Putting the priority in budgeting

My husband has wanted a new couch for years. And I agree we could use one. But something always elbows ahead of it on our priority list. An immediate emergency – the washing machine breaks and the estimate for the repair equals the cost of a new one. A capital improvement – our very expensive Chapel Hill property eroding into the creek can be stopped only by new retaining walls, trees and bushes. An increase in operating expenses – the cost of gas, groceries and utilities go up as our revenue shrinks in the recession.

Most of us watching Town Council members haggle over how to allocate town funds and whether or how much to increase taxes are well familiar with implementing priority budgeting. Citizens weighed in on their priorities – a small contingent asked for more and better space for teen programming, and a larger group implored restoring library operating hours to its previous level. (A library supporter suggested the teen initiative look into using space in the new library.)

Different council members suggested different ways to stretch tax dollars. Gene Pease advocated putting public safety first – fully funding police and firefighter needs, then trimming all other categories equally. Jim Ward was upfront that restoring library hours was of greater importance to him than adding more resources to the sorely understaffed police crisis unit, the frontline officers who serve residents at the scariest times.

Matt Czajkowski looked at tradeoffs – restore library hours or give municipal employees a 2 percent pay increase (enough to offset the increase in Social Security taxes individuals pay that went into effect this year)? Does a pay raise to current employees come at the expense of retired employees by ignoring OPEB liability? (And how much is that liability? Reports have cited the amount as $30 million or $60 million. That’s a big gap.) He noted that a 2-cent tax increase is a latte or two to one resident or prescription medicine for another.

Ed Harrison wanted to neutralize the unfairness of property owners with 2,000 square feet of impervious surface area paying the same $9 a year stormwater fee increase as someone with 4,000 square feet of impervious surface.

Mayor Mark Kleinschmidt said choosing one program over another to fund won’t work if the town wants to serve the needs of its diverse population, an important point as far as it goes. But how can we justify, say, public art if it means cutting back on police and firefighters?

We have a beautifully renovated library. The reality is we may have to budget its hours. Or make sacrifices in other programs to come up with the extra money. And tell crime victims they can de-stress in the tranquil library, a full 68 hours a week.
– Nancy Oates

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12 Comments

  1. DOM

     /  May 27, 2013

    Until the Town – and its residents – make a firm commitment to encourage growth and help improve our lopsided tax situation, we’re doomed to diminishing the services we cherish so much.

    This needs to happen NOW, not three or four years out. The half-dozen areas in town that were identified by the 2020 process as places for future growth need to be developed with all due dispatch. And PLEASE, no more R-1 zoning, which only benefits the privileged few – that approach has dug a deep enough hole for us already.

  2. Don Evans

     /  May 27, 2013

    The town can develop every last strip of land and it won’t help the budget if town council members continue to make shortsighted decisions.

    The council knew that it was approving a Cadillac library and would have to face $250,000 a year in extra funding needs when it was finished. Yet the majority ignored that looming reality, which was pointed out to them repeatedly.

    Now we have hypocrites such as Jim Ward wailing about the need to fully fund the library when his bad decision-making and lack of foresight brought on the current situation.

    If Ward had put some serious thought into the whole process several years ago, the situation would be different. Our council tends to act without thinking, to buy without looking at all the costs. Basic economics seems to be something Ward and his fellow council members have never heard of. Much to the community’s distress.

  3. Bonnie Hauser

     /  May 27, 2013

    You aint seen nothing yet – wait till the county hits with a bond referendum and tax increase (unless Chapel Hill beats them to the punch). Its the buzz for 2014 – and the capital projects are piling on.

    The county is looking at $11 million to expand the Southern Human Services Center, $8 million for a Carrboro library (don’t get too alarmed – it will change -but more discussion is needed), rural community centers, million dollar convenience centers, and a $1.4 million meeting room for the commissioners. At least the commissioners are pushing back on the sudden proposal of an $8 million county office complex at the Blackwood Farm on New Hope Church Road.

    The schools are showing capital restraint. It will be interesting to see if they are asked to pile on in order to secure support for the new bond and tax from parents.

    Lets not forget the economics of the landfill closing. Costs are already shifting to other solid waste services and fees are increasing.

    Our leaders secured two new sales taxes and a host of new county fees. Did anyone notice that only 10% of over $7 million in projected funds from the transit tax is going to bus service? The other 90% is going to reserves and consultants for LRT studies. As a “priority”, TTA is using bus funds to enhance their routes from UNC to Southpoint.

    CH Taxes are high – but the whole picture is stunning. Tax/fee increases are proposed by the county, the town, and the schools. I support economic development, but I doubt it’s a solution to fiscal excesses of this magnitude.

    Priority budgeting is a false choice – it continues to encourage citizens to beg for expanded services and tax increases.

    Its up to us to change the dialog.

  4. Terri Buckner

     /  May 28, 2013

    I remember priority budgeting exercises the council members did during their retreat earlier this year, and there was a citizen survey but I haven’t found anything that summarizes the final, combined results of those exercises. It’s not clear from the manager’s budget presentation whether the slide titled Making Connections is the result of those efforts.
    http://townofchapelhill.org/Modules/ShowDocument.aspx?documentid=18888

  5. Many

     /  May 28, 2013

    Bonnie,

    You forgot to mention the new county Jail,

    You hint that the short term transit priority seems to be to bus folks back and forth from UNC Chapel Hill to Durham malls (is this supposed to be someones idea of a new park n ride?), the dangling economic implication being that busing people to South Square to spend money probably won’t help the ol’ Chapel Hill tax base much, now will it?

    It seems as if the end game is that the core of Orange county is occupied and developed gradually by five cities; Carrboro, Chapel Hill, Durham, Hillsborough and Mebane and that economic competition along 85, 40 and 15-501 will ultimately help the County tax base. Chapel Hill & Carrboro currently are bound by State cuts to the UNC system, as well as conflicting spending wants and out of date policy and priority. Therefore I don’t think “priority budgeting” is a false choice for Chapel Hill, however I agree it probably will not be the silver bullet that solves everything.

    Nancy, some advice: Buy consumables in bulk when prices are low. Deflation is coming to an end. When interest rates turn, prices will be even more turbulent; there is so much leverage in the system that effect on the economy of even a relatively tiny interest rate increase will be magnified significantly. Of course you will have to go outside the county to buy in bulk, but you won’t be able to carry it all back on the bus.

  6. Geoff Green

     /  May 30, 2013

    Southpoint has been and will continue to be a park-and-ride lot. Unlike the UNC & Town of Chapel Hill lots along that corridor (such as the Friday Center lot and the Town’s NC 54 lot), it will continue to be free.

  7. Many

     /  May 30, 2013

    Geoff,

    Correct. I was making the point that while the ToCH/CHT and UNC/CHT are charging for ParknRide the CoD/TTA ParknRide remains free. Expanding Route 400 and 800 is further proof of the corner the voters and Town council have painted themselves into with the ill considered and communicated Tax for “Our Transit Future” and another nail in the CHT coffin.

  8. Don, it would be nice if your statement “The council knew that it was approving a Cadillac library and would have to face $250,000 a year in extra funding needs when it was finished.” was true.

    In 2008 Council knew were facing a 1.3 cent/$100 tax bump just for operations :

    “Operating and maintaining the new Library building will result in increases to the Library’s current annual $2,507,347 operating budget. The anticipated increased costs of providing Library services are the result of increased costs for both staff resources and for general facility use and maintenance in a larger building. The costs associated with fully staffing the new facility are expected to be approximately $626,227. This increase of 33.1% in personnel costs is based on new costs to cover three new service desk…. Proposed personnel costs reflect an anticipated 40% reduction in Library Assistant I circulation desk staff hours, due to the patron self-checkout option provided by planned installation of a radio frequency identification system (RFID)… The costs for other operating expenses, notably utility use and building maintenance are also expected to rise to reflect the 123% increase in the Library’s physical size. In total, the additional non-personnel cost increase associated with the expanded facility is estimated to be approximately $148,572. Taken together, these anticipated annual operating cost increases total $774,799 or approximately 30.9% of the Library’s current annual operating budget, and result in an anticipated total annual Library operating budget of $3,288,025 in 2010-11.”

    Total tax dollar commitment was anticipated at 3.78 cents.

    “Town budgets with an increase of approximately 1.72 cents in 2009-10, and a cumulative increase of approximately 3.78 cents in 2010-11 to fund Library debt service and operating cost increases without affecting other Town services.”

    Maybe presumptive Chapel Hill candidate GeorgeC, who has endorsed pretty much every budget buster over the last few years (I include the TTA tax which doesn’t help CHT and which will underwrite shipping the one of the largest discretionary spending Chapel Hill demographics to Durham to shop) will weigh in on his support for this tax bump.

  9. Matt Czajkowski

     /  May 31, 2013

    When Laurin Easthom and I voted against the library we were reviled by the library supporters. When I proposed we start charging for non Chapel Hill residents there was strong disagreement on the Council. Apparently the prevailing view in Chapel Hill is we should add to the tax burden of our residents in order to provide the residents of Carrboro and the rest of Orange County with a “Cadillac” library for which they will not have to endure a tax increase. The suggestion that we lease the ” branch within a library” to Orange County in lieu of building a library in Carrboro has merit. We could name it the Mark Chilton branch!

  10. Bonnie

     /  May 31, 2013

    Thanks Will and Matt – for reminding us that there was reasonable information behind unreasonable decisions. Now what? Can we change the dialog?

    Last night, I sat through hours of Chapelboro parents asking for a tax increase. Last week it was OCS parents who wanted schools funded but didn’t ask for a tax increase.

    I am sympathetic to the concerns about state funding for schools and filling the gap – but I am tiring of the unwillingness of our local govts to connect the fiscal dots and lead us toward contemporary solutions for a changing world.

    We’re not helping. As long as citizens keep lobbying for pet projects without considering the cost or impact on the rest of the community, new taxes and fees will keep coming. And no one seems to notice or care that the tax and fee structure has become so complicated, most of us have no idea what we’re paying for.

    Wouldn’t it be refreshing if parents and educators, who want more money for schools, raised more concern about how $7mm of local tax dollars left the county for transit that they will never see. Or were similarly unhappy about the waste of time and energy on a standalone Carrboro library.

    The glimmer of hope lies in the Council’s decision to send Obey Creek to the Compass Committee where stakeholders can sort out the issues. Maybe they can meet in the Chilton Library.

  11. Deborah Fulghieri

     /  May 31, 2013

    Bonnie,
    A glimmer of hope for what? To keep anyone south of the James Taylor bridge from driving one mile in less than half an hour? It is already every morning that traffic gridlocks from the light at Carmichael Street all the way up to the JT bridge and southward.

  12. Bonnie Hauser

     /  May 31, 2013

    hope for a dialog. The idea of debating in 3 minute speeches to the elected officials is silly. Doesn’t the Compass Committee force the developer and the citizens to work something out – and jointly present to the council Isn’t that better than a debating contest in front of a council and letting politicians decide? Of course the politicians will make the ultimate decision – but its a lot easier if the debates are resolved beforehand.

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