Council Says Staff Wages Should be Prioritized; Explores Expediting Affordable Housing Review 

GOVERNMENT

By James Kiefer 

Money talks, and was much talked about at Wednesday’s meeting of the Chapel Hill Town Council. 

Council members continued budgetary discussions for the coming fiscal year, with many elected officials saying pay increases for staff should be prioritized. Staff also presented findings of a study regarding factors that hinder affordable housing development. 

Property tax rate and valuing employees 

Council members honed in on two aspects of next year’s proposed budget: an increase to the property tax rate and employee pay. 

The proposed half-cent property tax increase for the 2022-2023 budget would fund transit operations; transit director Brian Litchfield stated in April that Chapel Hill’s transit system needs to purchase over a dozen new buses. 

The town manager’s proposed budget weighs in at nearly $128 million, an almost 9% uptick from the previous fiscal year. Over 50% of the Town’s revenue comes from property taxes and sales taxes, according to staff.

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 explained to the council Wednesday that the Town actually lowered the property tax rate by 3 cents for the current fiscal year. The current tax rate is 51.4 cents per $100 in assessed property value.

Jones added, however, that, 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. 

Jones also revisited a proposal, which the council has previously discussed, to provide a staggered wage increase for town employees. 

“What the manager’s budget is telling me, is that what we’re valuing most highly right now is our employees,” councilperson Amy Ryan stated. “There is $4 million extra dollars in this budget for our employees.”  

Under the proposed 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. 

Council member Adam Searing expressed some reservations about raising taxes during such a high period of inflation, citing higher prices for food and gas.

“For folks that don’t have that much money, this is a huge, huge hit,” he said. 

He added the town should still prioritize employee wages but did not support increasing the stipend town council members receive for their time. 

“While I’m open to discussing increasing what we pay the council, this might not be the right year to do it,” he said.   

Paris Miller-Foushee said the issue of pay for council members impacts who serves on council.

“It really is speaking to equity, our stipend is really low if we look at our stipend in comparison to other municipalities,” she said. “Low stipends really impact diversity and representation.” 

Researchers from UNC-CH and Duke reported in 2016 that increasing legislators’ salaries does not increase the socioeconomic diversity of legislative bodies.

The Town will hold a public hearing on the draft budget May 18 to get feedback from citizens and will hold a budget work session at the end of the month (see schedule here). The council anticipates a vote on the budget June 8.

Speeding up affordable housing

Following budget talks, staff presented findings that they said indicate Chapel Hill’s development review process hinders production of new affordable housing. Sarah Viñas, the town’s affordable housing director, said that staff sought feedback from housing developers and local partners. 

“It is clear to us that our current process is having a negative impact on our ability to build the inventory of affordable housing in Chapel Hill that’s needed,” she said.

Viñas further stated the current affordable housing review process is causing Chapel Hill to miss out on funding opportunities and partnerships with developers that could help produce more housing. 

Planning Director Colleen Willger shared some feedback from developers, who said much of the confusion in the review process lies in having to undergo review by community advisory boards in addition to the council. She said because the council and the advisory boards aren’t always aligned on design goals, developers often find themselves making fruitless adjustments to blueprints. 

Planning Manager Corey Liles explained how the timeline for review slows development.

“If everything is going right… development [review] could take 10 months, minimum,” he said. “What we see more often is around 14 months, and that’s not counting the time that happens between the concept plan review and the formal application submittals.”

He added that in Raleigh and Durham, many of the applications to build housing are submitted for sites that are already zoned for the proposed project, allowing the applicant to skip several steps in the review process. He added that Chapel Hill’s conditional zoning review process for light industrial projects, if used for affordable housing projects, could expedite the review process, as it removes concept plan review and has a timeline of around four months.  

Liles identified other time-consuming aspects of the current review process, such as that developers often go through at least eight advisory board meetings per project, all of which is billable time for development team employees and contractors. Liles also noted that expediting the review process would entail adjusting the way that the council receives community input. Current options include having a web portal, utilizing social media, distributing surveys and holding neighborhood meetings. 

Staff’s research comes on the heels of a study conducted by consultant Rod Stevens showing that 90% of jobs within the Town are held by commuters, suggesting that most Chapel Hill employees cannot afford to live in the city where they work. 

Council member Stegman noted that having an unnecessarily long review process can hurt development.

“I think it’s so important that we are cognizant of how much money our process costs,” she said. “That [cost] is always going to get passed along to residents. We really need to think about whose money we’re spending when we draw out these processes.” 

Council member Searing suggested the proposed changes to the review process would not be universally welcomed.

“However you feel about these [projects], they are going to be hugely, hugely controversial,” he said and added that an expedited approval process may elicit more criticism from residents than praise. 

Council member Miller-Foushee said that the Town’s advisory boards have not always promoted inclusion and that it’s important to maintain the caliber of the current review process.

“We don’t want speed to take away from quality of review; that’s not what our objective is,” she said. 

Other business handled during the meeting included: 

• The council discussed possible uses for funds from the American Rescue Plan Act; the Town is slated to receive $10 million in federal monies.