Council Passes Budget; Begins Dip into Federal Funds

GOVERNMENT

By James Kiefer

Correspondent

The Local Reporter

The Chapel Hill Town Council approved its budget for the next fiscal year Wednesday evening. The decision is paired with initial action on how to spend funds money the town is receiving via national legislation.

Packed into the $129 million budget is a bevy of items, some that benefit town staff and others that will weigh heavier on residents’ wallets. The main area the latter will be felt is in property taxes.

Included in this year’s budget is a nearly 1 cent tax rate hike. The council approved an ad valorem tax increase of eight-tenths of one cent per $100 valuation, increasing the current rate to 52.2 cents per $100 valuation in assessed property tax value. Town Manager Maurice Jones explained in a previous meeting that a 1-cent increase in the property tax rate generates about $958,000 for Chapel Hill. He told the council last month that the town lowered the property tax rate by 3 cents for the previous fiscal year. Despite the lowered tax rate, taxes paid by Chapel Hill homeowners actually increased last year due to an increase in the appraised value of local homes, according to Jones.

The increase in property taxes will act as a buffer for the town’s transit fund, which is in need of over a dozen new buses to meet expected operational demand, director Brian Litchfield previously stated. In his presentation to staff, one of Jones’s slides showed 23% of the total 2022-2023 budget allocation is earmarked for the transit fund. However, the Town of Chapel Hill’s contribution to the transit fund comprises only 21 percent of the total transportation budget. The remaining 79% is funded by the University of North Carolina, the Town of Carrboro, along with federal and state assistance, according to the Town’s website.

The approved budget also includes staggered pay raises for town employees. Under the new budget, employees who have fewer than five years of employment with the town would see a 4% wage increase and those employed for more than five years would receive a 5% raise.

Employees remain a primary focus, as the town is funneling over $379,000 towards hiring new positions. Among those hires will be staff like an Economic Development Administration Coordinator.  The council decided to forgo hiring a compensation analyst for the current fiscal year.

Chapel Hill has allocated over $380,000 to local organizations, including $258,000 to the Inter-Faith Council for Social Service as part of an interlocal agreement, and $126,000 for the Partnership to End Homelessness.

Other major budget allocations include:

• $329,000 for affordable housing performance agreements
• $125,000 for bike and pedestrian safety initiatives
• $160,000 for the cost of service increases
• $100,00 for downtown improvements
• $98,000 toward cybersecurity

Jones also outlined Chapel Hill’s five-year budget strategy, which focuses on efforts like environmental resilience, addressing infrastructure needs, access to affordable housing and social equity.

The approved budget will go into effect on July 1.

Outside the budget, the council also approved spending on a portion of federal funds it received from the American Rescue Plan Act (ARPA). Chapel Hill is slated to receive more than $10 million, half of which was disbursed last year.

The council approved $3.15 million toward several maintenance projects, including installing artificial turf at Cedar Falls Park, replacing the HVAC system at the Homestead Aquatic Center, replacing the Chapel Hill Library meeting room’s A/V system and commissioning a design for the East Morgan Creek Trail.

To be eligible for ARPA funding, an initiative must fall within five categories of expenses: supporting public health (which normally is the purview of county governments), addressing negative economic impacts, replacing lost town revenue, offering premium pay for essential workers or investing in water, sewer or broadband infrastructure.  

Regarding future spending, Chapel Hill resident Delores Bailey raised the issue of improving the Corner Teen Center. She described it as a potential “beacon” gathering place for the town’s youth and is concerned that it has fallen away from that goal.

“Let’s claim this and make it something we can be proud of and a place for our young people to come to and grow up in,” she said.

Council member Jess Anderson remarked that renovating the teen center had come before the council before, and feedback staff shared from youth showed a level of disinterest in the facility.

“The work was really centered on hearing the voices of young people,” she said. “So it wasn’t for us as adults to decide where teens wanted to be or what made sense for them.”

Anderson added that she is open to hearing new information sentiment from youth regarding the facility has shifted.

The current teen center is located in the basement of the post office on the 100 block of East Franklin Street. Senior Project Manager Sarah Poulsen informed the council that most of the work needed at the current facility was structural, citing issues like malfunctioning lights and broken plumbing.

Council person Camille Berry commented the council should be focused on impact regarding the initiatives it plans to fund with the remaining ARPA dollars.

“Are they for show or are they really to reinforce what this community is about?” she inquired. “Do we really value what we’ve built already and can we be entrusted to value what we build tomorrow?”

ARPA dollars must be committed toward spending plans by Dec. 31, 2024, and funds must be exhausted by the end of 2026.

Before ending in a closed session, other business handled by the council included:

• Discussion of a draft for guidelines on an ARPA funded project that would be directed by community input;
• Closing the legislative hearing for the Peach Apartments at 107 Johnson St.;
• Opened a public hearing regarding a request for a portion of Stinson;
• Authorized the town manager to modify the library’s Internet Use Policy via installing an internet filtering device;
• Discussed the Environmental Stewardship Advisory Board petition;
• Announced appointments to several community advisory boards.