Budget suggestions

The DTH reports that the volunteer committee to review the Chapel Hill budget has gotten underway. I'm often impressed by the graphics in the DTH and this story is no exception. But even with that nice visual aid, I stink at budgets. Basically what I can tell is this: the new Town Operation Center will cost a fortune. It's probably worth the expense to do it right in long run (and we don't have much choice), hopefully there's a little fat to be trimmed there.

One committee member suggests a temporary Town hiring freeze, but I don't see how that helps anyone. If we are to avert this tax increase (not just postpone it), we need systemic financial changes, not a quick purge. Since most of us are unlikely to get up at 7:30 on Monday morning to attend this committee meetings, let's discuss here. How would you cut the Town of Chapel Hill's budget? Or would you?



I was living with a very wealthy (the mother was editor of Elle magazine) family in the suburbs of Paris in 1989. I was talking to the father one day (yes, of course, over a bottle of wine) when the conversation turned to economics. I was glad it took this route since I was in my senior year of an economics degree. I asked him what the tax rate was for his family. He replied "About 60%" . "Holy *&%$!", I exclaimed, "You must be pissed!"

To which he replied, "Have you walked around Paris? Have you ever seen such a clean city?"

You get what you pay for. That is what Americans do not understand yet.

Cut all departments 10% IMMEDIATELY...
or your personal budget will suffer~10%.

Foy, et al don't have the courage.


While I understand the gist of your suggestion that we pay for good services (like your example of Paris) I don't understand why we should ALWAYS pay more. For example, in your story about Paris, which has the same problems (to a different, but not always smaller degree) as smaller cities such as Chapel Hill, you mentioned the price of a clean city. Why must a city before forced to employ the most expensive work force to “clean the streets” when responsible trash disposal by local citizens and enforcement of trash disposal laws is the way to go. As the saying goes about an “ounce of prevention” being worth more than a pound of cure (or taxation).

I won't comment on what the key expense drivers are for Chapel Hill. I'll leave that to persons who are more familiar with the subject. I will make once suggestion though and it probably agrees with what Mr. Granger has said. We need to encourage persons who are employed in “operations related activities” to demonstrate new efficiencies each year. Taxpayers don't work so that the city can grow its workforce and budget. If the town has invested in some well-intended but unused or underutilized amenities it should divest itself of them.

To summarize, what has the town done to deserve more of our money? If you can't demonstrate increasing efficiencies over time then you aren't doing your job. If persons managing town operations can't convince tax payers of the value of the services they provide, they shouldn't be surprised when we don't want to pay one red cent more for their work.

1. outsourcing all of the landscaping work that is done by the town. why should the town maintain a "landscape force" when that service could be performed by a private company for less money?

2. start charging fo the bus again. if you give away something for free that really costs something, it will end up costing you more and more and more...

3. eliminate curbside recycling pickup and replace with a per pound charge for the trash you thow away. that gives people an incentive to recycle: reduce the poundage i throw in the landfill and i reduce what i pay...

4. reduce/limit use of studies/committees/focus groups etc. was $15000 to discuss MLK St *really* the best use of taxpayer $ in tight times?


sounds like the Fireman First Principle--that only services can be cut to reverse a revenue crisis? i'm going to wager that the "business" of town government could be run more efficiently than it currently is...

Is this committee looking at only expenditures or also revenues for town services? As an example, are the fees charged for Parks & Recreation programs (tennis lessons, basketball leagues, daycamps, etc) comparable to other programs in nearby communities and facilities? How much does it cost to swim at the Community Center versus Triangle Sportsplex? If they are looking at saving pennies, could it be possible to also generate more pennies through fees?

Wayne and Jack--which town services are you willing to give up in order to reduce the tax burden?

I'm a Carrboro resident, so I don't have a vote on this one, but my understanding is that federal and state aid to cities has decreased. So the so-called tax savings from the feds have resulted in local tax increases, or at least financial pressures. And local governments can't run on a deficit--right? So, is the big picture here also that there's less money coming in? With the floods in the western part of the state, the state budget has taken a big hit (I know all the UNC departments had to find a certain percentage of unspent money in late 2004 and give it back to the state). How has that impacted local governments?

Also, didn't town council members in Chapel Hill recently vote to give themselves health insurance, even though part time town workers don't get that same benefit? Maybe that's one place to start cutting.

I'd be interested to hear the answers--to help give a perspective on this stuff.

Andrea--when you increase fees, you also close lower income people out of town programs. I hope there are still enough liberals around here that we can avoid some regressive taxation.

Bill--as I understand it, the budget advisory is looking at improving the efficiencies within town operations, not just at service cuts. One of your examples, pay-as-you-throw, has been considered for years but was determined (I *think*) to be too costly to implement. For your bus example, I disagree that it would save money. One trap I hope we can avoid is creating long-term costs at the benefit of short term savings.

I am the member of the citizens committee who, among other things, suggested a temporary hiring freeze. The town has hired a consultant whose expertise is to look at our town operations and suggest improvements based on "best practices", such as staffing for police response times, etc. In the next month or so they will be recommending operational improvements, and I think we should not fill any more positions until we see their recommendations so the town doesn't waste any potential money. Every dollar we save in the last 5 months of this budget year (04-05) will help decrease next years huge problem.

Let me tell you the facts/numbers behind a potential 20% tax increase (which is the increase that will be required if nothing drastic is done) for Chapel Hill next year. Although the budgets are complicated, I believe the deficit (costs over revenues) of $5.4 MILLION for next fiscal year (July 05 - June 06) breaksdown roughly like this:
General Fund-
Personnal increases - $825,000,
Increase in operation costs - $638,000,
Increase in Interest on bond payments-
New Town Ops Center - $2,000,000, New bonds - $277,000, existing bonds - $510,000,
Increase in capital improvements - $873,000
Transportation Fund-
Personnal increases - $210,000

The committee is charged with looking at everything, both ways to decrease costs, delay bonds, split the ops center into two projects, etc, and ways to increase revenue. We are supposed to be looking at everything, but the reality is being a volunteer there is a finate amount of time one can devote. And a finate amount of detail we can deal with. So for the most part, we are focusing on the big-ticket areas, and most likely won't get to too many line item details in the budget.

However, I'll speak for the 7 citizens who volunteered for the committee, we are committed to TRY to maintain the same level of service we enjoy in Chapel Hill, but also do not believe that our taxes should be increased 20% in one year. Right now Chapel Hill taxes are in the top 4% of approximately 550 towns/cities in North Carolina, and if this increase happens, we will become close to the most expensive community to live in the entire state. How many of you will have a 20% increase in your income this year, so you can stay even with your tax increase?

Gene Pease

Terri -- The town has a fee reduction policy for all P&R programs and fees. Based on income, citizens may pay either 50% or 10% of the posted fee.


Can you please explain why you think that charging for the bus again would not save money?

Can't we identify some positive-cashflow neighborhoods and just annex them? (sorry, couldn't resist)

Thanks Andrea, that's good to know!

Bill--Orange Co has ozone levels that are too high, and EPA has placed us in a "nonattainment" zone." The medical costs for individuals with breathing problems aren't local costs, but they do impact all of us through higher medical costs, longer wait times for appointments, etc. Also, if we don't clean up our air, we will be subject to fines. This is the same kind of position Atlanta found itself in with water quality 15-20 years ago. They are still paying fines and everyone down stream from them is suffering from their pollution (loss of the very rich fishing industry in Apalachicola Bay.

Reducing traffic volume of traffic on city roads (since we don't have industry to blame this on) is one of the best ways to improve our air. In order to reduce traffic, we need to change individual behavior to make public or alternative transportation more attractive (just as we did with recycling back in the 80s).

To be honest, I'm not sure that bus service has to be free, but I do believe that it has to be sufficiently cheap to entice people to change their behavior.

It's not just Chapel Hill local government that pays for the bus--it's also Carrboro and UNC students. (So UNC students who live in Chapel Hill and Carrboro are already paying for it twice--via taxes and student fees.)

I think the free bus system is one of the best progressive things this community has going for it. I often see faculty and students on the bus, but I also see people who are likely in the lower income bracket of our community. Asking them to now pay for this service is regressive and doesn't really make sense in the big picture. Better that those who can most afford it pay more than to ask those who can least afford it. The people on the bus are not this community's wealthiest citizens.


your argument that making people pay for the bus now is unfair and regressive reminds me of the old ad where the drug dealer is advising the apprentice drug dealer:

"How much do i charge?" asks the apprentice.
"You don't charge--just give them a taste. Then when they come back for more, that's when you charge them."

The town has given away free bus service for all of a year now and all of a sudden, the notion of actually *charging* people to ride the bus is "anti-poor"?


I've heard about the Triangle Ozone and I followed your link and frankly, I don't buy it.

In the article you referenced I found this particularly disturbing:

"The EPA averages the fourth highest level of ozone measured in an eight hour period each year for three years to determine the eight-hour standard."

That strikes me as a VERY faulty way to take a measurement. Substitute "temperature" for "ozone" and tell me this doesn't seem fishy:

"...averages the fourth highest temperature measured in an eight hour period each year for three years to determine the eight-hour standard."

So if the 4th highest temp for each year was 95 degrees and you averaged them together for a "standard" of 95 degrees, doesn't that seem wildly inflated?

You don't buy what Bill? The fact that we live in a non-containment zone, meaning we have poor air quality and have to clean it up, or the way the data was reported in the news article?


I don't believe that the manner in which the EPA gathers and measures that data gives any sort of accurate measure of what the air quality is like in the triangle.

i think it's the use of junk science to push an ideological view. sorry to have to say that but i think the "environment" is just the left's version of religion--"I can't prove it but I believe it anyway." And please, before anyone posts a bunch of links purporting to *prove* all the doom and gloom and naysaying about the environment is true, don't bother because I can post just as many links saying its not true.

It's interesting that this debate here has turned into a mini-version of what we see on the national scene: one group proposes the ideas and one group just says 'no.'

To respond to Terri Buckner's comment about what services to eliminate:

Garbage disposal: I can (and do) drop off any and all of my own refuse at the local recycle center etc. Residents that drive regularly should be capable of chaining their errands and delivering refuse to the appropriate dumpsites. This mentality should have been encouraged years ago. This should reduce the number of sanitation vehicles, maintenance and staff to support such things. Fees should be based on usage, period. Frankly, I hate it when those guys drive their trucks on my lawn.

Reduce Government: Do we “need” to rename streets? I don't think so. These kinds of things cost money and contrary to the beliefs of the town council, they don't provide any real value to the property. The thought is nice, but not “necessary”.

“Free” isn't free. If funds come from local, state or federal governments we all pay, one way or another. “More” is not necessarily better. My point here is that we should not create new city projects just for the purposes of chasing a matching grant that might be available. If we end up with something that we don't use, the money is wasted, no matter where some people think it came from.

Would the city consider asking all bus riders for donations or making that option available? Combined usage and donation rates could be used to determine what routes are continued. Routes that are less used and experience lower donations rates (less profitable?) could be eliminated. This is a twist on the “you get what you pay for” analogy. Sound workable?

Who says we have to eliminate everything, maybe we should consider replacing government employees with private businesses or contractors? Basically, any staffing or service that shows up under http://www.ci.chapel-hill.nc.us/TownServices/index.html should be under scrutiny or competitive bids and subject to replacement by the lowest bidder. That's the American way folks… that way when the city needs to ramp up or decrease services, the burdens of this are not placed entirely on the city, not to mention fund benefits and such. If a service provider does not perform, we fire them and get another. That's a quality and cost enhancing suggestion.

Bill--I don't represent a group, just myself. Nor do I believe that you represent all conservatives. The consequences of your science being wrong are much greater than the consequences of my science being wrong so I guess that makes you more of a gambler than I am. Anyway--you asked me to clarify why I don't believe that making the bus system pay for itself is necessarily a cost saving action. I provided my rationale and you've disagreed with it. Not much more to say, is there?

Orange Co has ozone levels that are too high, and EPA has placed us in a “nonattainment” zone.”

The fact that we live in a non-containment zone, meaning we have poor air quality and have to clean it up

I always find the argument that ozone levels are bad in Orange County and that our air quality is very bad to be interesting.

Orange County has never had an ozone monitor inside of it although it does appear that one is planned for the near future.

The closest one (depending on where you live in Orange County) is in Durham on Duke Street, Bushy Fork in Person County, or Pittsboro.

The only way (it seems) one can make the case that the ozone is bad in Orange County is by extrapolating and adjusting data from surrounding cities that are far larger than Chapel Hill or Hillsborough. Not exactly apples to oranges (pun intended) comparisons.

Paul--extrapolating/inferring is standard statistical practice. If you find it amusing for the EPA to use that practice, you must be rolling on the floor over the concept of a presidential mandate when there was only a 3% spread between the final vote counts. :~)

enviro regulations are put in place at great expense to businesses and consumers in order to effect incremental changes in the environmetn and then Mt St Helens burps twice in one year and it is now Washington state's greatest polluter.

another example: the tsunami comes along and in the matter of minutes creates an enviro disaster on a monumental scale. many of the areas hit by the tsunami were hit by a salt water wave that has destroyed farm land, crops, etc for years to come.

mother nature is a very poweful force and i think the notion that we can somehow
have a long-term lasting impact on the environment (for the better or worse) is foolhardy when you consider that a calamity like a volcano or tsunami can undo that work in the blink of an eye.

perhaps you can come up with a budget cutting idea of your own that we can kick
around? all i've heard from you is naysaying the ideas of others...

Earth is a system which contains a number of feedback mechanisms, temperature being one. I am not an environmental engineer but I do understand that when we humans do things to disrupt the system we have to pay the price, one way or another. I also understand that environmental engineers don't agree on the variables and the weight of those variables as they create models of the system. So I will agree with you that the data is subject to interpretation. But that aside, what system do you know of in which variables can be randomly changes without a positive response toward equilibrium? I'm not sure whether you are saying there are no consequences or whether you are simply questioning the extent of possible consequences.

My suggestions: I was on the advisory board that suggested pay as you throw back in the 80s and I still think it should be pursued. I'm also working on the IT advisory board to identify ways in which technology can be used to introduce more efficiency. And I'm not even a town resident!

terri, you listed a number of reasons why free bus service has benefits but i don't see how any of the benefits that you listed improve the town's finances? If you look at Joe Capowski's post here (http://orangepolitics.org/2004/12/paying-our-dues/#comment-21184) he seems to be saying that the ridership increases don't seem to be a function of price.

So while people may spend less time waiting to see the doctor because we have a free bus system, how does that increase revenue for the town or decrease expenses for the town?

Please explain to me how in 5-10 years if ridership continues to expand and there is a need for more buses and more drivers, etc., how the town will not be facing an enormous and ever growing expense?

I was the citizen on the budget committee who suggested a moratorium in hiring, which the DTH missed the reason: to couple the work being done by the consulting company Maximus, who is focusing the majority of their work on "best practices", such as police response times vs. staffing, so we avoid any other spending mistakes. The point was to get people thinking about what can still be done in the last 5 momths of this year, to lessen the problem in next years budget. Every dollar saved this year will make next years problem less.

The citizens are trying to look at both ways to decrease expenditures in our budget, and looking at ways to increase revenue to the city, but the reality is, we are all volunteers, and have a finate amount of time to devote to these issues. So far, the majority of our time has been spent trying to understand a really complicated budget, as well as trying to focus on "big picture" items/issues, as they will have the largest impact on the town's financial crisis.

And it is a crisis, as next years budget (july 05 - june 06) today shows a $5.4 MILLION shortfall, and a potential city tax increase of 20%, if creative ways to change the current plan can't be accomplished. If this happens, it would make Chapel Hill one of the most expensive towns to live in approximately 550 towns/cities in our state.

Here are the rough numbers. Increase in costs over last year:

Interest on bonds - Towns Ops Ctr $2 million, new bonds $280,000, existing bonds $510,000, increase in capital improvements $873,000, salary increases town staff $825,000, increase in transit workers salary (seperate fund) $209,000, increase in operating costs for outside contracts $560,000, and about $125,000 of stuff I can't figure out yet.

So we are looking at trying to lower the expenditures by: spread-out the bond schedule, split the town ops center buildout into a couple of phases, town wage/promotion/raise rates, and lots of other areas; and ways to increase the revenue: advertising on the bus system, fees, etc.

I am very interested in finding ways to not give-up the level of services we are used to in Chapel Hill, but also committed to finding ways to not raise our taxes.

If you want to discuss any ideas, I can be reached at gpease7@aol.com, and my cell is 423-9556.

Gene Pease

Bill--I didn't say the bus should be free. I said it should be cheap enough to act as a motivator to change behavior. That's the same principle behind the pay as you throw. People are rewarded financially for reducing their volume of trash. But under that kind of a program, you would have to pay the true cost of recycling, which as you noted earlier, we don't do now. The problem with both of these examples is that we only know 'accounting' type costs and *some* of us believe that societal costs should also be calculated in--which is what I was trying to say about air quality.

So let's take an example that doesn't have as many intangible cost possibilities. Where's your evidence that "outsourcing all of the landscaping work that is done by the town" would save money? I'd buy the idea of outsourcing work that is done irregularly or required expensive equipment, but please show your evidence for outsourcing everyday kind of work.

But let's look at the idea of the town vs. the private sector cutting the grass. Private companies can provide services more efficiently than government because private companies face very real consequences for failure--they go out of business. If the landscaping corp for a town government is wasteful and inefficient, what are the consequences for failure?

Think of products where consumers report the greatest satisfaction: computers, cars, televisions and compact disc players. Now consider what consumers report the least satisfaction with: public housing, public schools, the U. S. Postal Service, and veterans hospitals, just to name a few. The first group is produced through private competition; the second group is provided by government.

Regarding the buses in Chapel Hill, it is important to note that spending on individual modes of transportation does not occur in a vacuum. Spending on one mode often offsets spending on another mode. It is easy to look at the budget and see how much money is spent on providing bus service.

But how much money does not have to be spent on road widening projects and parking decks as a consequence of operating the bus service? What are the travel time savings that accrue by making the road system in town more efficient? What benefits accrue to the community in terms of having a strong enough service to carry citizens without cars to a wide variety of employment opportunities, who might otherwise be unemployed and collecting public assistance? What environmental benefits accrue to the community?

The following link is helpful in answering these questions.

Determining the Value of Public Transit Service

As to the question of: “How has the fare-free policy affected the cost effectiveness of providing this public service?”

I recommend:

The National Transit Database
Choose Profiles...then "All Agencies" then Search on the term "chapel hill"
Compare 2001 and 2003 profile for pre and post-fare-free stats.

If you look at the Cost Effectiveness and Service Effectiveness measures for Chapel Hill Transit for 2001and 2003, you will see the following:

Total Operating Expense: $6,245,000
Annual Unlinked Trips: 2,957,409
Operating Expense Per Passenger-Mile: $1.52
Operating Expense Per Unlinked Passenger Trip: $2.11
Unlinked Passenger Trips per Vehicle Revenue Hour: 31.58

Total Operating Expense: $8,005,653
Annual Unlinked Trips: 4,906,399
Operating Expense Per Passenger-Mile: $0.72
Operating Expense Per Unlinked Passenger Trip: $1.66
Unlinked Passenger Trips per Vehicle Revenue Hour: 36.85

As you compare these statistics, you will see that while the operations budget expanded from 2001 to 2003, ridership expanded to a much greater extent, which means that the service is becoming more efficient, providing a larger number of units of mobility (passenger-miles) at a lower price per unit.

From these data, a 28% increase in costs has produced a 66% increase in ridership.

I can name several private businesses which I refuse to do business with. Private does not always mean better. The issue on the table is cost savings. Is there any evidence that outsourcing landscaping services would save money? What criteria should the town use to make outsourcing decisions? This same question could be used to leasing. The town currently leases Internet access through Time Warner. The lease webspace too. Are there consequences/hidden costs to outsourcing services that could offset (potential) cost savings?

How about this ? Instead of cutting services, what if we merge the two towns ? Winston Salem did it. Then we can pay one police chief, one fire chief, one mayor etc, etc. It would save a ton of money, and we would still have all of the town services we progressives love.

Merging Carrboro and Chapel Hill might not decrease CH taxes--but it WOULD decrease Carrboro's. Carrboro has one of the highest tax rates/$100 in NC. (One reason people would rather be annexed by CH than Carrboro.)

It makes sense to combine the towns...at least for "economics of scale" reasoning, but it won't happen anytime soon. CH just ain't FUNKY enough for Carrboro.

So why can't Carrboro be the funky neighborhood in Chapel Hill? What possible reason can there be for maintaining two redundant town bureaucracies ? Those tax dollars could buy a lot of services.

As I said in the bgeining of this thread, yes, Carrboro pays higher taxes, but we get free wireless internet, the farmers market, the century center, and a town commons. See? What does Chapel Hill have to show for itself?

Well, Chapel Hill generally doesn't annex people until it can grant them services similar to those that the REST of the city enjoys. I wonder how many of the people getting annexed will be using Carrboro's WI-FI? And it's QUITE a hike to the Town Commons...particularly without sidewalks. Of course, one could DRIVE there...but then where would one PARK?

Having lived in BOTH towns (Carrboro for 15 years, CH for 8) I'll take our level of services over your taxes.

Well, if the two towns merged, it would have two farmers markets ( lest you forget the one at Meadowmont) a Century Center, and a town commons, along with adequate fire, water and first responder services. And BTW, I get Wi-Fi for a heck of a lot less that Carrboro taxes.

There's really no reason not to merge the towns. It's the best fidcally sound answer.

Oops, apparently I made a new word out of fiduciary and fiscally.

Katrina--I actually agree with you. As a former Carrborian I wondered why we didn't merge. It has been suggested before--and it never happens. (Rather like school merger.)

Carrboro doesn't want to be "the funky neighborhood" of Chapel Hill.

Used to be because the (then) older population didn't want "those hippies in Chapel Hill" (a direct quote from an elderly former West Main Street neighbor ) running their town. That gentleman "passed" a few years before the tides shifted in Carrborro. Y'all may not believe this, but, time was, Carrboro was a "yellow dog democrat" town of the highest order. Not THAT long ago, either!

Too bad Professor Edwards will live in the county (to avoid city taxes).

If the compassionate poverty specialist Professor will donate 10% of his income to charitable causes, I will match his donation.

"The left talks the talk, the right walks the walk" Duet.

Or MAYBE he just wanted a big chunk of land? How many 6+ acre sites are left in either CH or Carrboro that are developable? There are 10 acres behind my house, but most of it can't be built on under the new LUMO.

(Not feeding the troll, just raisning the idea.)

Maybe he just wanted a yard ??? He's got small children.That's why we don't live in town. I've got 120 roses, a berry patch, and a salsa garden that wouldn't fit in "high density residential ares." As progressives, we should support someones choice to live where and how they choose.

Katrina--I'm jelaous. I don't have enough SUN for more than 7 rose bushes--and they are borderline.

Yeah, i know, OT. But roses are VERY important. One should always take time to smell them...

Bill may think it is "junk science," but EPA has an interesting Web course, with good graphics, that describes in detail the effects of ozone on the human body. You can find it at: http://www.epa.gov/air/oaqps/eog/ozonehealth/index.html

Free bus rides provide clean air benefits to everyone in the community, but especially to the children, who are at greatest risk from exposure to ozone.

I'm still waiting to hear numbers, not just opinions, about why outsourcing is such a great idea. The silence speaks volumes.

The only way I can see commercial operations offering these services for less than what the town pays is that commercial operations would pay their employees less and offer fewer benefits. That would not be acceptable to me. Not only for humanitarian reasons, but back to the long term costs. People who don't make living wages cost society more in terms of health care, crime, etc.


I think the city owes its citizens an explanation or proof that its services (including landscaping) are delivered at reasonable costs before it considers any additional taxes. If certain jobs were up for bid, perhaps some good old competition might encourage higher quality and lower costs than the current monopoly that the city employees enjoy?

I'd go so far as to say that the state should do the same thing in DMV offices… and that the post office might be more productive (faster and cheaper) if employees there had more pressure to perform. But I realize that those jobs go beyond the scope of this forum. I am sure you get the gist of this…

I'd also mention that if you've ever had problems with “local cable provider” you'd already know that they aren't always the fastest and easiest folks to work with. Seeing how there's no other competition for cable services, there's even less of an incentive for them to perform maybe?

All, I do like the idea of merging the two city governments into one. Maybe we should suggest that the towns be renamed too? “People's Republic of Chapel Hill” has a special ring to it. ;)~

I found this amazing scripture (10:2) this morning. Praise the Lord!


Susan, thanks for the link--junk scientists pushing their junk science at taxpayer expense! What a treat!

Bill--No one says you have to agree so why bother with the sarcastic responses? I'm still waiting for your explanation of how outsourcing landscaping is going to save money (real costs not just line item).



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