Town Manager Roger Stancil issued a seven-page response this week to a group’s claim he has mishandled taxpayers’ money.
“In today’s world, it’s really easy to throw around words and accuse people of stuff, but being stewards of the people’s tax dollars is a serious responsibility,” Stancil said.
“I know Ken (Pennoyer) takes that seriously, and so do I. That’s our primary job,” he said. “I think it’s really important that people have confidence in how we spend their tax dollars.”
Pennoyer is the town’s business management director.
A group of 10 residents asked the Town Council Monday to look into Stancil’s fiscal management and asked him to explain his actions and come up with a plan for improving his performance.
Council members referred the petition to staff for follow-up discussion at a future meeting, which is their policy. Stancil’s annual evaluation is scheduled this month.
Stancil emailed the council and senior staff members his response Thursday.
He can’t answer for what happened before he was hired in 2006, Stancil said, but the town has had successful audits by independent experts and a top AAA bond rating for several years.
The town also has been recognized for its budget by the Government Finance Officers Association for 18 years, he said, and its annual financial report has won awards for 29 years.
Stancil said he consults regularly with the council on town finances. It’s not uncommon in his business to be questioned about what he does, he said, but he only does what the council tells him to do.
Here are the group’s criticisms:
Allegation: The town’s cost for consultants, including one contract for Martin Luther King Jr. Boulevard-Estes Drive area planning consultants that grew from $90,000 to $230,000
Response: Consultants were hired to help with four Central West (MLK-Estes area) steering committee meetings and one community workshop at an estimated cost of $93,000, Stancil said.
But the steering committee – of residents, property owners and others – ended up holding three community workshops and more than 30 committee meetings and 10 community meetings, he said. As a result, the process required more staff meetings and materials, he said. The town’s budget for planning Central West and other long-term focus areas was able to absorb the cost, he said.
“We learned a valuable lesson,” Stancil said. “As we strive to meet the interests of the council for community engagement, we must do so within the confines of the town’s financial realities and processes.”
Allegation: Using public money to promote private development, specifically the Obey Creek project
Response: Town staff is unaware of public money spent promoting Obey Creek on U.S. 15-501 across from Southern Village, Stancil said. Developer East West Partners is paying for the consultants and other costs related to the development agreement process, he said.
Allegation: Using fees expected from Ephesus-Fordham redevelopment projects to pay for affordable-housing projects
Response: This year’s draft budget proposed $188,750 for affordable housing projects, Stancil said, but the council asked for the equivalent of a penny on the tax rate, or roughly $729,000.
Town staff came up with several ways to make up the additional money, he said, including using $355,000 in expected development fees from the first few Ephesus-Fordham district projects this year.
Allegation: Failure in recent years to pay money toward the town’s estimated $56 million liability for retiree health care costs
Response: Retiree health care costs is a national problem. Chapel Hill’s council deferred payments toward future claims during the recession, Stancil said, in order to meet more immediate priorities. The council also changed the health care plans for new employees and those over age 65 to limit future costs, he said.
The town’s old health care plans still cover 892 current and former employees, Pennoyer said. The town will pay roughly $1.24 million this year for retirees now receiving benefits, a 6.3 percent drop in the annual cost, he said.
Pennoyer said that cost will continue dropping, because employees now join a defined contribution plan with different rules. There are 150 employees in the new plan, he said.
Stancil also presented a plan this spring to split a portion of money left over each year between the liability and the town’s capital projects fund.
Allegation: More than doubling the cost of flood-damage repairs to Town Hall – from roughly $500,000 to $1.2 million – by making additional renovations
Response: When Town Hall’s first floor was flooded on June 30, 2013, the council decided to renovate and make town services more efficient, Stancil said.
The town’s long-range plan already had budgeted $4.2 million for those renovations. The council approved $1.5 million for part of the project in November. Since then, the budget has grown by roughly $100,000 to upgrade the audio and video equipment in the council’s chambers, Stancil said.
The project restored the damaged council chambers, created a one-stop permit center on the first floor and included renovations to a wing each on the second and third floors. The business management offices are now on the second floor, leaving the town manager and council offices on the third floor.
The project was funded with an insurance payment of roughly $679,000 for the flood damage and about $900,000 from the town’s debt payment fund. It’s ahead of schedule and on budget, Stancil said.
Allegation: The town manager’s administrative budget is up 45 percent over five years, while money for repairing streets and replacing aging town vehicles decreased by more than 25 percent and other departments, including fire, police and public works, saw their share of the budget stagnate or decline
Response: Stancil and Pennoyer said those numbers don’t take into account changes in town operations and community needs in the last decade.
“That would have been a great starting point for asking the question, ‘Why is this like this?’” Pennoyer said. “We have a whole bunch of answers.”
The council, for example, has created new positions in economic development, sustainability, policy and strategic initiatives, employee concerns and, now, affordable housing. Council members asked for those positions to report directly to the manager, largely to give them more priority, Stancil said, but that adds money for those services to his budget.
“I don’t know if every manager does business like that, but that’s the way I do business, and that’s one reason the manager’s office changes,” Stancil said. “A favorite technique by some of my manager friends is to put lots of stuff in the planning department, so you don’t have to defend the manager’s budget. I don’t choose to do that.”
Once those roles are established, Stancil said he moves them to other departments. Two – policy and strategic initiatives, and sustainability – joined the Planning and Sustainability Department this year, he said, taking their money with them and cutting his share of the budget by roughly 20 percent.
That’s also the case when other departments switch duties, Pennoyer said. When landscaping moved from Public Works to the Parks and Recreation Department, it made the Parks and Rec budget appear to be growing at a faster rate, while the Public Works budget appears to be shrinking.
On average, budgets for all town departments have increased by 3.9 percent in 10 years, Pennoyer said.
Allegation: A potential case of fiscal mismanagement was averted this spring, the petition states. The town had planned to help build a road as part of East West Partners’ Village Plaza apartment project on Elliott Road. When questions were raised, developer Roger Perry said his company would build the road.
Response: Stancil said the town had planned to build the road through a public-private partnership, but a slide presented at a Chapel Hill-Carrboro Chamber of Commerce meeting was unclear about how that road would be funded and built.
Council member Matt Czajkowski raised the issue in June.
The initial plan had the developer paying for planning and design, on-street parking, sidewalks and streetscape amenities. The town would have paid to build and maintain the roadbed. Perry later announced his company will pay to build the road, sidewalks and related amenities.
The road would start at Elliott Road and run north between Village Plaza and the vacant movie theater site. It would end at a future road between Village Plaza and Eastgate shopping center that follows the Booker Creek Trail.
The road also is the main entrance to a parking deck for Perry’s Village Plaza apartment development.