OPENPUBLICA · PUBLIC MEETING RECORD
Record of Proceedings

Chapel Hill Town Council Work Session – February 11, 2026: Audit, LUMO Rewrite, Manager Evaluation

Meeting PortalWednesday, February 11, 2026
BodyChapel Hill, North Carolina
SessionMeeting Portal
DateWednesday, February 11, 2026
StatusFILED
Video Record
0:00 / 3:01:17

Transcript — Verbatim
0:00

Welcome to Chapel Fills Happen Happen Hills February 11, 2026 work session.

0:06

We are pleased to have you join us.

0:08

Tonight is the first meeting for our new town attorney, Nate.

0:13

So welcome, Nick, and thank you for joining us.

0:17

We are very excited you are here, and apparently you are also tax support for council members.

0:25

You do it all.

0:28

Tonight we have three items on our agenda for discussion.

0:31

Oh, and of course, I would be remiss if I did not say happy black mystery month.

0:37

We are going to honor the occasion officially and well in our regular business meeting, but of course, for our work session, an advanced celebratory month.

0:50

Tonight we have three items on our agenda for discussion.

0:52

A first, council will receive updates on the fiscal year 2025 audit report and the 2026 financials.

0:59

Second, we'll be discussing our land use management ordinance or LUMORE.

1:03

And third, we will discuss a report on town manager evaluation practices.

1:08

Before we get started, we want to remind our audience that the format of a work session is different than that of our business meetings.

1:15

Work sessions are an opportunity for the council to dive more deeply into specific topics.

1:21

And these meetings are more conversational and less formal.

1:24

We do not vote during work sessions, and the topics will come back to a formal business meeting if they need a vote.

1:30

Finally, we value public input, and we do want to hear from you on these topics.

1:45

Another way to give us your input is by emailing Mayor and Council at Town of Chapel Hills platform.

1:54

Okay.

1:55

Up next, item number one is our fiscal year 2025 audit results and our fiscal year 2026 financial update.

2:05

Okay.

2:06

Good evening, ma'am.

2:07

Council.

2:08

My name's Amy Owens.

2:09

I'm the director of business management.

2:11

Uh first let me apologize.

2:12

I am under the weather.

2:14

Sorry, I'm gonna try very hard to make it through the presentation.

2:17

That happy relevance.

2:19

But I am also here this evening with our town's external auditors.

2:23

I have Chad Jackson from Malden Jenkins to present on the fiscal year 25 comprehensive annual financial report results.

2:31

So under North Carolina Administrative Code, a municipality's auditor must present the audit and financial statements to the governing body in an official meeting in open session within 45 days after submitting the audit report to the local government commission.

2:44

The town's audited financial statements were submitted on January 15, 2026, and so tonight's presentation meets this requirement.

2:52

I will just briefly note that we are a little bit later timeline-wise than we usually are.

2:58

Um and a big part of that uh twofold.

3:01

One was because of the federal shutdown.

3:04

Uh compliance supplements were late to being issued, and so that delayed the audit.

3:09

Um, and then the second piece to that was uh WASA was delayed because of the shutdown in issuing their report, and because they are presented in our annual financial report.

3:22

Uh we could not complete our report until their report was issued.

3:26

So that's why you're seeing us in February instead of in December.

3:30

So after Chad presents, uh I will share some additional information with council.

3:35

But now I will turn the presentation over to Chad.

3:40

Good evening, my name is Chad Jackson.

3:42

Um Jenkins, the town's auditors.

3:46

And uh tonight I'm gonna be going through uh the results for the 2025 audit.

3:51

I'll go over our engagement team, results, and then some financial ratios and trends, and then open up for questions if you have any.

4:02

This first slide is our engagement team.

4:05

Um the manager for the engagement, and I manage the day-to-day um over the course of months that we do the audit.

4:15

Tim Lyons, the engagement partner, and then we have a separate director review at the end.

4:20

That's our quality control that doesn't usually do a lot of the groundwork testing, and he just comes in to make sure that everything standard, everything's good.

4:29

That's Brian Nicholson.

4:33

Uh the next slide.

4:34

Um our audit was performed in accordance with generally accepted audit standards and government auditing standards.

4:42

Um our objective is to provide reasonable, not absolute assurance that basic financial statements are free for material misstatements.

4:50

Uh we did not audit the financial statements of the Orange Water and Sewer Authority.

4:54

Um, as you said, that's that's what's the hold up with the federal compliance and uh WASA.

5:01

And the basic financial statements are the responsibility of towns management.

5:05

For our report, we issued an unmodified or clean opinion for on the basic financial statements.

5:11

This is the highest and best opinion that you can get.

Discussion Breakdown — Share of Meeting
Land Use Management███████████████████████23%
Public Engagement█████████████████████21%
Personnel Matters██████████████████18%
Budget Equity Analysis████████████████16%
Administrative Efficiency██████████████14%
Zoning Regulations████4%
Procedural1%
Fiscal Sustainability1%
Capital Improvement Planning1%
Summary of Proceedings

Chapel Hill Town Council Work Session – February 11, 2026

The Town Council held a work session on February 11, 2026, at 6:00 PM in the Library Meeting Room B. Mayor Jessica Anderson called the meeting to order, introduced new Town Attorney Nicholas Yates, and recognized Black History Month. The meeting covered three agenda items: the FY 2025 audit results and FY 2026 financial update, the Land Use Management Ordinance (LUMO) rewrite timeline, and a report on Town Manager evaluation practices. No votes were taken, as work sessions are conversational.

FY 2025 Audit Results & FY 2026 Financial Update

  • External auditor Chad Jackson of Mauldin & Jenkins reported an unmodified (clean) opinion on the Town’s financial statements. The Town received approximately $20.4 million in federal funds and $6.9 million in state funds, with no compliance findings.
  • Business Management Director Amy Oland presented that the General Fund ended FY 2025 with $3 million in excess fund balance available for one-time uses, after maintaining the 22% unassigned fund balance policy target. She proposed allocating these funds to: Greene Tract MOU ($100,000), FEMA administrative support, street maintenance equipment ($400,000), downtown improvements (including UNC lot 2 activation, holiday lights, PD substation), Fire Station 4 demolition ($1 million), and an infusion to the Debt Fund to keep the bond referendum schedule on track.
  • Mid-FY 2026 trends: property tax collections on target after revaluation; sales tax up from prior year; inspection revenues exceeded projections; expenditures at 48.6% of budget, with projected $2 million in personnel savings.
  • Council members requested additional details on downtown funding needs, historical excess fund balance appropriations, prioritization criteria, parking fund performance and revenue strategies, hiring and retention levers for hard-to-fill positions, public safety equipment and fire apparatus needs, public housing capital needs, and support for families displaced by storms.

Rewriting Our Rules – Land Use Management Ordinance (LUMO) Update

  • Long-Range Planning Manager Tas Lagoo presented a proposed timeline: completing a consolidated draft and technical review in spring 2026, releasing the draft for public review in summer 2026 with plain-language guides and educational sessions, and beginning formal legislative hearings in fall 2026.
  • Council members emphasized the need for materials that clearly connect proposed changes to shared goals (e.g., housing diversity, complete community, environmental resilience, small-scale commercial development). They requested a crosswalk showing where each goal appears in the draft, visual examples, hard-copy versions for review, and clarification of public expectations (summer engagement is educational; formal changes occur during the legislative process).
  • Discussion included the need for a facilitated work session to confirm shared priorities and prepare briefing materials on missing-middle housing and commercial development thresholds. Council members expressed a desire to agree on a set of “whys” (high-level goals) as a body before diving into the draft. Staff noted that public engagement for broad input is complete; summer efforts will focus on education and helping the public understand how to provide feedback to the Council during the legislative process.
  • Council member Theo Nollert raised the possibility of a narrow text amendment to legalize triplexes, quadplexes, and cottage courts before the full LUMO adoption. After discussion, a show of hands indicated a majority preferred to wait for the comprehensive rewrite rather than act piecemeal, given the interdependence of changes and the need to maintain public trust.

Report on Town Manager Evaluation Practices

  • Town Manager Ted Voorhees and UNC School of Government professors Carl Stenberg, Julie Beasley, and Colt Jensen presented best practices and a draft evaluation instrument combining quantitative ratings and narrative feedback. The tool is designed to clarify expectations, highlight accomplishments, and set goals.
  • Council members discussed challenges in evaluating certain sections (e.g., intergovernmental relations, staff effectiveness) due to limited visibility into day-to-day operations. Several members noted they felt unqualified to rate areas like staff effectiveness (Section 9) and university relations. Suggestions included phasing in organizational metrics over time and incorporating staff input through a 360-degree or 180-degree developmental feedback process.
  • Council member Louie Rivers stressed the importance of evaluating outcomes (e.g., whether town-UNC partnerships advanced) as well as process. Others agreed, noting that a focus solely on process might obscure results.
  • The mayor suggested that council members submit individual feedback directly to the UNC team rather than via a shared document initially, to avoid undue influence. Manager Voorhees will provide instructions for submitting feedback, propose key dates for the evaluation process, and translate council’s strategic priorities from the retreat into measurable goals for inclusion in the evaluation.

Key Outcomes

  • No actions or votes taken on any agenda item; all matters were received and filed.
  • FY 2025 Audit & FY 2026 Update: Council will revisit the excess fund balance appropriation at a March 2026 business meeting. Staff will provide additional information on downtown funding, historical appropriations, parking fund analysis, hiring challenges, public safety equipment, public housing capital needs, and storm-displaced families.
  • LUMO Rewrite: Staff will design supplementary materials (crosswalk, visual examples, hard-copy guides) and schedule a facilitated work session to confirm council’s shared high-level goals (“whys”). The timeline remains: spring drafting/review, summer public education, fall legislative hearings. No piecemeal text amendment will be pursued at this time.
  • Manager Evaluation: Council members will send individual feedback on the draft instrument to the UNC School of Government team by a date to be announced. Staff will develop organizational performance metrics and propose a phased approach for including staff feedback. The evaluation process will occur in fall 2026.

Meeting Transcript

Welcome to Chapel Fills Happen Happen Hills February 11, 2026 work session. We are pleased to have you join us. Tonight is the first meeting for our new town attorney, Nate. So welcome, Nick, and thank you for joining us. We are very excited you are here, and apparently you are also tax support for council members. You do it all. Tonight we have three items on our agenda for discussion. Oh, and of course, I would be remiss if I did not say happy black mystery month. We are going to honor the occasion officially and well in our regular business meeting, but of course, for our work session, an advanced celebratory month. Tonight we have three items on our agenda for discussion. A first, council will receive updates on the fiscal year 2025 audit report and the 2026 financials. Second, we'll be discussing our land use management ordinance or LUMORE. And third, we will discuss a report on town manager evaluation practices. Before we get started, we want to remind our audience that the format of a work session is different than that of our business meetings. Work sessions are an opportunity for the council to dive more deeply into specific topics. And these meetings are more conversational and less formal. We do not vote during work sessions, and the topics will come back to a formal business meeting if they need a vote. Finally, we value public input, and we do want to hear from you on these topics. Another way to give us your input is by emailing Mayor and Council at Town of Chapel Hills platform. Okay. Up next, item number one is our fiscal year 2025 audit results and our fiscal year 2026 financial update. Okay. Good evening, ma'am. Council. My name's Amy Owens. I'm the director of business management. Uh first let me apologize. I am under the weather. Sorry, I'm gonna try very hard to make it through the presentation. That happy relevance. But I am also here this evening with our town's external auditors. I have Chad Jackson from Malden Jenkins to present on the fiscal year 25 comprehensive annual financial report results. So under North Carolina Administrative Code, a municipality's auditor must present the audit and financial statements to the governing body in an official meeting in open session within 45 days after submitting the audit report to the local government commission. The town's audited financial statements were submitted on January 15, 2026, and so tonight's presentation meets this requirement. I will just briefly note that we are a little bit later timeline-wise than we usually are. Um and a big part of that uh twofold. One was because of the federal shutdown. Uh compliance supplements were late to being issued, and so that delayed the audit. Um, and then the second piece to that was uh WASA was delayed because of the shutdown in issuing their report, and because they are presented in our annual financial report. Uh we could not complete our report until their report was issued. So that's why you're seeing us in February instead of in December. So after Chad presents, uh I will share some additional information with council. But now I will turn the presentation over to Chad. Good evening, my name is Chad Jackson. Um Jenkins, the town's auditors. And uh tonight I'm gonna be going through uh the results for the 2025 audit. I'll go over our engagement team, results, and then some financial ratios and trends, and then open up for questions if you have any. This first slide is our engagement team. Um the manager for the engagement, and I manage the day-to-day um over the course of months that we do the audit. Tim Lyons, the engagement partner, and then we have a separate director review at the end.

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