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HomeMy WebLinkAboutMinutes - 19950525 1 APPROVED 6/2695 MINUTES ORANGE COUNTY BOARD OF COMMISSIONERS BUDGET PRESENTATION AND PUBLIC HEARING ON THE SCHOOL IMPACT FEE MAY 25, 1995 The Orange County Board of Commissioners met in regular session on Thursday, May 25, 1995 at 7:30 p.m. in Superior Courtroom in Hillsborough, North Carolina. The purpose of the meeting was to hear a presentation from John Link on his recommended budget and to hold a public hearing on Public School Impact Fees. COUNTY COMMISSIONERS PRESENT: Chair Carey and Commissioners William L. Crowther, Alice M. Gordon, Stephen H. Halkiotis and Don Willhoit COUNTY ATTORNEY PRESENT: Geoffrey Gledhill STAFF PRESENT: County Manager John M. Link, Jr., Assistant County Managers Albert Kittrell and Rod Visser, and Clerk to the Board Beverly A. Blythe (other staff members are identified appropriately below) NOTE: All documents referred to in these minutes are in the permanent agenda file in the Clerk's Office. PRESENTATION OF THE MANAGER'S 1995-96 RECOMMENDED BUDGET John M. Link gave an overview of his recommended budget. The highlights are listed below: 1. General Fund Budget totals $71,871,924 2. An increase of $69 per pupil allocation for Education 3. Increase in Debt Service for School Construction totaling 2.8 million 4. A "hold the line" County budget with the County departments increase totaling just 1.5$ 5. Establishes a General Fund tax rate of 92.5 cents per $100 assessed valuation - a 4 cent tax increase 6. An interim increase in the CHCCS District tax rate by one cent from 15.4 cents to 16.4 cents to address school start-up costs John Link said that there are future challenges for efficiency, schools and human services and emphasized that no service reductions that directly or adversely impact citizens were made. The budget continues the trend to require tough decisions on service levels. The County Department Heads and the Budget Team worked collectively to "Hold-the-line". He thanked Sally Kost and her staff and the Department Heads for working together on this budget and also Angela Bowling for designing the cover of the budget document. QUESTIONS OR COMMENTS FROM T8E BOARD OF COUNTY COMMISSIONERS Commissioner Halkiotis feels that the student enrollment projections from the Department of Public Instruction in Raleigh are not correct. Commissioner Gordon agreed that they are probably too low. 2 Commissioner Willhoit asked what one cent on the tax rate would generate -- both the County and the Special District tax. PIIBLIC HEARINt3 - PIIBLIC SCHOOL IMPACT FEES Planning Director Marvin Collins presented for citizen comments a proposed increase in the public school impact fee from $750 to $1,500. He noted that the $1,500 fee is based on the calculation of the maximum allowable fees which the County can charge for public school capital needs. The maximum allowable fee, as verified in the updated Technical Report, was approximately $1,900 in both school districts. He explained how the maximum allowable fee was calculated and what variables were used as a basis for the calculation. He noted that in late summer or early fall a new Technical Report will be presented using the latest information they can get. This will include a sliding scale for fees based on different factors, like bedrooms, type of structure, cost of construction or square footage. In answer to a question from the audience, Mr. Collins said that the tax base does not factor into the calculation of impact fees except when giving credits. PIIBLIC COMMENTS NANCY SALMON spoke in support of the increase in public school impact fees. She asked that the Planning Department use representative data and values for all parameters in their calculations of the financial impact of new construction. She hopes that the research being done this summer will not only be used for establishing a basis for the sliding scale but to more accurately assess the true impact on schools of new construction in the Chapel Hill-Carrboro School District. DAVID C. HURLBERT spoke against the impact fee and for alternative financing methods such as bonds and other traditional means of funding schools. He feels there is a disparity of the impact of impact fees on a class of people attempting to achieve the American dream of owning a home. He said that a person buying a $75,000 house is paying a 10$ tax versus a person buying a $300,000 house paying a .5$ tax. He said that good public schools are a benefit to the entire community, County, State and to the nation as a whole so the community as a whole should bear these burdens. He does not feel that only new homeowners should be the ones paying for schools. He asked that the Board of County Commissioners do the right thing. He is in favor of good schools but feels that he should not have to pay a fee when he builds his house since he has lived here all of his life. KEN TOUW, Chair of the Chapel Hill-Carrboro School Board, spoke in support of the increase. His perspective is due to the fact that there are more students in each classroom and there is no room available for additional students. He noted that construction costs have increased considerably since the setting of the original impact fee. Also, the Town of Chapel Hill sees the impact fee as an important revenue source for funding new schools. The best they can hope for from developers is that they 3 will donate some land and then the developers may want a decrease in the impact fee. He said that at $1,500, a developer building 1,000 homes would contribute 1.5 million and from these 1,000 homes generate enough children for an elementary school. It is unfortunate that the average home uses more services than the tax on that home pays. It is only the economic tax base increase that helps the County keep up with the schools. He would favor a different fee structure for the two school districts. JOYCE PRESLAR, resident of Orange County for twelve years who works in a local daycare said she learned about the impact fee when she bought a mobile home for $3,000. She is in a lower income bracket and cannot afford the impact fee. She thinks that a sliding scale should be considered. She is willing to pay taxes but does not think an impact fee is equitable. There are a lot of rental units with children. She asked that the Board keep their perspective and consider those who are in the low income bracket. THOMAS PHILLIPS, resident of Chapel Hill for a short period of time said he moved from Batavia which is one hour west of Chicago. In eight years Batavia went from a small community to a suburb of Chicago. They built thousands of new homes in that area and the schools became overcrowded. They passed a bond issue every other year to build new schools. The taxes became so high that the people who originally lived in Batavia were forced to move. The result of losing a bond referendum was to impose an impact fee - one for operating expenses and one for infrastructure. The same arguments were heard there. The real test of fairness is to ask if the impact fee taxes original residents out of their homes. He does not believe that the impact fee is going to affect the affordability of new homes. He feels that the developer will reduce the price of land. He is in favor of this increase in the impact fee because he will know that in the future additional construction of new schools will not raise his property tax. STEPHEN B. MORIARTY said that the only reason he is against the impact fee is because he cannot afford it. He may have to default on a piece of property he purchased because he does not have the money to pay the impact fee to move his trailer onto the property. He feels that the fact that he only makes $17,000 a year should not keep him from buying a house or moving a trailer onto a piece of property. He would like to see a sliding scale. KEITH COOK spoke in favor of increasing the impact fee. He feels that something needs to be done for those individuals who don't make a lot of money - 60~ of the median income which would probably be no more than 10$ of the population. The impact fee should be for those individuals coming into the County who have not previously helped pay for schools. He favors a sliding scale and asked that the Board of County Commissioners help people who are not making a lot of money -- people who live in small houses or trailers. 4 NICK TENNYSON, Executive Vice President of Durham and Orange Counties Home Builders Association, read a prepared statement. In summary the Home Builders Association is opposed to school impact fees because they deny the fundamental truth that the public school system is an indivisible benefit of life in the community. By singling out one class of citizens -- new home buyers -- for additional expense, the County is inferring that new home buyers get a larger share of benefit from the school system than do other citizens. He listed in his letter several problematic areas with the impact fee. MATTHW E. BARYON spoke on behalf of Stop Overcrowding Schools (SOS). He said that they do support an increase in the impact fee to $1,500. He feels that increasing the impact fee will be a step in the right direction toward solving the schools' overcrowding problem by providing additional money to plan new schools. SOS believes that the housing survey that the County will conduct will show that the actual capital cost to the County to provide the capacity for the students due to new residential construction averages well over $9,000 per dwelling. SOS believes that the Impact Fee should be set at a reasonable and substantial proportion of the capital cost to provide the money for planning, engineering and constructing new schools. They support a sliding scale where the fee would be adjusted according to the size of the house. This addresses the concerns about affordable housing and places the burden on four and five bedroom homes which typically bring more students to the schools. He asked that the Board of County Commissioners support this increase. PETER MORCOMBE, parent of a child in Carrboro Elementary School, said that he is in favor of more money being spent in the classroom and more money spent for instruction. However, he feels there is no need to raise taxes -- but to just eliminate the waste. He noted that American public schools spend more than any other country and yet rank near the bottom in scholastic achievement. He stated that private schools get the job done with half the dollars per student. He feels that until some progress is made to close the gap, the Board of County Commissioners should not even think of raising the taxes. His written comments are in the permanent agenda file. He asked that the Board of County Commissioners reduce the size of government at the local level. He presented a chart which compared the number of administrators in the Chapel Hill-Carrboro City School District to private schools with the same student enrollment. He stated that the school budgets presented to the Board of County Commissioners hide 90$ of the expenditures in the continuation budget that gets rubber-stamped every year. He favors zero-based budgeting so that all programs are reviewed annually. DANIEL V. ESKENAZI stated he is in favor of an increase in the public school impact fee. He read a letter from Susan and Allan Spalt which is in the permanent agenda file. In summary, they support an increase in the impact fee. They feel that substantial increases in local revenue are needed to pay for the 5 impact of new rapid development on the Chapel Hill/Carrboro City School System and that an increased impact fee is an important part of the revenue mix. They support raising the fee to $1,500 and separating Chapel Hill/Carrboro and Orange County fees. They support the impact fee study which is being done at this time. ALAN BELCH talked about bets being made on how high the impact fee will be raised. He said that new schools are needed and there is no question that the County must pay for these new schools. What increases the need for schools is children and unless there is a head tax on every new child coming into either of the school systems, there is no fairness to what is really happening. He stated that a $1,500 impact fee will cost homebuyers $3,000 in payments. He believes the cost of housing will continue to rise while the real issue of creating a bigger business base will suffer. He said that it concerns many in the County that significantly inappropriate figures have been used by various citizens groups to justify a larger increase and the press and the public seem to buy the numbers without question. GLORIA FALEY, resident for seventeen years and a volunteer in the schools, supports the Board of County Commissioners ten-point plan. She supports the $1,500 impact fee and encourages implementing a sliding scale based on number of bedrooms per square footage which will insure the diversity and richness of the community. She said that the bulk of the homes being built and sold in Chapel Hill are not affordable housing but $150,000 plus. She supports building and maintaining a working team of the Chapel Hill Council, the Carrboro Board of Aldermen and the School Boards to insure that any land use plan includes the children's education and a plan that requires responsibility for existing and new residents of the schools and responsibility of the developers who will sell their homes because of the high quality of our schools. She feels that the roots of the American dream lie in a good public education. KEN SCOTT said he feels that $1,500 is a large figure. Orange County has 5,400 students now compared to twenty-five years ago when they had 5,000 students. KAREN BARROWS spoke in support of the impact fee. She feels it is good budget management and that developers will absorb some of the cost as well as citizens. She noted that borrowed money cost more. She supports a sliding scale. Education cost more money today as well as constructing new schools cost more today. EARL DAVIS is against the impact fee and against any more taxes in this County. He feels the County does not care about the low income population. MARY JO BATEMAN, parent of three children in the Chapel Hill- Carrboro schools, read a letter from Livy Ludington who supports the increase to $1,500 for the school impact fee. In summary, she said that the schools are severely overcrowded and action must be 6 taken to pay for new should be one of the the burden of paying move into the County because she does not She also submitted a follows: schools. She feels that quality education County's highest priorities. She feels that for new schools should be put on those who Ms. Bateman supports a sliding scale want to see anyone overburdened by this fee. petition with 119 signatures which reads as We, the undersigned support the following strategies for ensuring that, future residential growth is linked to responsible and timely expansion in school capacity. 1. The areas' school boards, school administrations, and elected officials must accept mutual responsibility for joint planning. 2. Higher revenues other funding sources must be 3. A school impact proposed developments. from impact fees are needed, and found . study should be required for 4. Concurrency should be considered as an effective planning tool. 5. Developers of sizable subdivisions could be required to donate land. 6. Residential growth must not be allowed to outpace and overwhelm our schools' capacity to provide high quality education. RON WEBER stated he has been building homes in Chapel Hill for ten years. The price of housing has increased drastically over the last two years because of lumber costs. Although the target of school impact fees is new residents, it is actually affecting everyone who builds a home. He feels the Board of County Commissioners need a broad-based plan. The current proposal is the easiest but not adequate or fair. He feels there must be a better way. HARVEY GOLDSTEIN, President of the Chapel Hill-Carrboro PTA, stated that the PTA fully supports an increase in the impact fee. They do not believe that $1,500 comes close to the average cost each additional housing unit imposes on school capital facilities, especially in the southern half of the County. Hopefully, the study being conducted will yield a more accurate estimate of these costs. They continue to support a sliding scale so the fee does not have an adverse impact on affordable housing in the County. He urged the Board of County Commissioners to vote to approve the proposed increase for the Chapel Hill-Carrboro portion of the County, even if the Orange County Schools do not support the increase. This is justified by the explosion of residential growth in the southern portion of the County and the strain it has placed on education. TERESA B. MCPHERSON-spoke against the proposed increase in the school impact fee. She feels it penalizes the people who have lived in the area all their life. She is a single head of household with two children and little money. She wants a good education for her children but she wants to be able to provide for 7 them a home. She asked that the impact fee be made fair to all residents in Orange County. DEBBIE WAHLEN supports the proposed increase and asked that the Board of County Commissioners approve $1,500. She presented a petition with 57 signatures which reads as follows: We, the undersigned, although unable to attend the public hearing on May 25, 1995, urge the Orange County Commissioners to: 1. increase the impact fee on new residential construction to $1,500 immediately; 2. carry out a survey this summer to establish representative student-generation rates for new residences; and 3. establish an appropriate sliding scale for impact fees as soon as possible thereafter, to incorporate local school construction standards and newly established student-generation rates. She feels it is not unfair to ask new residential growth to share the cost of the impact on the schools. She asked that the fee be increased to $1,500 for the Chapel Hill-Carrboro District. She presented an article which explained how Atlanta handles impact fees. The article says that the fees have been a major way for them to do things (like building infrastructure) that they couldn't have done otherwise. LEON MEYERS spoke against financing public education with an impact fee. He feels that public education is part of government and benefits the entire community and should be funded by the entire community. He urged the Board of County Commissioners to be honest and rational in their decision on impact fees. He asked that the Board take advantage of all the hard work done by the Planning Department and make the right decision. PATRICK MULKEY spoke against the impact fee as it is currently designed. He will remain against the impact fee until County spending is brought under control, including both school systems. He feels that increasing the impact fee is the easy way out, cutting the budget and setting the money aside for future capital needs takes some action by the Board of County Commissioners. He questioned which road the Board of County Commissioners will take. LISA WARREN is more against the way that the fee is a flat fee. She and her husband are looking into building a house and must reduce the size of the house because of the impact fee. She feels that a lot of children are in apartments. She asked that the Board of County Commissioners make the fee more fair and look at incomes and other children in the system who are not included in the fee. 8 BEN LLOYD feels that Orange County should have enough money to do whatever it wants. In 1983, an Economic Development Commission was created. However, twelve years later there has not been a brick laid in the US70, I85 southern railway corridor. The plan should be to create some industrial and economic growth in this County to provide the money needed for new schools. He told of a new school built in Caswell County for 600 students for $4,525,624 compared to McDougle Middle School for 740 students at a cost of 11.5 million. He feels the school board needs to consider the most economical and viable way to provide those new schools. END OF PIIBLIC COMMENT Chair Carey acknowledged that letters have been received from Jill Blackburn in support of the proposed increase in the school impact fee, from Barry Jacobs asking that the Board make some tangible efforts to address several equity and procedural concerns before raising the impact fee and a letter was received on May 26 from Joan C. Smith asking that the Board of County Commissioners strongly oppose raising the facilities impact fee. Chair Carey announced that the Board of County Commissioners will consider a decision on this item at their June 5, 1995 regular meeting. Commissioner Willhoit made reference to a table Mr. Collins had a year ago showing the number of building permits in the County's planning jurisdiction. It was broken down by mobile homes and site building. To the extend that this data is available, he would like to have an update of this table. He recalls that about 50$ of the building permits in the Orange County School district were for mobile homes and most of the building permits in Chapel Hill and Carrboro were for multi- bedroom homes. He feels that this could provide a basis for a differential fee. With no further comments, Chair Carey, Jr. adjourned the meeting. The next regular meeting of the Board will be on Monday, June 5, 1995 at 7:30 p.m. at the Orange Grove Community Center in Bingham Township. Chair Carey, Jr. Beverly A. Blythe