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Brent
05-07-2004, 12:33 PM
Citizen Budget Review (“The People’s Money”)
Fourth Meeting 05/06/2004

Participants:
(* indicates attendance at this meeting)

Robin Joyce (helped facilitate first meeting only)
Adam Arnold (covering some meetings for the Cary News)
* Mike Dodson
* Matthew Danielson
* Brent Miller
John Finn
Katherine Haney
Daryl Baker
Josh Mills
Ray Czarnecki
Bynum Walter
Matt Walter
* Ron Woodard
Ken Elowitz
Darryl Black
Tom McCuiston
* Cathy Heath
* Don Hyatt
* Don Frantz
* Kelly Commiskey
* Lynne Loots
Betty Pickett
June Schmidt
Anita Porter
* Cas Nowak
* Karen Griffin
Spencer Combos
Mike Heath

Council members present this meeting:
Jennifer Robinson
Michael Joyce (briefly)
Julie Robison

New Participants since previous session:
None this time


Notes Since Last Meeting:

· Don Hyatt has set up a forum and e-mail list on the carypolitics.org Web site for use by the group for general discussion (thanks, Don!). We need to make more effective use of this resource.

Opening Remarks
· Michael Joyce: thanks to everyone; we are interested in your input; reiterated that this is not about politics
· Jennifer Robinson: thanks for the invitation; interested in what we have to say. Usually we have 2 or 3 people speaking out on the budget; it’s nice to have a group looking at the budget ahead of the process
· Julie Robison: Interested in hearing our observations.
Agenda:
· Determine high/low priorities for various areas of the capital and operating budget (similar to our exercise at the last meeting for PRCR)


Requests for Information:

Brent will consolidate these on behalf of the group and send to appropriate staff members to ask for more data:
· No new ones

Questions/General Observations:
· Raleigh/Cary have agreed to take over SAS Soccer park. This is introductory comment about how we might deal with fiscal issues: things that are (1) mandated by law; (2) “required”/expected; (3) discretionary. How about we brainstorm on some of these items toward coming up with our budget priorities (some we can agree on, some we may not). We should try to achieve a consensus on services that are discretionary.
· Just curious: who is paying to drain the lake (and associated things)
· We could be of most help to Council if we provided input on budget decisions that are upcoming. However, we have only the FY ’04 budget to work with, we do not know what proposals are coming forward in the FY ’05 budget

Discussion/Brainstorming:
· Mandated by law: Building inspections (how does this relate to, e.g., inspecting tree protection fences, given the recent incident?)
· Expected services: Police, fire, emergency medical, water, sewer, information services (offices for citizens to find out things about the town), roads, transportation, public parks, health/restaurant inspections (provided by county), pest control, trash collection, planning & zoning, “meet state regulations”, economic development [some feel that this is discretionary], fiscal administration (budget/finance), general administration (legal, clerk), maintenance/operation of all of the above where they apply
· Discretionary services (or have a large discretionary component): law enforcement (e.g., SROs), “sewer stuff” (see below) parks, trash pickup, revitalization, transportation
· Prefer tax increases to fee increases (tax increases are deductible)
Breakdown of the above categories:
· Expected services (unless otherwise noted, unanimous agreement that these are “expected” services from local government; some do have “discretionary” components that are further discussed later):
o Police (1 dissenting voice – “sheriff’s department could handle this)
o Fire (1 dissenting voice – could be a shared service with other governments, e.g., county)
o emergency medical
o water
o sewer
o information services (offices for citizens to find out things about the town)
o roads
o transportation
o public parks
o health/restaurant inspections (provided by county)
o pest control
o trash collection
o planning & zoning
o “meet state regulations”
o economic development [some feel that this is discretionary]
o fiscal administration (budget/finance)
o general administration (legal, clerk)
o maintenance/operation of all of the above where they apply

Ranking of these: high priority: roads, police,

· Strong discretionary component [see discussion/ranking below]:
o Law enforcement (especially SROs)
o Sewer “stuff” – e.g., maintenance on private property
o Parks
o Trash pickup (only 1 person is in favor of privatizing trash pickup)
o Revitalization
o Transportation

High priority decisions from a council member’s perspective: Rankings are the group consensus/average, out of a possible rank of 10, with 10 being the highest:
· Police:
o How important is it to have an SRO in every HS? 9
o Every middle school? 10
o Elementary schools? High, but not necessary to have one SRO dedicated to a single school 6-8 Are we willing to spend $900,000 to $1.2M to keep the current elementary school SRO program? Yes
· “Sewer stuff”:
o Should the town take over private sewers in Cary (the portion of the sewers on private property)? No clear group consensus (high priority for those affected, low priority for others). But this is based on an incomplete understanding of the situation; need more data on this (about what constitutes “private” sewer and what the town should maintain vs. what HOAs are responsible for vs. what individual owners are responsible for?). Suggestion: set aside a portion of the water/sewer fees to address general problems with water/sewer throughout town. Suggestion: charge different rates if there are in fact different levels of service.
o Open space preservation (from a portion of sewer fees): high priority. Expecting about 18% fee increase for sewers (4% of that is for open space acquisition). Is the 4% difference worth it to the group (i.e., 18% increase with open space acquisition vs. 14% increase without)? Yes, high priority.
· Stormwater: high priority, especially if considered along with other sewer items above
Parks: [minutes from last meeting copied here:] #1 priority is maintenance (unanimous in group) – maintain what we have. Other priorities among the group: Renovate existing parks (especially Lexie Lane), complete projects in process (before starting new ones), get out of money-losing ventures, land acquisition (don’t need to build parks today, but acquire the land today), build a dog park, preserve open space, connect existing greenways, especially in older neighborhoods, support a low-cost recreational pool (minority view that one person supports the aquatics center – “exactly what the Cary voters approved in the bond issue”). We ought to look at the five options that have been proposed for the aquatics center and see if prefer any specific ones of those. Lowest priorities are aquatics “super center” as defined (much more support a low-cost center that was recreational in nature and for citizens), public art, public takeover of failing parks & recreation facilities (e.g., Tennis Center)
· TCAP/redevelopment: “dynamic downtown”: Anything done downtown should appeal to the “broad community”, not a “special interest” and be some sort of “active use”. Lots of ideas on all kinds of things that might be done with the old Cary Elementary building. Priorities for various downtown options:
o Support for preserving old Cary Elementary building: 8
o Parking: 8
o Sidewalks/streetscape 8; one dissenting voice for much lower ranking.
o Incentives/lower fees 7; one dissenting voice for 4 ranking)
o New downtown park land acquisition: 6
o Stormwater remedies: support for a “canal” system downtown as a stormwater remedy? Some, but some uncertainty about this. What is the support for spending $5M - $8M to address stormwater problems in general? 9
· Transportation: Rail: Cary does not put any money into this.
o CTran: 8. Suggestion that we have a different fee structure that is very cheap for disabled/elderly, etc., even to the point of charging more for other riders. Also have more structured/regular routes.
· Volunteer organizations: ($78,000 given per year, divided among about 10 or 12 organizations.Requests this year exceed available funds). Suggestion that whatever money is available be equally divided among all qualifying groups. 4 people think we should not fund any non-profit groups whatsoever. Overall ranking not quantified, but was low.
· Public art: very low priority (1 person at 5 ranking; all the rest are 2 or below
· Trash pickup (subsidized about $10/household for trash & recycling; recycling services actually make money back): What is priority of service level vs. fees charged? Support for increased fees? Support for money-saving collection mode (e.g., street pickup rather than back yard)? [need to rank this one]
Ideas Going Forward:

From previous meetings:
By approximately May 5[now past], we should have a general report on group consensus on “general principles” for the capital budget (as input to the Council Budget work session for the capital budget on May 12) and similar input for the operating budget by approximately May 18, for the Council Budget work session for the operating budget on May 25.
We can follow this up with specific recommendations for the FY ’05 budget once it is available

Growth management needs to be a future discussion topic

Next Steps:
· Request any follow-up information from Staff (none new)
· Schedule for next meetings
o Thursday, May 6, 6:30 p.m.: Topic: TBD. Location TBD (we will choose a date/time/place and notify everyone by e-mail)
· Don Hyatt will e-mail the entire group with these minutes and encourage more on-line participation/discussion via the carypolitics.org forum
· Brent will produce a consolidated report of what we have done so far

Please note any omissions or corrections.

Brent
05-08-2004, 08:20 AM
I received this reply from Nels Roseland after sending the 05/06 meeting minutes to council. I replied to him indicating that the group fully understood that the proposed utility fee increase was not associated with using a portion of utility funds for open space acquisition, and that the question was framed as a way to gauge the strength of support for such spending, and that even knowing about the increase, no one wanted to reduce the amount of the increase by doing away with open space acquistion and that support for this program was VERY STRONG. if anyone recollects differently, please let me know.

FWIW, I also offered by own personal views -- making it clear that they were mine, not the group's -- on the other 4 options that Nels outlines for reducing the amount of this increase. Of course you are free to tell Council what you think, too; perhaps this is an item we may want to address as a group.

-------------- Nels's letter:

Brent, the summary you provided was very helpful. However, I did want to
clear up some inaccurate figures. Cary staff is recommending an 18% water
bill increase for FY05. However, the increase is not due to the
implementation of Cary's $1 million Open Space revenue stream.

The expected cost for an average 7,000 gallon per month customer in FY05 to
fund the $1M contribution to the Open Space Project is $2.61 per month or
about 5% of their total monthly bill. This works out to $31.82 on an annual
basis for the average single family Cary household.

This Open Space contribution was factored into the Cary Utility Rates two
years ago. The 18% increase you heard about is a result of Cary water
conservation efforts being too successful. This is an increase that is in
addition to our current rate structure (which included the open space fee).
Cary's odd/even water conservation policies, tiered water rates and wet
weather have actually lowered per capita water demand below our conservation
targets. In order to pay for ongoing Utility Plant operations and debt
service on our new expanded plant, Cary staff has recommended an 18%
increase. One way to reduce that 18% increase is to eliminate the open
space contribution. That is not a sound financial policy and would be
tantamount to a complete abandonment of Cary growth management and
environmental conservation principals.

However, there are other methods the Cary Council can reduce the proposed
18% utility increase:

1. Modify Current Conservation Policies - Utility revenue collections are
dependent on two variables. The volume of water purchased and the rate or
cost to purchase water. Per capita consumption has decreased below
targeted levels which has adversely affected revenue collections. Raising
water rates will not help revenue collections. When a commodity becomes
more expensive, you tend to buy less of the commodity. Cary needs to review
whether our water conservation policies are too harsh and can be relaxed.
For example, we could lift the ban on watering on Mondays, or allow Monday
watering only from 9am to 5pm. This would generate more volume and revenue.
We need to look at policy revision options that help us meet, yet not over
exceed our water conservation targets.

2. Ensure Business Users Pay their Fare Share - It appears that Cary staff's
water rate proposal has a disproportionately large impact on residential
users and an insignificant impact on commercial or non-residential users.
Any utility rate increase needs to spread the pain fairly and evenly across
all users. I do not believe that business users should bear a larger part
of any increase, however their share needs to be commensurate with
residential users.

3. Reduce General Fund Reimbursements - On an annual basis, about $6.3
million a year is transferred from the Utility Fund to the General Fund to
reimburse the fund for direct operating costs, utility employee salaries,
accounting and personnel costs and other administrative overhead costs. The
$6.3 million transfer could be reduced, thereby reducing the 18% increase.
The General Fund would realize a revenue loss that would require a property
tax increase or reduction in general fund expenses (I prefer a reduction in
General Fund expenses, for the record). If you ask most folks, would they
prefer a fee/rate increase or property tax increase if an increase is
essential, they will tell you that the property tax increase is easier to
manage because it is tax deductible for most Cary residents.

4. Adopt a 10% Reimbursement Charge to Cary Impact Fees - Right now, Cary
impact fees are used to offset and support hard infrastructure payments
(roads and sewer). We could levy a reimbursement charge for administrative
overhead, engineering staff salaries and accounting staff time. If we bring
in $4 to $5 million in impact fee collections, a 10% transfer to the General
Fund would equate to $400-$500,000 a year. Initiating and increasing this
General Fund reimbursement could reduce the Utility Fund reimbursement to
the General Fund. If the Utility Fund transfer is reduced, the need for an
18% utility fund increase would also be reduced. This WOULD NOT require an
increase in our current impact fee rates, this would simply change the mix
of impact fee distributions. 90% of impact fee collections would support
hard infrastructure and 10% would support overhead and administrative
expenses.

Nothing is easy when considering a budget as large and complex as Cary's,
however there are options available to reduce the 18% utility increase. I
hope that provides more history, context and options for you and your group
to consider. Thanks for taking an interest in Cary government and finances.

Nels C. Roseland, Cary Town Council Member for District B
Post Office Box 8005
Cary, NC 27512
Phone: 919.469.3247
Email: nroseland@nc.rr.com

Wuptdo
05-10-2004, 01:48 PM
IRT, Mr. Nels letter to Brent.

Probably more curious than anything else, but who actually came up with the recommendations: 1) Mr. Nels, 2) Mr. Nels and other council members, 3) Chamber of Commerce, or 4) Staff. This is what I consider to be the "meaty" stuff in the budget, and how Council will decide on to chew it. Given time and building of knowledge base (maybe 2005?), we may be able to come up with similiar recommendations.

Nice job, Brent on the minutes. I know how hard it is to keep minutes and stay involved at the same time. B-Z!

Mike B-)

MattD
05-10-2004, 10:30 PM
Brent -

My wife took a look at the minutes and feels very much informed... Great job on the minutes... and staying focused.

MattD
05-10-2004, 10:30 PM
Brent -

My wife took a look at the minutes and feels very much informed... Great job on the minutes... and staying focused.