Chapel Hill Town Manager Maurice Jones recommends 2019-20 budget
UPDATE: The Chapel Hill Town Council approved a $116 million budget on June 12 — roughly $3 million more than Town Manager Maurice Jones recommended in his fiscal year 2019-20 budget plan. The council also approved Jones’ proposed property tax rate of 1.6 cents per $100 in assessed property value.
Property owners could pay higher taxes next year to cover town construction projects, including a new police station, and the debt on a $10 million affordable-housing bond.
Town Manager Maurice Jones also wants to have a community conversation soon about a growing gap between local wants and needs and the town’s ability to pay for them.
“You’re not going to see a long line of folks saying cut ‘X’ or ‘Y,’” Jones said. “We need to talk about where are we spending our money right now, where can we spend it in the future, especially coming out of the discussion about climate action plans, what do we need to do to make us as strong as we need to be when it comes to environmental sustainability.”
The budget Jones presented Wednesday to the Town Council includes a 1.6-cent property tax rate increase — a 3% jump — for the 2019-20 fiscal year.
The $113 million budget is 3.7% more than the current budget and includes $68.5 million for the town’s daily operations. The rest pays for Chapel Hill Transit, construction debt, town maintenance, public housing and other non-daily needs.
This is Jones’ first budget as Chapel Hill’s town manager. The town continues to spend more than it takes in each year, despite a slight growth in property tax revenues and strong growth in sales tax revenues, he said. His spending plan for the fiscal year that begins July 1 is a short-term fix, he said.
“It’s not a secret that there are certain areas where we’re just not growing as quickly as we need to maintain out services,” he said. “Property tax is just one area where we’re not seeing the growth on the assessment side, quite frankly, and that is something we have to be aware of, and consider and think about as we’re moving toward the future.”
He noted the issue of delayed street paving projects around town. Those projects were delayed for several years to save money, he said, but the result is a decrease in the quality of local roads.
“That’s just an example of an area where we’ve cut in order to balance the budget,” Jones said.
He advised starting this year with six to 12 months of public discussion about the town’s future. That could form the foundation for a five-year budget strategy with investment opportunities, he said, and give the council more information for making future decisions.
A public hearing on the 2019-20 budget will be held May 8 at Chapel Hill Town Hall. Two budget work sessions also will be held — on May 15 and June 5 at the Chapel Hill Public Library — and the council is expected to adopt the budget June 12.
How much will taxes, fees increase?
▪ The proposed 1.6-cent property tax rate increase would make the new town rate 54.4 cents for every $100 in assessed property value. A penny on the town’s tax rate raises roughly $828,000.
▪ The owner of a $400,000 home would pay a Chapel Hill tax bill of $2,176 — an extra $64 — next year. Chapel Hill residents also pay a county tax rate of 85.04 cents and a Chapel Hill-Carrboro City Schools tax rate of 20.18 cents for every $100 in property value.
The Orange County Board of Commissioners will hear the county manager’s recommended budget Thursday at the Whitted Building in Hillsborough. The commissioners set the county and the school district property tax rates.
▪ The tax-rate increase would pay for a $10 million affordable housing bond that voters approved in 2018. The money is expected to help with affordable-housing projects on town land and redeveloping some public-housing complexes. Another debt-funded project is the new Chapel Hill Police Department, part of a future Municipal Services Center planned for Estes Drive Extension.
▪ The town’s annual Stormwater Management fee could increase by $2.82. The new fee would be $34.97 for every 1,000 square feet of impervious surface, such as roofs and driveways, on a property.
▪ The Downtown Service District rate — a tax paid on property in the downtown district — would remain 7 cents per $100 in value.
What are the big-ticket expenses?
The town’s public safety and public works expenses comprise about 56.6% of the proposed $68.5 million General Fund budget. Here’s a quick look at those and other big-ticket items:
▪ Chapel Hill Transit: It’s expected to cost $24.8 million next year — a 4.3% increase in this year’s budget. The town and its transit partners, Carrboro and UNC, are negotiating what each would pay.
UNC’s current 35% share would amount to $8.7 million next year, Chapel Hill would pay $5.5 million, and Carrboro would pay $1.8 million. The rest includes service charges, state and federal funds, and other financial resources, such as grants.
▪ Public Safety: The budget for Chapel Hill fire and police is nearly $25.7 million next year. The Police Department’s $16 million share could include $200,000 to improve starting pay and adjust existing pay to make the department a more competitive employer.
“It is a competitive market for good police officers, and we know we have a number of great police officers here and we want to retain them and also continue to recruit good officers to our Police Department. We think this is one way of doing that,” Jones said.
▪ Public Works: The department’s proposed $13 million budget includes money for streets and sidewalks, building maintenance, traffic planning, solid waste and construction projects.
What special projects are included?
The manager’s recommended budget includes money for environmental sustainability, affordable housing, urban design and other projects that meet the council’s strategic goals:
▪ $50,000 for developing a Climate Action Plan
▪ $315,000 to start addressing the issue of coal ash buried at the existing Chapel Hill Police Department headquarters. The town is working with the state, an environmental engineering firm and a toxicologist to determine what steps should be taken to clean up or contain the coal ash, which was buried on the site before the town bought it in the early 1980s. The council is scheduled to get an update on the ongoing work May 15.
▪ $100,000 for urban design services to help development projects meet placemaking, walkability and other goals
What’s in it for town employees?
▪ Roughly 74% of the town’s $68.5 million General Fund budget pays employee salaries and benefits.
▪ The town has faced increasing competition for hiring and retaining quality employees, causing a high 14% turnover rate, particularly in the Police Department. More employees also have retired. Jones is recommending the town maintain its benefits package and make annual market-based salary adjustments, including a 3% pay raise for employees next year.
▪ $100,000 for a comprehensive classification and compensation study of competitive salary ranges in the Triangle job market and to create a compensation policy
▪ The town will continue to meet the Orange County Living Wage standard — $14.25 per hour for employees without health benefits and $12.75 with health benefits.