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Work Session Minutes of the Town of Cary, NC June 20, 2008 7 a.m. Room 10035 316 N. Academy St., Cary, NC
Present: Mayor Harold Weinbrecht, Mayor Pro Tem Julie Robison, Council Members Gale Adcock, Don Frantz, Ervin Portman, Jennifer Robinson and Jack Smith
Refer to Exhibit A attached to and incorporated herein for handout materials (spreadsheet titled FY 2009 General Capital Improvements Budget Funding Status and FY 2009 Capital Improvements Budget Comparison Recommended to Revised).
Town Manager Coleman and Budget Director Fogleman outlined the Exhibit.
Mr. Portman asked about the status of aquatics, because it does not appear on the list. Mr. Fogleman stated aquatics is not funded in Fiscal Year 2009 and the $15 million in the existing project is still there and the majority of that money is funded with 2003 park bond authority.
Mr. Portman stated the council met a few months ago and made a site selection decision for the aquatics facility. He stated at a recent budget work session the council had a discussion and agreed to swap the aquatics cash of $15 million to instead fund Cary Elementary and to swap the Cary Elementary debt funding to instead fund aquatics. He does not think it was council’s intent to drop aquatics from the list.
Mr. Fogleman stated the $15 million for aquatics is still funded and appropriated. The additional $8.8 million is not yet funded for a total of $23.8 million. He stated aquatics is now funded with debt, which now raises the question of how it fits with the 15% debt ceiling.
Mr. Portman does not think the prior conversations of swapping funding for aquatics and Cary Elementary was intended to result in prioritizing Cary Elementary over aquatics.
Mr. Smith does not think aquatics fell off the table; rather, it is taking its role in the scheme of priorities. He stated the question is whether it is too low on the priority list at this time.
Mr. Coleman stated aquatics options are never foreclosed. He stated there is no specific aquatics project at this time other than the $23 million project. He stated staff is now reviewing options to partner with private organizations to bring a proposal to the council. He thinks the question is whether aquatics is a higher priority than anything else that has been removed from the funding list.
Mr. Portman asked the impact if we were to fund the Cary Elementary project with debt funding. Mr. Coleman stated it would be the same situation, and debt would go over 16.2%.
Mrs. Robison stated if aquatic partnerships work out, then council might want to explore a higher debt threshold.
Mr. Portman stated the council has reprioritized the capital budget to put $60 million in the downtown area, which removes aquatics. He thinks the council is creating a crisis by funding too much in the downtown area.
ACTION: Mr. Portman moved to not reassign the $15 million in cash from aquatics to Cary Elementary. Mayor Weinbrecht provided the second.
Mr. Smith stated the private sector has indicated a willingness to partner in aquatics, and he thinks it will come to fruition. He thinks it is important to make the investment in the downtown area to ensure economic vitality.
Mr. Portman is not trying to add additional spending for aquatics; rather, he wants to adhere to prior commitments. He thinks the downtown should be a cost-share.
Mrs. Robison stated downtown infrastructure is typically built by the municipality, and she does not see private sector participation. She thinks the TAC pool has satisfied much of the competition swimming demand. She thinks a recreation pool would be nice to have but is not necessary.
Mr. Frantz stated the Cary Elementary project is ready to move forward and aquatics is not.
Mrs. Adcock stated she does not think there is a lot of council consensus on aquatics and the scope of the project.
ACTION: Vote was called for on the motion. Mr. Portman voted “aye”; all others voted “no”; the motion failed for lack of majority vote.
Mrs. Robinson stated people are interested in raising money for the performing arts center, and the county commissioners are willing to move the hotel/motel/food/beverage money (county money hereafter) from aquatics into this project. She wants the council to make a decision about the time frame for this project. She stated it can take a few years for private fundraising. She thinks council needs to decide if we use the county money for the performing arts center, let it go, or find another use for it.
Mr. Smith stated Cary’s contribution to the county money is very high, and Cary has received very little in return. He said Cary is about to lose that money, and he concurred with Mrs. Robinson that the council needs to make a decision regarding the county money.
ACTION: Mr. Portman moved to apply the $10 million towards the combination of a competitive and recreation swimming venue, which was the original idea for the county money. The Town can build the recreation aquatic facility next to the existing competitive facility. Mayor Weinbrecht provided the second.
Mr. Coleman does not think a recreational aquatic facility would qualify for the county money, because the TAC competitive swimming venue brings in the visitors.
Mr. Smith would rather see a motion to direct staff to look at projects that could be an effective way to use the county money and get bring this information back to council in a timely manner.
Mr. Coleman stated Cary has long range plans for facility improvements that could fit the county’s criteria (i.e., soccer park and USA baseball). Parks, recreation and cultural resources director Mary Henderson stated staff will bring information back to council that would probably satisfy county requirements for county funding.
ACTION: Mr. Portman withdrew his motion, and Mayor Weinbrecht withdrew his second.
ACTION: Mr. Portman moved to direct staff to bring back information to council as soon as possible on a plan that would satisfy the county money requirements. Mayor Weinbrecht provided the second.
Mr. Frantz and Mrs. Robinson stated the performing arts center meets the county requirements for funding.
Mr. Portman stated the performing arts center is an unfunded project. Mr. Coleman stated it is a big enough project, and if programmed correctly it would probably meet the requirements for county funding.
Mrs. Robinson asked if it would matter that design of the facility would not occur for a few years. Mrs. Henderson does not think it would be a huge factor as long as the intent is stated. Mr. Coleman stated the county money could be used for design of this facility.
Mrs. Robinson stated the county money would allow the private sector to begin their fundraising so construction could begin in about four years.
Mr. Portman stated if the public raises private funds, then it is important for council to support the project and see it to completion. He does not think it is the right time to put more money in the downtown area.
ACTION: Vote was called for on the motion. Mrs. Robinson voted “no.” All others voted “aye”. The motion carried by majority vote. The motion carried by majority vote.
Mr. Coleman moved into the operating budget discussion. Refer to the Exhibit (page titled FY 2009 Capital Improvements Budget Comparison Recommended to Revised.
Mrs. Robison asked if the budget includes software to automate permitting. Technology Services Director Bill Stice stated the program is currently in the pilot mode with about 15 different projects, and staff expects to fully launch it in about the next 60 days. He stated the Town already has on-line permitting.
Mrs. Robison commented that there has been some e-mail traffic about school resource officers (SROs). She read that the county is looking to eliminate SROs at the elementary school level that are focused on gang education.
Mr. Portman asked for clarification on page 4 (square) on the computer software line item accounts. Mr. Coleman stated the software costs are generally to enable us to improve services to the public, help us meet regulatory requirements, or create efficiencies in operation.
Mr. Portman asked about the contracted services account. Mr. Fogleman will send the council an e-mail containing this information. Mr. Stice stated the Town is switching to VOIP, which will ultimately result in significant savings.
Mrs. Robison asked about fuel saving measures (i.e., hybrid vehicles, etc.). Mr. Coleman stated staff continually looks at different types of equipment and vehicles. He added the cost difference in the past has been significant with no pay-back; as costs change, the staff will continue to look at opportunities.
Mr. Coleman stated wastewater and water plants are huge energy users and always monitor energy use to take advantage of off-peak use. He stated staff will provide the council an outline of various decisions made by staff to create efficiencies and reduce operating costs.
Mrs. Robinson stated she has had misgivings about the 37 cent tax rate based on the difficult economic situation.
ACTION: Mrs. Robinson moved to set the tax rate at 33 cents. Mr. Frantz provided the second.
Mr. Frantz stated the council is doing the same projects with either tax rates.
Mrs. Adcock asked about the projected tax rate to increasing to 38 cents in a couple of years.
Mayor Weinbrecht stated there is never a good time to raise taxes. He stated unless there is a tax increase, he believes transportation and parks will suffer, and he cannot support this. He wants to revisit capital projects if council chooses to implement a 33 cent tax rate.
Mr. Smith stated everything is a priority and timing is important. He stated postponing some things does not ruin Cary’s quality of life.
Mayor Weinbrecht asked the status of Cary Parkway improvements. Mr. Coleman stated we would have choices to make regarding maintenance funding. Mr. Bailey stated $3.5 million has been funded in FY 2009; it is the FY 2010 budget that would have the extra revenue from a 37 cent tax rate. He stated FY 2009 is funded with either tax rate scenario.
Mr. Portman stated Jenks Carpenter/High House is an important safety issue to consider, and it is unfunded. Mrs. Robinson concurs with postponing this work, as long as the work already done would not be lost if delayed. Mr. Portman stated a project design is good for two to three years. He stated the design has not been completed design.
Mr. Portman suggested doing some of the downtown projects over a two-year period instead of budgeting the total amount in FY 2009. He would like to take $20 million capital money from FY 2009 and move it into FY 2010. He stated the FY 2009 budget has a record number of capital projects.
Mr. Frantz asked about removing $20 million from the FY 2009 streetscape fund and moving it to next year and bringing other projects back to the FY 2009 budget. Mr. Coleman stated to do this would breaking the streetscape project into phases and be willing to not do part of it if funding changes. He stated it would create cost and timing issues. Mr. Fogleman stated the streetscape funding is in one year’s budget to get the commitment to the scope of the project. It is all debt financing and is spread out into the long-term forecast of how it impacts debt percentage.
Mr. Fogleman stated Walker Street improvements are also debt funded. Mr. Bailey added that the Walker Street improvements do not impact cash, but it does count toward the 15% debt ceiling. Mr. Bailey stated if the council does not consider making progress on the Walker Street improvements, then the Town will lose $1 million in federal funding for this project. He stated it was kept as a high priority due to timing based on downtown congestion. Mr. Coleman stated Walker Street will continue to be a priority on Cary’s federal legislative agenda.
Mr. Frantz asked the impact on the debt ceiling if the Walker Street project is removed from the FY 2009 budget. Mr. Coleman stated it does not matter in FY 2009; rather, it’s whether to do the project at all. He stated it has been established that we need to do the project.
Mr. Coleman stated it is easy to focus on the current budget year. He stated staff tries to give historical perspectives of capital funding over a long period of time. He stated over the last 10 years the Town has spent hundreds of millions of dollars, and very little has been spent in the downtown area.
Mrs. Robison thinks a 37 cent tax rate gives some flexibility and cushion.
Mayor Weinbrecht stated if council postpones a tax increase this year, then he thinks it will be an even more difficult decision next year because it is an election year and the economy may worsen.
Mr. Smith is in favor of the council making the difficult budget decisions. He thinks if there is a cushion, then the council will find a way to spend it. Mrs. Robison clarified that her intent with a 37 cent tax rate is to have money to set aside and not to find other projects to fund.
The council continued their discussion on the merits of a 33 vs. 37 cent tax rate.
ACTION: Mrs. Robinson moved to call the question. A second was not stated. The council granted unanimous approval.
ACTION: Vote was called for on the motion to move forward with a 33 cent tax rate. Mrs. Robison and Mayor Weinbrecht voted “no”; all others voted “aye.” The motion carried by majority vote.
ACTION: Mayor Weinbrecht moved to conduct another work session to review capital projects. Mr. Portman provided the second.
The council discussed the merits of conducting another work session.
ACTION: Vote was called for on the motion to conduct another work session. Mr. Smith and Mr. Frantz voted “no”; all others voted “aye.” The motion carried by majority vote.
The clerk will work with council members to establish a work session date and time.
Mr. Coleman stated at the next work session the staff will address the impact of a 33 cent tax rate on transportation projects. He stated staff will also provide information on potentially cutting $20 million in debt from the capital budget.
Mayor Weinbrecht asked if staff will provide information about future tax rate increases. Mr. Coleman urged council to not look at numbers in terms of impacting tax rates; instead, look at it as creating new revenue to cover a shortfall if it exists or reprioritize operating and capital budget to meet conditions.
Mr. Portman also wants information on the return to the taxpayers on incremental tax revenues with full buildout of the town center area plan.
Mr. Coleman stated staff will also provide a picture of the total capital spending over the last eight to ten years and where it has occurred.
ACTION: At 8:58 p.m. Mr. Smith moved for closed session for the following purpose; Mr. Portman provided the second; and council granted unanimous approval.
Pursuant to G.S. 143-318.11(A)(6), closed session is called to consider the qualifications, competence, performance, character, fitness, conditions of appointment, or conditions of initial employment of one or more individual public officers or employees.
The council re-entered open session.
ACTION: At 9:15 a.m. Mr. Frantz moved to adjourn; Mr. Portman provided the second; council granted unanimous approval. (Mrs. Adcock, Mrs. Robison and Mr. Smith were not in the room and were not excused from voting; therefore, the record reflects an “aye” vote for them.)
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