Town Council - Regular Meeting

Thank you. Good evening, everyone, and welcome to the June 10th meeting of the Chapel Hill Town Council. We're very glad to have you join us. As a note to the clerk, Councilmember Sharp will not be joining us tonight. This evening, we have two items on our agenda for discussion or action. The first is to consider adoption of the final 2026-2027 budget and related items. The second is to hold a public hearing related to the downtown municipal services district contracted services. To get us started this evening, we have two proclamations to announce. The first is for Pride Month, and I'd like to invite members of the town's LGBTQ plus employee resource group and members of the LGBT plus community to please join me up front for the announcement and to receive this year's proclamation. Each June, we join communities across the nation in celebrating Pride Month, a time to honor the courage, resilience, and contributions of LGBTQ plus people, reflect on the progress made since the Stonewall Uprising of 1969, and recommit ourselves to the work that remains. Chapel Hill has long been committed to fostering a welcoming and inclusive community where all people are treated with dignity, respect, and belonging. We're proud of our efforts to support LGBTQ plus residents, employees, and visitors, and we remain steadfast in our opposition to discrimination, prejudice, homophobia, and transphobia. This year, we are pleased to join with our neighbors in Carrboro to celebrate small town pride and the vibrant LGBTQ plus community that helps make our town stronger, more diverse, and more welcoming places to live. Therefore, we are proud to proclaim June 2026 as Lesbian, Gay, Bisexual, Transgender, and Queer Plus Pride Month in the town of Chapel Hill. We encourage all residents to celebrate, learn, and continue to working toward a future where everyone is welcomed, embraced, and protected. Happy Pride.

I'm the comms director tonight.

All right. Good evening, everyone. Tonight, we'd like to take a moment to recognize June as Immigrant Heritage Month in Chapel Hill. Our community is enriched by residents from many different countries, cultures, and backgrounds. Immigrants, refugees, and newcomers contribute every day to our schools, businesses, health care systems, neighborhoods, and civic life, helping make Chapel Hill the vibrant and welcoming community it is. This month is an opportunity to celebrate their contributions, honor their resilience, and reaffirm our commitment to inclusion, dignity, and belonging for all residents. As such, we encourage everyone to join in recognizing and celebrating the rich heritage and lasting impact of immigrant communities in Chapel Hill. Now, if our immigrant neighbors and friends and supporters wanna come up here, we will read a proclamation making June Immigrant Heritage Month.

Thank you.

Whereas the town of Chapel Hill recognizes that immigrants and their descendants have contributed significantly to the cultural, civic, economic, and social fabric of our community, bringing diverse languages, cultures, skills, perspectives, and traditions that enrich our shared identity. And whereas immigrant communities have helped shape and sustain local institutions, including schools, universities, businesses, healthcare systems, and civic organizations, and whereas refugees, asylum seekers, and other newcomers who have come to the United States in search of safety, freedom, and opportunity embody resilience and determination and contribute meaningfully to the life of our community, and whereas Immigrant Heritage Month provides an opportunity to recognize and celebrate the journeys, resilience, and enduring impact of immigrants while reaffirming our commitment to inclusion, dignity, and belonging for all residents, and whereas the Town of Chapel Hill remains committed to fostering a welcoming community that values equity, mutual respect, and cultural diversity. Now, therefore, we, the Chapel Hill Mayor and Town Council, do hereby proclaim June 2026 as Immigrant Heritage Month and encourage everyone to recognize and celebrate the rich heritage experiences and lasting impact of immigrants in our community.

Thank you.

Thank you all for joining us tonight, and you are such an important part of our community. We are grateful you are here, and we are very proud to celebrate with you. Up next, that brings us to announcements. I have three quick things to share. First is that the town will be holding two stormwater open houses next Tuesday, June 16th at the Chapel Hill Library. This is an opportunity to learn about our stormwater management plan, find out what stormwater projects are happening around town, and share your ideas. Building resilience starts with community involvement. So we encourage residents, businesses, and neighborhood leaders to attend, share their experiences, and help guide efforts to mitigate future flooding throughout Chapel Hill. Please check out our weekly our town e-newsletter or the town calendar for more information Second is an invitation to join us for Juneteenth Which is a celebration on Friday, June 19th from 4 to 8 at the Hargraves Community Center This year's event will feature live performances history exhibits local food art vendors music dancing and activities for children please come out to honor black history culture and freedom while celebrating the spirit and diversity of our community and third our next town council meeting is scheduled for wednesday june 17th here in town hall at 6 pm this will be our last council meeting of the spring session we will be discussing our complete community implementation along with the land use management ordinance rewrite um both will shape how the town grows and changes in the future and we encourage members of the community to join us in person or virtually and to be engaged in these important conversations council members does anyone else have something to share Mayor Pro Temberry.

Thank you. Thank you, Mayor. I just want to do an underscore for Juneteenth. It is not just black history. It is our history. It is when the enslaved folks in Texas finally learned that they were indeed free. And we'll take that meeting loosely there. But I want to underscore that that is all of our history. And we share it just as we share today's proclamation for LGBTQ month and also for immigrant month. We are really proud to be a part of this community. Thank you.

Anybody else? OK. Next up, we invite members of the public to comment on items not on the printed agenda. For members of the public in attendance and wishing to speak, please sign up with the town clerk at the table on the left side of the chamber toward the front of the room. If you're here to speak on a specific agenda item, there'll be a presentation on the item followed by counsel clarifying questions and then public comment. To help keep things running smoothly, Mayor Pro Temberry will call two names at a time. The first should come on down to the podium and the second if you'll please come down to the front and sit and wait up there on deck. Finally, public input is important to us and I just want to remind our audience as always that we want everyone to be heard and we want to hear you most of all. So please refrain from commenting or clapping when folks are speaking.

Ready? Yeah. All right. We'll get it started with Jasmine Kithuria and also followed by Tisha Abdul.

Welcome. good evening everyone thank you so much for having me and for giving me the opportunity to speak with you all today my name is jasmine katharia and i am miss chapel hill's teen under the miss america opportunity the miss america opportunity is one of the nation's leading achievement programs for young women focused on scholarship service leadership and personal growth through this organization i have been fortunate to represent chapel hill while pursuing meaningful service through our community so for my community service initiative is called film mentality where film meets feeling and it uses film as a tool to create conversations around mental health when it can be really difficult. I've taken film mentality into places all over Chapel Hill, like the YMCA in Chapel Hill and the UNC Mental Health Hospital. I'm so proud to be able to serve this community, and it's truly honestly a blessing. Honestly, just hearing the first part of this town council meeting, I was just so, like I was in tears. It was absolutely beautiful and amazing, and thank you so much for giving me the opportunity to serve this wonderful city. I will be competing for Miss North Carolina's team in June, and I am so happy to have Chapel Hill behind me. Thank you so much.

Thank you, and congratulations.

Next, Tisha Abdul, followed by Alexandra Sheaves.

Good evening, commissioners. My name is Tisha Abdul, and I'm your Miss Chapel Hill 2026. I am a proud immigrant to the United States. And sitting at the first part of this meeting and hearing June be proclaimed as, I believe, was it national or what was the name? Yes, immigrant refugee month, that meant the world to me. This past May, I graduated the University of North Carolina at Chapel Hill with a bachelor's of science in neuroscience and a minor in chemistry. And I'm pursuing a master's of biomedical science this fall. I'm competing for the title of Miss North Carolina at the end of this month, and I am head over heels to say that I am proud to represent the town of Chapel Hill. It also feels like such a full circle moment to me to be able to stand in front of you today, because just eight years ago, I was the president of the Cabarrus County Youth Commission, where every other Monday after school, I would sit in the Board of Commissioners meetings. I actually had a spot right there in Cabarrus County with my name on it for two years. And needless to say, I am eternally grateful. And thank you for your support. I'm very excited to continue serving the town of Chapel Hill. And thank you for your time this evening.

Congratulations. Thank you. Sure. Come on, council. We'll do a quick picture. One second, Ms. Sheaves. Come on.

It's dangerous here having me take the pictures.

Anybody younger, want to volunteer to take the picture? And I'll take one for our town, too. Thank you.

Okay, next we will have Alexandra Sheaves, and Ms. Sheaves will receive Jane Stutz's time.

Yeah, and Jane is here as a neighbor. We're speaking on the same topic, and I'm afraid that I'll actually just give all our comments. For sure. And another neighbor, Neal Sprubecker, is here. So thank you so much for letting me address you. I'm here on behalf of a group of neighbors in Kings Mill Morgan Creek, Highland Woods, and a few other neighborhoods who have organized to advocate for safe multimodal access, rolls right off the tongue, at Odie's Road at Fordham. We have a request with about 175 signatures from town residents expressing support for the goal that I'm here to talk about today. And I think the council is broadly aware of our interests and concerns already. Just to highlight, there's more and more traffic on Fordham, I imagine you've noticed. Many drivers don't respect the speed limit, and crashes are common on the stretch of Fordham that we live adjacent to. With plans for the greenway connecting the Morgan Creek Trail to our neighborhood, we're anticipating greenway users wanting to be able to access downtown Chapel Hill and the university and hospital complex. With the improvements that we're proposing, Odie's is clearly the closest safe possible crossing to connect not only Morgan Creek East Greenway, but also other southern greenways and neighborhoods to Chapel Hill and UNC, and it has the advantage of minimizing hills, which we know can be a challenge for bikers and walkers. As Everywhere to Everywhere gets operationalized, and we were delighted to see some information about that, we want to make sure that the focus on greenways, which we are very supportive of, doesn't neglect the connectors that are going to make those greenways accessible and useful, and allow safe crossing at major barriers like Fordham Highway. We also know that for residents who live north of Fordham, there's no way to access the wonderful Merritt's Pasture other than getting in a car and driving to the parking lot adjacent to the Kingswood Apartments that, as I'm sure you know, often overflows on weekends. So today I basically have two goals. One is just keeping this concern on the town's radar. We know you're aware of it, and we also know that there are a lot of competing priorities, which we respect, but we do have a couple of requests. The first is that town staff work with regional planners and the NC Department of Transportation to identify the best solution to improve safety and access across Fordham, and to plan and identify what kind of funding makes the most sense to address this long-time barrier in our community. We know we need to partner with and not work against or around the DOT in order to get the changes that we envision. Our second request is to learn what criteria the town uses in considering and selecting improvements to advance. We'd like information about how the town weighs the many factors it must consider in determining what to prioritize. Despite being in the 2020 mobility plan, providing a convenient connection between Morgan Creek East and downtown and UNC, and the fact that that segment of highway is on Chapel Hill's high injury network, a crossing at Odie's never quite makes it into the short list of projects, despite different possible sources of funding, including state safety funds, raise grants, and others. We know the short list for the town is short.

Can I take Jane's minutes and keep talking?

I believe that since she's speaking for two, that she can have a little more time.

Okay, it's just a little. So we know the shortlist is short, and we would like to learn how the town weighs the many factors that it has to consider in determining basically what to prioritize, what actually gets on the shortlist, just so that we can advocate effectively. In conclusion, I'd like to note a crossing at Odie's seems to align with many town goals. It corrects a connectivity gap that thwarts everywhere to everywhere. An Odie's Road crossing would connect Kings Mill Morgan Creek, Southern Village, Culbreth Road neighborhoods, Kings Mill Apartments, and South Creek via the planned Greenway network, giving access to Chapel Hill downtown, UNC campus, and the hospital complex. And it also supports Vision Zero by addressing core problems that I think we're all aware of, including high speeds, dangerous left turns and U-turns on that section of Fordham, numerous crashes, and unsafe pedestrian and bike crossings. So many thanks for listening and also to my neighbors for joining me today.

thank you um so while the town no longer has a formal petition process sharing your concerns and ideas is incredibly important and it's a valued first amendment right it's something we continue to value and support council doesn't take immediate action on these requests but they're carefully reviewed by the town manager and staff who then will review the matter and they'll respond to us and to you

and if you have anything that you would like to leave like signatures or anything else you're welcome to leave with them with the clerk I think I think we may actually need to get those to the clerk maybe tomorrow you can get them whenever you want super thank you thank you

And that's it. All righty. That is our last speaker for items not on the printed agenda. So that brings us to our consent agenda. Council, do I have a motion to approve consent?

Move consent. Second.

Moved by Council Member Ryan, seconded by Council Member Miller-Foushee. All those in favor, please say aye. Aye. Any opposed, please say nay. Motion is unanimous, 8-0. All right. We're on to item number 10. which is to consider the final budget and related items for fiscal year 2026-2027. And I believe we have our town manager, our director of business management, and all the associated friends that you may need.

Good evening, mayor and council. We reach the end of the road on our budget process. I'm excited to say, and before we do the presentation, I just want to acknowledge Amy and Matt for their excellent work and support during the process. lauren and mary jane for their support of me as well and all the department heads and their staff that need to do a lot of work to put this information together so that we can consider it and get you a good proposal so thanks team i'm very proud of the work we've done and i'm proud of the work that council you did last year to set us up in good stead so that this year's process is a little less painful So good evening and after months of conversation I'm here tonight with the final version of your of your 26-27 budget for your consideration and adoption so included with this item to be clear is the budget ordinance that's the legal document that we use to implement the budget the pay plan and our fee schedule I've got seven slides it'll take a couple of minutes to get through them Please stop me if you have questions. Budget highlights, you've seen this before. The total budget is $170 million, a 3.6% increase over prior years. There is no property tax increase, which leaves our rate at $0.50 per $100 of assessed valuation. It includes a 4% of market pay increase for our excellent employees. And there are $2.4 million totaled up in your focus areas. Our priorities in creating this budget were grounded in our commitment to supporting our employees with competitive compensation and sustainable benefits, funding and strengthening our core municipal services, advancing your strategic priorities, and progressing towards fiscal sustainability, guided by our five-year budget outlook. The changes between the draft proposed budget that you considered are very small. We essentially received two additional grants. AARP is supporting a grant for a Vision Zero crosswalk project on Legion Road. at $20,000, and then we've received the actual amounts for the 5303 grant, which we get annually to support the MPO. We usually get an estimate, and now we have the final numbers, so that's now plugged in, and that's $274,000. $500 additional so the total adopted budget is the number that I mentioned previously 170 million thirteen thousand three hundred and eight that's the new number differentiated from the original proposal at 169 million And so those will be included in the budget ordinance. We are stewards of multiple funds and multiple budgets. This slide shows the final totals across all of our annually budgeted funds. If you have any questions, certainly let me know. For those watching at home, we have discussed this in detail, so we're not unfamiliar with these funds and these numbers. And so in summary, this budget provides resiliency to handle an unpredictable future, reduces our reliance on budgeting fund balance on an annual basis. We brought that down to... only half a million, makes significant progress in funding the operational priorities outlined in our five-year budget outlook, makes workforce investments in market pay, benefits, and adds three new positions, which have been discussed, addresses the needs of our enterprise funds, and advances Council's strategic priorities. We also maintain our funding commitment to outside agencies as we've done in previous years. So we recommend that council consider enacting ordinance 01, reestablishing the town budget for the fiscal year beginning July 1st, 2026 and extending through June 30th of 27. Thank you for your careful consideration and deliberation on this year's discussions. We know you've all given the budget a lot of thought over the last several weeks. We appreciate the time and effort you've put into that and to understanding our challenges. but also our opportunities as we move forward together.

Other questions? Thank you. Council questions? I have one. Could you talk a little bit about the Greenways funding and using fund balance and how that will kind of fit into this? I know that we're doing it kind of

Outside of the regular budget cycle be happy to do that So annually when we get to the end of the year the budget is a spending plan it's a limitation on our Expenditures, but the revenue side is only an estimate and so that is based on the best information we have at the time and Invariably, when we get to the end of the fiscal year, the estimate's not quite right, and often we do our best to spend less than we're appropriated. So you put those two factors together and you get, on the good side, a fund balance. On the bad side, you might get a deficit. We really try to avoid a deficit, and we'll take actions during the year to try to prevent that from happening. But when we have a fund balance, then our policies suggest that any overage beyond our required policy-based savings, that's what most people call a fund balance, are available for reappropriation. And so this last year, we had approximately $3 million to consider. And so the council considered that and made some allocations. And we look like we're going to be in the same boat this year. And so we'll be bringing you some recommendations when you return from the summer hiatus. And during that consideration, our top recommendation will be to consider appropriating some of those funds to an internal effort to build some what we call sort of quick wins greenway projects. So these would be smaller projects that connect existing greenways with other greenways or a missing segment of sidewalk or crosswalk and that sort of thing. We hope to gain real-world experience by doing this work with our own forces. They'll need to rent some equipment, buy materials, and contract for some services to make this happen. And from that experience over the course of this Fall and maybe next spring depending on how fast we get things done. We hope to Inform how we approach building even more green ways in the future fiscal years So that's how we propose to jumpstart implementing more e2e projects even as we're still working on the master planning That some council members got to learn a little bit about this evening before the meeting So that's how we're proposing to do that. There'll be some additional recommendations As well for use of fund balance one that comes to mind is there's some Land south of town that's been designated as potential park or trail conservation easement land, and an outside party is putting that together and have come to us to see if there's a way to help match that project. We haven't put that in the budget yet, but that's the kind of thing that's a one-time need that sort of lines up with other plans we have, and so we might sort of put something like that in our proposal to you along with the Greenway effort. So that's how I might address that topic. Anything else?

Mayor Pro Temberry?

Thank you. That prompted a thought. How would you like to help the public to understand how we as a town respond to the changes in our funding partners so how can they stay what can they expect that how we'll respond

So Mayor Pro Tem, I'm going to presume we're speaking mostly about support for our library. It could be that or it could be anything. It could be anything else. Right. One of the challenges there is we have other entities that have their budget process ongoing. We don't always know what that's going to look like upon adoption. And so indeed, the initial proposal from Orange County was to reduce library funding over a two-year period. We understand there's an amendment to reduce it over a three-year period, so that does sort of change that number a bit. There's also an amendment that looks like they'll be reducing support for parks and recreation services. At this point, our approach is to not take any drastic measures, understanding that the decisions aren't final, but we do have contingency plans For how we might address these things some of those plans have been shared informally with counsel during work sessions ideas include Fees that might be charged to non-town residents changes in service levels such as our reductions or days when things are operated or availability of programs additional ideas are increasing room rentals or on the parks and rec side it could be team or field rental charges All of those things would be typically on the table for any kind of budget cut scenario, but we don't want to rush into any of this. We just know these are options. We'll await the final decisions, and then we'll take a look at what we might need to do to recommend to Council some adjustments as we move into the fiscal year. In the meantime, one example of something that we'll probably defer action on is the additional staff member that's approved in this budget for the library. It wouldn't make a lot of sense to proceed with hiring that position only to have the need to do some service cuts or hour reductions. So that would that would not be something we've moved forward with until we kind of get a handle on where this is all headed Is that responsive to your that is?

I'm asking you to go on record just so that the public can follow along they have followed along closely with the county and And I want to make sure that they understand, they have a sense, right, of how your team will respond. Not the details of it, but what I'm hearing is, A, you're going to be patient and wait until the county has passed a budget or any other funding partner, how it impacts ours. I also am inferring that you don't expect it to be so drastic that we need to change anything in this budget, that this budget accommodates, can accommodate that. And I think that's important for our public to hear.

Yeah, I think what I would say is our budget is sufficient for us to not to have to take any immediate or drastic actions at this point in time. Depending on how things go, we may need to do something, though, in the fiscal year. Okay. But we'll keep a monitor on that.

Okay. Thank you so much.

I wasn't going to say anything but I have to ask the question because I think it's along some of the the same line similar line rather as councilmember Berry someone messaged me saying that the posture is that with this three million dollar fund balance that we can pay for our own library How do we reconcile that? What is our response to that posture?

Well, I think I would frame it in sort of an equity framework where town residents are also county residents. And so... whenever we're looking at the services delivered, we need to think about who pays and who benefits. We've tried to operate the library as a community asset. When we receive funds from other funding partners that other non-town residents pay into, then that gives us the opportunity to share those benefits more widely and feel comfortable that we're equitably sharing that resource because other than town residents are paying for it. But at some point, if that changes so that only town residents are paying for something, then I think we owe it to our taxpayers to make sure that we're not subsidizing non-town residents with free services, essentially. It's a tough thing to have to tell folks who might be benefiting from a service that that situation has changed, and through no fault of their own, we're going to have to perhaps consider fees. It's not something that they chose to do, but when that circumstance changes, we need to consider it and think hard about it and try to be responsible

To the folks who pay the bills in this community So as the wherever they land on the county lands two years three years in terms of Reducing funding for the library at which point will we be able to? Charge those fees Because I think, Council Member Noller, you mentioned that state law does not permit us to charge fees if the county is contributing funding in any kind of way. And so would it be when all funding completely ceases that that would be on the table?

So that's a legally complex question that I'll defer to the town attorney a bit on. But we'll have to evaluate that, because one could certainly Well, let me say how we had potentially thought this might go. If the county were to do it over two years, do the elimination of funding over two years, one thought we had was that we would, that that's 50% less money, that we might implement something in January because that's half a year and they've eliminated half of the funding. If they do it over three years, that sort of changes that calculus. But assuming that any amount of funding would require free service to be provided, that would change things as well. But I might posit this question. If the county were to pay us $1, is that sufficient to gain free services for non-town residents? I don't think so. So I think we've got some complexity there, and the amount of money involved I think must – apply to this discussion. And we also could choose not to accept the money and say that that's just not enough. And so we're going to have to go to the fees. So that those those are the kinds of things we're going to have to think through over the next few months. We'll wait to see what the county budget is. And then council will need to weigh in once we give you the analysis. So you can decide how we're going to implement this.

Thank you so much for your responses. I think it's so important, the first question that I asked and then this one as well, for our community to be able to hear your responses to those, so thank you.

I have a question that came from Mayor Pro Tem's question, as happens, but the shift in hours in some of our parks and rec facilities, is that something that's happening as part of our new budget or is that in anticipation of the county cutting funding or how did that happen?

Now that's really just a service optimization approach that staff did some analysis. They're in a mind of thinking about these things as they work on their master planning. They've got some data that help them make some adjustments. More adjustments would would be needed if we if we had significant cuts the amount of Cuts that are being proposed at this point by the county are fairly nominal. It's We would welcome More help so that we can provide service to folks who live in the area we we do have several thousand Orange County residents who take advantage of our parks and rec system and they are treated as town residents because of the the subsidy relationship and we are in town also County residents and Yes, we are. But the amount of money that we're getting from the county is not a lot. And again, if we're not really getting anything, then we're probably going to have to change how non-town residents are treated with respect to fees. They'll always be treated courteously, but they might have to pay a fee or a different fee.

OK, thank you. Are any members of the public wishing to speak? OK. Council, any final comments? Council Member Ryan?

Yeah, so first I'd like thank you Ted and his staff for all your hard work I know this is a massive massive job every year and one of the most important things that we do So I appreciate all your hard work. I support the philosophy behind this budget I think we're making big strides and investing and getting the town on the sustainable fiscal path that we've been working on for many years So pleased to see that continuing and really happy. I think it's gonna put our town in a good position and I'll be voting to support it but I agree with the opinion councilmember Rivers expressed at our last meeting and I personally don't support the added FTE for the library historian position and I understand the strategy you're using as it's aligned with the county funding cuts but I With budgets tightening tightening and core services more expensive than ever. I worry about mission creep away from essential library services Especially in light of our very inadequate budget for acquisitions. So But that aside, I think it's a solid budget. It's not a reason for me to vote against it And I think this budget is good stewardship of our communities tax dollars Mayor mayor Pro Temberry.

Thank you

I also will be voting to support this. I so appreciate all of the effort that went into coming up with this budget and then the ability to explain it to us. Thank you very much for your patience and for your fortitude. And once again, this is it. And I do want to, and I'm grateful that I got to go after Councilmember Ryan because I appreciate that you are going to look at how to invest those resources, what's happening with the library, did we put in a new FTE there or not. I also know that you're considering how do we manage our human resources. How do we have one person who is doing that? So I want to acknowledge the preciousness of our human resources. And so as you weigh the fiscal and the human, I want to say I recognize that those are both considerations for you. So thank you. and if we can't provide another full-time employee, how else can we support that one individual in that section? Burnout is a real thing, and we are a compassionate group, and so I don't think it will be easy, but I want to say that I support you at looking at that. Thank you.

thank you all um thank you amy and your team for um all the excellent work as always i will reiterate that i really am pleased that we're i think um relying less on fund balance and getting on you know really taking additional steps to create a sustainable budget for the future is Exciting to me even if it's not maybe the sexiest topic, but I think it's I think it is really exciting and we do know how much work goes into all of this and how many questions we have and how many times you get to explain things to us again when I we forget and so much appreciation to you manager Voorhees and all the staff and I know that also all the departments have to put in a lot of information in order to to share their needs and requests so I know it's a it's a full team effort and you all make it look easy so thank you very much and Council do I have a motion to enact a one with attachment so moved motion by Councilmember Miller Foushee seconded by mayor pro tem Barry all those in favor. Please say aye aye any opposed, please say nay motion passes eight to zero We have a budget.

Thank you, Mayor and Council.

Not even the state has a budget. We are ahead of the state yet again in passing a budget. We literally lapped them. We literally lapped them, yeah. They are still working on last year.

They did have a milk chugging competition today.

Oh, super. Glad they're taking their work seriously. All right. Item number 11 is to open the public hearing regarding the Downtown Municipal Services District contracted services. And our economic development manager, David Putnam, is here to walk us through.

This is the perfect height this time.

John Richardson has been nowhere near that thing. That's right.

He's not in the room. Good evening, Mayor and Council. My name is David Putnam. I'm your Economic Development Director. Apologies for the raspiness in my voice. I'm getting over something. It's what happens when you've got a 16-month-old at home. She's okay thankfully and I'm here to talk to you all about the municipal services district this evening and we have a public hearing scheduled for the contracted services of that district and I'm here to get into a little bit about what that means. I'm joined by Sarah Potter on our team, who's our business vitality manager as well. And so as you all might have questions that come up towards the end of this, we'll both be able to readily respond to those types of questions so that we can best address them. So what I'm going to do is talk about the recommended action in the front end, and then I'm going to bookend it in the back end, and that way, you know, we stay pretty grounded. But in between, throughout this presentation, I'm going to share with you kind of big picture what is the Municipal Services District, and then we'll zoom in to the specific request, because I'm sure that is of interest to the public as well. They probably want to know what this whole thing is and why we're meeting about it today. So the recommended action that I'm asking you all to do is to open and close the public hearing for the Municipal Services District contracted services. So a little bit about this district. It's a special tax paid by businesses and or property owners to fund enhanced services in certain areas, specifically of our downtown. And you are authorized to do this through the general statute, specifically this provision 160A-536, which places restrictions also on the uses of those funds that are generated. A little bit about our MSD and our Municipal Services District. It was approved in 1989, again under the office of providing enhanced services to the folks within the district. It covers Franklin and Rosemary Streets, and then between Henderson and Merritt Mill. If you're like me, I'm a visual person, so I kind of have to see it. I included a map here for everybody to look at, because when we talk about the Municipal Services District, In our downtown, they're really two different things that coincide. And so this is the official map of the downtown services district. And that's important because if you're inside this box, you pay a special service tax. If you're not inside the box, you do not pay that tax. How much revenue do we collect from this? The current MSC tax rate, I like to break down our tax rate into a plain language. We assess properties based on the per $100 value. Most people don't think per $100 value, people think per dollar. And so this is that per dollar tax rate that's applied to the MSD. And then for the fiscal year 27, what we're forecasting is that the total revenues are expected to yield $427,000. We did a ton of engagement September to December. We're actually really proud to say that we reached every business possible and we did a ton of efforts to try and reach everybody. came up with these results on what do the stakeholders want to see they want a downtown community safety is their number one first priority cleanliness is their second priority activation and experience is the third fourth is landscaping and fifth is town coordination and communications and the cleanliness is bolded because that is the basically the scope of services that we have that's going to be contracted out and that we're proposing to be contracted out So you guys just passed the budget, and big round of applause for that. That's a heavy lift, and I appreciate all of y'all's leadership. And when we think about the Municipal Services District, it sort of has its own micro budget. And this is how we're planning to budget those revenues. So we have a portion of it going to landscape and maintenance, which is actually a position inside Parks and Rec Department that's dedicated to providing those services downtown. We have downtown community safety, and our police department is doing a lot of that work. This is a very reliable and needed infusion of resources for them to continue doing great work with our downtown and the increased patrol presence. Contracted services, which we've got parenthesized by cleaning, and that's what we'll get into a little bit more today. And then operations, which is $15,000. So in total, it's about $427,000. So about, we did a competitive bid process for actually selecting the contracted services provider, and we got three respondents. Of those three, we invited two for interviews, and then we issued a kind of a preferred vendor notice to the final lowest and best offer, which was the Downtown Chapel Hill Partnership. and they are the prime contractor that we would like to select and then Block by Block is the subcontractor that they are using to provide some of these enhanced services. So the scope of that contract, that bold $220,000 in the budget, includes sanitation and cleaning of business district, modeling our respect values in service delivery, coordinating and collaborating with town staff, and then offering regular performance reports and progress reports for the stakeholders of the district and for the town. And so again, I would like to ask you all to open and close the public hearing for the Municipal Services District contracted services tonight. Thank you for your time.

Council, do I have a motion to open the public hearing? So moved. Second. Moved by Council Member Ryan, seconded by Council Member Miller-Foushee. All those in favor, please say aye. Aye. Any opposed, please say nay. Motion is eight to zero, unanimous. Council questions? Council Member Nollert, followed by Council Member Ryan.

Thank you, Mayor. Two brief questions. One, what makes it cheaper to contract externally for cleaning than to perform those activities internally? And second question, three bids for this contract doesn't seem like a lot. Can you help us understand why that's the number we end up with?

Yeah, great question. So in terms of why we might be deciding to contract for these services, it's a good question. We take an existing stock of what our capacity levels are internally, what services we have the bandwidth to deliver, versus what services we could maybe optimize with a private contract provider. And this is one of those services that we've just found to be more enhanced and easily streamlined with a contracted services provider while also providing us the best bang for our buck. And so through a contract we're able to really again, just offer the, really leverage the town's fiscal position in a lot better manner than if we were to do it in-house.

Can you be more specific?

Yeah, so what we get with this contract is full-time presence in downtown. I believe we're up to two. We get two full-time people downtown that are offering these services. They bring equipment and inventory that the town doesn't have to manage or maintain. And then we're also not having to carry those positions on with this work. And we still get the oversight. that we want, and we get progress reporting and their infrastructure with data collection and other things that they're offering for us. So in a way, we're really getting more than if we invest for that services ourselves right now. Yeah, sure.

Hi, everyone. Good evening. Sarah Potter. You guys all know me. One thing I was going to mention, too, I think for the purpose of this fund, Contracting out can sometimes make sense because the needs of the district might change over time. So investing in facilities or equipment and stuff that we might not need in five years doesn't always make sense where a contractor can be a little bit more flexible. And part of that engagement commitment is to always come back to the folks in that district and ask them if their needs have changed.

Councilmember Ryan Yeah, so I'm having a little bit of a hard time understanding exactly what is in the contract So I get that we are going to contract with the downtown partnership They will subcontract to block and block for the cleaning services we the con and and other than that out of the budget we spend money for our police and There was one other there were two other items one of which is operations. I don't know that's our operations or if that's the partnership That's ours. Okay, so So presumably the is the partnership getting any money or are they just a pass-through? I

So what we do is we package that contract, the 220, to the bidder, and then they are providing services as a pass-through, but they're keeping some for administrative functions and operational needs. And it's not entirely... cleaning services. They're also checking in with the stakeholders of the downtown district. They're providing us with progress reports. There's some administrative capacity built into the contract that they're able to leverage.

And I like the fact that you had metrics on the progress reports. I think that's very useful. Again, I know that in the past when we've kind of talked about the municipal services district. There's been There's been some feeling that things were very general, that we didn't have a strong direction for the things that we wanted them to do. And sometimes that made having a partner difficult because there wasn't a lot of clarity about what was going on. And I'm still kind of feeling that here. I don't know what the intent is. I know that when you reached out, you got a lot of different different responses and I see that we're addressing some of those but and I'll talk about more of this in the comments later but those other interests I think are important too and I'm just not seeing them happening here so

Yeah, so the contract that we've bid out is just for the cleanliness services, and then the town is taking on the rest of the services that are provided here, or that are requested here. So downtown community safety, our police department, and then the collaborations that they have with other entities, we feel pretty adequate to being able to provide those services. Activation and experience is offered through partnerships like Community Arts and Culture, the Economic Development Department, collaborating with UNC, those sorts of things, landscaping with that one position, and then town coordination and communications. That's specific to just being able to call and activate the town and have a ready, reliable person who's available. And while it's not being addressed in the budget, we do have that person, and that's Sarah Potter, our business vitality manager. And we're constantly, you know, updating and maintaining and also building those relationships with downtown business stakeholders and the resident stakeholders and the property stakeholders to make sure that their needs are being met.

So do you guys get any extra money for say the activation and experiences the town get any money out of the MSD for that?

No, we're rolling that into just our current capacity levels of what we can provide and

Can you explain that in a different way? Sorry.

Yeah, so when, like, what we're doing is, rather than assigning funds from the district, because it's a resource-scarce fund, right? It's only generating $427,000. to address all these needs we're trying to do that by leveraging the capacities that we've already got internally that being things like working with community arts and culture a little bit more closely so we have regular check-in meetings with them now as a department where we bring together other stakeholders and interests so that we can help meet their needs and help meet the business interest needs we're regularly checking in with folks from the university to try and do that same thing and And then we're constantly boots on the ground, getting out in front of the businesses and making sure that we're responding to their requests, especially as it relates to activation.

But there's no extra money in here for you guys for those efforts? Yeah. Okay. Thank you.

Mayor Pro Temberry?

Council member Ryan Addressed what I was curious about and I'm just gonna go with it You did a great job of listing what the stakeholders want and then on the next slide you told us The accounting for the resources the capital resources that we have are you going to? in a different manner, articulate how those wants are being addressed, if they'll have to be paused or not, because I think it's important, and this is going to go into a comment, but are you going to share it with the stakeholders of how you're addressing their desires, their wants? And it could be we don't have the capacity for it, but these are the ones that we are addressing. I'm just curious because it doesn't necessarily line up with this.

That's a good question. We try our best to communicate how we're achieving these interests through some of the things that we're doing, like the downtown newsletter that we send out. we're asking this contracted service provider to do regular check-ins and engagement with the stakeholders too and the intent is to work collaboratively with them so that we can make sure that these things are being reported out on for accountability right and transparency and then through those engagements we're hoping that we collect feedback from the downtown stakeholders and saying hey you're not doing enough in this area we would really like to see this optimized and that's really where more of the collaboration scope of work comes out of that private services contract than just the cleanliness okay thank you yeah

I had a couple questions, David. The first is that it looks like it's a year contract, and I think the previous, well, I don't know what the previous contract was, but I know it was three years, maybe two years, I don't know. But I'm just wondering why we're doing a year contract if, well, I can really get into a comment, but I'll try to hold it.

Yeah, our best business practice is to only do year-by-year contracts. And so this contract that we've currently got drafted is to do one year and then four options of renewal for a year each. The general statutes allow units of government to contract for up to five years, options included. And so it's just the practice that the town does to do one-year contracts.

But it's not because the previous contract was not a year, right?

I can't speak to the duration of the prior contract, but the way this is structured is while it's a one-year contract with the additional options to renew, we could view it as a five-year, up to a five-year contract, depending on if we were happy with the services.

Sarah, you were... I see.

Yeah, the language is the same. So how we've always done it is the bid essentially is valid for five years. And then every year, the contract gets essentially the partnership would issue a letter to the manager asking to renew that contract, and then we renew it.

I see so it's not like they're having to correct do much of it Okay, thank you that's helpful I guess the other question is about what this public hearing is I thought that this was coming back on consent or there was something that we were approving, but then maybe not. So I guess I'm not really clear on what we're doing.

Yeah, so this public hearing is explicitly about the scope of services that are being proposed as offered in the contract, not the vendor. It's not about anything like that. Yeah, yeah, I understood. It's just about really, I mean, this, the contract scope.

Mm-hmm.

It's to provide It's to collect comment on that scope and to see if the public and especially the stakeholders feel like the scope is in Accordance with what they had asked us to do and so how would you know if?

If they I mean, I guess I'm not I guess I'm from a process standpoint I'm not really understanding why like is it that if a bunch of them showed up and said that's wrong You got it wrong. That's not what I said or you know, whatever which I wouldn't anticipate but then it would somehow change or I mean, I would have met the council is the Partially the vehicle to the public right? So if the council is not approving it then I guess, what would be a point at which we would change this?

That's correct, Madam Mayor. So pursuant to the statute, our town clerk has actually sent out notice to folks within the district to let them know of this public hearing if they wanted to come and ask for a change in scope. The way our delegation resolution of authority is set up is that the town manager has the authority to enter into this contract after this public hearing has occurred. So if this body were interested in expanding the scope of the contract or Some of the services we internally provide with staff to expand that to have that scope, we could rebid that out. But this is the current recommendation for that. If we would want it to change within that next five-year period, the statute also allows for council to expand the scope of the contract to renegotiate. So this is just an opportunity to really double check because there is this special tax for the district to make sure that we're doing What it is?

That the body wants us to do And that's okay Give me one second and so guess my only other question is in terms of obvious and I I think councilmember Ryan asked this but I'm not sure I totally understood the answer so in terms of the the things that aren't being contracted for and some of those are then coming in-house I understood that how do we I guess understand how how much effort, how many resources are going to our downtown, given that some are kind of being funneled into our current capacity, some are being contracted with the Downtown Partnership and the Clean and Green. And obviously, the $127,000 or whatever is not even close to what the police department actually spends downtown. And so I guess partially from downtown, you know a communication standpoint but also to understand like how are we supporting downtown and vibrancy and and all the things that we all want you know how much are we actually investing and I guess there are pieces to me where our arts and culture department is not heavily funded either. So it doesn't seem like that's going to just magically happen by having meetings with them. So how is it all coming together that we're achieving these goals? And how much are we actually spending?

To the how much we're spending question, I don't have that number for you all right now, but what I could commit to is working with my peers and try and get a sense for how much we are actually spending. I can tell you it's well above and beyond the 427 number. Right. And, yeah, I mean, this is the perplexity of this resource, right? Like, we have a very... mean small downtown district and it compared to some of our peers like Wilmington and you know Winston-Salem it does not generate the same amount of resources that those districts do and so we feel like what we're offering is just the way that we can best achieve all those interests especially through this contracted services but I you know I think We're, I think, you know, this is the ultimate team sport. I hate to fall back on that, but it really is. I mean, we reached this further together, and through those collaborations and just working with this private services contractor, the university community arts and culture and Just trying to find new ways to be innovative and achieve the interests of this district.

I Strongly believe that's how we're gonna help to achieve that And so what would be the process for enlarging the district because we've talked about many times having it go down and I'm OK. I mean, that's been, over the years, something that we've talked about. And especially with Carolina North now, there's kind of this, you know, so how do we broaden the tax base of this district?

yeah so there's a few ways um you can grow the district and the general statute spell out a specific process and how to do that and it involves like engagement with those property owners petitioning and then you know pretty strong approval lift from this board and we can follow up with specificities on how to do that after this meeting but the other way that you can do it is to approve more projects in downtown increase the tax base and then this has a specific tax rate attributed to it it's that point zero zero zero five five number and Places in the past have especially Peer communities in North Carolina have looked at we need to right-size that number to meet the interests of the downtown or the municipal service district Stakeholders because it's not always downtown some places use it for other business districts some use it for water and sewer sanitary districts all sorts of stuff

I see. OK. And I guess then my final, final question is, in terms of the town coordination and communications, which, obviously, SARE is amazing and is everywhere all the time. So my question is more about how are, I think, one of the functions that it used to serve, maybe when it was working a little better before we had the dip, and now hopefully we're on the upswing, being able to advocate to the town as opposed to talking to ourselves. And so I'm wondering, who does that then? If the team of one who's pounding the pavement all the time, which is amazing, but us talking to ourselves is not quite the idea, right? So how does that happen?

Well, it's impossible to advocate against yourself, right? That's tough. Yeah, I think this downtown organization in particular has been through quite a bit of changes, and I think you're right. I think we're on the uphill climb, which is great. We have two relationships with that group. One is this private contract relationship. One is as a nonprofit in our downtown area that's representing the interests of some of those merchants. the property owners in that downtown and so you know I know they're and I say that because they have to have the capacity to handle that type of advocacy work and I think they're building that right now they just put out a job posting for an executive director style role I think they've identified a few people that could take that on and we would work very closely with that person but I think they're you know sort of at that period of rebirth and trying to get their legs stable again and then they could be in that position to advocate more strongly for the interests of that district but right now to answer your question about who's doing that work I think it's a hodgepodge of all of us I think the chamber gets involved sometimes. I think independent merchants get involved. I think the board members of that group get involved on occasion. And so it's going to be of increasing interest for us to work together and collaboratively with them so we can best meet that interest.

Thank you. Are there any members of the public? There are not. OK. Council comments? Mayor Pro Temberry, followed by Council Member Ryan.

Yeah. Thank you very much. What I'm hearing is that this was a step to make sure that we've made it available to the public, as opposed to being on the consent. And you've answered all the questions that we've posed. Thank you. And one thing that I would just stress is help us help you communicate. That's one concern that I think is shared by all of us. Communicate the wonderful things that you all are able to do with the investment that the MSD represents and then the investment that the town puts in as well. Thank you for this.

Council member Ryan. Yeah. Thank you. Yeah. Thanks to you guys for this good engagement with the district. I think that that's very useful I don't know that I couldn't have told you that that's what they wanted, but it's good to it's good to confirm that I Think for things like this. I think there's a bigger conversation. We need to be having at some point This seems to be a time to talk about it. So I know it's not related to the contract specifically and But I think the scope needs to be not just what the district is interested in right I think Council as part of our complete community and as part of just making sure the Chapel Hill in general is a thriving place Has a big interest in what happens downtown as well So I'd really like at some point to have that larger conversation about where in terms of a policy direction We really want to go and that can have implications for funding so for instance clearly if we want to really do activation downtown and experience we're gonna need to find money somewhere I know it's always been it's been a dream for a long time to get locked to up and running in a different way to be kind of an activated space maybe there's a chance to talk about that in the fall when we talk about fund balance but but I'd really like the opportunity at some point for us to talk with staff and counsel together and to say hey what are we really trying to do down here Clearly we want a police presence. We want we want it to be clean like those. Yes, absolutely But I think there's there's some bigger things involved so The only other thing it would have been helpful to me to see a contract Just I think it would have helped me understand the specifics of how you're scoping this a little bit better Thank you Councilmember Nallert

Yeah, I want to echo councilmember Ryan in that, you know, these goals are not super surprising there's a lot of tactics and strategies to reach them and I I think that things like wayfinding arts and culture investment that our development strategy inside of the boundaries of the district to create more money I think I think we need a much We need to devote more attention to that. We need to get a plan We need to be able to broadcast what the plan is. We need it to look pretty and be simple to explain but we I think are Really not optimizing and maximizing the value we can get out of the downtown that we can create for residents who live in it and don't live in it and for businesses that operate in it and don't operate in it and I know that we have a statutory requirement that this money is be spent primarily to benefit things inside of that boundary. But I really don't think that we are fully meeting the opportunity we have to be creative about that and to invest in things that meet these goals in perhaps slightly less intuitive ways, but that's a communication challenge that it's on us as a board and as an organization to rise to the occasion of and get creative. so I just want to really say I total agreement that we need to We need to dig in on this and we I think we have a huge opportunity here to create a lot of value by a lot of different metrics and definitions and I hope this conversation will will stay at a rolling boil Councilmember McMahon followed by councilmember Miller Foushee I

I want to add my voice to this. My council members who are saying the same thing, you know, downtown has a lot of opportunity. It's the heartbeat here. A lot of our residents have fond memories of downtown. They're wondering how downtown can be a place for them. Again, I'm excited to have this conversation in the future to get at some of the bigger picture things that are exciting for everybody in town and also opportunities for us. So yes to this conversation. Thank you.

Council Member Miller-Foushee.

Thank you, Mayor. I know we've passed the question, we're in comments, but I just wanted to refresh my memory a little bit when we returned back from Ann Arbor. I believe as a council we had a little bit of an opportunity with you, working with you, to talk about what we saw on that inner city visit and to express some of our interests and what that meant for our own downtown. And so while the purpose of this event presentation from you this afternoon was to discuss this contract and to allow the public to come and speak to it what may potentially been helpful is to, alongside what stakeholders have presented and what they wanted, how that dovetails with what you've, and what we as a board have talked about in the past about what we wanted to see in our downtown. and so I think being able to thread that needle would have been helpful as I'm listening to my colleagues and some of their interests or whatever and having two new council members who I don't believe you all were on involved in those conversations and so potentially being able to revisit some of the interests that council have been able to express that we have talked about in threading that needle and how that jives with the stakeholders would have maybe been helpful, I don't know, but I understand the purpose of what the presentation was intended to do this evening. So thank you for providing this and presenting to us. I especially appreciated the extra, the added materials that came in later for us to take a look at, so thanks.

Okay, I'll add on to that. I think Councilmember Miller-Fishy is absolutely right. We did some really good, we started some good work in our Council Committee on Economic Sustainability, and we started, I remember, and I asked for it at some point a while ago, and you sent it to me, the white boards that had people's ideas, and I thought that was a really great start, and I think... pulling continuing that and pulling that together and creating again i think i've said strategic plan in the past because that's the way my mind works or i guess that's the the word that i think is appropriate but i don't necessarily mean like a full-blown you know weeks and weeks of engagement with us on a strategic plan but i just think it's really really important that we kind of Pull it together and create that vision and strategic path forward or however, we want to talk about it with you So that we can also yeah figure out how we want to move forward where are there opportunities because I think it's a really good reminder that I didn't think of myself like yes, of course we can increase the tax rate we can also Increase density downtown we can go around the corner like those things all have you know merits and challenges right but like i think generally thinking about how are we moving forward and then this is kind of a small piece of that right is this is not they can't do it all and but i think you know what i'm really hoping is they can take on more in the future um since i think that really exciting downtowns often do have a really strong external group and then of course they get to work with our very strong internal group so it's not that it's you know it needs both and so um i'm really hoping in the fall that we can have a bigger conversation about where we're going downtown and signal that to people and help people um inside and outside of downtown understand where we're trying to go and how they can be part of that and how kind of what we want them to come to us with if they're interested in doing something more exciting with their property or you know whatever the case may be um I think there's just so much opportunity down there and it is um It needs to be a really exciting place. And I think with all the activity happening with Carolina Sports and all the other things going on, I think it's a good time for us to dig in and figure out really what does this look like and how are we going to get people to engage and do the things we need them to do for it to be the place that it should be. So thank you. I think this is, you've heard from us nobody from the public i guess we are the public um but uh thank you very much for this and um we are looking forward to continuing to work with um the downtown partnership and hope uh even though they're not here i'm sure we're all uh cheering for them and ready to um continue to work on making downtown a really great place so thank you very much Do I have a motion to close the public hearing?

Yes, I move.

Moved by Councilmember McMahon. Woohoo! Seconded by Mayor Pro Tem Berry. All those in favor, please say aye. Aye. Any opposed, please say nay. Those two are definitely a yes down there. Motion passes eight to zero. Council, it's still light outside. We are done with our agenda, which is very exciting. Thank you for all your hard work. And our budget is the most important thing we do all year. So well done, everybody, and congratulations. And we will see you one more time before summer break next week here. Same time, same place. Have a great night. Meeting is adjourned.