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DRAFT (Contact the town clerk at 919-469-4011 for official minutes)
Work Session Minutes of the Town of Cary, NC Community Development Block Grant and FY 2009 Budget May 13, 2008 5:30 p.m. Conference Room 10035, 316 N. Academy St., Cary, NC
Present: Mayor Harold Weinbrecht, Council Members Gale Adcock, Don Frantz, Erv Portman and Jack Smith.
Mayor Pro Tem Julie Robison and Council Member Jennifer Robinson arrived late and their arrival is noted in the minutes. Mrs. Robison did not attend the CDBG portion of the meeting because of a conflict of interest in that she serves on the board of directors of an organization requesting these funds.
Mayor Weinbrecht called the meeting to order at 5:34 p.m.
Mr. Philip Smith of the planning staff stated Hospice requested a $500,000 grant over a 3 year period, and the council committed $158,000 last year as the first year’s worth of funding. They conducted a groundbreaking ceremony and have site plan approval but they do not have building permits. The Town has requested from them a copy of their phase 1 environmental review which is needed prior to funding from the Town. Staff thinks the $158,000 can be spent in the coming year, and the additional commitment can be funded in a future year.
Mrs. Adcock asked if Hospice understands that this is not a denial but rather a timeline issue. Mr. Smith stated they understand this.
Mr. Smith said the funds are to be used to support six units in their palliated care center for low income families.
Mr. Smith stated the White Oak Foundation has requested CDBG funds from its inception in Cary, and the Town has always denied them because they are outside of the town limits. However, the Town is building a pump station on Green Level West Road and sewer is within a reasonable distance from their site. He said that they have received a HUD grant for a community center, and staff believes it may be appropriate to fund them this year. He said if they get utilities they plan to build an elderly care facility with some independent and dependent living units. He said that the site will be within 1.25 miles of a planned future activity center; they are 2¾ miles from High House and NC 55 and 4 miles to Alston and High House Davis Drive. They are within 2 miles of an elementary school and 3 miles of Green Hope High School. Mr. Smith said there is a budget request this year to extend C-Tran to NC55 and High House; if approved, they will be within 2¾ miles to a C-Tran route. Additionally, senior citizens are eligible for door-to-door transit system. He said that they are within 1000 feet of the future Rafferty Park and American Tobacco Trail and 1.5 miles to Thomas Brooks Park. He stated they will be well served when the project comes on line. He stated this project was the lowest ranked project recommended by staff for funding. They need a comprehensive plan amendment and rezoning to do their housing project. He said that funding could be delayed until next year or they could be funded this year and if annexation or zoning is not approved, then funding could reprogrammed for another use mid-year.
Mr. Portman asked if the application limits their project to senior housing. Mr. Smith stated funding is requested for the community center and a senior facility. Mr. Portman asked if that is consistent with the southwest area plan. Mr. Smith stated they will need comprehensive plan and zoning amendments. Mr. Portman is concerned that this appears to be a defacto approval of comprehensive plan and zoning amendments if council approves this grant. He thinks the funding is premature.
Mr. Portman asked about the next project that didn’t make the list. Mr. Smith stated they reduced funding for Habitat for Humanity, rehabilitation program, Hospice and The Carying Place. He said that money can be redistributed to the other projects.
Mr. Frantz asked what happens if money is not appropriated for White Oak. Mr. Smith stated it can be left unfunded.
Mrs. Robinson arrived at this point in the meeting at 5:45 p.m.
Mrs. Adcock asked about the thought process in holding money aside. Mr. Smith stated it covers any cost overruns.
Mr. Frantz suggested redistributing the money.
Mrs. Adcock asked about the Town’s past process (fund as much as possible or spread out as much as possible). Mr. Smith stated that staff uses an internal review to determine how well projects meet Town plans and community needs. He said they look at how it fits into the consolidated plan and address all identified needs. They try to spread funding to meet different needs.
Mr. Jack Smith asked about any backlog demand for rehabilitation. Mr. Philip Smith responded that they are doing about 25 per year and are keeping up with all applications. He said they have been hesitant to do a major advertising campaign because they don’t want a waiting list situation that may result in home repairs being delayed by homeowners. He said they also must match demand with the number of contractors interested in doing the program. He said that $60,000 is budgeted, plus money left over from previous years, plus an additional general fund request for a total of about $421,000 in rehabilitation at this time.
Mr. Jack Smith stated that the Town’s downtown program has resulted in less housing opportunities utilized by The Carying Place. He suggested council consider additional funding for this organization to meet their needs. Mr. Philip Smith responded that staff recommendation for The Cary Place replaces the units lost through the Town’s actions. If council grants the full request, then the money will provide for three additional units.
ACTION: Mr. Portman moved to modify the proposal to delete $100,000 for White Oak Foundation and allocate an additional $40,000 to housing rehabilitation, $30,000 for The Carying Place and the remaining $30,000 of the $100,000 that was eliminated to the reserves for cost overruns. Mr. Frantz provided the second.
Mrs. Robinson is concerned with adding more affordable units to downtown. She stated that the Habitat request for the Sorrel Street land purchase will put more affordable units in downtown.
Mr. Portman stated that affordable housing is driven by land price, and he understands the concern. Mrs. Robinson stated that downtown allows for higher density, but there are other higher density communities in Cary that can absorb this. She has a lot of reservation about concentrating affordable housing in one location.
Mrs. Adcock asked how much affordable housing already exists in the downtown area. Mr. Philip Smith stated that 69% of the Chatham/Academy census tract (population) is low and moderate, with the other three quadrants being 60%, 40% and 50% low and moderate income. He said that the Town center area plan is 60% rental property, and past council direction was to increase the homeownership rate in this area. He said if the Town uses CDBG funds for this purpose, then we need to make the housing affordable for the low and moderate income families that live in the area.
Mr. Philip Smith gave the following breakdown of the percentage of affordable housing in Cary by council district based on tax values: District A: 27%; District B: 21%; District C: 22%; and District D: 30%. He stated the size of the district should be considered.
Mrs. Robinson stated that affordable units do not have to be downtown. She stated that the market rate units could reduce the rental ratio without using CDBG funds.
Mr. Portman thinks that the majority of affordable housing in the downtown area is based on the market and not CDBG funds.
Mrs. Robinson said that she does not support $210,000 for Habitat houses in downtown but she would support them building affordable housing units in other parts of Town. She supports The Carying Place because the triplexes already exist.
Mr. Portman said he believes it would be more difficult to build affordable housing in other parts of Cary due to land costs.
Mr. Jack Smith stated it is important for affordable housing to be located near support services.
Mrs. Adcock suggested taking $100,000 from White Oak Foundation and not putting any additional money in rehabilitation due to other existing funds to do 25 houses a year. Instead, she suggested moving $40,000 from rehabilitation into The Carying Place (total $70,000 for The Carying Place) and putting the rest into the reserves.
Mr. Frantz won’t support the motion without rehabilitation.
ACTION: Mrs. Adcock moved to amend the motion as follows: take $100,000 from White Oak Foundation. Add $40,000 of this $100,000 to housing rehabilitation, add $45,000 to The Carying Place and add $15,000 to reserves. Mr. Jack Smith provided the second.
Mayor Weinbrecht stated the motion changes the housing rehabilitation amount to $100,000, The Carying Place amount to $175,000, adds $40,000 to the reserve, and eliminates funding for the White Oak Foundation.
ACTION: Mayor Weinbrecht called for a vote to amend the motion, and council granted unanimous approval.
Mr. Portman and Mr. Jack Smith clarified that White Oak Foundation and Hospice are just timing issues. Mr. Smith said that White Oak Foundation should get all other approvals in place prior to the Town considering CDBG money.
ACTION: Mayor Weinbrecht called for a vote on the motion (as amended), and council granted unanimous approval.
Mrs. Robinson asked Habitat to address her affordable housing concern. Mr. Woody Yates, Executive Director for Habitat of Wake County, stated they will be happy to look for land elsewhere. He stated the key issue is the land cost.
Mrs. Robinson wants to appropriate money to Habitat with the understanding that Habitat will look for land outside of the downtown area, and only move forward in downtown with these funds if necessary.
Mayor Weinbrecht asked whether the project descriptions are tied to the funding. Mr. Smith stated they will revise the HUD application deleting the reference to Sorrell Street. Council motion is not needed. Staff will update the description.
Mr. Frantz asked if staff works with organizations to help them find land. Mr. Smith stated staff works closely with these organizations to help identify potential affordable housing land.
Mr. Portman stated that compatibility is an issue. He thinks building affordable housing in affordable neighborhoods is the right thing. For this reason he is not in favor of directing Habitat to look elsewhere for this project. He said that he disagrees with changing council policy. Mrs. Robinson disagreed.
Mr. Portman asked the number of housing units in downtown and the number subsidized by the Town and whether it impacts the area. Mr. Philip Smith stated they have done over 100 affordable units in the Town center area plan and, except for The Carying Place, all are for homeownership.
Mr. Portman stated that 100 units is not significant as it relates to the number of housing units in the area. He agrees with what’s been adopted but not Mrs. Robinson’s suggested policy change.
Mayor Weinbrecht recapped that council would prefer Habitat to look for opportunities outside of the town center but council understands that it might not happen.
Mrs. Robinson stated council in the past has supported the policy of dispersing affordable units through the community and has supported homeownership vs. rental. Mr. Jack Smith added that consultants have stated that affordable housing can be dispersed. He stated it’s important to consider the vision for downtown.
Mayor Weinbrecht recommended that council direct staff to begin a review of the overall affordable housing policy and move forward with the proposed CDBG funds to Habitat. Mrs. Robinson concurred as long as Habitat tries to find land outside the downtown area. Mr. Coleman stated that the Town is in the process of updating the affordable housing plan, and the plan and related policies will be brought back to council.
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Mrs. Robison arrived at 6:28 p.m.
The agenda for the budget portion of the work session follows.
Refer to the proposed FY 2009 budget for reference, which is filed with the minutes of the May 8, 2008 council meeting. Additional materials were distributed at the work session and are attached to and incorporated herein as Exhibit A.
Mr. Coleman reviewed the budget calendar with council, including proposed council work session dates.
Mr. Coleman stated for FY 2009 he is recommended a $300,204,903 budget, which is equivalent to a 2.9% increase in the general fund operating budget and a 3% increase in the utility fund operating budget. He stated the capital budget changes each year based on the recommended projects. He stated he is recommending a total capital budget in FY 2009 of about $140,000,000; $48,000,000 of which is utility fund and $90,000,000 general fund.
Mr. Coleman stated this is a revaluation year, and the total property value in Cary increased by about 38%. He is recommending a tax rate of $0.33, which is a tax rate defined by staff as revenue neutral based on Cary’s growth over the past year. He stated the state formula for revenue neutral gives a revenue growth of about 5%, but based on Cary’s growth data over the past year the staff believes the growth is closer to 7%.
Mr. Coleman stated staff is recommending an increase in the solid waste collection fee from $11.75 to $14, and this is based on the policy to generate between 75% to 80% of the cost of the solid waste collection system through the fee with the remaining percentage covered through the tax rate.
Mr. Coleman stated this year the utility rate model indicates a utility rate increase of about 1.9%; however, when reviewing potential increases over the next few years, there is a spike of about 18%, and he stated council may want to consider leveling those rates over a five or six year period to avoid a rate spike. He referenced Page 13 of Exhibit A of the potential “smooth out” rates.
He stated staff has tried to identify costs of various elements in the general fund budget and note increases in every department and the associated reasons for increases. He stated there are no new major programs proposed for the general fund in FY 2009. He stated the recycling changes approved by council at the last council meeting are not included in the work session materials, because these changes will be reflected in the audit of the FY 2008 budget.
Mr. Coleman stated there are 25.25 Full Time Equivalent positions (FTEs). (Refer to Pages 21 through 26 of Exhibit A). He recommends these additional positions due to regulatory changes, workload issues and service improvements.
The council discussed workload issues in the inspections and permits department. They concurred that if becomes a concern, then council can make a mid-year adjustment.
Mr. Portman wants the council to have a comparison of the proposed FY 2009 budget to the (1) adopted FY 2008 budget; (2) modified FY 2008 budget; and (3) projected actual FY 2008 spending. Mr. Portman, Mrs. Adcock and Mrs. Robison agreed this is important for transparency. Mr. Frantz and Mrs. Robinson disagreed with staff spending time on the spending comparison, and they thought a better comparison would be the appropriations. Mr. Coleman stated staff can provide the requested information with minimal effort.
Mr. Portman asked staff to explain how they devised the revenue neutral proposed tax rate of $0.33 cents based on revaluation. Mr. Fogleman, Budget Director, described the process. Refer to Exhibit B attached to and incorporated herein for an explanation of that process.
Mr. Smith thinks a more accurate revenue neutral tax rate would be $0.3179. Mr. Weinbrecht reiterated that Cary’s calculation uses a more accurate growth rate for the past year and reflects a more appropriate tax rate ($0.33).
The council discussed the process used to calculate the revenue neutral tax rate. Mr. Portman suggested to round the number down to $0.32 instead of up to $0.33; he questioned the assumed collection rate used to determine this number. Mayor Weinbrecht suggested discussing the tax rate at the next budget work session.
The council directed the clerk to reschedule the May 27 budget work session to a date when all council members can attend.
The mayor adjourned the meeting at 7:52 p.m. |