The Chapel Hill Town Council wants to make sure that change doesn't cost taxpayers.

Council members began discussing a study Thursday night that shows the campus and its spinoff development could net Orange County $40 million over its first 15 years.

The red flag?

The study shows most of that gain would fall outside the town coffers.

When the costs of new services are subtracted from the benefits (much of them indirect, like projected sales tax), the town could come up several million dollars short due to a new fire station.

Council members will meet with UNC's consultants to better understand the study (see related story below). We asked Mayor Kevin Foy for his early thoughts.

How important is the fiscal impact study?

Foy: It helps us understand the pressure points. One of the big ones is we're going to have to build a fire station. The absolute numbers? Sure you can debate those. The study itself doesn't try to do anything other than set some numbers as placeholders. It doesn't try to anticipate inflation. If we need to build a fire station in say seven years, they don't try to figure out what that's going to cost.

I heard [trustees chairman] Roger Perry say that maybe the state would come in and provide that money.

Foy: We have to figure all of that out. But before we figure that out we have to figure out, well, what numbers are we going to use and when. You don't say to the university, 'You need to give us $3 million tomorrow.' ... And you know running a fire station is even more expensive than building it.

How accurate do you think these numbers are?

Foy: They're speculative across the board. You have to set assumptions. If the assumption is there's going to be 15 million square feet, you have to set assumptions about 15 million square feet of what, and when is it built, and what is its value, and who occupies it. That's one level of uncertainty.

There's a whole different level of uncertainty: direct costs versus indirect benefits.

Can you explain the difference?

Foy: Direct costs are, once we build 15 million square feet, or 7 million square feet, you've got to build a fire station. That is a direct cost, to pay for that.

An indirect benefit is, once we build Carolina North, there will be a lot of economic activity and we'll be selling things. And we'll get a portion of that sales tax. To me, that's a whole different level of uncertainty. Most people don't understand out of 6 percent sales tax the town gets like a half percent. And it's not like they're going to be selling cars out there. The indirect benefit being compared to the direct benefit, I think, distorts the study.

OK, so that goes in line with what I was going to ask next. Town Manager Roger Stancil says about $10 million comes back to the town in indirect benefits, so he doesn't even want to discuss that in making sure there is fiscal equity. Is the town going to ask UNC for some kind of in lieu payments?

Foy: Yes.

And do you have any idea, based on this study, how much that will be?

Foy: No. I don't think we do. The first thing we're going to have to do is identify [when] we need this fire station. Because up to a certain point the fire chief says you can cover [Carolina North] from here or there, but once we get to some critical mass we won't have the resources. So then the next question is what does the fire station cover? Are you going to use it only to cover Carolina North, or does it give you flexibility throughout the town? Because you can't burden Carolina North with something that benefits other parts [of the town]. And that's when we get into to what extent is it Carolina North's obligation and to what extent is it the town's obligation.

Was the town hoping Carolina North would at least be revenue neutral for the town?

Foy: Yes.

So does it concern you that this report shows it's going to have a net cost to the town?

Foy: No ... because I think we can make some arrangement so that it does become cost neutral. I think the university is open to that. They have said all along they don't want this to become a drain on the town's resources.

I think where push come to shove is the old argument we've had in the past: [UNC's saying] 'Well, we create a lot of jobs,' which is true. But as the [town] manager has said, 'In order to pay people I need the cash.' You can't pay them in some phantom impact that Carolina North is going to have on the economy. It probably will have some overall impact on the economy of Orange County and North Carolina. But our manager is looking at 'how do I get money to sign paychecks for the people who are going to provide the services?'