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HomeMy WebLinkAboutMinutes 11-19-2014 APPROVED 1/22/2015 MINUTES ORANGE COUNTY BOARD OF COMMISSIONERS CHAPEL HILL TOWN COUNCIL HILLSBOROUGH BOARD OF COMMISSIONERS CARRBORO BOARD OF ALDERMEN November 19, 2014 ASSEMBLY OF GOVERNMENTS The Orange County Board of Commissioners met with the Towns of Chapel Hill, Carrboro and Hillsborough for an Assembly of Governments meeting on Wednesday, November 19, 2014 at 7:00 p.m. at Whitted Building in Hillsborough, N.C. COUNTY COMMISSIONERS PRESENT: Chair Barry Jacobs and Commissioners Alice M. Gordon, Earl McKee, Bernadette Pelissier, Renee Price, and Penny Rich. COUNTY COMMISSIONERS ABSENT: Mark Dorosin COUNTY ATTORNEYS PRESENT: John Roberts COUNTY STAFF PRESENT: County Manager Bonnie Hammersley, Assistant County Managers Cheryl Young and Clarence Grier, and Clerk to the Board Donna Baker (All other staff inembers will be identified appropriately below) CHAPEL HILL TOWN COUNCIL MEMBERS/STAFF PRESENT: Mayor Mark Kleinschmidt, Ed Harrison, Jim Ward, Lee Storrow, Matt Czajkowski, George Cianciolo, Maria Palmer and Deputy Town Manager Flo Miller CHAPEL HILLTOWN COUNCIL MEMBERS ABSENT: Donna Bell, Sally Greene CARRBORO BOARD OF ALDERMEN MEMBERS PRESENT/STAFF: Mayor Lydia Lavelle, Aldermen Damien Seils, Michelle Johnson, Randee Haven O'Donnell, Sammy Slade, Bethany Chaney and Town Manager David Andrews. CARRBORO BOARD OF ALDERMEN MEMBERS ABSENT: Jacquelyn Gist TOWN OF HILLSBOROUGH COMMISSIONERS/STAFF: Mayor Tom Stevens, Town Commissioners Eric Hallman, Brian Lowen, Evelyn Lloyd, Kathleen Ferguson, Jenn Weaver, and Town Manager Eric Peterson TOWN OF HILLSBOROUGH COMMISSIONERS ABSENT: Welcome, Call To Order and Openinq Comments Chair Jacobs called the meeting to order at 7:02 p.m., and welcomed everyone to the Whitted Building. Mayor Lavelle expressed thanks for the opportunity to come together. Mayor Kleinschmidt said Council Member Greene and Donna Council Member Bell will be unable to attend, as well as Town Manager Roger Stancil. Mayor Stevens welcomed everyone to Hillsborough and to Orange County's beautiful facility. Introductions were made. It was noted that this is Commissioner Alice Gordon's last Assembly of Governments meeting. 1. Article 46 — One Quarter Cent Sales Tax Collection and Use; Funds Available and Main Uses for Economic Development in Oranqe County Chair Jacobs said this was first brought up at their joint meeting with Carrboro. Steve Brantley said he will focus on the economic development portion of article 46. He reviewed the following background information, as outlined in the abstract: Background: Orange County voters successfully passed a referendum in November 2011 to levy a one-quarter quarter (1/4) cent sales tax that generates additional annual funding for education and economic development purposes. Now called "Article 46", the funding program was forecast to generate $2.5 million annually in new local sales tax proceeds which would be split equally between education and economic development, each receiving $1.25 million. The 50/50 share of Article 46 funds for economic development was initially set for 10 years. The Orange County Board of Commissioners adopted a Resolution in December 2011 authorizing the new one-quarter cent sales tax, and actual proceeds began to accrue at the State level and distributed to Orange County in early 2012. There is no set protocol for Article 46 funding requests for economic development projects, such as proposed by the municipalities, to be considered by the County. Previous requests have been tied to specific project needs, and presented directly to the Board of Commissioners, the County Manager, and on occasion, by the towns' economic development staff to the Orange County Economic Development office. Proposed changes regarding how Article 46 is administered, such as defining the primary expenditure categories or overall objective may require the Board Commissioners to modify the existing Resolution. Attachments A and C provide a summary table, pie chart and current balances of the key sectors where Article 46 funds are used for economic development in Orange County. Assuming an annual $1.25 million receipt in sales tax proceeds, the Article 46 program and the Orange County Board of Commissioners' adopted Resolution identify seven (7) main economic development expenditures, as follows: Key Sector% of Total $ Annually • Debt service on water, sewer & associated 60% $750,000 Infrastructure made in Orange County's three (3) Economic Development Districts (Eno, Hillsborough and Buckhorn) • Orange County's Small Business Loan Fund 16% $200,000 • Entrepreneurial & Incubator Support 8% $100,000 • Business Investment Grants 8% $100,000 • Agriculture Investment Grants 5% $60,000 • Marketing & Collaborative Outreach 1.5% $20,000 • Advertising, Publishing & Collateral Materials 1.5% $20,000 100% $1,250,000 Debt Debt Service on Utilities - 60% of annual expenditures ($750,000) Funding to cover debt service on utilities, as currently being installed in the Buckhorn Economic Development District, was immediately put to use, and has already yielded a significant economic development "win" for Orange County. This $4 million project, initiated in late 2012, created a `backbone' sewer and water system to service or augment over 1,000 acres of economic development lands, stretching from the Cheeks and Efland areas westward toward the City of Mebane. This project included 2 miles of gravity sewer (18" gravity in western zone and 12" gravity in eastern zone) and 3 miles of 16" water system. Besides adding to the inventory of additional utility serviceable acres, the 16"water system created a large loop to increase pressures, water capacity and fire flow to many existing industrial businesses in Orange County's western economic development zone. Other Capital Investment Plan (CIP) projects are underway to improve the availability and reach of present utilities in designated economic development land use areas. The ability to have the County's western sewer system under construction enabled the Morinaga project to consider its present location and select an area in Orange County for the firm's new North America operation. In September 2013 the company announced the creation of nearly 100 new manufacturing jobs, and an initial investment of$48 million. A future plant expansion of similar size is anticipated in future years. With this new, clean industry, Morinaga America Foods, Inc. became Orange County largest corporate taxpayer (not counting the electric power utilities), and the County and City of Mebane formed an even closer relationship. Additional utility-served sites, along with appropriate zoning, road access and related power infrastructure, have since opened up in the County and are being marketed to other high quality business investment prospects. A second illustration of Article 46 funds from this category aiding local collaboration is the County/Town of Carrboro Interlocal Agreement related to the repair of a failing sewer line on Roberson Street, which would have negatively impacted over 20 downtown businesses employing more than 100 people. The sewer line has since been repaired with State funding from a Community Development Block Grant, and a 50/50 sharing of a required co-pay cost. The resolution and obligation for the Article 46 Sales Tax runs for 10 years, while the debt service on infrastructure projects runs for 20 years. Without renewal of the resolution at the end of 10 years, the General Fund would be obligated to pay the debt service. Small Business Loan Fund — 16% of annual expenditures ($200,000) The Orange County Economic Development office maintains a loan program that assists small (and start-up) businesses to obtain necessary capital, especially for firms that are otherwise unable to receive normal bank financing due to marginal credit history or short operating experience. Article 46 funds are available, when needed, to replenish the loan program's lending capabilities. Typical loans can be made for as much as $50,000 with a 5-year repayment term. With the slow recovery of the national, state and local economy, capital demand by local firms should continue to increase, and the County's loan program should find even more demand. The Economic Development office is working diligently to market the program, identify potential borrowers, and make additional loans to local businesses. To date, a total of twelve (12) loans have been made to eleven (11) small businesses, and there is one (1) pending loan application. All loans are current with no delinquent history or negative write-offs. Entrepreneurial & Incubator Support - 8% of annual expenditures ($100,000) There is an ongoing and successful effort to retain entrepreneurial start-up talent that originates in the County, such as from UNC Chapel Hill, by supporting an affordable and creative work environment that keeps such talent from leaving the County. Article 46 funds back an Interlocal Agreement between Orange County and the Town of Chapel Hill to support the monthly lease requirements of the "LaUNCh Chapel Hill" innovation center, located on Rosemary Street. Over the initial 3 1 /2 year lease period, the County will provide a total of $140,000 in economic development funding to support "LaUNCh Chapel Hill". This new incubator, with over 20 full-time promising firms, also has support and financial backing from the University and key private donors. Steve Brantley said there are two other programs that have not been tapped at all - Business Investment Grants, designated to receive 8 percent of the annual expenditures; and the Agricultural Investment Grant, designated to receive 5 percent of these funds. He said the funds for these have accrued, but there has been no protocol for how to administer these grants. He said, through this year, the economic development advisory board has worked on developing these guidelines, policies and procedures, and the goal is to present this to the Board in December for review. Steve Brantley said the final category is Marketing and Collaborative Outreach Advertising, Publishing & Collateral Materials, which is a combined 3 percent of annual expenditures. Clarence Grier reviewed the following revenue and expense information, as gathered since the inception of this tax: Article 46 Sales Tax Collection - October 2014 Report Orange County, NC Revenues Sales Tax Month/Year Month Distributed Amount Total FY 2011-12 $ 709,663 Total FY 2012-13 $ 2,732,718 Total FY 2013-14 $ 2,859,675 July 2014 October 2014 257,744 Total FY 2014-15 $ 257,744 Grand Total - Revenues: $ 6,559,800 Expenses Fiscal Month/Year Department of Economic Chapel Hill-Carrboro Orange County Development City Schools Schools Total FY 2011-12 $ 20,000 - - Total FY 2012-13 $ 78,730 $ 51,242 $ 490,000 Total FY 2013-14 $ 1,126,944 $ 1,023,273 $ 513,055 July 2014 1,500 - - August 2014 446 181,245 - September 2014 426,480 12,767 - October 2014 23,876 279,092 - Total FY 2014-15 $ 452,302 $ 473,104 $ - Grand Total - Expenses: $ 4,228,650 Clarence Grier said Chapel Hill Carrboro City Schools have spent about $1.3 million; Orange County Schools have spent about $1 million; and Economic Development initiatives have totaled $1.65 million. He said half of the revenues are allocated to education ($3.3 million), which leaves $3.3 million for economic development initiatives. He said the expenditures, as of October 31, 2014 are $1.7 million, and total committed funds and expenditures are $2.4 million. He said there is $890,000 in available funds as of today. Chair Jacobs recognized state representative Graig Meyer. He also noted the information at the Commissioners' places. Commissioner Rich noted that this meeting and all meetings are being televised. Alderman Slade asked to what degree the 60 percent has been allocated for the economic development zones. He is interested in other ways to allocate the resources to potential infrastructure improvements within the towns. He said some of these funds might be used to incentivize the towns to think creatively about light manufacturing, zoning, and working collaboratively with the County. Alderman Slade encouraged everyone to look at economic development as an opportunity to address major issues such as climate change. He said the federal and state governments are not doing anything about this, and studies have shown that economic development can align nicely with addressing this issue. Alderman Slade said he wants to consider supporting and giving grants to locally owned businesses. He said this provides benefit to the community by circulating money locally and providing jobs. He said he has a list of reasons of why it is important to support these locally owned businesses, and he will distribute. Steve Brantley said Orange County was eager to work with Carrboro on the repair of the privately owned failing sewer line on Roberson Street. He said there was a partnership on this project, and it has almost been successfully put into place. He said the County cost for this came from the quarter cent sales tax. Craig Benedict addressed the issue of projects in the Economic Development District (EDD). He said the Eno EDD has 500 acres that are underdeveloped or undeveloped. He said part of the capital improvement program over the next ten years is to invest about a $1.5 million in that zone. He said the Hillsborough EDD is in and around Waterstone, in the unincorporated portion of Orange County. He said there has been a master plan of uses in this area through joint planning with Hillsborough, and there is $1.5 million earmarked for economic development. Craig Benedict said the larger zone is a 2000 acre area in the Buckhorn EDD, which is an area bordered roughly by the railroad tracks. He said $4.5 million in infrastructure has already been completed here. He said this was already in process when Morinaga came looking in Orange County, and further infrastructure was extended to serve that project. He said there is another $4 million project that is in the 95 percent designed stage, and this will open up additional lands along the interstate. He said this total of$8 million in the Buckhorn area includes some water systems to serve existing economic development zones and to improve pressure, fire flow, and capacity. Craig Benedict said their program for debt service of$10 to $11 million will be $750,000 per year, over 20 years, with 10 years of funding through this quarter cent sales tax. He said one positive element is the $250,000 in additional sales tax revenue that comes to the County each year. He said if this keeps increasing, there can be investment in other areas. Commissioner McKee addressed Alderman Slade's comments and said small businesses are an integral part of the Small Business Loan program. He encourages anyone starting a new small business or an existing program to apply. Alderman Chaney said Carrboro also has a small business loan fund, and she asked if Chapel Hill or Hillsborough has a program. Mayor Kleinschmidt said Chapel Hill has a fund targeted at small business arts startup groups. He said this has been used twice so far. Mayor Stevens said Hillsborough does not have a fund, although many of their businesses use the Orange County fund. Alderman Chaney said she is concerned about having a lot of liquidity across multiple funds, and she suggested efficiency might be gained by collaborating, pooling funds and making policies together regarding how funding is done. Commissioner Price referred to the pie chart in attachment C, and asked what this represents. Clarence Grier said these are funds that have been expended, year to date. Commissioner Price asked about the reason why the economic development portion has not been fully used. Steve Brantley said once they begin to market the grant program, there will no longer be unallocated money in those categories. He hopes the towns will help market this. Chair Jacobs said Steve Brantley is in the process of hiring a business retention person who will be able to provide outreach to existing businesses and be available to meet with people to try and bring them into these programs. He said, once adopted, the policies can be distributed to the towns. Steve Brantley said the County Manager met with the economic advisory board and charged them to have their report ready by Dec. 1. He said the department has also recently hired an agricultural economic development specialist who will be a resource for the County and the towns. Alderman Slade asked if there is a plan to weigh the economic impact of these different investments and their return on investment. Steve Brantley said when the County was successful with Morinaga, their initial $48 million propelled that company to the number one corporate taxpayer. He said when utilities are put in the EDD it maximizes the ability to attract such companies, and this creates the biggest hit or success for the County. He said many of the impoverished residents of the County can benefit immediately by working for these new businesses. Alderman Slade said this gives a sense of the impact, but he would like to know if there are plans of ineasuring it compared to the other pieces of the pie. Steve Brantley said the incentives would not be paid by the community unless the company shows that it actually created jobs or made the capital investment. He said the County might also have a good idea of the expansion capabilities. He said a company in Mebane might be using Carrboro companies that do web design, or attorneys or banks. He said there need to be more quantitative opportunities to show this. Steve Brantley said the Wal-Mart in Hillsborough generates 12 percent of the retail sales tax, and you can see the measures for this retail tax. He said there are measures to show the net value of soccer tournaments to the community. He said there are various ways to see what is generated in terms of job base and sales tax, and staff will do their best to quantify that information. 2. Affordable Housinq a. Community Home Trust Charter Status Report Commissioner Rich reviewed some of the following information from the abstract: The Community Home Trust (CHT) is an affordable housing provider whose clientele includes first-time homebuyers earning less than 80 percent of the area median income. CHT was created by the local governments in 1990 to further the County-wide affordable housing priorities and has served as an essential vehicle for implementing inclusionary housing policies in Chapel Hill and Carrboro. As such, several families have realized the dream of purchasing a home through CHT's land trust model. CHT has determined that the current funding arrangement with the County and Town governments is not sustainable. CHT currently receives the following financial support from the local governments: Chapel Hill: $200,000 Orange County: $149,000 Carrboro: $35,000 Hillsborough: $2,500 Including an allocation of$11,000 of operational support from the FY 2014-15 HOME Partnership Program, the total of local financial support is about $397,500. In March 2014, Robert Dowling with CHT presented a draft Charter to the four local governments for input and feedback. The stated purpose of the Charter is to "establish a shared set of expectations as to what affordable housing functions CHT will provide to County and Towns". The Charter further includes renewal contract terms with regard to the governments' continued funding and CHT's responsibility to its beneficiaries. The Town of Carrboro Board of Aldermen discussed the draft Charter (Attachment 2—A) on June 3, 2014 and issued a resolution providing the following comments: 1. CHT should explore increasing the financial role of UNC and UNC Healthcare System. 2. The Town should explore the possibility of guaranteeing a line of credit for the Community Home Trust. 3. CHT should provide budget requests to the Town of Carrboro early in the budget preparation cycle. After multiple discussions with the County and Towns' leadership, it was determined that a "charter" was not the appropriate reference to the proposed agreement, and it was thereafter referenced as an Inter-local Agreement (Agreement). The Agreement would reconfirm support for the countywide affordable goals for homeownership and establish a formula to determine funding of CHT's operational budget. According to Mr. Dowling's forecasted budget, CHT will experience a net operating loss of about $209,000 if the proposed funding is not received by the local governments. The funding formula for the governments' respective financial contribution would be adjusted annually on a pro-rata basis in accordance with the number of CHT homes located within each respective municipality. Commissioner Rich said, in 2014, there are 230 homes in the $40 million portfolio. She said 83 percent of these homes are in Chapel Hill, and 17 percent are in Carrboro. She said 17 percent are single family homes; 38 percent are condominiums; and 45 percent are townhomes. Commissioner Rich said this was discussed at the Orange County retreat last year, and this proposed charter has been through a thorough review process by staff and attorneys. She said the goal is to take this new funding method back to their respective boards to discuss and approve. She said this has been a year in the making, and if nothing is done, the CHT will find itself in debt for $209,000. She said it is important to take action on this, and she encouraged conversations to happen soon so this can be included in the respective budgets. Alderman Johnson said this is part of the sustainability model, and the work of the CHT supports the goals of affordable housing. She said the sooner the better for moving this forward. Council Member Ward said the Town of Chapel Hill has not kept up with a funding model that is sustainable, and he feels confident that the CHT is wisely spending their money and is completing the task set before them. He said there have been years where development comes through the town's approval process, and CHT is asked to take care of these homes; however, as homes have been added, funding has not been added equally. He said this charter will formalize a fair share to be put into the CHT. Town Commissioner Ferguson said the work that is being done by the CHT could not be matched. She said the CHT is leading the way in affordable housing, and it has been provided mandates by government, but not the funding to carry it through. She encouraged the government bodies to support this new funding model. Mayor Kleinschmidt said the representatives have described their commitment to the CHT and an appreciation for the ways in which it advances affordable housing goals. He said the question now is to ask staff where we are and whether we are ready to move forward. Bonnie Hammersley said the managers have all met, along with staff and the executive director of the CHT, and there is a plan to meet again to discuss a unified recommendation to their governing boards. She would say that this could come back to the governing boards by the end of January. She said staff has worked with Robert Dowling to understand the challenges that CHT is facing. Mayor Kleinschmidt said the community has wondered about the timeline. He said support has always been very strong for this. Town Council Member Palmer said the model is good for getting people into home ownership. She would like to do more than just maintaining what is already here. She said 200 units is a drop in the bucket for what our County needs. She said affordable housing is economic development too, and she would like some information on what can be done to extend this model of ownership to other types of housing units. She said many older adults, especially in Chapel Hill, cannot afford to pay their taxes or maintain their homes. She asked what might happen if someone were willing to sell their home to CHT and then only pay taxes on the portion they own. Town Commissioner Ferguson said until there is a viable funding source the CHT cannot expand. She said rehab is always more expensive, and this is a very cash hungry business. She said the Home Trust itself is looking at how it can best serve the community, but the hard reality is that you need cash in order to expand. Council Member Matt Czajkowski asked what parts of Orange County are being defined when looking at affordable housing. He said Chapel Hill defines affordable housing by how much exists in the actual community of Chapel Hill. He said the CHT started out primarily providing single family residences and townhomes, being built by developers already working on these projects. He said there are now virtually no single family residence applications coming through, and the town is seeing rentals almost exclusively. He said this provides a whole host of other challenges. He said the land in Chapel Hill is prohibitively expensive for affordable housing. He said land is less expensive in Orange County, and there are some single family developments happening, and he questioned where we should look to expand affordable housing and whether it needs to be defined by specific community. He said questioned how success is defined in terms of affordable housing when there is affordable housing in Orange County versus in Chapel Hill. Alderman Johnson said they cannot rely on the CHT to meet all of their affordable housing goals. She this is important, but some things are being mixed up. She said this was really about the inter-local agreement, and it is connected to our goals, but it will not address all of the affordable housing needs. She said there was interest from all of the municipalities, at the last Assembly of Governments meeting, in having some sort of committee to work on supporting their action plans related to affordable housing. She asked about the status of this group. She said it is important to maintain their focus on the purpose of the inter-local agreement. Commissioner Pelissier said her comments are related to affordable housing and transit, and she said people are now looking at housing plus transit when talking about affordable housing. So when you think where you may want to put affordable housing, though it may be cheaper in some areas than others, you still might have much higher transportation costs in some of these areas, which is not what anyone wants. Council Member Matt Czajkowski said he disagreed with Alderman Johnson. He said the direction this is moving toward is for all of the jurisdictions to provide funding for the CHT, whereas it has historically only been Chapel Hill. He said the fundamental question is why Orange County should fund this if most of it is happening in Chapel Hill. Mayor Kleinschmidt said the funding would be proportional to where the homes are, so Chapel Hill would pay more. Alderman Chaney said Carrboro has an affordable housing strategy, and there was a meeting about the inter-local agreement. She said it would be nice to see in the agreement the proportion of funds that CHT is raising itself. Alderman Chaney said Robert Dowling is part of the Orange County affordable housing coalition, which is a group of about a dozen providers with some sort of role in affordable housing in Orange County. She said this coalition would be very interested in the question of the County's combined goals. She suggested that everyone think about being better listeners to that coalition. Mayor Kleinschmidt said he hopes that everyone will state their commitments strongly on the night when votes are taken to adopt these recommendations. He worries that future board members approving homes for the CHT will become concerned with the increased percentage of operational expenses that they are being required to pay, and this will be a disincentive. He hopes that each of the individual boards can employ whatever processes they might have to diminish that possibility. b. Transit-Related Affordable Housinq Opportunities David Bonk said this is an update on efforts being made to try and incorporate issues of affordable housing into the planning related to the light rail corridor between Durham and Chapel Hill. He said there is a strong correlation between affordable housing, the cost of transportation, and the ability of public transit to offset a major portion of that cost. He said staff inembers in Chapel Hill have been in contact with Triangle Transit (TTA) and with counterparts in Durham to coordinate efforts related to station area planning. He said the stations that have been proposed in Chapel Hill are best characterized as a combination of UNC owned and/or greenfield sites. He said Durham has an even mix of greenfield station locations and inner city urban station areas, which carry a host of issues. David Bonk said the federal government recently announced a grant program that would be made available to support the development of station area plans around stations for projects that have reached a certain level of maturity in the federal process. He said Chapel Hill submitted a grant application and should hear back about this in March. He said this grant would fund $2.3 million worth of efforts to support station area planning on both sides of the corridor, and it will be a coordinated effort between Chapel Hill and Durham. He said one lesson that has been learned is that it is important to start planning early; however, this is an evolving situation, and the grant that has been submitted has several key work tasks. He said one of these is a market survey at each of the proposed stations to determine the usage. He said there is another work task that flows from this that would focus specifically on developing strategies and plans for affordable housing that is consistent with the overall goals of both Durham and Chapel Hill. David Bonk said staff is very hopeful about the possibility of getting this funding, which has $20 million available nationally to fund at least 10 projects. He said staff from various agencies in Orange County have also been in discussion with the non-profit, The Enterprise Community Partnership, about becoming involved in this process. David Bonk said there is a need for the NC Housing Finance Agency to adapt some of their rules regarding low income housing assistance to better reflect the benefits of being located within access to public transit and light rail station area. He said TTA and the Triangle J Council of Governments did submit some comments regarding changes to these criteria, and they were partially successful in getting some criteria changed. He encouraged the local governments to weigh in with the housing authority to make more changes. Alderman Seils asked if the award to fund station area planning is referring to formal small area planning or something less than that. David Bonk said the work plan submitted does include a provision for small area plans around those stations, where it is necessary. He said Durham has already initiated an extensive process of identifying infrastructure improvements in most of their urban neighborhoods. He said some infrastructure will be identified in the greenfield sites. Alderman Seils said the stations in Chapel Hill will involve UNC, and he asked if UNC will be part of the conversations with TTA and Durham. David Bonk said UNC has been part of these discussions, and staff has reached out to let the university know about the grant application. Alderman Seils asked for more information on other local jurisdictions giving input regarding potential revisions to the criteria for affordable housing. David Bonk said he can provide this. Commissioner McKee said a short section of this line lies in Orange County, and this section is directly adjacent to Chapel Hill. He asked if there are any thoughts on how to work out the issue of these escalating land prices and how that affects the possibility of affordable housing. David Bonk said that is the purpose of getting started early and getting assistance from the federal government to do the planning. He said it is early enough in the curve that the escalation of land prices has not occurred yet. He said even if the grant is not approved, the process of going through the application allowed staff to really flesh out a work program that identifies the key issues moving forward. Commissioner McKee said his concern is that once this project gets to a certain point, market forces will take effect with a vengeance, and businesses and high end apartments will be drawn to this line. He sees a market influence that will impact the cost of this land, and he does not feel there are any legal means in place for holding the land prices. David Bonk said this will be a good topic for the upcoming meeting with the non-profit organization. Commissioner Gordon said it is important to consider transportation when talking about affordability. She said the federal grant process includes a requirement of a certain percentage of affordable housing around station sites. She said early planning should allow for this. Commissioner Gordon referred to the portfolio management information on page 4. She would like to see staff provide information on the root cause for why this flexibility is needed. She said it is important to figure out what made this work when it started and what changed, so that you have a good idea of the problem in order to come up with a solution that avoids the need for this flexibility. She said the goal was to have affordable homes, and if the trust has to sell the homes then this goal is not being accomplished. 3. Solid Waste Advisory Group (SWAG) Update Mayor Kleinschmidt said the purpose tonight is to receive an update from the advisory group and to take action to extend the SWAG's work. He said there is no recommendation, but they would like to keep working. He said the timeline is designed to be respectful of the four budget processes. Mayor Lavelle said she is one of the representatives from Carrboro. She said there have been 4 meetings to date, and she provided the following list of accomplishments: 1. There has been agreement regarding the need for co-ordination of funding and cost decisions and the timing has been identified to allow costs to be included in municipal budgets. 2. The group has determined that issues related to Recycling and Construction and Demolition should be dealt with first, and issues regarding Municipal Solid Waste and a transfer station will be dealt with subsequently 3. UNC and UNC-Hospital have been integrated into the discussions and the potential for partnering has been discussed, with recognition that this is a longer term project to be undertaken after an agreement on recycling has been reached. 4. The fiscal assumptions underlying the Solid Waste Enterprise fund have been explored. 5. A markup of the Inter-local Agreement has begun, and the group is working on the third iteration of this. 6. The group has agreed to keep meeting over the next several months with a plan to report back to the respective boards in the early spring. Town Commissioner Lowen said the group's work is not complete, and they are requesting reauthorization, with the intent of making a recommendation on recycling funding and the Inter-local agreement by the end of March, 2015. Mayor Kleinschmidt said the funding mechanism is the challenge, and this is the core of the conversations. He said the County has been carrying the recycling program, but another solution is needed by June 30th. He said several funding options have been presented to the SWAG and subsequently to the staff of the various jurisdictions for analysis, critique and recommendation. Commissioner Rich said the first quarter of monitoring since the roll carts has been phenomenal. She said the overall single stream tonnage has increased by 324 tons since the first quarter of last fiscal year. She reviewed the following monitoring information: • High Performing Programs o Urban Curbside Collection —29% increase o Government Building Collections — 15% increase o Recycling Collection from Convenience Centers — 19% increase • Other Programs of Interest o Multi-Family— 5% decrease o Rural Curbside— 3% decrease • Shred-a-Thon Success —Two Fall Events (University Mall and Hampton Pointe) o Over 880 participants 0 19 tons shredded and recycled Chair Jacobs said the group knows there is a charge for short and long term goals, and they will try and get through as much as possible before coming back to the boards in the spring. He said there were a lot of knots that needed to be taken care of first, and things may start to pick up speed moving forward. Mayor Kleinschmidt said SWAG needs authorization from the four bodies in order to continue its work. A motion was made by Council Member Matt Czajkowski seconded by Mayor Stevens to extend the time line for the Solid Waste Advisory Group (SWAG). VOTE: UNANIMOUS Alderman Slade asked, given the amazing numbers on the new containers, how this affects the goals for reducing trash and whether this goal needs to be updated. Blair Pollock, Solid Waste Planner, said the County has a 61 percent waste reduction goal, which applies to more than just recycling. He said his staff does not know the answer to the question yet. He said there is dependence on the state, because there is a statutory requirement that each County must set a goal, and the number is then calculated for them. He said the numbers for 2013-14 will come out in January. He said some of this is tied to the economy, and as consumption goes up, so do recycling and garbage. He said the solid waste staff would like to see the County reach the goal before setting a new one, although he can see the advantage of striving higher. Alderman Slade said he would like to see SWAG thinking in those terms. He would like to encourage them to think more strongly about zero waste. Council Member Harrison gave a personal testimony about his efforts to increase recycling and get rid of paper. Jenn Weaver asked Blair Pollock about emissions reductions, and whether the public has gotten the message that the public does not have to put bins out every week if they are not full. Blair Pollock said residents are encouraged to place full bins out at the curb, but they seem to feel an obligation to put them out weekly. He said it is worthwhile to encourage people to only place the full bins. Town Council Member Palmer asked about educational outreach. She said a local neighborhood mover left a lot of boxes at a nearby house, and she wonders if there might be an ordinance that requires moving companies to remove the cardboard. She also suggested leaving notes on the carts to educate residents. She asked if there is a budget for education. Blair Pollock said there is a recycling outreach and education budget. He said, in general, the education is reactive to specific situations. He likes the idea of outreach to moving companies, and he will look into this. He said there is a compactor at the landfill for cardboard. Commissioner Price said she would like to monitor and reduce the amount of tonnage and track where it is coming from. She would also like to know if everything being collected in recycling is actually able to be recycled. Blair Pollock said the switch to single stream is more economical, but there is more residue. He said residents assume that more stuff can be recycled, and the sorting process is less than perfect; however the increase in the net amount being recycled is still far greater than the increase in residuals. 4. Potential 2016 Bond Referendum Chair Jacobs referred to the white sheet outlining the 2001 bonds. He said there was unified request from Chapel Hill and Carrboro, specifically for the parks bond, regarding an aquatics center in 2001. He said now the municipalities can start to think about a coordinated approach for 2016. He said it is important to use this opportunity to sit down with their neighbors to determine what should be funded. Clarence Grier said the Board is in discussion about a general obligation bond referendum to be held in 2016. He read through the following information from the abstract: BACKGROUND: In recent meetings over the past fiscal year, the Board of County Commissioners has discussed the need for a future bond referendum to fund some County and School long-range capital needs. Due to recent changes enacted by the North Carolina General Assembly related to the dates in which a general obligation bond referendum can be held, a general obligation bond referendum can only occur during even numbered years. Therefore, there are only two possible dates for the Board of County Commissioners conduct a voter approved general obligation bond referendum — May 2016 and November 2016. If not held at one of these 2016 dates, a potential general obligation bond referendum would be delayed until May 2018 or November 2018. Bob Jessup, Orange County Bond Counsel, and Orange County staff has provided a schedule provided the Board with a brief timeline comparison related to both dates (Attachment A). The most recent time that Orange County held a general obligation bond referendum was in November 2001. That bond referendum totaled $75 million and the items included on the referendum were as follows: • School related projects totaling $47 million. • Parks and Recreation projects totaling $20 million • Senior Center projects totaling $4 million • Low and moderate income projects (Affordable Housing) totaling $4 million He said all of the individual items on the bond referendum passed on the November 2001 bond referendum. The total bond referendum passed with an average approval rate of approximately 55 percent. Additionally, some of the steps included in the process to prepare for the general obligation bonds referendum were as follows: 1. The Board of County Commissioners decided to proceed with a general obligation bond referendum. 2. The Board of County Commissioners formed and appointed members to a Capital Needs Advisory Task Force to make a recommendation as to the needs and components of the bond referendum (See Attachment B). 3. Once the components of the general obligation bond referendum were decided, the Board of County Commissioners appointed a Bond Education Committee to inform the public of the purpose of and the components of the general obligation bond referendum (Attachment C). Currently, the County and both School Districts (Chapel — Carrboro City Schools and Orange County Schools) have capital projects that are proposed for inclusion as part of the general obligation bond referendum. Moreover, both school districts have older facility needs totaling approximately $330 million that could potentially be addressed in part with a general obligation bond referendum. At the September 11, 2014 Board of County Commissioners Work Session, the recommended sizing of the potential general obligation bond referendum was discussed at a range between $100 and $125 million over a period of 20 years. At current AAA municipal bond interest rates, the total combined debt service for a $100 million general obligation bond issuance is estimated to be $6.5 million annually. This would represent the property tax rate equivalent of 4.00 cents on the current property tax rate. At current AAA municipal bond interest rates, the total combined debt service for $125 million general obligation bond issuance is estimated to be $8.1 million annually. This would represent property tax rate equivalent of 4.89 cents on the current property tax rate. Future debt capacity for a potential general obligation bond referendum can increase or decrease due to the following circumstances: • Future increases or decreases in interest rates • Future changes or modifications to the capital investment plans of the County and/or both School Districts (individually or collectively) • Future changes of a legislative or regulatory nature Alderman Slade said there is a resolution at their places that the Carrboro Board of Alderman passed regarding the energy efficient needs for renovating the schools. He said the facility upgrades provide a huge opportunity to do some of the energy efficiency upgrades. He said this can generate 25 to 30 percent cost savings. He said Carrboro's overall goal is to reduce greenhouse gas emissions 40 percent below 1990 levels by 2020, and schools in the town represent 6 percent of emissions. He encouraged the boards to include comprehensive energy efficiency improvement goals in this process. Alderman Chaney left at 9:OOpm. Alderman Haven O'Donnell thanked Alderman Slade for bringing this resolution forward to the Town of Carrboro and to this body. She looks forward to the opportunity to enact some of these recommendations that have been worked on for so long. Chair Jacobs said the County has green building standards, and the most recently built schools incorporate this. He said the other schools will be brought up to these same standards as retrofits are done. Alderman Slade asked if other items could be considered for a bond referendum, such as affordable housing. Chair Jacobs said affordable housing is on the table, but the Board has not actually decided what will be done. He said there are many groups outside of the schools and the towns that have needs and interests, and the Board will see what other groups make sense in coming to the table. Alderman Slade said there has been interest from his Board to see affordable housing represented, and he would like to add the suggestion of thinking about climate change. 5. Rural Buffer a. Rural Buffer and Countywide Population Proiections Craig Benedict said the projections information presented tonight is a compilation of input from all of the local governments during the Metropolitan Planning Organization process to develop the long range transportation plan. He said these plans were loaded into a model called "Imagine 2040." He said the numbers in the packet were designed to show the conditions in 2010. He said the information packet shows some striking numbers that need to be realized. He said if these trends can be accommodated with current land use plans, then we move forward; if these cannot be accommodated with current land use plans, then local governments will need to make some adjustments. Craig Benedict reviewed several maps and charts regarding population, dwelling, and employment in the towns and County. He said the population growth in unincorporated Orange County is projected to be 28,000 by 2040. He said the rural buffer projection looks at available land and makes assumptions about single family and multi-family building and sprawl. He said the population increase in the rural buffer is estimated to be 14,000. He reviewed the maps and zoning. He reviewed the map of the rural buffer uses and the following slide of Rural Buffer statistics: RURAL BUFFER SUMMARY STATISTICS Established; 1987 per JPA Total Area 36,958 acres Zoning Rural Buffer (RB) RB 1 DU / 5 AC* (University Lake) 15,400 acres RB 1 DU /2 AC (Jordan Lake) 21,558 acres Use Value Area (Farm & Forest) 1990 — 11,800 acres± 2002 — 10,970 acres 2014 — 10,206 acres Population (Rural Buffer approx.) 2010 Units —4,712 Population — 11,106 (DCHC MPO MTP) 2040 Units — 10,183 Increase 116% Population —25,161 Increase 127% Craig Benedict said it is difficult to put 5,000 projected new units in the rural buffer, even if you converted the farm land. He said the total acres of farm land decreased in 2012, but total farms increased. He said this was due to a decrease in farm sizes. He said the direct sale of food from farms to consumers has gone up due to County and town policies. He said there have been discussions for ten years about agricultural support enterprises. He said there is high demand for new housing in Orange County, and the models show a high degree of activity wanting to occur in the rural buffer, and agricultural support enterprises could help stem the tide of conversion. Craig Benedict said staff is in the process of developing the 2045 plan, and there is an initiative that asks whether 65,000 people can really come to Orange County, and if so, what housing will be used. He said staff is looking for input on how to develop this plan to make sure it is achievable and sustainable. Mayor Lavelle referred to attachment 3a and said it seems like the numbers are off for Carrboro. She said her staff will look into this. Alderman Slade said he would like to see a similar analysis applied to some of the proposed added commercial uses to the rural buffer. He questioned what kind of cap would be used for commercial development. He said his main concern is that commercial activity creates competing pressure for farms. He said he understands some of the history of how we got to this point, and Maple View Farms has been used as an example of why more of these uses should be allowed. He said that type of augmentation for farm activities is already allowed, and the more conditional use purposes are all that remains. He said the consideration is whether it is appropriate for these to exist in the rural buffer versus in the towns. Alderman Slade said he encourages everyone to proceed with caution in allowing more competing uses that might make it harder for farms to exist in the rural buffer. Craig Benedict noted that this will be discussed in item 5. Town Council Member Palmer said her concern is regarding the population growth and the rural buffer. She said in 2040 there will be "McMansions" in the rural buffer, and it is time to re-negotiate what is put there. She said land needs to be set aside for parks and recreation purposes. She said there also needs to be a farm land trust system to enable the small farmers to buy in, and avoid land being sold to developers. Chair Jacobs said Orange County has an agriculture trust fund and a conservation easement program and both of these are in play to accomplish the things that Council Member Palmer mentioned. b. Accommodatinq Appropriate Aqricultural Support Enterprises in the Rural Buffer Perdita Holtz said the boards of Orange County, Carrboro and Chapel Hill already discussed this item on several occasions earlier in the year. She said the Joint Planning Area (JPA) documents need to be amended before the County can consider adopting the implementing regulations to the Unified Development Ordinance (UDO) for Agricultural Support Enterprises in the Rural Buffer. She said the local governments need to adopt the same language in order for the joint planning amendments to become effective. She said the town of Carrboro adopted a resolution that includes a sunset clause for the amendments. She is hopeful that the discussion tonight will lead to a solution where all three local governments will feel comfortable in supporting it. Perdita Holtz said several options for consideration are listed on page 2 of the abstract, and staff is also open to other considerations. Commissioner Gordon said the staff inembers did a good job of providing some options. She said the sunset provision from Carrboro would automatically have a cutoff where all three boards have to agree to continue with the Agricultural Support Enterprises; and then staff came up with another option where all three entities would have to agree to stop. Commissioner Gordon said the three governments also have to agree to the amendments to the Joint Planning Agreement and Land Use Plan, and Carrboro has also made some changes there. She said it is important to consider these changes. Mayor Lavelle said the sticking point for Carrboro was the sunset clause, and the six suggestions given might provide a way for them to feel comfortable replacing the sunset clause. She suggested that Carrboro needs to talk about this, and then come back to staff and the County to let everyone know their decision. Mayor Kleinschmidt said the Chapel Hill Town Council has discussed this only briefly, but there was some general support for expanded farm uses. He said he believes the rural buffer was set up in a way to help keep it rural, but farmers need tools to be successful, and these have not been provided. He said the town just wants to make sure the farmers are being helped. Mayor Kleinschmidt said a sunset clause is not a good idea. He said creating a date at which this could end would put farmers in much greater jeopardy, as this sets a point at which a vested right must be attained or else value is lost. He said if you are a small farmer hoping to provide value to a future generation, you are going to maximize it well ahead of time and sell to a "McMansion" subdivision. Mayor Kleinschmidt said an annual review and monitoring by staff would be valuable. Alderman Slade said the point of a sunset date is that it would allow an opportunity for review. He said the focus would be on reestablishing the rules that worked if it is found that these current proposals do not work. He said the farmers would have a window to make use of the land at a higher use value, and then this could be grandfathered in. Mayor Kleinschmidt said before the sunset period, anyone with interest in enhancing the value, would engage in a process to guarantee their rights. He said farmers would not know what the government is going to do, and they would potentially sell to the highest bidder. Alderman Slade asked why the farmers would choose to sell to a "McMansion" at that point when this could be done at any point. Town Commissioner Ferguson said businesses want certainty, and without certainty, there will be no business. She said no one will invest commercially with a sunset clause that may make them stop in five or six years. She said some of the other suggestions limit growth, which caps out profits and what can be done to be successful. She said if a business cannot make money, it will sell. Mayor Lavelle said Chapel Hill has only talked about this briefly, but Carrboro has talked about this on at least three occasions for over 7 hours and has come up with a set of really good recommendations. She said their board was mixed on the sunset clause, but it was kept in to present to the whole body out of deference to several of the board members. She said she is hearing that no one supports the sunset clause, and this is why she is suggesting the town of Carrboro take this back and look it over to see if there is another mechanism to accomplish what they are looking for. Commissioner Pelissier said the Agricultural Support Enterprises started some time ago, and it was not just made up by elected officials and staff, but it was really made up by the farming community. She said the big picture of the rural buffer shows that it is more than just a ring; it is 37,000 acres that makes up a quarter of rural Orange County. She noted that over a quarter of the 37,000 acres is farmers, and the Board has already approved Agricultural Support Enterprises for the other three quarters. She does not want to give the message to farmers in the rural buffer that they will be micromanaged. She said farmers are commercial too, and she wants to support our farmers and the whole local food community. Council Member Matt Czajkowski said he has questioned the Metropolitan Planning Organization (MPO) growth projections for seven years, and his questions have never been answered. He said to the extent that this issue has developed an immediacy driven by the 2040 planning process, he questions the degree at which we are actually facing an issue today. He understands that we need to plan for tomorrow, but this feels like a hasty set of changes. He said the issue of having a sunset clause should be the end of the discussion, but not the beginning. Council Member Matt Czajkowski asked planning staff how many applications are on the table for the previously referred to "McMansions." Craig Benedict said the majority of subdivisions over the last 10 years that are larger than 10 lots have been in the rural buffer. He said the sheer number would not add up to the projections. He said a lot of these are converted farms. Council Member Matt Czajkowski asked how many development proposals are on the table today to take current farms and turn them into large lots for large houses. Craig Benedict said he can find and provide this information to the group. Council Member Matt Czajkowski said this information should be before them. He said the whole premise is based on 2040, and rather than the 5 year sunset provision, maybe this should just go slowly. He questioned what farmers are saying about this. Town Council Council Member Palmer said she supports the proposal wholeheartedly. She left the last discussion feeling like this was a really good initiative, and she has been learning more about what was presented. She does not want some of these enterprises within the city limits of Chapel Hill. She believes these belong in the rural area and will make the farming community more vibrant. She supports the local food movement and community supported agriculture and farming. Alderman Haven O'Donnell thanked Perdita Holtz for attending at least four meetings in Carrboro, because the Aldermen really dissected this. She said this document is not perfect, but it reflects a lot of time and effort. She encouraged Chapel Hill to take another look at it, as it is very complex and requires digesting on multiple levels. She said their board was not unified on the sunset clause, but they thought it was worth sharing at the next level. Alderman Haven O'Donnell said it is important to have a rural center and to have things that concretely support the efforts of local farming. She noted the earlier discussion about transit nodes for affordable housing. She said if some of these events, like wineries and breweries, are put out in the rural areas, it forces people into cars. She said there needs to be consistency with their values. Commissioner Price supported Commissioner Pelissier's earlier comments. She said the attempt is to support farmers, protect urban areas, and reduce sprawl. She said one of her concerns is that the list of six options may limit farmers from expanding their farm operation. She feels there needs to be another type of threshold that is more equitable. Commissioner Price referred to Alderman Haven O'Donnell's comment and said there have been people who have wanted to have the events out at the farm in order to bring people out. Commissioner McKee said we may be looking at timelines in the wrong fashion. He said today is not the problem because farming is a very long term proposition, and the short term in farming is ten years. He said a five or six year sunset is still in the short term. He said no one that is successful will limit their ability to move something forward. He said being grandfathered in will just mean you cannot grow larger, and no business wants to be frozen in time. Commissioner McKee said he does not see any rush to get this settled right now, but it needs to be settled in six months to a year. He said this should involve identifying the uses that the different entities cannot abide. He said he is not interested in leaving the slaughterhouse in the uses because there is not going to be a slaughterhouse in Orange County that is of a large enough size to be noticeable. He said some of the other uses may grow to be a 300 person event or a large complex, but Maple View is the exception and not the norm. He said most farms are going in the opposite direction and growing smaller. Commissioner McKee said he would urge everyone to move this forward, but it needs to be without any discussion of a sunset clause. He said he would never support a sunset clause. He suggested considering the alternatives to allowing these Agricultural Support Enterprises, which will be 2 to 5 acre lots with million dollar homes, and more isolation of wealth in a small area of the County. He said change is coming, and you will not be able to stop it. Commissioner Gordon said she appreciates the comments that have been made. She said the concept of the rural buffer was to have a definite edge around the municipalities so that in the towns you could provide services and have infrastructure, and then have the more rural area beyond that, where you do not have the infrastructure of water and sewer. She said this meant you had to rely on the carrying capacity of the land in the rural buffer. She said the goal is to keep farmers farming, and the question is how to do this without turning the rural buffer into something that is urban or commercial and without putting uses in the rural buffer that need water and sewer. Town Commissioner Hallman left at 9:55 Commissioner Gordon said it makes sense to do something that is a little more measured. She thinks Carrboro's intent with the sunset clause was to take things slowly to see what happens. She said that was a good motivation, but there are reasons not to have the sunset provision. She said you need to look at the uses allowed by right, by special use permit, and by conditional zoning. She said the proposed uses allowed by right are fine in the rural buffer, and the uses allowed by special use permits have special standards which is also fine. She said the problematic uses are those allowed through conditional zoning. Council Member Harrison left at 9:59pm. Commissioner Gordon said the concern is with a use that goes into the rural buffer and is so intense that it should not be served by a groundwater and septic system. She said Carrboro has identified some of these more intense uses. She recommended leaving out the more intense uses identified by Carrboro, any other intense uses that do not belong on a groundwater and septic system, and those uses with no specific standards or definition. She said the category of use called "agricultural services uses" is a catch-all category and she believed that this use should also not be in the rural buffer. She said that even without these uses, adding the other agricultural support enterprises would still give the farmers a lot of opportunity to farm. Commissioner Gordon recommended that Carrboro should to go back and re-visit this issue, and Chapel Hill should have a more in-depth discussion as well. She said the boards could go through and look carefully at all of the uses. She believes the uses allowed by right and by special use permits in the general use zoning districts are probably fine. She said Carrboro has added some language to the land use plan and the joint planning agreement that should be considered. She said there is a way to allow some additional uses in the rural buffer without allowing everything that has been proposed. She said there is a difference between rural and urban, and land uses in the rural area should only need septic systems and groundwater supplies. Town Commissioner Lowen left at 10:OOpm. Chair Jacobs said Maple View Farms is really where this whole Agricultural Support Enterprises started. He said the reason there are no tables in Maple View store is because there was a state requirement for a commercial type septic system to support that business. Town Commissioner Lloyd left at 10:05pm Chair Jacobs explained more of the history of Maple View. He said this process has lasted over a decade and staff has put in a lot of effort. He said Carrboro has identified only a few things and we are getting hung up on these. He said everyone wants to be protective and cautious. He said, respecting these concerns, there need to be some unified recommendations from planning staff in order to move forward in the near future. Council Member Matt Czajkowski asked Commissioner McKee if authorizing all of these uses will really make agriculture profitable enough to create return that is equal or superior to subdividing the property. Commissioner McKee said it will not compare to sub-dividing, but it might make it sustainable to allow the family to stay there. He said Orange County will never be able to equal the profit potential of a subdivision. He said this is not the problem. He said you have farmers in Orange County who need a supplemental income or an auxiliary enterprise just to help them stay there. 6. Town Updates Chair Jacobs said since it is late, the boards will forego the Town Updates at the request of Mayor Lavelle. He asked Jeff Thompson to give a one minute history lesson of Whitted Facility, and Jeff Thompson provided a brief summary. The meeting was adjourned at 10:12 p.m. Barry Jacobs, Chair Donna Baker, Clerk to the Board