Harold’s Blog: Cary EMS Merger, NCDOT Suspension, Tax Rate and More

Cary, NC — This week was a slow week. We continue in a State of Emergency due to COVID-19 which means that all my ceremonial events are canceled.

Monday – Discussing the Budget, Future Tax Rate

Monday I had my weekly one-on-one meeting with the town manager. We were joined by the Chief Strategy Officer. We mostly exchanged thoughts on the upcoming budget which will have a shortfall in the millions.

Adding to the complexity of this year’s budget is the fact that reevaluation is occurring, and projects funded by last year’s bond are planned. Any of these could have a significant impact on the tax rate.

Projections for future loss in revenue show that it will take a long time, perhaps years, to get back to the pre-crisis level.

As a result, preliminary information shows that going to a revenue-neutral tax rate would likely require lowering our levels of service, possible staff reduction, or both. I highly doubt our council would be interested in that sort of tax rate. Having said that, I am sure a tax increase is off the table as well.

My primary interest will be to maintain and improve our levels of service while keeping the tax rate as low as possible. I believe the tax rate we set will remain the lowest tax rate in Wake County.

By the way, we have had the lowest tax rate almost the entire time I have been serving as mayor. However, most Cary citizens think we have one of the highest tax rates in Wake County.

Wake County Mayors Talk COVID-19 & Tax Rate

Monday evening I participated in a meeting of the Wake County Mayors Association. The mayors discussed whether municipalities should have a role in tracking and tracing COVID-19 cases and agreed that this was a county role.

The revenue-neutral tax rate was also discussed with almost all mayors saying they will likely not do revenue-neutral. Most mayors have already decided to cancel their 4th of July celebrations.

Thursday – NC On Track for Phase 2

Thursday I joined the Governors Press Briefing on COVID-19. He and Dr. Cohen presented data that showed we were on course to move to Phase 2 of the reopening on May 22nd.

Friday – Weekly Metro Mayors Meeting Recap

Friday I participated in a meeting of the North Carolina Metro Mayors. Here is a summary of that meeting from the Executive Director:

Brief State Legislative Update

Schedule and Plans

• The NC legislature is coming back next week (May 18).
• There have already been a number of bills filed dealing with non-COVID related issues and we expect this session to be more “traditional” and not solely focused on COVID.
• The General Assembly is waiting on federal guidance to determine how to spend the remaining federal funds from the CARES Act.
• The budget and how the General Assembly deals with a revenue shortfall will be a main priority for legislators.  Currently, there is a $4B shortfall expected which does not include the DOT funding crisis (an additional $1b).

Local Bill deadline

• Filing deadline is next Tuesday, May 19

NC DOT – Powell Bill and Public Transportation CUTS

• There was a State transportation funding crisis before COVID-19 due to MAP Act settlements and disaster experiences.
• The COVID-19 pandemic has exacerbated this crisis due to historically low levels of gas tax and vehicle sales tax which is a primary funding source for DOT.
• As the Department looks at their financial situation, there is a potential for reductions of up to 25% across the board for a variety of programs – notably including Powell Bill funding and state aid for transit.

Update on Governor and reopening of NC

• Key Indicators are on track
• If indicators remain on track, the state could move into Phase 2 of reopening as early as May 22
• DHHS is still looking at trend averages over 7-day period
• The move to Phase 2 could be delayed if there is a change in numbers, but right now everything is on track. They will wait to make the determination next week.

Federal Update and Strategy

The Big Picture: 3 stages – response, restore and recover

• There have been 3.5 rounds of federal aid around COVID thus far.
• The last significant round (CARES Act) restricted the use of funds to direct, COVID-related expenses for local and state governments.  3 counties and 1 city in NC got over $430m directly from the U.S. Treasury.  Otherwise, all others (97 counties and 540 municipalities) have to rely on the NCGA to appropriate the federal aid to local government.
• The NCGA has $3.5Billion available for state and local aid. With the $3.5 Billion the NCGA created the Coronavirus Relief Package and set aside a local government reserve with $300 Million (from the $3.5 B).  Of that, $150M has been already sent to counties for the purpose of covering expenses specifically related to the COVID-19 response.  Counties may allocate funds to municipalities for eligible expenses.  The remaining $150m is held in a reserve on the chance that Congress would grant flexibility for its use.
• A communication was sent on Wednesday evening from the Executive Director and the President of the NCACC to ALL County Commissioner Chairs and County Managers, encouraging them to work with municipalities.

House Bill – Heroes Act – US House

• Massive $3 trillion bill (see attached) that will be voted on today.
• While it is expected to pass House, it will NOT be considered this is just the jumping off point for negotiations that will continue between the House, Senate, and President as to what will be included in the final package.
• Currently, there is significant aid to the tune of $375B that is set aside to go directly to cities and counties using a variety of ways to distribute that money.  (attached is a breakdown how what would be distributed in the House bill passed in current form)

Building a Coalition for NC for Congressional ACTION

• Broad, strong coalitions with a unified message have a huge impression on Congress.
• Talking points will be provided to you to continue the conversations with your Congressional delegation on the importance of direct aid to local governments.

JOINT Statement from NCLM, NCACC and Metro Mayors

• The statement makes it very clear that we need several things from congress: flexibility in spending for the current CARES Act funding and additional aid to states and local governments that is flexible.
• If you have a strong relationship in place with your county, use this joint statement to talk to your local delegation and continue to emphasize the need for this critical, DIRECT flexible funding.

Question: Is there a deadline we need to be aware of?

The expenditure deadline for the current CARES Act money is the end of the year.  In terms of timing for additional funding, it would be ideal to see progress made by the end of May – going much beyond that and chances for federal aid get dimmer – upcoming elections and public urgency may diminish if it drags on.

Mask the City

Mt. Airy Based – Renfro

• Winston-Salem connected with the largest sock manufacturer Renfro which is headquartered in W-S and plant operations in Mt. Airy.
• Renfro has shifted their production line to masks.  Worked in a collaborative effort with the state of Tennessee to provide a mask for every citizen in the state (5M masks).
• They are excited about partnering with communities all across the state, so please contact Beau to learn more.

Mask Winston-Salem – Mayor Allen Joines

• The City of Winston-Salem has worked with the business community and Wake Forest Baptist Hospital in a collaborative effort to mask the city.
• A group of local doctors came up with a design for a mask that has proved to be about 90% as effective as N95 masks and is washable up to 25 times.
• Renfro created a prototype for the mask and started manufacturing for the City.
• 390,000 masks have been distributed in Winston-Salem (city’s population 250,000).
• Money was raised to pay for 60,000 masks that went to low-income individuals and the elderly.
• 150 non-profits have helped distribute.
• This week the City had a senior day and 20,000 masks were distributed to individuals aged 65 and older with an ID.
• Also created a small business training program to provide training on how to re-open in a safe way where 2 masks where given for every employee.

The goal is to make it the norm in the city to wear a mask.

The meeting concluded after about 40 minutes.

Town Manager’s Report

The town manager, Sean Stegall’s report for this week included:

Manager’s Message to Council

Representatives from Emergency Operations Center (EOC) and Operational Framework Team (OFT) continue to amaze me with their adaptive thinking in developing a Welcoming Employees and Citizens Back to Town Facilities plan that focuses on safety for our employees and citizens. Cary will continue to distinguish ourselves by focusing on our values. Keeping our employees and citizens healthy is key, and we will only move forward with reopening when it is safe to do so.

The first step in the plan is to bring the department directors together on Monday, May 18, to learn specifics about the plan from the Public Safety Director Allan Cain. Then department directors will embark on step 1 of the plan, which is a risk assessment of their department’s physical spaces. During step 1, our citizens will continue to engage with Town staff digitally. Town Hall and all other staffed facilities, except for the Citizen’s Convenience Center, will remain closed to the public through May 31.

Our department directors have lots of complex decisions to make in the coming weeks, but I am certain they are up for the challenge.

Thank you for your continued support,

Sean

Operational Framework & Update

Deputy Town Manager Russ Overton’s weekly operational message featured information from my first virtual All Hands and a reminder that open enrollment began this week. During the All Hands, I answered pre-submitted and live questions that ranged from preparing the workplace for reopening to my thoughts on leadership styles during a pandemic. Staff found tremendous value in the event and I plan to do another one very soon.

The weekly operational report brings a close to the week’s activities outside of the Emergency Operations Center (EOC). Please take a moment to review the weekly operational report.

Departmental Updates

Included below is a summary-level overview of the operational activities continuing to take place during this health emergency.

• From a development perspective, there are 11 development plans due this week, including: One Walker One Walnut, Fenton, Cary Towne Boulevard Improvements, Belk at Cary Towne Center, and Duke Health at Green Level West.
• Currently there are over 250 building permits within our system to be reviewed and processed.
• Inspections are at or over capacity for the past week.
• Work in the right-of-way is being relaxed and will be starting May 18. Google and other dry utilities will be given the ‘okay’ to start work that has been approved via encroachment agreements.
• Efforts are underway to begin pursuing National Register Status for the Nancy Jones House, as well as preparations for moving and stabilizing the structure.
• The annual CDBG application was entered for submittal by Wake County this week.
• An updated version of the Town’s Standard Specifications and Details Manual to include revisions to the public townhome streets standards and specifications will be available on the Town’s website next week.
• Cary is working with Raleigh on a request from Wake County for CARES Act money to fund utility customer relief.
• The Town held its first virtual bid opening this week. The bid was for traffic cameras and was attended by 15 vendors. It was the most attended bid opening of the year, which resulted in lower than expected process.
• PRCR continues to process refunds related to cancellations. To date, Cary has refunded $432,000 for 7,200 cancelled registrations.

Federal Intergovernmental Efforts

The Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act (H.R. 6800) is a $3 trillion package to respond to the coronavirus crisis. Under the HEROES Act, the Town of Cary would receive an estimated $33,221,628 in FY2020 and $16,610,814 in FY 2021.

The House is scheduled to vote on the HEROES Act on Friday afternoon, where it is very likely to pass on a mainly party-line vote. However, Senate Majority Leader Mitch McConnell (R-KY) and the Trump Administration have expressed objections to taking up another COVID-19 relief package right now, saying there has not been enough time since the $2 trillion CARES Act was enacted on March 27 to determine whether new legislation is needed or necessary.

This very likely means that the GOP-controlled Senate will pass its own version of the COVID-19 relief package in early-mid June that looks substantially different from the HEROES Act, and a compromise version will eventually become law in June.

NCDOT Projects Suspended Statewide

On May 5, NCDOT suspended most projects currently in the preliminary engineering (PE) phase. Due to COVID-19, NCDOT’s revenue declined significantly, resulting in the agency falling below the statutorily mandated cash floor of $293 million. NCDOT is funded through the Motor Vehicles Tax (i.e. gas tax), Highway Use Tax (i.e. sales tax), and DMV fees.

The drop in revenue from these sources will result in more than $300 million in lost revenue for this fiscal year. An additional shortfall of more than $370 million is projected for FY21. According to state law, once the department falls below the cash floor, the department can no longer enter into new contracts that spend money on transportation projects. For NCDOT to begin reinstating projects, revenue replacements will be needed. The list of projects impacted in or near Cary include:

• Aviation Parkway between I-40 and NC-54
• I-40/I-440/US-1/US-64 Interchange Project
• Maynard Road Railroad Grade Separation
• McCrimmon Parkway from West of Davis Drive to Church Street
• Ten Ten Road Improvements from Apex Peakway to Kildaire Farm Road
• Trinity Road Railroad Grade Separation
• US-64 Improvements from US-1 to Laura Duncan Road
• Wade Avenue from I-40 to I-440

Additional Information of Interest

I’ve found the following articles to be particularly interesting this week and wanted to share with you for your reading pleasure:

Coronavirus Live Updates: As States Reopen, Fears of New Outbreaks Grow, The New York Times

The Real Reason to Wear a Mask, The Atlantic

Citizen Emails Center Around EMS Merger

Emails this week included a group of emails about Wake County’s merger of Cary EMS into the county EMS system. Here is the staff’s analysis of that issue:

Below you will find the relevant facts about Cary EMS, their relationship with the Town and the current situation as Wake County considers its FY21 Budget. I have also included my recommendation on the matter, and I am available to respond to any questions you may have.

Background:

Cary EMS is a nonprofit organization chartered by the Secretary of State and holds a franchise by the NC Office of EMS (OEMS) to provide emergency medical transport services to/for Wake County.

Cary EMS operates under an annual contract with and is funded by Wake County. Their ambulances function as an integral part of and within the Wake EMS system, exactly like any other Wake EMS ambulance. Operationally, nothing distinguishes them from Wake County EMS. Because they are a separate organization, they have EMS chief officers who also function as their corporate officers. For example, they have an EMS chief, just like Wake County has an EMS chief.

Revenue for Cary EMS is generated by Wake County billing for those services and Wake collects the receipts. Pursuant to their contract, Wake County pays Cary EMS through installments. This arrangement is very lucrative because of the significant number of people in Cary who possess medical insurance. From a health care economic perspective, indigent care is almost nonexistent in our area, so EMS services for our geographic area subsidizes expenses for other areas that have more indigent care.

Over the last 3 decades, Wake County has commissioned several studies to explore efficiencies with its fire and EMS services. One consistent recommendation is to consolidate nonprofits into the Wake County organization for effectiveness and financial efficiencies. For EMS nonprofits, all of them have acceded to Wake County except 2, Cary and EMS and Eastern Wake EMS.

The Town of Cary provides no financial or in-kind support for Cary EMS. Twenty-five years ago, we allocated about $80K annually but that ended about 20 years ago. Two Cary EMS ambulances co-locate in Cary fire stations 5 and 8. We have a contract with Cary EMS, and they pay operating expenses for that space.

The agreement framework we have used for years is they DO NOT lease space, but they do share operating expenses for that space. The philosophy is if we can accommodate their ambulance and crew with available building capacity, we will share the space for which Cary taxpayers have already purchased. We believe there was no need to charge taxpayers again through a lease agreement with a nonprofit organization that is also a Wake County contractor.

Current Situation:

Wake County’s consideration to fold Cary EMS into the Wake EMS Department is driven by the need to balance their budget. It is not driven by operational improvement, as there is no anticipated change in service level. The implication now is if that assimilation occurs, it is likely Wake County would not roll-over all of Cary EMS’s administrative staff, like their chief, administrative support, and others.

Cary EMS has had opportunities in the past to roll-over all assets and employees, but they have resisted that effort. Now, Wake’s revenue projections and commensurate expenditure reductions are driving this consideration. In the past, Wake County had been willing to accept all Cary EMS employees, now they cannot and reduce expenses. This is the great pressure and loss Cary EMS is feeling.

From an operational perspective, I see no option where the Town has an interest, standing or opportunity to influence or offset this scenario and I have not heard that anyone else sees an option. If anyone suggests Cary EMS transitioning into the Town as a department or division in the FD, I really do not see how that benefits anyone and it certainly does not benefit the Town.

The timing of any suggestion like that underscores it is simply another effort to resist. That scenario would also require State approval for an EMS franchise for the Town and on its face, I have no reason to believe OEMS would grant that franchise. Moreover, I cannot envision a scenario where Wake County would consent to that, as the OEMS would certainly ask.

Sean held a phone call with Cary EMS yesterday and listened to their concerns. He is following-up with the Wake County manager on the matter. Let me know if you have questions.

Get in Touch

Other emails this week included:

• Continued spamming about Umstead Park (We are not decision-makers in this issue and to date there have been 722 emails sent on this subject asking us to decide to save Umstead Park.)
• Dozens of emails about Cary EMS
• Request for a walkway along Chapel Hill Road
• Several emails possibly threatening legal action if I did not lift the Stay-At-Home order (Cary is mandated to follow state guidelines. I have only a State of Emergency in place)
• A complaint about a group home on Manchester Drive
• A question about the town’s purchasing policies
• A congratulation email for results in Cary’s biennial survey
• A request to give money to small businesses
• A request to require the public to wear masks
• A request to have a quasi-judicial hearing virtually to allow variance cases to move forward (Unfortunately, this is state law. We are working on a process to have an in-person hearing)

Next week’s activities include staff meetings, a meeting of the Wake County Mayors Association, a meeting of the North Carolina Metro Mayors, a meeting of the Capital Area Metropolitan Planning Organization’s Executive Board, a council budget work session, and a regularly scheduled council meeting.

Well, that is all for this week. My next post will be on Sunday, May 24th.  Although I have Facebook and Twitter accounts those are not the best means of communicating with me. Please send all Town of Cary questions or comments to [email protected] and email personal comments to [email protected].

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From the blog of Cary Mayor Harold Weinbrecht. Featured photo from Cary Area EMS Twitter, construction photo by Hal Goodtree, other photos courtesy of the Town of Cary and the Governor’s public Facebook page.

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