” it, noting that when he had first purchased employee health insurance it had cost him $19 per month. He said he sold his company and had to purchase his own health insurance and file his own claims, so he went from a no deductible policy that cost about $60 per month to a $1,000 to $1,500 deductible policy that cost $250 per month.
Council Member Hill said that since the Town had switched to United Health Care, none of his claims had been paid. He said that the reason he had been given was that the forms weren’t filled out right, or the zip code was wrong, or some other reason. He said he believed it was a “crock.” Council Member Hill said he would like for the Town to explore a higher deductible and a much lower premium and see how much savings that would provide. He said it was a different approach, but in his experience it would save money. Human Resources Director Pam Eastwood said they would look into that, adding as vendors provide bids they would be requested to show us what the differences would be in the plan if done the way Council Member Hill had suggested. She noted that one difficulty for employees would be the short time frame, noting that any change made now would go into effect in a few months.
Ms. Eastwood reminded the Council that the Personnel Ordinance stated that no changes would be made in the health insurance plan without first fully educating and informing the employees about what those changes would be. She said they were soliciting bids now for health insurance for next year as they do each year, so those questions could be asked now in order to get some “for instances” that we could report on at a later time.
Council Member Hill said if it was an idea with merit the Council could explore it at a later time, noting it did not have to happen now especially if it would violate the Personnel Ordinance. He said it had worked for him in the past and that was why he had suggested it. Mr. Horton commented he believed it would be seen as a “take away” by employees and we would need to evaluate the negative impacts of it as well. Council Member Hill responded that there were ways to mitigate any negative impact, noting that total coverage at three times the cost of the deductible was not a savings. He said he believed it was worth looking into.
Council Member Verkerk said that State employees were looking into totally “revamping” their insurance coverage, and asked if there was information that it would work to the employees benefit or not, and was that something we could look at as well. Ms. Eastwood said the difference between our health insurance and the State employees’ health insurance was that they were self-insured. Council Member Verkerk said she believed they were exploring switching to something else. Ms. Eastwood replied she had no information about that.
Mr. Horton said the change he had noticed was that the University had proposed that they create their own “group” that would be independent from the State employee group. He said he did not have the details, but that some consideration was being given to doing that. Mr. Horton said they would have to receive permission in order to do so.
Council Member Verkerk asked if we could pool with other municipalities to create a group. Ms. Eastwood responded that the League of Municipalities had a health insurance plan that smaller municipalities participated in, but did not know if the Town had ever done so or even considered it. Mr. Horton noted we had received pricing information from the League in the past, but we were a large enough group that we could provide insurance at a lower cost than the League. He said we do use the League for other types of insurance, for instance Casualty insurance and Liability insurance, which helps us out quite a bit, adding the market was different for those types of insurance.
Council Member Hill said asked how much the dues were to the League of Municipalities and what we actually received from them. He said he was “startled” to find that they could not give us accounting numbers that showed how each municipality “stacked up” to other communities. Council Member Hill asked if we could ask the League to supply that type of information. Mr. Horton responded that the League did supply certain reports along those lines, such as water and sewer fees, tax rates and tax collections. He said it may be more useful to provide the Council with an inventory of what the League did provide. Mr. Horton said the School of Government was the primary source for receiving benchmarking information about town or county services. To participate in that program, he said, cost about $10,000 the last time we did it. He said we would provide a list of what the League and the School of Governments provide.
Council Member Hill said when they approached the budget process this year, one of the things they were interested in was benchmarking with similar communities. He stated that was part of the original MAXIMUS proposal but was removed, adding many were concerned about that. Council Member Hill said many times when you received such information it was not helpful, but it was still nice to get it. He said finding out a way to obtain that information would be helpful.
Council Member Strom endorsed Mayor pro tem Wiggins’ comments regarding the Human Services budget. He said in his opinion the amount was “way too small” and he did not want to see any reductions.
Council Member Strom said it seemed that the staff had done an “absolutely tremendous job” in taking what was a horrible budget picture and making it dramatically better. He commented he knew it was a result of cutting corners and saving money, but they were still at about a 10 percent increase. Council Member Strom said he wanted to see a budget at below a 5 percent increase on the table for discussion. He stated there seemed to be enough money, and we had not yet received the recommendations from the Budget Review Advisory Committee. Council Member Strom said he believed they could reach that level based on the money they had to work with.
Council Member Strom stated that last year he had produced a menu of potential cuts in the CIP. He said for the next budget work session, he would like to see the staff go through the proposed Table 1.b CIP list and make some prioritization available to the Council. Council Member Strom said he believed it would be helpful for the Council to see how the staff would prioritize, for instance, the HVAC system in Town Hall versus the phone system. He stated it would be “less random” if some attention was given to doing that, since that was where some of the money was going to come from. Council Member Strom said he would prefer to see 50 percent of the CIP options cut out, and maybe as much as 75 percent.
Mayor Foy confirmed that Council Member Strom was asking the staff to provide a budget recommendation of below 5 percent. He asked if he was saying perhaps a 2-cent increase. Council Member Strom said he was looking at the 5.4 cents, and was looking at cutting that figure in half. Mayor Foy said, then, he was saying he wanted to see a tax increase that did not exceed 2.5 cents. Council Member Strom said that was correct. Mayor Foy said in terms of dollars that was around $1.2 million, and on the current base budget we were $300,000 short, so that would be an additional $900,000 to cover any other items the Council wanted to add not including whatever was cut for the current base budget. Council Member Strom said that was correct.
Mr. Horton noted that he believed his recommendation would require a tax increase higher than that. He said if the Council wished him to propose alternates that would be at that level he would do his best to do so, but based on what he knew at this time his recommendation would be above that level.
Council Member Strom reiterated that the Council had not yet received the recommendations from the Budget Review Advisory Committee, adding he believed they would be important and most likely from a different angle that they had seen before.
Council Member Strom said there was a $100,000 increase in the vehicle replacement fund, noting they had talked about changing their purchasing strategies to create a “greener” fleet. He noted that without that policy in place, he wondered about increasing the fleet expenditures. Mr. Horton responded that the Green Fleet policy would be presented to the Council at its April 25 meeting. Council Member Strom asked if Mr. Horton had a sense that the policy could be implemented in short order or would it take a while. Mr. Horton responded he believed it would be implementable in short order at least in part. To fully implement it would take many years, he said, because of the cost involved.
Council Member Strom said he was convinced that they need additional police presence in downtown Chapel Hill, noting that was a proposal to increase downtown patrol by four officers at a cost of $271,000. He commented that at the same time, at a Budget Review Advisory Committee meeting Mr. Horton had stated that Council policy was guiding police strategy and coverage. Council Member Strom said he did not need to know now, but he did want the staff to consider the possibility of shifting patrol to the downtown since it was a priority for the Council. Mr. Horton said it shift officers from neighborhoods or from community-based patrol. He asked if there was a suggestion for a particular area. Council Member Strom responded if he was given a choice it would be out from behind a deck, but he wanted to know what that would look like and understand what choices the Council would be making in order to achieve that.
Council Member Ward asked the Police Chief to give the Council some understanding of the implications of those four officers, adding he sees it in the “other options” category rather than in the “priority” options category in the materials. Council Member Ward asked why it did not fall into the higher priority category. Mr. Horton remarked it was because that was his option list, not the Police Chief’s, adding he was sure that it if was the Chief’s list it would be most definitely be in the base budget.
Police Chief Gregg Jarvies said officers in the downtown were their most critical need. He commented that he did believe that in the order of things their first priority was to fill the eight vacancies that currently existed. Chief Jarvies stated he did support the Manager’s recommendations regarding higher pay and increased incentives to fill those eight positions, and believed if he could maintain a full staff which had become increasingly difficult, then there would be more officers downtown. He said that would make it possible to maintain a full-time bike squad in the downtown, with four of those eight officers. Chief Jarvies said they were working diligently to fill vacancies and maintain a full staff. He said if they could get the eight vacancies filled they would be able to provide more downtown coverage both day and night.
Mayor Foy asked what the eight vacancies were they were seeking to fill. Chief Jarvies replied there were four in Patrol, two in Investigations, and two in Traffic.
Council Member Kleinschmidt asked if these were funded vacancies. Chief Jarvies responded that they were currently funded.
Council Member Ward said that the way the Manager’s recommendations were crafted now was that the incentives would give the Chief confidence that those positions would be successfully filled and remain filled. Mr. Horton responded that the Chief had not seen pay recommendations as yet because they were not fully developed, and could not comment on that. Chief Jarvies stated that he saw the educational incentive program discussed earlier as a small part of what needed to be a bigger process which of course would include base pay.
Council Member Ward said if those eight vacancies were filled and maintained, could he quantify what coverage the downtown would receive over and above what we currently have. Chief Jarvies responded it would mean four full-time officers dedicated to the downtown, meaning they would not rotate which could cause less coverage. He said it would give them one full-time additional officer in the daytime, so we would have two versus the one we now have, and then we would have about two to two and one-half positions available for night patrol. Chief Jarvies said the two officers working at night cover an area from Henderson Street to Merritt Mill Road, including Rosemary, Columbia and Franklin Streets. He said during the daytime there was only one officer to cover that distance.
Mayor Foy said he had understood that if the eight vacancies were filled, that would be what we would get not counting the four new patrol officers downtown. Chief Jarvies said that was correct, noting that was where the priorities were. He said that incident rates downtown had demonstrated that need, so it was critical to fill the two investigative positions and the two traffic positions. Chief Jarvies said that the other four would be committed to the downtown, adding he believed that future development would require even more coverage both for patrols downtown and for foot and bike patrols. Chief Jarvies said on an immediate basis if he could fill the vacancies, four of those eight vacancies would be dedicated to the downtown.
Council Member Ward said when the police force was increased, one would not suffice because four would be needed for the “24/7” coverage, referring to the four new positions for downtown patrol at a cost of $270,000. He said he understood that a group of officers were needed to equate to the level of one officer. Chief Jarvies replied if they were assigned to a rotating patrol, a basic police officer position on the road, then four officers provides you one at any given time. He said you could take four and assign them to a permanent unit, and provide coverage at a level of about three and one-half officers. Chief Jarvies said two would be assigned at night with one more assigned during the day, leaving one position to provide some flexibility for time off and other leave. Council Member Ward said he hoped a solution would be found for our current inability to maintain a full staff so that those positions could be provided in the downtown.
Council Member Ward said regarding fuel costs, he was curious if we were likely to see an increase beyond the $46,000 represented in the Manager’s memorandum. Ms. Johnson responded that the fuel increase listed represents a $1.80 a gallon for diesel and bio-diesel fuel and for kerosene. She was they were now looking at prices currently approaching that amount, which meant that if we believed it would go higher than that we may have to come back to the Council with an adjusted number.
Mr. Horton remarked that they were worried about higher fuel costs particularly for the transit system, noting that the market did not seem to have stabilized and believed that the cost would rise. He said he believed an adjustment would have to be made in the final budget, but he may be wrong. Council Member Ward said he believed the Manager should provide a little more buffer in his estimates.
Council Member Ward asked for a reminder of the status of their progress in funding the planning for the Library expansion. Mr. Heflin responded that a Library Expansion Committee had been formed, and he hoped they would begin work in the next month. He said the first steps would be orienting the Committee with the information, then hiring an architect and proceeding with the design.
Council Member Ward asked for explanation of the money to be spent and how far that would get them. Mr. Heflin said with the bonds sold this year, there as $.5 million. He said the plan was to sell the bonds in four issuances totaling $16.2 million. Mr. Heflin said they believe that the $.5 million would be adequate to begin the preliminary planning work with an architect and hope to get to the SUP stage, at which time they would have the next issuance which would allow them to complete the design work and get ready for construction they hoped in 2008.
Council Member Ward asked in what time frame the first stage regarding the $.5 million would be accomplished. Mr. Heflin responded in believed it would take about four to six months to select an architect and get them on board, and the preliminary design work and SUP work would taken a year beyond that. Council Member Ward said then the plan was to have an architect on board by the end of the year. Mr. Heflin responded that was their intention. Council Member Ward said then in 2006 we would be going through the design process and the SUP process. Mr. Heflin said that was correct, that they would refine the program, begin the preliminary design, and starting the permitting process. Council Member Ward confirmed that we had money in the current budget to do that. Mr. Heflin replied that was correct.
Council Member Ward said regarding the County cards for internet access and the out-of-County library cards, was there a way to implement a sliding scale to attempt to respond to the lower income users that may be taking advantage of those service and people whom he would like not to create a hurdle for. Ms. Thompson said they could explore methods to achieve that.
Council Member Ward asked if the Manager had a feel for what it would take to implement such a program. Mr. Horton responded that there was a method established in the Parks and Recreation Department, and they may be able to use a similar process for the Library.
Council Member Ward asked if the Library Board had a standard policy of recommending charging for certain services or not charging as the case may be. Ms. Thompson said libraries in general had a history of saying don’t charge, and believed our Library Board was supportive of that position. She said leveling the information for all citizens was what public libraries were supposed to do.
Council Member Ward said regarding the position for Apple Chill and in light of the present budget situation, it would be more prudent for the Council to do what we can with the position we have then to allow or encourage the wonderful program that we have to grow. He asked the Manager to elaborate on why it was a priority option. Mr. Horton noted that through his own observation of how the event had grown, the number of people who participate, and how much more activity it takes to coordinate and hold the event, he was convinced that it was necessary and had therefore put it in the priority category. He said when the event was the traditional one that we had all come to understand, we could do it in our sleep year after year. Mr. Horton stated it now brought in a more diverse group of participants, observers and citizens, and it was much more extensive. He said it covered a much larger ground area, we had an entirely different set of activities than before, and it was much more complex to put together. Mr. Horton stated he had been convinced that making that position a full-time position was a worthwhile expense.
Council Member Ward commented that one other issue that was not a big ticket item but he continued to chafe at was the Council’s decision to award itself with full-time health benefits for positions he believed were not full time. He asked the Council to reconsider its position and see that as a way to reduce the budget by that amount.
Council Member Kleinschmidt noted that Superintendent of Schools Neil Pedersen had presented his recommended budget last week that contained a request to the County Commissioners for more funding, and in that budget had listed the possibility of having to cut School Resource Officers due to budget constraints. He said the Town’s position in the past was that the schools should pay for Resource Officers. Council Member Kleinschmidt said that given the situation with the School Board and the County, would that remain our position or what would we be prepared to do. Mr. Horton said they had been in conversation with Dr. Pedersen regarding the possibility of making what he considered to be a minor adjustment in the contract so that the number of weeks of coverage that the Schools would pay for would be reduced. He said he hoped that they would agree to that rather than eliminating the program.
Chief Jarvies commented that they support the School Resource Officer program but did believe that the Schools should fund all of most of the coverage. He said what they had proposed and submitted to Dr. Pederson was a proposal that middle school officers would be funded and would work for all but eight weeks for the school system, those eight weeks being the summer break. Chief Jarvies said during those eight weeks the officers would return to full duty with the Police Department and we would pay those eight weeks of salary. Mr. Horton said he believed that was fair given the situation the Schools were in and the service that we provided. But if the School system decides that it cannot pay for any of those officers, Mr. Horton said, we would return those officers to normal duties within the Police Department and recommend elimination of those positions.
Council Member Kleinschmidt asked how many officers would that be, and would it only be officers at the middle schools. Chief Jarvies said the three middle school officers were the ones in question, with the two high school officers remaining at the high schools. Council Member Kleinschmidt asked how that would affect the Police staffing needs. Chief Jarvies said they would eliminate the three Resource Officer positions and absorb those three persons back into the force. He said it would have some impact on responses to those three schools when they need Police assistance.
Council Member Ward asked if the schools were now paying for a full 52 weeks, and the proposal made to Dr. Pederson was to eliminate the eight weeks during the summer break. Chief Jarvies stated that was correct.
Council Member Kleinschmidt asked what we would do with the three officers for those eight weeks. Chief Jarvies said they would place three officers downtown. Mr. Horton added that those weeks were popular vacation times, so those three officers would serve to relieve shortages during that time.
Council Member Kleinschmidt stated he wanted to be on the record as being against charging for Library internet usage. He said it would be an “enormous burden” on our citizens who visited the library with their laptops and used wireless access. Council Member Kleinschmidt said he believed the policy to provide free access was an important one. He said if the Manager brought back a proposal on that he wanted it noted that there were opposing views.
Council Member Kleinschmidt said other that than, he agreed with Council Member Verkerk that we should look at the budget with an eye towards the subsidies that we provide to out-of-towners. He commented that had reminded him about the annexation issue that occurred with the town next door [Carrboro] and how the certain residents had claimed to benefit in no way from their proximity to Chapel Hill or to Carrboro. Council Member Kleinschmidt stated that was “ludicrous,” that of course we subsidized them with services.
Council Member Greene asked for information about how much money we were not receiving from the federal government that we were not receiving this year or the past two years. She said it was important that our citizens understood that there was a relationship between our federal tax dollars and our local tax dollars. Council Member Greene noted that the Public Housing budget in particular was being significantly squeezed this year through a cut in federal funding. She commented that would be useful information to have.
Council Member Greene noted that Council Member Kleinschmidt had stated much of what she wanted to say regarding the library internet access charges. She noted that when she had mentioned free service for the homeless, such intended that to include not just the homeless but those who are jobless or having difficult paying rent. Council Member Greene said it was becoming even more important to be able to communicate electronically, adding it was no longer a luxury. She said that the National Library Association’s policy and the local policy was a sound one and we should support that.
Council Member Greene said it was an interesting question whether we should charge persons with, for instance, a Chatham County address when they use one of our computers. She said that may be something to consider in the same way that we charge out-of-County persons for a Library card. Council Member Greene said she did not really want to do that, and believed it should be available as a public service.
Mr. Horton noted that one of the basic theories behind free library service was that anyone should be able to enter the library and use the materials, not necessarily to check them out but to use them in the library. He said he believed the free use of the internet was a logical extension of that policy. Mr. Horton noted that most libraries he was aware of you could enter and read the materials without a library card, and in most libraries you were able to enter and use the internet without a library card as well. He stated that we had used the advice of issuing a number on cards as a way of tracking usage and our understanding of that. Mr. Horton noted he would bring options back to the Council, and they would have the opportunity to consider them.
Mayor Foy asked about the potential 5 percent increase in workers’ compensation insurance, noting it increases each year. Mr. Horton noted it had gone up every year that he had been in government service. Mayor Foy said it goes up significantly even when we don’t file claims, and ask why. Ms. Eastwood responded that the proposed 5 percent increase was “far different” than the 15 percent increase proposed two years ago. She said we had managed through setting up a program of case management, of active conversation with the League of Municipalities, and with working with our department heads we had brought our claims experience down. Ms. Eastwood said we were in a five-year window in terms of costs. She said the premiums were set by looking at the past five years, noting that even though we had been able to bring our number of claims down as well as dollars spent, we were still looking at that five-year window. Ms. Eastwood said as those “bad” years drop off and as we improve our experience and improved our reduction in number of cases and dollars spent, we should see a reduction in our expenditure. She reminded the Council that our annual increase used to run between 12 percent and 15 percent, and was now far less.
Mr. Horton noted that the medical costs would continue to rise, since that was a key cost involved in workers’ compensation charges. He said another key component was the salary replacement or income replacement costs. Mr. Horton said they would rise as well because salaries increase and over a period of time income replacement provisions increase as well. He noted that it was likely that those costs would continue to go up, but Ms. Eastwood and her staff, particularly Safety Officer Bob Finley, had done a good job in bringing those costs back in line.
Mayor Foy noted that a transit study was something they anticipated engaging in this year, and wondered where the additional money would come from that may be necessary for that. Mr. Horton replied it was their hope it would come from Carrboro and the University. He said the University in particular had indicated a strong interest in this study, and hoped that they would be able to contribute and would not hesitate to do so.
Mayor Foy questioned the capital equipment for information technology noted in the base budget. Ms. Johnson said they had a computer replacement program for laptop computers. She said in addition to that, they also make purchase of the servers. Ms. Johnson said it had been advantageous from a pricing standpoint not to finance them but to buy them at the time of year that they were needed. She said therefore they had not been able to package them.
Information Technology Director Bob Avery said it had been convenient to purchase computers as a “group buy” because once a year they could make a large purchase for desktop computers with a volume discount. He said for services, there were variations on what those servers were needed to do, for instance, whether it was serving a database, a web server, an email program, or just file storage. Mr. Avery said the size and utility needs for each was different, and we evaluated those when they were needed throughout the year and purchased them at that time. He said to try and do that once each year would not be a very economical process and would be difficult.
Mayor Foy said the vehicle replacement money in the base budget was an increase of $100,000, and asked for confirmation that was not the cost of the fund but the increase. Ms. Johnson said a schedule had been developed several years ago, and that this was the year a fire tower truck was to be purchased which accounted for the increase.
Fire Chief Dan Jones said this was the year that Tower 71, the ladder truck, was scheduled for replacement. He commented he believed it was the single most expensive piece of equipment the Town owned. Chief Jones stated that truck was purchased in 1992, and the normal replacement cycle for a truck of that type of truck was approximately 15 years. He noted that the amount of wear and tear that had been placed on it during the first several years had shortened its life. Chief Jones said it had become a “tremendous” maintenance problem, causing it to be out of service 30 to 40 percent of the time. He said when the consultant had studied the fleet replacement schedule several years ago, it had been determined that this year was the year for its replacement. Chief Jones noted that it was an expensive piece of equipment, with a replacement cost of approximately $800,000.
Mayor Foy asked if it would be possible to “smooth” that out by deferring something else in the Vehicle Replacement Fund, for example pushing something that was on a 36-month cycle to a 40-month cycle or something like that. He said his point was that fund was somewhere around one-half million dollars, and this would add $100,000 to that.
Council Member Strom asked what we would do with the current. Chief Jones responded that we would sell it, most likely to a smaller department that had limited use. He said it would require a substantial amount of money to refurbish it, but it would have much less demand placed on it.
Council Member Strom asked where the revenue would go when the current vehicle was sold. Ms. Johnson replied that the revenue would flow back into the Vehicle Replacement Fund to be made available for future purchases. Council Member Strom asked if Ms. Johnson had a “ball park” figure on what the revenue from the sale would be. Ms. Johnson said there was a schedule of what the planned purchases were and what the replacements were, but did not have that information at the moment.
Responding to the Mayor’s question regarding delaying some purchases in the Vehicle Replacement Fund, she was there were some items on cycles that could be considered for delay.
Mr. Horton stated that we would provide that information as part of a follow-up report, and we would provide additional information about whether or not it would be reasonable to make reductions in the vehicle replacement program. He commented that his concern was that we make sure that for any reduction we understand the effects of that, and we would do our best to work with the Council as they make decisions.
Mayor pro tem Wiggins asked for information on the status of the additional patrols in the Northside neighborhood, and whether or not the Council needed to give it more attention. She said a recent conversation with a resident had noted that some Northside residents were not satisfied with the police coverage, particularly at night. Mayor pro tem Wiggins requested an official report on what is taking place there, especially at night, and if we were seeing less or more incidents. She said it was important not to lose the momentum she thought we had in improving the safety and security of Northside.
Mayor pro tem Wiggins said she would hope that as a part of the budget process that the Manager was working with the Town Information Officer for a well-publicized plan for publicizing that when citizens get their tax bill what portion of it was for Chapel Hill. She said it was important for citizens to understand that whatever increases they receive were not totally from this Council’s actions. Mayor pro tem Wiggins said we should make it as similar and as easy to understand as possible, and that we do it repeatedly to get that message out continuously. She said she had read several articles in the newspaper regarding tax increases, and it appeared that citizens believed the Council had imposed them. Mayor pro tem Wiggins said she was not trying to shift scrutiny to any other governing board, but only wanted people to understand what portion of any increase was from Chapel Hill. Mr. Horton responded that the Town Information Officer was already working on information to be used for that purpose and in repeated fashion. He stated that material would be brought before the Council.
Mayor Foy noted the next budget work session was scheduled for April 27. He stated that the Council should consider whether it wanted to set an additional budget work session in May given that we would receive the Manager’s recommended budget and hold a public hearing in May. Mayor Foy said they were scheduled to adopt a budget the end of June.
Council Member Harrison commented that part of the tax rate increase the Council was likely to implement had to do with capital improvements, one of which was to prevent a roof was collapsing. He said he had attended the City of Durham’s budget work session recently where the Assistant Manager indicated they would carry forward $17 million in deferred maintenance. Council Member Harrison said it was not stated, but he believed it was to allow the City of Durham to not raise taxes. He said he did not want to celebrate raising Chapel Hill’s taxes, but it was better than allowing the roof to cave in. Council Member Harrison said it was our choice to do that and as the Manager was fond of saying, it was prudent to do so.
Council Member Ward said he would like a response on how we would maximize the life of the next tower truck we purchase. He said it appeared that we had overused our current truck because we had no adequate auxiliary equipment. Council Member Ward said he hoped that situation was taken care of and we could expect the full life from the next one purchased. Mr. Horton responded he would report back on that.
The meeting was adjourned at 6:10 p.m.