Meeting Date:

September 20, 2007







SUBJECT:     Assembly of Governments Discussion Items


DEPARTMENT:   County Manager







As noted in “Background” section





Laura Blackmon or Greg Wilder, 245-2300






PURPOSE:  To discuss topics of mutual interest among the governing boards of Orange County and the Towns of Carrboro, Chapel Hill, and Hillsborough.





1)      Regional Water Resources Use and Preservation


a.         Potential Joint Use of OWASA-Owned Jordan Lake Intake Site by Chatham County and OWASA


At an August 14, 2007 meeting with officials from Orange County, Carrboro, Chapel Hill, and Chatham County, OWASA was asked to provide a summary of past discussions that have taken place regarding OWASA’s joint use of its land on Jordan Lake (and the most feasible raw water intake on the west side of Jordan Lake) with Chatham County and other parties interested in utilizing Jordan Lake as a water supply.


In Attachment A, OWASA Executive Director Ed Kerwin has provided a summary and chronology of those discussions along with his analysis of the potential use of Jordan Lake water supplies by OWASA and other parties.  Mr. Kerwin notes that any plans for OWASA to participate in any joint venture to use Jordan Lake water supplies will have far reaching land use impacts and that such use by OWASA will be consistent with the principles of the Water and Sewer Management, Planning and Boundary Agreement.


Attachment 1 – a – 9/7/07 Letter from OWASA Executive Director Ed Kerwin to Orange County Manager Laura Blackmon Reviewing Past Discussions With Chatham County Regarding Potential Joint Use of the Jordan Lake Water Supply



b.         OWASA Presentation on City of Durham’s Request for OWASA to Provide Wastewater Collection Service for 57 Residential Lots in the Blenheim Woods Subdivision


OWASA has received a request from the City of Durham that OWASA provide wastewater collection utility service to a new development immediately adjacent to and on the Durham side of the existing Durham/OWASA service area boundary, and OWASA requested that this item be included on the Assembly of Governments’ agenda.  The City of Durham has made this request so that it may avoid having to build a wastewater pumping station to convey the wastewater load from the proposed 57 residences of the subdivision to its own gravity collection system.  If OWASA is to accept this proposal, the City of Durham would design, construct, finance, operate and maintain a collection system, meeting its own design and operational criteria, that would then connect to OWASA’s nearby wastewater collection infrastructure.  OWASA would then bill the City of Durham for the cost of its service as it would any sewer utility customer, while OWASA would incur only costs associated with maintaining its own infrastructure and treating the wastewater.


Durham’s request represents a “wastewater transfer” according to the Water and Sewer Management, Planning, and Boundary Agreement, to which OWASA is a party along with Carrboro, Chapel Hill, Hillsborough, and Orange County.  OWASA is sensitive to the fact that by accepting flows from this development or any other development outside of the OWASA service area, OWASA would be committing the necessary facility and applicable nutrient mass load capacities that meet the needs of that development. That means such capacity and nutrient mass load will not be available to meet OWASA’s own customers’ needs.  OWASA recognizes that if it is to be the service provider for this development, it must acquire the approval from not only its own Board of Directors but also the approval of the elected boards of Carrboro, Chapel Hill, and Orange County.  However, in terms of this particular situation, OWASA staff believe the potential effects of Durham’s request are offset by the fact that Durham has previously agreed to accept wastewater flows and nutrient loads from Orange County’s Piney Mountain Subivision which has almost the exact same number of residential customers. 


The OWASA Board of Directors discussed this request at its September 13th meeting and supported Durham’s request for a small wastewater transfer.


Attachment 1 – b – 9/7/07 Letter from OWASA Executive Director Ed Kerwin to Orange County Manager Laura Blackmon on Proposed Transfer of Wastewater from the City of Durham to OWASA for the Blenheim Woods Subdivision


2)           Review of Revenue Options Available to County to Replace Sales Tax and Other County Revenues to be Taken by the State (including Lost and New Revenue Sources and Amounts and Options Available to Orange County by Referendum)


Medicaid Relief/Sales Tax Swap


For a many years, counties across the state asked legislators to relieve them of mandated Medicaid expenditures.  The General Assembly responded this year by approving a three-year phased in plan whereby the State will relieve counties of their Medicaid expenses.  As the state assumes County Medicaid expenses, it will, in turn, take over a portion of the local option sales tax revenues.


The following is an excerpt from an August 24, 2007 email received from Dr. Lee Mandell, Director of IT and Research/CIO NC League of Municipalities:


The last one-half cent local option sales tax--Article 44--is the affected tax.  The state will take over one-half of this tax (one-quarter cent) effective October 1, 2008 followed by taking the remaining one-quarter cent effective October 1, 2009.  Municipalities currently receive a share of the proceeds from the Article 44 sales tax and will be reimbursed for the loss of those revenues.  The method of replacement includes a growth factor.  The first one-quarter cent lost will be replaced by a payment equal to one-half of what each municipality receives from the Article 40 local sales tax.  The Article 40 tax is a one-half cent tax distributed back to the county level on a per capita basis, so the first hold harmless, which begins October 1, 2008, is equal to half of this one-half cent – in other words, a quarter-cent, just like what is being taken away. Since there is growth in the Article 40 tax proceeds, there will be growth in the hold harmless payments.


Effective October 1, 2009, municipalities will receive a second hold harmless payment equal to one-quarter of the one-cent Article 39 local sales tax.  This is a tax distributed back to the county area on point of delivery, just like the tax being taken over by the state.  Again, the hold harmless payment is tied to the amount received from an existing revenue source so any growth will be included.


The money for the hold harmless payments to cities comes from the counties’ share of sales tax revenues.  The NC Department of Revenue will make both hold harmless payments directly to cities, and there is no expiration date on this hold harmless.


In a related measure, the state budget changed the Article 42 local option sales tax from per capita to point of delivery distribution, which will affect the total amount of tax proceeds returned to each county area for distribution among the county and the municipalities in that county.  [This change does not affect the method that counties choose to distribute tax proceeds among the county and its municipalities – either per capita or ad valorem.]


The attached “County Medicaid Relief/Sales Tax Swap Staff Analysis” spreadsheet provides a detailed fiscal analysis of the impact of the recent legislation.


Local Revenue Options


Local governments in North Carolina have historically relied heavily upon ad valorem property taxes as their major source of revenue. For a number of years, the Orange County Board of County Commissioners, the North Carolina Association of County Commissioners and many other Boards across the state, have lobbied the General Assembly for legislative authority to expand counties’ revenue options and lessen counties’ reliance on property taxes.  During the 2007 legislative session, the General Assembly granted counties the ability to enact new revenue options.


The new revenue options available for counties include a .4% land transfer tax and an additional ¼-cent sales tax.  There are several important factors related to the new options:


Commissioners face a number of decision points related to the new revenues.  Examples include:

·        Which Tax(es) to Include on the Ballot – As stated earlier in this agenda abstract, the Board has the discretion to put the land transfer tax, the ¼-cent sales tax or both of the new revenue referenda on the ballot.


Should the Board receive voter approval of the new local revenue options on May 6, 2008, Orange County would not receive any proceeds in the current 2007-08 fiscal year from enacting the new funding sources.




Commissioners are scheduled to discuss decision points and next steps with regard to local revenue options at their September 19, 2007 regular meeting.  As a result, it is likely that additional information will be available to share at the September 20, 2007 Assembly of Governments Meeting.


Attachment – 2 – aCounty Medicaid Relief/Sales Tax Swap Staff Analysis

Attachment – 2 – b – 8/21/07 Email from Rebecca Troutman, North Carolina Association of County Commissioners

Attachment – 2 – c – 8/24/07 Email from Lee Mandell, North Carolina League of Municipalities


3)           Land Trust Affordable Housing Task Force


At the March 29, 2007 Assembly of Governments meeting, Robert Dowling Executive Director of Orange Community Housing and Land Trust discussed the challenges his organization faces with long-term maintenance of land trust properties.  Subsequently, the Chair of the Board of County Commissioners and the Town Mayors are proposing the creation of a Task Force to discuss this issue and develop recommendations to address the identified challenges.  Attached is the detailed proposal.


Attachment 3 – a – Proposal: Creation of a Land Trust Affordable Housing Maintenance Task Force






4)           Review of Homestead Tax Exemptions Enacted by 2007 Legislature


In accordance with recently approved House Bill 1499, effective January 1, 2008, the following changes will take place with regard to the current Homestead Exemption program:

o       Maximum Qualifying Income – Currently, the maximum qualifying income totals $20,000 (adjusted gross income)

§         Effective January 1, 2008, the maximum income equals $25,000 (gross income).


The attachments provide additional details related to the changes and outlines the County’s plan to ensure that taxpayers are educated about the changes.


Attachment – 4 – a – Changes to the Homestead Exemption Program

Attachment – 4 – b – “Senior Circuit Breaker Property Tax Benefit” (affecting fiscal year 2009-10)


5)           Potential Regional Transportation Initiatives between Chatham/Orange/Alamance Counties, Chapel Hill Transit and Town of Pittsboro


Discussion at the August 14, 2007 meeting of Orange County/Chatham County/Chapel Hill/Carrboro/OWASA/UNC officials brought out the need for a transit partnership between Alamance County/Orange County/Chatham County/Chapel Hill/Hillsborough/Pittsboro.  The major focus of the partnership would be transit connections focused on external impacts of the University of North Carolina and Carolina North, and would include a process for development coordination among the various jurisdictions, including developing incentives for developers to design/redesign proposed land use applications to be transit friendly.


Discussions continue regarding the feasibility of transit service between Chapel Hill and Chatham County.  The Town of Chapel Hill, in conjunction with the Town of Carrboro and UNC, is developing the final draft for the Long Range Transit Plan.


In addition, the Triangle Area Rural Planning Organization (TARPO) Transportation Advisory Committee, in April 2007, endorsed a Resolution Requesting Transportation Funding Assistance To Support Additional Public Transportation Services Along the US 15-501 Corridor Communities.  The resolution was forwarded to the North Carolina Department of Transportation Public Transportation Division Director.  TARPO has not received a formal reply at this time, but NCDOT will issue advisement at some point.


No Attachments

6)           Written Updates


a.         Agricultural Support Enterprises Development


An interdepartmental group of Orange County staff (Planning, Economic Development, Environment & Resource Conservation and Cooperative Extension and Soil and Water) is working on an initiative to facilitate some of the new uses coming online that have a link to farming such as community supported agriculture, corn mazes, teaching farms, and pick-your-own operations.  These new uses will provide farmers with the supplemental income to keep their farms in operation and will provide local residents with a reciprocal farm connection – an opportunity to learn about agriculture and a way to support local farmers by buying locally grown products.  The attachment details the current status of this effort.


Attachment 6 – a – Agricultural Support Enterprises (ASE) Update – Assembly of Governments, 9/20/07


b.         Land Use Planning


§         County Comprehensive Plan Update Phase I


On October 3, 2006, the Board of County Commissioners (BOCC) approved a process for updating the County’s Comprehensive Plan in two phases as follows:


Phase I, to include the development of Comprehensive Plan goals of each element and County Profile Element, the first of eight Elements to be completed as part of the Update; and Phase II, to include the remaining Elements that will comprise the updated Comprehensive Plan.  The Comprehensive Plan will include the following eight Elements: 1) County Profile; 2) Economic Development; 3) Housing; 4) Land Use; 5) Natural and Cultural Systems; 6) Recreation and Parks; 7) Services (Utilities) and Community Facilities; and 8) Transportation.


Although the plan is generally a sustainable growth management policy guide for unincorporated county, the plan will consider the necessary intergovernmental coordination indicative of a cumulative and comprehensive regional view.


Draft Goals


During May and June 2007, the following County advisory boards and supporting staff worked to develop the draft goals for the Comprehensive Plan: Affordable Housing Advisory Board, Agricultural Preservation Board, Commission for the Environment, Economic Development Commission, Historic Preservation Commission, Orange Unified Transportation Board, Planning Board, and Recreation and Parks Advisory Council.

Goals express an ideal future end related to the public health, safety, and/or general welfare and provide a general direction-setter.   The draft goals have been developed in support of the Board of County Commissioners Comprehensive Plan Guiding Principles adopted October 21, 2004 and amended on April 24, 2007.  The draft goals will guide the completion of the second phase of the Comprehensive Plan Update process and following adoption, future legal and policy decisions.


Draft County Profile (Data) Element


During February - June 2007, County advisory boards (listed previously under part “a. Draft Goals”) and supporting staff coordinated to develop the draft County Profile Element.  Although the Planning Board and Planning Staff did play a lead role in the development of the initial draft, several revisions were made following review and input from other County departments and advisory boards.


The County Profile (Data) Element is to serve as the primary reference point for basic information contained in the Comprehensive Plan.  As such, it is intended to provide a convenient location for population statistics as well as key social, environmental, and economic conditions that exist within the County.  The information included in the County Profile Element will be used to develop the remaining seven Elements of the Comprehensive Plan and will also serve as a resource for future planning.


The general outline for each element does include an analysis of existing conditions, trends, challenges, objectives for the future and intergovernmental coordination.


No Attachments



§            Efland Area


A Efland-Mebane Corridor Small Area Plan has been developed to address the growth potential in the area. Certain areas will have the potential for public water and sewer systems. Some areas are in the design phase while others will be master planned awaiting economic development opportunities to arise. The county is processing a series of implementation strategies to proactively prepare the area for the planned non-residential intensity and residential density that is consistent with the long-range comprehensive plan.


Please contact Perdita Holtz at (919) 245-2611 or Craig Benedict at (919) 245-2592 if you have any questions.


No Attachments



§            Town of Hillsborough/Orange County Strategic Growth Plan Phase II


Last year (2005-06), the BOCC and Town of Hillsborough collaborated on the Town of Hillsborough/Orange County Strategic Growth Plan Phase I, which was adopted by both entities.  Acknowledging that there are growth pressures within and on the fringe of the Town of Hillsborough, a consultant was hired to examine the public water and sewer potential, land uses and transportation infrastructure to promote a sustainable pattern of development.  Phase I set the growth management framework through a resolution to prompt work to be done in Phase II through an interlocal agreement.  Coordinated Planning Zones, annexation boundaries, land use patterns, intensities and complementary resource and infrastructure plans and outreach are all part of Phase II.


No Attachments



§            Transfer of Development Rights (TDR) or Strategic Growth and Rural Conservation (SGRC)


The BOCC has a contract with The Louis Berger Group, Inc. and UNC-Charlotte Urban Institute to develop a process that achieves the goals and objectives of a ‘Transfer of Development Rights’ (TDR) program.


The program intends to use existing rules such as conservation easement purchases in rural conservation areas and companion zoning density bonus provision in Strategic Growth areas. 


The program would be between Orange County rural to Orange County urbanizing areas.  Rural conservation activities (i.e. farm easements or environmental preservation, etc.) may be accomplished by urban developers who wish to receive density or intensity bonuses in strategically planned growth designated land use areas.


The BOCC selected the consultant on March 1, 2005, and approved a contract to complete the first two phases (research and feasibility) of the study.  After receiving and accepting the draft TDR Feasibility Study on June 27, 2006, the BOCC authorized proceeding with the third phase (program design and ordinance development).


The Phase III contract was approved on November 2, 2006 and is proceeding.


If there are questions please contact Craig Benedict at (919) 245-2592 or Glenn Bowles at (919) 245-2577 and/or review the Planning website.


No Attachments



c.         Jordan Lake Nutrient Rules Update


On June 15, 2007, the Environmental Management Commission (EMC) opened public hearings on a proposed Nutrient Management Strategy and related rules for Jordan Lake watershed.  Almost half of Orange County (125,000 acres) is in the Jordan Lake watershed, including Chapel Hill and Carrboro. Public hearings were held in July in Carrboro and Elon, and attracted large numbers of speakers.


The current status of the Jordan Lake hearings and process is summarized in the Status Report attachment.


Attachment 6 – c – Jordan Lake Water Supply Nutrient Management Strategy and Rules Status Report - September 7, 2007



d.         Daniel Boone Property Redevelopment Update


The Hillsborough Town Board and Planning Board met in a joint workshop on Tuesday, August 28 to discuss the current proposal from American Asset Corporation (AAC) to redevelop the Daniel Boone Village and develop the adjacent Collins property with 550,000 square feet of retail space, 1,100 dwelling units of various densities, and a 12 acre parcel for civic, recreational, and school use.  The boards’ members reiterated previous comments about the number of residential dwellings proposed, the overall impact of the development, and the general vagueness of the vision or overall concept of the development.  When asked by the applicant whether there was a circumstance that would make 1,100 dwellings possible, nearly half the members responded affirmatively, if the package was right; while the approximate other half of the members present indicated they could not imagine that circumstance.  The members were more supportive of a range between 600-800 dwellings, again depending highly on the package of amenities and design that went with the proposal.  The members were unanimous in stating that all the dwellings needed to include sustainable building components like Leadership in Energy and Environmental Design (LEED) or Green Building standards.  At the Town Board’s September 24, 2007 workshop, the Board and Planning Board will receive some conceptual plans and renderings from AAC for discussion purposes.  At the conclusion of the workshop, the next steps will be determined.


No Attachments


FINANCIAL IMPACT:  There is no direct financial impact associated with discussion of these topics.  There are no action items requiring formal Board decisions.


RECOMMENDATION(S):   The Manager recommends that the Boards discuss the topics listed and provide appropriate direction to the respective staffs. *