Work Session Minutes of the Town of Cary , North Carolina

May 9, 2006

316 N. Academy Street , Cary , NC

Conference Room 11130

Present: Mayor Ernie McAlister, Mayor Pro Tem Jack Smith, Council Members Marla Dorrel, Mike Joyce and Jennifer Robinson; Council Members Nels Roseland and Julie Robison arrived late, and their arrival times are noted in the minutes

Mayor McAlister started the meeting at 4:30 p.m. He suggested to focus on capital issues at this meeting and cover any outstanding operational issues in a future work session.

Mr. Coleman outlined the proposed capital budget (see Exhibit A, which is attached to the April 25, 2006 work session minutes). Exhibit A attached to and incorporated in these minutes includes the following handouts from Town Manager Bill Coleman and Budget Director Fogleman: (1) memo to council titled FY 2007 work session #2 additional materials and; (2) Town of Cary Capital Listing – Projects Not Included.

Mrs. Robison arrived at 4:41 p.m.

Mr. Joyce asked for information about the $850,000 reclaimed water amount in the budget (Page 24 of Exhibit A, 4/25/2006 ).  Mr. Coleman stated this could be postponed and is related to expanding plant capacity, and the future year cost is related to budgeting funds for oversizing. Public Works and Utilities Director Kim Fisher stated Cary received federal money last year for this project, and it was in the form of a grant to Wake County on behalf of Wake and Durham Counties and the Town of Cary and was shared proportionally.

Mr. Joyce stated he’s looking for options to reduce the utility fee increase. Mr. Fogleman stated this wouldn’t impact the fee increase.

Mayor McAlister asked when the Town is scheduled to pay for the automated meter reading program. Finance Director Karen Mills stated the Town will primarily spend the money in FY08 and FY09, and the Town is planning to debt finance to match the debt service payments to the planned savings so it won’t impact water rates.

Mr. Fogleman stated staff is working on scenarios for the 6.3% rate increase and will bring it back to the wrap up work session.

Mr. Roseland arrived at 4:50 p.m.

Mrs. Robison asked about the status of the funds that were allocated about two years ago for odor control at the northwest Cary facility. Mr. Coleman stated the odor control funds are available. He added the Town began the biosolids dryer program about six months ago, which is a new process for sludge handling, and it has corrected most of the problems. Staff wants more operational time with the dryer to see if the project stills needs to be done or whether it can be handled in another manner, and staff should be able to make these decisions in a few more months. Mr. Kim Fisher stated he’s not received any complaints.

Mr. Joyce referenced Page 35 (Exhibit A, 4/25/2006 ) and asked for information about the reimbursement column (title of the page is “FY 2007 Utility Capital Programming”).  Mr. Coleman responded that some projects are subject to a proportionate sharing of cost, and this column represents costs coming from other municipalities. He added that the Apex reimbursement will be a lump sum; some of the Morrisville reimbursement will be paid over time with higher rates paid on a monthly basis.

Mr. Joyce referred to Page 25 (Exhibit A, 4/25/2006 ) and asked whether Cary borrows money on behalf of Apex or Morrisville. (Refer to the “project title” column; the page is titled FY 2007 Recommended CIB – Sewer.) Mrs. Karen Mills responded that Cary does not borrow money on behalf of another municipality.

Mrs. Robison referred to Page 26 (Exhibit A, 4/25/2006 ) and asked if this amount of money is enough to cover the annexation areas. Mr. Bailey replied that $400,000 will cover the street paving for the annexation areas, and this amount is separate from the $1 million for the annual repaving contract. He stated combined there’s a total of $1.4 million. He believes the $400,000 is enough to cover the annexation areas. Mr. Coleman stated if we need more than the $400,000 for the annexation areas, then staff will bring this issue back to council.  

Mr. Roseland asked about street lights in the annexation areas. Mr. Bailey stated this is a separate line item in the budget and the citizens need to request it. He understands that some want street lights but others don’t.

Mr. Bailey outlined the transportation projects in the FY 2007 proposed budget (see Page 26, Exhibit A, 4/25/2006 ). Mr. Coleman stated it will take $25-30 million a year for 20 years to fund the thoroughfare plan, which would require a substantial amount of debt. He stated the Town depends on impact fees, the Department of Transportation (DOT), and developers to help complete the thoroughfare sections. He stated a major future challenge will be to review the thoroughfare plan and make decisions about the areas that are most likely to receive funding by development or DOT and how the Town can fill in the gaps. He added the Town will never be able to afford all the improvements.

Mrs. Robison asked if the level of service study is completed for the thoroughfare plan. Mr. Coleman stated the plan is being redone, and staff wants council’s help in defining level of service. He stated a work session is planned for July.  

Mr. Roseland asked about condemnations for the Chapel Hill Road widening project, and he stated he thinks traffic will still bottleneck in Morrisville. Mr. Bailey stated there is a philosophy shift to focus on getting people to downtown Cary instead of RTP. He agreed that traffic will bottleneck in Morrisville unless Morrisville spends more money. He added that there are good relief valves at Maynard and Cary Parkway . Mr. Bailey estimated that around 30 homes will be impacted by condemnation. He stated this area is planned for redevelopment in the town center area plan. Mr. Roseland thinks this is a good project, but he acknowledged the challenges.

Mrs. Robison stated people in other successful downtown areas stress that a parking deck is the main tool for downtown economic development. She asked how the Chapel Hill widening importance compares to a parking deck as an economic development tool. Mr. Coleman replied that it’s important to have good access for a parking deck to be effective, and this road improvement project provides the access. He stated there’s never been a decision for the Town to build a parking deck, and all discussions about this issue have been about partnership opportunities. He stated redevelopment projects may present opportunities for a parking deck.

Mr. Bailey stated that only $1 million for design work is planned for the FY 2007 budget for the Chapel Hill Road widening project, and many questions may be answered with this work.

Mr. Coleman stated the streetscape plan and downtown cultural arts plan are coming to council in the summer, and these downtown plans are tied to the Chapel Hill widening.

Mr. Joyce asked about the federal funds we’re requesting for the Walker Street grade separation. Mr. Coleman stated there are numerous justifications for this funding, including the train, emergency services, congestion, and economic development. He stated the Town is still pursuing this federal funding.

Mr. Coleman noted that the transportation capital projects in the FY 2007 budget are primarily funded through the DOT loan repayment for NC 55.

Mrs. Robinson asked why Fire Station #2 needs to be relocated. Mr. Coleman stated it’s undersized; it covers the Crossroads area and the mall and this commercial development wasn’t there when the fire station was built. He stated the fire station was designed to accommodate four people and currently seven staff work there.

Mr. Coleman stated the Town also needs to identify a site for Fire Station #8. Mrs. Robinson asked if people ever offer to contribute to fire station sites (i.e., with development). Mr. Coleman stated the Town has started asking.

Mrs. Robison asked how the council is treating decision points with regard to what’s not included in the capital budget (see Exhibit A). Mr. Coleman stated he doesn’t anticipate moving forward with the “not approved project list” but staff considers them each year.

Mr. Roseland asked for information on debt vs. cash/lease/installment purchase for the radio purchase. Mrs. Cheryl Spivey of Finance stated staff has talked to leasing companies who have leased for up to 15 years, but this is a LGC decision. Any lease would be over the useful life. Mr. Coleman stated the Town needs the radio coverage in the west for the 800 system. Technology Services Director Bill Stice stated there are two coverage issues: west and north. He stated we plan to add at least one and maybe two sites and upgrade existing equipment. He stated the current system is 15 years old and is no longer maintained by Motorola. He stated there’s poor coverage out west, and it worsens beyond N.C. 55 due to topography. Mr. Stice stated the radios cost about $2.6 million, and the rest is for infrastructure. He stated the Town will use existing Town owned property. Mrs. Karen Mills stated the interest rate will be less than the current investment rate, and it’s more prudent to borrow the money than to use cash.

Mr. Coleman stated the open space plan issue will come back to council outside the budget process with recommended properties to purchase, and council will have the final approval.

Mr. Joyce questioned if staff is pursuing requiring the contractor to fix the drainage problems at the tennis park and SAS soccer park. Mrs. Henderson stated that staff has unsuccessfully pursued this avenue.

Mr. Roseland gave an example of poor emergency access at the tennis park. Staff will investigate.  

Mrs. Robinson asked about plans for the West Cary park. Mrs. Henderson stated staff will define acreage for the park and do a master plan concept.

Mr. Coleman stated one issue is funding for debt service on open space and whether to pay with the $1 million currently collected through the utility fund or pay as an expense from the general fund. He referred to Exhibit A, specifically to the pages labeled “Schedule” that’s part of the memo to council regarding FY 2007 work session #2 additional materials, which outlines various funding alternatives for projects (more aggressive, variables, etc.). He stated neither the $250 million nor $140 million figure includes aquatics or performing arts. He suggested to separate aquatics and performing arts from the PRCR budget and master plan, and staff can present council with options for these facilities using public and private funding.

The council concurred with having the streetscape and downtown cultural arts work session at the same time. They directed the clerk to schedule the aquatic work session at the earliest possible date, even if all council members can’t attend.

Mr. Coleman referenced the schedules once again that are part of Exhibit A and stated Schedule 6 is aggressive, and Schedule 6A shows the results that Schedule 6 will have on the Town’s ability to complete the PRCR master plan. Mrs. Henderson stated staff tried to be consistent with funding as much as possible across the years without having a particular level in mind. She stated through 2017 it averages $12.7 million and about $8.8 million in the next four years. She stated it maintains about 10% of the total towards renovations and improvements. She stated it shows what’s been done with the master plan to-date. She outlined what would be needed with the different scenarios. She stated full funding through 2020 would average about $18 million per year.

Mr. Joyce left the meeting at 6:34 p.m.

Mrs. Robinson asked where the additional $4 million in revenue would come from if council wanted to be more aggressive with the PRCR master plan. Mr. Coleman stated there is some margin in this year’s budget, but some would have to be through debt or the tax rate.

Mr. Roseland asked about fund balance. Mr. Fogleman stated at the end of FY07 there’s about $10 million (cash) over and above the council’s fund balance target of 50% of operating costs. Mr. Roseland believes fund balance and debt are both potential sources for the additional capital funding. Mayor McAlister stated by FY 2009 the Town may experience a shortfall in the fund balance margin. Mr. Coleman stated typically fund balance or capital reserve is used to fund the one-time expenditures. He stated if there’s an interest in providing more funding for PRCR facilities, then this is a funding source. Mr. Coleman stated the operating margin in fund balance is $5 million. Mrs. Robison stated the council may need to tap fund balance for some of the special initiatives. Mayor McAlister noted that he’d rather go into an aquatic work session or downtown cultural arts work session with some money in fund balance to spend for those initiatives instead of spending it on something else in this year’s budget.

Mr. Coleman asked Mrs. Henderson to identify priority PRCR projects in the event there’s additional capital funding in the budget. Mrs. Henderson gave the following examples: the arts facilities in the downtown, upgrades for existing facilities, and finish park design and development in the same year vs. putting off development to the next year.

Mrs. Robison stated the same year the council delayed Bartley Park , they also delayed the north Cary community center. She’d like some discussion on this issue. Mrs. Henderson stated this is on the aggressive plan list (Exhibit A). She stated staff has thought that this could be tied to the aquatic center, since the aquatics center could have community center attributes. She stated staff has also thought that council should consider more distance from the downtown community center. She stated community centers are important, and they do have an operations impact. She stated the Town is falling behind in this programming.

Mrs. Robinson left the meeting at 6:45 p.m.

Mayor McAlister stated the north Cary community center could be part of the aquatics discussion. Mrs. Henderson stated the north Cary site may not be at the same scale as what’s being discussed for the aquatic facility. Mrs. Robison wants a venue to bring this to council to determine what can be done with this site.

Mrs. Robison stated Lexie Lane is on the more aggressive scenario, and she wants to do these improvements. Mrs. Henderson stated the council has decided to continue to use the convenience center, but staff can do an analysis to determine if the park can be expanded in another direction. By consensus the council concurred with staff doing this analysis.

Ms. Dorrel asked if additional funding would allow the Bartley Park development to occur sooner. Mrs. Henderson responded negatively, because it would just be the first phase of construction during this fiscal year.  

Mrs. Robison reiterated council’s consensus about the following issues: Lexie Lane park analysis and discussion about the north Cary community center with the aquatics work session. The council confirmed their agreement.

Mr. Coleman stated he doesn’t see the aquatics facility being built in north Cary . If there’s an interest in looking at a community center in north Cary , then he suggested that council discuss it in a budget work session or have a separate staff report for council consideration.

Council concurred with staff doing an analysis of the original justification for the north Cary community center that was part of the original PRCR master plan (i.e., what criteria will be used to make a determination of where community centers are located, what justifies building a new community center, etc.). They concurred with this issue coming back to council outside of the aquatic center discussion.

Mrs. Robison asked at what point the council will discuss the projects not included in the capital program, especially for transportation. Mr. Coleman stated this can occur at the May 23 work session. Mayor McAlister stated at the next work session the council can wrap up the capital discussion and move to the operating issues.

Mayor McAlister adjourned the work session at 7:07 p.m.