Council Watch #4: Budget Surplus and a LUMO Update
he February 11th City Council meeting focused on two things that quietly shape nearly everything in Chapel Hill: money and land use.Council reviewed last year’s budget and first-quarter (Q1) results for FY2026. They also received an update on the long-running effort to revise the Town’s Land Use Management Ordinance (LUMO), the rulebook that governs how and where we build. Both topics may sound technical, but they have implications for services, housing, and long-term growth.
A $3 Million Budget Surplus
Council received a report showing approximately $3 million in surplus funds from the previous fiscal year. Staff outlined several potential needs where these funds could be allocated. Staff identified areas where the funds could be used, though no final decisions were made at this meeting. This is an important stage in the budget cycle. How Council chooses to allocate one-time surplus dollars can shape service delivery, infrastructure maintenance, and future tax pressure, but the Chapel Hill budget was given a "clean bill of health."
LUMO Update
Council also received a briefing on the timeline for updating Chapel Hill’s Land Use Management Ordinance (LUMO). A document that was last edited back in 2020–2021. The LUMO document is not light reading. It is a detailed and highly technical document that governs development standards, housing types, environmental protections, parking, density, and more. Reviewing and updating it is one of the most consequential responsibilities Council has. The timeline briefing highlighted how long comprehensive land use reform can take—and how much can change in the meantime.
Since 2020:
- Housing prices have risen significantly.
- Development pressures have shifted.
- Infrastructure conversations have evolved.
- Council membership itself has changed.
Council members serve staggered four-year terms, intentionally designed to preserve continuity while allowing for turnover. That structure helps keep long-term issues “alive,” but it also means major policy reforms can span multiple councils with different priorities and perspectives.
Why it matters to residents
The LUMO update affects where housing is built, how neighborhoods change, how businesses grow, and how Chapel Hill balances character with affordability. When a document that shapes development is five or six years in progress, it’s worth asking: Are we solving 2020’s problems—or 2026’s?
Process matters here. The longer major reforms take, the more important it becomes to reassess assumptions and ensure they still reflect current realities.
What I’m thinking about
Two themes stood out to me: timing and continuity.
On the budget side, Chapel Hill appears fiscally stable enough to generate a surplus. That’s good news. But the discipline comes in deciding how to use it wisely. One-time money should be treated carefully.
On the LUMO side, I’m thinking about institutional memory. Staggered terms are designed to preserve continuity, but large policy documents moving across multiple election cycles can become disconnected from the moment that produced them. The question isn’t whether LUMO should be updated—it clearly should. The question is whether the framework reflects today’s conditions and whether Council feels ownership over a process that began several years ago.
Long-range planning requires patience. It also requires periodic recalibration.
Questions I’m still asking
- What specifically drove the $3 million surplus—revenue growth, underspending, or project delays?
- How will staff revisit the original 2020 assumptions behind the LUMO rewrite in light of current housing and infrastructure realities?
- How is Council ensuring institutional memory as membership turns over?
- How will the public be included in shaping the new LUMO document?
