September 27, 2012
Special Budget Meeting
Minute Book 134, Page 1
The City Council of the City of Charlotte, North Carolina convened for a Special Budget
Meeting on Thursday, September 27, 2012 at 12:03 p.m. at the West Service Center, 4150
Wilkinson Boulevard, Charlotte, North Carolina with Mayor Anthony Foxx presiding.
Councilmembers present were John Autry, Michael Barnes, Patrick Cannon, Warren Cooksey,
Andy Dulin, Claire Fallon, David Howard, Patsy Kinsey, LaWana Mayfield, James Mitchell and
Beth Pickering.
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I.
Introduction
Mayor Foxx called the meeting to order at 12:03 p.m. and said he wanted to start out very briefly
with some introductory comments of why we are here and what we hope to accomplish and then
turn it over to the Council for everyone to weigh in. This is not necessarily reacting to what I say
but whatever you want to say about this process and where you’d like to take it. We had an
interesting summer that was full of highs and one very significant low which is the fact that
despite the effort on everyone’s part we left the summer without an answer to a capital
challenging facing decision. We could talk a lot about why that happened, but I think focusing
on the future is probably important to us. Let me try to summarize it. We spend months
developing a budget that failed, and we had two weeks to put a budget together before creating a
fiscal crisis. Alternatives were proposed and again we passed a no tax increase budget and along
the way questions were raised about the Mayor’s ability to count. I am usually pretty reserved
but I admit along the way I got a little exercised about where we were and I want to make it clear
to you that that had nothing to do with where you guys individually come down. It had nothing
to do with anything personally. It had to do with the fact that the law requires the Council to
approve a budget and I was very concerned that we were facing a fiscal crisis for the City. In the
end we did pass a budget. The City is not in the fiscal crisis we got close to and I think we’ve
got the time now to really dig deeper into what the Manager proposed and hopefully develop a
senses around how we can go forward. Let me share with you that the process we typically use
to get to a budget is one that I think will get us to this budget. That process is basically asking
every single hard question we have about what has been proposed by the staff, going through the
add and delete process where if there are concerns about particular items, folks can raise those
issues, projects can be taken out or put in and wherever we land is usually where the sense of
Council is. So what I used to say in my own neighborhoods when we tried to do the numbers
and it didn’t work, we have a chance to have a do-over and that is essentially what this is. I have
spoken with all of you over the course of the summer and I appreciate you taking the time to
meet with me and I feel that there is energy around this Council to go forward with something.
Let me suggest to you that we have three options. One I don’t think is a real one, but three doors
we can walk through. The first door I would describe as a “do nothing door” which is essentially
leaving the tax rate where it is and not preparing a capital program. I understand from staff that
at most we have until 2014 to adopt some capital plan before our AAA bond rating becomes
threatened. That is with an asterisk because as you know the bond rating agencies have begun to
work with issues like some of our larger employers and their futures and that is not as certain as
they would like to be, so that is an issue and that is door #1.
Door #2 is a “down payment door”. That is where we say there is so much uncertainty out there
and so much that we don’t know about the future that we’d rather do something to avoid getting
us into a bond rating problem, maybe classified as routine maintenance, but do something to get
us over that hump and when brighter days come again look at doing more.
Door #3 is “swing for the fences door”. I think the Manager’s proposal which is a program that
is calibrated to deal with the magnitude of the challenges our City faces.
That is my
characterization and not necessarily yours but I think that is essentially the set of choices we
have. I sent a letter to you and the letter says pretty clearly that this Council’s center of gravity
on these issues moves toward a maintenance of effort type budget. I will support a budget that
has a 2.44 cent rate increase that many of you suggested before, but I think that budget is
probably better calibrated to a five-year budget than an 8year budget, and that is an issue we
need to resolve, but we can talk about that if that is where Council wants to go. What I think we
should spend our time doing today after everyone has a chance to weigh in is going through
September 27, 2012
Special Budget Meeting
Minute Book 134, Page 2
where we left off with projects that seemed like there were pretty good consensus supporting
and maybe end the day with a sense of this council as to whether that consensus is still there. If
we have time we can dig into some of the specific projects. Let me say one final point, in my
view some of what happened in the summer in some people’s mind turned on the streetcar. I
don’t necessarily think so because I believe there is a lot that gets cut out of a budget like the
Manager proposed to get you down to 2.44 cents that also becomes an issue. I think we’ve got
two issues which is way more important than the plan. If the plan is more important, how do we
go forward and if the rate is more important what projects …What I propose is today we spend
time going through the areas where there appear to be consensus and we are assuring ourselves
that consensus exist or identifying places where it don’t. The next meeting I think we should dig
into the projects themselves, some that are more controversial and do a deep dive on those. The
third meeting would be essentially an early version of our adds and deletes where we can literally
make some decisions about which projects go in or out. But layering over all of that is the
question of which door we want to go through. Do we want to go through door #1, door #2 or
door #3?
I’ve got a quick PowerPoint and Warren Cooksey got me started on this. Some of these slides
you’ve seen before but I just thought maybe beginning this conversation with this would be
helpful. For those of you who are old enough or young enough depending on how you like to
say it, this is the corner of 5th and Tryon Streets in the 1970’s. That is the same corner when you
see all those cops during the DNC who were dancing around and created so much fuss. This is
our City today. It is the product of a lot of work that people have done and frankly the 12 of us
are the guardians of this city that we all call home. Some of you won’t remember the old
Douglas Municipal Airport, but I remember it. You could literally walk from one side and yell
across to the other side and someone could actually hear you. When John Belk said we needed
to build a new Airport people thought he was crazy. They said we have planes that take and
land., it works so why do we need to build a new Airport. That was in the early 1970’s and in
the mid 1970’s there was referendum that failed and in fact Mayor Belk didn’t serve and the time
when the Airport actually got built happened after his service ended. Ken Harris was the Mayor
who got the Council to put it back for a bond and the voter passed it in the late 1970’s. That led
us to what comes up next, which is this. The Airport in 1971 had about a million passengers on
an annual basis and had about 40 million last year, generating $12 billion economic impact. The
point here is that this was not an easy thing to get done, in fact it was a painful thing to get done.
And in fact the Mayor who started didn’t get to finish it, but saw it happen. It was the right thing
for the City and if you talk to any business association with the City in the last 10 to 15 years
they will cite the Airport is one of the top three reasons why they are here. This is the Old
Charlotte Town Mall and you can see there is a stack of cars right here. I used to park there all
the time and Andy used to go on a date there. Underneath that parking lot there was a creek
where it had been capped to create this place and let’s look at what that creek looks like right
now. It is one of the greatest amenities in the City and one that we have a chance to help
improve. This is Independence Boulevard and you could argue that Independence Boulevard
made more sense then than it does it does today. It didn’t have blockade down the middle, you
could make a left turn, business were along the side weren’t hurt and by the way we had Crispy
Crème. Independence got confused and didn’t know what it was. It was a highway for cars and
it was a business thoroughfare for those uses alongside it. What we have today is this and this
trend has been happening for a long time and I know everybody on this Council knows and
understands …
Here is Beatties Ford Road and I have shown you this same lot about 10 years before now and it
would look the same and I can show you 20 years before then and it would look much the same.
In fact that mechanic in front of the picture it is from the 1960’s and looks the same. While
Charlotte is growing, while we’ve seen so much growth in some areas, but some areas really
have stagnated and evening falling behind. Here is North Tryon Street and this is part of the
corridor that we think of now as essentially an innovation corridor. It certainly will be
something that will invite the Blue Line Extension further up toward the University City Area,
but again another area is still defining much of our downtown where a lot of people live but it is
really today the underbelly of our City. So you look at that and then you look at this. This is
what we have available right now to address those challenges.
September 27, 2012
Special Budget Meeting
Minute Book 134, Page 3
You’ve seen this map before and this is basically a map to show the trend in poverty, so that is
why the red is where you see more poverty. This is home values and you see that they are
decreasing in the same where poverty is expanding. We have an area of green is the southern
part of the City. School performance, we’ve seen this before. That is my bad pie chart but this
breaks down the budget The Manager proposed into categories, 17% neighborhood
improvement, 9% affordable housing, and 74% transportation. While we’ve seen a gradual
uptick in crime this year overall crime is down, but the Police Department has already told us to
get further down we need to put more assets in the field and these Police Stations become very
important to us over the next several years. This is a map of the neighborhood improvements
that are proposed.
I want to spend a few minutes on transit. If you look at the entire system the absolute greatest
ridership is with the Blue Line Extension and that is expected to draw 25,000 riders per day. But
if you look at the way the system is built, and by the way I think we are making some good
progress on that project, I really feel confident that we are going to get something done on that
before the end of the year. But if you look at how our system is actually set up the next projects
are the Red Line Commuter Rail and then after that you really have buses and streetcars. You
have the east/west streetcar, you have the streetcar out to the Airport. The ULI Study actually
suggests two extensions of the streetcar going out to the east part of the City. I want you all to
remember Tommy Freeman when we saw that video during our retreat. He talked about a fight
between two fast food restaurants when one of them could have accused the other one of buying
meat that wasn’t good and all this other stuff and they asked the other franchise why did you
attack the other franchise for their practices. The franchise said we don’t want to kill the category
and when we talk about a transit system I think we have to be careful not to kill the category of
transit. The streetcar is one facet of it but it is not all of it. The only reason we are talking about
the streetcar in the budget process is this chart right here. It shows you what the sales tax
revenue is going for. The black Line is what we need to produce in sales tax to build the system
we just saw. The Gray Line is what the sales tax is actually doing and the up side of that is that
after we finish the Blue Line Extension, after we get the 1 ½ mile of starter streetcar going it
could be a decade, 2 decades or 3 decades before we see another rail extension for our transit
system. This is the extension and we will talk about it more in detail at some point. I wanted to
make sure everybody knew what a streetcar was so let me try to explain what it isn’t. It isn’t the
San Francisco … and I think in a lot of people’s mind this is the image of the streetcar and how it
winds up and down and I get that. That is what a streetcar looks like and in many ways it looks
and feels like a light rail car. The only difference is that it is smaller and it is actually cheaper to
build compared to light rail, about a quarter to half the costs, but in cities that have done this
they’ve seen the increased value of those projects come in and this development here in
Portland sort of grew up around that streetcar. We may go a number of ways on this project and
I’m going to make the case as strongly as I can that this is something we should do, but if this
Council in its imminent wisdom and judgment decides this project is not a project we should do
we are going to figure out a way to go forward. I want to make it very clear, I do think this is a
good project and I think this is a worthy project and I think it will add value to our transit system.
As we normally do in our adds and delete process I will try to make that case, but if we decide
not to do this we decide not to do it, okay.
Here is where we left off and this is where I’m going to transition this back to staff. These were
the proposals that were put up, but one on the far end for me is where the Manager’s
recommendation was. So if you have a $200,000 house that is probably what you are paying now
$174 per year. The net change to the Manager’s budget would be only $72 additional per year
and you can follow all the way across. One difference between Plan #1 and Plan #2 and you
know which plan you love. One difference between the two of them was Plan #2 was a five-year
and plan #1 was an 8-year plan. We’ve got a lot of work to try to get done, we always do,
Charlotte always does, but all 12 of us have to get around this somehow. I’ve had a chance to
say to you what I wanted to say to you by way of introducing these retreats. I think it is
appropriate for anybody who wants to say something to do that.
*******
September 27, 2012
Special Budget Meeting
Minute Book 134, Page 4
II. Discussion – General Capital Investment Plan
Councilmember Cooksey said I was taking notes on your presentation and may go in reverse
order now since this chart is still up. A few things concern me about the expansiveness or
perhaps the lack thereof . This chart, for example, while I appreciate that it shows the relatively
small increases to a person’s tax bill based on the various plans. It completely fails to capture
the fact that for many of our homeowners in Charlotte what is a $200,000 house now was less
either more or less than and in the cases I can think of, less than that before the reval. It was
$400,000 to $600,000 were less than that. This is the theme that I had during the budget
discussion and it is one that I want to stick with and not lose sight of during our continuation,
that many, many people saw substantial increases in their tax bill in September of 2011 versus
September 2010 and I just could not look anyone who had that kind of tax bill in the eye and say
we are just asking for $60 to $70 when in many cases they were already paying $1,000, $2,000
or $3,000 more. I know balance requires us to note and I do note that are as the map shows quite
a number of our citizens who saw substantial decreases in their value and so from a tax
perspective the burden they would still come out okay from a tax perspective, but they have
equity issues that they are worried about. Part of our population is worried about their equity and
part are worried about their tax bill. That I think was, for me at least, deserves great
consideration during this discussion. To the point about category killer in the grand tradition of
debate, I agree with you about tying or doing the streetcar issue and the like as being concerned
about category killer for transit, that is what I view City funding of the streetcar line in itself. To
me that risks a great deal of public support for transit because in 1998 to 2007 our statement to
voters was the transit tax funds the transit system and while I acknowledge there has been
property taxes used for infrastructure improvements around the lines and we would use some for
the Blue Line Extension, I worry that there is a limit. For example, if I were to suggest around
this table, and I never would, but if I were to suggest that we should use some transit tax revenue
to build some roads in this City because we needs some roads, I would expect unanimous horror
in rejection of that idea because transit tax is the funding source for transit. So that is kind of the
mindset I would ask folks to consider when I recoil similarly the idea of using property taxes for
the streetcar. Property taxes are what we use and it is the funding source we’ve got for local
roads and so it concerns me that no-one would ever suggest using transit funding for roads, but to
put in this proposal to use road funding for transit strikes me as risking the category of citywide
support of the transit. Finally and just a question, I’m curious Mayor, could you clarify how you
see a role in this because on Monday you talked about this being a Council budget and a Council
process. Does that mean that whatever 6 of decide it is going to go through or you are still
reserving the veto possibility?
Mayor Foxx said good question but let me say three things to you before I respond to that
because I meant to say this at the outset. I want to be clear on what you guys and ladies can
expect from me. You can expect absolute respect for positions that every person on this Council
takes on this budget. That does not necessarily mean agreement, but it means respect. You can
also expect absolute commitment to figuring this budget out as a group of 12, not by committees
but working as a group of 12. We are at a point in this budget where the issues are tabled up,
some people might like some things, some people might not like other things and we will figure
all of that out, but I think you can expect me to be very strident about that. You can also expect
me to be open to figuring this budget out along the lines that some of you have articulated. I
know you, for example, stated very early concerns about going forward with any tax increase at
all, and later decided to support the 2.44 cents property tax increase which I take to be a move
away from where you started out and you are to be applauded for trying to work on that. I’m
making a move by saying I’d be willing to support a 2.44 cents budget, but I would be willing to
support it for a five-year period as opposed to an eight-year period because I don’t want to see
us lock in future councils to a lower level of maintenance of effort than we’ve had over the last 5
years. I said that back in June and I’m saying it again. I don’t relinquish my ability to disagree
with the Council so I’m not saying that I’m a casual observer to this process. My point is that all
of us, I can help this Council work through issues and different positions, but I can only do that
when those positions are brought into the field of discussion. To the extent everybody is talking
and we’ve got issues that are being put up on the board, we can work through those. You can’t
work through them when they are not put on the board.
September 27, 2012
Special Budget Meeting
Minute Book 134, Page 5
Councilmember Fallon said in the interest of full disclosure, $72 seems like a very small amount
but that is not a silo it is combined with the county and that is onerous to people. To raise it at
any point when their values have gone down to nothing and will go down further I believe, you
can’t do this to people. There are so many people that are on the edge. The other part is if
you’re going to spend $120 million on a small portion of the streetcar why not take that money
and either use the Gold Rush or expand the bus system into communities that don’t have it now
so they can get to work and shopping and doctors.
Mayor Foxx said let me try to reframe. Everyone on this dais has voted to raise the property tax
it is just the question of degree.
Ms. Fallon said it would have been a wash.
Mayor Foxx said you say a wash, it is a property tax increase and that is how the public would
receive it. With that as a baseline, the question is what is the right set of choices for this
community? We are not going to figure this out right this second. What we are trying to do is
open a process by which we can figure it out and what I’m suggesting to you is the best use of
our time in my opinion in talking to every single one of you and knowing what I know about
where people are and what the choices are. By the way you are pointing out issues that are
legitimate issues, you and Mr. Cooksey both. I know as well as you know there are people out
there that are struggling. The question I would ask you is given the fact that we are continuing to
see rapid growth in this area, given the fact that we are seeing devolution occur at the federal and
state level pushing down cost to local government, given the fact that there is a change in
environment even on the regulatory side on issues like transit where 10 years ago we could
expect a 25% local share, 25% state share and 50% federal share and I don’t believe that includes
– the Blue Line Extension may be the last of its breed and given where the sales tax are
performing how are we going to get this system built because the growth questions aren’t going
to go away. Honestly, if I could put it in a nutshell what we are struggling with, and again I
think there are some legitimately points on all sides of this and people can look at the facts and
make different decisions on where to go, but what we are struggling with is the trend lines where
the donut sits, where we’ve got a great center city that people come to work in, we’ve got frayed
neighborhoods in the middle and we’ve got a robust suburban area outside. That trend is already
there and the question is what we do about it. I can understand an arguments that says let’s try to
do what we can and do a little bit more later and we may end up there, but I think there is an
equal risk that by trying to incrementalize it we put the money out there and the trends overtake
it and we end up right back where we started. So that is the concern.
Councilmember Barnes said in preparation for today I went back and looked over the materials
we had over the summer and the spring in trying to arrive at a budget. What I decided to do
today was start with the Manager’s budget. I have no desire to get into a battle of the
Barnes/Kinsey proposal, etc. I actually went back and looked at the Manager’s original proposal
and there are some things about it that I want to point out then I want to dig down through the
issues. For example, in terms of economic impact the Airport and west corridor investments
were estimated to generate 5,000 new jobs. The east and southeast corridor investments were
estimated to generate $200 million in new development. The northeast corridor investments, that
one bridge, the north bridge itself was estimated to create 10,000 new jobs and the applied
innovation corridor was estimated to create $280 million in new development and the joint
communication center was going to save us over $700,000 per year in facility lease costs. There
are some great items in that budget and in fact as I looked through each of the items in there the
only item that I think we got stuck on was the streetcar. All of the other projects seemed to have
a permanence except the streetcar and what I mean by that is that we were contemplating
funding a portion of the line, the $119 million so with that in mind, what I did was look back at
some things we talked about before and haven’t talked about in quite a while. The first one was
the Bay Area Economic Study, was done in 2008 and released in January 2009 and I think that
that study done at our request by a consultant, Bay Area Economics actually provides a good bit
of guidance on how we might be able to move forward with the budget package and what I
would like to do, either in preparation for the next session or the third session is ask staff to assist
with some numbers. For example, just give a little bit of background on the Bay Area Study. It
contemplated a no build, no streetcar scenario, a baseline development scenario and an
accelerated development scenario. It also contemplated that we would use TIFs and MSDs in
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Special Budget Meeting
Minute Book 134, Page 6
building a streetcar system and it had low funding numbers, moderate funding numbers and high
funding numbers and it thought at that time that under the low funding scenario that we would
generate $209 million from TIFs and MSD’ from 2010 to 2035 and the high end was $333
million so there was quite a bit of value according to the consultants at that time that they
thought would have been creative and realized. One of the issues that some of us have talked
about privately was the idea of being able to assess some sort of special assessment to
Presbyterian or Central Piedmont or Johnson and Wales and JC Smith and there is a statute,
General Statute 12138 that would allow us, and I will seek the advice of Council if that is not
true, but I think it will allow us access to create a special assessment district that might include
those institutions again to create value to help pay for a streetcar program if we choose to go that
route. The report itself contemplated that we might use parking meter revenues, public garage
revenues, a surcharge on tickets to events at facilities owned by the City so all of the Bojangles
and Ovens facilities, the uptown arena would be one of those where we might add some fee to a
ticket to help subsidize the cost and there was one thing in there I caught and this is where I
would rely on the expertise of staff a bit more. It talked about us arranging credit guarantees to
repay construction costs and maintenance costs back to the general fund and it also talked about
arranging internal loans that we could use and repay through TIFs and MSDs. If you guys could
take a look at that and tell us what that might generate now I think that would be very helpful
Mr. Manager.
Also we had talked about putting $47 million of the $119 million in COPS and $72 million being
the part of the property tax. What I would like to know is with is respect to the $72 million, if
we are able to work according to the BAE Study and generate some values for the MSDs and
TIFs special assessment districts, how much of the $72 million could we reduce? I know you
don’t know that now, but just in terms of some things I would like to consider. If we are able to
create some offset either through credit guarantees or repayment, what do those numbers look
like for us? I had this conversation with Councilmember Howard and I think this is something
we should begin to figure out to talk about and that is the gentrification and densification of the
streetcar corridor if there is to be one. There is a level of gentrification and densification that
you see in places like Portland that would be required almost to make the streetcar system be as
effective as we would want it to be. There is a conversation I think that should be had with the
general public, maybe they know but I didn’t get many e-mails saying when am I going leave,
but I think it would be useful to address the mighty midgets of the Beatties Ford Corridor for
example, to have that conversation with people so they recognize where we might be going and
where they may be going. Ultimately folks, I hope that if we, and I think we will at some point,
as we arrive at a bond package we have to have something that the community will support
broadly and there are some issues that Mr. Dulin has raised, Mr. Cooksey and others, Ms. Fallon
about tax increases and if you put the wrong bond package out there it sinks because you have
so much negativity surrounding it and I think we would all like to be able to enthusiastically
support the neighborhood improvement bond, affordable housing bond, transportation bonds so
at the outset that is what I would like to have you all look at in the BAE study and also as far as
all the other projects and packages are concerned, I think they all made sense to almost all of us.
The only reason I took anything out was to try to get the six votes. The only reason Patsy took
anything out was to try to get the six votes. If we can get six votes and hopefully 11 votes on a
package it would be great if all of us could enthusiastically say this is good for all parts of the
City and we are going to support it. I think the public would have more confidence in the
package.
Councilmember Howard said I would like to hear from everybody. I would like to go around the
table and make sure we hear from everybody. I thought about going back through the process
and I don’t need to rehash a lot of that, but this has been a lot of sleepless nights for me
personally and one of the things I would like to start with, and I heard the Mayor say it, I would
like to put the responsibility back in this room, it is our budget, all 12 of us. I think the Mayor is
a member of the City Council so he has a vote to facilitate the end vote. I was happy Mr. Barnes
that you recognized it is not just his vote, it is six and that is the way our system works. It is all
of us, so I go back to the fact that all said what we thought and then we came back. I would like
to talk a little bit about what the Mayor was showing in those pictures. It brought back a lot of
good memories for me. If I remember right the old Charlotte Douglas Airport pictures were in
the 50’s which came right after the great depression and those horrible years. The new terminal
actually where the construction was mostly in the 70’s which happened during gas prices and
everything else was going on. The Coliseum opened up in the late 80’s and we were going
September 27, 2012
Special Budget Meeting
Minute Book 134, Page 7
through some economic turmoil in the 80’s and then we just had the audacity to take on the DNC
after the last turmoil and economic downturn and we did a pretty good job with it. I think the
word that comes to mind for me during all of this is “vision” and I think that is what the
Manager’s proposal was trying to get us to remember that Charlotte is a City of vision and we
always look to the future trying to figure out what comes next and not just kind of sitting on
where we are. For me fundamentally and maybe it has something to do with the fact that I have
spent a lot of time with transit over the last several years. I think the transit system is a gift that
we are going to leave to next generations and I think what we need to do and what we don’t
need to do is rehash it and we need to talk about what sources we need to get at if we can all
agree that we need to have a system, but we need to figure out how to make the system work.
Having a system on paper and having a plan didn’t do anything for us, matter of fact I don’t
know if was ingenuous or intentional or what the case was, but that same streetcar that will
eventually go down Trade Street, then peel off to Cedar Street over to Morehead Street, but
actually come down Wilkinson right outside of this building on its way to the Airport. We are
talking about building a system that has legs that go throughout the City, not just in one place or
the other. It is not just going to go down Beatties Ford Road and down Central Avenue but it
will peel off and come straight down Wilkinson on the way to the Airport. That is part of
building a system that we talk about. It won’t be just that neighborhoods that see the economic
development, eventually it will be economic development truly that we have in the community
and that is the Airport which was started when times were bad because we had vision as a
community. I think the Mayor is right, we have been given a great gift in the community and
we need to make sure we hand off to the next generation in the same shape we got it if not
better. Thank you Mr. Barnes, we do need to start with the sources and I hope we do start to
make it how we finish building the system that we are all hope and agree is what we should be
focusing on.
Councilmember Cannon said Mr. Barnes you made a comment with regards to the assessment
and thank you for doing your homework on that and pulling that out of a place where many of us
around the table didn’t even know existed. What I didn’t hear you talk about and maybe you
know the answer to, what type of assessment percentage wise, what were you talking about that
could be considered from each one of those entities that you made mention of?
Mr. Barnes said the study actually referenced numbers consistent with MSD so three tents of a
penny, a third of a penny that type of impact on the parcels that align, under a special assessment
district you need the majority of the property owners to agree and that takes me to another issue
about whether people are going to get behind this thing or should.
Mr. Cannon said would that be for all or some?
Mr. Barnes said would likely be all depending on how it was established and again I’m looking
to Curt and Bob for assistance, but I think it would be all of the properties along the corridor.
Directly on the corridor or three blocks back, but I think directly on the corridor. It would be up
to us to set the rate and again if you can establish a situation where we could leverage the
construction costs against that tax I think we would start creating a situation where people would
say, look the folks who are in the corridor, benefiting from the project directly have some skin in
the game. Specific numbers are in that study and they may not be good now, but they were at the
time.
Mr. Cannon said that helps a great deal because I think at the end of the day, vision and all that
stuff included, for the most part we agree on where it should land relative to some of the core
areas of concentration of interest. The elephant in the room is how do we come with finding
different alternative revenue sources that might help us as it relates to streetcar project. I almost
want to know from staff because I know there has been a lot of us around this table, including
me, that have gone to staff and asked for a little bit of this and a little bit of that, what it might
mean in terms of impact. I almost want to note that we aren’t repeating the same stuff over, what
that list looks like in terms of different suggestions or asks that have been on the table relative to
the potential revenue sources that might be out there. COPS have come up and we’ve heard
vehicle registration and a lot of different things, even private equity to some extent. I think that
just helps us to drill down on where we are trying to go.
Mayor Foxx said a lot of interest in looking at alternative revenue sources, value capture
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potentially a district based sources, MSDs, etc. Staff, is there a way to sort of catalog those
sources that have been suggested along with maybe some other ones that have been used
elsewhere? What I think would be most useable as a side by side, you have the source, you have
what we have the ability to actually implement ourselves without any help from someplace else,
what that source would spin off and I think that kind of side by side gives us the ability to have
that conversation.
City Manager, Curt Walton said the Streetcar Advisory Committee did a lot that, we would
have to update but that is not a problem.
Mayor said could we have that by the next session?
Mr. Walton said yes.
Ms. Fallon said thank you Michael, I’m going to rebuild a conversation you and I had. We spent
a lot of time on Monday night, you and I, and I have no objection, we talked about it. If we
could get a pot of money that would be dedicated only to the streetcar and sustain itself where it
would throw off the interest to have the street car funded every year rather than going to the
taxpayer. I’m not willing to go $500 million to build a streetcar and $6 million to $8 million to
run it. If we can get a funding source that just stays in that silo and throws off the money to run
it, I’m fine with that. The other think is and Michael brought it up, when we started to talk to
that, Beth and I sat down and said oh my goodness, we know gentrification will happen and I
am not willing to have people who have lived their whole lives before … and we came up with a
plan that if it happens possibly this Council would pass to keep people who want to stay in their
homes in their homes, without that big pot of money touting them into some other place because
it is not fair to people who want to stay in their homes.
Mayor Foxx said I think that is a very legitimate issue and different sources put more pressure on
that than others. An MSD, just as a for instance, creates a bit of a hike because I live in one by
the way and I pay more taxes than most of you all, but my streets are cleaner.
Councilmember Kinsey said yes, but they don’t get garbage service and I hear about it, not you.
Mayor Foxx said an MSD creates an increase in property tax within that particular district so you
could have two problems. One is people who live in that area end up paying more property tax
than people who don’t and the other one is that if you are really trying to revitalize an area and
bring business and retail uses into the area that provides a bit of a disincentive for them to come.
We can debate the source once we know what the sources are. I think the issue is trying to get
some on the table and I would add another concept which I think is being looked at for the Red
Line, which is value capture through TIF, but a different type of value capture in which maybe
you create an evolving fund so that whatever the initial outlay is for the streetcar, the value that
comes in gets redeployed to help build it out. I think there are models out there that have been
used that way. We might as well look at everything.
Mr. Cannon said the other thing I hope that we might look at as well, as we talk about trying to
create a balance in this community I’m reminded of the chart the Mayor used to illustrate about
Beatties Ford Road. We talked about the streetcar and where it will end at French Street. I
don’t know that we are working to create the type of balance that is much needed further inside
of that corridor and I would hope that we might be able to look at the opportunity of not going so
far as Rosa Parks per se, but maybe on this side of I-85 or maybe where the House of Prayer is, I
think it is Gilbert Street and consider looking or at least starting construction, if we are in this
direction, from Gilbert going inward to uptown Charlotte largely in part because one could
realistically argue that what we are looking at right now is really prone to taking care of uptown
and uptown only. Johnson C. Smith and all the great things that are happening in around it with
Mosaic Village, University doing well itself and what is coming in the way of different types of
residential units is almost uptown in its own respect. But going beyond that I think is much more
to be gained from. Ms. Fallon mentioned gentrification, something I am very familiar with by
way of what we had to go through when we were working to bring about SouthEnd.
Gentrification is a double-edged sword and you take your medicine the best way you feel like
you want to take it. Those choices are either you want to be fine with what you have, if it is
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Minute Book 134, Page 9
crime rates that or high if it is economic development that has left the area and you do something
about it, or you leave it alone and I don’t think that is where we are trying to go. Obviously, if
we do something about it, it does mean the potential of some changes along the corridor for
people and their ability to be able to reside there. That is why we had to go through trying to
educate people in the Homestead Act and get those people in line to be able to enjoy a lifestyle in
the community where they wanted to stay. Beyond that there is an education piece out there that
we have make sure we are about. People are still selling their homes in Wilmore for $50,000.
They have come to me and say should we make this move and I say no, if you can please stay
right where you are. They sold anyway and today or a little bit before not, many of those people
are finding themselves to be homeless. They didn’t have any place to go because they thought
that $50,000 was going to carry them somewhere, not really understanding that they still had to
pay for another place to reside. I would hope we would do all we can, and this is part of the
planning cycle, Debra Campbell, where we need good folks like her and other at the table to help
us with this process. It is not going to be, I don’t think, very simple as we start talking about the
build out of where we are trying to go. If were to start at Gilbert per se, and go inward to
uptown, it makes sense to me that we would try to make sure that we are connecting. Would you
stop at the Intermodal Station at Graham Street, probably not. I think we would extend it a little
further down to the Transportation Center area. Now you’ve got that connector of where it Ts at
a point where people can get on or get off and you’ve still taken care of ridership across the
board. If it doesn’t make sense that is find, but it would seem to me that rather than trying to do
everything right now with the streetcar, we look to do a portion of it and still again look at all the
alternative revenue sources that staff will bring back for consideration.
Councilmember Mitchell said Council, I have to apologize to you during the budget discussion
when there was a lot of talk about the streetcar I wasn’t too involved because I had a little project
called a “wedding” to get ready for on June 16th. I heard about all the comments about the
streetcar and the West Trade Street/Beatties Ford Road Corridor. I think we need to be very
careful when we talk about an MSD. Make sure you explain to us where the current MSDs are
and the criteria, what makes an MSD successful. I don’t want us to get too far down the road
and we realize an MSD is only successful when there is high density, a lot of rooftops. So Mr.
Barnes to your point, Presbyterian Hospital, West Trade Street, Beatties Ford Corridor, I’m not
sure an MSD is a solution to generate the type of revenue we need. I think it would be great for
staff just to come back and explain that to us. We talk about the partners along the streetcar that
we would like to participate, I just want to make sure we are fair because you start talking about
having high learning institutions focus on more than just academic, I’m not too sure that is their
mission. They are there to educate their population and not really put a lot of their funds into a
public service that usually the City provides. The fairness question, you said Presbyterian and
Johnson C. Smith which participate in the streetcar, do you have UNCC participating in the Blue
Line Extension?
Mr. Barnes said yes, significantly.
Mr. Mitchell said we want to make sure we do the ask and I’m not sure if we ask the Chancellor
to vote what would his response to that question be, we are talking about public service. Ms.
Fallon mentioned gentrification and I’m asking the question were you strictly talking about West
Trade Street and Beatties Ford Road or are you talking about another area of the streetcar?
Ms. Fallon I’m talking about where the streetcar would go.
Mr. Mitchell said I was trying to make sure if it was my leg or Patsy’s leg so you are talking
about my leg. Let me use the opportunity to talk about, we had dealt with that issue five years
ago so I think in the West Trade Street and Beatties Ford Road, that would not occur. Mr.
Cannon is correct, gentrification has a good and a bad and in our case it was good. You look
how Wesley Heights has changed, Biddleville and Smallwood and so I caution us to try to use
that as a negative, why we shouldn’t build something because we are afraid of gentrification.
There was certain provisions we took then, we did a whole study on gentrification and I have to
give Debra Campbell the credit. We got ahead of the curve to educate citizens on gentrification.
My point is, I want to make sure if we have any discussion, we use as much data as we can
relying on staff and instead of having this emotional discussion about out budget. That does not
do any good to any of us around this table. I was away, but I heard a lot of emotional debate
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instead of real hard facts so you are right the community was confused. They didn’t know what
we were doing, where was our direction. Mayor you mentioned the baseline, to me there are
several baselines and the big one is taxes. Do we have 12 votes around this table to say we are
going to increase taxes in 2013-2014. We need to decide. If we are not, don’t waste staff’s time,
don’t waste our time. If there are votes, and I give Andy credit, Andy has been consistent. Andy
said I’m not budging, I’m not going to raise taxes. Correct Andy?
Councilmember Dulin said yes and no. I was in support of 2.44 cents and $674 million worth of
projects.
Mr. Mitchell said so you will budget. Also maybe the baseline all 12 of us agree to discuss
raising taxes to a certain degree. Now is the baseline affordable housing, community safety or
transportation? As we go down this path this time I want us to really rely on staff’s data, make
more intelligent comments about this budget and let’s get away from this emotional debate that
has caused so much confusion in the community. None of us want to raise taxes. We’ve got
family members unemployed, we know folks who have lost their jobs, but it is about what type
of city we want for Charlotte.
Mayor Foxx said this conversation so far is light years ahead of where we were this summer.
We are going from the streetcar specifically to whether to do to how we do it and that is a
different dialogue. This is a process we’ll keep talking it through, but I think we are making
some progress.
Ms. Mayfield said first let me welcome all of you to District 3. We welcome you to the area and
some of you welcome back. I’m hearing the conversation and ultimately I want to believe that
I’m hearing that we all agree that we need to see something done. I will agree to the comments
that Ms. Fallon made regarding the conversation she had with Ms. Pickering as far as the followup of Councilmember Barnes in gentrification. I think a lot of that when we are looking at
economic development comes from our role with creating the opportunity since we say every
day that we do not create business, we just create the environment for business, there has to be
and I’m hoping there is a way for us to direct some of those conversation so that we see a certain
type of economic development in the area so that we don’t have more a dollar corner in certain
areas or a lot of salons, even though they are valuable and we need them and we need
barbershops, but we need a balance of that type of development that we see in areas. That is a
conversation we need to have with our business community as far as where their commitment
comes from and what commitment are they willing to bring to the table when we do decide to
move forward. I honestly believe that we do need to figure out a way to identify the funding
sources that are needed for a streetcar because we do need to have multiple forms of public
transportation.
I have the opportunity to sit on the Centralina Economic Development Sub-Committee and what
we are looking at is regionalism. The latest numbers that came out said that by 2030 the amount
of congestion that we are going to have on our highways is going to have us looking at cities
where they started off on the right path and somewhere they turned down the side road and got
lost. With me growing in South Florida in Miami I had multiple forms of transportation so I do
see why we cannot continue to wait on identifying how we are going to pay for the streetcar. I
recognize the importance of our cabinet and everything can’t be well, but if we think back, me as
a citizen, there was a lot of conversation in the community when we laid the Blue Line and
nobody wanted it. I get to have the benefit now of representing this district that has seen the
amount of growth in SouthEnd all the way down to I-485 because of the Blue Line. That was
targeted growth and we made sure that we had relationship with the business community. We
can do the same thing again. I agree with Councilmember Howard that yes, that vision has to be
there because that what has always grown this city and if you’ve been in this city for more than 5
years then you have seen the difference. I remember what the City of Charlotte looked like,
what Park Road looked like when I moved here in 1987 and what it looks like today to get from
one end of town to the other. We are now sitting in my neighborhood and I look at Wilkinson
Boulevard and the lack of growth that we have and I think about what that potentially can look
like when that streetcar replaces that sprinter line that takes you from uptown straight to the
Airport. Also thinking about those that come in and visit our city as amazing as I see the … You
don’t see that until you get uptown. When you come in from the Airport and you jump on that
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sprinter line, what you are driving through coming up Wilkinson Boulevard heading into town,
the first thing you see is not the beauty and the diversity of our area. Yes, I’m concerned about
gentrification, but I think we have a role to play in that and I’m not a fan of leaving certain
conversation to future Councils for them to talk about it because unfortunately I think that is one
of the reasons we are in the position we are in now was because we didn’t have those
conversations around taxes. I hear the concern that Mr. Cooksey has but we have no control
over the county’s role. We had a process where every four years they could have done an
evaluation and a of people in the community called for it and it didn’t happen. What we have to
do to my understanding is as elected member for City Council, we have to continuously look at
how we grow our city. We cannot use the fear of this additional tax is going to hurt because
again I’m looking at, if you leave out of this building and turn to the right I have a community
over here that has never seen an increase in their property values and their homes are valued
under $100,000 so those numbers we looked at looked at starting at a $200,000 home, they are
still paying $800 in taxes for that home that is valued at under $100,000. They are not seeing
the benefits and the infrastructure in this neighborhood and in the surrounding neighborhood to
justify what they have been paying and at some point we have to make the investments that are
targeted to make sure that this core where unfortunately previous years those people were when
we went through gentrification, a lot of them moved into this area so we did have a process of
moving people out when a small percentage, maybe 20% or 30% of the current residents were
able to stay there, but then what happened to everyone else, and I don’t think those conversations
really happened about what happened to everybody else. Well, a lot of them moved over here
and that economic resources and infrastructure resources didn’t come along when those people
moved so now there has to be a way that we make an investment that is going to give back. I
think a lot of times we forget that it is our responsibility to go out there in the community and
explain what the process looks like. I had a conversation with a resident last week when we have
the Police Station for Steele Creek opening and they were so excited and happy about it and I
explained this is because previous councils through bonds helped to pay for this. That is why we
have it so what we are saying that this body that is coming together potentially saying we are not
going to provide that same service of knowing that it makes an impact in the community by
having that Police Station wide and accessible and bold in the community, we are not going to do
that because we couldn’t pass a capital investment plan. Once we had that conversation about a
previous Council approved this, so now it is our turn to take it forward, that changed that
conversation a little, but I also reminded her we are not just saying we are going to raise taxes
just for the sake of it, we are paying those same taxes because we live within the city and you
have a lot of members of this Council that still go to work every day and have full-time jobs or
part-time jobs. Luckily I’m in that position right now and I can focus on this, but one I’m going
to have to go back to work. I’m saying I’m going to sign off to pay these additional taxes in my
home that is valued at under $100,000. I’m saying I know the importance of having it so it is not
just like we are arbitrarily saying we are going to do a tax increase, we are doing it for the
infrastructure that we need and if we do it the right way within 5 years we will start seeing the
benefits of that because the whole purpose of being a home owner is to be able to have value and
equity in your home because that is how you build wealth. That is historically how wealth has
been built because that is our system and one of the ways you build it. If we are not going to
invest in our community then I would hate for that to happen under our reign to say that we were
not forward thinking enough and that we couldn’t come to a decision to look at how we grow the
entire city and not just segments.
No, I do not support the idea of identifying a special tax because we already have that idea.
SouthEnd did that and SouthEnd is in a position where a lot of the residents can afford to do that.
Once we make our initial investment then we can look at having those conversations. Once we
get more homeowners instead of renters and more people that come in and buy low as Mr.
Cannon said, okay I’ll pay you $50,000 for your house and then at the height that house was
worth $200,000 or $300,000 so you’ve dropped quarter of a million dollar homes in the Wilmore
community where the average home was $48,000 to $50,000. That adjusted people’s tax rate
tremendously so you have people who are generationally been in their home, and they are seeing
some of the benefits, but you go two blocks over past Wilmore and you see no infrastructure
investment. I honestly believe it is our responsibility to do something about it. I hope we get to
a place where we can recognize a way to financially support streetcar, public transportation and
the other investments that are needed in the community.
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Councilmember Pickering said thank you Mr. Mayor for your introduction and laying out where
we are, how we got here and particularly for your kind words about anything you might have
said in the past was not intended to be personal. I appreciate that. You mentioned the three
doors, number #1 was do nothing door, leaving the tax rate as it is and #2 the down payment
door as you called it, specifically along the lines of what we actually need to do right now and #3
swing for the fences door. If it wasn’t for the County revaluation I would be at door #3 because
that is my general nature, think the big picture vision. The County revaluation really concerned
me and affected a lot of homeowners and I represent all of the citizens of Charlotte and I didn’t
feel like I could pile on the shock that some of those homeowners felt with an additional tax
increase at the 3.6 cent level. I did feel that we were fortunate in that the County was able to
reduce their tax somewhat so we could raise ours to that level and have a no net increase for
homeowners and that is why I supported that 2.44 rate and I still really think that was a happy
medium, that was the middle ground and that was the best of all possible worlds at the time. I
think it is just plain common sense, I want to do as much as we can without negatively impacting
homeowners right now. If it weren’t for that county revaluation I would have voted for that
budget and I really thought I was going to at the outset. That is my goal, what actually needs to
be done now, how much can we do. I would love to see that 2.44 cent rate and I’m open to the
five years and I have no opposition to the streetcar whatsoever on principle. I love all kinds of
public transportation but I do believe we need to look for alternative sources of funding, but I
have absolutely no opposition to it conceptually or philosophically. That is what I would like to
do, move this City forward. We cannot sit still and I absolutely disagree with #1. I have no
problem raising taxes in an election year, none whatsoever. I would love to move this City
forward, but we’ve got to take into consideration everything facing our taxpayers. I can’t just
kind of separate it out; I have to look at this total picture in my mind.
Mr. Dulin said last year’s budget cycle as we all know was interesting. The group of six that
came together on June 11th and again at 1:00 p.m. on June 25th I thought had done wonderful
work, led mostly by the hard work of Mr. Barnes and Mr. Cooksey, but the six of us came
together in pretty classic Charlotte manner to me, came up with a plan that I thought would have
worked and that I was willing to compromise. It was the kind of work that doesn’t happen in
other places, so it doesn’t happen in Raleigh for all these years and gosh knows it doesn’t happen
in Washington. That group came together with something that worked and you and I had an hour
conversation on Sunday the 24th of June before the meeting on Monday. I was pleased with that
work and oddly enough as things happened on June 25th some folks changed and we ended up
with zero which was fine with me. One of the things we are talking about here is, the 2.44 keeps
coming back up and some folks would say, and I’m saying this hypothetically because I’m not
supporting today, but some folks would say okay we can go right back to the 2.44 where we had
it, let’s tee it back up, but others folks at the table are saying no, no, you don’t understand. We
want to go 2.44 and we want to change the debt. To me the 2.44 was last week’s game and it is
over and we are not worried about how the game went last week, we’ve got a game this Sunday
that we are worried about, this coming year. The 2.44 might come back up but to me it is a new
day and it is a new opportunity to look at it. I’m still not a streetcar supporter, but I am a
supporter of the east side and I’m a supporter of the west side. I had breakfast at Bojangles at
Johnson C. Smith this morning and I was on Gilbert today. What is interesting thought and I’m
talking about the elected folks sitting at the table, I’m sitting at a table of my friends but I really
have for the first time in a while, the feeling there really are only two of us at the table. The
Republican minority on Council is really feeling the weight of that minority status at this
particular meeting, but I’m sitting with my friends. This is a friendly conversation we are
having.
Mr. Mitchell said can you explain what weight the Republican minority feeling?
Mr. Dulin said the conversation at the table has been from everyone it is all about how are we
going raise the added revenue to do the streetcar or these others things. The only note I’ve taken
is that new revenue sources are other people’s money and it all other people’s money that we
deal with.
Mr. Mitchell said how does that make the Republican minority feel like you are carrying the
weight?
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Mr. Dulin said there are 9 Democrat Councilmembers sitting at the table and two Republicans so
quite frankly you all can do anything you want to and we had two Republicans and four
Democrats came together last year in what I thought a wonderful fashion to try and get
something done, to get $674 million worth of projects done in all four corners of the community.
That ended up not working out so I don’t mind stepping up to the next plate and let’s talk about it
again, but I have the feeling today that what you all are going to want to do is be able to figure it
out and get it done regardless of what I have to say. You will listen to me I suppose.
Mayor Foxx said everyone is at the table and everybody has a voice and all voices will be heard.
Councilmember Kinsey said I’m going to keep my mouth closed and my ears open.
Mr. Dulin said I wish I had said that Patsy.
Councilmember Autry said I took on this position because I wanted to have a positive impact on
my community, to serve my community and to serve the best interest of this City to insure that
the City has a bright and stellar future ahead of it. I also had to write my escrow company a
check in January to make up the difference in what my property tax value had gone up and
someone who pays himself out of his own business at a fixed income rate, that wasn’t the easiest
task to do. It was a lot easier to ride my bicycle 10 miles over here today for this meeting and I
appreciated every mile of bike lane that we have, but there was no bike lane on Wilkinson
Boulevard, and there was no bike lane on Monroe Road. These are the kinds of amenities that
make a community a forward moving and forward thinking community. Public transportation is
a major component of that. It is what connects us, it is what keeps us vital, it’s what keeps us
growing to continue to build roads, to continue to widen existing roads. It is like me controlling
my weight problem by just getting a bigger belt. There are better solutions, there are more
sustainable solutions and I want to be involved in setting that course for the future of our City.
So when we talk about raising taxes I have to write that check also, but I’m willing to do it to
better our community.
Councilmember Barnes said I wanted to amplify a couple points. One point going back to the
original Manager’s proposal, it would have had a $1.6 billion of economic output activity and
impact on the community. It would have $383 million in earnings impact so there is a lot in
there. I only say that because I think as we talk about growing the community and developing
Charlotte we should recognize the literally the blunt force of that budget. With regards to the
questions that I’ve asked about the streetcar, I’m not suggesting that I will support a streetcar at
any cost. What I’m saying is that if the numbers that they give back to us makes sense and we
can actually offset a good percentage of that $72 million on the construction side, then I’m
willing to explore that. I think until we actually do that we won’t know and we need to do it
because we may find the situation where 25% of the money can be derived from these alternative
sources. The reason that is important is because we are in fact using five different funding
sources for the Blue Line and for consistency sake I think we should at least try to diversify the
funding methodology for the streetcar system. Hopefully we will get the data at the next meeting
and can move through it, but I’m trying to how to move forward and if we can find a way to be
able to give and take that is fine, but we’ve got to do something because we’ve got to represent
our City well and take care of the people who live in it.
Councilmember Howard said I’m going to try to stay where James said we should stay which is
logic and try to get to the real numbers. I want to go off on a tangent about how there are a
bunch of neighborhoods who didn’t see anything and we can talk about that and how some
would love gentrification, especially West Boulevard. What about a scenario where I think out
of fairness, how do we do this, there is a Blue Line that is going to run from Pineville all the way
up to the University eventually that didn’t have to do an MSD of any sort to get what it got and it
got that investment. I want to figure out a way to be fair to the people along these other corridors
so they don’t have to carry more of the burden themselves more than the people along the Blue
Line had to. What about us looking at a TIF along all the lines, the south line and the line up to
the University and the rest of the line. How about if we looked at a TIF on the rest of the area
and that would be used in a pool of money that is used to offset the ½ cent sales tax and maybe
the other sources we can come up with. That way the folks going to the University area, people
that have not yet benefited on the south line as well as the streetcar on Beatties Ford Road and
Central Avenue and eventually down Wilkinson Boulevard, how about everybody be put in a
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TIF just like they are doing with the Red Line essentially. Essentially what they are doing is
taking almost a straight shot all the way up and some of that TIF is going to be used to offset
whatever other sources they can get. Is that hard to figure out if we go right off the line, the
same amount of space we would go off for a PEDSCAPE maybe and go straight up Central
Avenue. What would that give us if we did the same thing everywhere and put all of that into a
pool that we then use with another source? That way at least everybody that has benefited from
the transit line are kind of all in and not just these future lines we are talking about? Is that hard
Mr. Manager:
City Manager, Curt Walton said I don’t it is hard, it would just take us a while because there
are a lot of parcels. I think you raise a good point. The 2030 Plan after we get the Blue Line
Extension done is pretty much … and so I think we have a bigger problem with what we are
trying to solve is the streetcar now. What you are talking about is the Silver Line, the Red Line,
the streetcar, everything could be done, we’d just need a little bit of time because there is a lot of
acreage to figure out.
Mr. Howard said I know we did it on Central Avenue and Beatties Ford Road already. We used
the exact footprint we used with PEDSCAPE so we already know that we’ve come up with a
plan to push density in that area. You don’t go outside that area, you go to the area we’ve
already identified in our land use plans for more density and that has been the PEDSCAPE and I
know we have it to a certain extent on Central Avenue and a good bit on Beatties Ford Road too.
That would be a good place to start and then also do it on the Blue Line totally and if we can get
in front of the Blue Line Extension we can capture that value as it comes on line and throw it all
in a pool and not do this thing where it only benefits the area that it is coming from. That is the
part I think fundamentally has been a problem for me that Beatties Ford Road should be expected
to carry its weight. Well, it carried some of the weight for the Blue Line too through the sales tax
so how do we make that fair across the board? That’s my proposal to put on the table today.
Mr. Barnes said would you include the areas that are already covered by the MSD?
Mr. Howard said I’m not sure. I think what Mr. Mitchell was saying earlier, we need to see how
fair that is or not fair for the downtown because they are already carrying two MSDs.
Mr. Barnes said I would oppose that kind of taxation where you lay on a TIFF through uptown
and a TIFF through University City.
Mr. Howard said I just want to see what it looks like. Actually a TIFF works differently I think.
A TIFF is us giving away value. It may not even matter, but the MSD is what would be a
problem. TIFF is us saying we can take a future commitment and put it in.
Mayor Foxx said we can delve much more deeply once we get the staff to come back with some
of the specifics.
Councilmember Cooksey said I also had some general discussion stuff that got sidetracked. I’ll
start with this one, as a former constituent of Councilmember Mitchell, I’m trying my dead level
best not to do what I’m about to bring up. It is very easy I think for us to have territorial pride
and be very concerned of our area. But a line such as my leg of the streetcar doesn’t help the
streetcar get to citywide and I wish I could find a nicer way of putting that.
Mr. Mitchell said I was making a reference because there was a lot of conversation and I just
wanted to make sure as a District Rep, I never did get a chance to give feedback.
Mr. Cooksey said I understand but language matters in all of this and to the extent that the
streetcar is a controversial project for the City to consider citywide anyway, but with language
such as “my leg of it” that adds a sense of ownership that makes it a lot easier for the people who
elect me for example, to say contrary to Councilmember Howard’s concern about fairness, if it is
your leg you pay for it and I’m not arguing that at this point. I’m talking about how we can,
because eventually we are going to have to be talking about, whatever we come up with, to the
community as a whole. If this is not discussed and we’ve repeated this theme generally in
conversation but when we start talking specifics, we are not talking about this as a citywide
September 27, 2012
Special Budget Meeting
Minute Book 134, Page 15
effort, then we are going to send 7 different districts and nothing gets funded.
Mr. Mitchell interrupted to say just a counter point. We talked collectively about funding
Ballentyne and you clearly said my project and my district.
Mr. Cooksey said Ballentyne is paying for that bridge. The taxpayers of Charlotte aren’t and
that is my point that Ballentyne is paying for that bridge.
Mr. Mitchell said this council voted and I just wanted to make sure.
Mr. Cooksey said the distinction I’m drawing is this Council voted to allow Ballentyne to pay
for its own bridge. That is the same model I brought down during the discussion topics and that
is the feedback I get a lot of. By way of illustration I’m elected from a district that has not had
an identified general fund bond project completed since Ballentyne was annexed 15 years ago.
You cannot come to District 7 and say this identified bond project was on the ballot was built by
the City of Charlotte. None exist.
Mr. Howard said how did the water get out there?
Mr. Cooksey said that is not a general obligation bond project. No voters voted on that so
whatever we go to we are going to have to, we’re talking general obligation bonds because the
water and sewer CIP that is done, we’re talking the general fund CIP through general obligation
bonds and it is also a proposal that with the exception of a Police Station which may or may not
make the final cut. Asking the voters in District 7 to support a general fund CIP that will have
no identified general obligation bond projects to vote on and I understand that point. I have
spent a good chunk of time explaining to a variety of community leaders why that is because a
lot of the neighborhood’s transportation projects are based on adopted land use plans and there
hasn’t been an adopted land use plan in South Charlotte since we adopted I-485. Again when we
talk about a named project for a general obligation bond vote there are none in District 7 since
Ballentyne was annexed 15 years ago. There is a reason for that but to a District 7 voter that
requires a lot of education which is the responsibility of all of us. That is what is percolating in
South Charlotte which is why I’m very hesitant to see the conversation going in the direction
about my leg of this or my leg of that.
A quick question of the Manager based on something that was said earlier, has any policy
making body in Mecklenburg County, be it MTC or this Council or any other, adopted a plan
that shows a streetcar on Wilkinson Boulevard?
Carolyn Flowers, CATS CEO said in the 2030 Plan there are two streetcar projects and so the
Sprinter Line is the precursor to the Wilkerson streetcar.
Mr. Cooksey said does it propose that it be constructed within the confines of the 2030 Plan?
Mr. Walton said not in 2030.
Mr. Cooksey said even when we have funding for the 2030 Plan was funding a streetcar line on
Wilkinson to be done by 2030?
Ms. Flowers yes.
Mr. Cooksey said I was just looking at it and I didn’t see it.
Mayor Foxx said the map I showed you came from the Plan.
Mr. Cooksey said back when the revenue was coming in I didn’t realize it was funded by 2030.
Ms. Flowers said it was a precursor to the local.
Mr. Cooksey said as mention that was the information I got. Another thought on going forward
in this process is I was able to compromise on the 2.44 the last go round because I could go back
and tell voters that there was no net change to the property tax bill as a result of that. Now there
September 27, 2012
Special Budget Meeting
Minute Book 134, Page 16
will be a net change if we are talking about a tax increase. I want to return to an idea I brought
forward earlier on the previous round and dropped and now that we are starting over I will bring
it up again. Because any property tax increase will fund the general fund CIP, is solely for the
general fund CIP, which will not happen unless voters approve general obligation bonds, I think
it makes a tremendous amount of sense to recognize the different roles that Council and the
voters in general obligation bond process, and whatever we agree to on the general obligation
bonds that vote should also be a vote on the tax hike. It shouldn’t be a Council vote on the tax
height, then tell the voters, well we’ve done it already vote for the bonds. Because the tax rate
solely, unlike in 2006 where it was a hybrid, this proposal is solely to fund bonds that the voters
have to approve. We can’t issue them and we can’t do what we say we are going to do in this tax
hike unless the voters approve the bonds. The voters I think should approve the tax hike.
Mayor Foxx said I’m really going to help you out Mr. Cooksey because you had the idea of the
no property tax increase budget this past summer and that is what the Council did so I’m not
going to count you out, but I think that is a process discussion that we need to have if you want
to have it, but that discussion needs to happen after we figure out (A) what are we going to do
and (B) when are we going to do it and (C) how.
Mr. Cooksey said I appreciate that. I didn’t want it to be perceived that I was dropping that at
the last minute that oh, now we’ve worked all this way and now Cooksey is presenting that. I
wanted that part up front in terms of something I think we should keep in mind. Once we get to
the end of this process, how do we present it to the voters and I think it makes the most sense for
the voters in terms of what the voter’s responsibility is versus ours to package the tax rate and the
bonds together.
Mr. Mitchell said Curt when we did all them property taxes increases, what year was that?
Mr. Walton said 2006.
Mr. Mitchell said Mr. Cooksey, your proposal is to put the tax increase on the ballot?
Mr. Cooksey said basically the general statutes permits us to go voters to get permission to raise
the tax rate either in general or for a specific purposes, so I would image the language would be
increasing the property tax rate by X for the purpose of supporting general obligation bonds.
Unlike 2006 when part of the increase was for bonds and part was for operation, this proposed
increase is bonds only.
Mayor Foxx said staff had a presentation that would have laid out areas of consensus, but I’m
sort of hearing a lot of things. Let me see if we can do an informal poll of sort of where we are.
How many would prefer to spend our next session basically looking through door #3 so to speak,
assuming everything but the streetcar in the budget and doing a deep dive on the streetcar? That
is one option I think I heard articulated. The other one is that we can take the areas of departure
that were in the last couple budget proposals and we can go through all the projects, the trails, the
eastside, Bojangles, Dixie/Berryhill Road. We can do that but I would like to know by a show of
hands which door people want to go through. Is it door #2, is it door #3, is it door #3 with the
streetcar, having a separate dialogue because I heard you say Michael and you also Mr. Cannon
that the streetcar is the thing that you feel like gummed things up so if we spend time on that
maybe we can get to a resolution? We have to make a decision as to what happens to the rest of
this stuff. A show of hands on focusing on the streetcar in our next session and leaving
everything else in the budget on the table. This is informally not committing you guys to a
decision, it is simply asking for an expression of direction for the next meeting.
Ms. Kinsey said is this door #3, to which the Mayor said yes.
YEAS: Councilmembers Barnes, Cannon, Fallon, Howard, Kinsey, Mayfield, Mitchell and
Pickering.
NAY: Councilmember Dulin opposed.
Mr. Barnes said it would help people if we dig down into the individual projects because I’ve
had folks say to me, what would $20 million do for public/private partnership and if people want
September 27, 2012
Special Budget Meeting
Minute Book 134, Page 17
to do it that is fine, but I think for me the key issue is the streetcar.
Mayor Foxx said I think what we should do next time is come together, spend the bulk of the
time on the streetcar. I do think having presentations on those areas where there was some
contention between the last two budgets would be helpful. The Thread Trail, the Bojangles
piece, the Dixie/Berry Hill Road, all that stuff that you all know, but I do think there does need
to be a level set on those things too so we’ll spend most of the time on streetcar next time. The
assumption is that the rest of that stuff is stuff that folks have a basic comfort level with and if
that is not the case, next time please bring your questions about those other things because the
third meeting will be adds and deletes.
Mr. Dulin said with the third meeting scheduled for adds and deletes, what does that do, Randy
and Curt, to our traditional schedule in the spring?
Randy Harrington, Budget Director, said it would help us in terms of planning for the spring.
Obviously Council made certain guidance decisions we will incorporate that into the budget
process. We would probably bring it back as a refresher in the spring as we deal with the capital
program as a whole, but we would include it again as part of the Manager’s entire recommended
budget process.
Mr. Dulin said a couple years ago I made a run at trying to get the Centralina Council of
Government out of our budget and still wish we had, but it lost so it stayed in the budget. The
next year it was there and we’ve done this with some people that have lost funding. In the next
year if it loses funding it just gets gone so this year technically those projects in the CIP last year
when the budget was adopted with no CIP those projects are off the table. It seems to me that at
adds and deletes if Councilmembers wants to add those CIP projects back in then that would be
the place to add them back in. Just don’t assume that they are there. I would think that paper
work would come to us with none of them because they were not passed.
Mayor Foxx said in the spring when we start our process and the staff makes a recommendation
to the Council on the budget, from there the Council then adjusts that budget to the dictates of
the Council. We effectively made no decision on the Manager’s budget. We didn’t do anything
and so the issue is now, the staff recommendation is still on the table, as still sort of the baseline,
right? The adds and deletes will be matched against that, so if there is something you want to
take out, propose taking it out. If there is stuff you want to add, propose to add it, but that is the
template from which we are working.
Mr. Walton said that gives you a chance to focus on the operating budget starting in March and
April which would be the normal first year of a two-year budget.
Mayor Foxx said so we won’t worry about add and deletes on the operating budget. Okay, thank
you all, this has been a really productive meeting.
Mr. Dulin said can I have the floor one more time? Just to the Councilmembers, I apologize but
I have a matter that is going to pull me away from the closed session this afternoon and I just
wanted to publicly tell you I’m leaving on an excused absence from the Mayor and City Manager
that I cannot stay.
Mayor Foxx said understood and thank you for that. With that is there a motion to go into closed
session.
September 27, 2012
Special Budget Meeting
Minute Book 134, Page 18
Motion was made by Councilmember Kinsey, that we go into closed session pursuant to
GS 143-318.11(a)(4) to discuss matters related to the location or expansion of an industry or
business in the City of Charlotte including economic development incentives that may be
offered in negotiations. Councilmember Mitchell seconded the motion and the vote was
recorded as unanimous.
The meeting was adjourned at 1:54 p.m.
Stephanie C. Kelly, City Clerk
Length of Meeting: 1 Hour, 51 Minutes
Minutes Completed: October 16, 2012
October 30, 2012
Special Budget Meeting
Minute Book 134, Page 125
The City Council of the City of Charlotte, North Carolina convened for a Special Budget
Meeting on Tuesday, October 30, 2012 at 12:00 Noon. in Room 267 of the Charlotte
Mecklenburg Government Center with Mayor Anthony Foxx presiding. Councilmembers
present were John Autry, Michael Barnes, Patrick Cannon, Andy Dulin, LaWana Mayfield, and
Beth Pickering.
Absent Until Noted: Councilmembers Warren Cooksey, Patsy Kinsey and James Mitchell
Absent: Councilmembers Claire Fallon and David Howard
I.
Introduction
Mayor Foxx thanked everyone for coming. This is our second called Capital Budget Retreat
and we’ve got an awful lot to try to pack into the conversation today. Just a couple points based
on some of the feedback from the last Retreat. First of all I want to say to the Council a really
good job talking through some of the issues the last time around. I think we got a good
conversation going about this issue of the budget and how important it is and how we want to go
forward. For the next couple of Budget Retreats we are going to have to start fumbling our way
through to a conclusion and I want to say at the outset that the intent behind these retreats was to
put us in a position where by November 26th, which is the next retreat, we could go through an
add and delete process. Today is really about trying to get questions answered about any
portions of the budget that you have questions about and hopefully setting us so we can be in a
position to start making some decision on November 26th. If you have a question about any
aspect of the budget today is a really good day to ask those questions. If you don’t have
questions, that is fine, but we want to try to get this to a point where we can start making some
decisions.
The second point I want to make, which is a bigger picture point is that we have to think about
this budget in the two stages in which it exists. One stage is what can we agree on as important
enough to ask citizens to pay for to get done and that is a policy decision. The other part of the
decision that we very rarely talk about in this room is the fact that there is a bond package that
actually gets put up to voters and we want the public to support these bonds, not only because we
think it is important to get projects done, but also because the AAA bond rating is such a critical
piece of our city’s physical health. As I understand it, no later than 2014, if we don’t have a
bond package that is put out there for voters to approve we are going to put that AAA bond
rating in serious jeopardy. As we work through the policy pieces, I know what is in the back of
your minds is also to some extent the question of what the public will support. It is not an
unimportant question.
The last thing is just to frame this because I think the media has gotten a couple of things wrong
about this budget. We are going to spend some time today talking about the streetcar I’m sure,
but if you take the Manager’s recommendation which was a 3.6 cent increase in the property tax
and you took the streetcar off of the table it would be a 3.0 cent property tax increase. The
problem that we ran into in summer is that we had five councilmembers who wanted the
streetcar, we had four who didn’t want to raise taxes over 2.44 cents and we had two who might
have supported everything but the streetcar. Where we were in terms of the continuum wasn’t
aligned to a majority. This is a difficult discussion and the hope is as we get more information
perhaps people find a way to shift around to one position or another, but the reality is that none
of us want to raise property taxes, I can guarantee you that, but none of us want to see the AAA
bond rating of the City get jeopardized either. Randy Harrington had graciously put together a
great presentation for us last time but we were unable to see it. He is going to delve into a little
bit of what the budget scenarios looked like last time. I know from your comments that
everyone is not necessarily thinking about this as a continuation of that, but a sort of different
process, but this may be helpful in framing where we go with the add and delete because there
were some differences there and maybe as we conclude today we can identify where we want to
spend our time on November 26th.
Councilmember Kinsey arrived at 12:05 p.m.
II. Highlights of Special Meeting Materials
October 30, 2012
Special Budget Meeting
Minute Book 134, Page 126
Budget Director, Randy Harrington said I will be brief and as the Mayor said there was one
topic in particular that I wanted to touch on that we didn’t get a chance to do it at the last
workshop. That top is related around the CIP proposals, looking at some of the commonalities
and the differences and then I want to on this real briefly a second area. At the last workshop
there seemed to be some interest around a handful of alternative revenue sources including
Municipal Service Districts, sometimes referred to as MSDs, Special Assessments or sometimes
referred to SADs, Tax Increments Financing TIFs, and Tax Increment Grants or TIG. MSDs,
SADs, TIFs, TIG become the alphabet soup of local government and just to help everybody
make sure they understand the differences between and among those, I want to take a couple
minutes on that as well.
First I will jump into the first topic related to Comparison of General Fund CIP Projects. Please
turn to Page 7 and I will speak about Page 7 first. Page 7 and 8 really contain the same
information, but they are laid out in a little different format on each side. On Page 7 we’ve got
the three different proposals that were discussed as part of the final adoption in late June. One
included the Manager’s recommended CIP. There was a 3.16 cent proposal over 5 years and
there was 2.44 cent proposal over 8 years. The way this table is broken out the top third of the
projects that were included in both the 2.44 cent proposal as well as the 3.16. The light green
shading denotes areas where there was interest in the project, but differences in the level of
funding under each particular proposal. In the middle you see additional projects that were
included in the 3.16 cent proposal – Southern Dixie Berryhill Infrastructure widening, some
public/private partnership opportunities, Park South Drive Extension, Cross Charlotte Multi-Use
Trail and the Streetcar. The additional projects, the last section that were included in the
Manager’s recommended budget as well as a couple projects in the 2.44 you see there related to
the fire stations, Idlewild Road and Monroe Road, the UNCC Informatics Partnership, Research
Drive, one of the bridges, North Bridge No. 1 in the northeast area of Charlotte and then two
maintenance facilities.
I will ask you to turn to Page 8 and this might summarize it a little better.
Councilmember Cooksey arrived at 12:10 p.m.
Again we’ve got this laid out as far what are the commonalities among the 2.44 and 3.16
proposal and again you see these on the right hand side you see the two proposals and one was in
or was included or not. Overall 22 of the 30 projects, there was commonalities so 73% of the
projects it appeared that there was some commonality or similar interest among the
Councilmembers. If you look underneath the projects included in the 3.16 cent proposal, that is
where the differences start. You see the yes or the no and if you take that down into the third
project underneath the additional projects included in the Manager’s Recommendation, you’ve
got 8 projects where there was disagreement among. The last four projects listed on that page
were four projects where there was agreement between the two proposals of not funding. I
wanted to highlight those in terms of where the commonalities and the differences were among
all those projects and I might pause just for a second to see if there is a question on that.
Mayor Foxx said as a point of clarification on the 3.16 proposal there were some items that were
deleted as I recall, that were in the 8th year of the bond cycle in the other program. Some of the
differences are the difference between a 5-year program versus an 8-year program which makes
me think that maybe this might be a good juncture to ask this question as to how folks feel about
an 8-year program versus a 5-year program. The original recommendation was 8, but 5 is what
we typically do. Does anyone have any heartburn about an 8-year approach?
Councilmember Mayfield said we are looking at the breakdown, I think we would have a better
opportunity both around our table and in community to move forward with a 5-year program that
we can hopefully agree upon as opposed to the 8-year and that will give us a little more time to
identify and let the economy continue to change. We’ve seen amazing growth in Charlotte,
especially compared to other cities. Here is the opportunity for us to look at letting some more
of that growth happen as opposed to identifying that 8-year plan right now.
Councilmember Pickering I heard you say I believe, let me just make sure that all the projects
without the streetcar, that would come to the 3.0 tax increase. Is that for a 5-year or an 8-year?
October 30, 2012
Special Budget Meeting
Minute Book 134, Page 127
Mayor Foxx said that is an 8-year. For instance we had four members who said nothing over
2.44 and a lot of the conversation in the community was the streetcar was the holdup in the
budget process, but if you had taken the streetcar out you would have been at 3.0 which would
not have solved the problem for the four members who said nothing higher than 2.44.
Ms. Pickering said if we were to narrow that down from an 8-year program to a 5-year program
then that would make those four even farther. Is that correct?
Mayor Foxx said if you took the same projects that were in the 8-year program and you tried to
do them in five years, my understanding is you would drive the property tax rate up.
Mr. Harrington said you would, possibly between 2.35 and 3.35 is what it would jump up to.
Approximately 3.3 cents total rate.
Mayor Foxx said for the entire list of projects?
Mr. Harrington said if you take out the streetcar and condense it into a 5-year program that rate
would be approximately 3.3 cents.
Ms. Pickering said what percent increase would that be?
Mr. Harrington said about 7.5.
Ms. Mayfield said so we are thinking about if we were to only look at the 5-year program and to
remove the additional items that were identified for the 8-year program, so basically stopping at
the 5-year with only the projects we initially had listed, including the streetcar based on the
Manager’s recommendation, what would that rate be?
Mr. Harrington said right off the top of my head I don’t know. Under this example, the
assumption being that everything was condensed into a 5-year and nothing was taken off except
the streetcar, but that particular scenario, if you took off one year, I don’t have that number off
the top of my head with the streetcar, but we can certainly get that as part of the follow-up.
Mayor Foxx said I’m asking that question because when we get together on the 26th we are going
to have to decide that question, the 5-year versus 8-year and that has implications on what the
rate is as well as how much we can borrow, depending on what we do.
Councilmember Cannon said would it be fair to say if you went with the 8-year you are
spreading out probably less of an impact on the taxpayer per se, if you did 8 versus 5?
Mr. Harrington said correct.
Mayor Foxx said there is also the question of how much can get done within that 5-year period
because when you compress a lot of that within a timeframe that way, you may find you are not
able to move the projects any faster than you would have under an 8-year scenario. I don’t know
the answer to that, but that is a question that we can come back to.
Councilmember Autry said do we impact the ability to adjust our course for the future of the City
by looking at a 5-year plan versus an 8-year plan. It seems with a 5-year plan we would have
less time to see how things are working and making the adjustments looking forward to the
future of the City versus an 8-year plan which has less impact on the taxpayer as far as what the
tax rate is, but what does do to our community for locking us into those kinds of plans?
Mayor Foxx said that is a really good question and I would love to have the staff weigh in on
this. I actually looked at the 8-year 2.44 option from last time and what became clear to me was
that what you end up doing is you end up with a lower ability to do transformative projects. It is
sort like an extension of a maintenance budget over an 8-year period of time. I thought that over
that period of time and I know there are arguments on the other side, but over that 8-year period
of time we would have locked ourselves in when at some point in the future we may decide there
are other things we need to do. The problem with debt is that once you pull the trigger on debt
October 30, 2012
Special Budget Meeting
Minute Book 134, Page 128
issuance, you really can’t go back and redo it. If the Council were to say in five years with an 8year budget say we want to do more projects, that is a whole different set of borrowing. You are
not able to leverage the investment you did on the first. I know reasonable minds can differ on
that but that is sort of the issue that I had with it.
Ms. Pickering said so typically we do five years. The idea for the 8-year was to do
transformative budget and do these things, but typically we do five years and why is that we
typically do five?
City Manager, Curt Walton said it is just really the standard in municipal budgeting for capital
programs.
Mr. Harrington said let me jump in briefly and decipher some of these different terms we talked
about that potentially could be funding sources. The first is Municipal Service District or MSD.
Most of you are probably pretty familiar with this. In Charlotte we have five, three in the
uptown, one is SouthEnd and one is the University City Area. Typically there are additional ad
valorem tax rates on top of the existing rate to fund higher levels of service for that particular
area or geography that has been identified. It could be services or capital expenditures and in our
case they are used typically for urban revitalization and development and economic
development.
The next area, Special Assessments, sometimes referred to as SADs, it is an assessment on the
property to pay for all or a portion of the cost of public improvements that benefits that particular
property or properties. Some of the examples would be like streets or sidewalks in a particular
area, a sanitary sewer system. In 2008 the General Assembly revised some of the language
temporarily for Special Assessments and we refer to them as New Special Assessments where
they allow the ability to use Special Assessments on public transportation. You will see that
term on a couple other slides here.
Tax Increment Financing (TIF) is the use or borrowing of money to fund certain public
improvements with the purpose of attracting private investment within a designated area. The
debt that is incurred is both secured and repaid from the additional property taxes that result from
that areas new private development. There is currently no application of this in the City of
Charlotte and across the State of North Carolina. My recollection is there are two examples of
what we might consider a General Statute Tax Increment Financing Option.
The Synthetic Tax Increment Financing (STIF) is similar to the TIF but the key different is that
the incremental revenues that result from the added development are used to repay the debt but
they are not the security to repay the debt. Other assets or general tax inability of the City is
pledged to help secure that debt. An example of this would be the cultural facilities that we have
in Charlotte.
The last one is Tax Increment Grant (TIG) this is where the developer fronts public
infrastructure. They take the risk and then the City through a reimbursement process grants back,
using a portion of the incremental tax increases to repay the cost that is associated with public
infrastructure. Examples of that are in First Ward, The Levine Development would be an
example and road infrastructure down in the Ballantyne area which is another recent Tax
Increment Grant that Council approved.
A few other notable characteristics, again here on the MSD, it typically funds a multiple or
variety of services whereas the New Special Assessment from a specific infrastructure project.
Under the MSD the revenues are managed by the City or through some designated agency. Nonprofits and educational institutions do not pay the property tax under an MSD. The geography is
defined by the governing board and a particular case as it relates to the streetcar extension project
that is proposed in the CIP, using an MSD as well as using the information extrapolated out of
the BAE Study that you have in your packet, we estimate that revenue source would generate
between $150,000 and $920,000 depending on the level of growth anticipated as well as the
amount of the property tax.
October 30, 2012
Special Budget Meeting
Minute Book 134, Page 129
Councilmember Dulin said that is the one on this page that sort of perked my interest this weekend with my reading. When you say the street extension project, we are talking from where it
will be the one mile we are getting ready to build to the bus station, the extension to and pass
Johnson C. Smith?
Mr. Harrington said it would be French Street to Sunnyside, a four-mile segment.
Mr. Dulin said the $119 million was for four miles? That is longer than I thought it was.
Mr. Harrington said the extension is 2½ miles and then the streetcar starter project, which is
currently underway, that is 1½ miles.
Mr. Dulin said from Presbyterian Hospital to the end of the new extension. I would really like to
see where you are coming up with those numbers because I have run in my head and I’ve ridden
in my car and I have ridden the Gold Rush about exactly where there is developmental
opportunity there and somebody had to go out and study it and say there will be development
here and there will be development there. It would be interesting to see where that study was
done.
Mayor Foxx said they are using the BAE Study and they do it parcel by parcel in there.
Mr. Dulin said I did not go back to the study and study the parcels. That is interesting.
Ms. Pickering said on #4 under MSD, non-profits, educational institutions, and governments
exempt from paying. I thought I saw something in the BAE Study, is that true, our educational
institutions, Johnson C. Smith, Johnson and Wales, CPCC would they be exempt?
Mr. Harrington said yes.
Ms. Pickering said I noticed under Seattle, Seattle and Portland had educational institutions.
Mr. Harrington said they may be paying under a different finance tool that the State of
Washington has that the State of North Carolina may not have, or it could be contributions by
those institutions, but under this particular type of model in North Carolina, they are exempt
from paying property tax.
Councilmember Mitchell arrived at 12:26 p.m.
Mr. Pickering said this is the BAE Study, Page 6, “In North Carolina, tax-exempt properties are
not subject to Municipal Service District fees, however the State legislation recently authorized a
new special assessment district for critical infrastructure, including public transit, and tax-exempt
property owners would be required to make payment for this type of district”.
Mr. Harrington said that is the second column. This new Special Assessment, one of the features
of it, it does require a petition from the property owners and it has to be 51% of the property
owners who at least represent 66% of the assessed value in that district. They have to sign on to
it. It is specific infrastructure, the city funds the costs and the assessment could be applied to all
property owners under that scenario if it is a fixed fee or the fee is based off the direct level of
benefit that the property is receiving based upon the infrastructure that is placed adjacent to it.
Under that scenario they would pay. Under this particular example on the Special Assessment
there would need to be additional study and review done to determine what would be the level of
revenue generation from that. It can vary, depending on different rates or how it is applied and
some properties might receive a higher assessment versus others, depending on the level of
benefit so it is really variable and that is why there is not a dollar amount up there at this point.
The last slide I have related to TIFs, STIFs and TIGs.. TIFs are initiated by the City and they
typically fund infrastructure within that TIF district. The City fronts the property costs and then
the incremental property taxes are pledged and used to repay that debt. The geography is defined
by the governing board. One unique piece of this under the TIF the City cannot designate greater
than 5% of the City’s land mass to TIFs. That is one limitation that is required by General
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Statutes. Again using the BAE Study and some information they had used in trying to
extrapolate that down for the sake of what we are talking about, we would estimate that the TIF
generation is between $57,000 and $306,000. A Synthetic TIF works similar to the TIF but
difference in terms of the pledge of what is being pledged to be paid back. The Tax Increment
Grant is really not an option here because we are not asking a developer to build the streetcar so
under that scenario a TIG would not be an applicable tool for the streetcar extension.
Mr. Autry said last week in New York we heard the team BID used (Business Improvement
District). Which of these align with that sort of concept?
Mr. Harrington said it is probably the Special Assessment District or it could be MSD and
sometimes you hear of LIDs (Local Improvement District) or Business Improvement District
because they are all variations on ways of either assessing those properties that are within that
district or a flat fee or some level of property tax or some other tax that applies for them to pay
for that infrastructure.
Mayor Foxx said there is one other questions I would like to ask the staff. Obviously these
sources and options were on paper available to us. Can someone talk through how the streetcar
landed in the capital budget, what the case was for it from a staff perspective? Also why some of
these sources weren’t contemplated as part of the capital program to begin with and maybe that
will launch us off.
Mr. Walton said with the demonstration project that we are already partnering with the FTA on,
we have already decided to get into the streetcar business and we will have that 1½ miles which
is a great start, but in and of itself it doesn’t accomplish a great deal. In my mind the full build
out of the streetcar from Rosa Parks to Eastland is very important both from a transportation
perspective and from an economic development perspective so that was the main driver of why it
is there. It does have different economic development, the catalyst potential beyond the bus
because the stops are different. It is a more permanent feeling and I think the Central Avenue
and Beatties Ford corridors would develop differently with the streetcar than it would just by
being the bus, even though those are two of highest ridership areas, we know the demand is there
for transit but this provides another option. In going forward in my mind it is probably twothirds economic development and one-third transportation because we have the transportation
there now and this wouldn’t change that greatly, but it does change the economic development
potential I believe. As for looking at other sources, we’ve looked at all of these and we’ve
looked at more than these and they all have some kind of issue associated with them. Either it
puts a burden on undeveloped property which seems counter intuitive, so we didn’t go with most
of those. Others would potentially work but would represent such a very small percentage of the
project costs, we might could get to 1% to 3% of the project but certainly nothing that got us to
$119 million. We did go through all the ones that Randy went through and anything else that
was in the BAE report and there are a lot of things in there and in North Carolina we only have
specifically the powers given to us by the General Assembly and most of those we don’t have the
authority for and that led us back to really only the source we do control which was the property
tax. Some of the discussion last spring was that was a departure from what we had said we were
going to do that we would never put property tax into transit and in my opinion we’ve already
done that. We’ve done that several different ways, but just on the Blue Line Extension, I don’t
think we would have gotten to where we’ve now gotten, to all of yours and Carolyn’s credit if
we hadn’t used some of our infrastructure money that has already been set aside and there is
more in the plan here, to do some of the things that the Full Funded Grant Agreement just
couldn’t cover. We would have had a project that really couldn’t get through the level of
scrutiny the FTA was looking for in my opinion. The maintenance of effort is a combination of
revenues, but they are all general whether it is sales or motor vehicle or just property tax dollars.
We have $19 million per year going into transit which goes back to 1998 when we were getting
out of the transit business. I felt like we were already there and as I have said before, I think the
model going forward is going to have to be much more locally controlled, whatever revenue we
use, because I just don’t see Congress having a federal transit program with a 50% share. That is
just my opinion but whatever happens I think going forward I do believe that the Blue Line
Extension is likely the last project of its kind. Even setting the streetcar aside, we are going to
have to decide whether the 2030 plan or whatever years we put on that plan, it is something that
we are really concerned about completing and that is as a countywide community because we are
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not going to get there anytime soon. It would take decades and decades and decades to get the
North Line, the Streetcar, the Silver Line down Independence so it is a bit of a departure from the
streetcar, but just to say I think we are going to have to put more local dollars into transit and
streetcar was something we were already getting in the ground. We have the tracks from the
older projects, we are getting ready to do the demonstration project so it is just a logical
extension of where I thought we were.
Mr. Cannon said I appreciate that and on the developmental side in terms of fostering and
bringing some of that about, is that to be both commercial and residential?
Mr. Walton said it could be. I think the streetcar is a little bit different than light rail in that light
rail might lend itself more to develop as residential in my mind. I don’t know that that is
statically proven or not, but it could be both. If I look at Central and Beatties Ford I would see
them developing more from a commercial perspective, but it wouldn’t preclude residential.
Mr. Cannon said would it be something where we feel that if we built the streetcar that they
would come or is it more down the lines if we move forward in this direction that we are moving
in a parallel manner or down a parallel track in both trying to speak to developers that potentially
would come as we move forward with the process. Which is it?
Mr. Walton said I think it would be parallel and perhaps the development is going to come
before the project. We saw that some on the South Line. I think we are actually seeing a little bit
more movement along the Blue Line Extension than we would if we weren’t doing the Blue Line
Extension. I don’t think it is build it and then they will come, I think it is either they come
together or the development occurs before.
Mr. Cannon said I’m only asking that from this perspective. One, obviously the community
knows the level of discussion we are having about the streetcar. It just seems logical that if we
end up going in that direction that it makes some sense to begin to have some level of discussion
with developers about their level of interest in that Central Avenue corridor or Beatties Ford
Road. The last thing, you started at a certain point by way of talking about how we got to where
we are, but it is fair to say that two, financially it was supported by another revenue stream along
the way, or that was the intent, for the ½ cent sales tax to be the financial piece that would carry
us through with this, which is where all of us had hoped that we would end up. Unfortunately it
has caused us to be in a different place today because we don’t have that source. But certainly it
had my support 80 times if not 100 times over.
Mr. Dulin said I’ve been looking through the BAE report and I can’t find the real estate parcels
that they used to come up with the estimates of funding sources.
Mr. Harrington said I don’t know that the report actually lists the parcels by number or name but
the geography is a quarter mile on either side of the line.
Mr. Dulin said they are telling us how much they could potentially make with that tax to pay for
the thing. I would really like to know where they see that coming.
Mr. Harrington said I can look and see if there is some additional information.
Mr. Dulin said I haven’t been able to find it and I’ve been looking for it. This Council has taken
numbers like that at face value before, i.e. the NASCAR Hall of Fame attendance numbers
without checking into it and I thought we need to, and I’m still mad at myself for not running
those numbers. I think we need to trust, but verily these numbers we are getting for how we are
going to pay for it.
Mayor Foxx said let me add to that point, the good thing about the study was that it was done at a
time when the real estate markets were in the tank and I’ve actually had some developers come
back to me and say that they think this study is actually understating the potential. I’m sure that
along the way there would be some effort to refresh this or update it based on current conditions,
but I to your point I think it was a worthwhile study.
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Councilmember Barnes said I want to go back to the funding issues. For me this issue has been
about funding sources the entire time and some of the things the Manager said brought some
thoughts to mind. Going back to when we voted to accept the $25 million grant from the Federal
Government with the $12.5 million match from the City, one of the things that I asked about was
how we would pay for the line going forward, how we would fund the extension of the streetcar,
both east and west from the terminus points along Elizabeth Avenue and we never really
answered that question. I’m going to talk about the Streetcar Boundary Committee Report which
Councilmember Mitchell provided to us, but we really never answered the question and where
we seemingly came out was okay, nothing else really works so let’s just put it on the property
tax. That is the feeling I’ve gotten and that is what concerns me because, even to the Manager’s
point, if we spend the $119 million in this budget on the streetcar there is an additional $400
million to $500 million that will remain to be paid to finish it. Councilmember Mayfield
recently started talking about the extension out to the Airport and there have been no identified
funding sources for any of those legs. That is what bothers me because from my perspective we
will essentially have to continue to raise property taxes for the next several budget cycles in
order to finish this 10-mile stretch and in order to run the streetcar out to the Airport. That is
why I’ve been talking about funding sources.
One of the things that I noticed and this is on Page 22 of the materials we received, was that if
you look at Atlanta, Cincinnati, Portland, Memphis, Seattle, Tampa they all have fairly robust
mixes of funding. In fact if you look at Portland, for example, I think it has about 13 funding
sources and the other systems have multiple funding sources as well. Of course if you look at us
in the green and the blue at the beginning you see that we have essentially the initial contribution
that we are making to match the federal grant plus the portion that is being paid out of our CIP or
proposed to be paid out of the CIP. What I’m hoping to do and I’ve been saying this for the last
little while here, is figure out a way to actually make our mix a healthier economic mix for the
benefit of the City because I don’t want us to be in a position where we are committing the next
few CIPs to one project. Also going to the Streetcar Advisory Committee Studies that Mr.
Mitchell provided us, I found it actually fairly instructive that the summary at the beginning was
actually quite … where it references the case studies of Portland. Again it talks about the 13
different funding sources, 20% coming from TIFs, 20% from … and bonds and I know we have
no municipal parking decks in the City. I had also talked about local improvement districts that
provided 19% of the construction financing and under Seattle it mentions that half of the
construction there was paid for through local improvement district levees. Then on the second
page of that synopsis there was a reference made to several outstanding issues that our Advisory
Committee believed were important. Among those issues were whether there were any new
tools that we might have available to us or perhaps should be created. It also mentions the fact
that the cost capital and inflation would mean that a TIF or MSD could cover anywhere from
15% to 25% of the construction costs and finally on that piece it mentions that there should be
some explanation of benefits to the broader community. That is something we haven’t done.
There are a lot of people who do not get the streetcar and a lot of them live in my district. They
don’t all live in Mr. Dulin’s district and I think that if we are able to move forward with the
streetcar at any point we should figure out how to explain the benefits of it to the broader
community. For example, there is already rezoning activity in Ms. Kinsey’s district related to
the Blue Line. There are some rezoning coming up already so there is activity there and we are
seeing the private sector interest in the line. What I have been hoping to see was interest from
the private sector in the streetcar line and I have told you all this individually, but starting at the
Presbyterian end of it, Presbyterian, the Clayton Road property, CPCC, Center City Partners,
Johnson & Wales, Johnson C. Smith taking some active role in actually helping us finance the
line and I don’t think that has happened yet. I think we have asked whether there is interest
among those beneficiaries and I think the answer has been no, but if anybody knows that would
be helpful to know whether any of those entities have expressed an interest in their kicking in
financially or to become part of that petition process for a Special Assessment District, but
ultimately I think it is important to us for the financial benefit of the City to determine whether
there is a way to use and create multiple funding sources for the streetcar line. I will ask the
question of staff to move forward. Are any of the beneficiaries that I just mentioned expressing
any interest in creating a Special Assessment District or any other kick-in or buy-in to move that
line forward?
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Mr. Walton said I have not ask them.
Councilmember Mitchell said Johnson C. Smith University donated land for the vehicle
maintenance facility. That has been their commitment for the streetcar participation. I think it is
difficult to have, and I’m just going to speak on my corridor side, and I’ll let Patsy and John
speak on theirs. Johnson C. Smith is probably the biggest stakeholder I have and I think the land
donation is probably going to be the farthest they will go to show their participation for the
streetcar. Not because they don’t want it, but I think because of the University, they fall more
toward academic preparation of students. When you look at the other possibility on the corridor
I think it gets very challenging on Beatties Ford Road and West Trade Street where there is some
vacant land and we probably have a lot of small businesses located there. I floated the idea of
the MSD and BID and it would be very difficult to put another tax burden on some of those
small businesses there. I agree with you, I would like to have a mixed use of funding sources to
do the streetcar, but I think it becomes very challenging when you see our options. Most of them
would tend to give a better source of income for us, we actually have to go to Raleigh for
approval. One thing I would like to ask staff is the business privilege license that we currently
have. Is there any flexibility or any creative way that we can generate possibly income from
there? Like Mr. Barnes said, looking at these other streetcar, I think we have to be careful the
climate when they were built. It was a whole different climate then than we are now, whether
you are talking about the federal level or whether you are talking about the economy in general
so some of these tools unfortunately are not available for us. I think if we are going to do this,
the argument needs to be a transit plan, not just a streetcar plan. Curt, I think your comment is
right, I think this conversation should be how are we going to form the 2030 Transit Plan and
when you look at that, how bold we are and what we need to accomplish. We are going to have
to make some tough decisions and I think we need to have the discussion now. I can remember
when we were having the Blue Line Extension ribbon cutting, what was so profound with what
Congressman Mel Watt said was let’s don’t be like Atlanta. You’ve got to make steps now to
provide infrastructure so in the future when our children and grandchildren stay in Charlotte they
will say we made the right decision in 2012. It is not easy and none of us have the $119 million
laying around, but I think we need to make the best decision we can but keep in mind this is a
whole different climate that we are in. Dana and I had a conversation with Holland and Knight
yesterday and there is some hope, maybe in the long session with Congress that maybe streetcar
and transportation might be the only bipartisan support that gets done. I wouldn’t be a betting
man and think that would actually happen, but at least Holland and Knight said this might be the
only initiative that both the House and Senate can agree on. Mike I agree with you on two
things, one the conversation needs to be changed, this is about a whole transit plan for us and
secondly I would like to have a mixed use of funding sources and quite frankly I know staff is
running out of options but if you could look at the Business Privilege License, could that
generate another course for us, I think it would be helpful to our discussion.
Mr. Barnes said I hope we have a Business Privilege License as of 2013. I know there has been
some appetite in Raleigh to get rid of it but I hope there is one. There is something you said that
I hadn’t thought, I talked about it but hadn’t condensed it in this way. If our strategy for funding
what we used to call the 2030 Plan is to say we are going to raise property taxes to do it, I think
that is dangerous. If you said to me that we are going to build the Blue Line on the property tax I
wouldn’t support that either. It is the diversity of funding sources that makes that line make
sense in my mind. Again my concern is just about the long-term physical health of the City in
terms of the need to raise taxes for essentially the streetcar program and addressing the other
things of the City, the Police, roads and the other stuff we have to do, but I appreciate what you
are saying.
Mr. Harrington said I just wanted to respond to Mr. Mitchell’s question. I’ve asked Gregg
Gaskins to help me out a little bit on the Privilege License piece and I’d be happy to ask Gregg to
give some updated information on what that is like right now, but we’ll follow up in a write-up.
Mayor Foxx said Mr. Barnes and Mr. Mitchell have just put their fingers on what I think is
ultimately the stumbling block here. I think it sort of depends on the level of confidence that
there is going to be an avalanche of money coming into transit at the federal and state levels or
that the state is going to magically develop a greater appetite to give local options for expanding
transit, which I’m skeptical of at the moment to be honest with you. If you take as a given that
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Minute Book 134, Page 134
those things aren’t going to happen that is the only reason we are having the conversation. It
would not be happening but for that and the fact that the sales tax is essentially depleted. We are
having a philosophical conversation but eventually we have to start making some choices and in
my mind the issue is we started along the path of transit in 1998 because we saw a growth
pattern starting to happen and in fact over the last 30 years we’ve basically added another city on
top of the old Charlotte and we are expecting a city the size of Pittsburg in the next 25 years.
The growth pressures aren’t going away, even if the funding sources are. Just doing a quick
calculation there is $119 million proposed in the capital budget, using property taxes, there is
$25 million from the federal grant and $12 million we’ve already matched, if you took that total,
that is $156 million and about 17% is federal money. While the shovels are out there turning dirt
and the materials are being purchased to put up … and other things, I think the question is do we
want to leverage or don’t we. If we can find some of these other sources and make them work,
great, but we need to start making some calls. I think any of these sources that you guys want to
delve closer into to get.
Mr. Barnes said unfortunately David Howard is not here today because he’s mentioned a funding
source that we really haven’t talked about and that is the 25% sales tax that the County has the
power to put to the voters for approval. I’m not suggesting that we do that and I wish Dave here
because he is much more articulate on that particular item than I am but it is one of the items that
is actually at our local disposal and would obviously require our county partners to be more
actively engaged. That would raise almost $33 million. My point is that there are at least
sources, well several sources that we have and no one of them is going to generate half the cost
to construct and to operate, but cobbled together they do create some diversity of funding. The
big deal for me is that the institutional stakeholders are saying we want it, but they are not
willing to do much to get it. That is problematic.
Mr. Mitchell said what would you like for them to do? What I ask staff to include among the
Blue Line was the neighborhood study so we would clear what capacity, what neighborhoods
would benefit from the streetcar proposed line, but I would be interested in having that
conversation with some of the small business owners along the West Trade Street/Beatties Ford
Road. I just need to be clear what is your expectation that you would like to see them do?
Mr. Barnes said I would be happy to paint the picture. In a better setting what I would envision
would be Presbyterian coming to us and saying we’d like to be a part of this Special Assessment
District. CPCC would do that. Center City Partners would say we’d like to contribute part of
our tax to this effort or create some overlay that would provide additional funding for the
streetcar because it obviously goes through our CBD and there is some tourist value there and
other value that comes along. You’d also have Johnson & Wales say that we want to be a part of
this Special Assessment District to create or whatever label you want to put on it, but do they
actually want to be an actual part of the project and obviously the same with JC Smith. What
concerns me Mr. Mitchell is that I have heard none of that from any of them and that bothers me.
I know they all want it, or at least we hear that they want it, but in terms of them actually saying
yes, here is some money here is us in a Special MSD, us in a Special Assessment District with a
check, here is something, that is what I would hope to see.
Mr. Mitchell said let me push back a little bit. I think it is always the city’s responsibility to
provide the infrastructure whether it is police or transportation. When you mentioned all the
institutions, most of them besides the hospital is a college or university so for consistency
purpose did UNCC come to us beside the land they gave us, did they come to us with any
additional funding?
Mr. Barnes said the contributions from UNCC as you know are real estate and in kind
contributions that total about $4 million.
Mr. Mitchell said but it was the land right?
Mr. Barnes said the bulk of it is land and it is land where classroom buildings have been where
the line goes onto the campus. Also the Blue Line would not work if they had not allowed us to
come on campus because the ridership numbers reached the threshold that we needed. They
actually provide a good example of what other institutions could do or should do.
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Mr. Mitchell said the only reason I’m saying this is I want to make sure we are fair to the other
institutions, so UNCC donated land.
Johnson C. Smith is donating land for the vehicle
maintenance facility, UNCC donated land for the Blue Line Extension. Correct?
Mr. Barnes said let’s talk about that. As I understood it, according to materials, the Maintenance
Facility for the streetcar was intended to be the Blue Line Facility up near going towards
Belmont and once it was extended beyond French Street there would be a Maintenance Facility
built for it. The $119 million doesn’t include a maintenance facility for the streetcar so I don’t
know where that land is that Smith would be donating but there is no intent to build a
maintenance facility for the streetcar anytime soon, which is another issue.
Mr. Walton said the four-mile piece doesn’t require it so the short piece will use the south side
maintenance facility. The four-mile would use this property that James is talking about. Build
may not be the right verb there but that is where maintenance would be performed until the
whole line is developed and then it would require a maintenance facility somewhere along that
line.
City Engineer, Jeb Blackwell said it includes $5 million for construction for a temporary
maintenance.
Mr. Barnes said within the $119 million?
Mr. Blackwell said yes.
Councilmember Kinsey said I don’t think we need to debate this any longer, but I will add that I
think UNCC has a much greater interest in the light rail because of them building a campus
uptown. I do appreciate what they are doing to help us do that, but I do think they have a greater
vested interest in it than perhaps Johnson C. Smith or Central Piedmont might have in the
streetcar.
Mayor Foxx said if in fact Johnson C. Smith has committed to providing some real estate for the
maintenance facility, it won’t take the $119 million number down, but to what extent are they
prepared today to go ahead and dedicate that as a contribution to the project?
Mr. Mitchell said they have earmarked and it is right in front of the School Workers Credit
Union. That parcel of land just before you get on Highway 16, they have donated that as part of
their commitment to the streetcar.
Mayor Foxx said can we apply a figure to that and treat that as a contribution?
Mr. Barnes said how much is it worth?
Mayor Foxx said I don’t know. I don’t know how much the acreage is.
Mr. Cannon said can we get just for information purpose the acreage of the land that may be in
question here as well as the cost of it. Do we have projected cost estimates of future operating
and maintenance for the streetcar start up project?
Mr. Harrington said yes we do, it is $1.5 million.
Mr. Cannon said what about the additional 2.5 mile segment proposed in the recommended CIP?
Mr. Harrington said we estimate that at $4.4 million.
Mayor Foxx said is that on top of the $1.5?
Mr. Harrington said yes.
Mayor Foxx said so it is really $5.9 or $6 million.
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Mr. Cannon said as we continue to talk about the future of it will the City have to raise additional
revenue i.e. property taxes in the future to pay for the project operating and maintenance costs
for the different streetcar segments?
Mr. Harrington said right at this point we don’t have an identified funding source beyond the
extension project so that could be a combination and variety of sources, but we have no
identified funding beyond the extension piece. For the extension piece it would be the property
tax that is part of what the existing tax rate is as well as the proposed increase.
Ms. Pickering said I think Mr. Mitchell raised a good point that this is now and many of these
were then so we are in a different environment. I agree that we do need to look at the total points
in time as the Manager mentioned. We need to look at the big picture and my concern is that we
have competing interest. We have the need to invest in the neighborhoods that need investing
and we have many property owners who feel like they are overburdened already and we risk
possibly alienating them even further and driving them away. That is really a concern of mine,
all over the City, not just in some areas. One specific question I had back on page 23 in the BAE
Study, I immediately associated it with your point Mr. Mitchell that we are in a different time
now, a different economic climate. The cost per mile which is down near the bottom, ours is
47.6 per mile which is much higher than most of these others and I am curious as to why that is.
Most of them seem to be about 25 and we are at 47.6. Is there a particular reason for that? Help
me understand that.
Mr. Harrington said one is, if you look at the dates when they were built. A number of the ones
that are cheaper, they have been in design probably since early 2000 or mid-2000s. Ours is the
last in terms of date so the cost are escalated out to 2018. Then if you look at Seattle where they
are next to Charlotte, would be the last one to come on line and they are at 39.5 so you can see
that further out it is a higher cost per mile.
Ms. Pickering said Cincinnati is anticipating 2014 like Seattle, but is only 25.5.
Mr. Harrington said I’m not an expert on the other systems, but the topography is sometimes is
different, the level or type of cars or systems could be different and that might explain some of
the difference as well.
Mr. Mitchell said Randy or Gregg, do you mind talking about the Business Privilege
opportunity?
Mr. Harrington said I will ask Gregg Gaskins, the City Finance Officer to comment a little bit
more on that.
Gregg Gaskins, City Finance Officer said there are a whole lot of questions about how we
would do that and depending on your answers to the how we would do it, it would change the
numbers. We believe that there are about 20 businesses currently paying and there is a $10,000
cap on this particular kind of tax so if there are 20 businesses that are paying the max it would
only generate about $200,000. Clearly the current forum wouldn’t work to generate anywhere
close to the kind of revenue we are talking about. If you remove the cap and if you changed it to
some type of parking space design and there would be an annual charge per parking space, we
got some numbers to see what kind of numbers would it take to generate a net $4.4 million.
There are a number of things you have to do in terms of the financing requirements, etc. so you
are having to have about $5 million to get $4.4 million so the $5 million ends up being your
total. These numbers may not be exact because you have to remember that they were not
gathered for the same purpose. When I tell you that there is 45,000 approximate spaces of the
kind that we are talking about in the City and I’m going to make an exclusion in just a second,
then you do that by the per space charge and you look at what you are going to do in order to
generate the $5 million and you have an annual fee of about $110 per space per year. Just as an
example to give you an idea of what that would mean, Charlotte Douglas International Airport, if
they were included, and Bob and I talked about them not being included, but if they were
included, to give you an idea of what they would have to pay. They would pay $2.8 million in
tax annually on their parking spaces. If they are out, under that scenario the charge would
actually go down, if they were in it would down to $70 and everybody’s would be $70 and they
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would only pay about $1.8 million, but if you take them out everybody is paying about $110 per
space per year. That is how you go from 45,000 spaces and generate $5 million so it is a big, big
charge which raises a lot of legal questions that Bob and I talked about whether you would
actually be able to do that. There has been litigation concerning a different issue, so there would
be litigation if we were to try to do that, but that is the approximate number, $110 per space, per
year.
Mr. Dulin said that is for free and for paid parking, correct?
Mr. Gaskins said no, only paid.
Mr. Dulin said for instance the new parking deck at Mosaic Village is a free parking deck so that
is not included.
Mr. Mitchell said UNCC uptown, not included.
Mayor Foxx said I’m feeling a little déjà vu. Any sources that anybody wants to put on the table
for further expiration. These are the same crickets that I was worried about.
Mr. Mitchell said I would like for Greg and Bob, I would like to see the legal challenges we
might get involved in. I think Mr. Barnes is right, the General Assembly showed an appetite to
get rid of the privilege license tax and we don’t know what is going to happen in the long session
but I would like to further study if Greg and Randy can provide us with a handout or something
that we could really vet on that opportunity, I would like to see that flushed out more.
Mr. Barnes said I want to avoid the crickets. Let me just say a few things that might help
amplify a few of my points and kind of tell you where I am. My issue isn’t that I don’t want the
streetcar to be built. That is not what I’m saying. My issue is the methodology, the math, how
we go about doing it. That is what I’ve been saying the whole time and if some of these funding
sources can be cobbled together to create some significant or some reasonable pool of money
that is great. What I’m saying to you is that without that it really, really, really concerns me to
think that we are going to be spending X number of billion dollars on transit projects, particular
the two streetcar lines we’ve talked about on the property tax. That is my concern and believe
me, John beat me up last week and Howard beat me up, you beat me up and we’ve had some
really good conversations about the project. All I’m saying is there a way to put together the
project that won’t result in us having to raise taxes again, and again and again to pay for it.
When I looked at the long sheet, Page 23, we are the only city that is using its CIP to fund the
streetcar line and I guess we don’t have Sugar Daddies like Atlanta apparently does and
Cincinnati does, and Seattle does and Memphis does, but it really concerns me that we
essentially saying we’ve got one option let’s go for it. I think again thinking long terms and
thinking about what you said Mel said, when my kids are older are we still going to be raising
property taxes to finish the streetcar. There is talk about the line going up Monroe Road, and the
one that we are talking about now is the one to the Airport and the one to Monroe Road and if
you are saying well there aren’t going to be any funding sources other than the property tax that
does concern me.
Mr. Autry said basically that is where I was going to ring in too, infrastructure is this body’s
responsibility. If there is a need I certainly want to explore every funding option that we have
but at the end of the day it is still our responsibility to get this stuff done. If it means property
tax then that is fine. That is what it has to be because that is where the sources are and where the
resources are to be able to continue with this project. I just don’t see if there is not a special TIF
or SID or LID or a top or a bottom or anything it is still this body’s responsibility to provide for
the infrastructure and see that this City continues to grow.
Ms. Kinsey said I think we are fooling ourselves if we think that taxes will not be raised in the
future. Not necessarily for a streetcar, but for anything because of our inability going forward to
annex how are we going to pay for infrastructure and other services that we have always paid for
anyway out of property tax. Saying right now that we don’t want to build a streetcar because we
have to raise property taxes to pay for it, if we think we are not going to have to raise taxes in the
future for services I think we are fooling ourselves. Even if we could annex, there is a limited
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amount of land out there that we can annex. Maybe I’m wrong Mr. Manager, but I think we’ve
got to look ahead and understand that some Council and may not be this Council, but at some
point we have to pay the piper.
Mr. Cannon said Ms. Kinsey I think you are right. You know Charlotte is not shrinking and we
are continuing to grow population wise and otherwise, but I think Mr. Barnes’ point of
contention happens to be that you are compounding it more so on the backs of taxpayers with the
streetcar by way of the single source being only property tax to fund it. Is that correct?
Mr. Barnes said yes.
Mr. Cannon said you don’t disagree that in the future there is going to be an increase in property
taxes along the way because we are not shrinking, we are growing.
Mr. Barnes said correct.
Mr. Cannon said you are not suggesting, and correct me if I’m wrong, for those persons that you
are asking to be a part of what we would normally call a public/private venture, you are not
suggesting that they throw a whole bunch of revenue that they don’t have toward trying to be a
part of this game.
Mr. Barnes said I am not.
Mr. Cannon said it sounds like more so that you are saying have some skin in the game but not
skin you can’t afford to have in the game.
Mr. Barnes said I’m not talking about bankrupting anybody. In fact you are correct Patsy that
taxes are going to go up in the future because the City will grow. I get that piece, but what I’m
saying is if we keep raising taxes, say just for sidewalks and roads, and you add on top of that the
next leg of the streetcar and your sales tax keeps going up for whatever reason, at some point
there won’t be anybody left in the City to pay the taxes. We are close enough to other counties
and a state for people to have other options and a lot of them have already taken advantage of
those options. That is something that bothers me. We don’t want this City to be unaffordable
and unlivable or viewed as being unaffordable or unlivable so while yes there will be tax
increases in the future I’m suggesting that we should also consider the things that we do that
might drive up the tax rate. Again, without bankrupting anybody, if there are ways to cobble
together additional funding sources to help fund the streetcar, this current leg, the one to the
Airport and the one on Monroe Road, I think that is great.
Ms. Mayfield said let’s say we were to have the support to move forward with the current model,
will we have the flexibility where once that infrastructure starts coming in for us to adjust to start
backing off from the taxes being the main funding model to give enough time because we are
seeing the growth. We are seeing the development and we have so many zoning petitions that
are coming in for development across the City and so many are going to be coming in, but we
need, in my opinion, we need to make the investment now. If that means us doing what the City
has done to grow to this point and taking that step out we need to do that but will that flexibility
be there where as that development starts to happen, we can adjust and start identifying those
other funding models that create that more robust. Even though this is great, to me it seems like
we are stuck with thinking about what Mr. Mitchell just stated, that we are looking at what used
to happen and that is just not our reality moving forward. With the reality moving forward will
we have that flexibility where once that development starts to happen throughout what will be
the streetcar line, even looking at 2030 Transit Plan, to make adjustments and start backing off
on the tax rate?
Mr. Walton said yes ma’am you would and thank you for the question because I wanted to go
back to something you and Mr. Autry said earlier, but keep in mind the whole premise of the
transformational CIP was to grow the tax base, particularly in the northeast and the west. As that
happens, hopefully as we move forward that allows you the potential to do exactly what you are
talking about and it could be particularly if we incent commercial development or manufacturing
so that the sales tax grows more for CATS and it grows more as a general revenue. The answer
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is yes, as you go forward you can look to change your funding scenario. The point Mr. Autry
made about being locked in, which I think is a very good question, whatever you choose whether
it is five years, eight years or ten years state law requires you to do an annual appropriation. You
can adjust your plan on an annual basis. If you want to move faster or slower you have an
annual option to do that. The voters approved I think about $200 million of bond capacity in
November of 2008, we put that in deep freeze for about 6 to 9 months in 2009 because of the
economy. Just because you have approved a plan and the voters have approved the bonds
doesn’t mean that you have to go forward on the same timeline. You can go faster, slower or not
at all. I think the 5 versus 8 is an important policy decision for you to make. As far as being
locked in though, it doesn’t lock you in, whatever number you choose.
Mayor Foxx said you said that very well, but in terms of the amount of dollars available we are
locking ourselves in to the total amount available.
Mr. Walton said exactly.
The Mayor said but you can move it as fast as you want.
Mr. Walton said once we have sold the debt, you are definitely locked.
Mr. Mitchell said David Howard just texted me and said our Synthetic TIF, particular if we look
at what has been generated from the light rail, the property tax that has been generated from all
the new development, can we look at a Synthetic TIF currently now using the taxes from the
light rail to further finance all the transit projects. He said we have calculated from the light rail
line the property taxes, do we have a number that has been generated from the current light rail?
Carolyn Flowers, CATS CEO said $1.45 billion.
Mr. Walton said not a rate but a redevelopment amount of $1.45 billion.
Mr. Barnes said that is not a tax revenue.
Mr. Walton said no, that is assessed. We would have to take that and turn that into a rate.
Mr. Mitchell said that is David Howard’s option, so don’t kill the messenger.
Mayor Foxx said we obviously have to instruct the staff to either do something or not do
something relative to these revenue options. Right now we have information, but we don’t have
a direction to give the staff to give us prior to November 26th and remember the goal on
November 26 is to start the survivor game of voting things on or off. Is there any request to do
that?
Mr. Mitchell said I would like to make a request that Greg Gaskins can further do research and
analysis and bring back to Council the Privilege License Tax money to be generated for transit
needs in our community.
Ms. Mayfield said would this also be a good time to bring back those numbers for SouthEnd
because that is our most current model where we have seen success because just with the
SouthEnd within the last three months we have opened up more than 18 businesses, so to look at
what taxes have been generated in SouthEnd and possibly the anticipated, but looking at real
numbers to bring that back to Council as well in the form of a motion.
Mr. Barnes said do we need motions to do this?
Mayor Foxx said I’m going to ask how many people want to consider a streetcar option with
alternative revenue sources as part of it other than the property tax?
For: Councilmembers Autry, Barnes, Cannon, Kinsey, Mayfield, Mitchell and Pickering.
Opposed: Councilmembers Cooksey and Dulin.
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Mayor Foxx said so there is an interest in looking at alternative revenue sources. Mr. Mitchell
has put on the table Business Privilege License – how many would like to take a look at that?
For: Councilmember Autry, Barnes, Kinsey, Mayfield and Mitchell.
Mr. Barnes said only for information. In other words we are just trying to get information.
Mayor Foxx said but understand we are trying to tier the information so we can make a decision
on November 26th. How about the Synthetic TIF?
Mr. Dulin said did 5 votes pass?
Mayor Foxx said five did not pass, but in the past we have used 5 to key up.
Mr. Walton said if you are doing straw votes, 5 keeps it going.
Mr. Barnes said as we move along I wanted to add in there the Special Assessment District, the
one that provided for a statute where typically the property owners have to come us, but I think it
would be worth at least speaking with the five or so constituents, Presby, CPCC, Center City
Partners, Johnson & Wales, Johnson C. Smith, to find out whether they are going to be willing to
participate more fully and will actually do so.
Mr. Dulin: We might want to add in that Northeastern, Wake Forest and the Charlotte School of
Law would all be in that.
Mr. Barnes said I think it should only be properties that are in my opinion, that are within a
quarter mile, the two blocks or three blocks.
Mr. Cannon said or on the beaten path.
Mayor Foxx said so the request is to explore the SAD, Special Assessment District, and to ask
the major property owners that are on the streetcar track to give us an up or down on that. How
many want to go down the path of looking at that?
For: Councilmembers Autry, Barnes, Cannon, Kinsey, Mayfield, Mitchell and Pickering.
Mayor Foxx said Mr. Howard has raised the Synthetic TIF. I imagine that would require some
thoughts about a TIF District or something or you would have to figure out a mechanism to
recover those dollars because in effect we already receive property tax value, but I think the idea
as I understand it is to redeploy some percentage of the incremental value into a funding source
for additional extensions of the line.
Mr. Harrington said for clarification, do I understand it along all transit corridors or within a
particular corridor?
Councilmember Cooksey said I was going to ask a question about this particular copy. I don’t
want to shoot the messenger here or anything but as I understand it a Synthetic TIF operates
when the City partners with a private developer that actually builds the infrastructure. How does
that work with the streetcar? What private developer is going to build it for us to repay?
Mr. Harrington said I think you are thinking of a Tax Increment Grant where the developer
builds the infrastructure and we reimburse. Under a Synthetic Tax Increment we would just
identify any increment revenue in a particular district and Council by policy or budget then
applies a certain percentage of those revenues to the specific project.
Mr. Cooksey said how is that different from the TIF then? What makes it synthetic?
Mr. Harrington said the different is what is pledge as a security. Under a statutory TIF the
incremental revenue is pledged as the payment as well as the security for the bonds whereas on a
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Synthetic TIF you are pledging the revenue but your security are other sources such as either
other city assets or other city revenue streams.
Mr. Cooksey said what Synthetic TIF has the City done where there wasn’t a private partner
involved actually building infrastructure?
Mr. Harrington said the cultural facilities.
Mr. Cooksey said I thought Wachovia built those.
Mr. Harrington said we are using their revenue from that to pay the bonds.
Mr. Walton said they did build it and turned it over to us.
Mr. Cooksey said so there was a private builder that built them and then gave it to us. Did we
authorize the contracts or anything or was that all handled in the private sector side?
Mr. Walton said Wachovia handled all of that.
Mr. Cooksey said that is what I’m getting at on this Synthetic TIF concept. I wasn’t sure how it
worked with no private partner actually building anything because we don’t have any cases of
using it when there has not been a private partner actually building something that I’m aware of.
Mr. Walton said perhaps the right wording would be to look at the projected incremental taxes
from all the transit corridors or whichever transit corridor you designate rather than TIFs or
Synthetic TIFs.
Mr. Cooksey said I think where this is going is actually a new model concept because the other
thing about a TIF and if you are talking about a district and you are building within that district
then this is the case of using revenue from one area for something else and of course part of the
risk of that comes from assuming that you do have continued increases because I keep
remembering that in FY11 the assessed value for the SouthEnd MSD was $863 million, the next
fiscal year, FY12 it was down to $853 million. After reval SouthEnd went down $10 million in
total value so you can’t always assume that you’ve got that kind of growth and value.
Mr. Barnes said one issue of concern with Mr. Howard’s proposal and that is the 5% rule that
Randy referenced earlier. I don’t want us to be in a position where we have committed so much
land along the transit lines to TIFs that we don’t have TIF options in other parts of the City for
other projects. I don’t want to necessarily commit ourselves in that way.
Mr. Mitchell said it is just information.
Mr. Barnes said yes, just information I agree with you, but that one gives me some heartburn and
I just wanted to express the heartburn. I also wanted to say to a point the Manager made about
the contributions from the property tax of the Blue Line. I don’t know what the percentages are,
but what would be the corresponding percentage between the contributions we made from the
general fund to the Blue Line. In other words we keep talking about treating the streetcar and the
Blue Line the same way. If 1% of the Blue Line comes from the general fund should we say that
1% of the streetcar comes from the general fund. Are we going to start matching it up? It may
not be possible in light of and nature of the 2030 Plan, or what is left of it, but it is certainly
something to consider.
Ms. Mayfield said with this current conversation, would the question I asked earlier as we move
along, whether it is the TIF or whatever it is will we still have that flexibility as the development
comes along to be able to make adjustments or will we be locked in if we were to move toward a
TIF or one of these others that we are discussing?
Mr. Walton said some of those would lock you in. If the debt is secured by the agreement in
place, probably Special Assessment might be the one or the MSD. If there are actual contracts
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that lock you into something, in order to do the financing you would be locked, but I think in
more cases, no you wouldn’t be locked in.
Ms. Mayfield so my ask would be that while staff is pulling this information together to look at
that additional box to show to show that difference what can be changed at a later date and where
we might be locked in.
Mayor Foxx said Mr. Barnes has raised some really good questions and three of them I don’t
think you have given full answer to. One of them is the question of how the whole system gets
funded. This is the way I think about it. With transit funding right now over the last 12 years we
have been able to basically apply a formula. We do X amount, the state does X amount and the
federal does X amount, we can get a project done. Where we are now I think is we are trending
more toward kind of a national jump ball on infrastructure dollars where the money is set in a
pool and you have to go compete for it. One of the indicia of success is local funding so I
believe that we’ve put ourselves in a position of strength in terms of seeking federal dollars for
extending our transit system by putting local support behind it. Now originally we envisioned
the sales tax being that source, we’re just in a different place right now and whether we will be
there the whole time I don’t know. I actually don’t think you will see 100% of the streetcar
funded by property tax. In fact if you take the 4.4 miles, 100% of this project isn’t funded by
property taxes. There is at least 17% coming from a federal source.
Now having said all of that, I think we are talking about years of jagged edges with these
projects where instead of we are going to this line for a billion dollars, we are going to do the
next line $750 billion, we are basically going to end up cutting the projects into chunks and
trying to do them as we can. That is uncomfortable because I can’t tell you what the formula is,
but it is not for the lack of trying to figure it out. This is kind of like the Wiz when you finally
get to see the Wiz and behind the door is Richard Pryor. That was number one, and number two
I think the public deserves a whole lot more information on what this project is and what it isn’t.
We are wholly incapable of giving the public that information until we decide whether the
project is in or out. We can go all day long and I just don’t think you can make a community
pitch for something and then vote it out of the budget. I think you’ve got to figure out whether it
is a good policy choice and then take the steps to try to inform the public. I agree with you there
is a lot of information that needs to be put out there but if the Council is not going to get behind
this project there is no point in putting the information out there. Last point is that getting back
to something the Manager said, I frankly don’t view this project differently than I view the
innovation corridor or the Independence Boulevard investment. This is trying to add value to the
community ultimately and if we were talking about putting money into a sinking hole that would
be one thing. If we were going to invest money and it wasn’t going to return any value I would
be the first one saying cut it. In fact cut it twice because it doesn’t make sense, but if you take
the BAE Study seriously, which was done again at a time when people were a lot less optimistic
about the future than they are today, value will be created as a result of this investment. It is a
matter of degree. I can’t tell people of our City that we are doing the best job of planning for the
future if we are going to allow an entire corridor to continue languishing, which I don’t think is
appropriate.
Let me say one last thing about this because next time we will be putting hands up and down on
this. There is a lot of really silly commentary out there that this is about grievance politics,
paying people back, fairness, justice and stuff like that. That is not what this is about in my
opinion. It is about economic development and realizing that the City isn’t going to grow out
anymore. We might get an annexation or two down the road, but if we are going to grow the
City it is going to be grown from within and if we don’t prepare these parts of the City for
growth within we are going to be the one losing. I agree with you the balance we are trying to
figure out is how much can you add value through investment versus how much do you drive
yourself out of competition for those families and for those businesses that we would otherwise
want to have in the City. There is no magical wand that is going to tell us what the answer is, but
I’m concerned again that we just need to figure it out and get behind it. The last point I will
make, and I will say this again the next time, the public in my estimation is very skittish about
the future. We have an election in 7 days and hopefully that will resolve at least kind of what the
federal government is going to look like. But if we have a Council battling itself over what the
right investments are going into a bond cycle, I don’t think that is going to bode well for what the
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public is going to say back to us. I’m hoping that over the next month or so we can build a little
stronger consensus than there is about what to do going forward. I appreciate your input Mr.
Barnes.
Mr. Barnes said in response to what you just said I think the reason why we see some of the
creativity or diversity of funding sources that we see with these other cities is because of the
issue you raised because everybody sees that the federal government, regardless of who the
President is or regardless who runs the House and Senate will likely spend less and less money
on some of these large ticket type items. What I am encouraging is that we essentially attempt to
do the same thing with the diversity funding sources. Also and I have been struggling with how
to articulate this, the streetcar project was one of the few, if not the only item in the budget that
was kind of the beginning and not the end. It was in there as an initial $119 million but if you
add in the Airport piece the Monroe Road piece and the rest of that initial stretch, there is an
additional billion dollars that remains to be spent and a lot of the money that is in the budget
won’t be spent unless there is a partner that comes to the table, so the public/private partnership,
$20 million for eastside won’t be spent unless someone else comes to the table. The informatics
money for UNCC, that is all a part of something that will happen on the campus that will cause
us to spend money. The investments at the Airport, the same thing there. A lot of that money
wouldn’t be spent unless there is a contribution or a buy-in from the private sector to help move
something forward. With the streetcar, yes we are talking about putting in a fixed rail asset and
that is it. There is nothing to show that there will be the additional contribution. To the point
Mr. Cannon made, I believe we haven’t had some of the developers we all know come up and
say guys, I’m going to buy five blocks along Beatties Ford Road or along Central Avenue or I’m
going to building 20,000 square feet of this and 5,000 units of housing. We haven’t had that.
Luckily, it happened along the Blue Line where you had folks coming and Blue Sky I think was
one of them that did that rezoning for that really large residential building.
Mayor Foxx said very good points, but many of these projects were built before there was any
clarity at the federal level of support for the streetcar at all in any of these cities. Portland, in fact
was the first city in the county in many years to actually build one. Since then there has been
more support at the federal level. Atlanta got $47 million for a streetcar project. I take your
point, but I think that we have to decide to do it or not to do it. Let me push back on one point.
We have a general sense that we want to explore other revenue sources, which is fine, but if the
Council were to say, for instance, that we would support putting the $119 million in place for the
streetcar, if there were X number of private entities willing to put up money or if there was a
private sector investor of X amount, I don’t think you are going to get $119 million of private
dollars to build the streetcar. I don’t think that is going to happen, but if you were looking for $3
or $4 million, maybe that is a conversation to be had, but right now what we have is we’d like
some revenue sources, but we are still kind of … on that so I would sort of turn that back on
Council to try to figure out, if this is something that you are seriously interested in then let’s try
to figure out how to put some parameters about it that aren’t poison pills, that are actually
designed to actually see something happen.
Mr. Cannon said but sometimes Mayor you don’t have to have, inasmuch as you have some
people in the private sector, let me just drill down and talk about developers for second. There is
no reason why we should have a developer here in Charlotte doing business out in the mid-west
along a corridor that is just like Beatties Ford Road. He is being incented by the City to do some
there and we should be doing that same thing I think in conjunction with what we are trying to
do here. The point in case is that sometimes asking the private sector for dollars is one thing, but
trying to leverage it potentially another way, if we can get those people to come in and we can
incent them to do some development along Beatties Ford Road where it makes sense and we can
identify Debra Campbell where those pockets might be and others that can help us along the way
between the District Reps, of where future development can occur. I almost would like to see
that information come back to us about where the potential might be. District Reps knowing
their districts, you should know that and I’m sure you do. We’d like to have that opportunity to
be able to put that on the table and begin talking to some of our local developers about their level
of input. I think that begins it, at least for me. That changes some level of where I am in my
thinking to move us forward because you have to have a parallel track in my opinion, of doing
both those things at the same time.
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Mr. Mitchell said let me share with Council that opportunity, if it could be on West Trade Street
or Beatties Ford Road. I’m only going to speak on the section I know. I think if we are waiting
for private developers to come in to this City Council and say they are going to invest first before
we lay those tracks, it won’t happen. I don’t want staff to go down that path thinking that is a
possibility. I think for us, like we’ve always done, at the end of day if it is about public service
we think it is the right thing to do we can find the diverse income we need to provide public
service at the end of the day. Private and public partnerships have worked great for us but I
don’t think when it comes to infrastructure they have been in front of the City Council, we’ve
always led the charge and then they come in behind us and said great idea, we see that as a
catalyst, let’s participate. I think what I’m hearing, and correct me Mr. Cannon, and Mr. Barnes,
you all are saying let’s see if there is interest out there first from the private sector before we
make an investment.
Mr. Cannon said no.
Mr. Barnes said no sir.
Mr. Mitchell said so what are you saying?
Mr. Barnes said I’m saying to you Mr. Mitchell that since the BAE report came out of January
2009, nobody has stepped up and said when the time is right I’m going to do X or if you guys do
this I will do Y. That hasn’t happened has it? Beyond the Sunnyside Drive and French Street
piece nobody has stepped up in almost four years to say I’m going to do X after you guys do Y.
Mr. Mitchell said let me remind you. What has happened in the last four years? You brought up
a good point, let’s talk about four years ago. What has happened since 2008? It has been a
whole new norm that we have face so you are right, companies have struggled, we’ve been in a
tough environment so why would you expect during tough time that a company would step up
and say I’m willing to take the lead.
Mr. Barnes said because prime is 3.25, money is cheap.
Mr. Mitchell said okay, a point for you two. Let’s continue to have that conversation, so you
look at our rezoning packages since 4 years ago. We went from 33 to 38 cases down to 6 cases.
Prime is so cheap why do you see other development occurring even on our rezoning package?
It is reality as one thing to say prime is cheap, there is still an access to capital issue you have out
there why a lot of companies are not doing any development. If you think I’m wrong you can
ask Debra Campbell why we see less in the pipeline now.
Mr. Barnes said there is some truth to what you just said, but our rezoning package is getting
thicker and thicker as you look at what is coming, there is more and more and more stuff coming.
Mr. Mitchell said let’s take the four-year window, to your point.
Mr. Barnes said we were suffering through the great recession, but my point is, even during that
time there were people forecasting things that they plan to do. We are not seeing a lot of new
activity around I-485, the incomplete piece, people wanting to get active up there. I think there
is stuff that, and I’m not necessarily trying to pick on the streetcar project, but I’m saying in
terms of how the private sector has traditionally received our out front effort, you normally get a
sense that something is coming. Look at the stuff that Warren Cooksey gets off the rezoning in
Ballantyne. People take these little parcels, ½ acre and want to build a thousand apartments on
it. So there is stuff popping up and my concern is that along that stretch we are not seeing people
say they are going to invest in Charlotte. That is what I’m saying.
Mr. Mitchell said I don’t disagree with you, but I guess through my lens we’ve always been
proactive providing infrastructure and not all of a sudden I think the discussion is we want to
wait and see somebody else doing it. I’m not advocating that to nobody else. I want to advocate
to City Council that we take the lead and that we be a catalyst and make change happen. I’m
glad that Peter Grubb came, but he saw that we were going first. Peter Grubb didn’t get out there
first, he saw that we were moving and we were creating the change and he said I want to
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Minute Book 134, Page 145
participate. I want to make sure we are not putting this all on the private sector to do it, we are
saying we are going to be a catalyst.
Mr. Cannon said all I would add is that no, it is not about going to them first. I’m saying run a
parallel track, in other words if they can see what it is we are doing, much like Clay Grubb and
others, it doesn’t hurt you or any of us to knock on the door of those developers that will come to
help buy down those rents so that we can have something different other than barber shops and
some of the other things in our community that we’ve been accustomed to having in some of
those areas we are talking about between Central Avenue and Beatties Ford Road. You have
somebody right now in your district, I don’t know if he still resides there, but he is a developer
and he is asking how can I participate, how can I contribute to what is going on. Matter of fact,
he happen to be at the ribbon cutting that was held across from the old A & P for Mosaic Village.
If we getting these people pulling our coattails asking how can we get involved, why aren’t we
bringing those people to the table.
Mr. Mitchell said I guess the difference I’m saying is let us be out in front. I don’t mind a
parallel track and I’d be interested to see how much money he will bring to the table. But I don’t
want us to get into this, we’ve got someone out there who is willing to participate. I would
rather say here is the vision, here is the catalyst, if you would like to participate, here is where we
think you can help us.
Mayor Foxx said is the question whether the private sector will invest itself in the corridor and
add value that way because that is what I hear you saying Mr. Cannon. Or is the question, will
someone step up and underwrite part of the construction or operating costs of the streetcar.
Those are two different questions and I’m trying to nail down what the issues are so that when
we come back here next time we’ve thought about that ahead of time and we know what the
issues are. Right now I’m still not clear.
Mr. Cannon said what you said to define my position is absolutely right. The latter is not what
I’m asking for.
Mr. Barnes said and for me it would be, but as a part of the Special Assessment issue.
Mayor Foxx said we are going to come back with more information on those sources. There are
some other parts of this budget and we’ve got some other business to take care but let me ask this
question. Are there any other features of the Manager’s budget on which people want more
information?
Mr. Barnes said I like the entire budget, I just have concerns about the funding sources for one
project.
Mr. Cannon said just for information purposes I would like to see the add costs because I know it
is going to be additional costs, to what it would be if we were to extend the line further up
Beatties Ford Road at least by the House of Prayer, to get further inside of the corridor to bring
about the absolute change we are talking about trying to create. I think doing it from where we
are talking about now going back toward Elizabeth. All I’m saying if we are going to do it let’s
try to extend it if we can, but if we can’t at this particular time, fine.
Mr. Walton said $88 million.
Mr. Mitchell said we are struggling with the $119 million, adding another $88 million.
Mr. Cannon said you may not be struggling with that. Sometimes it makes a little bit more sense
and the case can be made greater for really going inside deeper to an area that you know is
crying a little bit louder than the areas we are trying to concentrate on right now.
Mr. Mitchell said it is $119 million plus $88 million.
Mr. Cannon said I get that.
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Mr. Mitchell said I guess the conversation is Mr. Cannon, how much property tax we would have
to raise if you do $119 million plus $88 million?
Mr. Walton said we’d have to figure that out.
Ms. Kinsey said I understand what you are saying, but there is a section down Central Avenue
that would argue the same. If you are going to take it further one way, you have to be really
careful about. I’ve already heard people on the eastside say it is going more down the west and I
said no it is not. It is exactly where it needs to go and we are going to get ours so be careful.
Mr. Cannon said we have been paying attention to Eastland Mall and people along the Beatties
Ford Road corridor don’t have the luxury of a mall or anything like that.
Ms. Kinsey said I wouldn’t call Eastland a luxury yet.
Mr. Autry said I would compound what Ms. Kinsey says in that there has been a lot of public
discussion about how to approach the streetcar project and it was all agreed by the public that it
would be built equally in both directions at the same time, thereby not favoring one or the other.
So if we are going to look at what it takes to extend it out for that $88 million, I would like to
know how many further $88 million added to the top of it would send it out into the east
direction.
Mayor Foxx said there are a couple issues before we close out on the budget discussion. On the
streetcar, I do think there is an issue of creating more travel advantage and I know that San
Francisco for instance has put in sensors that allow their streetcars to move through the traffic
lights faster and actually have created a portion of right-of-way that is dedicated to streetcars in
certain parts of their City. I would like to ask the staff to do some work on exploring that before
our next session because I think the more of a travel advantage we can give with that particular
project the better it is, recognizing that there is a substantial part of the reason for doing it is
economic development.
Mr. Harrington said I was just going to add, I think a part of having that capability to advance the
signals as they go through, I just wanted to point that out.
Councilmember Pickering said is it possible to get a little more information about both an
upgrade in the traffic signal system and also more detail on comprehensive neighborhood
improvements programs? What exactly are we talking about?
Mr. Walton said yes ma’am.
Mayor Foxx said the last thing you brought up was one that I wanted to bring up also. No-one
has really brought up the neighborhood improvement programs but a couple thoughts on that.
One is if in fact we are able to agree on a capital budget in November, I think some time would
be well spent between November and budget approval, fleshing out a little more detail on what
those projects might be. I would suggest that it is not really adding dollars, but it is an addendum
to our direction on the budget that we ask staff to spend that 6 month window developing
implementation plans, to the extent we can. The last point related to affordable housing, we got
this packet of information responding to the last affordable housing retreat and it provided some
really good information on a series of approaches to helping us address that issue. I’d like for us
to consider that as part of our discussions on the 26th. One aspect of it that I didn’t quite pick up
in the write-up, was how much of the $81 million plus of all those projects combined, how much
of that could be bitten off within existing sources. I know there is $60 million for affordable
housing plugged into the Manager’s recommendation and presumably there are some dollars
available to fill a $21 million dollar gap and I just don’t know what that is.
Mr. Harrington said I think we can answer that and I will ask Pat Mumford, Neighborhood and
Business Services Director to answer that.
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Minute Book 134, Page 147
Pat Mumford, Neighborhood and Business Services said assuming we have the total of $13.5
million and that is comprised primarily of $9.7 million of Trust Fund money and $3.5 million
carried over with CMBG and the rest is just some little pocket change.
Mayor Foxx said $13.5 million available today, so that is roughly $8 million that we would have
to find to do this program here? You’ve got $81 million that you need to do and you’ve got $60
million that’s plugged into the Manager’s recommendation and $13.5 million can be used for it
and that should leave about $8 million that we have to find.
Mr. Walton said keeping in mind that comprehensive neighborhood strategies doesn’t preclude
affordable housing as a component of that money. It is whatever is in the area plans that make
up that bigger geography.
Mayor Foxx said so for instance with the neighborhood stabilization program we could
potentially draw $8 million?
Mr. Walton said integrate that into bigger pool.
Mayor Foxx said that is going to be something I hope we can take up. Any other questions on
the budget?
Ms. Kinsey said are we going to meet at the Belmont Center on the 26th? I cannot hear in this
room and it is a lot more convenient quite frankly for me to go down there, although I welcome
you to District 1. I’ve only heard about half of what you’ve said when you turn your head.
Mayor Foxx said I’m sorry, I’ve been doing a lot of talking. We actually were invited to do it at
Mosaic Village.
Mr. Mitchell said I’ll make sure that we have speakers Patsy, and microphones.
Ms. Kinsey said I just like the Government Center.
Mr. Dulin said we have Council Business that day at 4:00, we have Council Dinner at 5:00 and
Council Business to do afterwards and here it is 17 minutes after 2:00. This Council tends to go
a little bit late and I think being off campus and getting us back on regular business schedule, I
think puts us in a need to be in Room 267 that day where we are on campus and ready to go.
Mayor Foxx said why don’t we have a vote on it?
Mr. Mitchell said what time is it, 12:00 to 2:00?
Mayor Foxx said no, it is 2:00 to 4:30 and we would be starting our Business Meeting at 5:00.
Right now it is scheduled to be at Mosaic Village but if you guys want to do it at the Government
Center I’ll tell them.
Kinsey: Is it at Mosaic Village at noon?
Mayor Foxx, no at 2:00. Is there a motion to change the venue?
Barnes: So it would be 2:00 to 4:30 at Mosaic Village and be at the Government Center by
5:00?
Motion was made by Councilmember Dulin, seconded by Councilmember Cooksey, to move
it back to the Government Center for efficiency for both us and for the staff it takes to get
here and to give us wiggle room ongoing long as we sometimes do.
Mr. Dulin said I just think for efficiency and what makes sense I think we need to be on campus
at the Government Center.
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Minute Book 134, Page 148
Mr. Mitchell said why are we starting at 2:00 instead of 12:00?
Mayor Foxx said I that is polling of the City Council.
The vote was taken on the motion and was recorded as follows:
YEAS: Councilmembers Autry, Barnes, Cooksey, Dulin, Kinsey, Mayfield and Pickering.
NAYS: Councilmembers Cannon and Mitchell
Mayor Foxx said are there any more questions on the budget because the next time we are going
to be voting I don’t want to hear people say I didn’t know or I wish somebody had told me.
Ms. Mayfield said Curt, back to something I asked you earlier, when you bring it back to us can
we take off the projects that were proposed out to 8 years because I think somewhere in the
question I ask, I guess a conversation started up so I wasn’t saying compact everything into five
years. I was saying leave what we have up to five but the items that we had that were going to
go into the 8 years, if we were to just lop those off and postpone those for now, what are we
looking at financially as far as the tax increase if any and what funding models we will be able to
identify and what programs we can identify if we were to just take off those other three years. I
think somewhere in the conversation there was a conversation of condensing everything into five
so I think there are some people who want to see what those numbers are, but what I’m
specifically asking for are what are the five years’ worth of projects, how transformational can
we be with that time period opposed to looking at 8 years? That in my mind will help us get a
better foothold on the economy turning around.
Mr. Walton said I thought that was the $3.16 million model that had the streetcar in it.
Ms. Mayfield said yes, but it also removed a lot of those additional projects that we had.
Mr. Walton said basically leaving everything in except what was going to be in the 2018
referendum.
Ms. Mayfield said so keeping your original, just lopping off that piece?
Mayor Foxx said one thing that it did do I remember that it moved all of the police stations into
the five year window which I think is important.
Mr. Barnes said I have some concerns about doing that because if you look at the numbers that
we had, this is the Autry, Howard, Kinsey, Mayfield, Mitchell budget If you look at what we
lost by doing that and I don’t have time to do that right now, but my point is that I’m concerned
about losing some fairly valuable items again throughout the City by doing that. I like the $926
million and I like the streetcar if it is done right and if it is not done right I liked everything but
the streetcar.
Mr. Dulin said just so there are no surprises, when we are talking about the bond cycle, that
assumes a property tax increase in election year 2013. I just want to make sure everybody at the
table understood that.
Mr. Mitchell said we’re not scared.
Mayor Foxx said not to prolong the pain of the conversation, but that does raise an issue because
when this was initially presented we had 8 years from 2012 to 2018, basically it will run us
through 2020. Now that we don’t have 2012 there is a question of how you sequence a bond
cycle going forward because we typically have done it every two years. Do we skip a bond cycle
somewhere in the middle, do we do two in consecutive years, how does that work with the
financing method? Frankly, I would actually like the staff to help us answer that question next
time and give us some indication of what would help the dollars go further in terms of spacing
out the bond cycles.
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Minute Book 134, Page 149
Mr. Dulin said and what we don’t know is in an off election year with the County Commission,
whether they will be coming to the residents with a tax increase as well.
Mr. Cooksey said my former Councilmember is a former resident of District 2 and I’ve been
talking and there is one way to address the issue that Councilmember Dulin brings up, is if you
put the tax hike on the ballot along with the bonds, that covers it. It changes the cycle a bit, but
that is one way to address Councilmember Dulin’s issue about a June 2013 tax hike is if you put
it on the ballot, you don’t have that.
Mayor Foxx said that is something we need to talk about.
Ms. Kinsey said I would suggest that maybe we ought to have, if we vote to have the CIP, just
get back on schedule and put it on 2014.
*******
III.
CONTINUED DISCUSSION FROM SEPTEMBER 27TH SPECIAL BUDGET MEETING
There was no discussion on this item.
*******
IV.
CITY MANAGER RECRUITMENT PROCESS
Mayor Foxx said we promised to give you guys an update on the Manager recruitment process.
The Council Manager Relations Committee has had some conversation but we are not at a point
where we have a recommendation on either a schedule or a particular firm, but you have in front
of you two schedules that we have discussed. We do have a meeting tomorrow at which time we
could recommend one of these two. There is also a sheet that shows the various firms that have
been asked to submit some kind of response to a proposal. I think the most pressing question for
us is the choice of firms and Cheryl, can you sort of walk us through what we’ve got here?
Cheryl Brown, HR Director said we put a spreadsheet together for you that lists the various
firms we contacted and those firms that responded and I have an update. At 11:59 this morning
we heard from the Spencer Stuart firm. I didn’t have time to get that incorporated into the
spreadsheet, but I will walk you through that information this afternoon. The front page contains
the firms that did submit proposals and there are three of those firms, Waters Consulting,
Springsted and Voorhees Associates that really do specialize in public sector recruitment work.
Coleman Lew is a local firm with limited public sector experience, but some. They are more
involved in recruitment of CEOs, Presidents, Directors, Senior Management, a bit of public, but
private and international work. Waters Consulting is a firm that we have used before and they
did our Police Chief recruitment for us when we hired Chief Monroe. They are very strong in
the public sector and have an extensive amount of public sector recruitment experience and they
have also worked with us in some of classification and compensation work out of Human
Resources. Springsted is a public sector advisory group out of Minnesota and they’ve got
extensive public sector experience, particularly on the east coast. A lot of work in North
Carolina, Virginia and then more mid-west, Minnesota, Indiana, Illinois and Springsted is the
preferred provider of services for the North Carolina League of Municipalities and for the NC
Association of County Commissioners for non-recruitment HR activities, so Springsted is nonrecruitment HR activities as well.
Some of these are just consulting type firms who do
recruitment and other HR type work for local government. Voorhees and Associates works
exclusively in the public sector. You can see they’ve got extensive experience in smaller
communities across the country, again particularly in the mid-west. Management Partners was
one that we did contact and they are more of a general management consulting type firm. They
have conducted a few recruitments at the City Manager level but they don’t have that type of
specialization.
They do work with local governments in other type of work, including
organizational analysis, performance measurement and those types of things. Spencer Stuart, as
I mentioned, their contact apparently was out of town until Sunday night and I received an e-mail
from him and we worked yesterday to get the information in this morning. I’m sorry it is not
there, but they do not have any City Manager recruitment experience, but they do have
October 30, 2012
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Minute Book 134, Page 150
experience in other governmental practice, very strong financial services, global development,
philanthropy, global banking and marketing type of work. They are a very large firm. They’ve
done 4,000 searches over the last year, 53 locations of offices in 30 countries around the world.
I didn’t touch on price, if you’d like I can highlight that.
Mayor Foxx said let’s see if there are questions right now.
Councilmember Autry said with other bids, etc. we are required to take the low price bid?
Mr. Walton said this is a service so you can choose.
Councilmember Barnes said I’m going to go back to what was at that time untimely and based
upon the research I’d done at that time, I thought Waters was a good option for us both in terms
of price and experience. I still think they are worth considering as a first option and I don’t know
them.
Councilmember Cannon said of the 41 City/County Managers they’ve had do we know how
many city and how many county? That looks like a group number.
Ms. Brown said I do, but I don’t have it separated out right now. I have it with me and I can
answer your question after the meeting if that would be helpful.
Mr. Cannon said that is fine, and do you know, like Voorhees and Springsted, how they derived
at a number which is relatively low in $16,900 and $18,000 respectively in terms of costs?
Ms. Brown said no sir, I don’t know how they derived at that number. Your firms that do
specialize in public sector seem to be more competitive than some of your more global firms. I
didn’t have it in the information but the Spencer Stuart bid was a third of the full total comp
package similar to what Coleman Lew had proposed and a third of that package would be about
$85,000 for that recruitment process.
Mr. Cannon said I’m interested in find out from Voorhees Association, a little bit more about
how they derived at that number.
Ms. Brown said she was very specific with me and said we’ve played in smaller markets and that
bid did come in after the others had been published. That was something that we had to consider
because we brought the information to the Committee early on and then we went back out and
got additional information so Voorhees is one of those that came in after the first three had
proposed.
Mr. Cannon said you’ve got the Evanston and Bloomington, etc. some of the smaller?
Ms. Brown said yes sir.
Mayor Foxx said what I’m going to suggest is that, I hear you Mr. Barnes on Waters, and you
asked for more information on Voorhees?
Mr. Cannon said no, I’m fine.
Mayor Foxx said other thoughts based on this information in terms of which direction to go. We
can take a deeper dive in the Council Manager Relations Committee and come back with a
recommendation on the 12th of November. Both of these schedules have the 12th as sort of the
starting point. Without objection we can do that.
Councilmember Mayfield said can we around this table try to reduce this number down so that
what you go back to as committee opposed to the committee going through all five to jumpstart
the process because I also pick Waters as far as the fact that they have experience with larger
cities as well as in the sector that we are looking for. I think we can eliminate some of these
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Minute Book 134, Page 151
possibly and that will help reduce some of the conversation you all have, opposed to coming
back again with five.
Mayor Foxx said I think that makes sense.
Mr. Autry said I would probably rather say is there anyone who wants to put forward one of
these firms besides Waters at this point.
Councilmember Mitchell said I would like to put forth Springsted from St. Paul. Greensboro,
North Carolina so they are used to a form of government that we have and the fact that they are
used by the North Carolina League of Municipalities. Waters and Springsted would be my two
to really vet on.
Mayor Foxx said I’m going to throw Spencer Stuart back in there just because we don’t have the
data in front of us. I would at least like to see them.
Councilmember Cooksey said regarding these timeline proposals, given the way that we’ve now
stretched it out, shouldn’t we put on here when Council should appoint an interim City Manager?
We’re going to have to do that and I guess December 14th we would do that because that would
be our last chance to do so before Curt viciously takes his toys and goes home. I mentioned that
yesterday, but I figured I would also mention it today when more people are here.
Councilmember Pickering said Spencer Stuart, this says no expertise in these types of searches.
Is that correct?
Mayor Foxx said some information that was provided to staff at 11:59 today and we don’t have it
in front of us, so that is not updated.
Ms. Pickering said so they may have expertise.
Mayor Foxx said what has been said is they’ve not done a City Manager search, but they have
extensive private sector. I want to know what I don’t know about them.
Ms. Pickering said I’m comfortable with Waters if Mr. Mitchell would like to look at the second
and third firm.
Mr. Cannon said can I get the same request on Springsted that I requested on Waters and that is
just the number of actual City Managers they’ve hired and County Managers and the breakdown
between those two?
Mr. Barnes said thinking back to when we recruited this gentlemen to be our City Manager, is it
not true that we followed proposal 1, which was to get community input at the same time we
were posting the position? I say that to say that if the committee has arrived at a
recommendation with respect to the job description and the qualifications I’m comfortable
having that put out to the public domain, getting public feedback at the same time we post the
job for applicants, in other words proposal #1. As you all know I’d rather get this done sooner
rather than later and even this is too long for me, but I think we can live with it. I think proposal
#1 is great with Waters, but I heard Springsted, I heard Spencer Stuart. Do you want a motion?
Mayor Foxx said no.
Mr. Barnes said we’ve got to move this bad boy on.
Mayor Foxx said it is moving.
Ms. Mayfield said this is for clarity sake because I wasn’t around when we went through this last
process. So there is a process where we go to the community, my question is, is there a process
where staff has an opportunity, whether it is anonymously or whatever to have some input? I’m
concerned about this timeline that we are initially looking at, not being enough time to really
have the door open for the most qualified candidate to come in. I don’t want us to feel like we
are rushed to put someone in this position because we also have to think about along with
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Minute Book 134, Page 152
everything we discussed today this next City Manager is the one who is going to potentially be
identifying a replacement for our Director of the Airport. There is a lot of upcoming positions
that are going to need to be filled so I want to make sure that we have a comprehensive plan to
make sure that we get as much input as possible to try to identify the most qualified individual.
Mayor Foxx said Cheryl you correct me if I’m wrong, but the scope of an arrangement with a
search firm would involve some level of stakeholder input so they would be charged with doing
some of that 360 work even with staff. I think that was done the last time we did a City Manager
search.
Ms. Brown said we have built into both proposals to receive input from Mayor and City Council,
to receive input from business leaders and community leaders and to receive input from
employees on staff.
Ms. Mayfield said so when you are pulling that information as far as experience for some of
these firms that have submitted proposals, it will be helpful for me to know at least a snapshot of
how expensive their 360 is because if we are only going to identify a certain segment of staff, it
would be helpful to me to know what segment of staff are we looking at because the work that
Manager Walton has done, though amazing, trying to identify someone else is going to come in
and be able to work with our system as expansive and detailed as it is, that is something I really
want to make sure the search firm has true experience in making sure that we have a full 360 and
not a spot check to the best of their ability.
Ms. Brown said when you say full 360?
Ms. Mayfield said when we look at staff, Curt you manage how many? Your total number of
staff under you?
Mr. Walton said 24 direct reports.
Ms. Mayfield said so you have 24 direct reports and then thinking about all the sub groups that
is under that. If we stop at executive level as far as staff having an opportunity to share, we may
not get down to have the level of conversation that we may need to. I’m not saying that we need
to go all the way into the weeds, but I would get a very different conversation if we were
recruiting and I was speaking to Mr. Dulin who was the executive director of that department
opposed to if I was speaking to a staff member that is serving under Mr. Dulin.
Ms. Brown said actually we do intend to go down into the weeds. We don’t intend to stop at that
mid-level.
Mr. Walton said and I would certainly hire Mr. Dulin.
Mayor Foxx said this is good input and we’ll have a vote on our go forward on the 12th of
November. I’m going to end this like we started. I do think one of the best things we can do for
whoever becomes the new City Manager is to figure out this capital budget because I do not
believe it is something we want to throw a new person in the middle of.
The meeting was adjourned at 2:30 p.m.
Stephanie C. Kelly, City Clerk
Length of Meeting: 2 Hours, 30 Minutes
Minutes Completed: December 27, 2012
December 17, 2012
Special Budget Meeting
Minute Book 134, Page 288
The City Council of the City of Charlotte, NC, convened for a Special Budget Meeting on
Monday, December 17, 2012, at 12:10 p.m. in the Council Chamber of the CharlotteMecklenburg Government Center with Mayor Anthony Foxx presiding. Councilmembers
present were: John Autry; Warren Cooksey; Andy Dulin; Claire Fallon; LaWana Mayfield;
James Mitchell and Beth Pickering.
Absent until noted: Councilmember Patsy Kinsey
Absent: Councilmembers Michael Barnes, Patrick Cannon, and David Howard
********
Due to technical difficulties, there was no audio or video of this meeting.
********
Mayor Foxx stated that we have all seen and heard the horror of what happened in Newton,
Connecticut on December 14th. He noted that our hearts and minds are heavy with the senseless
tragedy of losing 20 children and 6 adults at the Newtown Elementary School.
Councilmember Patsy Kinsey arrived at 12:11 PM.
The Mayor expressed that this discussion pales in comparison to the events in Newtown, but are
still important issues. He stated that he’s spent a lot of time since the summer contemplating how
best to resolve the budget impasse, but sensed that the Council is not ready. The Mayor stated
that clearly there are several uncertainties. He highlighted the uncertainties as being, the
economic impact of the “fiscal cliff”. He noted the possible implications the “fiscal cliff” will
have on the federal budget. He asserted there is a sense that some time should be taken to
examine how the situation will play out. Mayor Foxx pointed out another uncertainty as being a
“new” State government taking place in January. He mentioned a couple schools of thought as to
what effect the election of the new legislature will have on the City, as well. Finally, Mayor Foxx
pointed out that Mecklenburg County is in the middle of revaluation. Having said all that, the
Mayor stressed that it won’t hurt [the Council] to wait on making a decision on the Capital
Investment Plan (CIP), but advised Council that they would eventually have to make a decision.
Mayor Foxx emphasized that Council will have to decide which is most cost effective for the
citizens or determine whether waiting is a better strategy. The Mayor stressed that if this Council
doesn’t make a decision, it will be left for another body to make the decision. He suggested that
the better course is to make a decision.
Motion was made by Councilmember Mitchell, seconded by Councilmember Mayfield, to
defer voting on the recommended CIP budget at this time and to vote during the normal
Spring budget process plus to refer individual CIP items to Council committees for review
and recommendations
Councilmembers expressed their viewpoints on the proposed motion; some asking for
clarification and others expressing their support of the motion.
Councilmember Mitchell highlighted the intent of the motion as being that each committee
would, with staff input, work to identify the resources necessary to fund individual projects and
then report out their findings.
Mayor Foxx commented that there was a lot of room for discussion and collaboration. He
further commented on the proposed Streetcar Project and the East Independence Economic
Development Strategy. He suggested that there may be a better way to get to the question, even
though the answer may not change.
The vote was recorded as unanimous.
December 17, 2012
Special Budget Meeting
Minute Book 134, Page 289
ADJOURNMENT
The meeting was adjourned at 12:35 p.m.
Stephanie C. Kelly, City Clerk
Length of Meeting: 25 Minutes
Minutes Completed: June 10, 2013
February 27, 2013
Budget Workshop
The City Council of the City of Charlotte, North Carolina convened for a Budget Workshop on
Wednesday, February 27, 2013 at 3:12 p.m. in Room 267 of the Charlotte Mecklenburg
Government Center with Mayor Anthony Foxx presiding. Councilmembers present were John
Autry, Michael Barnes, Patrick Cannon, Warren Cooksey, Claire Fallon, Patsy Kinsey, LaWana
Mayfield and Beth Pickering.
ABSENT: Councilmembers Andy Dulin, David Howard and James Mitchell
I.
Introduction
Mayor Foxx called the meeting to order at 3:12 p.m. and said we have lots to go through today,
the CATS Budget, Storm Water Budget, Financial Partner and Outside Agency Funding
Requests. Let me reiterate where we are in the process. This is the first of several Budget
Retreats. The information you have in front of you that you will have for the rest of the spring is
information upon which the Council will make its decisions on add and deletes and from which
the staff will make recommendations on enterprise operations like Storm Water.
All this
information is cumulative and once you hear it today it is probably the last time you are going to
hear it specifically referenced at this level of detail unless you ask a question. I just want to
make sure that as we go through the process this spring nobody is under the allusion that they
didn’t hear something because you are getting all the information one time and if you have a
questions about it later you have an opportunity to ask those questions. With that I will turn it
over to Julie Burch our Interim Manager and let me say again to you Julie and to the staff, how
much our Council appreciates what you all are doing under some very trying circumstances. We
can always create our own dysfunction, but it is doubly troubling when we have some that is
being visited upon us so I appreciate what you all are helping us work through and thank you for
being part of this today.
Interim City Manager, Julie Burch said thank you for that and I say that on behalf of the entire
team. Just to add on to what you said in terms of kicking off this Budget Workshop Mayor, yes
this is the first of three and we the City Management staff have found that over the years it has
been very helpful to have these Budget Workshops with Council as we work our way towards
the ultimate Manager’s recommended budget and in this case this year we will be presenting the
Manager’s recommended budget on May 6th, but the point of these Workshops is to provide to
you and present to you staff’s preliminary ideas and thoughts around major topics in the budget
and certainly to give you an opportunity to give us some feedback, ask questions, seek more
information, give us perspective on any aspect of what we are sharing with you. We really
encourage you to do that as we go through these presentations this afternoon and then again there
will be two more opportunities, two more Workshops before we work our way towards May.
This afternoon you are going to hear from Carolyn Flowers talking about the CATS budget. Of
course we had a briefing on the Blue Line Extension financing on Monday evening. This today
will be a broader view of the CATS budget and will give you an opportunity to ask questions of
Carolyn. That will be followed by Jennifer Smith who will discuss the Storm Water Budget and
particularly talk about our recommendations around the Storm Water fee and then finally Randy
will talk with you a bit about Financial Partner Requests. No recommendations around this
Financial Partner Requests today, but simply for your information and feedback. With that, if
everybody is good to go I’m going to turn it over to Carolyn Flowers and we will begin to talk
about CATS.
II.
CATS Budget
CATS CEO, Carolyn Flowers said I wanted to basically bring you up today on CATS budget
process. We started our process in January. We start a head of the City budget process because
we go through a review with MTC then they recommend a budget to City Council and so we are
right now in phase of going over our budget in detail with MTC and today we will be providing
an overview of the budget to City Council for your adoption in the May/June timeframe. (She
used PowerPoint for her presentation to Council. A copy is on file in the City Clerk’s Office.)
I will start out with the overall foundation of the Metropolitan and Transportation Commission
direction and that is the 2030 Plan which includes transit projects in corridors that were initially
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February 27, 2013
Budget Workshop
envisioned to be done in a 30-year period and the primary local funding source was the ½ cent
sales tax. We were projecting an annual ridership from that build out of 52 million passengers.
Today with the expansion of the bus system and the implementation of a light rail system we are
about 50% there in terms of meeting the objective of 52 million passengers. However, we had a
significant impact to the overall plan with the recession in the 2008-2009 timeframe. We had a
projection and escalation of the sales tax that was impacted by the economic downturn and now
we are projecting growth at a much lower rate at about 3.5% increase versus a 7% increase that
was in the 2030 Plan. The result is that the operating budget has had significant stress on it in
the last few years and we are also looking at where our funding partners are. The Federal and the
State Government are experiencing reductions in their revenue sources. Tomorrow I guess we
will have to see what is the outcome of the sequestration discussion and what this has done is
have an impact on the implementation schedules that we had in the original 2030 Plan.
This is a gap analysis on sales tax. The red line is trajectory for the 2030 Plan and the blue line
is the actual experience that we’ve had in the last few years in sales tax receipts. We have a gap
of about $145.3 million to date with our trend line on sales taxes. This gap will continue because
it is going to be difficult to ever recover from the extraordinary impact that we had from the
recession.
The 2030 vision remains. We are still working on delivering projects even though we have
constrained resources. We are still working on looking at innovative financing and project
delivery methodologies to look at the next priorities in the 2030 Plan. Our next priority is the
Red Line and we are working on ways that we can implement that project and overall knowing
that the implementation schedules will be slower than originally envisioned in the 2030 Plan.
Councilmember Cannon said Ms. Flowers thank you so much for your continuing presentation. I
wanted to ask you, with regard to the MTC and CATS not abandoning the vision of the 2030
Plan, that Plan would include the Streetcar still correct?
Ms. Flowers said that is correct.
Mr. Cannon said I raised that and I wanted that for the record largely in part because there was
some notion that that was not still a part of the Plan.
Ms. Flowers said the Plan continues to be all five corridors that were originally put into the Plan.
The Plan includes the Northeast Corridor, the Blue Line Extension that we are working on now,
the next project would be the Red Line. The Streetcar and Independence Corridor are all
included in that 2030 Plan and we are doing planning for major investment studies on other
corridors in the future.
Mr. Cannon said but there is indeed a 2030 Plan, no question?
Ms. Flowers said no question, there is a 2030 Plan.
Councilmember Pickering said the 2030 Plan right now calls for Streetcar to the Airport. Is that
correct?
Ms. Flowers said the 2030 Plan calls for two phases on the Streetcar corridor. Phase I is to
construct along Beatties Ford Road, Trade Street and Elizabeth Avenue from Rosa Parks Transit
Center to the Mecklenburg County Health Department, to Presbyterian Hospital. Phase II
extends the Streetcar along Hawthorne Lane and Central Avenue to the Eastland Mall Center and
then there is a West Corridor that will construct Streetcar along Morehead Street, Wilkinson
Boulevard to the Charlotte Gateway Station to Ashley Road. There were several phases to
implement the Streetcar.
Ms. Pickering said I thought I saw on the Plan that a future time past what we are talking about
in the budget of the Streetcar servicing the Airport. The reason I asked that I know that light rail
is much more expensive, but I was just curious, and I know we have no money, but to me it
seems that light rail would be more appropriate to the Airport in terms of speed. The public likes
to get to and from the Airport quickly.
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February 27, 2013
Budget Workshop
Ms. Flowers said the 2030 Plan, the Wilkinson extension is the one that would go out toward the
Airport. There were technology decisions that were made when the 2030 Plan was implemented.
Some of those technologies have been revisited like Independence so there are still investment
studies that will determine the final technology. Streetcar was the technology that was adopted
in the 2030 Plan going out toward the Airport.
Ms. Pickering said although discussions could still be had to talk about things on the 2030 Plan?
Is it written in stone?
Ms. Flowers said no, MTC can revisit that and they have last year with the ULI Rose Study,
come back and revisited options for the Independence corridor and then also looking at whether
or not there needs to be something in the middle of Independence versus parallel corridors along
Monroe Road. MTC has the option to revisit the technology.
Councilmember Fallon said two questions, one just came with that. Say we don’t keep the
Airport, will we still be obligated and will we be building a Streetcar or anything else out to the
Airport since it would not be under our control and why would we spend money that someone
else controlled?
Mayor Foxx said that is a question for not only us, but the MTC as well. Some $40 million in
the capital improvement plan from last summer that would have put money into the roads at the
Airport.
Ms. Fallon said frankly if they are going to take it away from us, then they should be responsible
for everything for it. Can I have a timeline, Blue Line, Red Line?
Ms. Flowers said well we only had the original timeline. We don’t have an adjusted timeline
because of the issues that we have with funding so we have not updated the timeline. In 2010 we
did a workshop and we talked about our capabilities with the available revenue receipts that we
were projecting in the future so the only project that we have put on an updated timeline has
been the Blue Line Extension. The Red Line, there was a projected timeline of delivering a
project by 2018 if we came up with the financing sources and the project delivery methodology
and come to an agreement with Norfolk/Southern. The other projects we went to the MTC at
that workshop and said we are not identifying a timeline because we don’t know what our
revenue capability would be in the future. So we do not have a timeline for those projects.
Ms. Fallon said if I’m not mistaken the Blue Line has the shovel in the ground already.
Ms. Flowers said the shovel is about to be in the ground.
Councilmember Cooksey said while I appreciate that there is a lot of sensitivity around the
Airport issue I want to be careful about any comments about what kind of infrastructure we do
around there for two reasons. One, as much as we do talk about transit here to build on and
amplify something the Mayor said, we are in the second position here, it is the MTC that is
empowered to be the lead dog on establishing policy induction light. Secondly, the transit
system regardless of jurisdictions and changes is intended to be a regional system. After all a
good chunk of the Red Line isn’t in Charlotte either and we will be supporting it. I would be
cautious about saying well if they take it away from us, the heck with them. I wouldn’t do that.
Councilmember Barnes said Ms. Flowers, a couple of the questions that have been asked brought
a couple of thoughts to mind for me. One with respect to the 2030 Plan because of the treatment
that we were attempting to make with respect to the Streetcar, what has that done regarding how
the MTC used that project in its plan. Remember the piece that we were exploring was the
extension of the whole Rosa Parks to Eastland alignment and then I believe at the Retreat Mr.
Cannon asked a question of the City Attorney about the legality of our approach and I wanted to
hear the updates on that, and you may answer that questions about the treatment by the MTC.
Ms. Flowers said MTC still has this project in the Plan and there has been no discussion with
MTC about reprioritizing it. During the discussions last year we only appraised MTC that the
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February 27, 2013
Budget Workshop
City was looking at the option of financing it, but there was no discussion at MTC and any detail
about the impact of the City CIP decision. I think they were waiting to see what the outcome of
the decision was going to be.
City Attorney, Bob Hagemann said Mr. Barnes you are correct, Mayor Pro Tem Cannon, at
the Retreat asked for an opinion as to whether or not there was any issue with the City moving
forward on the Streetcar. For that matter with what we’ve done to date on the Streetcar given the
wording of the Interlocal Agreement. In terms of the timing of my answer I plan to get you an
opinion by Friday or on Friday. I’m working on it literally as we speak. I finished reviewing
documents that I needed to look at this morning so I will have a written option to Mayor and
Council on Friday. It is a little bit of an odd situation because it is a contract and the City is one
of eight parties to the contract. The question really goes to the question of has the City or could
the City possibly be in breach of the contract and that is not something that I typically would
discuss publicly. My memo will be attorney/client privileged and does not mean that you won’t
have the right to release it if you choose to, but my communication to you is going to be
attorney/client privileged and it is coming on Friday.
Mayor Foxx said just a couple of comments since we’ve gotten off on the Streetcar project. As
we have been saying the funding, can you go back to that chart Carolyn that shows the funding
gap? This funding gap is showing you the gap between actual revenues and what would be
necessary to meet 25% of the cost of the plan. The assumption that was made in 1998 and
subsequently in 2002 and 2006 was that each project would be funded according to the same
formula, 25% local, 25% state and 50% federal. One of the flaws in the Plan, and it was rightly
called a flaw, is that we assumed that at some point all of these projects would fall into that
same formula and the reality is that they haven’t. The Red Line for instance, which I’m a
supporter of and I want to see us making progress with, but it didn’t qualify for federal funding
or it wasn’t as competitive for federal funding as some of the other projects were and to date that
situation doesn’t seem to have improved. As a result that project may be one where our local
percentage is much higher than 25% but you see what the funding situation is there. That is one
point. The second point is that we can sequence these projects in time when we have money.
When we don’t have money I don’t know what the sequence is. It is kind of hard to spend
money that you don’t have and not only do we not have any new money, we don’t have any old
money, we don’t have money. That is one of the reasons we formed this task force of the MTC
to take a look at some options to maybe go to Raleigh and see if additional sources that could
allow us to get the funding back on track. The last point is that because of this very chart the
argument that I continue to make and hope that you can find a way to make it as well, is that our
past efforts to accelerate a mile and a half of the Streetcar actually helped soften the blow of that
chart. Because we actually have taken cost out of the system which if you adjust for inflation
over time it could end up being tens of millions of dollars out of the cost of the overall system.
Those are just various points along the way, but I realize the sensitivity around this, but the
financial challenge right now, bar none, is the biggest one we have. Politics are what they are
but there is no money and I’m happy to see us get the Blue Line Extension done and I want to
see us get it done, but if all we ever endeavor to do is to get one north/south line done I think we
are fooling ourselves into thinking that we are solving the problem of mobility sustainability and
frankly our land use strategies that we’ve been talking about for 20 years, if we don’t get the rest
of that system built. It is almost not worth it.
Councilmember Autry said Ms. Flowers, your chart here makes me think of something else that
is fresh on the headlines too. Are your actual projection or the way we are looking at this is also
considering the reduction of the unemployment benefits that have passed at this stage and how
that impacts people’s buying power?
Ms. Flowers said that is why we have basically tempered our sales tax projections. 3.5% is
somewhat conservative but we have to look at the way that we are going out in the future and
maintaining a slower growth on sales tax because there are going to be factors that could impact
us immediately or in future years. We are not I think that aggressive. We are basically aligning
ourselves with the forecast that the City and the County have also and with the State. We are not
looking at a very aggressive growth with the sales tax, but yes, that could impact us because that
means those who are transit dependent may not even have the ability to take transit.
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February 27, 2013
Budget Workshop
Ms. Flowers continued her presentation with slides on Page 5 and said I would like to go over
some of the progress we have attained in the last five years. On the Rapid Transit side we did
deliver the South Corridor Light Rail Project and it has attained national acclaim. It is a model
for land use and transit development and we’ve had over 60 municipalities come to Charlotte to
look at what we’ve done here. The Northeast Corridor has advanced to the final design and it is
moving into construction. As I give you that bid on Monday night we are in the pre-construction
phase and we do have grant contracts with the State and Federal Government and we are
working on the alternatives for advancing the Red Line. We are engaged in discussions with
Norfolk/Southern regarding traffic corridor studies that could lead to final definitions of the
project design. On the service side, as I said, with expansion of the bus system and only one
corridor implemented we are already at 50% of the ridership projections that were in the 2030
Plan and I think that is a Hallmark of success for us. Operating and maintenance costs have been
constrained over the last few years and we’ve managed with no service reductions despite rising
fuel and personnel costs. We have on the revenue side initiated new resources of revenue,
advertising, thank you all for your support on that, and we were also able to get well operations
implemented as part of the State Maintenance Assistance Program. We were the first light rail
and the only light rail operator in the state. They were not counting that in the State Assistance
Program as part of ridership and we were able to get the support of the State and finally get the
rail assistance in that program. We have been competitive and we’ve received $76.7 million in
federal grants. With earmarks no longer being available the only way that you can get funding
now is through competitive grants and we have been able to get into that process and be
successful. We just want to emphasize one of the greatest achievements for us is that we are
operating 2014 levels of service with 2007 level of sales tax receipts. I think that shows that we
have gotten more efficient and effective in the way we are utilizing our resources.
Mayor Foxx said can you say that again?
Ms. Flowers said we are operating 2014 level of service with 2007 level of revenue.
Mayor Foxx said that really deserves commendation. That is amazing.
Ms. Flowers said we have managed to reduce our operating expenses by about $30 million in the
last five years. (Last slide on page 6) Five consecutive years of budget management – you look
at the budget and the actual operating costs and you can see that we have reduced our expenses
by $30.5 million over that period. We focused on what is our core responsibility, which is mass
transit, eliminated things that were nice to do and not part of the mandate and basically focused
on insuring that we could keep service on the street, which was really important to the taxpayers
in this county. They have invested in transit and this is the yield that they get for their
investment.
Mr. Barnes said I noted that the 2012 operating costs and budget projections were fairly close
and the question I had was at what point you might see the costs exceeding the budget because
we’ve managed to keep the blue higher than the green for the last five years, but I’m worried
about it exceeding the blue.
Ms. Flowers said that was part of our discussion on Monday and we see that possibility in the
future as we move forward with the BLE financing plan. We try to basically look as we project
the budget, we look at the operating costs because we are an enterprise fund so we have to
balance our operating costs against the available revenues. Every year on an annual basis we are
trying to manage within the prescribed growth in the future and with 70% of our costs coming
from labor and 11% coming from fuel we have to insure that we have some proactive
management to manage the labor costs as well as manage the fuel costs. We hedge and we do
things that we can do to contain our budget growth.
Mr. Barnes said I think it was in 2015 that it might.
Ms. Flowers said yes, this is the 2014 budget, this is a two-year budget process and we are going
to have to come back and revisit 2015 based on looking at the outcome of the BLE financing.
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February 27, 2013
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Ms. Flowers continued her presentation with the slides on Page 7. Continuing the Management
of Resources you can see the reduction in our workforce during this period. What we’ve done is
eliminate positions and reallocated positions from areas that have less of a critical need to those
that have critical needs. Through the management and reallocation process we’ve managed to
keep our head count fairly flat. For the Blue Line we are hiring termed positions, basically
hiring the resources that we need for only the period of the project so we are continuing to
management our administrative costs as we move into the future. Beside the economic impacts
we are struggling with the direction that our funding partners are going in the future. The
Transportation Reauthorization Act Map 21 was only passed for two years and in the past it had
been a 6-year program. They gave transit agencies more budget certainty for their formula
funding and for opportunities to get New Start grants and other capital grants. This program was
for only two years and it was flat. But they haven’t been able to even implement sections of it
because we have been in a continuing resolution so we haven’t been able to get additional
funding. There was a change in the state in the way that they looked at the New Starts program.
They eliminated the New Starts program but because they had a commitment with us they
extended our cash flow over a 10-year period. We would have in the past received that on a
reimbursement basis, based on what we had actually incurred so now we are over a longer
timeline which is increasing our need for a short-term borrowing on the BLE and federal
sequestration is scheduled for about an 8.5% cut for transit. That could affect us and it could
also lengthen the cash flow availability for the Blue Line Extension.
Moving forward from all of that we continue to work on providing ways that we can deliver
service and we are continuing our efforts to manage our budget.
Our preliminary
recommendation for budget is that we are focusing on our core responsibilities which is safe,
reliable service for our passengers. If you have safe service and reliable service that attracts
passengers and it also keep them loyal to the system. We are growing revenue service hours by
3% and this is all base fund grants that we received to put in new service. We have to continue
the stability for the ADA service and customers so we are putting additional resources into our
ADA Program and we are seeking federal operating assistance for service growth and as I said
we will focus on safety and reliability.
We are coming forward for 2014 with a structurally balance financial plan. We are continuing
the hedging to manage fluctuations in our fuel costs and to give us budget certainty. We are
managing the debt financing for the BLE Project. Asset maintenance is important for state of
good repair. You want to insure that you have assets that are reliable so that you put your service
out on time and we are continuing to limit the growth of our operating and maintenance cost and
our capital program is sized with only available resources and focused on those things that are
necessary to keep the system running. We are putting in funds for studies for the future
corridors.
This is a matrix of our actual budget in 2013. The revision that we did in mid-year and the 2014
recommended budget and 2015 proposed budget. The 2015 proposed budget does not include the
impact of the BLE financing so that is something that we will have to revisit. This is our
operating income for 2014 and is projected at $138.4 million and our expenses are projected at
$110 million and the balance is $28.1 million which would go over to the capital side. We do
have CIP income that is coming in and that is for our capital projects. Most of our capital is
attributable to the Blue Line and you can see our budget year end budgetary balance. We have
to, based on the Interlocal Agreement, hold at least a $100 million reserve balance so we are
exceeding that in this budget over those years. These are the positions and this is the summary.
The highlights of the budget, the assumption is 3% escalator on MOE. We have a commitment
for this year from our MOE partners for that and our sales tax revenue reflects recovery, but only
a 3.5% annual growth. There is no fare increase in 2014 but as part of our finance policy
adopted by MTC we would have a fare increase in 2015. Our expenses, we are projecting at
3.6% growth rate and as we indicated before, labor and fuel are the major items in our budget.
We are also projecting operations of the Streetcar system in 2015 and we would be relying on
that funding to come from the City’s Pay-As-You-Go program.
Cannon: What is that projected fare increase amount?
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February 27, 2013
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Ms. Flowers said our policy indicates that we can go up to 25 cents every two years. So the
increase would be through a fare hearing next year and through looking at the budget proposal.
Cannon: Up to 25 cents, but may not be 25 cents?
Ms. Flowers said that is the adopted policy of MTC for fares every two years.
Mayor Foxx said one thing we haven’t talked about yet which beyond the sequestration issue is
that there is a prolonged period of time when the federal government is effectively shut down
and there is market ripple effects of that and perhaps consumer effects of that that impacts sales
tax. How much running ahead of that have we done to cover ourselves in the event there is a
rapid slow down as a result of what is going on in Washington?
Ms. Flowers said if we have a reduction in our sales tax receipts we would have to go back and
adjust our budget to match that reduction. We do end up with a balance that exceeds the $100
million. We would have to look at the combination of operating efficiencies plus not building
that reserve as high.
Mayor Foxx said I think that is a risk and things are so tight as they are with our financing model
that I think we are going to need to give ourselves a lot of cushion this year on the budget
because there are some variables in the economy, in Washington and at the state level that could
really hurt us.
Councilmember Cooksey said don’t let what he said interfere with the next slide please.
Ms. Flowers said the next slide – this service is implemented on grants.
Ms. Fallon said are you able to reduce that $100 million that you still have to keep as a reserve or
it must be the $100 million?
Ms. Flowers said $100 million is the amount that has been approved as the balance and as we go
into the Blue Line financing program there are other reserves that are going to be created as a
result of that which were basically discussed on Monday, but our reserve requirement could
increase which would have an impact on the ability to operate in the future.
Ms. Fallon said not decrease but increase?
Ms. Flowers and increase.
Mayor Foxx said what are the triggers for use of the reserve? If for instance the sales tax
revenue just craters because the economy just slows down so dramatically, is that a sufficient
cause for us to use reserve funds or not or does an earthquake have to happen?
Ms. Flowers said that is an MTC policy and we would have review that at MTC as to whether or
not that policy could be, or if there could ever be any use of that.
Budget Director, Randy Harrington said just for clarification and to add to Ms. Flowers, my
understanding the $100 million is really the back stop on the debt service capital side. It is not
intended for operating at this point.
Ms. Fallon said what do you do with the interest from it?
Mr. Harrington said it goes back into the operating. It can be applied and appropriated.
Ms. Fallon said it could be used for something else?
Mr. Harrington said yes.
Ms. Fallon said I mean to supplement if you have a deficit.
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February 27, 2013
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Mr. Harrington said for operations.
Ms. Flowers said there has not been very much interest recently even on $100 million. Anyway
we are going to be implementing service. There has been a demand and as a result of
countywide bus planning study we had a lot of demand for service on the Pineville-Matthews
cross town area so we are going to be implementing in June service on NC 51. That corridor has
developed and there is a lot of activity centers on that so we are going to be implementing that
service. We are also going to implement the Harrisburg Road Express Service and that is also
funded with a federal grant. We are going to add 7,198 hours this year to the bus system.
Ms. Fallon said we are getting a lot of letters about disabled service. Will we be enhancing that?
Ms. Flowers said we have added resources to the budget for STS because the demand is
continuing to grow. I think some of the letters you are getting are in areas where we don’t
currently have any local bus service so the ADA requires you to operate in ¾ of a mile of local
fixed bus route so in place in the county where we do not have local service, the ADA doesn’t
require you to add the paratansit services. We service paratransit in those areas outside of the
corridors on a capacity and if we have additional capacity we have people who have cancelled
rides then we can provide those rides. Our capacity on a daily basis is generally used to 100%,
but by adding this new bus route on the Pineville/Matthews Road corridor we are able to offer
the parallel services along that route. There are areas like Mint Hill where we do not have any
fixed route service and I think that is where a lot of your inquiries are coming from.
Ms. Pickering said I recently had a request for service later in the evening, particularly for third
shift workers. How late do the buses run?
Ms. Flowers said we generally run the buses to a little after mid-night and to 1:00 a.m. in some
places. Those service workers are probably getting off between 1:00 and 2:00 a.m. are probably
the ones who are making the demand. We are looking at places where there is still a high
demand for service. The light rail I think operates to about 1:00 a.m. When we have special
events we operate later but it is a cost and generally the ridership level for what we call “owl”
service is generally much lower and a lot of systems have had to cut that service because it is not
efficient. The things that we are dealing with are resource constraints and the ability to fund the
additional service. If we are able to get grants or something like that or have private partners
who work with us to fund those kinds of services we can do so.
Mr. Cooksey said while yes much of the system does go past mid-night, that is a delightful thing
but Route 43 does stop at 8:11 p.m. That is the last stop for Route 43. I just had to share that
because I know some of this stuff.
Ms. Flowers said he is a loyal rider and I hear from him.
Ms. Flowers continued her presentation with slides on Page 11. We had a discussion of the debt
program with respect to the BLE financing on Monday night, but our outstanding debt as of July
1, 2012 was $156.7 million. As we discussed on Monday night the BLE cash flow from our
partners has definitely impacted us and it is going to cause us to carry more short-term debt for
this project. We are projecting that we will be carrying about $425 million in short-term debt.
Greg discussed the financing on Monday night in detail with you and also we plan to retire about
$3 million in debt in 2014. Our CIP over this period is about $1.3 billion but is primary
attributable to the Blue Line. The funding sources are listed here, a combination of State,
Federal, Local and barrowing. We will adjust the CIP if we are impacted by sequestration or
other federal actions and we would have to adjust it if we had any impact from the state.
The key capital projects for us is procurement of buses, continuing the 5-year overhaul which
you have already approved of our S-70 railcar trucks, upgrading all of our radio equipment
because analog equipment will no longer be supported so we have to move to digital equipment.
Our fare boxes are ancient and we are going to replace the fare boxes on the system to magnetic
technology and we have to upgrade our route scheduling systems.
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Councilmember Mayfield said are we going to receive a breakdown of what these costs are
going to be with replacing the 20-year fare boxes, how many buses, are we replacing the whole
fleet with some of the newer buses that we have bought or looking to buy?
Ms. Flowers said we can give you the breakdown of these projects and what they cost. We are
phasing in the fare boxes. We will first start out with new fare boxes on new buses and then we
will start replacing the fare boxes on the bus fleet. The five-year overhaul of the S-70 railcars,
we had a procurement action last year with the Council to approve those and we can give you the
radio equipment background. I don’t have it on me right this moment, but we will give it to
Randy.
Mr. Cooksey said tell me a little more about the fare boxes and what are they going to look like.
Ms. Flowers said they are going to be magnetic. They will be working with a magnetic strip. We
are projecting that they will be like a debit card, you can fill the card at different locations or on
line and when you come on to the bus you can cap them and decrement the card. This is the
direction that they are moving in the industry and also reduces conflicts between the operator and
the passenger about the fares because it will just take the fares off the card.
Mr. Cooksey said obviously, I have no idea what the cost of this will be which is why I’m asking
the questions. Any possibility of skipping the middle man and just being able to read a credit
card or debit card directly at the fare box?
Ms. Flowers said yes.
Mr. Cooksey said is that going to be part of this change?
Ms. Flowers said yes.
Mr. Cooksey said two happy dances in one report. When does that start? When can we start
bragging about that?
Ms. Flowers said hopefully starting next year because we are going to be coming to you for a bus
procurement and so the spec on the buses will include a new fare box. We have reached the end
of our five-year contract for buses so we have to go back out for procurement and that will be in
the June timeframe.
Mr. Cooksey said is CATS doing the financial projections or is the City Finance Team doing the
financial projections?
Ms. Flowers said CATS did a financial projection for the funding of the project through the FTA
and we provided baseline information for the model.
Mr. Cooksey said this is overall not just the capital improvement. For the CATS budget, are the
projections?
Ms. Flowers said this comes out of CATS. I thought you were talking about the financing. For
the budget CATS provides the projections.
Mr. Cooksey said thank you and I look forward to the new fare boxes. I would hope that
increases some ridership because it will be a lot of easier than making sure you’ve got a couple
$1’s on you all the time.
Councilmember Autry said I want to thank Mr. Cooksey for two happy dances and a ghost
buster’s reference in one meeting.
Mr. Harrington said Ms. Flowers is exactly right in terms of CATS and their projections on the
revenue. One thing I would add, there is a significant level of collaboration with the Budget and
Evaluation Department and in particular the Finance Department as it relates to sales tax
revenues and in collaboration on this particular point.
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Ms. Flowers said that is what I had mentioned that we are aligned with the City’s projections for
not only our revenue but in terms of our personnel costs. We are City employees so except for
the bus operators and the mechanics who have a collective bargaining agreement so we are
aligned with the assumptions for personnel cost increases with the City.
Ms. Flowers continued with the last slide on Page 12 and said this is the CATS budget schedule.
April 24th the MTC will adopt the budget and recommend it to City Council for approval. May
13th the City Council receives and approves CATS Operating Budget and CIP and June10th
adoption of the budget.
III.
Storm Water Budget
Interim City Manager, Julie Burch said Jennifer Smith from Engineering and Property
Management and our Storm Water Services Manager will be presenting the Storm Water Budget.
Jennifer Smith, Engineering and Property Management said I will talk a little bit about the
history of Storm Water and how we came about and what we are based on, the types of projects,
our Storm Water Fee and then our recommendation for the fee increase for the coming year. Ms.
Smith used PowerPoint for her presentation to the Council.
I would like to point out one of our flood safety messages, Turn Around, Don’t Drown. That
includes not only a car but don’t walk in it either as I would say that is not very safe.
Councilmember Cannon said there is a question about if we know where that is located.
Ms. Smith said yes, that is at the Boxer Building at Morehead and McNinch Street in the August
2011 storm event.
Mr. Cannon said it looks like those folks in the back were not trying to stop him.
Ms. Smith said way back when, the US EPA mandated that localities must reduce pollutants
flowing to the streams. The way the City of Charlotte decided to handle this was creating a
Storm Water Utility. That Utility was created in 1993 and at that time it was decided to charge
the storm water fee based on the contribution of the problem which was impervious surface.
When it rains and hits an impervious surface runoff is created, it runs off that impervious surface
and won’t soak into the ground. From the beginning that Storm Water was created there has
been a huge backlog of problems, both water quantity and Storm Water quality. Our fee
increases started in 1997 to try and get that backlog down and at that time they were projected to
continue to sometime in the future get to a PAYGO program.
I will share with you a little future. The EPA is working on new Storm Water rules. They were
to come out a year or so ago, they are now projecting that a draft comes out in June of this year
and finalized in December 2014. That could put additional requirements on us for improving
water quality so what impact that may affect our budget for FY15 we are not sure at this point in
time.
Mr. Cannon said when might you have some idea?
Ms. Smith said when we see the draft rules in June if they come out in June, they have been
delayed several times. We would be able to get a sense of what impact that may have. The types
of projects that we do are capital projects for flood control. We do both what we call major and
minor projects. These are generally very large neighborhood wide projects that would affect
somewhere between 20, 100 or 200 properties at a time. Large pipes going in and these are the
most expensive projects that we do. Our maintenance and repair projects are also to help reduce
flooding, but they are really to try and maintain the system. The generally only affect may 1 to
15 properties, but definitely smaller in size. Our water quality projects are to improve water
quality throughout the City and the County and to restore impaired waters. The majority of our
streams are listed as impaired and so we are trying to work on improving that water quality.
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The other thing that we contribute funding to is collaboration with other strategic city initiatives
like neighborhood improvement projects, transportation projects, transit projects and also
economic development projects. A little bit of detail on each of the projects – our flood control
projects as I mentioned were very large. We started these projects when the program started and
we’ve completed 65 projects to date. There are 28 projects in progress and our goal as of FY12
was to start four projects each year. As you notice in the graph next to this (Page 19) our
backlog is currently about 45 projects. Between FY10 and FY11, actually with the FY11 budget
Council had requested that we take the backlog of the major flood control projects down. It was
at 19 years and that dropped to 13 years and it has continued to decrease as we’ve been doing
those four projects per year. I will mention that this list isn’t a definite list as residents call in
and we see the magnitude of the project. Projects could be added to this category of projects.
Luckily we haven’t gotten more than what we are able to start in any given year so we are still
trending downward.
On the minor projects, this program began in 2009 and we’ve completed three projects too date.
Originally we were only starting about one project per year. In 2011 we increased that to two
projects per year as well. We have seven projects in progress and here is where I said projects
could be added. You see this backlog continuing to go up so the number of years to complete all
the projects that are currently on the list is about 17 years. For our maintenance and repair
projects, this is probably the thing that you as Council may hear the most about. Residents call
in, we go out, take a look at the problem and these are I wouldn’t say first responders but we are
trying to get to these projects very quickly. We currently have about 408 high priority projects
for future work. Our high priority projects are founders in the road, street flooding, house
flooding, it could even be a failure that is close to the house that could compromise that house if
it wasn’t take care of in a reasonable amount of time. We have about 243 medium priority
projects and those projects are crawl space flooding, a hole that may be further away from the
house and it is not yet a compromise to the house or the roadway. Then we have over 5,800 low
priority requests. Those low priority requests are channel erosion where the erosion isn’t
affecting a house or a road, it is in the back yard, it is definitely a nuisance but it is not really
damaging the house or roadway.
Councilmember Kinsey said when somebody is having a water problem, CMUD will go out if it
is on CMUD side then CMUD fixes it, if is on the property owner’s side they have to fix it. Do
we ever run into anything like that with Storm Water?
Ms. Smith said yes, our practice and what was approved when the Storm Water Program was set
up is that the issue or that storm drainage system has to receive runoff from a public street in
order to qualify for service. As long as it is getting water from a street somewhere above it, it
would qualify for our service. We will go out, take a look at it and investigate it, if we indeed
find that it is receiving runoff from a public street and it is a valid problem to us then we will
include it on the list.
Ms. Smith continued her presentation with the last slide on Page 19. Our program goals are to
have our high priority projects ready for construction within 6 months of the date they were
called in. We are currently behind as we are getting more calls in for service than what we
complete in a given year so we are running at about 2 ½ years from the time a request is called in
until we can get out there and have a project ready for construction on the highs. On the
mediums our goal is to have those ready within a year and we are running at about 3 ½ years.
Again trying to fix the road flooding, the house flooding, the higher kind of damage type
projects. One thing we are looking at is how we can create some efficiencies with our staff to try
to get more projects done. We are also working with the County to consolidate some customer
service type work that we could then reallocate those positions to doing some of this work.
Our Water Quality Program, the goal again is to improve water quality by restoring impaired
waters. We started doing projects in 2000 and to date we have completed 41 projects. We have
28 projects in progress. These are stream restoration projects you see come through the Council
agenda process where water quality enhancements which could be a pond retrofit or some other
types of BMP, rain gardens, wetlands and that type of thing. There are thousands of projects out
there that we need to do in order to completely restore our impaired waters. Our program goals
are to start 1 mile stream restoration and 4 of the water quality enhancement projects per year.
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With those stream restoration projects we have worked with the core and the state to create what
we call stream mitigation bank. With that stream mitigation bank, if there is a transportation
project that wants to widen the street and there is a creek that runs underneath that street and
currently has a pipe in place, in order to widen the road we need to install more pipe. That is
considered an impact by putting that pipe in the creek by the state and the core. With our
program of having a stream restoration bank, we can do a stream restoration within our
community and that can be used as the mitigation for putting that pipe in. The benefit of this is
that if we didn’t have this program and that transportation project put that pipe in, they would
have to pay into a state fund to mitigate for it. The state could then use that money anywhere
throughout the state and it would not necessarily come back to our community. So we would
have an impact that would even make our water quality worse where at least we are getting the
benefit of doing the work here and mitigate for that impact. We have sold to date 4.55 miles of
stream restoration credits to our bank. A lot of these have gone to the Airport. We are also
selling credits to the one extension for impacts that they had so again we are able to keep any
impacts that we had by doing other types of projects, mitigating for that locally.
Mr. Cannon said at some point would you be so kind as to get some information back. I would
like to be able to see about the 28 projects that are in progress, where they are taking place and
when they are projected to be completed.
Ms. Smith said would you like that just for water quality or would like that for all the programs?
Mr. Cannon said all of the programs if possible, but if that is too much then I’ll back it back, but
if it is not too much of an ask.
Ms. Smith said I can definitely get the water quality in the major ones.
Mr. Autry said Independence Boulevard, the creek running under there, we are not going to pull
the pipe up but put a bigger culvert in there. We are going to pay off money to offset some place
else, but yet the capacity of that culvert running underneath Independence or any other roads is
not being improved to deal with the runoff that is up stream for those, correct?
Ms. Smith said Independence is actually a state road and our Storm Water fees don’t go to
improving the state roads unless we are making it worse. If the state was wanting to increase
those pipes then they would do that project.
Mr. Autry said but outside of the state’s right-of-way for Independence and that was just for
instance that is still our Storm Water system outside of those right-of-ways, correct? So we can
… the system north and south of Independence but it is still going to be a problem when it tries
to go through that culvert underneath Independence, correct?
Ms. Smith said yes and if we were doing work upstream and saw that our project was going to
make the Independence Boulevard situation worse, then we would start talking to the state about
improving Independence Boulevard.
Mr. Autry said just another point of frustration.
Ms. Smith said a little bit of recap on our fee increases to date. As you can see in the graph from
FY10 to FY11 shows that additional increase that Council gave that ended up reducing the
backlog timeframe years to start those last projects for flood control minors. Then from FY11
projected through FY15 we have been showing a decrease in fee increase, trying to get down to
the cost of living with our fee increases. I will mention that the construction cost index for FY12
was showing somewhere between a 2.5% and 3% increase in construction costs. Our costs for
construction are probably about 65% of our overall budget so that gives you some sense that as
construction costs rise we could see definitely some rises in our expenses.
Our proposed fee increase for FY14 is a 5.5% fee increase for the majority of the residents
within Charlotte. They fall within tier 2, 3 and 4 category. That is those properties that have an
impervious area 2,000 square feet or greater and that would be a 41 cent per month increase on
those. The reason why I’m showing the tier 2, 3 and 4 in FY10, the County went to a 4-tier
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February 27, 2013
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system so they actually break down their fee a little more into four different categories. We still
only charge two rates, one for less than 2,000 square feet and one for 2,000 square feet and
greater. The FY14 total fee includes not only the City portion of the fee, but the County portion
of the fee which is charged to every resident throughout the County and then an 85 cent
administrative fee for the billing. What I used here just to share with you what those rates would
be, is the FY13 Mecklenburg County Storm Water fee because I’m not sure what they are going
to do with their fee this year. I think they are proposing no increase at this time.
Councilmember Mayfield said is there any way for us to look at the administrative fee because
we are receiving calls constantly regarding the water bills. We are hitting people twice. They
are being hit by the County, they are being hit by us and it is to the point that the actual usage
that they have opposed to the fees, and I understand we need to make sure we have a high quality
of water and we receive awards for our water quality, but is there anyway on this end that we can
try to offset and alleviate some of these costs because the idea of continuously increasing the rate
for that to fall on the citizens is just extremely hard, especially for a lot of our seniors and those
that fall in that 60 and below AMI where their water bill is becoming the main bill in their
household. They are having to make a choice between some essential needs and making sure
that the water isn’t disconnected, which we’ve had calls where people were hit with extremely
large bills that we have to then go back and try to negotiate and try to offset to assist them. Has
there been any discussion around what can be done to alleviate some of this financial pressure on
the residents?
Ms. Smith said related to the 85 cents, we would definitely have to work with finance on that.
That is part of producing the bill in the system, the software that is in place to maintain all the
bills so we would have to work with them on that piece. We can certainly follow up on that and
see.
Mr. Autry said so we have different tiers of ranking Storm Water but two fees, correct?
Ms. Smith said the County has four tiers, the tier one, tier two, tier three and tier four and we
charge the same fee for tiers two, three and four.
Mr. Autry said I might suggest that you could have relief with those seniors etc. if we had a fee
structure that represented more about what the impact of the impervious surface was on the
system.
Councilmember Cooksey said I owe it to Ms. Smith to take the blame for that in that staff did
come before Council about 4 or 5 years ago with that very suggestion, the same year that the
County went to the four tiers, but as we were in the earlier stages of the recession the impact
would have been to raise Storm Water fees on roughly a third of the households in Charlotte by
40 some percent. I take full either blame or credit because my point of view on busing back
against that and other joined of course, but I was pushing back on that a good bit at the time. To
be honest I have been waiting for things to get better because I prefer the idea of a tier system
based on percentage of impervious surface, not an absolute measurement and the system we have
in place is one of absolute measurement of impervious surface. That is an unfinished business
item that at some point Council will have to confront again I think, but on our side, just by way
of the background, we stopped consideration of it because of recession concerns and the County
went ahead and did theirs. Have I covered the history satisfactorily?
Ms. Smith said yes, it was FY10, the same time that Mecklenburg went.
Mr. Autry said if we are looking for more capacity to take care of more project it should be
something that we should consider going forward.
Mr. Cooksey said at the time the proposal was a revenue neutral one and I think the County did it
roughly revenue neutral as well. The transition was designed to be revenue neutral so it wasn’t
about shifting the tiers to gain more revenue it was about where we distributing how the revenue
was gained based on the amount of impervious surface. I wouldn’t look to a four tier system as
necessarily as bringing in more revenue, it is just about distributing where you get the front more
equitably.
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IV.
Financial Partners and Outside Funding Request
Interim City Manager, Julie Burch said our next topic is Financial Partners and Randy is
going to lead you through that conversation.
Budget Director, Randy Harrington said I’ll try to bring us home. I don’t have a PowerPoint
presentation for you this afternoon, but I would like to make some overview comments about
what is in your packet and what we have received so far as requests. Ms. Burch did mention that
these are requests we’ve received and these aren’t recommendations, we’re just passing along the
requests that we’ve received for Financial Partner and Outside Agencies. As you recall the City
does fund Financial Partners and Outside Agencies and often times these are non-profits to help
provide various services to the community. Some of these include support for high priority
Council initiatives, like the Charlotte-Mecklenburg Housing Partnership. Also provides funding
that compliments various departmental services such as United Family Service Victim
Assistance which is now called Safe Alliance, which in some cases works with our Police
Department as Community Enrichment Programs. An example of that would be the Arts and
Science Program.
The funding for Financial Partners and Outside Agencies comes from – really we put them into
two buckets. One are those that are funded from the General Fund, those being from general
dollars as well as specific dedicated revenues such as to municipal service districts and Charlotte
Regional Visitors Authorities which are based off of formulas. Then the Neighborhood and
Business Services financial partners which are funded from CDBG and home funds as well as
the Innovative Housing Pay-As-You-Go funding in the City’s capital program. The packet
before you includes one page summaries of the agencies and in those summaries it provides an
overview of what the financial partner provides in terms of services to the community. It
provides a brief overview of some of the performance information, it also includes some
financial information of prior and the history of what they requested along with the very bottom
of the page includes what the requested funds, if they requested an increase, what those funds
would be applied toward. As far as new request the application deadline for financial partners
for the General Fund is January 8th and at that time we did not receive any new applications,
however, we did receive two additional letters funding requests after that and we have included
that as a handout at your place. One from the eNOugh for Domestic Violence Awareness and
another one from Carolinas’ Carrousel and the letter that we received is provided to you as FYI.
As it relates to a couple other special notes, as you know the Charlotte International Cabinet,
back in October you received a presentation from the Lee Institute regarding their findings and
recommendations to transition the Charlotte International Cabinet into an agency or office within
the City’s budget or a City department. The Charlotte International Cabinet Board did affirm
that recommendation in the fall as well and right now City staff is reviewing that and continuing
to evaluate that. The City Manager will bring forth a recommendation on that a little bit later in
the budget process, but I just wanted to inform you that that is currently being reviewed. The
After School Partners, we do have 8 new funding requests under the After School Program and
again those are going through the review process and evaluation and a recommendation on those
will be provided in the future as part of the City Manager’s recommended budget.
If you want a brief summary, on Page 29 provides an overview of the current Financial Partners
and what they have been funded at as well as the new one that have requested additional funding
and that provides just a basic overview.
Councilmember Mayfield said when the presentation was made regarding the Charlotte
International Cabinet they were also looking at doing some consolidation because we have a
position out there which is Chief of Protocol that works with our International. I want to see if I
could get a little bit more information because I think there was a conversation where it was
decided that that may be rolled under but that conversation didn’t necessarily include the
department or individuals that worked in that space to make sure that this is a good fit. We’ve
seen where we have merged a couple other departments that someone thought might be a good
idea, but on the ground it hasn’t worked out as well as we thought it would. I would like to get a
little bit more information on that because when it was presented it was presented in this
overview, but I think we need to really look at is that a role that should be rolled into the
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February 27, 2013
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International Cabinet and if so what is that going entail moving forward since this has been a
standalone position since 1995. I want to make sure that it is not something that is going to hurt
us moving forward since we are working to build better and stronger international relationships.
Mr. Harrington said we’d be happy to provide some additional information. I do have Brad
Richardson in the audience and I don’t know Brad if there is anything to add to that right now,
but we can certainly follow-up with some additional information.
Brad Richardson, Business Services said I prefer the latter.
Councilmember Kinsey said I see on Page 29, it is very helpful to have this year’s budget and
then they have the two-year request, one for 2014 and one for 2015 and the change of course if
from 2013 to 2014. When we look at our budget and approve it are we automatically approving
the 2015 request? Are we doing a true two-year budget or not?
Mr. Harrington said as part of the two-year budget process Council appropriates funding only for
the very first year and then the second year is what I would call an endorsement of the plan. It is
simply a plan or starting point for the subsequent year, but of course we come back with any
tweaks or changes and Council does have to approve that second year in the second year.
Ms. Kinsey said I think if we are “endorsing” that second year that makes it a little bad if we
don’t do anything about it the second year and in some cases I don’t know that we can. I thought
that was what you were going to tell me, but I wanted to make sure.
Mayor Foxx said create an expectation.
Ms. Kinsey said I think that is what we are doing and are we doing it with anything else, with
any of our departments?
Mr. Harrington said in terms of?
Ms. Kinsey said create the two-year.
Ms. Harrington said yes, all City Departments as part of the two year process will submit a
budget for the two years. That is what we will present to you and the Manager will present that
as part of the recommended budget, a two-year budget.
Councilmember Barnes said as I look through the financial partner information I noticed that the
difference between the current funding levels and the requested levels is about $1.3 million and
within that there are a couple questions I had for you and then there is a broader issue I want to
talk about. With regard to Center City Partners, I think this is a simple typo but under their prior
year accomplishments they list 115,772 new retail establishments in uptown. Is that really 115
or 11.5? That is that Mr. Harrington, it is under that first bullet point on Page 36.
Mr. Harrington said that does appear to be a high number doesn’t it?
Mr. Barnes said if you could get clarity on that. On Page 38, the CRVA one of our favorite
topics, there was a note under performance that their target was to consume 6.5 million occupied
rooms for the year and 34 million square feet of convention and exhibit space being used and the
actuals were 6.1 million rooms and 18.7 million square of convention center exhibit space used.
I wanted to know what happened to create that shortfall in light of how great we all through last
year was going to be. Also the customer satisfaction survey fell short and I wanted to know what
were the underlying issues and responses they received from visitors that resulted in that number
being lower. They also failed to meet the MWBE number and I want to get background on that.
Also with the YMCA Community Development group they had a target of 100 families being
served and the actual was 93 so are we to assume that there were fewer families that needed help
than we thought? That appears to be the same for the advocacy piece. The target was 100
families and they served 93. They note that a $15,000 increase would help them serve an
additional 22 students.
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Mr. Harrington said that is correct. That is part of the Y achievement.
Mr. Barnes said that is accurate, okay. The bigger issue that I wanted to talk about is in the
HAND Committee we’ve been dealing with issues related to supporting families and
homelessness etc. something the Mayor brought to us during the various Housing and
Neighborhood Development Retreats that we had last summer and fall and a number of these
requests mirror what we heard about 3 hours ago in HAND so we are trying to meet the same
issues in our budget on the CIP side in HAND and the same stuff is popping in our operating
budget here. It seems to me that we need to figure out which one it is going to be because just to
give you guys the background, we discovered today that the CIP request for affordable housing,
etc. went from the $60 million that we were discussing last year to $68 million and there may be
an additional request of $10 million for something else. There is some growth occurring in the
budget and what I’m worried about here is a duplication between what we talked about as
HAND Committee and as the whole with the issues the Mayor raised and some of us supported
and raised and in these requests being made by the funding partners. Again if you could clarify
those issues and I’m fairly sensitive to it because no-one ever asks for less money. I think CMS
asked for $11 less than they did last year, otherwise the requests seemed to be more except for
another one and with the Out of School Time Partners I think we agreed on, per the ED
Committee and Budget Committee $1.24 million for that and the request totaled $3.2 million.
Obviously we have something to resolve and then the two new ones that we talked that Mr.
Harrington mentioned are an issue, but I just point that out to the Council because it is something
that the Out of School Time Partners will become a political football the way it did last summer
and I hope we can address it early on.
Councilmember Fallon said in view of the fact that we will go into sequestration and it looks like
it and we won’t be getting the money we expect and we won’t be getting the money from the
State, is it possible for people to hold the line for a year?
Mr. Barnes said Ms. Fallon during the major downturn a few years ago we did that as I recall. I
think Mr. Hall was the Budget Director at the time, but we actually kept the funding levels of the
prior year and in fact we cut them 2% so people kind of knew they had to adjust and obviously
we can always propose something similar this year but some of these I think we should pay a bit
more attention to.
Ms. Fallon said I’m not proposing to cut, I’m just saying hold the line.
Mayor Foxx said can I offer some perspective on this too? I’m sensitive to what you are saying
Mr. Barnes because we could spend an unlimited amount of money on some of these issues and
still not make a dent in the problem. We are in the throes of a tsunami that only seems to be
getting more intense. Let me describe a little bit about what I mean. The recession knocked out
27,000 jobs in the City of Charlotte in two years and we struggled to get our numbers back up. I
think there are actually more people working now then there were back then. The workforce is
bigger than it was back then which means that the percentage hasn’t changed as much. But just
think about what is happening in the last few weeks. Unemployment benefits, and I’m not
talking, forget politics for a second, I’m just talking facts. The State of North Carolina has cut
unemployment benefits from 26 week to 22 or 23 weeks and what that means is that the prospect
of extended unemployment has been eliminated in the state. If people can’t get extended
unemployment benefits the way they have been up to this time, and my concern is that those
lines at the soup kitchens and in those shelters is likely to get a lot longer because of some of
some of the things happening at the state level and this is a theme we are going to keep talking
about over and over and over again for the next couple of years, as decisions get made at the
federal level I think it is going to get more challenging there. As it get more challenging at the
state level, guess who the citizens are going to look at. They are going to be looking at you and
me so I hear you but I think one of the counter ways to look at it, if things were just static that
would be one thing, but I just think things are going to get more challenging and it is probably at
least wise for us to at least look at the possibility of creating more capacity at some of these
backstops where we not actually decrease the number of people that are homeless even if we
build homeless facilities because of how rapidly people are going to be falling off the wagon.
But if we don’t do something the problem is going to get worse so I think we will continue
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February 27, 2013
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having the conversation. It is actually very good policy conversation to have but I think we are
in for a tough ride. I’m sorry I’m so upbeat today!
Councilmember Cooksey said two things, first of all bus route on Highway 51 and debit card at
the fare box which I pretty happy about. Actually I had a question about the answers to Council
questions. Are we ready to move on to that or do want to deal more with Financial Partners. I
don’t want to cut that conversation off. I need to continue a cliché phrase and I want to channel
my energy on Mr. Autry in this case. The answer to question 2 about alternative fuel vehicles,
Page 50, said that today in 2013 we have 876 flex fuel vehicles. Don’t really expect the answer
to the question now but what is life without asking a question in response to the answer to a
question. How many of those flex vehicles are actually using the E-85 as opposed to are just
capable of it and are still fueling up with 10% ethanol or less? I would be curious to know
because we’ve bought this and they can run on it. I don’t know where to buy it so are we buying
E85 for them or are they just ready for it when it is available?
Mr. Harrington said I’ll be happy to provide that for you.
Mr. Cooksey said do you approve of the question John?
Mr. Autry said absolutely, and Tyvola Road and I-77.
Mayor Foxx said this is not a budget related statement but he is not here with us right now but I
think we all owe Councilmember Dulin a great debt of gratitude. He has been in Raleigh for the
last two days carrying a lot of water for us and when you see him tell him thank you because he
has been a great soldier for us on this Airport issue. I also want to thank staff, Dana Fenton has
been doing an awful lot of work. Julie, Greg Gaskins, Bob Hagemann there has been a lot of
them out there toiling over this and I know there is a lot of disappointment in the action the
Senate took today, but it hasn’t been for lack of trying. I really wanted to say that.
Mayor Foxx said this is the first of three and this is a good conversation.
questions, see you tonight.
Ask all of your
The meeting was adjourned at 4:51 p.m.
Ashleigh M. Price, Deputy City Clerk
Length of Meeting: 1 Hour, 39 Minutes
Minutes Completed: April 15, 2013
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March 20, 2013
Budget Workshop
The City Council of the City of Charlotte, North Carolina convened for a Budget Workshop on
Wednesday, March 20, 2013 at 3:11 p.m. in Room 267 of the Charlotte Mecklenburg Government
Center with Mayor Anthony Foxx presiding. Councilmembers present were John Autry, Michael
Barnes, Patrick Cannon, Warren Cooksey, Andy Dulin, Claire Fallon, David Howard, Patsy
Kinsey, LaWana Mayfield, James Mitchell and Beth Pickering.
I. Introduction
Mayor Foxx called the meeting to order at 3:11 and said today is really the first day we start to dig
into our budget in a real way and I want to kind of explain to those who have not, I don’t know
where you would have been not to see what we’ve been working through in the last year and a half,
but in a nutshell what the City Council has done over the last several months is we’ve taken the
budget recommendation that was made in the spring of last year and we’ve all voted for one
version of and we’ve all voted against another version of it. We’ve gone through several workshops
in the fall and now I’ve asked the Committees of the Council to take each piece of this almost a
billion dollar budget and to dissect it, look it up and down, trial test it, stress test it and figure out
what, if any, of it could be changed or improved or whatever. The Committees have now gone
through and looked at these various pieces of the budget and today we will hear report outs on that.
We are also going to get a report from Greg Gaskins on the state of our finances. There is some
activity with the County’s re-evaluation that we will be apprised of and we will also have, I’m told,
a very simulating presentation on our utilities later on and how that is going. For those of you who
think you might want to leave early, you want to stick around for that.
Let me try to frame a little bit of what we are dealing with. In the last 2 or 3 years I have said
repeatedly that we will find ourselves in a place of economic uncertainty at some point in the
future. There are clearly challenge at the federal level, clearly challenges at the state level and we
are now there. The question for our City is how do we define the future. Over the last several
months I’ve had an opportunity to talk to every one of these Councilmembers and every one of
them wants to do the right thing for this City, and I believe that. As we are budgeting, the hard
question for us is whether we budget for the City we have or whether we budget for the City we
want to have. Recognizing that we can’t all have everything, we can’t see every good thing that we
want to see happen in this City happen, but there are some things that are critical to the future of
our City and that is why we are here. I look forward to the presentations by Committees, I look
forward to working through this process with all of you, so with that I will turn it over to Julie
Burch our Interim City Manager.
Interim City Manager, Julie Burch said thank you Mayor and Council for being here today. As
you know this is our second Budget Workshop in a series as we work out way towards the City
Manager’s recommended budget. We use these workshops to give you an opportunity to provide
the City Manager with input and guidance into the development of the recommended budget and
give you an opportunity to ask questions and seek additional information that you may need or
want along the way. Speaking on behalf of the rest of the staff, we truly appreciate that opportunity
because that really does give us great guidance as we go about our work and come back to you in
early May with the recommended budget. I want to thank all the Council Committees for their hard
on reviewing the various CIP projects and as the Mayor pointed out each committee will be
reporting out on the results of those reviews today. I would like to stress too that we seek your
direction in particular on the CIP to the extent that you are comfortable and that you are prepared to
give some guidance and direction on the CIP individual projects or collectively. We seek that
because we would like to be able to come back on April 10th, which is your next scheduled Budget
Workshop to provide some refinement around whatever direction you might give us today or
whatever additional information you might need about that aspect today. We will be happy to help
guide you through the process and provide the information that you need, but again we would like
to get some direction and guidance from you today around the Capital Improvement Program to the
extent that you are ready to do that.
Mayor Foxx said I want to layer onto what Julie said. The other piece of this that is important is
that there is no capital budget currently. What we are working on now is recommending to the
Manager what the Council would like to see come back in the Manager’s recommendation and
based on that our comments will be folded into what the Manager recommends back to us in
May. We will still go through the formal public hearing process, etc. and still have our budget
adjustments and straw votes, but this is our chance to inform what the Manager sends back to us.
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March 20, 2013
Budget Workshop
The second point I want to make is because there is so much going on, particularly in Raleigh right
now I would like to ask the Budget Committee and staff to look at our calendar and consider
backing up some of the dates that are in there. What I’m a little worried about is there may be some
shoes that drop in Raleigh on the budget that require us to make some different decisions that we
might have made otherwise and I think we ought to just plan to be surprised because we’ve got a
lot of surprises going on these days. I would ask you all to take a look at that and see if we can
maybe move some of those dates into June to give us a time to be able to see everything on the
field if we can.
Ms. Burch said I think we can prepare a different calendar and take that through Budget Committee
and then bring that back probably on the 10th of April Workshop? We will get to the CIP
Committee report out to you momentarily but first I would like to ask Greg Gaskins to come up. He
wants to give you a property and sales tax revenue update, particularly in light of new information
provided to the County Commission last night. This is just for your information and certainly any
questions or feedback that you might want to give us at this time.
II. Property and Sales Tax Revenue Update
Finance Director, Greg Gaskins said let me reemphasize what the Mayor said related to how
many changes are going on. Normally when we get to this stage we have pretty good ideas about
sales tax and property tax. We do not today have those and there are changes that are pending that
could change anything that I say dramatically between now and when we have to act on a budget.
That is unprecedented, that has never happened in my career and hope it never happens again
because we don’t know with certainty what the numbers will be. We may not know with certainty
what those numbers will be when we have to enact a budget and that is unprecedented and that is
not a good thing. If you’ve been where the City has been and has our fiscal reputation and the
expectations that the citizens have of the way we do our business, it is not a good thing that we are
in this situation. We are in a very bad place and we didn’t put ourselves there, but we are there.
(Mr. Gaskins used PowerPoint for his presentation to the Council. A hard copy is on file in the City
Clerk’s Office.)
One of the things is the sales tax. These are the sales tax estimates based on the current sales tax
law. As you know a new sales tax law has been proposed and under that new sales tax law there
would be changes and this might actually get better in terms of the amount of revenue. That has just
happened and of course it has not been enacted so we do not know for sure that that would happen.
These projected sales taxes at $69.4 million were consistent with the mid-year projections and you
see an increase based on current projected conditions. That may be what the sales taxes are, but it
also may be that they are different from that, so we don’t know at this point in time on the sales
taxes. That is not very different from the last number that you looked at concerning these numbers.
Now let’s go forward to these numbers and these numbers are the property tax estimates. These
estimates were given to us based on where the tax office was a few weeks ago when we met with
them. None of that is necessarily information that we can rely on today. The reason for that is
multifold. The county last night considered reviews both from their County Finance Office as well
as from Pierson and the result of those are that the County is looking at a more negative picture in
terms of revenue than they were previously considering. Let me give you the shorthand version of
that. They are basically looking at it in two different ways and they are getting about the same
result. One of the ways they are doing it is they are looking at the total number of parcels that are
under review, the 58 parcels across the entire county, and they are looking at what the impact of
that is in terms of a potential lowering of values and what the result of that would be in terms of the
overall amount of money collected. Then they are also looking at where you step back away from
that and you look at all values in the County and you put that information in and you look at what
that decrease in value should do. Under both of those scenarios you get close to $25 million in
reduction in terms of the revenue that would be available for the budget, so what we did, just since
last night, we took a look at our situation and we tried to run those same two types of scenarios and
compare what we had done to what they
had done. Given both of those scenarios from a total budget perspective you are slightly over $9
million under both scenarios. Both scenarios you have lower revenue of about $9 million. It is
between $9.1 million and $9.4 million. We will continue to recheck that. For us there are 38 parcels
instead of 58 and we are just now trying to review as much information as we have, but that is an
approximate figure that would match up. In addition to that one of the things that we would be
having to deal with is what solution might come. There is legislation proposed that has alternatives
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March 20, 2013
Budget Workshop
solutions. One of those solutions would involve a scenario where a calculation is made by
somebody, in this case like Pierson related to all of those values and from whatever period they
make that decision, going all the way back you would be readjusting values over that entire period
back to 2011 and pushing money back out to people. That is very difficult for us to calculate or
figure out how much impact we would have and when it would hit us. It is very difficult for
example, once you have taken the money at the appropriate rate and you’ve spent the money, to
come back and say oh, we didn’t have that money to spend, if that in fact is what you are going to
do and therefore the ultimate impact to us and what year that hits us we still don’t know and we
don’t know how to make that adjustment.
We are actually in a situation where probably nobody in the state knows how to do that because
nobody has ever had to do it. For the fact that happened we would not know how to tell you the
total impact of that or what it would be in this year. We are continuing to work on that, but that is
an issue that we may not know at the time that we do the budget. Right now think of that $9 million
shortfall, that total number 7.27.3 general fund number, in terms of a shortfall based on this type of
revenue estimate and in addition to that there is a possibility that the refund number that we already
had looked at, where we had set aside money for the refund, and where we had gone beyond the
original recommendation by the County Tax Office, we’ve exceeded that and they are now saying
that that thing could go beyond your number, about $4 million or $5 million in additional monies
even beyond what we had put aside for that purpose. We are still trying to determine exactly, based
on this theory, what those numbers would be. Therefore your situation with your property taxes is
still very unsettled. We are looking at numbers that could be $9 million to $9.5 million total plus
additional refund numbers, plus you have uncertainty about if the legislation actually went in and
when the timing of that happened, how much additional money would be affected. So I am not able
to tell you at this point in time what the total impact of all of that is going to be. This simply tells
you what we are doing and we’ve been working with the County to try to establish the basis for
them doing that in comparative. It is not happy news.
Mayor Foxx said what is the good news?
Councilmember Fallon said did you figure in the rumors that we heard about the business tax, the
$17 million being taken away too?
Mr. Gaskins said there is a Bill that has been introduced that would repeal the Business Privilege
License Tax. That is not in the news that I just gave you. That would be the opposite of good news
to lose that revenue because it doesn’t attempt to give us any way to replace that and so that would
simply be an additional hole of $16 plus million in your next budget.
Mayor Foxx said let me describe where we are. We are on a slope and the slope is going to keep
moving us down the hill. Where we’ve been trying to go is defining the future for this City so that
we set the floor for this community long-term. The lack of a capital plan is a glaring problem for
this City going forward, but it is only going to get harder. We’ve seen this coming and it is now
here.
Mr. Gaskins said and to agree with you Mr. Mayor, I would also point out, and I hate to say it
because it is more bad news, but if this happens what you get for a penny which impacts the
calculations that we do for you for the CIP, drops under this scenario. That means the cost of your
CIP program just went up.
Mayor Foxx said okay Greg we are going to take the microphone from you buddy.
Mr. Gaskins said I’m just the messenger.
Budget Director, Randy Harrington said there is one piece of news that might be good to hear
from the standpoint of the appeals process, we’ve known that has been in the pipeline for the last
year to two years and during that time staff has been setting aside the potential for those appeals
refunds and so we have been doing that over the last three years and we have in the range of about
$11 million set aside for the purpose of the appeals process. Staff has been thinking about this for
the last couple of years and we’ve been trying to anticipate, trying to prepare for the what ifs. I
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March 20, 2013
Budget Workshop
don’t want you to get the impression that we haven’t been thinking about it because we have, the
Budget staff and the Finance staff in concert.
III. General CIP Committee Referral Report Outs
Interim City Manager, Julie Burch said to kick this off I would like to have Randy quickly walk
through the material that we have distributed to you today so you can get a feel for what you have
in front of you and then we will proceed to the Committee Report Outs.
Mayor Foxx said I understand Mr. Howard has an obligation at 4:00 so what I was thinking is if we
could get the Budget Committee to get through theirs and then get through Transportation that
would work.
Budget Director, Randy Harrington said you have a handout which includes all of the
Committee Report Outs that the various Committee Chairs will be going through. I wanted to make
sure you were aware of that. It does have a table of contents on the front to help guide you through
those particular projects. Another thing I will point out, in your CIP material we do have quite a bit
of material in there for you and I just wanted to highlight what is in there just for your awareness.
On Page 9 is a Table of Contents for this particular content and on Page 13 we have the Mayor’s
referral that lists the projects by Committee. Page 15 provides a copy of the original layout of the
proposed CIP. On the following couple pages I wanted to note, one of the things we messaged in
the fall was that in the spring time we have to relook at any of the projects that fall in that first cycle
that were pushed up so to speak and the original plan as you recall, was to have the bonds in 2012,
they were pushed out into 2013 we would have some cost escalation impacts for those projects in
that first cycle. Staff has gone back and looked at that and we have provided that information to
you in your packet starting on Page 17. There are 8 projects that would be impacted, some road
projects as well as some of the Public Safety facility projects and these cost escalations are based
off of construction price indexes that we’ve used to estimate materials costs for these types of
projects.
Councilmember Cannon said you mentioned the piece about the construction escalation in there. It
is my understanding from the construction industry that on April 1 of this year construction costs
will double. Have you factored that number in?
Mr. Harrington said Jeb Blackwell may be able to comment more on that piece.
City Engineer, Jeb Blackwell said when you say costs doubling we have not seen any indication
that costs would go up at that level.
Mr. Cannon said have you gotten any level of indication about costs increasing at all on April 1st?
Mr. Blackwell said yes we have. We have a number of indexes that track that. The costs of course
are driven by two factors, one is local market which gets the labor and that sort of thing which is a
large portion of our costs and of course materials tend to be more globally driven now when asphalt
prices rise with the oil market just like your gas prices when gas goes up by $1, 25% there is a
similar costs to asphalt. Concrete and steel seems to be globally driven so we have looked at those
indexes and made our best estimation of what those costs increases will be.
Mr. Cannon said so your guestimate is going to be in what we are going to be talking about this day
in terms of future numbers, correct?
Mr. Blackwell said yes.
Mr. Harrington said on Page 19, this provides a revised listing of the projects and the peach
coloring you see on the sheet reflects those projects that would experience an escalation factor and
that total escalation factor equates to about $14 million which would take the proposed CIP from
$926.4 million to $939.7 million. Moving on in the packet on Page 21 the Transportation and
Planning Committee, as well as the Economic Development Committee reviewed potential
economic impacts of the projects and Michael Gallis and Associates participated and provide a
review on that analysis. We do have a report that outlines the projected impacts. One of the things
you will notice on Page 24 at the top, there is a table that outlines the total economic and market
impact projected at about $2.2 billion with the proposed CIP and the support of close to 18,500
jobs. Mr. Gallis is here today and can help answer any questions if you have any, but we do not
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have him scheduled for a presentation. That is it for the overview and I will turn it back to the
Mayor and the Committee Chairs to provide the report.
Mayor Foxx said I think we all know each pretty well and folks can just get up in the order they are
supposed to and I think Mr. Barnes, Chair of the Budget Committee is first and we appreciate your
work.
Budget Committee – Councilmember Barnes Chair.
Councilmember Barnes said I want to begin by thanking the members of the Budget Committee,
Vice Chair Andy Dulin, members LaWana Mayfield, Claire Fallon and Patsy Kinsey for their
participation and leadership on the Committee. We have spent a good bit of time trying to be
respectful of the instructions given to us by the full Council and going through our work efficiently.
I believe we’ve done that and if you will join me on Page 65 of today’s packet you will see the two
projects that I’m going to be speaking to very briefly. We were charged with the responsibility of
reviewing the Northeast Facility and the Sweden Road Facility, which is a total of $30 million in
the CIP. The Sweden Road Facility is a replacement project and the Northeast Facility is an
improvement upgrade and a new facility being added. The Sweden Road Facility is a little over $21
million and the Northeast Facility is a little over $8 million. With the change added on at the end it
is about $30 million for the two. The Sweden Road Facility will replace the oldest facility in the
City’s catalog of facilities for vehicle maintenance and the Northeast Facility will be built on land
currently owned by the City and it will be built among other City projects or City facilities and will
help reduce the cost of operations and provide for greater efficiencies with respect to City functions
and operations. The Sweden Road Facility will actually open up land for development for the South
Corridor Line of the Blue Line so there are many positive aspects to the two facilities and the
Committee unanimously recommended that the Council include the two facilities in its CIP. I’ll be
happy to take any questions that the Mayor or Council may have.
Mr. Harrington said one piece I forgot to mention in your packet is that we do have all the
Committee presentations and reports that the Committee has received. Mr. Barnes had referenced a
presentation from Budget Committee but all the other Committee presentations are in the packet as
well.
Mayor Foxx said those projects were voted out favorably by the Budget Committee.
Transportation and Planning Committee – Councilmember Howard Chair
Councilmember Howard said I would like to thank my Committee as well, the Transportation and
Planning Committee made up of Vice Chair Barnes, Mr. Cooksey, Ms. Kinsey and Mr. Autry. You
charged us with looking at a number of projects as well so if you look at the packet that was
provided for at the table it is Page 23. If you look at the notebook it actually starts on Page 131. We
were charged to look at the 26-mile Cross Charlotte Trail, the improvements along the Northeast
Corridor, the road infrastructure projects, sidewalk and pedestrian safety projects as well as the
traffic control and bridge projects. All total those projects added up to $316 million of the number
with an economic benefit of well over $1 billion in synergy and economic development benefits,
and a total of about 6,900 jobs as a result of those investments.
We actually started looking at these projects back in January and we had five meetings since then
where we went through each project. There are a total of 13 projects and staff gave us a great
presentation and we heard some of the same numbers from Mr. Gallis about what he thought we
would benefit from these projects and we also took the time in our last meeting, just yesterday, to
look at alternative funding sources and learned a lot about how TIFFs, STIFs, didn’t even know
that was one, but that is the synthetic TIF as well as STE and the SAD districts, how they all work
together. I think if we had some more time we could probably figure out how to apply some of
those but given the timeframe I think we decided not to mess with those right now, but it was good
information. After looking at all of the projects the Committee did recommend all the projects to
Council to be included in the CIP and my support on this is Mr. Hall and Mr. Hall wanted to make
sure we covered everything.
Mayor Foxx said these were all voted out favorably by the Transportation and Planning Committee.
Mr. Howard said we took some time to look at whether or not we could use the TIFs, SADs, STIFs
and all those things to make a difference and I think given some time we probably could have
lowered that number but each one of them had his own hair. Some required us to go to the state and
some required us to go after votes from the citizens or people on corridors. I think given the
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timeframe and what we needed for the CIP we decided not to do that at this time, but they are
methods that we should be looking at for other projects in the future I think.
Mayor Foxx said so they were voted favorably.
Mr. Howard said yes.
Mayor Foxx said this is a good time to ask questions because you all asked for a deep dive into
these projects.
Councilmember Cooksey said I stand to be corrected by minutes but in the committee votes that I
made I was voting basically to confirm that projects had been reviewed and to submit them to
Council for additional consideration for the entire CIP because it is only the entire Council that can
determine what projects would go into it. I don’t want to be later labeled as being favorable and
then change my mind. I just thought that the committees that I was in looked at these and after we
examined them that we had done what out charge was and then we would send them back to
Council for consideration on how to put a CIP together.
Mayor Foxx said I understand what you are saying but let me share with you, having set through
this. Did you ever see the movie Misery?
Mr. Cooksey said actually I have not.
Mayor Foxx said having set through this for a while there has been an absence of input by this
Council on the budget and so the whole idea of sending this out to Committee was to get feedback,
input, cut whatever recommend it back to the full Council. I’m interpreting the votes of the
committees as votes that these items should be recommended back to us by the City Manager. I’m
just telling you the way I’m interpreting these votes. That is what I ask you all to do and you all are
doing it.
Community Safety – Councilmember Cannon Chair
Councilmember Cannon said Mr. Mayor you know one of the questions you happened to ask early
on was how do we define our future. One of the things we believe in Community Safety is one way
to define this is making sure we are adhering to the needs of our community relative to public
safety, making sure that our houses of worship, making sure that our area businesses and most
importantly our neighborhoods are safe guarded and protected accordingly. Additionally what I like
to always do is to try to make sure that I’m inclusive, trying to make sure that everybody has a
chance to participate along the way. We’ve done so in Washington and we will hopefully try to do
that again today and all of us come on a level of hopefully being able to move us forward. There
were three areas that we had areas of concentration in relative to the budget. One was our Joint
Communication Center, the second would have been Police Divisions and then of course the third
would have been land purchase for future stations, that is fire stations, and what I would like to do
is to have members of our committee who have been kind enough to say they wanted to participate
in this exercise, to come up and sort of walk you through what the benefits are to each one of these
particular areas. On the Joint Communication Center I would like to call on Councilmember
Pickering to go over this with you. Keep in mind this Joint Communication Center originally was
$64 million. That is an old number so that number will change largely in part because there was not
a motion to move forward on a motion of course that did pass relative to a CIP, but we could not
agree on that so hopefully we will come back to it.
Councilmember Pickering said on the Joint Communication Center, I’ll just mention it briefly as I
think the Council is familiar with it, and it really is exactly what it sounds like. It is an opportunity
for the Police Department, Fire Department to come together and share a communications center
and that would allow them both to share space, technology and resources thereby holding down
costs and improving efficiencies. I would submit that one of the most important efficiencies that
would be seen is in the response time to citizens when they call in for service. As many of you
know when a citizen calls in for service they are asked what type of an emergency is it, is it Police,
Fire or medic and at that point the call is transferred to the appropriate agency. Under a joint
communication center that call would no longer have to be transferred. The initial call taker or
dispatcher would be able to take all of the information right then and there and feed it to the
appropriate agency so instead of two people handling a call we now have one person handling a
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call. That reduces response times to our citizens which of course goes to the issue of possibly
saving lives. We are told that that could possibly reduce the response time from 60 seconds to a
minute and a half per call. That is important. So in addition to that Police and Fire would share and
standardize 911 communication equipment and training. There is also the potential of adding
additional agencies, 311, C-DOT Traffic Center, Mecklenburg Sheriff, etc. Also the emergency
operation center would become a central hub here. It is currently housed in a classroom which
apparently is not adequate for a city of our size and I am particularly concerned about this and I’m
sure you all are, as we continue to see severe weather, it is important that we have an emergency
operations center operating at its maximum efficiency. Lastly we believe that this would promote
revitalization of that neighborhood with economic development as well and just gives the
perception of enhanced safety and the committee unanimously voted this project forward.
Mayor Foxx said the Joint Communication Center, you know that has been lampooned in some
corners, but it is a very vital project and I think everyone on this body has supported that in the
various iterations of budgets that I’ve seen.
Mr. Cannon said I think it has already been highlighted in our write-up that we can see at least what
has been estimated by staff to be at least a $4 million jump that is going north in terms of costs
now. The difference a year makes is what we see in that.
Next will be Committee member Councilmember Dulin and he and Councilmember Barnes will
double team benefits of the Police Department Division Offices.
Councilmember Dulin said Mr. Cannon asked me to bring you guys up to speed on the Police
Stations and their development. Those of us who have been around a while, when I got on Council
in 2005 and I said why are the Police Stations down in a hole somewhere, the former Police Chief
said cheap rent. With Chief Monroe who I think has done our community a fine job, he said that is
a problem we can fix. He has been along with Council and our backing on this crusade to get these
Police Stations up where folks can see them. I want to give you a little bit of an update on that and
I’m pleased with the work that our Council and our staff has done trying to get us to this point.
Currently we have five of the new style Police Stations in our community, Sugar Creek and North
Tryon Division, Metro Division which opened in 2009 on Beatties Ford Road, I’m very proud of
that and I’m sure we all are. The Providence Division opened in 2011 in Ms. Kinsey’s District. The
Steele Creek Division in Ms. Mayfield’s District and under construction and soon to be on Central
Avenue, the Eastway Division, also in Ms. Kinsey’s District. As we know these Divisions, they are
deliberate as to where we put them. The Division Offices are highly visible, they are accessible to
not only the citizens in the community but citizens throughout our region, including us. We know
where they are, we can see them and pedestrians can see them, and they are indeed transparent to
the communities of which we all serve and I’m proud of them. The Division Offices offers space
for community meetings, they are in fact an additional community asset. At the Providence
Division, the Grier Heights Community loves going there, we have a nice meeting space for them,
we have meeting rooms, we have a Board room so these Police Stations, although costly and the
cost will rise but we are not near done. The cost rise on everything in our community and we need
to keep that out front too, but they are indeed money well spent and if safety is our job number 1,
then this is a job worth doing and moving forward. Lastly, these offices are standardized, they have
standard floor plans and obviously, there is some engineering and some architectural expense with
them but we are dealing with a template that tends to work and we tweak it a little bit for each
neighborhood. Mr. Chairman, thank you for letting me give the report.
Mr. Cannon said Councilmember Barnes will report on the Divisions in terms of where they are
located in terms of the City owned facilities report.
Mr. Barnes said I would share with my good friend Mr. Dulin that I believe you have borrowed
from my notes and stolen my thunder.
Mr. Dulin said Mr. Barnes we’ve been sitting in the same class all these years.
Mr. Barnes said let’s talk about some great things and it goes back to the Metro Division and the
improvements that division office has created in the surrounding community, Washington Heights,
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Lincoln Heights and the surrounding area and that has essentially become the template for what we
are trying to do. The Steele Creek Division Office, I believe will have the same impact, the
Providence Division Office has had a very positive impact on Grier Heights. I think that the
Westover Division will have a great impact on that corridor because it will allows us to combine in
a more efficient space of City services. What we are hoping is that when you take a situation like
the Hickory Grove Office, which is in what looks like a warehouse and put that into a free standing
facility it invites the community in. It becomes a place that the community can identify as a
resource, as a safe place to be. I’ll give you a couple of good examples of why we need to move
forward with the six Police Division Offices. The North Division Office is hidden in an office park,
the University City Office is literally hidden in an office park and the North Tryon Office is in the
Sugar Creek Service Center so it is shared with the Library. They share space with the County
Library but the fact of the matter is once we are able to build these free standing facilities it literally
has the effect of creating more efficiency from the Police perspective in terms of officers being able
to do their jobs, but it also bridges a gap that exists between CMPD and the community at large.
The Committee fully recommended these projects for inclusion in the CIP by the full Council. If I
might take one second to mention something about the Joint Communication Center that Ms.
Pickering talked about, one of the things we discussed at some level during the Committee
meetings was the fact that that Joint Communication Center combined with the new Fire
Department Headquarters could have a very much a catalytic effect on the Graham Street and
Statesville Avenue Corridors and if you combine that with the applied innovation corridor it has the
ability to transform parts of Mr. Mitchell’s District, Ms. Kinsey’s District and eventually head up
north into mine so in terms of looking at the CIP and these parts of the CIP, the Public Safety piece
as having a catalytic change effect I think they do and obviously the 12 of us have dug down into it
much more into it than the community has and our staff has as well, but there is some really good
things contained within these projects in terms of how they could improve Charlotte.
I do want to add that we will see approximately a 4% escalation of costs as a result of the delays
from last year and obviously the longer we wait the greater the escalation so hopefully we can
figure out to move forward. There were six Police Division Offices in the CIP so that we are trying
to get out to the community.
Mr. Cannon said once again they were voted out and one of the unfortunate things as you talk about
having inadequate space right now in some of these Police Divisions, it is not too farfetched to be
able to see someone who has been apprehended for something be in the same space being
questioned by one of our citizens that lives in and around the area where they come in just to have a
conversation about what is happening in the community. It is not a proper setting for our citizens to
be in. We need more adequate space than what is out there and in some cases you have settings for
classrooms and we can do better than that and we do recognize and realize that yes, we are talking
about potentially a million dollar bunk but what is more these days, ones safety of how much it is
going to cost us and right now we know that safety is priority number one. Relative to the next
item, this also has been voted out. This will be the benefits of land purchase for future Fire Stations.
Chief Hannah is represented here today and I also want to also acknowledge Chief Monroe who has
joined us. Councilmember Fallon will speak on this subject matter.
Councilmember Fallon said I don’t know if you were as surprised as I was, I knew we had about
750,000 people and I knew we would be getting more when one of the latest statistics indicates we
have almost a million people here. Consequently, the Fire Department and Emergency Services
have many more calls than normally we would have expected them to have, therefore we need to
build more fire stations. We need to have emergency resources for disasters, we need to purchase
land now when it is empty and at a lost cost. We can’t wait to purchase it when the costs go up and
as you know there is more building going on and people are purchasing land again. The purchases
benefit the City because they are catalyst for economic development. Things grow up, housing
grows up around fire station, stores and other things that the community needs. Our land purchase
shows that we have a commitment for doing what is right for the citizens of Charlotte and that is
providing the services that are one of our main services to provide which is fire, police and
infrastructure.
Mr. Cannon said are they are any questions on the issues surrounding future land sites for fire. By
the way these opportunities currently exists for us to be able to go out there and secure them if we
so desire. As stated we want to make sure we are getting out there and taking advantage of the
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market place right now in terms of costs rather than continuing to delay it. Anything we can do to
continue this exercise in moving forward would be great.
Mayor Foxx said has there been some thought to – we’ve got a pending resolution with the City
and the County on consolidating among other things Medic and Fire. With the Joint
Communication Center, has there been thought been given to the capacity of that Joint
Communication Center to house Medic if in fact at some point in the future co-locating that service
was a part of the plan?
Mr. Cannon said there actually have been several other departments that have been talked about
coming into that local. We are talking about 311, C-DOT Traffic Center, Mecklenburg Sheriff,
even a data center facility and so the question becomes and we had this conversation in Committee,
is there even share a cost along the way if the County may be also participating in that. Something
that could help us lower our costs in there as well. Not only are we sharing joint resources, but we
are also sharing the expense for that particular facility. It is still out there in terms if we decide to
do the Medic piece or not. As you know we continue to work on that and your office has been
engaged and trying to help us see what we can do with regard to it. We will continue to move in
that direction if at all possible.
Mr. Dulin said there is a piece of property behind the Joint Communication Center that I believe
and Chief Monroe or Hannah could tell me, we have it under option now or do we own it already?
We own it so we’ve got property behind our new Joint Communication Center that can be used for
such a facility. We have the big question of costs and I think Chief Hannah has got something.
Mr. Cannon said the footprint of the building, square footage wise, the capacity is there. We could
house a lot of things there so that is not a question. We can certainly do it and are ready, willing
and able, we just need to move forward on the opportunity.
Mr. Dulin said the future of that has been a part of our conversation in Committee.
Economic Development Committee – Councilmember Mitchell Chair thank you for the
opportunity to report out the Economic Development Committee work. Councilmember Cannon
serves as Vice Chair, David Howard, LaWana Mayfield and Warren Cooksey make up the
Committee. What really makes our work so important is the work that staff prepares for us and I
have to thank Ron Kimble, Brad Richardson and Pat Mumford and their whole team for allowing
us to get through so many workload items this year. Every time Council referred something to
Economic Development I look over at Ron and either Ron kind of stresses out or he will say we
can do it. I thank staff for their great work and making our job a little easier.
If you would join me on Page 83 of the big notebook at the beginning of Economic Development.
What I’m going to take you through is what Randy referred to earlier, the referral report out, first
on Page 9. Each one Council, allow me highlight two key areas. One is the total costs of the project
and more importantly just to take you back to the Council Retreat Michael Gallis report of job
creation and the total economic impact. I think from my committee’s standpoint, we really focused
on those two items, job impact and economic development. The first one is the Airport West
Corridor improvement. We referred this out and if you will drop down to the most important two
items, $942.7 million is projected for economic impact, 6,910 jobs. So as we talk about the projects
and the impacts they are going to make let’s make sure we remember those numbers.
Let’s go to our next project which Ms. Kinsey and Mr. Autry are very excited about, the Bojangles
Coliseum and Ovens Auditorium area redevelopment. A total of $25 million for that project,
however when you think about the impact, there is projection for $20 million impact and 263 jobs.
Our next project we are recommending out is the East/Southeast Corridor, $20 million funding for
that project, total economic impact $28.1 million and it will create 445 jobs. The next one and the
Committee had a lot of discussion about the Streetcar expansion project of $119 million and we
recommend that Councilmember David Howard and Jill Swain, the Mayor of Huntersville are
working on the MTC Funding Committee, we want to defer our discussion until they have the time
to look at our whole transit system including the Streetcar and then we would like to make a
recommendation after they have time to do their study. Our goal is truly once the MTC funding
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group has the time to look at all our transit projects that the Streetcar can come back to us probably
in a way that we can finance without increasing our property taxes. That is our goal.
Mayor Foxx said has there been a jobs analysis on the Streetcar?
Mr. Mitchell said we did not get that far in our committee.
Mayor Foxx said Mr. Gallis have you done a jobs analysis on the Streetcar?
Michael Gallis said no, our analysis didn’t include the Streetcar. We thought that would be done
by another group.
Mayor Foxx said did another group do a jobs analysis?
Budget Director, Randy Herrington said as part of the review, the BAE Study that was done a
few years ago, that is being updated right now and is being finalized and would come back to the
ED Committee. That particular report won’t have jobs in it, it will just have the development and
commercial and residential growth in the corridor but not a jobs analysis.
Mayor Foxx said well I’ve had a jobs analysis done of it and out of all the projects in the CIP it
creates the most jobs and if part of this is about creating jobs then we need to do the things that are
going to create jobs. Another question I’ve asked the Economic Development Committee and I’m
sure you all haven’t gotten to it yet, but I want to make sure it doesn’t fall off the table Mr.
Mitchell, is that if we didn’t do the Streetcar does anybody have an idea how we are going to help
revitalize Central Avenue and Beatties Ford Road. If the answer is nothing that is unacceptable.
These communities have toiled and worked and paid for infrastructure for every part of this City
and it is time that we figure out some strategy to create jobs, opportunity, revitalization and growth
in these areas. When I get asked questions about my support of this project, my question back to
people when they ask me why do you support this, well what solutions do you have? I would like to
see if there is another answer to that question.
Mr. Cannon said one of the other things that we did not talk about in Committee because we didn’t
get a chance to and by the way as we talk about defining the jobs that it will create, which I’m
hopeful that it will create, I want to find out if we are talking about construction jobs only or if it is
construction jobs and then something else in addition to that which is what I’m hopeful that it will
show. My primary interest is hoping that Councilmember Howard and/or the MTC will find a
proper revenue source for us to be able to utilize which would then in turn allow us to hopefully
build this project from the outside in rather than the inside out. If the idea is go and create balance
in this community that we are talking about in some of our fragile and threatened areas why then
would be starting in a stable area in the midst of uptown? Why wouldn’t we be starting it out at
least by LaSalle Street, but if you find a proper funding source through the MTC then you don’t
have to worry about that costs per se because now you have a designated revenue source that will
allow us to build out as far as Rosa Parks if we needed to, but if we wanted to be conscious about
the dollar we could go as far as the House of Prayer or LaSalle Street which gets us to really the
point of where commercial is on Beatties Ford Road to allow people to be able to take advantage of
riding out to that area or from that area back into the City of Charlotte and to connect further. I’m
of the position to say that I hope that if we are able to move this forward and we find a proper
funding source I’m all about the jobs and I think we all are, that is just a given, but it is more
important to me that we work to do something from the outside in rather than the inside out.
Now the other piece, if we can’t – let’s say we didn’t do the Streetcar to the Mayor’s question, what
else is there? How else do get there? When I was a District Rep for District 3 we instituted
something called the Westside Strategy Plan. It had to cover a series of different things from
housing to transportation to public safety to economic development. It was about job creation, it
was about business development and at some point it got to be a good thing about even business
retention, well not so much that because we were trying to create, but the environment and even
land use was some of the other subject matters. I don’t see why this Council could not find a way to
come up with a Beatties Ford Road Strategy Plan centered only around economic development. I
don’t see why we couldn’t find a way to come up with funding for Central Avenue Strategy Plan
solely for economic development. In the past what we did when the Westside Strategy Plan came
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you all know that the Eastside Strategy Plan came as a result of the Westside Strategy Plan but that
was concentrated more on infrastructure and not economic development. There wasn’t a great
concentration there to be able to help us with that. It is my hope that – those are some what ifs that
we could be talking about around this table to create opportunity that is actually less in costs than
what we are talking about with the Streetcar. I don’t see the Streetcar as a catalyst, I see it as an
amenity but it helps, it works if we do it the right way. I think there is some way to potentially get
there, I don’t know if we’ve talked about it all.
Mayor Foxx said let me go back on this because you made some very important points. This whole
budget is an economic strategy plan. That was the whole genesis of it. Recognizing that we have
parts of this community that are underperforming from a revenue standpoint but across a range of
issues underperforming in terms of job creation, underperforming in terms of quality of life, across
a range of things so the whole plan has been built off of a desire to see these areas become more
robust and more economically viable. That is what we should want for all parts of our City. No
neighborhood ought to be stuck with a bunch of crime and no neighborhood ought to be stuck with
a bunch of folks that can’t find good opportunities etc. To your point about how the thing was built,
that is an engineering question and has nothing to do with the funding. So either the money is there
to fund it or it is not there, regardless of whether it is built from the outside in or the inside out or
upside down or right side up. The problem we’ve had is that we haven’t been able to find a way to
get the funding done. Again, I’m all for strategies but we’ve been fumbling with this for a year and
what I’m concerned about quite frankly is that we are about to set in motion potentially an 8-year
budget and once you pull the trigger on an 8-year budget you don’t get many chances to amend it.
If you carve these corridors out you are probably out. If you carve them in, I heard about a 40/40/40
Plan, carve them in with undefined spending I don’t think that is a good solution either. There is a
lot of work that needs to get done on this and I’m only raising this because I don’t want the
Economic Development Committee not to wrestle with what other options might there be to see
revitalization happening in these areas. My guess is that the answers aren’t going to be very
plentiful. To me this is just like what happened in Ballantyne and Warren will probably give me a
history lesson on Ballantyne but the City has always helped to put infrastructure in places and that
infrastructure has resulted in private sector investments that have help build this community. That
is the story of Charlotte and it just amazes me that when it happens to be in the east and west
corridors of our City it becomes controversial.
Ms. Pickering said I couldn’t agree with you more, you and also what Mr. Cannon mentioned. We
discussed this at the Retreat a bit. Our priority absolutely is to revitalize the Beatties Ford Road
Corridor, east side, there is no question about it. Your question is what else could we do. That is a
question I raised at the Retreat, what about public/private partnership fund for that eastside
corridor? We have some money for the eastside now but there is not that much. I think we all
agreed on this and this is the question of the moment. The question is how do we revitalize those
corridors, how do we fund it, how can we do without raising property tax? That is the question at
hand and I agree with you and I think there has got to be a way that we can do this, something we
can do now in this budget. We have to do something now, we cannot wait.
Mayor Foxx said let me tell you something. Ms. Pickering if we can figure out a way to do it
without raising property taxes I am all for it. All in two feet. Not to interrupt you but I want you to
be discerning about what you are saying because there is also a piece of this – let’s say we did
everything in here but figure out east/west Charlotte. Are you saying that every other place is worth
the investment but that place? I’m just saying my point is that is how it could be read within a
certain perspective. I don’t think that is what you are saying, but what I’m saying to you is that we
have to defend the decisions that we make and if we make a decision to invest in North Tryon
Street, invest in Independence Boulevard, invest in wherever, but we made a conscious decision to
say on these places hmm. I just don’t understand that.
Ms. Pickering said I appreciate that. I’m saying exactly the opposite. I’m saying I want to invest
now into those corridors. Now, how can we do it? The Streetcar may be one way. It is 18 years
before it gets all the way out Beatties Ford Road. I’m not willing to wait 18 years. 18 years, some
folks aren’t aware of that. It is 18 years before it is fully built out to Beatties Ford Road. We cannot
wait, we have to do something now.
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Mayor Foxx said are you saying that if we did this 2 ½ mile stretch it would be 18 years before that
got built?
Ms. Pickering said I’m saying it is 18 years before the Streetcar is fully built out to Beatties Ford
Road Corridor which is the corridor I am most concerned about because as you said in the past it
hasn’t changed in over 20 years.
Mayor Foxx said but you agree that if we made a decision today it wouldn’t be 18 years before that
piece would get built out?
Ms. Pickering said West Trade is what is in the budget, not Beatties Ford Road.
Mayor Foxx said let me back up. I actually disagree with you on this point. I don’t think it will ever
get built because right now the sales tax is empty. There is nothing and that is what the Committee
that Mr. Cannon was referencing is taking a look at, how do we refurbish our funding scenarios for
our transit system, not just the Streetcar, but the Red Line, the Southeast Corridor, all of it, but the
problem we have is that there is no money to do anything beyond the Blue Line Extension, which is
the most important project by the way Mr. Barnes that we have on our plate right now. I don’t think
we are talking about 18 years. I think we are potentially talking about never.
Ms. Pickering said but what are we going to do now? That is my questions.
Mayor Foxx said we voted in 2006 to put a Police Station on Beatties Ford Road. How long did it
take Mr. Mitchell?
Mr. Mitchell said from 1999 to 2006.
Mayor Foxx said and once we pulled the trigger on it, it got built when?
Mr. Mitchell said it took about 19 months to build it.
Mayor Foxx said Mr. Cooksey has road projects in the Ballantyne area that were voted on when,
2007?
Mr. Cooksey said well, it depends on which bond they were going to be on and then got postponed.
Mayor Foxx said they got put on the bonds, they passed but you still don’t have the road projects.
So my point is that from the time we make a decision it can be years before projects can get done,
but if we don’t make the decision the project never gets done.
Ms. Pickering said we know for sure it will be 18 years before it is fully built out to Rosa Parks.
Mayor Foxx said no we don’t.
Ms. Pickering said how do we not know that?
Mayor Foxx said because there is no money.
Ms. Pickering said if we pass this budget which did the West Trade piece now and the next budget
we’d have to –
Mayor Foxx said there is no money.
Ms. Pickering said even if we voted for the Streetcar now what are we going to do for that corridor
right now?
Mr. Cooksey said the brief history lesson is the City some infrastructure to Ballantyne and then
annexed the infrastructure that had been built privately in Ballantyne. Then once the City took over,
for example put the Community House Bridge on its CIP and then didn’t fund it until the
Ballantyne area, Bissell Company stepped up to fund it to get tax refunds to build the infrastructure
for us. So that is the history lesson. Ballantyne is infrastructure that was annexed, not built by the
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City. The question and Mr. Cannon referenced it and Ms. Pickering referenced it, but I just want to
ask the question since you spoke about this moments ago, if the Manager’s recommendation had
passed with the 2 ½ mile $119 million Streetcar project, when would there have been rails on
Central Avenue? There is no answer. When would there have been rails on Beatties Ford Road
north of Johnson C. Smith?
Mayor Foxx said within 3 to 5 years.
Mr. Mitchell said I heard 2017 or 2018.
Mr. Cooksey said a 2 ½ mile project from Johnson C. Smith to north of the hospital in an 8-year
CIP would have rails on Central Avenue, so 8 years from last year would put it 2012 to 2020.
When would they have been built on Central Avenue and Beatties Ford Road, what years in that
CIP proposal?
Mayor Foxx said in the Manager’s recommendation? There was a 2 ½ mile stretch that was
programed in the budget but there was nothing beyond that.
Mr. Cooksey said to Ms. Pickering’s point, in the 8-year CIP proposal from the Manager last year
did 2 ½ miles on Trade Street and just north of the Hospital, but nothing on Central and nothing on
Beatties Ford Road.
Mayor Foxx said no, that is not true. It would have gone to French Street which was Beatties Ford
Road.
Mr. Cooksey said how far north from Johnson C. Smith?
Mayor Foxx said let me give you another piece of this, which is that when and if we make an
investment, probably more if than when, there is also the opportunity to package that as a Small
Start so there is an opportunity to go beyond what you have put on the table. That is an unknown
because we never got that far.
Mr. Cooksey said that is the question I want answered because what I saw from the Manager’s
presentation last year was an 8-year CIP that did 2 ½ miles of Streetcar from Johnson C. Smith to
just north of the Hospital, no rail on Central and very little rail on Beatties Ford relatively speaking.
Mayor Foxx said but here is the point. I think the point is that one of the empirical truths of transit
in general, Streetcar and light rail in particular, is that the private markets follow those investments.
I think what this was designed to do wasn’t necessarily to get to completion, it was designed to
create a catalyst where there is no catalyst. I think the goal here was to create a catalyst project, not
necessarily to get 10 miles of Streetcar but to approve the concept and to get some energy into these
corridors. I think the Committee is doing the right thing here and I totally agree that this process
that the MTC is working through ought to be done, but I’m sort of raising these points because I
don’t want us to get to a point where these corridors fall off the table when we have to make a
decision on the budget, whether it is the Streetcar or something else I think we’ve got a
responsibility to really thing about because remember we are the fastest growing metro region in
the country. In the country, and yet we are starting to see the areas of growth and opportunity
shrinking so the whole theory of this budget was to try to expand the size of the pie and if we don’t
figure these areas out I think we are going to leave ourselves not hitting the target.
Ms. Fallon said if we want to get money into those communities immediately, let’s talk about a
40/40/40 Plan. It gets money and you are saying we have the money, everything is depending on
that wherever we get it from. There is so much you can do if you put that money into a community
directly and soon because it wouldn’t be waiting for 2018 or 2020, it would get sidewalks and
lighting and I would subsidize grocery stores that they don’t have there because we subsidize
everything and its brother, why not the grocery store and give those people a chance to have decent
stores. It creates jobs, you have decent roads. Go on Beatties Ford Road on those little side streets,
there are beautiful little houses there, that could also be revitalized but they need sidewalks on the
side streets, they need lighting on the side streets, they need a lot of other things that $40 million in
each community would make the difference on.
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Mayor Foxx said I didn’t mean to get us way off on the ramp here, but let’s get Ms. Mayfield and
then close this out and keep moving.
Councilmember Mayfield said what I heard you say when mentioning the plan that Ms. Fallon just
mentioned, that idea of dropping $40 million without there being a clear goal of what that $40
million was going to be spent on, in my personal opinion is a waste. It is throwing money without
any clear direction of what that money is going to be identified for. As a member of this Committee
and as someone who has supported the entire Capital Investment Plan that included public
transportation, and still not clearly understanding how one piece of this project has been pulled out
of an entire plan that was nearly a billion dollar plan, still not really understanding that discussion,
but had a great opportunity at the Black Political Caucus meeting to answer questions and help
people realize the big picture. At the end of the day what we as the Economic Development
Committee looked at is the charge of the items that were broken up for us. Yes we agree that Mr.
Howard and Jill Swain and others through the Committee should be looking at funding sources, but
it is not an option nor is there a consideration for us not to be talking about public transportation.
I’ve also had conversations with Ms. Flowers. She and I did a tour together to Design Line which is
a local business that we have here that has finally passed the … they needed in order to have their
modes of transportation on our streets even though they have been successful in California and
other areas. The conversation is happening about how we identify multiple forms of public
transportation but it is unacceptable for anytime a discussion is being had for there ever to be a
comment that is made regarding those people nor is it acceptable at any time to speak as if this
great beyond and what they need and when comments like that are made along with the fact that it
is extremely irritating. As a member of this Council and what our role is as this body and looking at
what is the expectation of our Capital Investment Plan. What is the expectation of each Committee
report out. What we are saying these are the reports, these are the items that we are pushing forward
that we are saying as a Committee we believe that we can support right now. But there can be no
misunderstanding that we are not still looking at how we expand our options for affordable public
transportation to try to get some of these cars off the street as well as looking at what is true
economic development, how do we grow economic development and what is our role in to making
that happen today to help prepare for the future, opposed to being afraid and getting stuck and not
doing anything.
Mayor Foxx said Mr. Mitchell you’ve got a presentation to finish. You can come up at the end if
you all want to continue this.
Mr. Barnes said you started this whole thing and now you want to stop us from talking about it.
That is not right Mr. Mayor and you know that.
Mayor Foxx said I’m reclaiming the floor and I will say this. We can go right to Mr. Mitchell, we
can finish the presentations and if we want to come back to this we can come back to this.
Mr. Mitchell said the next item is Applied Innovation Corridor, a $28 million project. Potential
economic impact $151.8 million, 567 jobs. The last one is the UNCC Informatics Innovation
Partnership and our recommendation is to not include this at this particular time but allow the
UNCC staff as well as Ron Kimble and our Legal Department to continue to flush through this
partnership because there are some outstanding issues that we need to get resolved before we can
move forward. Those are our referred out items, part of economic development and I’m scared to
ask if there are any questions, but are they are any questions?
Mr. Cannon said do you think at some point we might be able to have some level of discussion in
Committee about maybe bringing Debra Campbell in and whomever else Mr. Chair to talk to us
about a Central Avenue or Beatties Ford Road Strategy Plan?
Mr. Mitchell said I think that will work fine Mr. Cannon, what I will ask is that we finish the MTC
study and let’s look at what they are doing and then that could be referral for Council to make to
the Economic Development Committee. I think we will welcome that.
Mr. Cannon said keep in mind that Economic Development Strategy Plan would have nothing to do
with the transit piece of it. It would be a separate piece by itself and would stand alone. Remember
when we had the Westside Strategy Plan, when you came in 1999 the first thing you asked me was
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March 20, 2013
Budget Workshop
where is the money. I was spending it and we were working it and by the time you came and you
wanted to set forth your charge to get some things going, there wasn’t a lot to do. If we would have
had a remainder we could have had your Police Station, but in light of that not being the case if
there could be something geared strictly, specifically for economic development, I’m not talking
about transit, I’m not talking about anything other than economic development for Central Avenue
and Beatties Ford Road, I want to know from this Council and from you if we could have that
discussion at some point.
Mr. Mitchell said I welcome that discussion.
Mayor Foxx said I think it would be good.
Mr. Cannon said it would make a difference.
Mr. Dulin said Mr. Barnes isn’t in the room anymore and I’m not done on the Streetcar
conversation. Do you want to wait until the end or do you want to do it now?
Mayor Foxx said let’s wait until the end.
Housing and Neighborhood Development - Councilmember Kinsey Chair said well we are
going to spend your money, but as good citizens of this community we should be caring for those
about those who are less fortunate so I’m going to be reporting out on the Affordable Housing
Programs and I want to recognize and thank the Committee. LaWana Mayfield is our Co-Chair and
then we have the ABCs, Autry, Barnes and Cooksey. Also at my back I have Pam Wideman, Pat
Mumford, Eric Campbell and Julie Burch and I do appreciate the work they have done on this
report. On Page 19 of the report that was handed out today, you will see of this and then the big
report is on Page 105. The first project that we are recommending is a housing locational policy
land acquisition program of $5 million. These funds would be used to support the development of
new assisted multifamily housing in permissible areas, that is in accord with the locational policy,
as defined in the revised policy. The second item is the tax credits set aside program and that is $16
million. Funds would be made available to developers receiving a North Carolina Low Income Tax
Credit award from the North Carolina Housing Finance Agency for the construction of new or
rehabbed multifamily housing serving households earning 60% and that would be $39,100 for a
family of four, or less of the area medium income. The third item is supportive service program and
that is $12 million. These funds would be made available to developers for developments that
further the goals of the ten-year plan to end and prevent homelessness. Developments may include
a variety of service and support such as case management, domestic violence, legal, life skills
assessments and you can see the rest there in front of you.
The next item is Incentive Based Inclusionary Housing Programs and that is an $8.1 million item.
We just passed that recently. Funds would be made available to developers to encourage the
development of affordable housing by the private sector. Next is the Single Family
Foreclosure/Blighted Acquisition and Rehab Program. That is $6 million and funds would be made
available to developers or homeowners to acquire or to rehab and reuse foreclosed and blighted
single family properties to expand the supply of affordable housing in targeted areas throughout the
City. The last in the housing category would be Multifamily Rehab and Acquisition Program at $12
million. These funds would be made available to developers and multifamily owners to acquire and
renovate housing units in areas of the City where there are high vacancy rates, making all or a
portion of the development available for the provision of affordable housing. As you see the
proposed affordable housing CIP is designed to address the continuum of housing from
homelessness to maintaining home ownership. It is designed to address the need for geographical
dispersion and the rehab of existing single and multifamily units that are or may be used to expand
and increase the supply of affordable housing.
The proposed Affordable Housing CIP is designed to continue the creation on mixed income
communities which we have found work very well. On March 18th the Housing and Neighborhood
Development Committee unanimously voted to recommend the $60 million Affordable Housing
Program for inclusion in the recommended CIP. We also considered the general CIP projects
referring to Housing and Neighborhood Development Committee. Our staff is wonderful at coming
up with acronyms so this is CNIP. The first project is Prosperity Village at $30 million and that is
designed to capture the I-485 development interest and many of these are designed to capture
things like that also the value of parks and greenways and in areas of Transportation. The second
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March 20, 2013
Budget Workshop
area is the Central/Eastland/Albemarle area and that is a $20 million project. That is to expand the
momentum from close-in neighborhoods revitalization and to develop new neighborhood shopping
districts. The third is Whitehall/Ayrsley at $30 million and this is to capture the values of natural
amenities in the greenway and river as well as other items. Then the Sunset/Beatties Ford Road
area at $20 million and in addition to capturing the value of parks and greenways it would support
the project LIFT communities. The last is the West Trade/Rozzells Ferry Road area at $20 million
and that supports the Johnson C. Smith area transformation and the Project LIFT Communities as
well as some other items.
This Comprehensive Neighborhood Improvement Program or as I said CNIT is a new approach and
combines the City’s current neighborhood improvement program and business corridor
revitalization program allowing us to comprehensively address community needs. The City’s
existing area plans are the foundation for this work. While there is no established methodology for
estimating the potential amount of increased property value that will be gained from CNIP
investments we have seen that work done through the current neighborhood improvement program
and business corridor program have changed the outcome in communities and result in a higher
than average return on the investments. On January 23, 2013 the HAND Committee unanimously
voted to recommend the comprehensive neighborhood improvement program for inclusion in the
recommended CIP.
Mr. Dulin said do you happen to have a tally Ms. Kinsey from Committee or staff about the total
millions of dollars spent because what you just mentioned is all spread out, but those millions out
the Beatties Ford Road corridor and the Albemarle Road/Eastland Mall site. I heard those numbers
come up a lot. Johnson C. Smith was mentioned.
Ms. Kinsey said I cannot do that in my head and I do not have a calculator right here, but it is in
your report.
Mr. Dulin said the numbers are here I just wanted to know of the $60 million, $30 was going to be
spend down Beatties Ford and $30 million in Eastland Mall. Randy do you have any idea about that
calculation?
Mr. Harrington said I don’t off the top of my head and I’m looking at Pat Mumford and he is
shaking his head. Anything to add Pat?
Mr. Mumford said if you are asking about the $60 million affordable housing, no we do not have
locations for those projects.
Mr. Dulin said we do have pinpointed X amount of monies that we want to spend in those, for
instance you just mentioned $20 million to help the service area of Project LIFT. In fact we are
planning, if we can get it funded to spend money in those corridors.
Ms. Kinsey said this is really a continuation of what we’ve done in the past Neighborhood
Improvement Projects and Corridor Projects so this isn’t something necessarily new. It is a new
concept by blending those two programs.
Mayor Foxx said Ms. Kinsey I just want to say I got a chance to attend your Committee meeting
and you actually were not there. The conversation and level of intricacy of this work is very, very
complex and I want to thank you and the Committee for putting your shoulders to the wheel.
Ms. Kinsey said thank you, the longer I’m working with this the more I realize number one how
important it is, but number two how difficult it is. It is not an easy task and sometimes it is a little
overwhelming, knowing the need, but also then knowing the resources.
Mayor Foxx said that is the last report. Mr. Dulin do you want to jump in, or Mr. Barnes do you
want to jump in?
Mr. Dulin said I have notes on that somewhere but I’m going to let my heart do my speaking rather
than my notes.
Mayor Foxx said that is always the best way.
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March 20, 2013
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Mr. Dulin said Mr. Mitchell reported out that the Streetcar had been pulled from their
recommendation today for the MTC Study to happen and I did make a little note on the edge of my
paper, said on hold for now. I was prepared to let that go today and be on hold, then the
conversation started up. It started with the Mayor and then it bounced around a little bit and it got
personal again and I need to remind this Council that the Streetcar, we have spent hours and hours
and hours on it, and the staff thousands of hours. It remains today to be the dividing line that
divides this otherwise gentile Council. There was a plan last year that did not include the Streetcar.
It included $674 million of capital improvement around this community, many of the things we’ve
talked about today. If we had passed the darn thing last year without a tax increase we wouldn’t be
here today. We’d be working on other things and other issues. The fact is that we do spend money
in those two corridors. We are buying every building in east Charlotte that we can and we are
trying to rid areas of blight over there. We are trying to help Beatties Ford Road. We’ve just spent
millions of dollars helping Johnson C. Smith Campus and Mosaic Village. I voted for the thing and
I’m proud of that. I’m proud of other projects we’ve done there. Lord knows I have to defend it
every day, but I’m proud of the money we spent to buy Eastland Mall and the drug houses across
the street from Bojangles. I’m proud of those votes because we are helping to clean up that
wonderful neighborhood behind it. But the Streetcar is the problem, and I was prepared to let that
problem pass by me today without saying anything about it until it came up. It is going to continue
to be a problem through this budget cycle. We at your suggestion scheduled three separate Budget
Workshops in the fall to try to get ahead of it.
Mayor Foxx said let me interrupt you. It was actually at Council’s suggestion. There were several
Councilmembers who wanted to do that.
Mr. Dulin said very good. We scheduled three Budget Workshops, got nothing done in the first one
because we were talking about the Streetcar, got nothing done in the second one because we were
talking about the Streetcar and we cancelled the third one because it was too close to Christmas or
Thanksgiving.
Mayor Foxx said we actually had the third one.
Mr. Dulin said we cancelled one of them.
Mayor Foxx said no we didn’t, we postponed one of them.
Mr. Dulin said maybe you didn’t invite me to that one because you knew what I was going to say. I
just need to let everybody know that the Streetcar is still a stopper for me and it is a stopper for the
community. It is a divider of this Council when we can get work done. I know it is frustrating for
everybody in different ways around this dais. Everybody is frustrated. I go back to it being out of
line. It was brought up by Tober trying to save the light rail money in 2007 and here we are in 2013
still fighting about it. I’m going to unfortunately have to continue my advocacy against the
Streetcar now and I was planning on not saying anything today. But here we are again and it is
going to continue to divide us and I’m looking into a crystal ball saying it is going to be a bloody
budget cycle again if we have to do that of getting people to pick sides, which is what we’ve done.
Mayor Foxx said let me say in response, I think some progress has been made even today, even
though it may not look like it. I think there has been some helpful suggestions Mr. Cannon to sort
of look at some other strategies. I don’t know what they will yield but it is worth taking a look and
that is consistent with what I’ve asked the Economic Development Committee to do which is to say
if we don’t do this what can we do that will actually make an impact. In addition to that I’ve said in
response to Ms. Pickering and I’m serious, it is not a joke, that if we can find a way to decouple it
from the capital plan and figure a different way to see some progress happen on it, I’m all for it. I
really am. I don’t know that we can but I’m all for that and the final point is that there is a
difference between investing and spending money. I want to make sure people understand the
difference in my mind there. Spending money is standard operated procedure, taking a bag of
money and dropping in on the corner and saying we just did something for you. Investing is having
an actual strategy around those investments that yield more private sector activity, creates jobs and
creates revitalization and that is where I have some departure with some of the conversation. I have
friends who are actually not Democrats and one of them sat down with me and he said Streetcar is
the craziest thing, why don’t you just put $200 million into infrastructure, I’d support that. It is
actually very similar to what Ms. Fallon is saying, but the reality is that if our goal is to create jobs
and create revitalization our staff is telling us what they impression is is to what will most likely do
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Budget Workshop
that. One last response Andy, and I’ve heard this too, that the Streetcar is sort of stuck into the 2030
Plan in an effort to save the light rail. I think that is in reference to the referendum effort. Let’s
assume that that is true. Let’s assume that it was kind of laid there as kind of a straw man so to
speak just to create the kind of buy in across the community to try to keep the transit tax. I think
that is a shame. It is not the way this community ought to be run, to hang out something out there
with no intention of doing it. I hope that is not true, but I’ve heard it. That is one of the reasons why
we ought to do it.
Mr. Barnes said I had to step out abruptly to call a client by 4:30, I wasn’t storming out of the
room. I know it looked like that but I wasn’t. I did not expect to have to re-litigate the Streetcar
issue today. As I read the economic development materials you all had tabled it Mr. Mitchell and
you and I talked about it and I thought it had been tabled to some extent. But I can appreciate the
conversation about it. What I want to say though is that there are a number of reasons that a number
of people, both on this body and in the community, have concerns about the Streetcar. Some people
just don’t want it because they don’t think we should build it because they don’t think east and west
Charlotte is worth it. Some folks say that the funding methodology is problematic. I’ve been in that
camp since I have been on the Council essentially. Essentially there are arguments to be made that
the Streetcar Advisory Committee disregarded the BAE Study which never contemplated using
property taxes from my perspective to build the line. There are people who would say that
primarily building a line uptown doesn’t really help revitalize West Charlotte or East Charlotte
because it is essentially an uptown line, although I understand the connectivity with the rest of the
system. So there are a host of issues that a number of people argue about why and why not on the
Streetcar and the budget that was put together that was vetoed had a $40 million investment for
West Charlotte and we are doing work now on Beatties Ford Road and other places, the Mosaic
Village investment that Mr. Dulin mentioned. Those investments are taking place as Mr. Cannon
mentioned, he siphoned all of the money out of the Corridor fund when he was on Council to help
West Charlotte and there was $72 million in that budget from last year that included East Charlotte
that included the Bojangles investments and some other things. Mr. Dulin mentioned the $13
million we spent buying Eastland Mall, the money we spent buying hotels and motels.
The reason I raise these issues and make these points is that I want it to be clear to people that we
don’t disregard parts of Charlotte. You all know I’ve been mad about the 84 used car dealership on
North Tryon Street since I’ve been here. Ms. Kinsey and I have talked about it and we haven’t done
a thing about that. I’ve been hoping and praying but even the Blue Line won’t help that really
because of where most of them are located. That is a concern for me, we’ve never done anything
about it but I haven’t made it a class issue and all this sort of north/west east/south stuff which I
think is not helpful to what we are trying to do. I do believe that we will figure out how to do the
full transit plan. I believe in the 2030 Plan and the Streetcar is a part of that plan and as you
indicated Mr. Mayor, and as everyone knows here the funding methodology for the 2030 Plan, the
½ cent sales tax is not sufficient to build the Red Line, to build the Purple, to build the Silver. It
hopefully will help us finish the Blue Line. But we have a number of challenges that a lot of people
in the community don’t have a chance to appreciate because they don’t have a chance to dig down
into all the conversations that we all know about and we have with staff and various parts of the
community.
There are I think some solutions out there that will likely involve getting some help from Raleigh.
The problem there is that there isn’t any help, even if they say there is as they did with the Panthers,
there ultimately isn’t any and that is not helpful. So if it has to be a local option it will probably
take 20 more years because of the sufficiency of the funding sources. If we could get what we used
to have in Raleigh, which are partnership, we might have a chance to get the full 2030 Plan done. I
heard the tension here and that sort of stuff is not helpful to what we are trying to do as a body and
I know these folks showed up to kind of witness what we do and people are watching now too on
TV. I am determined to figure out how to get a budget passed without it being vetoed this year and
I hope you all are. I know all 12 of us desperately want to pass something and I remain committed
to that so hopefully it will happen and I look forward to a very, very robust presentation from Mr.
Gullet on CMUD now before I have to leave to go pick up my children.
Mayor Foxx said very well stated Mr. Barnes, let me say a couple of things in response. I really
want to see us get a budget passed too. I think everybody around this table does, even Andy wants
us to pass a budget. Even Warren wants us to pass a budget, now he may not vote for it, but he
really wants us to pass a budget. I think everybody wants to see us get this done so I think the spirit
is there to do it. The issue will become, I predict, I think the things that we’ve talked about today
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March 20, 2013
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were never controversial. The rest of this budget was never controversial. I never heard people
argue that much about the Cross County Thread Trail even though I think some people might pick
that apart, but I think it is a good project. But I think the question is what target are we trying to hit?
The neighborhood improvement investments you talked about, the $40 million, those will make a
difference and that is a substantial amount of money but I still don’t see in those investments job
creation. I don’t see substantial job creation there and that is what I’m still struggling with there. I
think the Committee has done the right thing. I think taking the time and listening to what the MTC
comes up with is the right strategy so I want to make it very clear. I also want to make it very clear
that if there is a way to do this outside of a property tax increase we ought to double down and try
to figure out how to do it, and if there is a different and better way to accomplish the goal of
creating jobs and some vitality, let’s do it, but if we go through all of that and the answer is we
can’t get there we might find ourselves right back in the same place. I think you’ve got a tough job
Mr. Mitchell, Mr. Cannon, Mr. Cooksey, Ms. Mayfield and Mr. Howard, you’ve got a tough job
figuring this out for us but for the strongest horses goes the heaviest loads. Good conversation and I
appreciate your engagement.
Ms. Burch said to wrap this up I want to ask again if the Council wishes to give the staff direction
in terms of inclusion of any projects as far as coming back to you all on the 10th of April, a listing
of those projects if you so choose along with the associated tax rate it would take to support those.
Mayor Foxx said I’m going to make a statement and if someone has an objection they can raise it.
The statement I will make is I believe that the intent of this Council is that the staff will bring back
the items that have been favorably reported out of Committee and adjust those items to a tax rate
for discussion on April 10th.
Mr. Dulin said for purposes of study, should we include the additional Joint Operations Center for
311, Medic, etc.?
Mayor Foxx said I think it is in there already. Everything that was favorably reported, anything that
was deferred will not be in there.
Mr. Dulin said we just discussed that though at the end of our report, we didn’t report it out I don’t
believe.
Mr. Cannon said yes we did as a Committee.
Mr. Burch said that is very helpful and we will follow that direction and be back on April 10th with
that information.
Mr. Barnes said I wanted to ask about the project, the UNCC Informatics.
Mr. Mitchell said you were talking to your client and the only thing we said we are going to allow
UNCC and Staff to continue to have discussion.
Mr. Barnes said I know there was this issue about the public/private purpose piece and then there
was a reference Mr. Mitchell to the fact that the investment could spin off two to three companies
per year. It seems that the issue is between public and private kind of like the Johnson C. Smith
Mosaic Village piece, not the economic value of the job creation. I thought based on the write-up
that you provide us, Pages 101 and 102, it has a tremendous economic impact potential and job
creation potential.
Mr. Mitchell said that is why we want to vote to move forward but deliberately, but let staff and
Legal work with UNCC.
The meeting was adjourned at 5:33 p.m.
____________________________________
Ashleigh Price, Deputy City Clerk
Length of Meeting: 2 Hours, 22 Minutes
Minutes Completed: April 18, 2013
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April 10, 2013
Budget Workshop
The City Council of the City of Charlotte, North Carolina convened for a Budget Workshop on
Wednesday, April 10, 2013 at 3:08 p.m. in Room 267 of the Charlotte Mecklenburg Government
Center with Mayor Anthony Foxx presiding. Councilmembers present were John Autry,
Michael Barnes, Patrick Cannon, Warren Cooksey, Andy Dulin, Claire Fallon, David Howard,
Patsy Kinsey, LaWana Mayfield, James Mitchell and Beth Pickering.
I.
Introduction
Mayor Foxx called the meeting to order at 3:08 and said we are at another point along the way in
our budget discussions. We’ve been at other points before, but we are back at the table. Today
turns out to be a pretty pivotal day. It is the day that our staff has identified as the last day for the
Council to offer its advice on what the Manager should propose back to us in the form of a
capital budget. I don’t want to go through all the steps we’ve been through, fur we have been at
this for the better part of a year and a half on the capital side of the budget. We have been
through a very hot summer, three budget retreats in the fall and we’ve had several retreats since
the fall. All pieces of the original recommendation from the previous City Manager have been
sent to Council Committees for reporting out. Those report outs were done late last month and
almost all were favorably reported out. There were two that were held back, the Informatics
proposal relative to UNC Charlotte and the Streetcar. Today I think the desired outcome is for
the Council to give some guidance to the staff on how to go forward with this recognizing that
we could today give some guidance as to what we would like to see back in the early part of
May. In addition to that one of the issues that has really created a lot of the gridlock on the
budget, the Streetcar, has been the subject of a lot of discussion and conversation.
The new City Manager, as I’ve read recently, would like to take some additional time to gather
his own thoughts about this project and digest some of the data and information that is still yet to
be produced, such as the BAE Study update, and the fact that we have an MTC Finance working
group that is studying the financing of the Transit System over all, which is as it turns out a $3
billion system if it were built today. Over the course of the 2030 cycle it would be about $4.5
billion system and that $1.5 billion difference is tough. Today I came prepared to enable the
City Manager to take the time he feels like he needs to digest what is there and to gather his
thoughts about how, if at all, that project ought to be moving forward and that our conversations
today would focus on the balance of the capital plan. I wanted you to know where I’m coming
out on that today. I will say that it is my desire that we figure out a path forward for that project,
even if the path forward for that project is a different way than inclusion in the capital investment
plan. I’ve had some conversations with the City Manager about trying to figure out whether
there is a different pathway and I hope as we go along in the summer that we get there. With that
I will turn it over to Ron Carlee and we have some exciting news I understand.
II.
General Capital Investment Plan
City Manager, Ron Carlee said I would like to begin the meeting with some good news if that
is alright. I would ask that Carolyn Flowers come forward and share with us what she learned
today.
CATS CEO, Carolyn Flowers said this morning the Department of Transportation published
the President’s budget and the recommendation for the Blue Line is $100 million which is what
we’ve signed our contract agreement for. We had been anticipating an impact of sequestration
so this definitely helps us with managing our financial plan and it is good news for us that we are
included in the budget and that we are fully funded in the budget.
Mr. Carlee said if I may continue behind that good news just to say an additional word with
regard to the Streetcar process that I’m going through. I see this actually on a parallel track with
the budget. It is not really a sequential process. The problem is that in terms of the operating
budget and the remainder of the CIP as brought forward by the Economic Development
Committee, I really have to make decisions, based on your feedback this afternoon, early next
week in order to get from the production cycle for the books, to give you a budget in May. To be
able to complete the Streetcar review within the next five days is not a feasible thing to give it
the kind of attention and creativity it needs. I will be doing this in parallel and I don’t expect to
take it through the summer by any means. I expect to be back to you before you actually vote on
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April 10, 2013
Budget Workshop
the operating budget and CIP for FY14. The VAE preliminary report has just come in, they are
doing revisions for it. The impact of the Streetcar is a critical variable that needs to be
understood and I would like time to work on that and fully understand it and also want to look at
some alternative funding mechanisms recognizing the concerns around sales tax and property tax
discussions you had previously.
The CIP which Randy is going to review with you in our next agenda item will not include either
the Streetcar or the UNCC project, the latter of which I’ve not done much work on, although I
understand it is mostly legal issues that we are dealing with on that one. I would not want the
absence of the Streetcar to be read as an elimination or a dropping of the Streetcar, but merely an
opportunity to have a chance to reanalyze it and present it with some additional information and
impacts for you.
Councilmember Mitchell said what is your timeframe for bringing it back to us?
Mr. Carlee said my hope would be to bring some material back to you in May if I could or it may
be early June, but I don’t see a necessity to drag this beyond this fiscal year in terms of a
decision making point.
Councilmember Dulin said what is the hurry in getting it back to us before a budget adoption if it
is not going to be in the budget decision that we make over the next six weeks or so?
Mr. Carlee said I actually believe I will have sufficient information and that it would
advantageous, if we have adequate data, to go ahead and wrap up the decision making on it one
way or the other so that it is not hanging over our heads. If there were any implications in the
budget you would see them up front, you would know them, understand them actually before
you voted on your operating budget or your CIP revision.
Mr. Dulin said let me work through that for the group then. We are going to work through our
budget process without discussing the Streetcar, then somewhere right before we vote you are
going to either insert the Streetcar into the budget or not insert it into the budget.
Mr. Carlee said I would probably phrase it differently, but I think that is correct. Ultimately any
action you would take on the Streetcar to fund it would be a budgetary action whether you did it
as part of the budget adoption or as a pre-adoption or a supplemental adoption.
Mr. Dulin said I disagree with that process.
Councilmember Howard said you disagree with all of it. That is not anything new.
Mr. Dulin said I’ve got the floor Mr. Howard.
Mr. Howard said I would like the floor when I could Mr. Mayor.
Mr. Dulin said I’m more than prepared to go back and forth with you Mr. Howard or anybody
else in the room.
Mr. Howard said I got it Andy.
Mr. Dulin said I don’t think that is fair to the community. I don’t think that is really fair to the
Council. Some of the Council is going to love that because they are not going to have to worry
about it or talk about it or answer questions in the community. They are just going to say oh,
don’t worry about it, we’re not worrying about that right now. Then all of a sudden a week or
ten days maybe or less before this Council has to vote on it, on the biggest divisionary issue this
town has seen in decades if not ever, is going to get thrown in front of the Council and ask us to
vote up or down on it. I don’t agree with that methodology.
Mayor Foxx said if I might insert one comment. This disposition of that issue, we sent
everything to Committees and everything but two projects have come out of Committee to this
point. Even a few weeks ago when the Committees reported out, I believe the motion that the
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April 10, 2013
Budget Workshop
Economic Development Committee made relative to this project anyway was to take additional
time to await the MTC Finance Working Group Study, which is looking at the whole system and
also to look at other ways to do the project outside of the capital budget and to look at ways to do
something other than the project that would have a stimulative effect in the corridors we were
talking about including what Mr. Cannon talked about, about the east/west strategy. The ED
Committee had got plenty of work to do irrespective of what the Manager is proposing. I think
what he is suggesting is he has not digested this project in a sufficient way to be able to have an
opinion on it and he is just telling us he wants to take some time to study it.
Mr. Carlee said the time constraint that I’m suggesting is the time constraint on me to get reports
back to you. The timeframe within which you consider it and how you consider it is of course
your discretion.
Mr. Dulin said for that matter you ought to be taking a look at every project in the CIP with the
same – you don’t know what roads are what. UNCC you could find it but you don’t know the
incubators out there, you don’t know about the road on the other side of the Airport. For that
matter you ought to be saying lets pull them all until I study them all. Why segregate the
Streetcar?
Mayor Foxx said if I might respond to that and I apologize, but we’ve been at this for a year and
a half and he has been at it for 8 days. Part of the reason is because these issues have been in
front of every single Committee, they’ve been reported out and this Council has taken
responsibility for what is being presented to us today. In fact I can think back to several terms
ago when a lot of members of the Council, including the person who used to occupy this chair,
would talk about how we needed to take more ownership of the budget anyway and in effect that
is what we’ve done. We haven’t done it in a very artful way. It has been a little clumsy, but the
Council is basically recommending to the staff what budget to recommend back to us.
Mr. Howard said the only thing I was saying to my good friend Mr. Dulin is that we should be
careful about overdramatizing this. We’ve had more divisionary things than this and really what
we are talking about is the mass transit system itself and we are talking about a piece of it. I
want us to be careful about demonizing parts of it because we still have a system that we need to
build and this is very much part of the system. It connects two of the stations that are very
important and I want us to be careful about over doing it with this one because we still have to
come back at some future and come back to the public and say we still need to build this in some
kind of way because it is part of the five corridors plus this one that we’ve talked about and it has
a very important function with this. As a matter of fact without this one you don’t have the leg
that gets you down to the Airport and there are a lot of things that happen with this one line so I
just want us to be careful about overplaying, oh my God it is divisive, it is the worst thing, it is
not. It is an important part of our future and we need to figure it out whether it be though this or
some other way. As far as the budget implications I think the Mayor and Mr. Cannon actually
covered what I wanted to say which is this whole process was about trying to figure out how to
get projects that would be transformative to some of the areas in our community to get economic
development going so we can throw off more revenues from different areas that are not
producing now. I understand that Mr. Cannon actually talked about that. My frustration with all
of this is that we spent a year and a half on it and we still have no other solutions from anybody
about what would move the ball forward. We’ve had a lot of things thrown at this, but nothing
that would move the ball forward in the area if you haven’t seen it. Again, areas of town that
have actually seen development, of course it doesn’t mean anything to you guys, but the areas
that haven’t they are counting on us to figure it out around this table. I get a little frustrated
when we demonize this project as the worst thing ever because if not this one then what is it. For
a year and a half I haven’t heard anything that would change my thought on the fact that this
could will be the thing that could change these areas of town. Nobody has added anything to the
conversation.
Councilmember Cannon said I don’t want to belabor the point. I think the Manager has made at
least a fair request in terms of trying to seek alternative funding sources which has been the issue
that has been in my craw relative to the subject matter. I don’t know that you find it in the
timeframe that you suggested. It sounds to me that it is referencing whatever may be out there
away from this whole issue around property taxes, which has caused some angst in terms of a
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source. I’m okay with where you want to go. I don’t know that I’m asking you to rush the
process per se. I’m asking that you use a true level of due diligence to determine what that might
be to get up to speed. Obviously, you have to catch back up with those persons the Mayor has
talked about that are working toward the same goal and/or the idea, but we do need to know what
the thought might be so we can make the community aware of where we are trying to go and
how we might be trying to get there.
Mayor Foxx said let me reiterate something I’ve said already. I Anthony Foxx would like to see
us figure out a way to move forward with the capital budget and the Streetcar even it means
pulling the Streetcar out of the capital budget so that we can move on. There is too much need
out there from public safety assets, roads and bridges and improvements, but we’ve got to figure
a pathway. I think we’ve got an opportunity to do that if we are creative so I’m hoping we can
get there. I’m just telling you that what may end up out of this Andy is what you have saying all
along. I just think we need to give it some time.
Councilmember Barnes said there is an issue that the Council referred to the Budget Committee
regarding scheduling that is related to what Mr. Dulin brought up and we do have to figure out
how to deal with it because we examined the various budget scheduling options that might be at
play and decided recommending sticking with the current schedule for some very specific
reasons regarding the end of our fiscal year, regarding potential action from Raleigh relative to
the Business Privilege License Tax and other things. For example, we are currently scheduled to
have a public hearing on the budget on May 13th. It would be of some concern to me to have the
Manager come back, say in the second week of June, and recommend what we went through last
summer as it was then. You should have an opportunity for a public hearing and some debate.
We’ve been through it before obviously, but it strikes me that that could put a lot of negative
pressure on us and on the community. I’m wondering Mr. Manager, if you could commit to
having your work done by the middle of May if possible because I think the more we know the
more the public knows, the better in terms of what our options may be, in terms of how we may
want to pursue any options that may exist with respect to the Streetcar and everything else in the
CIP. Andy actually raised a valid point and maybe I wouldn’t have said it that way, but he raised
a valid point.
Mr. Carlee said I very much understand that concern and I will try to have something out before
the public hearing if I possibly can. In any event I will have a report to you so you know where
things are and what I’m working on and where I’m going with it so it is not just hanging out
there with no knowledge or no information about what I’m learning and where I see some
opportunities for us.
Mr. Barnes said appreciate this if you would, I’m not suggesting that you rush your process, I’m
just suggesting that you be aware of some of the things Mr. Dulin alluded to and some of the
things we’ve been trying to deal with for the last 10 months.
Mr. Carlee said understood.
Councilmember Cooksey said not to belabor the point but just to chime down the Warren
Cooksey perspective. Based on the Committee analysis and based on the goal of a system that is
governed by the MTC and not this body, my expectation is that the CIP that is included in the
FY14-FY15 budget will not have the Streetcar line item in it at all ever. Council may return to
the topic matter, it may come back at a later time, there may be hearings or may be discussions
of funding possibilities, there may be a discussion March, April, May, June of next year about
modifying the CIP because it is up for modification every year.
But speaking for this
Councilmember based on what we’ve done so far in Committee work and in Budget Workshops
I don’t expect to see that line item at all ever between now and the vote on the budget in the CIP
for the FY14 budget.
Mr. Howard said speaking as David Howard I would be just fine seeing it given a
recommendation from the Manager.
Mayor Foxx said and there is democracy right there. Here is a larger point. Presumably a capital
budget will be passed leaving aside what its contents are. Presumably at some point there will be
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a bond referendum on the ballot and if the half of the Council is saying I don’t support these
bonds and the other half are saying these bonds are the best things since sliced bread the
community is going to be just as confused and that is not a good receipt for the future of this
City. The reason why I’m saying what I’m saying is the capital budget in theory could happen
without the Streetcar, in theory, but I don’t think this Council will enthusiastically support the
capital budget if that issue is dangling. It needs to have a pathway to get done and I’m hoping
that can happen.
Mr. Howard said it is interesting how you just said that. A pathway to get done does not
necessarily mean CIP. A pathway to get done could be everything that you and Andy just spoke
about. What I’m trying to say is let’s be careful about demonizing this project the way we have
for the last year and a half because if we come back as a part, and I’m sensitive to this because in
this very room I have sat with a group of people trying to figure out how to fund the whole $3
billion gap that we’ve got. In that situation we come back with something and all I got from this
Council is a bunch of rhetoric about how bad it is then we have a problem with the whole
system. Now whether it is part of this or not, I agree with the Mayor on that part, we will try to
figure it out, but one way or the other we have to keep moving the system forward. Either we
agree to that or we don’t. Let’s just be careful about demonizing this piece or any other piece of
this system.
Mr. Cooksey said I’ll say it again. I do not believe it is the City Council’s job to move this
system forward because the system is governed by the Metropolitan Transit Commission set up
by interlocal agreement with the Mayors of the towns and the Chairs of the Board of County
Commissioners in charge of the system. I continue to go back to the discussions and the vote in
1998 and the repeal effort that failed in 2007 about how this was a regional system with regional
governance and regional leadership. So I don’t think it is our responsibility to get this done at
all. It is the MTC’s and I appreciate the work that the MTC has finally shifted to do on
addressing these funding issues. It is not us. We gave that up, this city gave that up in 1998.
That is my story and I’m sticking to it.
Mayor Foxx said I’m going to say a couple more things about this and then maybe we can talk
about the rest of the budget. In 1998 the ½ cent sales tax was passed and I’ve actually taken the
time to go back and look at the plan. I think everybody who talks about transit and asserts an
opinion in one way or the other on different projects ought to look at the1998 Plan. The 1998
Plan has no Blue Line Extension, it had a commuter rail line going north, but it had no Blue Line
Extension, it had no Streetcar. The flaw in that plan from the very beginning was that it assumed
the same percentage of support from all of our partners, 50% federal match, 25% local match and
25% state match. As pieces of the plan were put into it over time nobody ever went back to true
up the assumptions on the different projects. You have projects that were hoped to have qualified
that don’t qualify. Some that weren’t even on the table that got on the table and I can remind
you that Mayor Reed was here a few weeks ago and he said that when Marta was built in Atlanta
in the early 70’s they were getting 80% matches and we believe 50% matches are good today.
The trend line on that is what we need to be looking at. I’ll also remind us that the entire system
is probably $4.5 billion on the schedule that is set out there right now. If we built it today it
would be $3 billion so we actually save money by accelerating pieces of the system.
Furthermore I will tell you that if the pieces of the system we are talking about, the Blue Line,
Streetcar or whatever, are put in place that does no damage to the system. It actually gives the
system more capacity to grow. Are there regional politics in this, absolutely. Do we need to
work more collaboratively with the MTC, not only on this Streetcar, but also the Red Line and
other pieces of the system, absolutely, but time is money and every year we don’t make more
progress on the system we are spending money we don’t have. What I’m basically saying is the
½ cent sales tax is not set up to finish the system even it were performing perfectly because the
ratios were not accurate. What we are now doing through this working group and I’m very glad
this working group, they are doing a great job by the way, but they are working to true up those
assumptions. They are looking at all kind of different ways to finance the system that don’t even
involve government money in some cases. I’ve urged them to hit the target. Don’t shoot for half
way to the moon. If we are going to get the system built, let’s design a financing structure that
actually achieves the objective and doesn’t over promise because I think that is what has
happened with the system at this point. When people say a promise was broken, I’m asking
which promise do you want us to break. You want us to break the so called promise not to use
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certain taxes to get the system built even though we’ve increased property taxes to help the Blue
Line Extension keep its financing intact or do you want us to break the promise to get the Plan
built in 2030 because one of them is going to get broken. No easy answers to this and I would
say this, our system goals of getting the whole thing done, we are probably two years away from
actually deploying anything because you’ve got to work through the ideas, you’ve got to build
the coalitions, you’ve got to go to the General Assembly in most cases and we are almost done
with the long session. If we could get them out of town today I would say go home. We are two
years away from that conversation. What we are talking about with this project is incremental
deployment of a piece of the system. It is not the whole Streetcar, it is not the whole system. So
more conversation on that but I appreciate the point and I just want us to excise our demons and
move on and that is what I’m trying to get us to do and to think about. Why don’t we go ahead
with the rest of the budget and I appreciate that 40 minute interlude.
Mr. Dulin said for something that is not on our agenda today, we’ve sure divided by it.
Mr. Howard said just so you know a couple weeks ago before we went to Washington, a couple
of you know that I was working really hard to amend the legislative agenda to add some
language about the Red Line just because I think it is our job as a part of the MTC to take some
leadership and really what I’ve heard as a part of the Red Line, because I’ve been involved in
these conversations a lot more than most people around this table. We are working on all parts
of it. As a matter of fact I have talked to Mayor Woods who has been chairing the Red Line
Task Force about putting together a list of requests from this body on ways we can take
leadership on getting that line going. This is not just me kind of picking out one of them. This is
the one that makes the most sense right now. Washington influenced and some other reasons.
But there are some things I think we could be doing on the Red Line that have come out of the
conversations with this Committee, and it will require Charlotte to take some leadership, so
Charlotte does have a role in this, let’s not forget that. We are the biggest City in the MTC by
thousands and thousands and hundreds of thousands of people so we have some leadership role
in this. The majority of the system is inside the boundaries of Charlotte and we should care
about making sure this moves forward. You will hear more from me on all of them, it won’t be
just this one.
Mayor Foxx said great conversation and you know what, that is actually clarifying because we
got that out of our system.
Mr. Carlee said I’m going to turn it over to Randy Harrington to review the other elements of the
CIP. There are some scenarios that he will present to you at the end of the presentation. There
are two pieces of feedback in particular that we are looking for from you this afternoon. You can
be as definitive as you feel comfortable but these scenarios are really two key pieces that are
important for you. One is on funding the CIP. You will have different property tax rate options
to look at and your guidance on that would be helpful. Among the key question there beside the
amount is whether you are comfortable in considering a property tax change this fiscal year as
opposed to next fiscal year, which has a fairly significant impact on what we are able to do. The
second variable is bond referendum and whether to have a bond referendum this fall or to wait
until next fall and get back on the City’s regular cycle. As you listen to Mr. Harrington’s
presentation and see those options at the end, those are places for feedback that would be
particularly helpful to us.
Mayor Foxx said I want to make it very clear what we are doing so we can have a good visual
for this. What we give the staff today in terms of facts will likely be what we get back in May.
Once we get this back in the form of a recommendation from the staff in May, it will be off to
the races in terms of the public’s watching this and following our deliberations, etc. so if you
have heartburn about any piece of this, today is a real good time to express that because you have
a chance now if there is something that the Council doesn’t wish to have come back to us, there
is a chance to say that today.
Budget Director, Randy Harrington said it is my pleasure to share with you some preliminary or
draft recommendations at this particular point as it relates to the General CIP. One of the
things I will point out is that you do have a hand-out at your place setting, Hand-out 1 which
gives the material for my presentation. I would like to cover essentially three areas, and first off
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to provide an overview of the components of the General CIP being the debt and the PAYGO
components as well as how those are funded through the property tax rate. Next I would like to
jump into this reminder of some information that we presented back in February at your annual
retreat related to debt capacity, project savings and capital reserves. Then jump into some
PAYGO program recommended changes, just a brief reminder on our past bond referendum
history, and then jumping into the last piece that Manager Carlee alluded to related to the options
and the piece that you asked us to bring back from your March 20th Budget Workshop.
Starting out, just an overview, as you will recall, the allocation of the current 43.7 cent property
tax rate is divided or allocated three different ways. First to the general fund, 36 cents which
funds your basic general fund operations, Police, Fire, Transportation, Neighborhood and
Business Services, Solid Waste and those types of services, then you have two other allocations
that go to the capital program. To the debt service fund which funds your debt side and then the
PAYGO fund which funds the cash side. As you see there at the bottom of the slide, kind of an
overview, trying to think of the differences between the two, the debt component funds your
larger longer life type big capital investments in the community whereas the PAYGO program is
typically our smaller projects or projects that don’t lend themselves very well to a debt type
financing. Then typically most of the projects and programs in your PAYGO Program are
related to capital maintenance of existing infrastructure that we have here in the City.
As you will recall at your February Retreat we messaged the debt capacity, existing capacity
based off of the existing current property tax rate of $25 million. Project savings related to some
street bond project savings as well as some facility savings totaling $12 million and then capital
reserves at $5.3 million. Capital reserves is the amount above your 16% general fund fund
balance policy target. It is the amount above that that is available for transfer over to the
PAYGO program per your policy, so we have those identified as well.
Mr. Howard said Randy remind me again why is 16%?
Mr. Harrington said for a variety of reasons. Primarily the AAA credit rating is one of the
primary factors. Cash flow and then one of the other big components is emergency uses, like a
Hurricane Hugo or something like that comes through can have tens of millions of dollars of
damage. It is an emergency rainy day fund for that particular purpose. Greg, you want to add
anything to that?
Mr. Howard said I would like to hear Greg’s response, why 16% and what is the standard for
most cities our size?
Finance Director, Greg Gaskins said there are a number of answers to that, let me give you a
couple of short answers. One is that there was a policy obviously made by a prior Council
related to that and that is the most obvious reason. It is approximately one month of
expenditures which is considered almost a minimum in terms of having a major emergency to
have that much cash available. At one point in time considerations of higher levels were made at
the Budget Committee level because there are in fact places that have much higher than that,
smaller places in some cases have 100% to 125% because it is the relative size of the amount of
money versus the size of budget expenditures they have. In North Carolina if you did an
average, it would probably exceed 16%. There is a Local Government Commission minimum
recommendation of 8% so therefore for a lot of the major ones you see it falling somewhere
between 8% and 25%. There are a number of reasons, but actually after looking at all of that
prior Council made a determination of 16%.
Mr. Howard said do you mind at least getting back to me what other Metropolitan areas,
Asheville, Greensboro, Raleigh and then our peer cities in other parts of the country, what their
capital reserves are and then that information that you just mentioned Greg, about the School of
Government and what they have to say about it?
Mr. Gaskins said the Local Government Commission is one that has the recommended 8%.
Mr. Howard said I don’t want to mess with it, I just want to understand it better.
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Councilmember Fallon said isn’t it basically an insurance policy for the City and didn’t the bond
people want us to add a percent to it to make it 17%?
Mr. Gaskins said two things. It is for an emergency in the event that you have some disruption
that either does one of two things. It either interrupts the flow of funds to you or you have
additional expenditures that you don’t have other funds to cover in the event of an emergency.
In addition to that yes, when the committee looked at it in the past it was to determine whether or
not as a result of certain events in the world certainly in terms of natural events, disasters and
storms etc., but also because we now have terrorism is a risk factor that we did not have at one
point in time. There was consideration as to whether 16% was enough.
Councilmember Pickering said Greg, in your professional opinion is 16% your recommended
number or would you have a different number, and if so what would it be?
Mr. Gaskins said I’m pretty conservative and I think I’ve been on record before Council before
to say that when this was discussed before my personal recommendation was 20%, but that was
not the Manager’s recommendation and Mr. Carlee is smiling as I say that and I haven’t talked to
him about it. In the past that was my personal recommendation.
Mr. Carlee said it is an issue I’ve looked at considerably. I think the previous Council policy is
prudent in Charlotte and I’m very comfortable with the 16%.
Mr. Howard said I was going to ask him, given the fact that you were at an organization that
advised on that, what is your organization advise cities?
Mr. Carlee said neither our organization or Government Finance Officer Association nor the
bond rating agencies recommend a specific percentage. What they recommend is that local
governments have comprehensive financial policies and the level of your reserves be created
relative to your risks within your revenue streams and the expenses that you face and your ability
to make adjustments operationally when bad things happen. Even among AAA jurisdictions you
will see a wide range of different reserves and it is really hard to compare apples to apples when
you start looking at them. There is really a deeper financial analysis to understand what other
funding you may have that could be reallocated or frozen to insure your – in essence what the
bond rating agencies are looking for is assurance that you are financially sustainable in the
context of your total financial condition.
Mr. Howard said you actually make another good point. I would assume that we keep capital
reserves for our enterprise operations as well separate and apart from this one. I’d be interested
in what those are and what our policies are there and what the balances are there.
Mr. Harrington said I’m happy to provide that.
Mr. Gaskins said there are individual policies for each of the enterprise funds. They have their
own policies that are different and we will be happy to share that with you as well.
Mr. Howard said do we decide those policies? Did a prior Council decide what it should be for
Utilities?
Mr. Gaskins said that was in consultation with obviously the enterprise funds and then
recommendations were made to the full Council.
Mr. Howard I would love to know those and the balances.
Mr. Harrington said I would like to talk about two recommended changes in the PAYGO
Program related to maintenance items. The first one is related to the Solid Waste Services
Administration Building, HVAC, heating, air conditioning retrofit and as you may recall this
facility was completed in 2010. Since its completion the HVAC system has not been performing
adequately and staff believes that there were design errors made in the design of the HVAC
mechanical system. A retrofit is required and the funding for that would be $1.2 million but one
of the things I will note is the City has been in negotiations and conversation with the architect
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and the contractor and have been unable to achieve a resolution so we have sought legal action to
recover damages as well as the retrofit costs, but at this particular point they are recommending
up fronting that costs to get the project going.
Councilmember Mayfield said so realistically does it look like we have a solid chance of being
able to recoup those funds since it has been determined that there were errors in the original
construction of this? If we are saying we are going to identify $1.2 million in order to make sure
that the staff is in a healthy environment while working what are the chances of us making sure
that we are able to recoup those funds and once those funds are recouped are we making sure that
it is going to cover the total funding balance and where are those funds going to be returned to?
Mr. Harrington said I think generally speaking we feel like there is a good case and that is
moving forward. As far as getting damages and compensation for the retrofit, it is always a
question mark and I can have the City Attorney comment a little bit, but we will certainly seek
the full amount. A jury ward could be something different of course if it were to lead to that, but
we are pursuing the full amount and the damages associated with that. Any payment back to the
City would come back to your PAYGO fund for re-appropriation.
City Attorney, Bob Hagemann said to briefly elaborate, we did not do anything wrong. We do
have a problem. This is one of those situations where you have a contractor and an architect
pointing the finger at each other which is why we’ve had to go to litigation. We will do our best
to recover as much, if not all of this money, but we will also have to evaluate as we go through
that process, risks and possible settlement.
Ms. Mayfield said is this one of the projects that we bid out and the lowest bidder won the
project?
Mr. Hagemann said yes.
Mr. Barnes said is it a contractor who has done work for us before?
City Engineer, Jeb Blackwell said there are some minor construction issues with the contractor.
The primary problems here have to do with the mechanical design. We believe that the system
was not designed correctly and so we are dealing with the designer.
Mr. Barnes said had we worked with that vendor before?
Mr. Blackwell said the lead design firm, the architecture firm, we have dealt with on a great
many projects and have not had this problem. Our largest problem isn’t actually with the lead
architectural firm, although they are in the middle of this of course. There was a mechanical
sub-contractor that we believe is predominantly responsible for this and they have not been very
responsive as far as responding and dealing with this problem.
Mr. Barnes said have we had a relationship with that vendor before?
Mr. Blackwell said I don’t believe they had done work prior to this.
Unidentified speak: They have done a couple of projects for us before as a sub-consultant, but
not as a prime. Obviously, we usually deal with the architecture engineering directly and they
have worked with us on several.
Mr. Harrington said the second maintenance item in the PAYGO Program is the seat
replacement at the Blumenthal Theatre. There are approximately 2,100 seats and about 21 years
old. The theatre was opened I believe in 1992. The seats are deteriorating and this includes the
cushions, the mechanical retraction components, the physical nature of the seats have reached
their useful life. We recommend replacement of those.
Mr. Barnes said I’ve heard the story before about the Blumenthal Theatre. Do we own that
building?
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Mr. Harrington said we do.
Mr. Barnes said how much do we spend annually for maintenance on that building?
Mr. Harrington said I don’t know the number off the top of my head.
Mr. Barnes said we own the dirt and the structure?
Mr. Harrington said we own the facility and this is the type of capital expense that would be the
City’s responsibility. I’ll be happy to get more details in terms of what we have in our
maintenance budget.
Councilmember Mitchell said as a follow-up to Mr. Barnes I guess I’m getting a little confused
because when we developed a cultural facility I thought one of the discussions we had was not to
get out of the maintenance business so did I miss something?
Mr. Harrington said I’m sorry and I apologize for the confusion. There is an element of
maintenance as part of the cultural facilities plan that they do carry and cover, but in this
particular case this would not be one of those items.
Mr. Mitchell said what other facilities do we have some maintenance responsibility? Do we
have the Harvey Gantt?
Mr. Harrington said we do for all those cultural facilities.
Mr. Mitchell said would it be helpful for you to provide for us a list of what maintenance
responsibility we still have because I can remember that was part of a lot of our discussion. I
remember Patsy kind of being our resident art expert really focusing on we don’t mind building
and paying for development but we need to get out of the maintenance business. I’m kind of
surprised that we still are to a certain extent so if you can provide a list at what level we still have
some responsibility I think it would be helpful.
Mr. Harrington said I’d be happy to and as a part of that plan a large bit of the maintenance was
shifted to the operators in terms of taking care of them, but certainly in our write-up we will
clarify that for you and outline all that for you.
Mr. Howard said just to keep going with that, talking about reserves a little while ago, do not
each one of these buildings have reserve set up that they put money aside from their tickets to
keep the building up. Actually all of our buildings, because we own the Belk Theatre as well. I
don’t know if we have an interest in Spirit Square, but do they not have reserves set up to take of
maintenance?
Mr. Harrington said the City as part of the PAYGO maintenance some of those components, that
is where some of these larger maintenance items would be funded from. As far as a reserve I’m
not aware of a particular reserve and I’m looking at our City Engineer and he is shaking his head
no, there is not a specific reserve that is set aside for each facility to cover expenses like this.
Mr. Howard said what you are telling me is that we’ve decided in the past that PAYGO will act
as a reserve for replacement issues. So we don’t have a maintenance reserve, we just put money
in every year to take care of all these. Is that what this is?
Mr. Harrington said we do, but this is a unique item. We do have some ongoing programs but
given the size and the nature of this, that is why we are recommending and noting it separately,
and it is a onetime only expenditure and that is why we are pulling that out and making that
transparency for Council.
Mr. Howard said I’m not necessarily concerned about this one per se as much as if there was
something that happened with the City, could these buildings not be kept up on their own. It is
not just one thing, it is whether or not – I didn’t realize that these theatres were kind of like the
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Arena and those things where we were just covering a bunch of things. I thought they kind of
functioned on their own and they don’t.
Mr. Harrington said they do to some degree, but for the larger capital, the City is responsible for
the buildings themselves and then we do participate on that front.
Mr. Blackwell said the Arena has a cap ex-account. Some of the partner ones we do have an
account for the arena. Most of the buildings, the vast majority of maintenance is scheduled
maintenance. We know when mechanical units or what age they are so we work through that
schedule and work through those numbers with the Budget Office.
There are occasional
emergencies that happen on unexpected failure of equipment or the Police Station was struck by
lightning and you end up with unexpected costs and usually we have enough flexibility in the
budget to address those, but the vast majority of the buildings are dealt with through a planned
set of maintenance, repairs and replacement. There are a few like the Arena that the cap-ex
account that we and the Bobcats each contribute an amount to and we agree on what projects will
be done each year.
Mr. Howard said Jeb, is there a reason why you didn’t do that on all of the buildings that way so
that part of the ticket sales and proceeds go to fund up front?
Mr. Blackwell said the cap-ex account has a look ahead in it where we look at what our
anticipated costs are and we are able to plan those expenditures out and if necessary we will talk
about adjusting them out. At this point we haven’t had to talk about adjusting the cap-ex account
amount, but at some point as the building gets older it could be that we would have to look at
adjusting that. We are trying to do that through a proactive several year out planning process.
Mr. Harrington continued his presentation with the slides on Page 4 – Capital Reserves – a part
of the overall program we do recommend retaining that $5.3 million at this point for budget
flexibility as potential contingency needs. If this capital reserve of $5.3 million is not needed or
used as part of the budget process we would recommend two additional projects and that would
include Americans with Disabilities Act facility improvements. We recently had a study that
reviewed all of the City’s facilities and identified areas were improvements could be made to
increase and improve accessibility in compliance with the ADA federal law. Then the CMGC
Plaza Waterproofing. I hope none of you have been in your car and have been walking in the
deck underneath and had water drip on you, you might have and I know that there have been
times when the Plaza area does have some seepage and some leaking of water that comes
through. That can get into the parking deck area as well as other mechanical rooms that we have
underneath the Plaza and Jeb has shared with me that in a number of cases we’ve had to put tarps
in our mechanical room to cover our electrical equipment to prevent any potential shortages of
water leaking through. It is a concern and a safety risk and that is one additional item that we
would recommend in the budget if the capital reserves are not used.
Ms. Mayfield said is the water proofing going to be a shared costs since more than just City
employees do utilize that parking?
Mr. Harrington said yes, it could be shared with the entire facility and the County and CMS does
pay for share of the building.
Ms. Mayfield said so that $.3 million would be the City’s share? Basically if you could provide
a breakdown of what we are anticipating those costs to be and what the shared costs would be so
the City is not taking the bulk of the repair costs on this.
Mr. Harrington said CDBG and Home Grants, at this particular point we don’t have a
confirmation back from the Federal Government on what the exact allocation reduction will be,
but at this particular point we are anticipating about an 8.4% reduction.
Mr. Mitchell said because this is very important that we use CDBG for a lot of our programs
what was the reduction last year or are you just being consistent? Was it 8.4% reduction last
year and is that why you feel comfortable with the 8.4%?
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Mr. Harrington said the 8.4% is what we are hearing and feeling so to speak from our contacts
in the Federal Government. Last year we had a reduction of 6%.
Mr. Mitchell said 6% reduction last year and the two dollar amounts, what are we talking about?
Mr. Harrington said the dollar amount equates to a couple hundred thousand I believe. I will be
happy to confirm that back to you in one of the Q and A but it is about 8.4% at this particular
point. We will know more hopefully toward the end of April and of course we will have those
specifics for you as part of the Manager’s recommendation.
Mr. Harrington continued with the Rental Assistance Program and said at the April 1st Workshop
they did have a brief discussion on the Rental Assistance Program and a concept or an idea to
fund that endowment. I’m not sure if the Council wants to speak to it now. The Budget
Committee did review that item and it is on your agenda at a later point for discussion but I did
want to note at this particular point that we have recognized that piece and wanted to include it
here in terms of whether the Council would like to have continued discussion.
I will shift a little now into the debt side of the general CIP and just a brief history as you are
familiar with in terms of past bond referenda history, at the last Workshop you requested staff to
go back and essentially take the original recommendation for the CIP, exclude the Streetcar and
the UNCC Informatics and run that number and see what level of tax rate is produced. We have
done that and as part of that we have also looked at three other scenarios that could reduce the
property tax rate yet still have all the projects, but essentially what we were looking at was the
original concept in the CIP had a higher level of projects and funding requirements in the earlier
stages so you had a high level at the top and kind of decreased over the course of the four cycles.
We played with that and reversed it, having lower costs and fewer projects in the front side of the
cycle and then pushing projects to the later part of the cycle and looking at opportunities for
getting planning and design going early up front and getting projects that would have greater
economic benefit, trying to get those closer to the front side.
We did that not as a
recommendation or any proposal but simply as an illustration of what that would look like.
Mr. Howard said the way that this was explained last time is that this was presented to us in the
framework with helping us with economic development in that donut area around the center city.
It was to put as much in as fast as you can to get that economic return going as quickly as you
can. Was that taken into consideration with this inverted approach?
Mr. Harrington said yes.
Mr. Howard said and you still feel like that is the projects that you would put forth first would
still, well not the same effect, it couldn’t, it is not as much investment.
Mr. Harrington said the timing could alter the timing of when those economic impacts occur, but
in terms of looking at the totality of the plan that all of the projects were still in, but it could be
that you would experience some delay and some of those economic benefits if projects are
pushed out further, but ultimately at the end of implementation of the entire plan conceivably
then those economic benefits in total would occur.
Mr. Howard said the only thing I’m saying is that we talked leveraging against other investments
going on in the areas. I’d like to make sure that is still a part of the thought process so it
leverages it faster. To have the Blue Line come on line and then NEISSE be ten years out
doesn’t make a lot of sense to me and I’m sure that is not one of the ones you did, but that is the
kind of thinking I’m talking about that it makes sense with the investment that is going in those
corridors.
Mr. Harrington said you can see the assumptions that are in all four scenarios and I will highlight
those for you. (Page 6) If you look at those four scenarios, scenario one being the Council
request at the last Workshop, assuming bonds start in 2013 the associated property tax rate would
be 3.99 cents. If you took that same plan but instead of starting the first bond in 2013 you shifted
it to 2014 start, that would equate to a 3.17 cent tax increase. Scenarios three and four, this is
what I mentioned earlier about trying to push projects later in the cycles, do more planning and
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design up front, looking at those particular example and these are outlined later in your packet
behind the PowerPoint presentation. If you did that assuming a 2013 bond start the tax rate
would be 3.64 cents if you shifted it by one year to start in 2014 in terms of the bond vote that
rate would go to 2.78 cents.
Mr. Carlee said this gets to the point I was making at the beginning of the presentation so you
can see the difference based on the bond start. The tax rate in each scenario assumes a July 1,
2013 tax rate
Mr. Harrington said correct. The other thing that I will add is that you know these tax rates are
based off of current assumptions and what we know the economic environment to be. Of course
those change over time and we re-evaluate those annually, but this particular point, this is what
comes back.
Mr. Cannon said Mr. Manager, would you want to describe today from your perspective what
might be the pros and the cons of each one of those scenarios or bring something back to us with
regard to that?
Mr. Carlee said there are three dimensions to them. One is the actual capital projects themselves
and how we advance them and maintain continuity. That is obviously a really critical thing. A
second one is the capacity issue which is really the tax rate and around that, which is your
purview and not mine, is the little political issue of amount of tax rate and when you may do it.
The third one is more of a strategic issue around what is on the ballot when our bonds are on the
ballot. One of the things that I’ve learned as I have been going through my review is that the
County or Schools are likely to have bonds on this year’s ballot and from a strategic standpoint
the question is would that disadvantage our having a bond issue and risk some confusion about
what the City is doing and why we are doing it with a discussion in the community about other
bonds on the same ballot.
Mr. Howard said you are saying if we raise taxes this year but don’t start projects until next year,
that is number four?
Mr. Harrington said that would be two. If you took the original recommendation on the CIP,
excluding the Streetcar and UNCC Informatics and started the tax rate effective this July, but you
had the first bond in November of 2014, it goes down to 3.17 cents.
Mr. Howard said the scenario you are talking about is the inverted part where you do most of the
projects up front. What are the two scenarios?
Mr. Harrington said scenarios three and four are the ones that invert the projects in terms of
pushing more to the latter cycles.
Mr. Howard said scenario one is timed just the way it was presented?
Mr. Harrington said correct, one and two are both timed essentially in similar fashion than what
you have been seeing and reading and reviewing over the past year.
Mr. Howard said so you get everything we talked about except the Streetcar and the Informatics
if we did number four? You just time it different?
Mr. Harrington said correct.
Mayor Foxx said now let me make sure I understand it because now I’m confused. What David
just said is true also of one and two as well. I thought one and two were fully loaded except for
Streetcar and Informatics.
Mr. Harrington said correct.
Mr. Carlee said let me try to clarify it. One and two maintains the schedule that you’ve
previously talked about. The difference is when you have the bond referendum and so we will do
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some adjustment in terms of scheduling design and contracting and bond so you get some bond
savings which enables you to have a lower rate. In three and four you are actually pushing some
of the projects out and they are the same projects that are pushing out on both of them, again the
difference is when you have the bond referendum and start paying debt service. We front load
the payment of our bonds so we have high payments in the early years which is a leading
practice in financial policies. That is why you get a lower tax rate by holding off on your bond
referendum into 2014 in either scenario.
Mr. Howard said but it is still 8 years? Bond referendum every two years?
Mr. Harrington said correct, four cycles.
Mayor Foxx said so this chart, just sort of flag this chart because we are going to come back to it
at the end of this discussion because one question is which plan do we want to do, but the other
one is when do the bonds come in for the public to consider. Essentially what the staff is telling
us is that you can actually have a lower property tax rate by delaying the bonds into 2014.
Mr. Carlee said which does put you back on your regular cycle, but has some other damages in
terms of what the public is used to.
Mayor Foxx sand and not potentially competing with the County.
Mr. Harrington said just for clarification there is an overview of those scenarios on Page 9 of
your Handout #1. Then the following four pages spell out those four scenarios and the timing of
the projects within the four cycles. Again, just to make sure it is completely clear, all of these
cycles assume a property tax rate increase effective this July 1.
Mayor Foxx said just for the public’s benefit I’m going to make another point, which is that
scenario two, last year scenario two and let me say scenario one was 3 cents, so it has gone up a
penny just with one year’s delay. We in this sector like to tell people we are saving them money
when we don’t go forward with property tax increases, but you can see here that the same set of
projects are actually more expensive when compared apples to apples and to further the point we
are in an extremely low interest rate environment and low construction pricing environment and
we could find ourselves losing money by waiting over years and years. That is a real challenge.
Ms. Fallon said have you figured in a raise on that scenario two?
Mr. Harrington said yes and one of the assumptions, where appropriate, as I mentioned on the
previous slide, we have factored in project cost inflation if the project was moving out. A
number of you like to see and understand what does that impact then translate into for a
residential property owner and I just prepared this slide that gives an overview. Just looking at
just the difference component of what that increase would translate into on a monthly basis as
well as an annual basis.
Mayor Foxx said I could probably back in and figure this out, but what does $100 million in
capital capacity correlate to in terms of tax rate?
Mr. Harrington said it depends a lot on timing but roughly under one cent.
Mayor Foxx said ½ cent? I know it kind of depends on what the overall program is.
Mr. Gaskins said what we could do on any scenario, we could take it and run you a number
based on the scenario.
Mayor Foxx said the reason I’m asking is for a $400,000 house, scenario one is $119 more on an
annual basis and if you back it out monthly, it is $10. When you back it out weekly it is $2.50
and you are getting close to a billion dollars in projects done.
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Mr. Harrington said the Manager has already alluded to some of the questions and if there is any
additional feedback that the Mayor and Council would wish to give we would be happy to
receive that or any other questions of feedback that you might have.
Mayor Foxx said are the questions that we need to answer?
Mr. Harrington said I think you did two earlier with our 40-minute discussion, but the first one is
the one I framed at the beginning of this in terms of guidance and how I then proceed forward in
putting together the core CIP.
Mayor Foxx said is this the time to pause and have this discussion?
Mr. Harrington said yes sir.
Mayor Foxx said the one issue we need to deal with is item #1 that has two parts to is. Again
this is in the frame of where we want the staff to come back to us with, so input.
Councilmember Kinsey said all of these scenarios assume that we would raise taxes this year. I
don’t know where I am on this but I’m just saying this is an election year. If for some reason this
council decided not to raise taxes this year is it correct to assume that the tax increase would be
larger next year?
Mr. Carlee said to do the same projects on the same schedule yes.
Ms. Kinsey said do we have any idea what that increase might be?
Scott Greer, Finance said delay the tax a year. It was 3 cents last year and it is 3.17 cents this
year, that 14 is a one year lag of … like we would have done if we had done in 13, so the 3 and
the 3.17 are roughly equal. The 3.99 is the fact that you are pulling it closer. You are only
collecting taxes for one year so I’m saying 20.2 is probably about what the impact would be if
we wait another year because that is where the inflation and all the other stuff comes in.
Mr. Gaskins said if conditions remain the same.
Mayor Foxx said I would have thought scenario one would be closer because we were talking
last year about the tax rate and the bond package happening in the same year, the first one, and I
know you’ve got four bond cycles, two of which are stacked one year after the other, which may
account for some of the difference, but it strikes me that scenario two is the scenario we didn’t
actually consider last year which was voting for the rate and delaying the bond package for a
year after.
Mr. Greer said scenario two is what we did last year.
Mayor Foxx said scenario one was last year as well. I just want to make sure we are getting this
right.
Mr. Greer said last year we were going to have a referendum in 2013 and another one in 2015.
I’m sorry it would have been last November so 2012, 2014, 2016 and 2018. Now we are talking
about 2013, 2014, 2016 and 2018. So we are compacting the projects into a closer period and the
key is that you didn’t collect the taxes that you would have collected in FY13 so you have less
money to start out.
Mayor Foxx said I understand that but it seems to me that there is a difference between
2013, 2014, 2016 and 2018 and 2012, 2014, 2016 and 2018.
Mr. Greer said it is one more year of collection.
Mayor Foxx said I understand but what we did last year strikes me as more similar to scenario
one than scenario two. I understand the compression issue, but isn’t that counterbalanced by the
fact that you in scenario two you are doing something we never did last year and never
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contemplated which is we didn’t contemplate raising the tax rate in 2012 and putting a bond on
the ballot in 2013.
Mr. Gaskins said there is now another factor. As you know I reported to Council about the fact
that we now have the re-evaluation issue and so all the numbers you looked at last time are not
the same because now we have lower start values across the board. You’ve got a double impact,
it is not just the impact from last year to this year, you have to also realize that you’ve got start
values that are lower. You’ve got two factors that are influencing the difference in the numbers.
Mayor Foxx said right and we are only adjusting for one of them. When we compare last year to
this year scenario two is factoring both factors.
Mr. Gaskins said yes, you’ve got two things different and last year you didn’t have that.
Mayor Foxx said to answer your question, it is probably somewhere between 3.99 and 3.17 but
we don’t know where.
Ms. Kinsey said I just thought I might emphasize the fact if we don’t raise taxes this year most
likely they will be higher next year if we go with the same package.
Mayor Foxx said that is right.
Mr. Cooksey said I will just reiterate something I’ve said in the past since this is the time for it.
Scenario that I favor wasn’t actually modeled and that goes back to premise that for a CIP to
happen as laid out, two things have to happen. There has got to be a tax increase and the voters
have to approve it and I’ve said going back to last September, I don’t see the point in separating
those two decisions. The General Statutes give us the authority to ask the voters to vote on a tax
increase and because the sole purpose of the tax increase is to fund the CIP, the vast majority of
which the voters have to approve when they vote on general obligation bonds and I think the
voters should vote on the tax increase as well, which would put levying it out to June 1, 2014
assuming the referendum takes place in the City elections as general statutes contemplate this
November. That is the scenario I backed. Tax increase shouldn’t happen in the budget this go
around and should be on the ballot in November for changing the budget next year.
Mr. Howard said I was wondering if we had any indication from the County about their schedule
for re-evaluation in the future? Are they prepared to do that on a more consistent basis, and if
they are is that factored into the assumptions that you’ve made?
Mr. Gaskins said if you will remember Mr. Howard, when we talked to you before we were in
consultation with the County about what they were doing. We do know that they are going to
use the same methodology for creating the numbers that were are, that is going to be in your
budget. We know that, but we don’t know, based on the legislation that hasn’t passed yet exactly
what will happen after it passes. What that means is that we don’t know therefore the timing or
whether they will choose Option A or B in that legislation. The legislation that is pending
related to Mecklenburg County and the repayment of those people whose properties were
considered overvalued. In that legislation you have two possible options, one of those is sort of a
hybrid option of refunding that is not a full re-evaluation and one of those options is a full reevaluation. Obviously, the impact of those two choices would be different. One of the issues, if
you had the option chosen, where you didn’t do the full re-evaluation is you don’t know how
much longer you might be dealing with an issue of below value. In other words if you don’t do a
tax rate that takes you back to a revenue neutral rate then you could have more than one year
where you are continuing to have values that are lower than would have been anticipated had you
not had the problem. So we don’t know yet the answer to that question and we won’t know until
the legislation is passed and the County Commissioners make a decision.
Mr. Mitchell said let me follow up on something Mr. Cooksey said earlier. I think we increased
property taxes in 2006 and I remember the bonds but I don’t remember us putting the property
tax increase on the ballot. What did we do different in 2006 that Mr. Cooksey is trying to
describe that we ought to do now.
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Mr. Harrington said there was not a component on the bonds that ask to approve a tax rate
associated with it. Council approved the tax rate prior. It was a 3.86 cent tax rate and at that
particular time that funded capital, police officers and additional street resurfacing, but the voters
did not approve on the tax rate component.
Mr. Mitchell said because we didn’t put it on the ballot?
Mr. Harrington said right.
Mayor Foxx said we need to flag this because we are going to come back to this. Is there any
other input on the two questions, rate and timing of a potential bond cycle?
Mr. Mitchell said on the bond referendum, Randy refresh my memory, are we talking about four
cycles? I cannot remember the dollar amount of those four bond cycles. One was affordable
housing.
Mr. Harrington said is there a particular scenario in terms of the amounts per cycle?
Mr. Mitchell said I’m thinking in both scenarios you were saying there were four bond cycles.
Mr. Harrington said there are four years, but are you asking about for example under scenario
one what would be the total amount in the bonds for that particular cycle?
Mr. Mitchell said yes.
Mr. Harrington said if you will look on Page 11, under scenario one. Under each of the columns
at the bottom it shows the GO bonds component, that first one $140 million.
Mr. Mitchell said in 2014 we are talking about $221 million and $161 million in 2016 and $96
million in 2018.
Mr. Harrington said just for comparison purposes, if you look on Page 17, one of the examples
there again an illustration showing projects being pushed out. You see a bond start of only $103
million and then $141 million, see how it builds and it is going to the latter part of the cycles.
That is the difference.
Mayor Foxx said the delta between one and four, is that interest charges?
Mr. Harrington said cost escalation related to construction.
Mayor Foxx said when you advance the projects faster you end up paying less for them
ultimately?
Mr. Harrington said as you are pushing projects to later, yes you add that inflationary component
to them and it increases the price of those projects.
Mr. Howard said I was wondering if you would Randy, talk to the Chamber about their feelings
about – you know we had this thing in Charlotte for a long time of referendums over $200
million, always had a hard time of passing. I would love to check since we need to work with an
outside party to help sell the bonds to the community on what their thoughts are on these
different amounts as well.
Mayor Foxx said he is asking for the Chamber to be advised on these scenarios and to get some
input into the scale of the individual bond years. In Mr. Howard’s words when bonds have been
over $200 million they have a little trouble passing. Just asking for input.
Mayor Foxx said we’ve had questions we now need input. Let me ask it this way – Scenario
one, is there support for the Manager recommending scenario one. This is not hard vote, you can
vote for more than one if you want, any input is good.
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Mr. Howard said number four requires some political courage but I’m really intrigued by the fact
that if you wait a year you save so much and it gets us back on our cycle of being on the off year
of the county. I’m intrigued by number four Mr. Mayor.
Ms. Mayfield said Randy, if I am looking at this correctly, if we are looking at just the total
package cost of scenario one and scenario three, those are the two that are going to be the most
economical for the community. We are looking at $804,764,000 total bond package for scenario
one and $809,363,000 for scenario three as opposed to the scenario four which Mr. Howard is
looking at which goes up to $821,229,000. We are going to come out more economical based on
what we know today and knowing that there is going to be an increase in costs on either scenario
one or scenario three. Those would be looking at really the most two economical choices to
move forward this transformative capital investment plan that we had agreed upon and that we
challenged staff to come back with, taking out the Streetcar and Informatics?
Mr. Harrington said by economical you mean in terms of the lowest total costs of the package?
Mr. Mayfield said right.
Mayor Foxx said by a show of hands, this is not a vote, this is just trying to get us closer to some
idea and the other option is just going to each individual and asking you where you are on this.
Scenario one, any support for scenario one? Two votes. Scenario two – 6 vote. Scenario three –
1 vote. Scenario four – 6 votes. Two and four so I think that settles the question on the bonds.
Now it is sort of an issue on the rate. Do you want to discuss two and four a little bit more?
Let’s just kind of pretend one and three aren’t there.
Ms. Kinsey said I would go with either one. My vote was for either one with a tax rate increase.
Mr. Barnes said the reason why I supported scenario number two is because it essentially
captures a lot of the issues that we were trying to address, many of the needs that we were trying
to address. We learned during our analysis of the Public Safety Committee that the Joint
Communication Center had gone up in cost about $4 million, from $64 million to $68 million,
and just as an example and so under scenario number two, the Joint Communication Center is
included in one bond cycle which would allow us to draw that issue and have that corridor to
become more complete at least as far as City work is concerned. Scenario two would also
include the Bojangles/Ovens redevelopment funding which was important for a slew of reasons
and I don’t know how you feel about it, but it would help accelerate that and several other issues
including dealing with parts of NEISSE. Last year that package less the Informatics was 3 cents
and now it is 3.17 cents and I don’t like the idea of having to delay another year on allowing
voters to vote on the packages, but in order to get us back on our even year cycle I think it would
make it sense to support scenario number two.
Mr. Howard said just to respond because we’ve been having this conversation for a year. A lot
of what I heard last year from folks that didn’t agree with me around this table was that the
economy was important and we needed to be concerned about how much we raised taxes. In this
situation we are still talking about a cup of coffee but it is still a difference so why is it not the
lowest one period.
Mr. Barnes said I think Mr. Howard, there are a few issues in the question you pose and from my
perspective if are able to provide the projects that the public expected sooner rather than later
that is a good thing. You will notice that under scenario number two the first bond package is
$244 million and the next is $249 million, the next $195 million and the final one would be $126
million. Under scenario four the first package is $142 million, almost $143 million, the second
is $230 million, the next $208 million and the next $239 million. So more of the projects are in
the earlier cycles under scenario two as opposed to scenario four and because of the importance
of the projects I figured it would be more conducive to meeting the expectations of the public to
do the projects in 2014 as opposed as to 2020 or 2022 and that is my thinking. As far as last year
goes I voted for a budget and it was a rate neutral budget and it was vetoed and a motion was
made for nothing and nothing passed so we find ourselves in this uncomfortable position because
of that. As I sit here in 2013 that is how I have to look at it.
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Mr. Howard said I think I’ve heard from a number of my colleagues for about a year now that
the economy was one of the real reasons why we didn’t need to do certain things so in that
scenario if we can get all of the projects and the rate not have to go up. Maybe you were not one
of the ones that made the argument about it being a hardship on our citizens, but I’ve heard that.
Mr. Barnes said I want to move the City forward.
Mayor Foxx said we all supported a budget. They were just different budgets and I think that if
we continue kind of reflecting on the past we will continue having trouble moving into the
future.
Mr. Barnes said we spend the first 40 minutes of this meeting doing that.
Mayor Foxx said I’m hoping that we can move forward.
Mr. Cooksey said Mr. Barnes’ point about the Joint Communication Center I would like to ask
Mr. Harrington about the escalation factor. As you pointed out in Budget Committee and
looking back at last year’s original proposal 2012 bonds had $64 million for Joint
Communication Center. I’m looking at scenarios two and four now since those were the ones
that got the most – scenario two puts the Joint Communication Center in the 2014 bond at $68
million which is an increase over two years of a little over 6% and yet scenario four breaks out
that same $68 million over the next four years for the Joint Communication Center, $24 million
in the 2014 bond, $44 million in the 2016 bond. How does the Joint Communication Center
build up over 6% two years from 2012 to 2014 but it doesn’t go up 2014 to 2016?
Mr. Harrington said the project in totality was analyzed for its overall costs and what we know of
the project and that one set of increase based on what we know of costs inflation would cover it
so that is why there is no difference between the two.
Mr. Cooksey said I’m not sure I’m following just yet. That could be a clarification provided in a
latter memo. I’m fine with that, I just wanted to raise the question since that was the point about
the escalation. It is flat laid out here that form 2012 to 2014 it goes up a little over 6%, about $4
million form $64 million to $68 million, but in scenario four where it is still $68 million it goes
out two bond cycles and it doesn’t change. That just puzzles me so if there is a better
explanation I would love to read it later.
Mr. Harrington said I will be happy to but from a general perspective it was analyzed based on
what we know with construction inflation that one time would cover that particular project, but I
will be happy to come back with any additional detail and clarity on that.
Ms. Pickering said Mr. Howard’s point, I don’t think any of us like to raise taxes, I know I don’t,
but I was fully prepared to. I’m not reliving history but I was prepared to last year and did vote
to raise them to some degree. I’m not happy to do it but I will do it this year. I think it is
important that we move this City forward and these projects were all good projects and we all
essentially agreed on that. I think it is important to move them forward ASAP and the fact that
the county and the schools may have bonds this year, I think it is a consideration that I certainly
took into consideration last year, the county issue of the re-evaluation so that is why I’m
supporting scenario number two.
Mayor Foxx said do you feel like you got some good guidance?
Mr. Carlee said yes sir, I actually do. I think the guidance on the 2014 is extraordinarily helpful
and the range of discussion on the tax rate is one that I think we can wrestle with and hopefully
get something that you can work from in the upcoming budget.
Mayor Foxx said are there any other issues that staff has on the capital budget because I’ve got
one I want to raise because I don’t know if it is resolved or not resolved. There is this issue of the
rental subsidy endowment piece and I wanted to bring attention to that for two reasons. One is
that as I recall we had a scenario presented to us back in the fall that I think it would have done
the rental subsidy somehow I’m not sure and maybe staff can help me understand this, but would
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April 10, 2013
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have required an additional $8 million. We now have a strategy that uses what was previously
plugged in at $60 million but now requires an additional $10 million in PAYGO. So I’m trying
to figure out, number one what is the state of play with the strategy itself and number two, by the
way I don’t like the idea of taking from the Business Corridor PAYGO monies to do that rental
subsidy piece. If we are going to do it we probably need to create an account or place for that
and to do it. I think it is a good idea, but I want to know where that stands because I didn’t hear
conversation about where that stands right now.
Mr. Carlee said I will be happy to tell you what I heard from the Council. What I heard was a
high level of interest in being able to leverage City money with the foundation on the private
fund raising for a rental assistance program. But certainly no consensus and some concern about
doing that from the corridor funds and what I’m in the process of doing is looking at the housing
program in its totality. This piece of it was brought back to the committee in isolation of the rest
of the housing program and so I plan to meet with housing staff to look at our total program that
is proposed for fiscal year 2014 and to assess relative priorities, especially given the opportunity
to leverage funds with this program. I don’t have a recommendation to make to you at this point,
but I heard the interest in the program but the concern around the funding source.
Mayor Foxx said I share that concern and I wanted to see this happen in some way, but I think
that if we are going to do it we just need to put a place in the budget for it.
Ms. Kinsey said I think I channeled the Manager because I was wondering if there wasn’t
something. I thought we should look at the overall housing budget to see if there was anything
there before jumping ahead to do something else. I’m glad to hear that.
Mr. Barnes said on that issue and it is coming up later in our agenda. When the Budget
Committee looked at the issue, if you will look at Page 59, we asked staff to provide potential
funding options and that is what you have there and what we did not do because we weren’t sure
so we decided not to make a specific recommendation because of the potential multitude of
funding sources. So what we have on Page 59 are the potential options that the Council could
choose if it decides to fund that.
Mayor Foxx said I’m sorry, I jumped ahead. You are right we are going to come to it. This has
been very good input. I know everybody is kind of tired of talking about the capital budget but
I’m actually a little invigorated by the conversation because it sounds like there is some
movement.
General Fund Revenue Update
A.
Property Tax Revenues
Finance Director, Greg Gaskins said I would like to say that you already know this, basically
there is little change from what we looked at the last time we discussed this. We do have the
pending legislation which could pass at any moment actually because it is pending in the
Legislature. The sales tax estimates have not changed. We do have concerns about whether or
not legislation will pass that might impact, not this year, but the next year in terms of our
revenues. As to where we are overall with the property tax estimates we have seen an impact as
a result of the fact that assessed values are expected to drop and that has resulted in 2014 and
2015 projections that are lower than where we were the first time we looked at these, but the last
time we talked about the fact that they were going to be lower we have now confirmed that we
are using the exact methodology that the County is using at this point to make that determination.
This is based on the Pierson work that is being done for the County and that re-evaluation work
and as a result of that we are expecting to have lower property tax revenues. The Manager’s
recommendation will be based on these new revenues and these projections showing a drop of
about 1.7% in value loss. What we won’t know for sure is the impact of the selection, as I
mentioned before, that the County Commissioners will make once this legislation passes of how
to deal with the difference in re-evaluation values. We don’t know that today as we speak what
they are going to choose.
In terms of appeals we are looking at greater appeals losses than we first projected. We knew that
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April 10, 2013
Budget Workshop
the last time I talked to you. We do believe that we have the ability to handle that. Part of the
reason was we were very conservative. We had a fear when we did this and started talking about
the first time that actual appeals losses were going to be greater. That was largely because of the
fact that this had become a very, very high profile issue in Mecklenburg County. It was very
obvious that we had people who were disturbed. It was very obvious that we had some values
that were incorrect and as a result of that we anticipated that there were going be higher appeals
and there in fact have been higher appeals. What we don’t know is depending on what happens
with the legislation and the results, whether in the next year you will have that same level of
appeals that you had in this year. Hopefully, given the report that will come out in October from
Pierson in a reasonable resolution, we will see a drop in appeals. As we speak today we don’t
know that and there is no way really to know that for certain. The numbers that we are looking
at today, which will be the best numbers that we have are fairly close to what we projected at the
last meeting. We are looking at numbers that we expected based on the report. We did have
additional meetings with the County Tax office and the County Finance Office and we are using
the same methodology that they are. As you know since they are in full control of that, that is a
good idea because we are pretty much are dependent on what they are producing to get our
property tax numbers.
Councilmember Fallon said how much will be dependent on the fact that property rates are going
back up again?
Mr. Gaskins said that really won’t have an impact until they do the full re-valuation.
Ms. Fallon said won’t that affect what they have to give back?
Mr. Gaskins said it really won’t. What they are going to give back is going to be based on the
Pierson Study that is underway and which they are tentatively supposed to report back in
October so it is really going to be based on that. A new re-valuation will occur at some point and
that re-valuation hopefully won’t have the problems that the last one had so that we establish
the revenue neutral rates on that, we will actually have a base that we can be confident on.
Understand this is a very unusual situation that we are dealing with. We haven’t had this
situation before, we haven’t had an issue where somehow mid-term we are having to have this
level of appeals or particularly we’ve never had before an actual drop in value which we might
have to account for and we are now talking about accounting for in the next year’s budget.
Ms. Fallon said in other words they are going to have this done on the value when it was
originally done of what the values would have been last year? Even if there is a raise that won’t
be caught till the next cycle?
Mr. Gaskins said it will not be caught until there is a reval done. There is no interim period and
that is the reason it is very important I think and probably what is happening as we are speaking
values are actually increasing. House sales are increasing, but we won’t capture any of that until
there is a reval.
Ms. Fallon is that part of the problem because they kept putting the reval off?
Mr. Gaskins said a very unusual situation and it is fairly complex but we did go into the last
re-valuation at a very unusual period in terms of the end of an 8-year period where you had a
very high front end and then you had a back end situation that was low. It was basically your
perfect storm and apparently it was too perfect because it wasn’t handled well. Now we are in a
situation of having an unprecedented situation of trying to deal with the impacts of that. If you
just imagine for a second that this had not happened this way, what is most unique about it is
that it is very difficult for us now to come back to a revenue neutral rate because we are in an
artificial situation where it is depressed. If you actually were to try to create, and the City hasn’t
done anything wrong in this, we didn’t go out and do the work or anything else, if you tried to
create that the only way you could do it in the interim period of time would be by actually
increasing a tax rate to compensate for that. That is the reason that is a sticker problem.
Mr. Harrington continued his presentation with the last slide on Page 2. We do expect the
legislation to conclude in June. The County’s re-evaluation consultant and we expect to have
that information back from them or at least their study completed in October and then we will
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April 10, 2013
Budget Workshop
have some more information and will be able to bring back to Mayor and Council for 2014. We
are considering the use of some onetime tax and tag money, which you will recall from your
February Retreat we noted this as a onetime change and how the state and county, when you
register your vehicle you would also pay your taxes at the same time. There is an
implementation period with that that gives us a little bit of a bump that we are considering use
that for FY14 to keep the revenue neutral so to speak.
In 2015 the eye here is what are the potential revenue impacts. Of course I could mention the
outcome of the re-evaluation appeal study. The City Manager is considering a revenue neutral
property tax rate recommendation for FY15. At this particular time we anticipate few operating
budget changes for FY15 pending the outcome of the re-evaluation study along with any other
potential impacts that could occur.
Mr. Carlee said this is the other big issue that I wanted to make sure to highlight for today. We
do have a loss of property taxes because of the de-valuation and my understanding is typically
the City would consider an equalization tax rate had this followed normal process. Now whether
you actually do it or not would be under consideration. What we are proposing to do is using
some onetime funds to actually plug a hole in the operating budget specifically from the devaluation of property values and under the anticipation in next fiscal year, once we know what
the real number is you could consider an equalization tax rate.
Mr. Dulin said what that means if Council raises taxes this year the equalization tax rate is
another tax increase two-years in a row.
Mr. Harrington said some of you have been reading about state tax reform. There have been
several bills introduced to reform the State’s tax system. They are still being reviewed and going
through the process but at this particular time this is what we know. There are four particular
general revenues that have been at least mentioned or listed in the legislation as proposed for
elimination and those would include the Business Privilege License Tax, which we estimate in
FY15 to be close to $18 million in revenue for the general fund, the Utility Franchise Fee, sales
tax reduction on food and beer and wine distribution. I’m always looking for humor although this
is a serious topic, looking for humor in a budget presentation, but I do want to clarify that the
beer and wine distribution is not the State giving the City beer and wine, it is the revenue that
they are distributing.
Mayor Foxx said I think the beer and wine distribution would help us pass a capital budget.
Mr. Harrington said the real question related to these areas that we’ve identified, what level of
offset will occur as it relates to any broadening of sales taxes and what not and we don’t know
that at this particular point. From what we understand at this particular point there is still some
review that needs to happen to understand and at this particular point we don’t have confirmation
that we would be held harmless so to speak.
Next Steps – These are the next steps currently in Council’s calendar related to the budget
process, and I think we have talked about some of the questions and the Manager has already
asked these and Council has already given some input. With that is the conclusion of the general
fund update at this point.
The meeting was adjourned at 6:26 p.m.
Ashleigh M. Price, Deputy City Clerk
Length of Meeting: 3 Hours, 18 Minutes
Minutes Completed: April 26, 2013
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April 15, 2013
Budget Workshop
The City Council of the City of Charlotte, North Carolina convened for a Budget Workshop on
Monday, April 15, 2013 at 4:04 p.m. in Room CH-14 of the Charlotte Mecklenburg Government
Center with Mayor Anthony Foxx presiding. This is a continuation of the Budget Workshop held
on April 10, 2013. Councilmembers present were John Autry, Michael Barnes, Patrick Cannon,
Warren Cooksey Andy Dulin, Claire Fallon, Patsy Kinsey, LaWana Mayfield, and Beth
Pickering.
ABSENT UNTIL NOTED: Councilmembers David Howard and James Mitchell
I.
Introduction
Mayor Foxx thanked the Council for agreeing to get together following their meeting last week.
In order to keep ourselves on schedule we through we would just add an hour to today’s meeting
and finishing up the piece that did not get done last week. I will turn it over to the City Manager
for any comments he wants to make and then we have quite an agenda to get through in the next
hour.
III.
Council Referrals to Budget Committee
Councilmember Barnes said under the referrals to the Budget Committee, there were three. One
regarding the Budget Process Calendar, the School Resource Officers (SROs) and the funding
issues there and the Rental Assistance Program. As you all recall last week we essentially
touched on … to a superficial extent, each of the topics that the Committee handled and I don’t
mind leading the issue because it was fairly straight forward I think. Regarding the calendar, we
struggled to figure out a way to adjust the calendar. If you look at Page 35 you will see the
current schedule under proposed options A and B. The concern we had was that by moving
ourselves close to the end of the fiscal year we might encounter problems if in fact we have any
budget hiccups this year. Also that are some issues regarding Storm Water Services and their
ability to establish a budget because that budget has to be approved by the County as well and
the closer you get to the end of June the more pressure it puts on the County to essentially
approve Storm Water Services budget which they would only be able to do at the beginning of
July which would create a $20,000 cost to government to make that happen. We felt comfortable
recommending staying at the same schedule but we will be happy to discuss it.
Mayor Foxx said the reason this came up was because of concerns that we may get a June
surprise from Raleigh on a source of revenue or a combination of sources of revenue and then we
may be in a position where we have adopted a budget and set a tax rate, which I understand by
law that we can only do once a year. Then we would end up having to scramble at the end of
June so that was the nature of the concern. Has that been given some thought?
Mr. Barnes said I think it was. Would any tax rate adjustments be for the calendar year or the
fiscal year? In other words if we set a rate in June and something strange happens in Raleigh,
could we then set, if need be, set a new rate in July?
Mr. Harrington said no, the General Statutes do allow for resetting a tax rate, but under an
emergency purposes.
Those would probably have to be unique and administratively it is
extremely difficult to do that.
Mr. Barnes said I’m not suggesting that we do that but in the event something bazar happened I
think it would create what may statutorily be an emergency.
Carolyn said I think we could look at whether that is something that constitute an emergency.
There’s been very little evidence of ever reestablishing a budget along the property tax rate for
emergency purposes. We would look into and I will talk to Bobby Little and provide some more
guidance on it.
Mr. Dulin said I have never been a part of something like this, but could we adopt a budget and a
tax rate contingent upon Raleigh finishing their work, but then somewhere before July 1 rotate
out of the bata position into the outer. It slides into the accepted spot after we find out the gap
between the Lepo and it actually slides into the spot.
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April 15, 2013
Budget Workshop
Mayor Foxx said I was actually thinking the same thing. I wonder whether there is an action that
can be taken by the Council that in effect creates an active date at a later point in time unless the
Council intervenes. We’ve sort of set a provisional tax rate that would become effective July 1.
That may be in effect what we do, but I think there is some language that we would probably
have to think about because once we say the rate for next year shall be X, you can only do that
one time. We ran into that last year and maybe there is a way to say that unless we come back to
this conversation before June 30th the rate shall be X. Maybe there is a way to fudge our way
around that so that we give ourselves some flexibility in the event the unthinkable happens.
Councilmember Fallon said could we do an interim rate to take effect when we know what our
budget is?
Mayor Foxx said I think we are kind of talking about the same thing.
City Manager, Ron Carlee said I understand what you are saying. Let us get with the City
Attorney and look at what the options may be as you get closer to that timeframe, giving him a
chance to dot the I’s and cross the T’s.
Mayor Foxx said I will throw another thought out there. I’m not selling this, I’m just throwing it
out there. Because of the capital budget issues there is a school of thought that says let’s go
ahead and figure that out and get that out of the way and when we’re dealing with the operating
side of the budget in the later part of the process we can continue our conversation to that so
there is a possible way to make it two-track.
Councilmember Cooksey said summarize this conversation with a direct question to the
Attorney’s Office to get back to us on and that is do the statutory restrictions and changes to the
property tax rate take effect from the date of adoption of the budget or on July 1?
Carolyn said the rate takes effect on July 1.
Mr. Cooksey said but does the restrictions on changing the rate?
Carolyn said the restrictions, as I understand it, once you adopt your budget then you are
restricted from changing the rate.
Mr. Cooksey said we got into that last year so just a little history lesson. Last year when the rate
was set at a level, we found that we could not come back to changing that decision once it was
made and that was before July 1, so once you set it, it is set. I didn’t know if the set becomes
effective July 1 or if becomes effective the date the Council adopts the budget.
Mr. Dulin said with that said, we need the float between June 10 and July 1 and I’m for the
earlier adoption date, but I’m also for less tax than more tax, but I’m also for Council having
time to do our work. I don’t know whether we need to really re-think the later date than to give
us float if we can’t do something where we adopt with an asterisk on the 10th and then wait late
June or July 1 for it go hard. Then I think we need to start looking at a later date to give the
Legislature, that is 2 weeks between the 10th and the 24th. They might come in with something
after that. They could and I think we found out they will not do their work around what is in our
best interest.
Mr. Barnes said to the point Mr. Dulin just made my sense is that what we do with our budget
might in fact create some changes in Raleigh. We will adopt a budget and they will do something
to counter our budget so I almost have this perspective that we should do our job, stick to our
schedule and deal with whatever they do. By the way in terms of things that we know they may
do, two of the biggies that come to mind are repeal of the Business Privilege License Tax which
would be $17 million gift and also a broadening of the sales tax and elimination of the State
Income or Corporate taxes. There could be some impact in terms of broadening the sales tax and
the Business Privilege License Tax and I don’t know the value of the sales tax hit. We know the
value of the other and perhaps it would behoove us to essentially ask staff to identify a $17
million plug for that Privilege Tax money and otherwise move on.
Mr. Harrington said one clarification to that, the legislation that we understand now proposes
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April 15, 2013
Budget Workshop
those changes effective for FY15. So at least at this current point it is not an FY14 impact. It
would be FY15 so that does give us a year but of course that is based on what we currently
know.
Mr. Dulin said I think the Chair of the Budget Committee had a nice point there that maybe we
ought to take care of our business and see where the stones fall, but we need to concentrate on
catching the ball. We don’t need to be worried about what is going on around us.
Councilmember Autry said what would be wrong with approving a budget and set a rate with a
vote later on. In other words if we approve the budget on the 12th, but not set a rate, then the 24th
we set the rate. Is there any precedent that would restrict us from that?
Mr. Harrington said the adoption of the tax rate has to co-inside with the adoption of the budget.
It is considered one in the same under the general statutes.
Mr. Cooksey said the question I should have asked before, I finally tracked down GS 159-15 and
so I now know the question I should have asked. The question I have is what does substantially
mean in GS 159-15 which reads: if after July 1 the local government receives revenues that are
substantially more or less than the amount anticipated, the governing body may before January 1
following the adoption of the budget, amend the budget ordinance to reduce or increase the
property tax levy to account for the unanticipated increase or reduction of revenues. How much
is substantially is my question to the Attorney’s Office and I don’t expect an answer right now.
Carolyn said I will make note of that and respond back to you with options and ranges of how to
handle it.
Mr. Cooksey said that to me looks like the only loophole that exists – if revenues are
substantially after July 1. Mr. Harrington may have something on that point.
Mr. Harrington said the one thing I understand correctly, the property tax bills go out in July so
essentially under that scenario if there is an emergency declared there has to be a second set of
bills that would go out in terms of that process.
Mr. Carlee said that was the proposal that was in front you before, and here is the Part B to it.
The Part B would be to backfill that Business Corridor Revitalization money, that $10 million by
reallocating $10 million from the Comprehensive Neighborhood Improvement Program, the
CNIP Neighborhood Improvement component, of the proposed general CIP. With that it would
take the CNIP program from $120 million to $110 million and you would plug in $5 million in
the first cycle and the $5 million in the second cycle under a category called Reserve for
Business Corridor Revitalization. It could be used for similar types of uses. How you have
currently used Business Corridor Revitalization money, it could be used for infrastructure type
improvements. You could use that in the corridors or as a compliment to what is envisioned in
the five community areas that are envisioned for the CNIP. That $10 million could compliment
business corridor type investments there or in other areas, but it gave Council that flexibility and
it did not add to the total of the general CIP.
Mr. Mitchell said I just feel awkward. I think most of us around here support the Rental
Assistance Program. I know I had a presentation when I was on board, but I think choosing
Business Corridor versus rental substance just doesn’t sit well. Randy, you say you would take
revitalize funding by allocating $10 million from the Comprehensive Neighborhood, why can’t
we just do that now? Why do we have to backfill the corridor, why can’t you just take $10
million out from the Comprehensive Neighborhood Program?
Mr. Carlee said because it is bond money. What we are trying to do is find a substantive for
PAYGO money with bond money. We need PAYGO money for Rental Assistance Program.
We can’t use bond money or else we would have brought to you a proposal to take housing bond
money, but we can’t actually use bond money for the rental assistance.
Mr. Mitchell said how much to we allocate in the Housing Trust Fund each year?
Mr. Carlee said the last bond was $15 million.
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April 15, 2013
Budget Workshop
Mr. Mitchell said for the Housing Trust Fund?
Mr. Carlee said correct.
Mr. Mitchell said how much is left in the Housing Trust Fund?
Mr. Carlee said $10 million.
Mr. Mitchell said so we’ve got $10 million in the Housing Trust Fund. Don’t you think it is a
better fit that the Housing Trust Fund should go toward housing, putting people in housing?
Mayor Foxx said I think the plan, the housing strategy that is being through about does put that
money to work for housing. They are looking for another $10 million to help build a gap on this
rental substitutes. Mr. Mitchell, I share your concern and I wonder why if we are looking for
PAYGO money why don’t we just put PAYGO money in the budget for this purpose?
Mr. Mitchell said I think we are sending the wrong message that the corridor is not that
important and that is the message we don’t want to send. Even if you are talking about future,
we would hope that we would do other development in corridors. I know that wasn’t the intent
but that is the reality of how some people are going to perceive this and I don’t want it to lose
merit because it is a worthy program. I think it will fall because you all are tightening us in a
corner through the corridor fund and rental assistance. I don’t think any of us feel comfortable
being in that spot. We’ve got $2 million sitting aside already for the Housing Trust Fund. To
me that is more of a clean and natural way to use for housing rental assistance. Mr. Manager I
hear you say PAYGO but be careful. I’ve got to agree with Mr. Cannon, we were in ED
Committee and he leaned over to me said you know the Business Corridor is slush fund. It
seems like every time we get a proposal it is a recommendation to take it out of the Business
Corridor Fund. I would rather you challenge us and say we don’t have enough projects in the
business corridor and go out there and get some projects to use those dollars as opposed to
allowing that money to continue to sit there and then we always want to take some of it away for
other programs. It is very uncomfortable for me and I’m just speaking for myself.
Mr. Carlee said the position I was articulating is what I was hearing back from the Council. I
really understand that so we actually don’t want to reduce resources available for the corridors.
What we were looking to try to do was actually substitute money for the corridors from PAYGO
to bonds so you would still have $10 million earmarked for the corridors, but they would come in
two increments of $5 million in each bond issue. Thinking as we go into the corridors and try to
find those projects you are talking about and being more aggressive about spending the money
that we would likely have projects of a magnitude that would qualify for bond funding.
Mr. Mitchell said to the Mayor’s point, why can’t we just put the rental assistance budget
allocation in the budget?
Mr. Harrington said there is simply not capacity in PAYGO funds to fund $10 million. The only
way to do it would be to reallocate, take away from existing maintenance programs in the
PAYGO.
Ms. Kinsey said the Housing Trust Fund is bond money so we can’t use it anyway.
Mr. Mitchell said for this purpose.
Ms. Kinsey said we don’t have to do $10 million right off the bat. We don’t even have to do $5
million, we could do $2 million if you can locate the funds to allow us to do it.
Mayor Foxx said if this is a priority, and I think it is a worthy investment to get the substantive
program done but why could we not create a PAYGO account for this particular purpose and
have a sunset once we’ve gotten up to …?
Mr. Harrington said in that 5-year stream of revenue there is not $10 million of revenue growth
that will cover that. The only way to cover it is to reallocate from existing programs.
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Mayor Foxx said let me ask the question again. Why couldn’t there be sufficient growth?
Mr. Carlee said the two ways to do it within PAYGO would be to reprioritize existing projects or
change the PAYGO tax rate.
Mayor Foxx said what kind of impact would we be talking about regarding the PAYGO tax rate?
Mr. Harrington said for $2 million a year on the tax rate would probably be somewhere in the
neighborhood of .2 cents roughly. That would then reduce the capacity either in the general fund
or reduce the debt capacity on the proposed general CIP.
Mayor Foxx said I personally feel like this is something we should figure out a way to do. I’m
not asking myself should we do this or shouldn’t we do this. I think it is a question of how and
to Mr. Mitchell’s point I think what is striking people is that the corridor fund is there to jump on
opportunities to help revitalize our corridors. If you make a commitment today to say we are
going to repurpose that money for this subsidy program and then you make replenishing that
money contingent on future actions of this Council and perhaps even the community, you are
trying up putting that a little bit at risk. From the Council’s standpoint I think one policy
question is, is this enough of a priority for us to consider creating a PAYGO account specifically
for this purpose. The staff is trying to help us work within what we’ve put on the board so to
speak last week. I appreciate and understand where you are coming from and frankly if there is a
way to do it I want to see us do it. I think the choice that Mr. Mitchell pointed out is the one that
is feeling a lot of heartbreak.
Mr. Carlee said so I can be clear it is that risk piece that is bothersome to you, taking the
neighborhood corridor money and moving it from PAYGO to bond.
Mayor Foxx said the headache with getting those funds in the budget in the first place is very
similar to the headache we are going through trying to figure this rental subsidy so there is not a
large appetite to play around and we mitigate an issue that we dealt with previously.
Mr. Carlee said that is simple to understand. It sounds like we need to go back to the drawing
board if the Council is interested in our trying to find a way do a rental assistance program.
Mr. Mitchell said let me follow up on Ms. Kinsey’s point so I can be clear when I speak to the
community. Because the Housing Trust Fund is bond money, that is why we can’t use that pool
of money, it has to be a PAYGO.
Mayor Foxx said if we were to create a specific account for this purpose without taking from
something else that is in the budget cycle, what I just heard is that we probably are looking at .2
cent impact to the tax rate.
Mr. Harrington said we will need to conform that. We will calculate it.
Mr. Carlee said we did look at other PAYGO items to find out if there was enough money to get
the $2 million per year. Where we could substantive PAYGO for bond we were trying to keep it
whole and we were finding problems with the other PAYGO lines, but I understand the
sensitivity of the importance of keeping the neighborhood corridors as a PAYGO line.
Mayor Foxx said I think going forward we need to differentiate between – there is bond money
for business corridors which is the $13 million and then there is this PAYGO account that comes
in every other year. I think we might need to figure out a way to differentiate that
Mr. Carlee said let me clarify that. They are actually one in the same so there actually is $13
million in PAYGO money now for neighborhood corridors. I wouldn’t touch that because I
would still like to have money in PAYGO to do something opportunistically in the corridor if we
are able to do it. The idea was that the future PAYGO money coming into it we would shift to
bond and so we would have $13 million in PAYGO where we need cash ready available and
then back up the next $10 million with $5 million in 2014 and $5 million in 2016. The idea was
not to take any of that $13 million PAYGO that is currently on the table because for all of the
reasons you’ve said in the other meeting.
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April 15, 2013
Budget Workshop
Mr. Howard said I want to understand a little more about what you are saying that the
neighborhood improvement program is the money that the Planning Commission and
Neighborhood Development spent to implement area plans. Is that what money is? What is
CNIT and where is that normally in the budget, where is that spent?
Mayor Foxx said this is the new neighborhood improvement program and this is the one where
instead of spreading money around the city like peanut butter we are going to concentrate
significant spends within concentrated areas. It is a revision of our practice. Typically this fund
has been used for curb, sidewalks, gutters, streetlights or whatever to help the neighborhood, but
the vision for this is to actually do some different things, involving the neighborhoods, involving
the county and the schools to try to imagine what cannot happen in five neighborhoods around
the city. That is actually another problem I have with this proposal is that not solve a bit of our
capacity on that end and there is a lot of blood spilt trying to keep that intact and I’m just worried
that we are losing a little capacity there.
Mr. Howard said I actually support that we shouldn’t take it out of the corridor fund but we
should still leave the $2 million additional to add to it. I don’t think we spend enough money on
the corridors. I actually would argue that issue be a part of every bond cycle anyway, not
replacing it to do something else. That is the problem. We have these two priorities that we are
talking about and they both deserve some attention and I would argue that we probably should
put more in there but not less. If you drive these corridors, some we have been talking about for
the last year, has been the lack of attention to at least two of these corridors we are talking about
trying to do something to jump start it. We know that just paving the sidewalks is not always it
so find some ways to do more Mosaic Villages or perhaps some other things, we need to figure
that out.
Mayor Foxx said is there a general feeling to ask the staff to continue working to try to get this
rental subsidy piece figured out?
Mr. Mitchell said just for clarification, note #2 said use of federal HOME and CDBG grant
funding is not permitted by the Federal Government. Just for clarification, why?
Mr. Harrington said the Federal Government doesn’t allow the use of … money for endowment
type purposes. It is a federal regulation requirement.
Mr. Mitchell said let me play on words. They would change that if it wasn’t considered an
endowment program. Then could we use CDBG funding for this program?
Mr. Harrington said that is probably a legal question, but I think the spirit of it is still an
endowment so that would still raise the eye brow of the federal government if it were used that
way.
Mr. Carlee said that is really the core of the rental assistance program, and that is why the
Foundation is going out and seeking private donations so we are essentially matching those to be
able to get one-time gifts that would then spin off interest to support the rental assistance
program.
Mayor Foxx said this is good conversation on this. Mr. Barnes anything else on this?
Mr. Barnes said that is it.
The meeting was adjourned at 5:29 p.m.
Stephanie C. Kelly, City Clerk
Length of Meeting: 1 Hour, 25 Minutes
Minutes Completed: May 31, 2013
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May 15, 2013
Budget Workshop
The City Council of the City of Charlotte, North Carolina convened for a Budget Workshop on
Wednesday, May 15, 2013 at 3:05 p.m. in Room 267 of the Charlotte Mecklenburg Government
Center with Mayor Pro Tem Cannon presiding. Councilmembers present were John Autry,
Michael Barnes, Patrick Cannon, Warren Cooksey, Andy Dulin, Claire Fallon, Patsy Kinsey,
LaWana Mayfield, James Mitchell and Beth Pickering.
ABSENT UNTIL NOTED: Councilmember David Howard
Mayor Pro Tem Cannon called the meeting to order at 3:05 p.m. and said this is our time to
discuss the FY2014 and FY2015 budget adjustments and we’ve got at least three hours dedicated
to this and whether we need that or not I’m going to let you all be the judge, but I would hope
that I could frame that by saying we can be in session up to 6:00 p.m. but we don’t have to be.
*******
ITEM NO. 1: INTRODUCTION
City Manager, Ron Carlee said Randy Harrington is going to be our Tour Guide tonight as you
lead the Council through this process. I will turn it over to Randy to tee things up for us.
*******
ITEM NO. 11: UPDATE ON BUDGET PROCESS
Budget Director, Randy Harrington said this is your Budget Adjustments Meeting and
following this meeting the next Budget meeting will be the May 29th Straw Votes and after that
would be your June 10th scheduled Budget Adoption. Typically it has been Council’s practice
that items discussed or proposed today that receive 5 or more votes, we will take those back and
run the analysis on the proposals and considerations etc. that might be around the decision
package, bring those back to you at your May 29th Straw Votes meeting and at that meeting it has
been Council’s practice that any of those items receiving 6 or more votes we would include in
the Budget Ordinance that you would see on June 10th for your consideration for adoption. I just
wanted to touch base on that in terms of the process and these next two meetings focused on
those particular changes that Council would like to make to the Manager’s recommended budget.
Mr. Carlee said are you looking for confirmation from Mayor Pro Tem on those?
Mr. Harrington said just as a FYI on past practice, whether or not Council wants to continue that
and that is certainly your choice and your desire, but that is typically what has happened in the
past.
Mayor Pro Tem Cannon said it is a practice that has worked well for us so if there is no objection
I would suggest that we continue to go through that same process and allow us to move forward.
Councilmember Kinsey said I just want to let everybody know that I will be leaving early and I
apologize, I did not get this meeting on my calendar and I scheduled a flight out at 6:00 p.m. I
will stay as long as I can, but I will have to leave early.
Mayor Pro Tem Cannon said it is for other public service business.
Ms. Kinsey said it is the National League of Cities Board Meeting.
Mayor Pro Tem Cannon said you will not be along as some other members will have to probably
take off while we are doing some things, but come back to rejoin the meeting.
Mayor Pro Tem Cannon recognized the Council and ask if there are any thoughts, suggestions or
ideas as we consider this budget. The floor is open.
Mr. Harrington said I don’t have an amendment, but the one item that I did forget to mention
earlier, last Friday in your packet we did send out some Q and A’s in the agenda for this
particular meeting. At your place setting you do have some Q and A’s follow-up from Monday
night’s public hearing. If you do not have either of those two items Pam Smith will be more than
happy to bring them around to you.
Mayor Pro Tem Cannon said these are pretty much centered around compensation and benefits?
Mr. Harrington said correct.
Councilmember Fallon said I had asked Randy if we put the $63 million back into the budget,
which is taxpayer money, what difference would it make? Would it take down the rate that the
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May 15, 2013
Budget Workshop
taxpayer pays on $100,000 or $200,000 house? Do you want to talk about that Randy?
Mr. Harrington said I don’t have any specific information and we would have to run the analysis
to determine what the exact number would be but I think Ms. Fallon’s question was if you took
the $63 million that was proposed for the Streetcar, the local funds, and applied that to the capital
program, just as a rough estimate it would probably reduce the rate between .15 and .25 just as a
range guesstimation at this point. It would probably take the rate just a little bit below 3 cents
but the overall range or parameter; I think that was your question.
Mr. Carlee said we would need to drill that down a little bit further because probably not all of
those sources would you want to reallocate, but for a range I would say that is a good starting
point.
Mayor Pro Tem Cannon said the one thing you want to measure there is the level of investment
in terms of reaching a goal that you may have, will it achieve that or not relative to be able to
pull that back, utilize those different dollar amounts.
Ms. Fallon said it would be just applied to the bottom line.
Mayor Pro Tem Cannon said there were some other items that were talked about and maybe
somebody had a request for more information. Would anyone like to raise those items?
Councilmember Dulin said this is a question about the 2% bump. Do we have any idea what the
total cost is to the City for the pay raise this year?
Mr. Harrington said if you do the 2% Broadbanding and the 1% public safety marketing and the
2.5% or 5% steps it is about $6.6 million.
Councilmember Mitchell said thank you staff for providing this material at our table because I
think some of it came from Monday night and there was one question that one of the speakers
from Solid Waste shared with us or made a request of 5% across the board merit increase. Is that
question addressed here in the handout?
Mr. Harrington said in terms of what the cost of the 5% is?
Mr. Mitchell said yes.
Mr. Harrington said no it is not addressed in the Q and A. I can bring that back to you.
Councilmember Pickering said Randy, along that line, is it possible to get a comparison with
other cities for our Solid Waste workers to see how we compare with other cities?
Mr. Harrington said in terms of pay?
Ms. Pickering said yes, in terms of pay.
Ms. Fallon said what is the criteria for merit? Why isn’t it given straight across the board rather
than merit?
Mr. Harrington said it is based on of performance and each department has its own performance
goals and initiatives related to achieving Council’s priorities. It has been Council’s philosophy
that the Broadbanding employees be on a merit based system which is pay for performance
system to have an opportunity to reward for performance.
Ms. Fallon said aren’t some neighborhoods easier to deal with than others so that the merit
criteria would be different.
Mr. Harrington said you mean different by department?
Mr. Fallon said different by the area that they cover.
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May 15, 2013
Budget Workshop
Mr. Harrington said I don’t know if I can answer that. I don’t know if you could restate your
question.
Mr. Fallon said what I’m getting at is that merit is such a subjective criteria and after listening
Monday night, would it be fairer to just give across the board and maybe have some kind of
bonus thing for someone who was really exemplary.
Mr. Carlee said there are a variety of different pay plans approaches. I probably have worked
with all of them over my tenure and one of the things I will be looking at going forward are the
pay plan structures here. Obviously I couldn’t do that in this initial period of time. There is
obviously some subjectivity in valuation for any positions. The idea is that supervisors do
establish performance standards so the employees know what the expectations are and then the
financial rewards are based upon the degree to which they are achieved. Having some variation
of pay is I think generally considered a sound approach to personnel pay systems. What is not
done here, which may be worthy of further consideration in the future, are some across the board
increases in order to keep up with market. Some pay plans have an across the board component
to it and then some variable pay that is sort of a hybrid system. One of the areas that I will be
looking at in preparation for 2015 is specifically around our field workers and what our
competiveness level is there and what their longevity is and what is the appropriate system for
field workers. As you know we already have two pay plans in the City, one for general
employees and one for public safety. I will want to look more closely at field and based on the
consultant’s study, I will be looking more closely at Aviation and whether or not we have pay
plan that is competitive with our market in Aviation relative to other City departments and
authorities.
Ms. Fallon said I was just trying to get at, after listening to them on Monday night, how is the
moral in the department because they seemed to feel, at least what they said was, it is unfair to
have some employees getting more when we work as hard. They are not our highest paid
employees.
Mr. Carlee said I understand that. I actually met with the supervisory staff in Solid Waste this
week and I will be going out and meeting with field staff next week and getting a better sense
with them and what their issues and concerns are. As I said that is one of the areas I will be
doing reviews on going forward.
Ms. Fallon said it was difficult to listen to especially since they get a raise that negates
everything they have with the medical.
Mr. Carlee said actually it does not negate everything so I think that is one of the really
important points. This is illustrated in the work that Randy prepared for you today. Employee,
while the percentage increased in medical, depending on your plan, may be higher than the
percentage increase in your pay, the base of the pay is so much larger than your payments for
your benefits, you end up in a net positive position.
Mayor Pro Tem Cannon said I know that you’ve gotten some requests. Make sure there is a
clear distinction between what the ask was on Monday night. I thought what I heard was we
want 5% and not to be based around performance per se.
Mr. Carlee said that is what I heard.
Mayor Pro Tem Cannon I just want to make sure all understand that because in your place of
business you can only work within certain confides of what you can give at a run that practice
by. Let’s just make sure we are evaluating things across the board as we ask staff to go back and
find more information for us.
Mr. Carlee said in that regard, the two things that I ask a specific request for information coming
back is what would 5% cost and the second question was how does our Solid Waste
compensation compare with other jurisdictions?
Mayor Pro Tem Cannon said those are the pointed questions that must be asked.
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May 15, 2013
Budget Workshop
Councilmember Barnes said Mr. Harrington and Mr. Manager, I wanted to talk to you about the
information you all provided on April 10th regarding funding impacts from state tax reform. You
had indicated a potential for $52 million impact to our general fund budget. I wanted to know if
you have any updates on that and then I wanted to propose some deletes.
Mr. Harrington said at this particular time I’m not aware of anything new other than I think it
was about a week and a half ago the General Assemble, Senate side, made some introductions of
a new package related to tax reforms. Other than that I don’t have any other additional
information at this time, but the pieces that we did identify there were about $52 million worth of
potential risk areas with the big question being how much of that would be offset by any
broadening of sales taxes or other revenues that the legislature might consider.
Mr. Carlee said all the representations that have been made to me is that none of those would go
into effect until FY2015.
Mr. Barnes said what I’m hearing is there is no indication about whether those cuts will be more
or less likely. I have a couple concerns on the operating budget side, one is the rental assistance
program. It is proposed to be a $2 million payment from our general fund and hope to have
some other funding source after this fiscal year. I’m not confident that will happen so I’d like to
take that out as a delete until we essentially see how next year is going to look. I also want to
keep those Charlotte International Cabinet positions where they are, meaning don’t put them in
Neighborhood and Business Services.
Mr. Dulin said isn’t that like $156,000?
Mayor Pro Tem Cannon said are there any other proposed or suggested ideas as to where it
might go?
Mr. Barnes said leave it where it is, separate office. What I’m suggesting is, not that we would
never ever, ever consider it because we can always can consider things. I’m saying that in light
of some of the uncertainty with respect to our potential cash flows that we leave it out of our
budget for a year.
Mayor Pro Tem Cannon said we can list everything first and then come back and check the
hands or we can do it now. Is there a preference by the body?
Councilmember Cooksey let’s see them all first.
Councilmember Autry said I have a question about compensation for City employees. If we are
going to find out what it would cost to add 5% to the salary, could we also find out what it would
cost to bring City employees up to AMI?
Mr. Carlee said Area Median Income? Yes, we can calculate that.
Councilmember Howard said how do you calculate that? Based on the position, because area
median income is actually $64,000 so everybody makes at least that?
Mr. Autry said I’m just asking what does it cost. I’m not making a recommendation, I just want
to know what that number would be.
Mr. Howard said does that include City Council?
Mr. Cooksey said Mr. Autry and Manager Carlee, I would suggest that one of the difficulties of
that request is that area medium income is based on family size. If you want to start talking
about investigating every staff member’s family size to figure out what the appropriate area
median income measure because the figure Mr. Howard sited at $64,000 is for a family of 4, but
for a family of 2 it will be different and for a single person it will be different. What do you
mean by area median income and how deeply are we supposed to get into that kind of a study
based on the family size of an employee?
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May 15, 2013
Budget Workshop
Mr. Autry said what I’m really interested in is what the total pay package for FY2013 is for Solid
Waste Services folks after they pay their insurance premium of $27,750. This is the response
that was handed out today on page 2 and if there was a family of 4 where the breadwinner was
employed by Solid Waste Services how much difference at $27,750 net after the premium and
that is not really their net, that is the gross after their insurance premium because they are still
withholding taxes, etc. Are these folks qualified for affordable housing?
Mr. Cooksey said I’m sure they are, depending on the household size.
Mr. Autry said I’m just curious, when we are debating here 3.17 cents and we have folks doing
the work for the City in affordable housing taking home $27,500 what percentage difference
does it mean that they are falling short of AMI for a family of four?
Mr. Cooksey said I can’t emphasize enough that I don’t think we should assume a family of four
for every employees nor should we assume that a City employee is the sole income earner. What
you’ve got is an extraordinary number of variables to have to take into account where you have a
sanitation equipment operator’s average salary FY2013 has total pay less current premium of
$27,750. There are going to be several categories of household size, number of income earners
in the household and the like. I don’t know how you go about suggesting we analyze the pay
based on a person’s household side and how many income earners there are in it.
Mr. Autry said how about if we narrowed that question? Could I know what the percentage
difference is between $27,750 and the AMI for a family of four in Charlotte?
Mr. Howard said the easiest way to do that is just say everybody should make what AMI for one
person is. I’m a little concerned about kind of hyper bowling the salaries past what the market
says they should be. Then you kind of throw the whole chart off. If a position in comparable
cities are actually a certain thing for a certain position and we artificially make it something else
based on something else, a social mission, that kind of gets our whole pay scale out of whack.
Now you have to push everybody up and it is not just the people at the lowest because if they
make as much as their supervisors when you do that, the supervisor has got to make more so you
are pushing that up.
Ms. Pickering said the turnover rate for Solid Waste is 9.l % in comparison to 3.5% for the City.
I wonder if you consider that to be high and could we also compare the turnover rate to other
cities?
Mr. Carlee said yes we can do some benchmarking of that rate. 9.1 is not extraordinarily high,
but it is high relative to the benchmark that is in here that was of concern to me was of other
maintenance job category. I don’t think it is a good comparison to all job categories, but you can
see on our other maintenance job categories we are at 6.8% which is actually a pretty good
turnover rate and I would consider that pretty favorable. The 11.3 compared to 6.8 is high in
Solid Waste and does merit for the research.
Mr. Mitchell said the 26-mile Cross Country Multi-use Trail, Randy you said was a partnership
between the City and the County and I’m all for collaboration. I’m struggling with the amount
of $35 million so I would like to make a recommendation, and since we partner, to reduce that
from $35 million to $20 million on the City side. I would still like to get some information about
how many neighborhoods would that touch and how much is the County putting in since it is
supposed to be a partnership between us and the County?
Mr. Harrington said let me follow-up on that.
Mr. Autry said to add that I would also want my colleague to see the Michael Gallis report on the
economic impact that we saw in Transportation and Planning. I think that would be beneficial.
Mayor Pro Tem Cannon said Mr. Mitchell, you want to reduce that down to $20,000?
Mr. Barnes said do we know what we would get for $20 million? Would it be worth doing at $20
million?
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May 15, 2013
Budget Workshop
Mr. Carlee said that is part of the answer we will have to bring back to you.
Mr. Barnes said we are going to be voting on this in a moment.
Mr. Carlee said the vote today is for us to put it on the list to review and bring you back
information as I understand it.
Mayor Pro Tem Cannon said the process is for something to get 5 or more votes and then for that
to come back on the 29th as we go through the straw voting process. That is when we are firming
everything up budgetary wise to be prepared to adopt a budget soon thereafter.
Mr. Cooksey said to help clarify the CIP that might help inform the report in two weeks, as I
recall there are three separate segments to it. There is a north, a middle and a south, so one of the
approaches we could take with a reduced amount in the CIP is to fund two legs instead of three.
That is one way to approach it when you come back to us. That is something I think would be
worth seeing. What would $20 million do for the entire 26-mile stretch or what could you lop
off and maybe keep a middle and a northern or two of the three, that kind of thing. I remember
they had different amounts to them as well.
Mr. Carlee said I would typically take all of these request liberally so that we could bring you
back alternatives. We will tell you exactly what you ask for but then we would provide you with
other alternatives and other scenarios. For instance the three segment alternative here, and it may
be different amounts of money. The 5% request we would probably show you that in half
percent increments so that you not only get the answer you want, but you see what other
flexibility you may have.
Mr. Howard said the amount for the Cross Trail is how much in the CIP?
Mr. Mitchell said $35 million.
Mr. Howard said I’m looking for the economic development piece. I wanted to share with Mr.
Mitchell how much that impact was.
Mayor Pro Tem Cannon said that is in your May 20th Package.
Ms. Fallon said can we get some kind of estimate about how many people would be using it?
Mr. Harrington said we know that approximately 80,000 people live adjacent to the trail and
there are approximately 90 plus jobs that are associated or businesses along there that employ
that many people.
Mr. Barnes said what Mr. Howard is looking for is on Page 25 of the March 20th handout and has
the projected $370 million and 1,200 jobs.
Ms. Pickering said can we see how many jobs it would be for the section that we are
considering?
Mr. Harrington said on Page 12 of the March 20th Workshop packet does list the Cross Charlotte
Trail in terms of the total economic impact. The value was estimated at $151 million and an
estimated 582 jobs. The other piece I’ll note is that on Page 160 of that same packet for March
20th there is some information from the Committee Review Process from this past spring that the
Transportation and Planning Committee reviewed and there are about 6 or 7 slices that go into a
little more detail on the Cross Charlotte Trail, the neighborhoods it impacts and the jobs.
Mayor Pro Tem Cannon said that information will show you that this trail is supposed to stretch
from Pineville to Cabarrus County. It is pretty lengthy but I think you make a good observation
there in terms of what it might mean on the economic side of things. This will come up in a
moment in terms of whether to move forward with it or not.
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May 15, 2013
Budget Workshop
Mr. Mitchell said I have one more add and I would like to speak to it. I call it Charlotte
Constituent Intern Program and the gist of it is to allow us the flexibility to have one intern to
work in our City Council Office. You know over the years our roles have changed
tremendously. Our City has grown and from a staffing level I think it is unfair to us to put so
much pressure on the great staff we currently have so other cities have used the intern program
as a way to get people to understand the City as well as to take some relief off of
Councilmembers. If you look at the Universities we have between Davidson, Johnson C. Smith,
UNCC, CPCC I think it would be a great opportunity to get some of those students who are
majoring in Political Science or Public Administration to work strictly on constituent service and
I keep emphasizing constituent service only. We don’t need anyone working in our office who
has other agenda or we use them differently, it strictly should be constituent service. We have
had examples and I can tell you personally when I was elected in 1999, I had one from Johnson
C. Smith and they helped me create a District 2 director, made up of all my business leaders and
church leaders. Councilmember Howard has used one recently who helped with our Youth
Council. LaWana Mayfield is using one now and it is very helpful to us when you think about
all the neighborhood meetings we have to attend, I don’t think it is fair for staff to have to work
after 5:00 so I would like for us to consider it. The dollar amount I would say is between
$82,940 to about $160,000. The low end, $82,940 is based on each one of us having a
constituent intern in our office at the minimum wage of $7.25 so I came up with $7,540
multiplied by 11. Councilmember, it is your prerogative if you think you need one or if you
don’t need one, but I think when you are talking about how we are serving our constituents it is
definitely something that we need to look at in more detail.
Mr. Howard said since you mentioned it, I actually have had great success with it. Actually the
Youth Involvement Program is something I started with a former intern and she has actually
gone on and is now working in Kay Hagan’s office now so it was a great launching point for her
as well. More recently we have been using an intern to help organize things and we know how
we get behind as well as communicating with our constituency and actually she has moved on to
help Ms. Mayfield. I think it was a great experience and for me growing up when I have
potential in-terms that became the work experience that I used to get a job. If we can make it
happen, I think it would be helpful.
Councilmember Mayfield said Mr. Mitchell and I have had this conversation. Personally I say
$10 as opposed to $7.25 because I don’t think the minimum wage is $7.25 today. Also another
part of that was 20 hours a week, but I know for me personally with my District there are a
number of meetings which we all have. We have some of our neighborhoods that have their
community meetings on the same evening at the same time or within 30 minutes of each other
and it has been helpful when I’m at one event having someone that is representing not only me
but also the City in a positive way. When we are looking at interns and looking at those Political
Science Majors interns, giving them the opportunity for some actual hands on experience as
opposed to only being in the office for filing and things like that which we need. If we are
looking at it I think what we discussed was around a 20-hour work week, but only for those
Councilmembers that have a need. It is not automatic that every Councilmember will have
access. We are looking at best practices through our colleagues through National League of
Cities and other areas even around the Carolinas as far as how they are able to respond to the
constituents in a more effective and professional manner outside of utilizing the amazing three
staff that the 11 of us have. It will be a great opportunity to not only expand our internship
program but also recognizing that at the end of the day you can’t go to the gas station and just
smile and they will fill up the tank. Even though we have limited pay we need to look at how
can we make sure that our in-terns have get real work experience for when they move on to
wherever the future holds for them.
Councilmember Kinsey said I think I heard Ms. Mayfield say what I was going to say, but I’m
not sure. Were you suggesting that maybe there would be a pool of in-terns, not necessarily one
for each of us, and I think we would have to be very careful because there is a limited amount of
money if we go in this direction. I think we would have to be very careful of how often we use
them, but I do agree that although Robin does one hell of a good job for all of us, and I don’t
know how she does it all, and of course Kim and Alvin have other responsibilities and how they
manage I don’t know. I’ve very appreciative of everything they do for me personally, but I think
some extra help would be good, but I’m sure the Manager would do some kind of program so it
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wouldn’t be a runaway thing. I think if we start with a pool just to see how many of us use them,
and some will use them more than others. That is a thought and I think maybe that is sort of
what you were saying.
Ms. Mayfield said it is very close because if you think about the in-tern that I have now it was a
shared in-tern between David and myself. The idea of having someone and the pool will be
helpful and why I say bump that dollar amount up a little bit and looking at a 20-hour workweek
which is about the average time of in-terns. If we are able to identify the funding for those that
need the additional assistance we will have already discussed it and looked at a way to offset
some of the costs and I’m thinking more so the financial costs of that intern with the impact of
them committing to their volunteer hours, but also looking at real life work experience for them.
Ms. Kinsey said I think whatever we do it should be a pilot program. If we go in this direction I
would like to see it be a pilot program.
Mr. Barnes said I just heard Ms. Mayfield say volunteer hours and I think that is exactly what it
should be, a volunteer program. A lot of the value of internship programs from just being at the
place and getting the experience of being with people like you or people like David. In terms of
us creating another cost center in the City government I don’t think we should do that.
Mr. Dulin said Mr. Mitchell this is add and deletes so you’ve added up to $160,000, what are you
going to delete to pay for it?
Mr. Mitchell said if you remember as we continue to go I’ve got another way we are going to
have some additional cost to pay for it. Or I can ask staff to bring back some resources to
identify additional income.
Mr. Dulin said the $63 million for the Streetcar is going to suck up every dime in this City and
there is nothing stopping one of us from having an in-term. Matter of fact you guys have had an
in-tern working just fine. If you want an in-tern have at it and we can use a program to get at
your in-tern, I don’t know how David got this nice young lady, I think she is in the room today,
but that is great, but there is zero reason why we need to start paying a whole other cost center to
start paying college kids to come help you clean your office, or whatever it might be. I’ve been
down here 8 years, I keep my own calendar, make all the meetings, had two last night. People
call me I put them on my calendar. Our staff, Robin is doing a great job and is bringing the level
back up to where we needed it after a couple others that weren’t up to it. With that can I get to
some deletes? Mr. Manager, you were really kind in one month figuring out where we have an
extra pot of $63 million. When we got the $25 million grant for the starter line that is under
construction, we had to scramble to find $12.5 million to come up with our part of the starter
line project and all of a sudden we’ve got $63 million. With that in mind I’m on Page 142 in our
book and that is Preliminary CIP Plan – Joint Communication Center $68 million. I’d like to pay
for that and I’m going to take that $68 million out of the CIP and pay for it with $63 million that
the City Manager has identified as available because interestingly enough if we go for a federal
grant for $63 million, a federal match for 50% of that $129,000 and we don’t get it that money
would apparently still be there. So $63 million gets us there and I’d like to delete $2 million
from the Rental Assistance Program, that is $65 million and then go back over to our Financial
Partners on Page 93, Non-departmental Accounts, we are scheduled to give the Arts and Science
Council $2.9 million a year for the next three years. I’d like to take the remaining $3 million,
$1.5 million out of that budget for a two-year period in FY14 and FY15 to make up the
difference and that gets us to $68 million for the Joint Communication Center. That is $63
million from the pot of money that the Manager has found, $2 million from Rental and $3
million from the Arts and Science Council, $1.5 million for two years. That gets us to $68
million and we build the Joint Communication Center on Statesville Road which we all say we
need. Now back to Page 93, the UNC School of Government, you all have talked me back into
that a couple of times. We really use the School of Government for resources when our folks
either aren’t up to it or we are just snowed under. Is that right?
Carolyn said that is correct. We use them for their expertise and legal issues that maybe we
don’t always have expertise in.
Mr. Dulin said do we know how many hours, do we keep track of the hours?
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Carolyn said we probably don’t keep tract of the hours, but we probably call them once or twice
a week or sometimes more depending on the issues.
Mr. Dulin said I’m going to leave that one alone and Mr. Manager, no offense but the ICMA
Host City – I don’t know anything about that. It is not for FY13 but for FY14 and FY15 it is
down for $50,000. Is that us bidding to be the host city for their convention? When would
Council find out about that other than right now in our work up?
Mr. Harrington said this is consistent with what we’ve done in the past. As you recall in the
early 2000’s the City hosted the ICMA as well as other NLC type conferences and there is
typically a city contribution portion that is required to fund the event. This is the ICMA portion
and as you know in three years is the NLC conference which is scheduled to be in Charlotte.
That would probably be a similar piece where there is a city component contribution to make that
event succeed and occur.
Mr. Dulin said how many visitors do we have for the ICMA conference?
Mr. Carlee said I think it is somewhere in the 3,000 range. This actually will be the 100th
anniversary conference.
Mr. Dulin said we are bidding on it for FY14 of FY15?
Mr. Carlee said it has been awarded based on the representations 7 years ago probably/.
Mr. Dulin said so we’ve already got it.
Mayor Pro Tem Cannon said leave that alone Andy, that is a good deal.
Mr. Dulin said then my pet project, I would like to delete the Centralina Council of
Governments, $175,542. That is a delete with nothing adding back, that is just a straight delete
and we can use that money for anything we want and I would like to put it towards sidewalks. If
somebody has a better idea where they would like to put it, that is fine.
Ms. Fallon said the Park South Drive Extension that would be in FY16, delete $8.63 million.
Mr. Dulin said that is the only project in District 6 in the CIP and it is ridiculous.
Mr. Cooksey said delete the proposed property tax increase however you want to reference that.
It is for the capital project. Part two delete the General Fund CIP; part three add a provision in
the budget to initiate the process for a referendum for a property tax increase for November
2013.
Mr. Howard said when we spoke about the CIP a couple of weeks we were presented with four
scenarios. There was a scenario that only did a tax increase of 2.75 I believe but still got all of
the projects, and just pushed them out further. I would like add that as a way that we proceed
with the CIP. One of the things that I heard over and over again last year while we were going
through this conversation about the CIP and I said this that day, that there was a huge concern
about raising the tax rate too high because of the economic circumstances that our constituents
find themselves in. It makes no sense to me to raise the property tax higher than it needs to be if
we can get all the same projects and the scenario you brought to us actually got us all the same
projects, pushing them out. This is a long view that we are doing for a cheaper rate and if it is
really about the taxpayers then I don’t see why we wouldn’t do this scenario. That is scenario 4
and I continue to feel that way. The next thing is that I would like to add back the Informatics at
UNCC for $10 million. I think you guys have been very clear about what the economic impact of
that could be and I would say adjust the property tax accordingly to accommodate that $10
million add. I guess we need to see it with the 2.78 and the 3.17. Part of this conversation that
we continue to have about our mass transit system is about the fact that we are out of money.
One of the reasons why the Gold Line is even brought up is because we were talking about the
fact that without doing something our mass transit system is really going to stall for years, not a
couple of years, but for years because the sale tax is not throwing off what it needs to throw off.
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I’ve been making the argument for a while and you will hear it out of the committee of leaders
that the MTC convened and it was a very across the board representation of people from our
community and they understand that we have to keep this system moving. Losing momentum is
just not an option. I would like to propose that we keep going on all fronts. I think the Gold
Line is a way and the scenario that the Manager brought us is a way to keep that part of it going,
but I’m really concerned about the fact that we are not doing anything to keep the Red Line
Portion of the system moving as well. In addition to the add that I’m getting ready to put on the
table, I think we also need to continue to find ways to include in our Legislative Agenda how we
ask for the support we need from the state and from the federal government as well. You will be
hearing more from me on how that.
How do we start to put the same energy that we’ve put in the Blue Line, Gold Line and into the
Red Line and eventually the Silver Line because we have to move all of it? It is my thought that
we have to move it in pieces right now because we are not going to get the big federal grant
again anytime soon. I have talked to staff about what is that one thing we could do to make sure
the Red Line is moving to the next level. I starting out just thinking how we could add it to our
CIP, if there was a real capital way we could do it, but from what I understand what they are in
need of right now is the equivalent to a traffic study, a rail study if you will that
Norfolk/Southern needs to figure out how they would co-exist with our commuter line every day.
Kind of giving the direction we’ve been going, regardless of what we do there is traffic study
that needs to be about how it would all work together. Given the size of this project, it is not
small. A study could be as much as $300,000. The state has already come in and said they
would do a portion of it. I think they have committed up to $50,000 of it. What I would like to
add is up to $250,000 for that report and the way I would like to pay for that, I would like for
staff to go back and look at all the sources we have transportation and otherwise just to see if
there is a way to deal with that and come back as part of how we could potentially do that. I
think we are going to have to inch along on every one of these lines. We are not going to do it in
one big sweep anymore unless we figure out how to get it and the next big thing that needs to be
done is this study if you will. That is what Norfolk/Southern is going to require. The route we
are going right now is the state is talking about doing a white paper that could take another year
and then that turns into whether or not we do a study and I think we have a unique situation right
now where we are going to have attention in Washington and it would be a great time to start
talking to Norfolk/Southern about a three P opportunity. Maybe they take over and they help
with financing it, they help with operating it, however we go about doing this, the very first thing
we have to get off the plate is this study and I would like to suggest that we move forward with
it.
Mayor Pro Tem Cannon said Ms. Kinsey wanted to make a comment when there was discussion
with regard to proceeding with scenario four with the 2.78 cent increase because I think there
was a comment made with regard to not really maybe seeing the difference.
Ms. Kinsey said I just wanted to remind all of us that the longer we push it out the more
expensive it may be. That is my only comment. But I am also going to have to leave so I would
ask to be excused from this meeting.
Mr. Howard said before you take yourself out, just so we are formal because I did talk to her
about the transit piece. Can we just go ahead and do the 5 votes on that one?
Ms. Kinsey said I’m not ready to vote for that because I want to see everything.
Mr. Howard said this is just to get back information on it.
Ms. Kinsey said I don’t mind getting back information on anything, but I don’t want us to vote
on anything today and me be an automatic yes. That is the only thing.
Mayor Pro Tem Cannon said I think Ms. Kinsey does make a point and I think that was a point
made also by Mr. Barnes as I recall about being able to do projects more so inside of producing
for the taxpayers today rather than in future years out. One was expense by the way on top of
already additional expense because nothing was approved a year ago. It is a cluster of an issue.
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Mr. Howard said the point I’m making is that if it was about the taxpayers last year it would have
been cheaper to do it all last year. All I heard over and over again was it was about this rate and
the fact that the rate was just too much. My point is if it is about the rate and what it does to the
consumer, if it was about now they are going to have to pay another $50 per month, anything we
do above that, I don’t care how far we stretch it, is doing that. You just can’t have it both ways.
Last year it wasn’t about the projects, and now this year it is. If it is about the rate I’m going to
support leaving it at the 2.78 and not going up further than that.
Mr. Barnes said you actually make a good point Mr. Howard but I thought that what was
underneath the surface of last year’s debate was also the rate issue. At that time a 2.44 rate
would have been rate neutral, taxpayer’s wouldn’t have seen any change in their tax bills and we
would have gotten $674 million in investment. There was sensitivity to that piece and then there
was also sensitivity to the overall cost to the taxpayer, but I think that was tied very much
directly to the 2.44 and since that opportunity is gone we are dealing with what you suggest 2.78
or 3.17 or some other number, I am concerned about pushing too much of it out into the future. I
do want to say that each of these projects has been vetted by a committee. They have all come
out of Committee except for Informatics and I hope we can figure a way to get that back because
of the prospects of it generating two … per month and throwing the applied innovation corridor
which isn’t my district, it is in Patsy’s district. I think that would be a great thing to do. They all
came out of Committee with positive support and six or seven of us supported scenario two so I
think we are all trying to figure out how to move forward and do it in the near term because we
will be fairly old in 2020.
Mr. Howard said you would have been a year younger if we had done it last year. My point is
that last year the difference for me is that there were all kind of scenarios put out that cut a bunch
of projects. The 2.78 we can get all the same projects, no cutting and we will get the CIP
package in its entirety, but if it is about the rate and what it does to the consumer I still am
confused about why we need to go higher than the bear minimum of what it takes to get all of the
package done. We will vote in a few minutes and like you say if 6 or 7 go that way it won’t
make it, but I wanted to make sure that it was a clear. Last year it was about one thing and this
year it is about something else. I’m trying to figure out what it is. If it is about the consumer,
that should be the rate.
Mayor Pro Tem Cannon said I think it is about two things really. It is about service delivery and
it is about the rate. This body has to make a determination about if you are in a catch 22
situation what is more, the level of service delivery to be able to grant it to the taxpayers sooner
rather than later or is it more about the rate. I think either one of those can be argued well within
the confides of any place that we go among our constituents and I think they get both sides of
that so wherever you decide to land is where you land.
Motion was made by Councilmember Cooksey, seconded by Councilmember Barnes and
carried unanimously, to excuse Councilmember Kinsey for the remainder of the meeting.
Ms. Pickering said to Mr. Howard’s point for me it is about the rate and I’ll get to some things in
a minute but I wanted to preface the conversation by saying often Councilmembers hear that we
just want to raise taxes and we should be talking about jobs. Mr. Barnes made this point the
other night and it is a good one and we should keep stressing it. This budget as proposed by our
City Manager creates 18,000 jobs. That is a lot of jobs so yes, we have to spend money but it is
investing. By the same token I think it is important for us to note that we don’t want to take a
cavalier attitude towards taxpayers who really don’t want to see their taxes raised. We can’t
afford to lose those folks. Charlotte can’t afford for people to leave Charlotte for neighboring
counties. We can’t afford to have businesses and individuals who are considering moving to
Charlotte also choose a neighboring counties because the taxes are lower. This is real, it is
happening and we know that. I’m concerned about that and I’m also concerned very much, as
we’ve talked about before seniors on fixed incomes. To some of us a $100,000 home, $264 a
month, $32 per year may not seem like much but the property tax goes up a little bit and the
water bill goes up a little bit and the Storm Water bill goes up a little bit and food prices go up a
little bit and maybe gas prices go up. These things add up and these folks don’t have any wiggle
room. There is no getting a second job. There is no increasing that income that they do have.
The last thing I want to do is stress those poor folks who should be trying to enjoy their golden
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years. This is the balance that we fight. Again I think what we are striving for is an affordable
tax rate for the City that allows us to attract and retain individuals and businesses to this City and
how do we do that. What I did when I went through here was ask the question do we have to
have it now? I think we need everything on this list and I support everything and I think we all
do. All these projects are good projects, but the question is does it go to the issue of revitalizing
the areas of the City that we have talked about that need revitalization, that is how we are going
to bring this City forward. We can’t annex or we’re going to build up the areas that we have
here. That was my major question – do these things go to that or could they be deferred? I’m
going to suggest for deletion and it give me no pleasure to recommend any of this for deletion
but I’m going to use the word defer. Can we wait two years for some of these things? The
Traffic signal coordination, $15 million; the update traffic control devices, $19 million. The
Police Stations and this one is a tough one, public safety is the number one issue for us, no
question about it, however I would submit that some areas need a new police station more than
others. I would suggest deferring the South Division Station and the Park South Division
Stations and leaving the rest. That would be about $20 million. I would also suggest some of
our maintenance facilities upgrades, I hate to do it but I think we can defer Sweden Road
Maintenance Yard replacement, $22.6 million and Northeast Equipment Maintenance Facility
$8.5 million.
Mr. Howard said I’m glad that Beth and I agree that we should keep the rate low which means it
sounds like you are going to support me on the 2.78 because I think what I’m understanding is
that none of the jobs move. They move if you take out the projects you just ask for, but if you
delay it based on scenario 4 you get the same job affect, the project just happens later so that still
works. As far as the move around the seniors, if it is about the tax rate than that again would
make the argument for 2.78 so whereas I was going to counter, I think I just want to say thank
you because I think we agree.
Ms. Pickering said I’m glad we agree. The point is if we are going to raise taxes at all let’s do
the projects ASAP but I’m trying to bring down the rate because I am concerned about the tax
rate.
Mr. Howard said it doesn’t sound like we agree if that is how you feel about it but okay.
Ms. Mayfield said I have concerns regarding deferring the upgrade of our traffic signal system
because we are unfortunately last year just as this year, we are seeing too many pedestrians that
are in accidents that are leading to fatalities. Part of that is the combination, really three things
that need to happen, we need to create an education awareness campaign and I’m not going to
add that up there because that would be another dollar line item, but we also need to make sure
that we are along with upgrading out traffic signals we are creating the additional crosswalks and
islands and safety paths that we do need when we are looking at, and I’m only going to speak for
District 3 and not the entire city at this point. Everyone that is a District Representative knows
best what is happening on the ground in their area, but when I have seniors that are not safely
able to cross the street because we don’t have the island and the lights are not coordinated in a
way to give more than enough time for them to be able to cross safely. When I have citizens that
are not seniors that are running into some of these same problems and when we are looking at the
impact, this to me is immediate. This isn’t something that I can support deferring when we are
talking about upgrading the traffic control devices which to me the two go together. You cannot
do one without the other and we are looking at the growth and I do agree with Ms. Pickering that
we need to do the best we can to try to keep the citizens we have in the City, but at the same
time we cannot forget that when we are comparing ourselves to other cities we still are that low
cost city to move to. If we have 1 or 2o that may be moving out of the City we have 3 to 5 that
are moving into the City and when they are moving in they are coming in and buying our right.
There is that balance of what do you do to invest in a community as the community continues to
grow. For me those two are not two that I’m willing to support deferring. I can agree with
deferring the Police stations at this point if that is something we need to do, but I cannot support
the traffic control devices nor the system signal coordination upgrade being deferred any more
than they already have been deferred.
Ms. Pickering said to Ms. Mayfield’s point I’m not aware that pedestrian safety is caused by
poor traffic signal timing. I’d be more interested in hearing more about that. Sidewalks and
pedestrian safety is here and definitely stays here, no question about it for $60 million. I would
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absolutely not touch that no matter what.
Mr. Barnes said briefly on Ms. Pickering’s suggestion I view the traffic control system as public
safety items and the Police Stations are obviously public safety items. One of the concerns I
have is with respect to the two division offices you referenced, the land down there won’t get any
cheaper. It won’t get any cheaper anywhere in the City probably, but certainly not down there so
I think that would be a stretch for me to try to figure out how to support that. To Mr. Howard’s
sensitivity about the rate, I would be interested in knowing what happens to the rate if we add
Ms. Fallon’s $63 million to Mr. Howard’s 2.78. I want to see what the rate turns into.
Mayor Pro Tem Cannon said maybe someone else at the dais knows this, but I thought I heard
that you get the same number of jobs if you did this deferral. I don’t know how you would get
the same number of jobs with the 3.17 versus the 2.78 when those are construction jobs that will
come into play for some of those police stations. That doesn’t make a whole lot of sense to me
and I don’t know how you get the same number of jobs per se. Somebody needs to probably do
a recount on that, but I too would caution where we are trying to go in this City relative to
continuing to try to reduce crime in all areas of this community, not just in one or two and we
will get to it later. We need to be real mindful of that, east, west, north and south. It is critical
and we need to support our police department and our officers and certainly our Police Chief in
those efforts. I understand why the ask because we are trying to drill down on numbers, but let’s
make sure we are not drilling down on quality of life issues and in this case public safety issues
that would be something I think we should be mindful about.
Ms. Fallon said if you do the $63 million and you add the Park South Division, which still gives
you $70,000 you still have a lower rate and you still get all the jobs and you get everything in
there that you wanted to begin with. You get the Police Stations and the Command Center and
everything else. All it does is take that money plus that Park South and we didn’t figure the Park
South in at the time, we just did the $63 million. It does take the rate down but you get
everything just the same.
Mayor Pro Tem Cannon said do you mean on deferring?
Ms. Fallon said yes.
Mayor Pro Tem Cannon said yes, but do you know what, people don’t need jobs two years from
now, they need jobs today.
Ms. Fallon said I didn’t mean deferral, I meant just putting that money toward the budget.
Mr. Mitchell said what is reference to the $63 million?
Ms. Fallon said the $63 million that was cobbled together for the Gold Line. If we put that back
into the CIP and you add the Park South Division you’ve got $70 million that you can put back
into the budget and have everything that we had on this budget without having to raise the tax
percentage more than 2. something.
Mr. Mitchell said you are saying don’t fund the Gold Lynx Line with that?
Ms. Fallon said right this moment, put that money which belongs to the taxpayers back into this
budget so we can have a lower rate but get everything we need.
Ms. Mayfield said Ron there was a request looking in Neighborhood and Business Services for
three additional staff for a project that we are anticipating. I want to look at what retirements
that we have to possibly roll that position as opposed to creating three and possibly only creating
one position, but looking at what our current staff capacity is. There is a possibility as was
mentioned earlier where we are talking about interns. There are quite a number of interns that
are in Neighborhood and Business Services but also you have some staff members that might not
be utilized to their fullest capacity that are interested and want to be involved with a few more
projects than what they are currently have. I’d like for us to look at that before we identify this
standing $250,000 plus that is going to be increasing over the next few years, what retirements
do we having coming up, what current opportunities do we have within the current staff structure
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that is in Neighborhood and Business Services in order to make sure this is going to be a
successful project and what the impact can be for one staff member as opposed to three.
Mayor Pro Tem Cannon said what we can do is go to the top of our chart and begin to take some
votes on what we want to keep and/or delete. Ms. Kinsey has departed to catch her flight and I
would ask this of staff, I would be interested in your analysis of what does get 5 or more votes in
terms of the pros and/or the cons for the adds or the deletes.
Rental Assistance Program – Councilmember Barnes has this for a deletion of $2 million. The
number of hands for this to continue to more forward for deletion: Barnes, Cooksey, Dulin and
Fallon.
Charlotte International Cabinet remain as it is now and not move to Neighborhood and Business
Services –
Mr. Barnes said I think it is $156,000.
Mr. Harrington said $156,000 and a little bit of change but the net difference is zero.
Mr. Barnes said except for the retirement piece and benefits and all that. In other words they
would be full-time City employees.
Mr. Harington said I think it is essentially to keep as it is. Keep them as a financial partner at the
current level.
Mr. Barnes said yes.
Ms. Mayfield said Mr. Barnes, just for clarification and I apologize if I might be mixing these
two thoughts up, but I was under the impression that when we were having the discussion about
transitioning Charlotte International Cabinet into Neighborhood and Business Services, is
because there is a great possibility that it is not going to be able to continue for it if we don’t help
with the structure, but also I was thinking it was going to be more like the relationship that we
have with CRVA where they are a part of us, but it wasn’t going to be this really great financial
impact on the budget in Neighborhood and Business Services.
Mr. Barnes said as I understand it the CRVA employees are not City employees. These would
be City employees and the CRVA is a financial partner funded through a tax established by the
General Assembly. These folks would be funded through the property tax in the General Fund.
Early on I talked about whether this was some function the Chamber could adopt at some point.
Mayor Pro Tem Cannon said Mr. Barnes do you want to move this along to get further
information.
Mr. Barnes said no I want to say a delete.
The vote for Charlotte International Cabinet delete: Barnes, Cooksey, Dulin, Fallon and
Pickering.
Charlotte Constituents Intern Program with a range from $82,940 to $160,000.
Mayor Pro Tem Cannon said is the Mayor’s Office included in your arithmetic?
Ms. Mayfield said no the Mayor has got 6 people.
Mayor Pro Tem Cannon said are his interns paid?
Ms. Mayfield said when you look at our staff breakdown we have a total of 9 that are part of
constituent services for Council and the Mayor’s Office. Three of those are the three that
Council utilizes. There are six that are on the payroll.
Mr. Harrington said my recollection is that the interns are not paid.
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Mr. Cooksey said first of all could you clarify the distribution of those 9 staff members assigned
to Mayor and Council because my understanding of it was that 4 are assigned to support the
Mayor and 5 are basically considered Council support, one of those being Dana Fenton that as
the Legislative Liaison he is a Council support position, not a Mayoral support position. Do I
have that correct? It is a 4/5 split and not a 6/3 split.
Mr. Harrington said I would want to confirm that but I would be happy to bring something back
that outlines where the positions are if that would be helpful.
Mr. Cooksey said yeah, if you could. The second point to this conversation is by way of general
explanation on voting I’m not going to vote for an add that doesn’t have a delete associated with
it. If it doesn’t make it through then we won’t get the information, but if it does I want to get that
point out there.
Ms. Fallon said isn’t that other stuff the operating budget? The other people on that, not the
capital?
Mr. Harrington said it is all operating.
The vote for the Intern Program – Autry, Fallon, Mayfield, Mitchell and Pickering.
Arts and Science Financial Partner – deletion
Mr. Mitchell is that the dollar amount that we currently give to the Arts and Science Council?
Mr. Dulin said no sir, we give them $2.9 million. The larger issue is taking the Joint
Communication Center which is a $68 million item and I was going to pay for that with $63
million the Manager was going to find for the Streetcar; $2 million for the Rental Program and
$1.5 million from Arts and Science Council in each of two years in order to get the $68 million.
Mayor Pro Tem Cannon said that looks like a bungle, do you want to vote on the bungle or vote
on them individually?
Mr. Dulin said we just voted down the rental but I don’t mind getting in here and finding another
$2 million real quick.
The vote to delete $1.5 million for two years from ASC financial partners – Cooksey and Dulin.
Centralina Carolina of Governments with the idea of having that money to be appropriated
toward sidewalks –
Mr. Dulin said does anybody here know what the Centralina Council of Governments has done
in the last year?
Mr. Howard said managing the sustainability grant they got from the Federal Government. They
also have helped us with letters that we got that went to the Speaker and the Governor with the
Mayors of the surrounding area saying they shouldn’t mess with the Airport. They organized
that and we didn’t even ask for it. They continue to be part of that effort. They won me back
over because a couple weeks ago I was ready to do with you on this one but I understand what
they role is in this because if we don’t pull all our efforts together we are going to continue to
have problems. That is why I’m back okay with it.
Mr. Dulin said they came into existence when the other surrounding counties didn’t have the
funds or the mechanism to do their own work or they own study, their own economic
development. All of those counties now have those mechanisms, including County Economic
Development work in all these counties. The City of Concord has its own; the City of
Lincolnton has its own. All those folks come in and we are by far the largest donor to that group
and right now I would rather – it is redundant. We have Ronnie Bryant and his regional group.
We have a lot of those counties are working against us on our Airport and trying to save their
own hide while they are trying to skin us. I think that thing has run its course and at some point
we are going to have to say that is $175,000. We are throwing around $150,000 for
sustainability studies and $150,000 for this and there is something on the Board for $250,000 for
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another study and no delete beside it. We could take that $175,000 and put it toward Mr.
Howard’s study if you wanted to. That is $175,000 that the citizens of Charlotte aren’t getting
their money’s worth out of I believe and I plan on voting to delete it and I would love for you all
to also. That would be a bold thing to do today.
The vote to delete the $175,542 for COG – Cooksey and Dulin.
Eliminate two of the proposed Charlotte INClusion positions.
Ms. Mayfield said the total of the three positions was $276,000.
Mr. Harrington said the first year is $263,287 then the second year is $239,980 for all three
positions.
Ms. Mayfield said what I asked for was the elimination of two positions and getting the
information coming back.
The vote to delete two positions – Autry, Barnes, Cannon, Cooksey, Dulin, Fallon, Mayfield and
Mitchell and Pickering.
Twenty-six Mile Multi-use Trail – The deletion would be at $15 million.
Mr. Dulin said they are looking for $35 million from Charlotte; we don’t know what the County
is in for yet, correct. They don’t have any money so they are not going to bump up whatever
their participation is.
Mayor Pro Tem Cannon asked if there was any further information from the County?
Mr. Harrington said I will ask Phil Reiger, Deputy Director for Charlotte Department of
Transportation and I think he has an answer to that question.
Phil Reiger, Deputy Director Charlotte Department of Transportation said specific to the
County’s participation in the Cross Charlotte Trail., they have an interest in two pieces; about
four miles in the southern section which is about a $5 million investment and then about two
miles in the north section which is about a $2.5 million investment. The key to that is the pace at
which the County invests in greenways. They build greenways different than the way we build
roads and sidewalks so they look for opportunities to purchase the property they need and as they
acquire the property they then move into design. Their pace at which they will develop those
projects may be a little different than our pace, but they have committed and are pursuing those
two pieces, both the northern and the southern section.
Mayor Pro Ten Cannon said did you just say their contribution was towards 6 miles of it?
Mr. Reiger said 6 miles but please understand that they have already spent about $43 million on
the Little Sugar Creek Greenway, which is a critical part of that southern section connection. We
will be connecting that to get to center city. A significant investment has already been made by
the County and they are continuing to move forward with helping us make other greenway
connections.
Mayor Pro Tem Cannon said so what you want to say then is that is the remainder of the amount
that they have put into place already.
Mr. Dulin said do we have any idea from the County how much money they are going to invest
in helping us build road next year?
Mr. Reiger said it is my understanding the County doesn’t have authority to build roads.
Mr. Dulin said I think we ought to stay in our lane and build roads and sidewalks and not bike
trails.
Mr. Reiger said they do have a limited authority to build roads through the schools.
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Deputy City Manager, Ron Kimble said there was legislation a few years ago that granted
them authority and it is important to note that the County is now involved in road building. They
participated with us in the Ballantyne agreement for building roads and they are also helping
with roads at Tanger, so the County had begun to participate in road building with the City of
Charlotte.
Mr. Dulin said that is really good to know.
Mr. Mitchell said just as a follow-up I understand they spent $43 million, but part of our
argument in spending our money was economic development and jobs so it will be interesting to
see out of that $43 million they have spent for the Sugar Creek how many jobs were created as
part of the investment. I just struggle a little and I think we’ve got other city responsibilities we
can use our bond capacity for, but I believe in collaboration so that is why I didn’t say remove all
of it.
Mr. Barnes said the 26-mile Cross Charlotte Trail is projected to create 1,160 jobs and to have a
$370 million economic impact and the synergetic impact was much higher than the $35 million
that we put into it. I actually support it and think it makes a lot of sense for a number of reasons
and it was a part of the economic development argument that we discussed and heard last year.
Ms. Fallon said out of curiosity where those sustaining jobs on the greenway or were they
temporary jobs.
Mr. Harrington said sustaining.
Mr. Howard said a strange position because it did come out of my committee whole so I’m a
little hesitant, but I do understand what you are saying Mr. Mitchell about we are going to get
something, maybe not all of it. I’m going to vote for it just in the interest of seeing what you
would get for 20, but just from that standpoint.
Mayor Pro Tem Cannon said I have asked staff to bring back the pros and the cons. This
discussion reminds me a little bit of I-485. We had breaks in between, you want to see the
completion but those breaks don’t quite allow for there to be the kind of flow you need in order
to get from point A to point B. People will be using the trail to travel by various ways from
walking to riding their bikes to whatever other forms they want to take on it, a Moped or what
have you, but I’ll support it to move forward just to bring some information back on those pros
and cons because I think it is just as important to make sure we capture all we can in there.
The vote to delete $15 million from the Cross Charlotte Trail – Cooksey, Dulin, Fallon, Howard,
Mayfield, Mitchell and Pickering.
Vote to take the Joint Communication Center out of the CIP and pay for it with other pots of
money as outlined by Mr. Dulin earlier: Cooksey and Dulin
Vote to delete $8.6 million from Park South Drive Extension: Cooksey, Dulin, Fallon and
Pickering.
Mr. Mitchell said in whose District is this?
Mr. Dulin said it is in my District. It is the only project in the CIP in District 6. It is a little tiny
thumb of a road project that literally goes through another man’s parking deck. It is a silly
district and they threw it in there last year to throw a bone to the poor people of District 6.
Mr. Cooksey said I worry about this but part of that Multi-use Trail does go through District 6 as
well so there was a little something else out there, but I’m with you on the deletion. I voted to
take it out of committee because I thought it was something the full Council should look at along
with the rest of the CIP, but if memory serves the estimated economic impact of this $8.6 million
project was something like $3.4 million.
Mr. Harrington said $3.6 million.
Mr. Cooksey said $3.6 million so we are not getting the money’s worth out of that one so I will
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support the District Rep and pull it from the CIP.
Mr. Howard said this came through committee and it was as much about circulation in that area
and freeing up land. It was a lot more indirect benefits to this, not just direct. When you think
about the congestions that happens around Fairview Road, Morrison and Sharon, this was to
actually make sure when you come out of Park South that you actually have a way to distribute
that traffic because right now most of that traffic coming up from the south comes up Park South
and comes up Sharon Road. I remember what D-DOT told me and it was about opening up
connections to open up the area behind this so it was more indirect than just direct.
Mr. Dulin said correct except for the site of this road there is a 4-story office building and
literally there is a two-level parking deck. Number one we don’t own the office building, we
don’t own the parking deck and this project to go through, we’d have to tear down this man’s
parking deck and put the road through there and then it comes about 20 feet from the corner of
his office building. It just doesn’t make any sense. I’m willing to throw that in for the good
folks of District 6 and save the taxpayers.
Mr. Mitchell said but you are not running again.
Mr. Dulin said I threw in last year. It was a dumb idea last year and it is a dumb idea this year. I
would love to find something we could build down there to help those good people, but that is
not the project to do it.
The vote to delete Park South Drive Extension – Cooksey, Dulin, Fallon, Mayfield and
Pickering.
Delete the proposed property tax; delete the General Fund CIP; add a provision in the budget to
initiate the process for a referendum for property tax increase for November 2013.
Mr. Cooksey said the basic logic is the purpose of the tax hike is to fund the CIP, the voters have
to vote on the bonds that are involved in the CIP so why not have the voters vote on the tax hike
that funds the bonds the voters have to approve?
The vote was Cooksey and Dulin.
Proceed with CIP scenario 4 with the 2.78 cent tax increase; delete CIP scenario 2 with 3.17 cent
tax increase.
Mr. Howard said I spoke about this when we were dealing with the CIP a couple weeks ago and
staff presented 4 scenarios and one of the actually the fact that you can raise taxes by 2.78 and
still get every project that is on the CIP as opposed to raising it 3.17. My argument being that
we’ve heard a lot over the last year during the CIP conversation, at least from some, that the vote
against it last year was about what it would do to the public and if we can get all the same
projects by stretching it out a bit and not raise it more than we have to. I’m always about raising
taxes no more than you have to and in this situation we just do not have to raise it to 3.17 and we
can still get the same projects.
Mayor Pro Tem Cannon said to finish that out, yes you would get the same projects but you
wouldn’t get it on the same time line. The number of jobs that one would suggest might be the
same, they wouldn’t necessarily be that largely in part because you still have those construction
jobs that would have to be taken on through things like the Police Divisions and several other
items that might be factored into both of those scenarios.
Mr. Howard said I’m going to disagree with you because what you are saying is that every one
of these projects is going to take the same amount of people to construct. That doesn’t change if
you do it today or if you do it tomorrow. It takes 12 people to do it, it is going to take 12 people
to do it then. So the number of jobs doesn’t change.
Mayor Pro Tem Cannon said what I have said is that people would prefer to have an opportunity
a little bit sooner rather than a whole later in the way of being able to provide for their families
and/or themselves. I just want us to be conscious of that. You can vote anyway you want but I’m
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just asking you to be conscious of that.
Mr. Howard said just to play it out Mr. Mitchell, what I said earlier to a similar remark, the
arguments that I’ve heard over and over and we’ve really had some intense conversations about
this, it was the wrong time to raise taxes and Ms. Pickering said people were moving out of the
City because taxes were going up and it would hurt seniors. If that is the case then we should
want to keep that rate as low as we can. If we can still get the same projects, I’m still not sure
what we are talking about.
Mr. Dulin said a yes vote here eliminates everything except the 2.78. It eliminates the other
scenarios.
Mr. Carlee said as I understand the Council’s procedures it would bring this proposal back for
consideration. It is not determinative with regards to the 3.17. It puts the 2.78 on the table for
further discussion. We would bring you back an analysis and then at your subsequent meeting
you would make a decision based on that analysis whether to go between the 2.78 and the 3.17
along with all the other things you have put on this agenda.
Mayor Pro Tem Cannon said basically it is what I was asking earlier about getting the pros and
the cons relative to what it means.
Mr. Carlee said there would be an item for you to actually vote on in this regard.
Mr. Dulin said we will have another opportunity to vote no down the road?
Mayor Pro Tem Cannon said whatever you want to do.
Ms. Fallon said how long does it stretch it out?
Mr. Howard said that is what we will get back. I don’t have the information in front of me but it
stretched out some of the projects and again my only take on this is you get as much as you can
for the least amount of tax hike. I can get every project for a cheaper rate.
Mr. Cooksey said I don’t know but I think using the phrase stretching out identifies exactly what
is going on here. Each scenario was four bond cycles – 2014, 2016, 2018 and 2020. Each
scenario had the same projects in it, the difference between 2.78 and 3.17 was whether some
projects appeared in 2016 instead of 2014 or in 2018 versus 2016 or in 2020 versus 2018. It is
when they hit in the four bond cycles; nothing goes outside that 8-year time frame that is being
talked about. The more you build in the later years the lower the rate has to be now.
Mayor Pro Tem Cannon said it came down to about service delivery versus rate. One could
argue you are still delivering the service with what has been proposed at 2.78. It becomes how
close in or how far out based upon the time table of it all.
The vote to proceed with scenario 4 with 2.78 tax increase – Cooksey, Dulin, Fallon, Howard,
Mayfield and Mitchell.
Informatics at UNCC- Adjust to the property tax rate whether it is 2.78 or the 3.17.
Ms. Mayfield said what we are calling to vote for is to add back in the $10 million for the
Informatics?
Mayor Pro Tem Cannon said to add it back in to be on point for straw votes.
The vote – Autry, Barnes, Cooksey, Dulin, Fallon, Howard and Pickering.
Commuter Red Line Study – staff is to look at the transportation transit funding on this.
Mr. Barnes said would you contemplate Mr. Howard, the three towns to the north contributing to
this cost? Are we the only folks paying for it because there are only three stops in Charlotte.
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Mr. Howard said we have the biggest stop being Gateway Station and it is an important
component to this city. I would be okay with either one. If part of the scenario is talking to the
towns and see what they could contribute, I’ve just got a feeling it is going to be such a small
number that I don’t want you guys to get into thinking it needs to be on some par level. It
probably would be the smaller amount, but the point is it cannot move forward. Gateway
Station, when they go out and try to get somebody to bid on that, it is not going to be as
attractive to a developer if there is no plan to bring the Red line into it. It has a huge effect on
what happens in our center city probably more than any other town.
Mr. Barnes said the Red Line is also an MTC project. Is the MTC going to kick in?
Mr. Howard said the MTC, their money is our money. They don’t have money. The money
goes through us. To the point about support I spoke to Mayor Woods in Davidson today and
have spoken to Carolyn and Ron about it as well. My desire is just to do something to jump start
this and this seems to be the next big hurtle. The other line that is getting funding is kind of
sucking up all the extra money. There is no other way to do this for some years and that means
the Red Line is going to wait until something comes along to pay this.
Mr. Barnes said the only concern I have is the scope creep and kind of what happened with the
Streetcar where we start finding $15,000 to $40 million and all of a sudden the Red Line
becomes a part of our budget.
Mr. Howard said I have actually done the leg work by talking to the MTC. The other thing I
should add that this very scenario of doing a three P is part of what will be in this finance
committee’s study. It is very much how do you go to Norfolk/Southern to say we’d like to
partner with you guys on the three P, and getting them to take some skin in this because the
whole line belongs to them. The very first thing they said before they would consider anything is
that we don’t know how this work with our traffic. We can sit and go back and forth over the
next couple of years or we can figure this out so we can move that project on.
Mr. Barnes said for years there has been this discussion with Norfolk/Southern about those
tracks and their lines and right-of-way and now we are finally coming up with this question.
That question has been out there for years too. I just wonder it would be another excuse for them
not to partner.
Mr. Howard said what we know is that it is an excuse for them not to proceed now.
Mayor Pro Tem Cannon said what I hope doesn’t happen is that it doesn’t get stretch out too
long only because I’m reminded of the BAE Study. The next thing you know you will be coming
back doing another study. If it can be used quick and applied great.
The vote was taken on $250,000 for a study of the Red Line – Autry, Barnes, Cannon, Howard,
Mitchell and Pickering.
Delete the upgrading of the traffic signal – Pickering
Delete upgrade traffic control devices – Pickering
Delete South Division and Park South Police Stations – Cooksey and Pickering
Delete Northeast Equipment – Cooksey and Pickering
Delete Sweden Road Maintenance Facility – Cooksey and Fallon
Mr. Barnes said I asked about his scenario plus the $63 million. Was that to be voted on or just
for information?
Mr. Harrington said I think that was a question for information.
Mr. Barnes said back to Mr. Howard’s Red Line the challenge I have is I think it will be
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spending that will begat more spending and we will just keep spending money and all of a
sudden the whole project will be on the City’s budget. That is what worries me. You are asking
staff to come back with information on the 29th that would tell us what. The item says essentially
for us to kick up $40 million to pay for a study.
Mr. Howard said and ways that maybe we could do that and we still get to vote yes or no then.
This is symbolic as much as anything to these folks that we are serious about this because I don’t
think they received a message from the City of Charlotte that we are serious about the Red Line
at all.
Mr. Barnes said for information purposes I will vote for it.
Mayor Pro Tem Cannon said I will vote for it for information.
Mayor Pro Tem Cannon said this will be it until we reconvene on May 29th for six or more votes
on these items to be included in the budget adoption ordinance on June 10th.
Mr. Mitchell said Mr. Manager I think it would be helpful if you could give us a summary of
what transpired here today so we could all be clear. We get a lot of material and I don’t want to
get lost so if staff could provide a summary of the vote so we are very clear what was added and
what was deleted that would be helpful.
Mr. Harrington said we will work on the information and sent a packet out at the end of next
week in anticipation of the meeting on May 29th.
The meeting was adjourned at 5:10 p.m.
______________________________
Stephanie C. Kelly, City Clerk
Length of Meeting: 2 Hours, 5 Minutes
Minutes completed: June 18, 2013.
May 15, 2013
Budget Workshop
Minute Book 134, Page 22
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May 29, 2013
Budget Workshop
Straw Votes
The City Council of the City of Charlotte, North Carolina convened for a Budget Straw Vote
Session on Wednesday, May 29, 2013 at 12:08 p.m. in Room 267 of the Charlotte Mecklenburg
Government Center with Mayor Anthony Foxx presiding. Councilmembers present were John
Autry, Michael Barnes, Patrick Cannon, Warren Cooksey, Andy Dulin, Claire Fallon, Patsy
Kinsey, LaWana Mayfield, James Mitchell and Beth Pickering.
ABSENT UNTIL NOTED: Councilmember David Howard
*******
Mayor Foxx called the meeting to order at 12:08 p.m. and thanked everyone for being there. It
seems like we have been doing budget straw votes the better part of 18 months, but here we are
once again. I want to thank Council for your continued engagement on this very important issue.
It is my hope today that we can provide some definitive direction on our budget for the year. I
know there are some proposals that are floating around and those need to be worked through, but
I hope when the dust settles what we end up with day is what we can definitively move forward
with in June. I think the Manager’s request, and I think it is a good idea, that at the end of our
straw votes today that we take a vote to express intent to the staff of our intensions on June 10th.
This budget is probably the most important piece of policy that we will do by a term for several
reasons. One because it will ensure that the City’s physical position as a AAA bond rating city
stays intact for the better part of a decade. Second, because what this budget captures is an awful
lot of visioning for this community. Visioning on basic bare bones, roads, bridges, basic
infrastructure, visioning on public safety assets such as police stations and the Command Center.
Visioning on assets in our community that will continue to make us an attractive place to live,
work and play. I’m very pleased with the work this Council has done to this point because this
budget has gone through a lot of iterations and gyrations, but one of the last things this Council
did was to move it into committees and each of the committees have taken bits and pieces of this
budget and looked at them very carefully and all of them were favorably voted out, save two, one
of which was dealt with last night and the other one, I there are some legal issues. Aside from
that all of those pieces of the budget were moved forward. Hopefully there won’t be a lot of
controversy today and hopefully we can move forward and get this done and life will go on.
Councilmember Howard arrived at 12:09 p.m.
City Manager, Ron Carlee said I indeed hope that life goes on after this afternoon and I’m
confident that it will. It has been interesting learning the Charlotte process for doing budget
compared to my previous experiences. Some things have been different, some things are very
similar, and this is very similar this afternoon. What you call straw votes we called final mark up
in my previous job. One of the few things that is consistent from one city to another is that once
you get the budget decisions made, in order to prepare the final document for a formal vote a
tremendous amount of back room work has to be done. It is the numerically equivalent of
dotting the I’s and crossing the T’s to make sure that everything truly does balance out. While
I’ve not recommended a whole lot of changes in your process, one addition that I would propose
from my previous experience beginning on Page 3 is at the end of the day after you’ve
considered all the items before you, to adopt a motion that would direct us to prepare those
documents essentially establishing your final mark or essentially establishing the budget which
we would then go back and do the mechanical things in order for you to come back on June 10 to
formerly adopt those legal documents and to express whatever policy perspectives and visions
that the Council wants to use to frame the budget. At that point it is not the Manager’s
preliminary budget, it is the City’s budget and is your budget. You can see the motion that I
have proposed there, very similar to what I have worked with in the past.
If you will go to Page 5 you will see essentially the agenda for today. It comes in a couple of
different formats. If you go to Page 7 however, you will see a handy reference table so you can
keep score of items as you go through them and make your determinations on the items which
you identified in your add/delete session. Our agenda per your policy has been defined by your
add/delete session and what is on here are the things carried forward from the add/delete session.
We have background material on each of them.
I have not actually made explicit
recommendations on each item. I do have some guidance that I may offer you if that would be
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Straw Votes
helpful. The one piece that I would like to get on your agenda early on and not to take it out of
order, but most of the items on the list are fairly routine kinds of items that Council has typically
put on now for the research and made decision about. The one that is particularly significant, I
want to address up front so you can have it in your mind as you go through the other items,
particularly in the CIP was the alternative on the 2.78 property tax to the 3.17. When that
scenario was presented to you in your workshop earlier, I hadn’t really dived into it and looked at
it very much, in fact my initial reaction well if you get everything for a cheaper tax rate, why
don’t you just do it. I have had since an opportunity, with this coming up on the add/delete to
really look at the impact of the 3.17 versus the 2.78 and my recommendation to you is not to do a
wholesale shift from the 3.17 to the 2.78. As I looked at that in the micro its affect is to push a
significant number of programs really to the end of the CIP. What is happening there is that
people’s expectations around projects will be deferred for an extended period of time and it is
really making a decision more about future Councils than it is about respectfully your own vision
and I think it creates imbalances in the bonds over the different cycles. If you want to make
changes in the CIP that could push some things out and potentially lower the tax rate my
recommendation to you would be to do those on a project by project basis as opposed to a
wholesale change, based on a scenario we had given you. You didn’t come up with this, we
gave it to you, but looking at it as a wholesale change I would not advise it. We have structured
the projects that are affected by the difference between the 3.17 and the 2.78 in a way that you
can make individual changes if you wanted to make a project by project choice and tell you what
the implications would be. I will show you that when we get to that point, but as you go through,
the way this is ordered the 3.17 doesn’t come up until later in the agenda and I just wanted you to
have that in mind as you look at other CIP projects that you have on the list.
Councilmember Howard said I understand what you are saying and actually after getting the
information and understanding the way the project flow would work I’m actually find going with
your recommendation a couple weeks ago.
Councilmember Dulin said that is the 3.17 versus the 2.78?
Mr. Carlee said yes the 3.17 versus 2.78.
Mayor Foxx said because we’ve been dealing with the same basic set of issues, there are a few
operating issues in here, but on the capital we’ve gone through about 100 scenarios so I’m
hoping we get these votes pretty quickly on the capital ones. The operating may take a little
longer because some of them are new. Why don’t we start with the capital and try to get through
those.
Amendment 4 – Reduce Cross Charlotte Rail by $15 million, from $35 million to $20
million in funding.
Mr. Carlee said if you want to start with the capital that begins with Item #4, Page 16 which is
the Cross Charlotte Trail. The item that came up in the discussion was a reduction by $15
million. We have shown you in the response what parts of the Trail would be impacted and we
have broken that up into two different segments of $7 million and $8 million, one in segment
two. We have given you a lot of information on it and will be happy to respond to any questions
that you have.
Councilmember Kinsey said since I have worked with the Little Sugar Creek Greenway ever
since I have been on the Council, I think it is a shame that we couldn’t find a way to complete
that one little segment that staff has indicated we couldn’t. It is around Seventh Street area and
I’m really sorry that couldn’t be completed because it is a really important connector between the
two segments. I understand engineering and having served on the Committee, I know enough
about how difficult it is to work with NC-DOT and get all those things done. I think it is a
shame we couldn’t have done that and maybe left off something at either end.
Councilmember Mitchell said I was the one to bring this issue up and now I have to do more
research. Thank you staff for bringing this information to us because I want to see the impact to
the neighborhoods. I’m okay with funding it at the $35 million so I’m withdrawing my delete,
taking $15 million out of the Cross Charlotte Trail. I will support the original $35 million.
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Straw Votes
Councilmember Barnes said thank you Mr. Mitchell for saying what you just said. I have
nothing further to add to it and I appreciate you doing that. I would note Mr. Dulin it helps your
neighborhood.
Councilmember Dulin said we voted to put it here so if it leaves I think it has to be a vote.
Mayor Foxx said the straw votes to put them up were put up so someone could make a motion
today to actually take it out. If the maker of the motion decides that he doesn’t want to put it up
there, unless someone else wants to make motion to make the cut, then it goes away.
Mr. Dulin said he has deleted something that I thought was worthy of being in the budget and by
vote of Council put it to where it is today.
Mayor Foxx said the vote was to ask staff to come back, show impacts and to tee it up for a vote
today, but there has to be a motion to actually do that and there has not been a motion to do that.
Mr. Dulin said so we will vote on the original $35 million?
Mayor Foxx said that is correct. There has been no change to the budget on this.
Amendment #5 - Park South Drive Extension
Mr. Dulin said I made that and I’d like to ask a couple questions about our real estate. This is pie
in the sky kind of project. There is a 5-story office building that is in the way of this project and
a 2-story parking deck and a creek. I’d like to know from our Transportation folks, did they do
any research as to if this was a viable project or just so they could throw a little $8 million Advil
at District 6 to make them feel good about themselves. I’d like to ask DOT how they came up
with this project and if any research was done at all or did they just write it down on a piece of
paper.
Danny Pleasant, Charlotte Department of Transportation said the project was really
conceived through area plans for the SouthPark area many, many years ago and has remained on
our plans for quite some time. There is a developer who is working in the area, Crescent is
building an apartment complex and they will build a part of that street and stub it to this location.
We will be able to fill that gap with this project that does cross a parking structure that has one
level and then a ground floor level that we’ve determined could be reconfigured and some of that
parking restored back, but certainly it will take some work with the property owner themselves,
who I believe are out of California that actually own that property so we will have to reach out
and have those discussions if you choose to pursue this project and move it forward.
Mr. Dulin said the 5-story office building is owned by someone in California, they own the
parking lot and the parking structure and I don’t think anybody from us has called them to say
we are thinking about putting this on a plan for future projects. Do you have any problem with
us cutting a street through your parking deck so that we can put something on a list for District 6
to show them that they are not forgotten? I’m sorry Danny, and it goes back to the former
Manager as well in last year’s budget. That is just not good enough. You can make anything up
if you want and we might as well say let’s double deck Providence Road to alleviate traffic. You
can write that down on a piece of paper and put it in the CIP, but it is still not a viable project.
When they were putting the CIP together last year they literally were looking for something they
could do to help the residents of District 6 and they come up with this little tiny project that goes
through a building we don’t even own and we haven’t even talked to the owner in California. It
is not good for the 100,000 folks that live in District 6.
Mr. Barnes said when I first moved to Charlotte I lived in Quail Hollow and I would kill for the
problems you’ve got, million dollar houses, neat streets, nice shopping malls. My point is I
understand what you are saying Mr. Dulin but the reason why that one project was suggested is
because there is generally complete infrastructure in south Charlotte, particularly in your part of
South Charlotte. I would support the project if you supported it. If you don’t want to support it I
won’t support it. I heard staff explain, at least in the Transportation and Planning Committee
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meeting, the way that particular extension could help alleviate traffic around SouthPark and get
people from one side to the other, but if you don’t want to support I understand.
Mr. Dulin said if indeed it was there I’m not saying it wouldn’t help, but for it to happen it has to
go about 20 feet from the corner of a 5-story office building where a guy has just put a new
restaurant. It has to go through his parking lot where people park to use his building and then
through the back side of his 2-story parking deck, across a creek. I’m not saying anything about
anybody else’s golf game, I could hit a driver as far as this whole project is and that means it
would have to go one way or the other because I can’t it straight. It is easy to write it down on a
piece of paper but have we done any work to find out if it was doable? No. On these other
projects we know if Tuckaseegee Road needs a bridge. We know about Informatics at UNCC
and those are projects that we’ve talked to the people.
Mayor Foxx said do you support this or not?
Mr. Dulin said in its current form there is no reason for us to move and I don’t mind cutting that
$8 million out.
Motion was made by Councilmember Dulin, seconded by Councilmember Barnes to delete
Park South Drive Extension in the amount of $8,632,000.
Mr. Howard said as an at large member I think I need to pull back and make sure I’m looking at
the whole picture and our whole transportation network is important. I take staff at their word if
this is important and I don’t think it was for political reasons. There is a lot of congestion around
that mall and around that area. I’m tempted to say let’s take that $8.6 million and move it over to
UNCC for Informatics but I don’t think I want to mess with the package at all. So I won’t
support the motion.
Mr. Dulin said I’m not saying it wouldn’t work if we had a relationship with the guy in
California that owns the building and the parking deck, but I think, and I might be wrong, that
not the first conversation has been held with the property owner that we are thinking about
making a connection, would you be up for that. If that is the case then they literally are just
drawing stuff down on a piece of paper to make it look like they are thinking about a project. I
don’t mind speaking up for the folks that I represent.
Mr. Carlee said we are not sure whether or not anyone has directly contacted the property owner.
It is not an approved project at this point. What staff has done is preliminary work to access the
proximity to the building relative to our urban street design and to access whether or not we
could mitigate the parking in order to avoid adversely affecting the property owner. Staff has
done enough of an assessment to have a sense that the project is a viable project, notwithstanding
that when you get involved in dealing with the property owner there will probably be some
extended negotiations along the way, but there is no sense in beginning those extended
negotiations unless it is a project that we really want to do.
Councilmember Mayfield said for clarification what we are saying right now is that Andy you
are in support of your original motion of deleting the Park South Drive Extension and not adding
it back in the way we just added in the last piece.
Mr. Dulin said that would be fine and anybody that wants to go stand in the parking deck that is
above this site after this meeting is welcome to go over and I’ll give you a very brief review
because it doesn’t take very long to look down and see how crazy this is.
Ms. Mayfield said as the District Rep when you put it on the first time, I supported it because
you are out there in your community. As the District Rep, if he is comfortable with this delete
then I’m going to support your delete on it.
Councilmember Cannon said developers have known what has been coming by way of rezonings
we’ve had in that area, the right-of-way is there so they are familiar with it. I’ve been riding that
area, not as long, but maybe just a few years shy of you Andy for 40 years and all I’m saying is
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that if it is a matter of dealing with congestion in that area we ought to be mindful of lessening
the burden on some of those folks over there. I still travel it today and run slap dead into it as a
traveler in the area so I know what they are experiencing first hand and you know what they are
experiencing first hand so in as much as I obviously respect you and would like to go on the way
that you want to go on this I don’t know that I can get there. Being a former District Rep I get
that piece but sometimes in years past there have been people that saw something a little
different than what I saw who may have served in an at large capacity. That said I’ll encourage
us to go along with staff’s recommendation. I don’t think it hurts us to try to help if we can help.
I think it does put us in an awkward situation if we just ignore it.
Mr. Dulin said my motion is to delete and a lot of it is in protest to something that is silly.
Mr. Barnes said I withdraw my second.
Ms. Mayfield said I will second it.
The vote was taken on the motion to delete the $8.6 million for Park South Drive Extension and
was recorded as follows:
YEAS: Councilmembers Cooksey, Dulin, Fallon and Mayfield.
NAYS: Councilmember Autry, Barnes, Cannon, Howard, Kinsey, Mitchell and Pickering.
Amendment #6 – Delete General CIP Scenario 2 with 3.17 cents property tax rate increase
($816.4 million package) and replace with scenario 4 with a 2.78 cent property tax rate
increase plan ($821.2 million package).
Councilmember Howard said I will withdraw my proposal for 2.78 property tax rate.
Amendment #7 – Add UNCC Informatics project at an amount of $10 million.
Motion was made by Councilmember Howard, seconded by Councilmember Barnes, to add
UNCC Informatics project at an amount of $10 million.
Councilmember Mitchell said I remember in the economic development meeting we had a
discussion about this and there was a legal issue that was still outstanding. Could we get an
update on the legal issue?
Budget Director, Randy Harrington said in North Carolina it is denoted what services cities
and counties can do specifically by the General Assembly. In this particular case cities are not
authorized to fund a higher education component. That is the key legal issue and so if Council
were to add this back to the budget, one of the things we would continue to do is work with
UNCC to see if there is a different way to achieve the same outcome for the project under a
scenario that is legal and within the authority that is given to us. Right now there is no authority
for the city to contribute those funds to the University.
Councilmember Barnes said one of the things that makes the investment attractive is it is
projected to spin off about two companies per month and as a part of our applied innovation
corridor strategy, which is in Ms. Kinsey’s District, it would help create jobs, it would help
establish that part of Charlotte as a Research and Development area, Technology area as a result
of work going on at the campus. I think it would be a great idea and one of the question I have
Mr. Manager, were you able to identify a funding option. If there something we could cut to
keep within the 3.17 to allow us to do it? I think we just gave it away.
City Manager, Ron Carlee said yes you did. The other options would involve adjusting other
projects and their timing.
Councilmember Howard said or increase the tax rate.
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Councilmember Mayfield said since we are in the process where we still have these legal
concerns, if we were to move forward with this $10 million and we are not able to come up with
some creative way to make this happen what happens to that $10 million?
Mr. Carlee said it would still be available to Council to reallocate.
Ms. Mayfield said I supported it when we put it on the delete. For me we just had a conversation
around the table where we could have reallocated it. I still support it because along with the
legal concerns that we have I don’t feel this falls under our umbrella as what our focus area for
the city is to make this type of investment. I think UNCC is an amazing school, they do great
work, they produce great and wonderful graduates that have excelled, but for me this falls in
their category or the business community, one of our business partners coming in to support this
so I’m going to still support the deletion.
Councilmember Kinsey said I understand this is an economic development tool but I’m
concerned about the legal issues and we sort of have a history of doing all this stuff and making
it all work and that makes me uncomfortable. While I was not here on the 15th long enough to
vote on this I’m going to vote to delete this particular project at this time.
Councilmember Cannon said any ideas as to how much this would change the number of the
3.17 if we just rolled it into?
Councilmember Dulin said this Council is pretty good at adding stuff, but not very good about
deleting, but we just deleted $6,830,000 from Park South Drive, can we roll that over?
Mayor Foxx said 3.27.
Ms. Mayfield said no, it was left in.
Mr. Dulin said I was trying to find the money for you Mr. Howard.
Mr. Barnes said do you want to reconsider?
Mr. Dulin said no but I’m going to support the Informatics.
Mr. Howard said I just want to be clear. Are you saying that if for some reason we reconsider the
$8.6 million you would vote to put it in UNCC?
Mr. Dulin said no, if we had cut South Park Drive then I would say use the money for UNCC. I
just voted to cut it, but I’m planning on supporting UNCC. I could make a decision for 100,000
people that we would like to help UNCC today with our money.
Mayor Foxx said is there a substitute motion to take out Park South Drive Extension and
substitute the funding for UNCC Informatics?
Motion was made by Councilmember Barnes to add the $10 million back to our CIP for
UNCC Informatics and fund it through the $8.6 million deletion for Park South Drive.
Councilmember Pickering seconded the motion.
Ms. Mayfield said Mr. Manager, where would the difference from the $8.6 million and the $10
million come from?
Mr. Dulin said I have done the math and it is $1 370,000 difference.
Mr. Carlee said what I recommend is that if you pass this motion that we would work on this
project within the $8.6 funding parameter.
Ms. Mayfield said not with the $10 million goal?
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Mr. Carlee said correct. The $8.6 million is not a significant amount of money anyway you look
at it and we have legal issues we have to work out anyhow. There is a whole lot of work to be
done around the Informatics. If you’ve got $8.6 million on the table then we can work with $8.6
million and see if we can make the project go.
Ms. Mayfield said what we are saying now is not adding the $10 million back in but deleting the
$8.6 million and identifying that fund, even though we still have legal issues, and that is still my
biggest concern and tying in with what Ms. Kinsey stated, the fact that we are saying that we are
going to figure this out to make it work, have we had any conversation with the business
community in order to see if they are willing to step into this role as opposed to the City stepping
into this role?
Mr. Carlee said I will say that we will try to figure it out. I can’t guarantee that we can resolve
the legal issues, but we will work to do so. It will necessarily be coming back to Council for
further review which will include consultations with the business community and the other actors
that are involved.
Mr. Mitchell said I would just caution us Council. This just doesn’t feel right to me that we have
taken a role versus entrepreneurship and the headline in the paper is going to read that. I don’t
think that is what we are really trying to accomplish here. I know some people are passionate
about the Informatics and I say let’s vote as two separate issues. If we are serious about road
improvements as we’ve heard from our citizens over and over and I’m just going to blunt Andy,
you aren’t going to be representing them next year.
Mr. Dulin said I was against it last year too.
Mr. Mitchell said the responsibility is going to rely on those us who are going to be on Council
and I may not be for Informatics or against Informatics but let’s be very careful about choosing
project. I just don’t think that is how we want to proceed.
Mr. Barnes said I’m very sensitive to what Mr. Mitchell just said and I’m also sensitive to what
Mr. Dulin said. Essentially if we dialed it back 15 minutes we would have done what Andy
suggested, delete the $8.63 million and then pursuant to Mr. Howard’s effort, added $8.63
million for Informatics. We could roll all of that into one budget so I understand what you are
saying, but we took a short-cut to do what we could have done 15 minutes ago.
Mr. Mitchell said for those who support it, why not put the $10 million in there? We’ve got the
votes to put the $10 million in there. Until the legal issues get resolved, it still stays as a
placeholder. City staff says we can use those funds for other projects. Let’s just keep them
separate. I think what I’m uncomfortable about we are saying roads versus entrepreneurship at
UNCC. I don’t think it is either or, we can have both.
Mr. Barnes said what would be the methodology to reopen Mr. Dulin’s original motion, revote it
and then have a new vote on this item?
City Attorney, Bob Hagemann said a motion to reconsider by someone who voted in the
majority, if that passes the matter is back up for a vote.
Mr. Howard said is there any interest on your part to do a 3.27? If we do that we leave his vote
alone and we just vote on this with the source being the rate.
Mr. Barnes I would prefer not to do an additional increase. I heard the Manager say that if we
revisit some of the projects there may be some way to squeeze out the money and I don’t know if
you have time to do that between now and Monday, and in fact we were trying to get this
wrapped up today so we could vote.
Mr. Carlee said we would need to do that today.
Mr. Barnes said we want to do that. Is there anything that you all can think of as we are sitting
here now that would generate the savings that we are talking about?
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Mr. Carlee said I can show you what they are. If you go up to the board we have put up there
each of the projects that would have been affected by the change to go to the lower tax rate. If
you look on Page 26 you can see them listed, what would change from what bond cycle to the
other bond cycle and the amount of delay that would be affected. That table lists those projects
by bond cycle. Table #7 lists them by category and what we have done is calculate on each one
of those how deferring the project would impact the tax rate. As you can see it is a lot of bits and
pieces in order to come up with the impact to add the $10 million and whether or not you would
want to go down that path I don’t know,.
Mayor Foxx said it seems there are some legal issues associated with the Informatics anyway
which may or may not be resolved to the satisfaction of those who want to see that project
happen. Would it be possible to structure a motion such that $8.6 million is reserved, priority
being for Informatics, assuming those issues get resolved, that is where the money goes. If the
issues don’t get resolved then it be reserved with a prioritization placed on the Park South
Extension. Left that way you have given the instruction to staff to go forward with the other
project if the funding is there.
Mr. Barnes said is that acceptable?
Mr. Dulin said acceptable.
Mr. Mitchell said no.
Mr. Barnes said the thing I like about the Mayor’s suggestion is you are saying if the legal issues
clear up and Mr. Dulin says I want to give up that funding.
Mr. Mitchell said that is the part I have a problem with. He shouldn’t make that call. I’m
supporting doing the project.
Mr. Howard said I see the value in growing our entrepreneurial Eco system, we’ve been talking
about that and I think part of growing that Eco system is going to be to make sure that UNCC
becomes a bigger player in how we grow that and how we develop the talent pool around it. For
that reason I’m going to stay with it. Either one of the scenarios I’m going to vote for it Mr.
Barnes, but I wanted to tell you why I’m doing it because I think it is important to grow that at
UNCC. If we can grow our economy we can build all kind of roads.
Mr. Barnes said it seems to me we still have Mr. Dulin’s original motion to delete the $8.6 which
has been voted on. I am not going to pursue Informatics because I don’t think there is support
for it. What would be great would be if they could work out the legal issues with UNCC anyway
and let us know at some point and maybe we can use the business corridor revitalization fund if
there is anything left.
Mr. Howard said that doesn’t change what I just said a few minutes ago. UNCC is still and if
you think about it, most of the research towns and how important their universities are to their
growth. We still need to figure out how to better utilize UNCC in our economic development
strategy. If it is not Informatics fine, we need to spend some time on that in the future.
Mayor Foxx said maybe there could be some policy direction and we could ask staff to explore
opportunities to leverage our relationship with UNCC.
Mr. Howard said I was actually going to refer it to ED.
Councilmember Cooksey said if memory serves Item 4 or 5 on our high entrepreneurship
strategy is to seek out more opportunities to work with the University communities in general
and UNCC in particular. So that is a policy item that is already adopted by Council.
Mayor Foxx said the motion has been withdrawn by Mr. Howard.
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Amendment #8 – Add Lynx Red line Commuter Rail study support at an amount up to
$250,000.
Councilmember Howard said I think you heard yesterday pretty clearly there are some
opportunities to be created to put these public/private partnership and if we can figure how to
move that forward it means a lot to the whole system. One of the first hurtles is this big hurtle of
getting over this potential study that is needed. The request was an up to number with the
understanding that the State would participate as well, but we need to get over this hurtle to get
the Red Line conversation going. These are big projects and in order to get some of these studies
that need to be done to move it cost money. This is part of that scenario yesterday of cobbling it
together and moving everything forward as much as we can as quickly as we can.
Councilmember Barnes said we talk about regionalism, we talk about the MTC and the six towns
and everything until they want to take something from us always coming back to Charlotte
writing the check. Are any of the towns who benefit from this project, and there are three of them
to the north in this county, going to be helping?
Mr. Howard said I think one of the things that is missing from the Red Line conversation is
Charlotte’s leadership and that has affected conversation about the Blue Line, the Gold Line
about whether Charlotte is really in on the whole system and the majority of the system does lie
within Charlotte. This is another part of just moving the complete system forward as far as I’m
concerned. We start getting into you have a part of this and you have a part of this and is this a
system, and in that situation we should go to all six towns, not just the three up north. I really
just want to move – we have some opportunities with three P’s with Norfolk/Southern that are
real and I think in addition to showing good faith on this one we need to say to Norfolk/Southern
that we are serious and this could be leveraged more than probably any investment we make if
we do this right. I didn’t ask for them to be asked about it.
Mr. Barnes said do we know that the up to $250,000 can’t be scoped more appropriately? It is
really going to be $75,000, is it going to be $100,000?
Mr. Howard said we don’t know. What we know in talking to Carolyn and her staff that a
normal study of this type could cost about $300,000. The state has about $50,000 they have
allocated for it right now. We will continue to have conversations with them and part of this
could be us having conversations with the towns. That is why I’m saying up to.
Mayor Foxx said I sense the discomfort and I’m wondering whether Mr. Barnes your point and
Mr. Howard your point, whether there could be an effort to say up to $200,000 and the difference
be something that we go to the towns and ask them to join in with?
Mr. Howard said there is some appetite here then I will be quiet, but I’m not sure what makes us
comfortable. It could be more symbolic than anything because we’re still the 800 pound gorilla
on this one. We still make up 57% of the MUMPO area and we make up more than that in
Mecklenburg County, I can’t remember what the number is. We are still the big I on this one
and if that is the symbolic number than fine, I just didn’t want to try to come up with what would
make everybody feel symbolic enough.
Mr. Barnes said here is the thing and I understand and believe in the 2030 Transit Plan. We have
tried to figure out how do the line and all the experiences we’ve been having we’ve been trying
to figure out how to get the lines done. With the Red Line you’ve got three stops in Charlotte
and the rest of them are outside of Charlotte and going up into Iredell County potentially. All
I’m questing is whether we get $5,000, $10,000 from the other municipalities involved to help
offset the cost. I actually understand what you are saying about the … and I get that but part of
this comes from my conversation in Transportation and Planning about MUMPO and the fact
that people are approaching that a little differently and looking for some equity. That is all.
Mr. Howard said that none of the towns in Mecklenburg could have been a part of any of those
conversations, none of them. About the regional issues that we’ve been having they have all be
really supportive. I’m talking about the Airport and none of them have been a part of that at all.
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I guess I could support what the Mayor is saying about the $200,000. The point is we need to
move it and give the resources to move it.
Mayor Foxx said when we did the Libraries a couple of years ago our funding was contingent on
other partners coming to the table so it is another way to structure this so it is setting an amount
that gives some room for them to help fill the gap but also make our funding contingent on the
gap being filled. I’m just throwing out ideas to help move this along.
Councilmember Cannon said it seems to me we ought to be getting some feel to come up with
some basic division on this in terms of the shared costs and we haven’t done that. It concerns
me a little bit that we are guessing on the costs and if we did some basic division on the costs,
and obviously our nut is even less than what is going to be proposed and even less than maybe
$100,000 or unless we are going to pick up the additional costs because of our scope of size here.
In the name of regionalism it would seem to be that they would be on board with trying to help
us out with this. I would like to try to keep us on par with the recommendation of the Manager
and I think that is all our goals right now. The conversation should have started some time ago. I
just don’t know that a shot in the dark with guessing at a cost and not doing some basic division
on this to come up with something is the way we ought to be going. The last point is I don’t
know what is in contingency right now off the top of my head, but if that is another way to go,
with what is in contingency I think is probably something for us to consider to try to help us get
there to minimize the impact. Can I get a comment on contingency please Randy, or Mr.
Manager?
Budget Director, Randy Herrington said up on the screen you have some revenue sources that
have been identified as potential use. One would be the Red Line Planning and Design from
PAYGO. This is what you used for advancing planning and design typically for bond projects.
You are talking about the Council discretionary piece there which is the 3rd, 4th and 5th lines and
the current Council discretionary is a little over $29,000. Right above that we have identified
$300,000 in fuel reserve, an amount that we don’t anticipate using this particular year. We do
anticipate using some of it, but not the full amount so $300,000 would be available from that
particular pot.
Mr. Cannon said that is the point. I think if we can be flexible in terms of our thinking and in
terms of where we might be able to land here are some things I think for us to consider without
having to jump head in on something.
Mr. Carlee said I think that is a good solution to reallocate $250,000 from the fuel reserve into a
contingency for Red Line studies. It is only in contingency so it would be subject to coming
back to Council with a specific scope of the study, cost sharing and other elements as we
continue to discuss with the towns and the state and Norfolk/Southern as to what we actually
need to do, but we will have already set aside our resources so they would be available to
participate in that.
Mr. Cannon said it remains up to that amount?
Mr. Carlee said yes, it would be subject to coming back to Council for approval.
Motion was made by Councilmember Cannon, to reallocate $250,000 from the fuel reserve
into a contingency for Red Line Studies. Councilmember Howard seconded the motion.
Councilmember Fallon said I think that is a good idea because basically the whole point of that
line is to bring people in here to work, to bring taxes to us and to have a regional plan. When we
had the Urban Institute, the towns seemed very willing when they understood what it would do
for them. I really think that we ought to allocate that money because it is going to cost more than
that in the end because we will have to do further studies, but put a pot of money that can be
used and then ask the towns to come in with us. When they see the willingness of us to do it.
Mr. Barnes said it is up to $250,000 as opposed to up to $200,000?
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Mr. Cannon said I think it is going to shake out to be the same.
Mr. Howard said you mentioned three stops and the biggest stop we will have will be Gateway,
then there is the potential of one at Camp Station area. This is going to have a bigger effect on
Charlotte than any other towns just based on Gateway alone.
Ms. Fallon said there is one on Statesville which will be a big project.
Councilmember Kinsey said this in effect takes us away from the CIP and puts it in a regular
budget.
Mr. Howard said this is not CIP at all, this is an other.
Mr. Barnes said concerning our ability to get partnerships from other towns how would you
suggest doing that because they are all going to see this on line and say well, they have the
$250,000, so we are going to say no when they call.
Mr. Carlee said we still have to scope the project so there is a lot of discussion that will be taking
place including in the context of the MTC with the towns at the table. I serve on the MTC
myself now so we will be carrying the message of contingency that was created by Council
subject to participation by others.
Mr. Barnes said how would you suggest Mr. Manager if you approach the partners and say the
project is going to cost $250,000 or $200,000 and they say well you guys have already set aside
the money so we don’t want to kick in anything. I want some partnership.
Mr. Carlee said I’m comfortable having that discussion with them and you didn’t set up a
formula. What I heard from the Council is that we would like for them to have some skin in the
game.
Mr. Barnes said what I’m asking you is to quantify the skin.
Mr. Carless said that is what we would do jointly with them. I think that gives us the negotiating
flexibility to help them see that it is to their advantage and everybody else’s.
Mayor Foxx said why don’t we ask the Manager to scope that out, have those conversations and
then at some point come back to us. The reason I threw $200,000 out there, it was because
$250,000, if you give $200,000 that is 80% of $250,000 which we are 80% of the county
basically. That was the theory there. You may come up with a different formula and that is fine.
Why don’t we ask the manager to develop a partnership?
Mr. Barnes said I’m fine with that but I have a question about this fuel reserve. How do we have
$300,000 left over from fuel reserve. Did we overestimate?
Mr. Harrington said last year as part of the budget process we included a $500,000 fuel
contingency based off of the escalation in pricing that we were seeing at the time. That is a
sustained level of escalation. We think we hit the mark pretty good from the standpoint of that
$500,000. We estimate that Police is going to need about $200,000 of that and the other
departments will be okay so we have estimated about $300,000 that is not needed. It was a good
thing that Council approved that and we did need to tap into that, but not all of it.
The vote was taken on the motion to reallocate $250,000 from fuel reserve into a contingency for
the Red Line Study and was recorded as unanimous.
Mayor Foxx said that takes care of all the things listed under the Capital budget.
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May 29, 2013
Budget Workshop
Straw Votes
Motion was made by Councilmember Autry, seconded by Councilmember Mayfield, to direct
the City Manager to prepare the necessary budget documents, resolutions and ordinance based
on the FY2014 and FY2015 Preliminary Strategic Operating Plan and FY2015-FY2018
Capital Investment Plan as amended by the City Council approved straw
votes.
The vote was recorded as follows:
YEAS: Councilmembers Autry, Barnes, Cannon, Fallon, Howard, Kinsey, Mayfield,
Mitchell and Pickering.
NAYS: Councilmembers Cooksey and
Dulin.
Mr. Cooksey said I appreciate the procedural observation because technically that is what it
is, but I harken back to how the Manager presented it and our experience last year and I
absolutely feel that while technically it is a procedural amendment this vote should be a flat
indicator of how each Councilmember will vote on June 10. I’m voting no on June 10.
Therefore I’m voting no today.
Mayor Pro Tem Cannon said I hear you but each member of this body reserves the right to
cast their vote how they choose to vote whenever that time comes. But to you point people
will hold in terms of where they are and if not we will hopefully know ahead of time.
Stephanie C. Kelly, City Clerk
Length of Meeting: 1 Hour, 37 Minutes
Minutes Completed: June 21, 2013
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