City Council Meeting (Rescheduled Date)

City Council Meeting Monday, February 9, 2026 The Mebane City Council held its regular monthly meeting at 6:00 p.m., Monday, February 9, 2026, in the Council Chambers of the Mebane Municipal Building located at 106 E. Washington Street. This meeting was held as a “Special Meeting” as the Regular Meeting was postponed due to inclement weather. Councilmembers Present: Also Present: Mayor Ed Hooks Richard J. White, III, City Manager Mayor Pro Tem Tim Bradley Preston Mitchell, Assistant City Manager Councilmember Katie Burkholder Lawson Brown, City Attorney Councilmember Sean Ewing Daphna Schwartz, Finance Director Councilmember Montrena Hadley Ashley Ownbey, Development Director Councilmember Jonathan White Stephanie Shaw, City Clerk Mayor Ed Hooks called the meeting to order, noting that this was the February 9th meeting, rescheduled from February 2nd due to inclement weather. Mayor Hooks called for a moment of silence after the Pastor scheduled to give the invocation was unable to attend. Before proceeding, Mayor Hooks recognized the entire city staff and all departments for their exceptional work during recent challenging weather conditions, expressing the Council's appreciation for their dedication to serving the City. No one spoke during the Public Comment Period. Mayor Hooks gave an overview of the Consent Agenda as follows: a. Approval of Minutes- January 5, 2026- Regular Meeting b. Final Plat Reapproval- Potters Mill c. FY25-26 Disposed Assets July 1 to December 31 d. FY25-26 Financial Report ending December 31 Finance Director Daphna Schwartz introduced Patricia Rhodes from Stout, Stuart, McGowan, and King LLP to present the FY2024-2025 Audit report. Patricia Rhodes reported that the city received an unmodified (clean) audit opinion, which is the best possible outcome. She highlighted that the city has received the Certificate of Achievement in Financial Reporting from the GFOA for the fourteenth consecutive year. Ms. Rhodes explained that the Annual Comprehensive Financial Report contains four letters, all addressed to the Mayor and Council. The audit was conducted in accordance with generally accepted auditing standards, and no material weaknesses or significant deficiencies in internal controls were identified. She presented comparative data showing Mebane's unassigned fund balance percentage at 68% of expenditures, an increase from 45.55% the previous year. This compares favorably to the state average of 50% and far exceeds the minimum requirement of 8%. For the Utility Fund, Ms. Rhodes noted that unrestricted net position decreased from approximately $6.2 million to $4.1 million, which Ms. Schwartz would explain in detail. Mayor Hooks inquired about the city's credit rating. City Manager Richard White later confirmed that the city maintains excellent credit ratings of AA- with Standard & Poor's and AA1 with Moody's Investors Service. Ms. Schwartz then provided a detailed financial presentation highlighting key points from the Comprehensive Financial Report. She explained that the City's total net position is $176 million, representing all assets minus liabilities across all funds, with an increase of almost $10 million from the previous year. For the General Fund, revenues came in 8% higher than budgeted, with particularly strong performance in permits and fees (34% over budget), miscellaneous revenues, including revenue in lieu of taxes, and investment earnings. Expenditures came in 13% lower than budgeted, primarily due to delayed vehicle deliveries, including a fire engine. Council members engaged in a detailed discussion about the budget performance. Councilmember White asked about the original versus amended budget figures and sought clarification on what conclusions should be drawn from the strong performance. Ms. Schwartz explained that while revenues exceeded expectations by about 8%, some factors, like high investment earnings and one-time revenue in lieu of payments, might not be sustainable. The discussion revealed that approximately $1.3 million in purchase orders rolled over to the current fiscal year, primarily for vehicles not delivered by June 30th. Staff noted this has become common since COVID-19 disrupted supply chains. Regarding fund balance policy compliance, Ms. Schwartz presented analysis showing the General Fund's unassigned fund balance at 68% of expenditures, well above the policy requirement of 33%. For the Utility Fund, Ms. Schwartz explained the challenge with the current policy language. The Utility Fund shows a negative net position due to carrying $64 million in debt for the WRRF expansion project, while the corresponding assets were still under construction and not yet recorded. When looking at all utility-related funds together (including capital projects), the combined position is at 32% - only 1% below the policy target. The Council discussed this policy interpretation. Ms. Schwartz recommended changing the fund balance policy to look at all proprietary funds together rather than just the individual Utility Fund, and to focus on unassigned rather than total fund balance for better flexibility measurement. The Utility Fund used $1.3 million in fund balance during the year, largely due to a $1.6 million transfer to the WRRF expansion project. This decrease was anticipated as part of the project's financial planning. Ms. Schwartz reviewed other major funds, including the General Capital Reserve Fund ($1.8 million available), the new Occupancy Tax Fund (in its first year of operation, with conservative budgeting resulting in surplus funds), and various capital projects. For the debt portfolio, the City issued significant new debt in FY25: $1.2 million for vehicles, $7.3 million for the Lake Michael Dam project, $750,000 for utility vehicles, and $67.2 million in revenue bonds for the WRRF expansion. The presentation concluded with recommendations to update the Fund Balance Policy language to better reflect the city's actual financial position and flexibility. Mayor Pro Tem Bradley made a motion, seconded by Councilmember Hadley, to accept the annual audit. The motion carried unanimously. HR Director Beatrice Hunter introduced DeLane Huneycutt, the compensation and classification consultant, explaining that the FY26 budget approved conducting a study of one-third of all city positions to ensure competitive salaries and ranges. DeLane Huneycutt presented findings from the comprehensive study covering 30 positions across Administration, Finance, Human Resources, IT, Inspections, and Planning departments. The study surveyed 18 benchmark organizations, adding Kernersville and Clayton to align with the concurrent Raftelis Staffing Study. Results showed 4 classifications at or above market and 26 below market. All management and leadership positions (13 total) were below market, as were most other classifications studied. Ms. Huneycutt explained the methodology using 50th percentile market rates and recommended market adjustments. For employees, 16 of 33 individuals in the studied classifications were recommended for market adjustments. Council members asked detailed questions about the methodology, challenges in comparing across different municipalities, and the merit system. Discussion covered how merit increases work within salary ranges and the difference between market adjustments and cost-of-living adjustments. Councilmember Ewing inquired about performance bonuses and recognition programs. Ms. Huneycutt explained that while some governments use bonus systems, merit-based increases typically work better in the public sector than private sector-style bonuses. The study recommendations would be considered as part of the FY27 budget process, with future studies planned on a three-year rotating cycle covering different position groups. Mayor Pro Tem Bradley made a motion, seconded by Councilmember Ewing, to accept the Compensation Study report. The motion carried unanimously. Recreation and Parks Director Aaron Davis explained that NCDOT now requires formal ordinances for street closures related to city events, specifically the Fourth of July event on Corregidor Street and the Christmas parade on Center Street. This represents a change from the previous informal email approval process. Councilmember Ewing made a motion, seconded by Councilmember Hadley, to approve the ordinance authorizing the temporary closure of designated streets for the two special events as identified in the ordinance, authorizing the Recreation and Parks Director to execute any related submittals to NCDOT and coordinate necessary implementation of closures. The motion carried unanimously. City Attorney Lawson Brown explained that the property adjacent to City Hall became available when the owners, Dr. Hoyle and his wife, expressed interest in selling during conversations about utility relocations. The property has operated as a dental office for approximately 40 years, but was originally built as a house. The purchase price of $325,000 represents the amount requested by the owners, compared to a tax value of approximately $186,000. Mr. Brown noted that recent house sales in the area have reached close to $1 million, making this a strategic location purchase. The owners requested 90 days’ post-closing to remove belongings, after which the city would take full possession. City Manager White indicated staff would evaluate future uses, potentially for offices or other City needs, as space constraints at City Hall and the Inspections building continue to be an issue. Mayor Pro Tem Bradley emphasized the importance of not missing opportunities to acquire adjacent properties, referencing past situations where the City could have benefited from purchasing more land when it was available. Mayor Pro Tem Bradley made a motion, seconded by Councilmember Burkholder, that the city purchase property from Janice Properties LLC for $325,000, subject to usual due diligence, and authorized a budget ordinance amendment and authorized the City Manager and Finance Director to execute the purchase agreement and necessary documents to consummate the purchase, pending due diligence. T motion carried unanimously. Development Director Ashley Ownbey reported three openings on the Bicycle and Pedestrian Advisory Commission (BPAC): two from expired terms and one recently vacated seat. Josh Johnson requested reappointment, and additional applications were received for the remaining positions. After a brief discussion among Council Members about the applicants, appointments were made to fill all three positions with different term expirations based on the nature of each opening. Councilmember White made a motion, seconded by Councilmember Ewing, to reappoint Josh Johnson and appoint James Thrasher to serve three-year terms and Ryan Sheehy to fill the vacant position with a term expiring in 2028. The motion carried unanimously. Ashley Ownbey presented an application for a Downtown Exterior Improvement Grant for $8,500 for facade and drainage improvements at 109 North Fourth Street. The property, owned by Yonnie Butler, requires work to address recurring flooding inside, caused by failing brick-and-mortar exterior walls. The grant represents a 50/50 match program with a maximum award of $10,000, and the property falls within the Downtown Vision Plan area. Councilmember Burkholder made a motion, seconded by Councilmember Ewing, to award $8,500 as a downtown exterior improvement grant for facade and drainage improvements at 109 North Fourth Street, as described in the application. The motion carried unanimously. As an informational item, Ms. Ownbey reviewed the city's long-range transportation plans, highlighting the proposed circulator route from the 2018 Comprehensive Transportation Plan and its incorporation into Mebane 2045. She presented a map showing primary stops at Cone Health Park and Ride, Oak Manor Market (Food Lion on N. First Street), Walmart, and the Mebane Arts and Community Center, with additional stops downtown, at the Mebane Public Library, and near Starbucks. Sarah Williamson from Orange County Transportation Services presented details about their current operations, including four fixed routes and demand response services with 98% on-time performance. She explained that they recently implemented fare-free service as a pilot program. The proposed Mebane circulator would operate as a one-year pilot, running 10-11 hours per day compared to the current Orange-Alamance Connector's 4 hours. The route would include loops through Mebane, taking approximately 25 minutes each cycle, with connections to the Hillsborough service. Council members asked questions about ridership trends, success metrics, cost-sharing arrangements, and potential expansion. Mayor Hooks expressed particular interest in potentially connecting Tanger Outlets and downtown areas in future iterations. Ms. Williamson explained that the pilot year would focus on gathering data about ridership, costs, and federal funding opportunities. While there would be no initial cost to participating municipalities, future cost-sharing arrangements would be determined based on pilot results and available grant funding. The Orange County Commissioners' public hearing is scheduled for March 5th, with potential spring implementation. Council expressed general support for the pilot program as an informational item requiring no action. Mayor Hooks stated that the Council would be going into closed session, but before doing so, Councilmember Ewing had a couple of additional items. Before Councilmember Ewing began speaking, Mr. Brown suggested a fifteen-minute break, with the Council to convene in closed session at 4:15 pm. Councilmember Ewing raised two items for future consideration. First, he suggested discussing establishing a warming center where citizens could access a government building during extreme weather for warmth, phone charging, and basic facilities. The Council requested that staff investigate. Second, Councilmember Ewing addressed emergency shelter capacity, noting that Alamance County currently has limited options with the Fairchild Center as the primary shelter and Graham Recreation Center as backup. He requested budget discussions about investing in additional emergency shelter capabilities, potentially including generators and shower facilities at City facilities. Councilmember Burkholder supported the shower concept, suggesting that facilities like the MACC could be enhanced to better serve displaced residents during emergencies. Mayor Pro Tem Bradley made a motion, seconded by Councilmember White, to go into a Closed Session for Legal Claim Pursuant to N.C.G.S. 143-318.11(a)3- City of Mebane and City of Graham litigation. The motion carried unanimously. Mayor Hooks called for a motion to return from closed session at 4:46 pm. Councilmember White made a motion, seconded by Mayor Pro Tem Bradley, to come out of closed session and back into the regular meeting. The motion carried unanimously. City Attorney Brown reported on the closed session discussion regarding representation for former Mebane employees if they are noticed for depositions by the City of Graham, that the City of Mebane agrees to afford representation to former employees under a joint representation agreement. Mayor Pro Tem Bradley made a motion, seconded by Councilmember White, to provide representation for former Mebane employees if they are noticed for depositions by the City of Graham. The motion carried unanimously. Mayor Hooks noted upcoming events, including the Downtown Extravaganza, Good Friday holiday, Farmers Market reopening, Easter celebrations, and the Dogwood Festival on April 24-25. There being no further business, the meeting was adjourned at 4:48 pm. ________________________ Ed Hooks, Mayor ATTEST: _________________________ Stephanie W. Shaw, City Clerk