Work Session Minutes of the Town of Cary, NC

May 8, 2006

Subject: State Legislative Agenda

Conference Room 11130

316 N. Academy St., Cary

 

Present:  Mayor Ernie McAlister, Mayor Pro Tem Jack Smith, Council Members Michael Joyce, Jennifer Robinson, Nels Roseland

 

Absent: Council Member Marla Dorrel

 

Council Member Julie Robison arrived late and her arrival is noted in the minutes.

 

Mayor McAlister started the meeting at 11:38 a.m.

 

The purpose of the work session is to discuss the Town of Cary ’s state legislative agenda for presentation to the Town’s local delegation.

 

Mayor McAlister referred council to the report below from the May 3, 2006 , council subgroup meeting:

 

2006 NC Legislative Agenda Report

 

The 2006 Session of the General Assembly (“Short Session”) will convene on May 9, 2006 . Only certain measures may be considered during the Short Session, primarily those relating to appropriations, finance, pensions and retirement, and localities (local bills).  In addition, crossover bills that passed either the House or Senate in the previous session may proceed as well as study committee bills, appointments, and a few other specialized categories.

 

Although local bills are allowed, there are some restrictions.  They must be filed by May 24, 2006 , they must be “non-controversial,” and they must be approved for introduction by each member of the House of Representatives and Senate whose district includes the area to which the bill applies.  Cary is represented by Senators Richard Stevens and Janet Cowell and Representatives Russell Capps, Nelson Dollar, Paul Stam, and Jennifer Weiss.  Additionally, it has sometimes been a practice that all members of the Wake County General Assembly delegation be in support of a bill before it is introduced.

 

While there are many issues of interest and engagement to the Town of Cary , it is the Council’s practice, and our consultant’s advice, to focus its primary effort and attention on a limited number of items – items that are the most relevant, have the most impact, and have the greatest opportunities for success.

 

On Wednesday, May 4, 2006 , the council subgroup met to discuss a list of items proposed by staff and council for consideration of inclusion in the Town’s 2006 legislative agenda.  This list was developed over the course of several months as issues and ideas surfaced. 

 

Besides the specific Town of Cary agenda items to be pursued, there are many other issues that may come up during the course of the legislative session.  One of the most important advantages of having legislative consultants is their ability to monitor the day-to-day unfolding of events and alert the Town to actions that could affect it.  While we are not actively working for changes, any proposals related to public employees, state annexation laws, cable franchising, development regulations, taxation or eminent domain--to name just a few--could have significant impact in Cary , and we would want the opportunity to analyze and quickly develop a response.  It would be impossible to list on a legislative agenda every item that could possibly come up during a session, but we would want all actions to be monitored for relevance to and impact on the Town of Cary .

 

After reviewing all of the proposed items, the subgroup expressed interest in pursuing three issues and requested additional information about those items.

 

1.   Oppose Senate Bill 951

2.   Consider local legislation for a special tax district for downtown redevelopment

3.   Support legislation that clarifies that Powell bill funding may be used to improve or widen state roads

 

Senate Bill 951:  SB 951, Public-Private Solid Waste Collection, passed the 2nd and 3rd readings in the Senate during the 2005 session and was sent to the House on June 2, 2005 where it was referred to the Committee on Commerce.  Therefore, it is eligible for action in the upcoming session.  The bill requires that if a city or county does anything to displace a private company providing any solid waste services, the local government must either allow the company to continue providing the service for 18 months after the contract has been awarded to another company or pay the private company 12 months of their gross receipts.  While Town of Cary employees provide curbside solid waste and recycling pickup, other portions of the solid waste collection process are contracted out.  Placing restrictions on the entry of new businesses into a market and on the contracting and award process would reduce the ability of the Town to provide solid waste services in the most cost-efficient manner possible.

 

Tax Abatement District:  The ability to create a tax abatement district is an economic development tool that allows increased property taxes that result from improvements to be phased in over a period of years.  A Norfolk , Virginia , program offers taxpayers an opportunity to improve residential, commercial or industrial structures and not pay full taxes on those improvements for 14 years.  For the first 10 years, there is no tax on the value of the improvements, then in years 11 through 15, the assessed value is gradually recognized--20% per year--and added to the tax rolls.  Fort Wayne , Indiana uses tax abatement for a period of 10 years for both building construction and expansion and equipment purchases.  Tax abatement can be used in a more narrow way, such as only for specific types of improvements, i.e. historic preservation or affordable housing.

 

Property tax abatement has historically not been embraced in North Carolina , and further research indicates that there may be issues related to the constitutionality of such an economic development tool.  There may be other, similar tools that could be used that would have some of the same effects without the need for additional local legislation or that do not raise constitutional issues.  The passage of Amendment One in the 2004 referendum provides for the use of tax increment financing for economic development projects.  Tax increment financing provides for local government debt to be paid off with the proceeds of the increased tax payments that result from the increase in property values which in turn results from the project undertaken with the debt financing.

 

Powell Bill Funding:  Due to some conflict in interpretation of Powell Bill requirements, there is some question about whether these funds may be used for certain projects on state maintained roads or to extend or build a road that will later become a state road.  The Town does have sufficient local projects for which its Powell Bill funds may be appropriated; however, for ease in administration and flexibility for upcoming projects, it would be helpful if these funds could be used for a broader range of projects.  The Town does not currently use Powell Bill funding for any projects on state-maintained roads or roads that will become state-maintained.

 

Monitor for Action:  annexation, local taxation, cable franchising, public employees, development regulations, rights of way, eminent domain, solid waste, minimum housing and nuisance abatement, stormwater, and any other action or proposal which would impact the Town of Cary

 

____________________________

 

Mayor McAlister stated that the only bills that can move forward with the legislature are those approved in either house in the earlier session or local bills that have unanimous support of a local organization and the local delegation, and bills affecting the state budget. He said that the committee determined that there are no bills needed by the Town in the short session for the local delegation to introduce on Cary ’s behalf. 

 

Mayor McAlister referred to the items above for which the subcommittee requested information, none of which require the local delegation to introduce into legislation: opposition to senate bill 951, Tax Abatement District, and Powell Bill Funding

 

Mr. Coleman stated that Senate Bill 951 requires that if the Town changes solid waste contractors then we would be required to either continue paying the current contractor for an additional 12 months or continue to let him operate for 18 months. Mayor McAlister said that the Town opposes Senate Bill 951.

 

Mayor McAlister stated that the question has been raised whether the Council would choose to make the TCAP a special district eligible for tax increment financing (TIF), Amendment One bonds. He said that no legislation is required because approval last year granted the Town the authority to do that if we so choose.

 

Mrs. Robison arrived at 11:44 a.m.

 

Mr. Coleman said that the tax abatement issue was brought forth by the downtown merchants’ group. He said that their original proposal was for the Town to seek authority to charge a lower property tax rate downtown if development occurs. He said there is a constitutional requirement for an equitable property tax system and, therefore, tax abatement would be unconstitutional. He doesn’t believe that the legislature will give the Town that authority because it would be a change to the constitution. Mr. Cozort added that classifications that have to be met are very narrowly drawn and that it only fits one or two places. Mr. Cozort stated that it would have to be a statewide bill to get passed--if it’s a statewide bill it’s not eligible to be considered in the short session, and if it’s a local bill it is unconstitutional.

 

Mayor McAlister stated that the downtown Heart of Cary group is overwhelmingly more supportive of the consideration of a TIF district.

 

Mrs. Robison asked about drawing a statewide bill that applies to only one area. Mr. Sands replied that it would have to be crafted so that it is statewide bill, but drawn so that there is only one place in the state that meets the classification.

 

Mayor McAlister stated the Powell Bill item may cause some concern with the Department of Transportation and the council may not want to explore this avenue at this time.

 

Engineering Director Tim Bailey concurred with the mayor and said it is an interpretation by the Department of Transportation. He said if it becomes an issue in the future the Town may want to reconsider pursuing it to be used as a mechanism for funding.  

 

Mayor McAlister stated that the subgroup also put together a watch list of issues that may be brought out in the short session: 

 

Mayor McAlister stated that council should be made aware if any of these items move forward, giving them an opportunity to weigh in on any legislation. He suggested council consider a legislative agenda that includes all of the watch list items but does not request any action for local legislation by our delegation.

 

Mr. Roseland asked about a statewide measure on sewer and water bonds for rural communities. He asked about Cary ’s eligibility and stated that he would like Womble, Carlyle to assist with that. Mr. Sands responded that the legislation is not yet available. He said there is a possibility that if the bond issue goes through that it can be expanded to include Cary . However, it is a work in progress and they have not seen any of the language.

 

Mayor McAlister said should be added to the monitor list.

 

Mrs. Robison said that the bond initiative was introduced at a North Carolina Rural Center conference she attended for the water 20/30. She said that crisis areas have been identified and prioritized and that a rigorous analysis was performed to identify those catastrophic areas. She is not aware of anything that would preclude the Town from inclusion if the bond moved forward.

 

Mrs. Robison asked the there was any additional enabling legislation required in order to enact the Town’s authority for Amendment One. Mr. Coleman replied that the Town has the authority to pursue it subject to the local government commission authority. Mayor McAlister added that the Town would probably need a signature project downtown in order to move forward.

 

Mr. Roseland suggested monitoring the rural water and sewer bond issue to ensure that Cary is considered as eligible. Mrs. Robison suggested also including the regional wastewater partnership which is more inclusive.

 

Mayor McAlister said that council would move forward with no requests for special legislation, and express where they stand on the other items.

 

ACTION: Mayor McAlister moved to accept the subcommittee’s recommendations (as noted above); second was provided by Mayor Pro Tem Jack Smith, and council granted unanimous approval.

 

Mayor McAlister stated that the Town’s legislative agenda will be shared with the Western Wake Partners.

 

The meeting adjourned at 12:04 p.m.