Chapel Hill Town Manager Roger Stancil presented a recommended budget, with no tax increases, to the Town Council on Monday night.
Earlier that afternoon, he and Finance Officer Ken Pennoyer met with a group of reporters to break it all down:
“The budget, as it’s recommended tonight, has no tax increase in it.”
The recommended budget Stancil was set to present to the Town Council that evening comes to a near-total of $96 million, an increase of 3.5 percent from the last budget.
As Stancil said, the budget is balanced without a tax increase. About $2.7 million of fund balance would be used to help balance the budget.
The recommended budget assumes a one-percent growth in the property tax base, and a six-percent growth in sales taxes.
Stancil said the recommended budget for Fiscal Year 15 begins to address “some of the unsustainable strategies” that Chapel Hill had to use during the recession.
For example: One-time bond funds for resurfacing roads have dried up, so the Town staff is recommending restoring $578,000 to the operating budget.
Addressing a recent focus on affordable housing, the town will dedicate a quarter penny on the current tax rate to fund new initiatives.
The stormwater budget is down 5.9 percent. Stancil said that’s due to some large expenditures in the previous budget.
The stormwater fee is recommended to be increased by 75 cents per Equivalent Rate Unit.
“That was discussed last year when the basis upon which the stormwater fee is charged was changed,” said Stancil, “and there was an increase in the fee, and a realization and acknowledgement that we had to have steady increases to that rate in order to meet the stormwater requirements of the town.”
He compared that to the Orange Water and Sewer Authority’s policy of increasing fees steadily, rather than waiting until a large fee increase is deemed necessary.
Transit takes up the biggest slice of proposed total budget expenditures, at 21 percent.
The recommended amount of transit funds for Fiscal Year 15 is $20.5 million.
The sustainability of the transit system is a major concern for Chapel Hill. According to the summary presented to the Council, the delay in replacing old buses has created “a huge unfunded liability.”
“We have something like 42 buses that should be replaced today,” said Stancil. “So we’ve got a critical need in terms of how we continue to replace buses, with a diminishing potential for federal subsidy of buses.”
The recommended budget includes $400,000 to begin the financing process to buy buses. It’s projected that $42 million will be needed by 2023 for that purpose.
The next step in the budget process will be a work session on Wednesday at 6 p.m. The transit budget and resurfacing funding will be discussed at that meeting.
That will be followed by a public hearing about the recommended budget on May 19.
Two more work sessions are tentatively scheduled in early June, and a target date for adoption of the budget is June 9th.