By Susan Dickson
Staff Writer
Chapel Hill Town Manager Roger Stancil presented a budget to the town council on Monday recommending no tax increase and no layoffs for town employees.
The $50.5 million budget holds the property-tax rate at 49.4 cents per $100 of valuation, or $988 on a $200,000 home, the same rate that applied in 2009-10 and 2010-11. The budget also maintains the downtown service district tax rate of 7.1 cents per $100 of valuation.
Stancil’s proposed budget includes a 4 percent decrease in general fund expenditures, which he said he achieved with a $740,500 reduction in capital projects funding, replacing $661,000 in street paving funding with bond funds and finding $584,346 in miscellaneous budget cuts.
Other cuts include the elimination of the town’s Fourth of July fireworks display, for about $37,000 in savings; the elimination of Project Turn Around, for $76,844 in savings; the use of bond funds for library transition costs, saving $229,700; and a $247,669 reduction in matching funds for the fire grant.
“The recession has been a very challenging time,†Stancil said. “I think that we’ve weathered it well. We need for the economy to begin to grow.â€
The only new item in the budget, Stancil said, is the town’s comprehensive plan, which represents a $250,000 increase. Budget increases include a $520,250 increase in health insurance costs and a $128,620 increase in employer contributions to the state retirement system.
The budget also includes a one-time $800 payment for employees to help them with rising fuel and health care costs.
To balance the budget, Stancil used about $1 million from the available fund balance, which, though less than the amount taken from fund balance in recent years, lowers the town’s undesignated fund balance from 19 percent to about 12 percent – below average for those with triple A bond ratings.
“We’re one of the smallest towns in the country to have a triple A bond rating,†Stancil said, adding that maintaining the fund balance and consequently the triple A bond rating is important for the town’s ability to borrow money at favorable interest rates.
The council will hold a public hearing and a work session on Stancil’s proposed budget on Monday at 7 p.m. at the Chapel Hill Town Hall.
Transit
On Tuesday, the council heard from transportation director Steve Spade in a work session regarding the 2011-12 Chapel Hill Transit budget, which includes about $900,000 in potential savings through the elimination of service for certain trips and routes. The savings could help close a $2.3 million budget gap for CHT.
According to CHT projections, the potential service reductions could affect more than 1,000 riders a day, including 68 patrons of EZ Rider, CHT’s paratransit program that provides shared-ride transportation for disabled individuals.
Spade said ridership is booming, with more than 134,000 rides per week. However, he said, CHT is facing potential maintenance cost increases in coming years, as 62 percent of its fleet will be more than 12 years old next year.
CHT’s $17.7 million expenses are shared by Chapel Hill, Carrboro and UNC and partially funded through federal and state revenues and miscellaneous grants.
Council members have discussed bus advertising as a way to collect additional revenue and stave off service reductions, and on Tuesday indicated they would like to further investigate that possibility. According to Spade, CHT could potentially raise more than $500,000 with a six-month contract for ads on 15 of its buses.
“It seems to me that there’s a market here,†Mayor Mark Kleinschmidt said.
Spade told council members that the proposed service reductions would need to take effect in August in order for CHT to realize the savings, and that the council would need to collect public comment regarding the proposed reductions prior to a June 13 decision.