Town-University Fiscal Relationship Unchanged by Budget Crisis

The town has a cost-sharing agreement with the University to cover certain services used by UNC, such as fire coverage and clean up after events like Halloween and basketball games.

In October, the council sent a letter requesting in 17 points that UNC play a bigger role in sharing costs. A month later, UNC responded, disagreeing on three points -- one of which mandated that UNC cover all costs created by development of the Horace Williams tract. The council acknowledged UNC's position in November but stipulated that the council stay abreast of discussion.

Now, because of the state's $900 million budget shortfall, Gov. Mike Easley has discussed withholding funds from municipalities, which would mean a $1.4 million cut for Chapel Hill. The cut could mean drastic adjustments to the town's budget, including the possibility of layoffs or an increase in property taxes.

Despite the concerns, Town Manager Cal Horton said there would be no change to services provided by the town, and he dismissed the possibility of increasing the price for services.

"We don't have any ability to increase costs charged to UNC, because it's a state agency," he said.

Council member Mark Kleinschmidt said the possibility of increasing fees or cutting service back to trim expenses had not even been considered.

Although most of the calls to the Chapel Hill Fire Department are campus-related, Kleinschmidt said it is the town's duty to provide the service.

"That's something we're going to do anyway," he said. "It's part of the cost of running a fire department. The University is covered because it's in Chapel Hill."

Council member Pat Evans said the services provided to UNC, although limited, should not be changed.

"(The town doesn't) provide any services to UNC," Evans said. "We really just provide fire services. We can't risk a citizen's life by reducing that service."

Kleinschmidt pointed out that although the state contributes about $860,000 for services provided to the town, that amount never covers the total cost. "I don't think we're ever going to have a day where the state covers as much as it costs," Kleinschmidt said.

Despite the costs, Kleinschmidt noted that the town benefits greatly from UNC's presence, although that impact cannot be easily measured.

Council member Jim Ward said the town is carefully considering cutting other areas to preserve the quality of life.

"Now we're talking about cutting back in ways that won't require anyone to be laid off," Ward said. "We're also going to reduce capital improvements and put them on hold."

UNC officials could not be reached for comment.

The City Editor can be reached

at citydesk@unc.edu.