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Council weighs budget options

Posted on June 7, 2012 by Susan Dickson

By Susan Dickson
Staff Writer

CHAPEL HILL – Taking a step back from Town Manager Roger Stancil’s recommended 2012-13 budget, the Chapel Hill Town Council hashed out several budget approaches on Monday, including options ranging from no tax increase to a larger-than-proposed tax hike.

Stancil has proposed a half-cent property-tax increase as part of his recommended budget, which would represent the town’s first property-tax increase in three years, bringing the rate to 49.9 cents per $100 of property valuation. The proposed increase stems from increasing Chapel Hill Transit costs, of which Chapel Hill is responsible for 31 percent.

The projected shortfall for the budget is about $350,000 – about half a cent on the tax rate. As an alternative to raising the tax rate, Stancil said, the council could choose to shift funds from the general-fund balance (the town’s savings account), make cuts to transit or make cuts in the town’s general-fund budget. However, Stancil said he did not recommend making cuts to transit, since service was cut substantially last year, and, because Chapel Hill’s share of transit funding is 31 percent, the cuts to service would need to be substantially higher than $350,000.

According to Stancil, transit expenditures are up 6.4 percent, from $18 million to $19.1 million, attributable to increasing fuel costs and a reduction in state funding.

Council member Matt Czajkowski said he felt the council should not consider transit separately from the general fund and should look for other areas to cut to make up for the shortfall.

“I’m not a fan of pulling money out of the general fund, but there are clearly places where we’re increasing expenses this year where we perhaps don’t have to increase them as much,” he said.

The proposed budget includes a 3 percent raise for town employees, who have not received a salary increase since 2008-09, and several council members said they would like to consider a smaller raise, while others said they strongly supported the 3 percent raise.

Mayor Mark Kleinschmidt said he felt that making a one-time transfer from the general-fund balance would be a good solution and buy the council and transit partners some time to look at the sustainability of the transit system and find efficiencies. The transit system, which went fare-free 10 years ago, has seen its budget increase by 52 percent since 2006.

Council member Gene Pease said a long-term plan for sustaining the transit system is crucial.

“If we’re going to sustain it, there has to be a financial plan, and we can’t keep borrowing from other funds, which is probably going to be infrastructure and town facilities, to pay for it,” he said.

Stancil also outlined the projected 2013-14 budget, which includes an estimated $3.2 million in increased costs.

Council member Donna Bell said she would consider raising taxes by a full cent instead of the half-cent this year in order to lessen the blow next year.

“To maintain those things that we value, we have to pay for them,” she said. “Right now we are creating a budget that maintains the things that are important to us.”

The council also reviewed a plan that would restore some of the daytime hours at the Community Center Pool that were cut in last year’s budget. The increase in hours would cost the town about $38,000, and council members said they would like to look at a fee structure that could cover some of those costs.

The council had been scheduled to vote on the 2012-13 budget on Monday, but Stancil said he likely would need extra time to find $350,000 in savings in the general-fund budget to present to the council as a budget option with no tax increase.

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