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HomeMy WebLinkAboutMinutes 05-19-2011 APPROVED 8/23/2011 MINUTES ORANGE COUNTY BOARD OF COMMISSIONERS BUDGET PUBLIC HEARING May 19, 2011 The Orange County Board of Commissioners met on Thursday May 19, 2010 at 7:00 p.m. at Department of Social Services, Hillsborough Commons in Hillsborough, North Carolina. The purpose of this meeting was to hold a public hearing on the County Manager's Recommended 2011-2012 Budget. COUNTY COMMISSIONERS PRESENT: Chair Bernadette Pelissier and Commissioners Valerie Foushee Alice M. Gordon, Barry Jacobs, Earl McKee and Steve Yuhasz COUNTY COMMISSIONERS ABSENT: Pam Hemminger COUNTY STAFF PRESENT: County Manager Frank Clifton, Assistant County Manager Gwen Harvey. Interim Assistant County Manager Michael Talbert and Clerk to the Board Donna S. Baker (All other staff inembers will be identified appropriately below) 1. Openinq Remarks-Chair Pelissier Chair Pelissier said that the Board and the public will receive the budget presentation from the Manager and Finance Director. She dispensed with the reading of the public charge, but asked the public to abide by it. 2. Presentation of County Manaqer's Recommended FY 2011-12 Budqet (PowerPoint Presentation) Frank Clifton referred to an orange hand out about a summary of all 100 counties and their statistics and he reviewed some of the categories. Among all 100 counties, Orange County is fifth highest for the tax rate, twenty-first in population, first in per capita income (in 2008), 24th in school population, first in total school resources (including the special tax in Chapel Hill divided by total students, so that is not necessarily accurate for the whole County), fourth in current ADM expense, fifth in total capital ADM, and eighth in debt service associated with education. This information is based on the budgets from last fiscal year. Financial Services Director Clarence Grier made the PowerPoint presentation. County Manager's Recommended FY2011-12 Annual Operating Budget and Capital Investment Plan Presentation Department of Social Services, Hillsborough, NC Orange County, NC May 19, 2011 Recommended General Fund Budget •Totals $177.3 million •Represents an increase of$2.0 million from original current year budget of$175.3 million, which is a 1.1 percent increase from previous year original budget. •Represents a $3.9 million decrease in the current year's amended budget Guiding Principles •Meets Board directives •Balances County's operating budget without a property tax rate increase •Does not provide for a reduction in force •Funds local school districts at the same funding level for current expense, recurring and long range capital Fiscal Year Tax Increase Approved Amended Difference Ending/Ended 2007 Yes $163,473,184 $166,585,727 $3,112,543 2008 Yes $173,625,351 $177,228,766 $3,604,415 2009 Yes $183,005,580 $191,754,758 $8,749,178 2010 No $177,589,039 $185,940,474 $8,351,435 2011 No $175,313,920 $181,143,619 $5,829,699 2012 — Mgr's No $177,279,970 N/A Recommended Difference in 2009-2012 2009-2011 Budget Since Last Tax $ ($5,725,610) $ (10,611,139) Increase/Reval Proposed Ad Valorem Tax Rate Effective July 1, 2011 •Recommended tax rate of 85.8 cents per$100 of assessed valuation •This rate produces $133 million in property tax revenues for FY2011-12 •Overall Property valuation increased 1.2% •One cent on property tax estimated to generate $1,537,967 General Fund Revenues - Property Taxes—75.3% - Sales Taxes— 8.6% - Intergovernmental Revenues —9.0% - Charges for Services, Licenses, and Permits— 5.5% - Investment Earnings, Miscellaneous, Transfers — 1.5% Sales Tax Revenues •Recommended Sales Tax Revenues of$15.3 million is 5.5% higher than the $14.5 million budgeted in 2010-11 •Actual sales tax revenues are down over 47% since the peak of$22.5 million in fiscal 2007-08 •The Medicaid - Sales Tax swap will continue to limit future growth of sales tax revenues •2011-2012 Sales Tax Revenues estimated to grow by 1 to 2 percent next year. Proposed Chapel Hill Carrboro City Schools District Tax Rate Effective July 1, 2011 •Recommended tax rate of 18.84 cents per$100 of assessed valuation •Represents no increase in the property tax rate for the District •Recommended tax rate will generate $18.8 million for the Chapel Hill — Carrboro School District •This represents an additional $1,605 per pupil above the County's allocation •One cent on district tax estimated to generate $987,247 Recommended Funding for Chapel Hill Carrboro City and Orange County Schools •Total General Fund appropriation totals $83.5 million •These funds will fund day-to-day operations, repayment of school related debt, and capital •Appropriation equals 47.1 percent of total General Fund Budget •Reflects $620,954 decrease from current year General Fund appropriation due to a decrease in debt service. •Equates to $3,102 per student for each of the 19,141 students in both districts for day- to-day operating funds Additional Funding for Local Schools .In addition to the $83.5 million for operations, debt and capital, recommended budget allocates $1.8 million to fund non-mandated safety net initiatives for both school districts. Some of these initiatives are: .School Health Nurses - $634,332, an increase of$23,603 .School Resource Officers - $529,410, a decrease of$1,845. .School Social Workers - $642,374, the same funding as the current fiscal year .With these additional non-mandated funding initiatives, the total funding for the local school districts total 48.1% of the General Fund Budget Additional Options For the Savings in Debt Service for Funding Education - Pay down debt service in FY 2011-12 with the savings in expected debt service - Establish a Debt Service Reserve to offset next fiscal year or future years debt service Funded County Initiatives •Maintains all County services at current levels •Fund increases in medical insurance, retirement and 401(k)/457 for non-sworn employees •Increases positions for EMS Communicators and EMTs •Replaces two ambulances •Provides the Sherriff with one transport vehicle and 4 additional patrol vehicles •Recommends the purchase of a Bookmobile to service rural Orange County ■Funds Non Profits at a reduced level from FY2010-11 ■Provides the issuance of$2,152,000 in debt to fund County recurring and long range (pay-as- you go) capital General Fund Expenses - Education —37% - Debt Service-Education — 10% - Debt Service-County—6% - Transfers —2% - Governing and Management—8% - General Services —4% - Human Services— 18% - Community and Environment—3% - Culture and Recreation — 1% - Public Safety— 11% Solid Waste Initiatives .A new annual sanitation household fee to fund additional operating hours at the solid waste convenience centers and related improvements. The fee would provide approximately $320,000 in FY 2011-12 to fund the extended hours and improvements. .A new $5 surcharge on the tipping fees and an appropriation of fund balance from the Solid Waste Enterprise Fund to establish a reserve to fund future remediation costs and improvements for the Rogers Road Community. Total revenues generated would be approximately $240,000 for FY2011-12 .An appropriation of fund balance of$750,000 would used to establish the reserve. Additional Funding Options •Article 46 '/4 Cent Sales Tax •Appropriated Fund Balance, if necessary County Capital Investment Plan Recommended Projects Information Technology $500,000 Affordable Housing $170,000 Register of Deeds $150,000 Roofing Projects $ 55,000 HVAC Geothermal — Link Government Services Center $618,000 Southwest Branch Library $650,000 Southern Human Services Center $280,000 Building Improvements— 112 N. Churton Street $152,000 Building Improvements— 129 King Street $145,000 Lake Orange Capital Maintenance $112,000 New Hope Preserve/Hollow Rock Access Area $ 25,000 Total Capital Investment Projects $2,857,000 Concerns and Issues for FY2012-13 •Health Insurance •Retirement contribution rate increases •Debt Service •County Capital Projects •School Capital Projects •Economic Development •Revaluation •State or Federal Budget Issues •Inflation •Economy Public Hearings and Work Sessions (All Meetings Begin at 7:00 p.m.) Public Hearings — May 19th at Department of Social Services, 113 Mayo Street, Hillsborough May 24th at Southern Human Services Center, Homestead Road, Chapel Hill Work Sessions — May 26th at Southern Human Services Center, Homestead Road, Chapel Hill June 9th at SHSC Work Session/Adoption —June 14th at SHSC Final Adoption —June 21St at SHSC Document Availability •Clerk to Board of Commissioners •County Financial Services Office •Orange County Library •Chapel Hill Public Library •Carrboro/McDougle Branch Library •Cybrary, Carrboro •Orange County Website •www.co.orange.nc.us Chair Pelissier said that Commissioner Hemminger is ill this evening and will be unable to attend tonight. 3. Public Comment Daniel Derby is an Orange County employee and he is representing the Employee Consortium as its Chair. He said that he is here to represent Orange County's most valuable asset, its employees. He said that the County is blessed with hard-working and dedicated employees that truly enjoy working for the County. The employees have continued to provide excellent service through these past few years of economic difficulty. However, due to the rising costs of everyday living and salaries that have stayed the same since FY 2008-09, many of the employees are having a hard time providing for their families. He said to please keep employees in mind as the County Commissioners deliberate the budget. He said that the ERC will be forwarding a letter to the Board of County Commissioners soon. He thanked Frank Clifton for balancing the budget without a tax increase. Jack Chestnut is the Chair of the Senior Orange Development Day Healthcare Program. He thanked the Manager and Assistant County Manager Gwen Harvey for their support of the Day Program in 2012. He said that the program has 30 participants now. He said that in February there were some issues and concerns, and he wanted to share these concerns with the County Commissioners and give them the correct information, since they had heard about them through various sources. Beginning in last fiscal year, they lost two veterans, which pay $65/day. Later on, they lost some more. This was a financial hardship. Carol Woods helped with some funds. They have been trying to recruit more people for this program. He thanked the Board for its support. Robert Dowling is the Executive Director of the Community Home Trust and he thanked the County Commissioners for their past support. He said that he hopes Orange County would continue to support them in the coming year. The Manager has budgeted for the Community Home Trust this year at the same level as last year and he hopes that the Board of County Commissioners would agree with this. If not, then there will be a deficit of$65,000. He said that the projected salaries for next year are about$25,000 less than this year. Unfortunately, healthcare costs increases are a concern for them. He said that for 20 years, the Home Trust has piggybacked on the County for health insurance. He said that they are in relatively good financial shape. Krysia Lynes spoke on behalf of the schools. She is the PTA President for the CHCCS district. She said that they have been actively advocating for funding for public education and have been concentrating efforts on the State level. They are asking that the additional 1% on sales tax not be removed until sales tax revenues have recovered from the recessionary levels. She thanked the County Commissioners for their past support. She hopes that the County Commissioners will fund a continuation budget for CHCCS. NON-PUBLIC HEARING ITEM 4. Oranqe County Transit Plan: Draft Financial Plan for Rail and Bus Investment Chair Pelissier said that Triangle Transit would be on their way shortly. Chair Pelissier said that in the meantime, she gave the Board a summary of the recent Orange County Leadership Transit meetings to discuss the Orange County Transit Plan. The goal is to develop a financial plan to be brought back to the individual elected boards. She said that they have discussed this issue and the bus plan. She said that there will be a cost-sharing with Durham County and Orange County that is agreed upon by both counties. They are having this work session because the timeline has been sped up, since Durham County has decided to put both a '/4-cent sales tax and a %2-cent transit tax on the ballot in the fall. She wanted Orange County to have the same discussion. One of the issues that came up this week at their meeting is that with the %2-cent transit tax, Durham County was to make their decision before the end of June, but then it got changed to the end of July. The Board has received some information in the packets that was briefly discussed on Tuesday. There are some general plans for the light rail. Chair Pelissier suggested talking about the bus plan until Triangle Transit representatives arrive. The bus plan was just presented to the Board of County Commissioners on Tuesday and none of this information has been presented to the Towns in Orange County. The Towns would have to buy in before moving forward. Planning Director Craig Benedict said that about a year ago, Orange County took a stronger role in the Orange County Transit Plan. He showed some maps of the Triangle region. It has been decided that there would be two systems — one from UNC to Alston Avenue and then another system in Wake County that would go from Cary to North Raleigh. More recently, a commuter route element has come about that would connect the dots between the light rail. There is an idea in the group that maybe Orange County should pay for 20% of the line between UNC and Duke and maybe Durham County could pay the remainder. Regarding a fair share financially, Triangle J was hired to do an analysis of what they called a Shared Benefit Area, and Craig Benedict showed this area on a map. They finally came to the conclusion that Durham County would pay for the parts that are in Durham County. The scenario discussed tonight is suggesting that Orange County pay for portions of light rail within Durham County, but within the Chapel Hill Town Limits. He went through Attachment 4 which was the Durham-Orange Triangle Regional Transit Program Financial Plan Draft. He said that staff of Hillsborough, Mebane, Carrboro, Orange County, Chapel Hill, Triangle Transit, and UNC met on a regular basis for about six months to determine which bus routes need to be augmented to provide better service. The group came up with goals and priorities. David King, Executive Director of Triangle Transit, made a PowerPoint presentation. The Orange County Bus and Rail Investment Plan Maps of peak hour volumes (red is bad, yellow is getting bad, and green is ok) In the next 15-20 years, the red will increase significantly if something is not done to alleviate the volume of traffic. Forbes — Raleigh-Durham Named America's Biggest Gas Guzzler "The cities and suburbs of `The Triangle' are close enough that people don't think twice about driving from one to the other. Yet in doing so, the average household racks up 21,800 miles per year. Assuming an average 20.3 miles per gallon, that means burning through 1,074 gallons per year, about$4,200 at current prices." —Christopher Helman — Forbes — May 2011 Quick Background - Special Transit Advisory Commission (STAC) —2008 - Joint MPO Long range Transportation Plan —2009 - Passage of HB 148 Congestion Relief and 21St Century Intermodal Transport Fund — 2009 - County Bus Planning —2010 to 2011 - Alternatives Analysis—2010 to 2011 Bus Planning - New service - Increased frequency - Park and ride - Amenities Public Input Alternatives Analysis - Light rail - Commuter rail - Stations - Cost estimates Financial Model - Balance of bus and rail - Settings for variables - Use of borrowing - Plan must be affordable! Elements of the DRAFT Bus Plan 1-5 by Year 1 1. LOCAL -Service Improvement CH, C UNC in the 15/501 corridor 2. REGIONAL—Carrboro-CH-Durham Express (Route 405) 3. REGIONAL—Mebane—Hillsborough —Durham Express 4. LOCAL—54 Corridor Improvements (Orange and Durham Counties) 5. LOCAL—Support existing services 6-15 by Year 3 6. LOCAL—Chapel Hill —Carrboro—UNC Sunday Service 7. LOCAL -Hillsborough Circulator 8. LOCAL—Chapel Hill —Carrboro—UNC Saturday Service 9. REGIONAL—Route 800—SW Durham (Southpoint) —Chapel Hill peak 10. RGP-Improve service in unincorporated Orange County 11. LOCAL—Extend evening service in Chapel Hill —Carrboro-UNC 12. REGIONAL—Carrboro —Chapel Hill-Durham Express (Route 405) —Saturday 13. REGIONAL—Chapel Hill —Regional Transit Center via Southpoint (Rte. 800) —Saturday 14. LOCAL—Hillsborough Circulator 15. REGIONAL—Hillsborough —Chapel Hill (Route 420) —peak 16-19 by 2035 16. RGP— Improve service in unincorporated Orange County 17. REGIONAL EXP— Pittsboro —Chapel Hill Express 18. REGIONAL— Route 805— RTC via SW Durham (Woodcroft) 19. LOCAL— Improve peak hour bus frequency Chapel Hill Carrboro UNC BUS INVESTMENT - New bus hours by end of FIRST year—22,050 hrs - New bus hours by end of THIRD year—44,100 hrs - Total number of new bus hours by 2035—50,400 hrs - MLK Busway Improvements completed —2017 - Potential Rail Dividend Bus Hours—30,000 to 45,000 RAIL INVESTMENT - Opening year of Light Rail —2025 - LRT Capital Cost- $330 million - LRT Annual Operating Cost- $3.2 million *Sales Tax Growth Rate—3.6% Financial Resources available for Transit - Local revenue in Bus and Rail Transit Investment Plan o %2 sales tax o $7 vehicle registration fee o $3 increase in Triangle Transit vehicle registration fee o Rental car tax revenue - State participation —25% assumed - Federal participation — 50% assumed Approval Process DCHC MPO - Approves Bus and Rail Investment Plan Triangle Transit Board of Trustees - Approves Bus and Rail Investment Plan Orange and Durham County Commissions - Approves Bus and Rail Investment Plan - Authorizes referendum *All municipalities within Durham and Orange County must receive copy of Bus and Rail Investment Plan for review Proposed Schedule—Oranqe County - DCHC TAC Bus and Rail Investment Plan Review— May 11 - BOCC Review Bus and Rail (B&R) Investment Plan — May 19 - Carrboro Board of Aldermen Review B&R Investment Plan — May 24 - Chapel Hill Town Council Review B&R Investment Plan — May 25 - BOCC Review of B&R Investment Plan —June 7 - DCHC TAC consideration of D/O(Durham/Orange) B&R Investment Plan —June 8 - Hillsborough Town Commission Review B&R Investment Plan —June 13 - BOCC Approval of Orange B&R Investment Plan and Authorize Referendum —June 21 - Triangle Transit Board Approval —June 22 Commissioner McKee said that he does not want any of his questions to be taken as personal attacks. He said that he would not be willing to ask the Orange County voters to vote on two taxes in the same year. He does support the bus service and the County just had a reduction in bus service between Chapel Hill and Hillsborough due to reduced ridership. He said that he would prefer to expand the bus service within Orange County, Chapel Hill, and Durham County rather than go with a light rail system. He said that the population base for Durham County and Orange County does not even match those of Wake County, so it would make more sense to start the light rail component where the population base is, in Wake County. Commissioner McKee said that he understands that extensive development will occur around the rail line, and he does not have a problem with that. His concern is that this extensive development might siphon development away from the rest of the County. David King said that the Route 420 reduction in service was around the midday route, but there was more growth in other times. Regarding the density in Wake County, it is about 900,000 and Orange County and Durham County together are only 450,000. He said that the connection between Orange County and Durham County would be a commuter rail. He said that, in Mecklenburg County, the development community did a lot of development in anticipation of that rail line. He said that he would anticipate the same thing for this area. Commissioner McKee said that he understands the arguments, because this area will grow. The point is that he does not want to create a financial black hole with a rail component at this time. He looks at it as two different components— bus and rail. He is in favor of the bus component at this time. A bus system is much more flexible than a rail system. He said that he does not know what kind of answer he can give to the rural areas of Orange County as to why they should pay a %2-cent sales tax when it may end up taking more sales tax in the future to support this proposed light rail system. That is why he prefers a built-out bus system. David King said that the $3.2 million annual cost for light rail is for 2025 and they grew this with inflation. He said that the segment in Orange County that is proposed will be the best in the area. Commissioner McKee asked if this was a $1.4 billion project for the total cost and David King said yes. Commissioner McKee said that this will be an ongoing expense for the County and the Towns. Commissioner Yuhasz said that this is a lot of material to digest all at once. He said that he does not think this is the right time for Orange County to go to the voters for a %2-cent sales tax at this time and would make it very difficult for either of these taxes to be approved ('/4-cent or %2-cent). He said that he agreed with Commissioner McKee that this is the most expensive way to provide this service. He said that it seemed that this light rail is not serving a very dense area with the exception of the universities and the hospitals. This is not like downtown Charlotte. He does not believe that this is the right time to go to the voters to ask for a %2-cent sales tax. Commissioner Gordon said that they are talking about the timing of the transit investment, so it is important to figure out what they want in bus and rail systems and how they can join regionally with their partners. She said that in the longer term she hoped the Commissioners would agree to do something to enhance public transportation. She said that the compressed time schedule is daunting. But regardless of when they schedule a referendum, the Commissioners need to come to a consensus on what assumptions they will make, and what they see as their future and then to adopt a plan. She said that she does not want to stop the planning even if a fall referendum is not scheduled. She suggested taking up Triangle Transit's offer to meet one-on-one for more information. She said that the compressed timeframe is making this all more difficult. Chair Pelissier said that the County Commissioners need to focus on the transit plan before they decide to put anything on a ballot. She summarized some of the principles: • Cost sharing between Durham County and Orange County—this is vital to the plan and the concern is whether the cost sharing is reasonable. She feels it is reasonable. • Does this cost sharing give them sufficient monies to do the bus plan in the first three years? • Need feedback on the prioritization of the bus service from the Towns. Chair Pelissier said that she wants to know what needs to be discussed about the plan. This is the homework that they all need to do regardless of when they put the transit item on a ballot. Commissioner Foushee said that she has been part of the process and Chair Pelissier's comments are on point. She said that a lot of the time they have spent in this process so far has been on the bus service. She said that Commissioner Gordon's comments about planning for transit is one of the most crucial points of all. She does not want Orange County to miss out on being part of the solution for regional transportation. She said that right now there is no commitment from Durham or Wake Counties to put this on the ballot in November. However, she would not want to stop the conversation about the future of transit. Commissioner Yuhasz made reference to the number of parking spaces at the rail station and said that 4,000 spaces may not be enough in the long-term. He needs to see the information about how this will all work out. David King said that the information does exist. He said that Triangle Transit has been leading this effort but the land use decisions are made by the jurisdictions themselves. He said that he would be glad to sit down with the County Commissioners and talk through this further. Chair Pelissier said that her peers have different areas of experience with the concept of light rail. She suggested that Board members meet individually with Triangle Transit to learn why they need light rail or at least schedule a work session to learn this information. Commissioner McKee said that he would prefer having this information be presented to the Board versus individually. Commissioner Yuhasz said that he would like a presentation focused on the light rail component and assumptions on the land use. Frank Clifton said that it will be difficult to explain to the public and there will have to be a high level of trust developed between the County and the public over this plan because it will be 15 years before the train runs. Commissioner McKee asked about the rider fee and what percentage of Triangle Transit is fare free. David King said that 100% of the service requires a fare. Chair Pelissier said that this is one of the areas that lack clarity. Chapel Hill Transit is free, but TTA is not free. It is not totally clear how this is going to work with the additional bus hours. She said that the Towns' expectation is that it would be an expansion of Chapel Hill Transit and would be free. Discussion ensued about the assumptions of the Chapel Hill Transit being fare free. Commissioner Yuhasz asked for more information about when the tax is implemented and the light rail comes to fruition. David King said that it is built into the financial model. He clarified that the elected boards decide and TTA implements it. Chair Pelissier said that the one thing not fixed in the plan is the bus route and they still need public comment about it. Over time, the light rail might take ridership off the 54 route, and then there would be dividend hours. The County is responsible, but the Towns are large stakeholders. This is not yet clear. She does not think the Towns really understand what this model really does and how the change would be made to the bus model to be sure all the needs are met. David King said that they cannot decide what they are going to do with bus routes in 2020. They have tried to be more specific about the earlier years. Frank Clifton said that there is no formal agreement between Chapel Hill, Carrboro and UNC about the public transportation and how the costs are divided. It is pretty much a handshake and an annual discussion. There is no written document. He also said that all of the projections on the sales tax are very conservative. Any change in the dynamics of this community will have a major impact on this transit plan. Commissioner Jacobs said that the Board of County Commissioners needs to talk about the timing, whether or not it will be putting this on the ballot or not, at the next meeting. He does not think that this decision can wait any longer than the next meeting. Chair Pelissier said that she has heard from four people that they do not want it on the referendum this fall. Commissioner Jacobs said that this needs to be communicated to the public and at a meeting where the media decides to show up. Chair Pelissier said that the current plan was to review the financial plan at the June 7tn meeting. However, they may not want to adhere to that schedule now but to add to the June 7tn meeting a discussion of transit and a plan of how to proceed and whether or not to put it on a referendum. Commissioner Gordon asked for confirmation about whether Durham County was going to vote in July about the referendum. David King said that the current plan in Durham County is to make a decision on June 27tn There are public hearings and public outreach going on now. Commissioner Jacobs said that, with all due respect to Durham County, there was an article in recent paper that it was ready to go with the %2-cent sales tax. Orange County needs to tell the public what it is doing and the timing. Chair Pelissier agreed and said that they can do this at their June 7th meeting. She said that the Board's priority is the '/4-cent sales tax this year for economic development and the schools. She said that she has received feedback from various sectors of the community that if this %2-cent sales tax is on the ballot, it diminishes the support tremendously for a '/4-cent sales tax. Commissioner McKee said that he would like to see this back on June 7tn Chair Pelissier reiterated that the County Commissioners need to proceed with developing a transit plan. She said that the cost sharing is solely on the Board of County Commissioners, but it still needs input from the Towns on the actual plan. 5. Adjournment A motion was made by Commissioner Yuhasz, seconded by Commissioner Gordon to adjourn the meeting at 9:45 PM. VOTE: UNANIMOUS Bernadette Pelissier, Chair Donna S. Baker, CMC Clerk to the Board