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HomeMy WebLinkAboutMinutes - 19961014APPROVED 11 /19/96 MINUTES ORANGE COUNTY BOARD OF COMMISSIONERS ORANGE COUNTY SCHOOL BOARD CHAPEL HILUCARRBORO SCHOOL BOARD SCHEDULED MEETING OCTOBER 14, 1996 The Orange County Board of Commissioners met in joint session with members of the Orange County School Board and the Chapel Hill-Carrboro City School Board on Monday, October 14, 1996 at 7:00 for a tour of the McDougle Elementary School with the regularly scheduled meeting starting at 7:30 p.m. COUNTY COMMISSIONERS PRESENT: Acting Chair Stephen Halkiotis, and Commissioners William L. Crowther, Alice M. Gordon and Don Willhoit. COUNTY COMMISSIONERS ABSENT: Chair Moses Carey, Jr. COUNTY ATTORNEY PRESENT: Geoff Gledhill ORANGE COUNTY SCHOOL BOARD MEMBERS PRESENT: Bob Bateman, Chair, and members Susan Dovenbarger, David Kolbinsky, Keith Cook, Delores Simpson and Larry Haverland ORANGE COUNTY SCHOOL BOARD MEMBER ABSENT: Richard Kennedy CHAPEL HILL-CARRBORO SCHOOL BOARD MEMBERS PRESENT: Mark Royster, Chair,. and members Harvey Goldstein, Mary Bushnell, Ken Touw and Nicholas Didow CHAPEL HILL-CARRBORO SCHOOL BOARD MEMBER ABSENT: Bea Hughes Werner COUNTY STAFF PRESENT: County Manager John M. Link, Jr., and Assistant County Manager Rod Visser, Finance Director Ken Chavious, Deputy Clerk Kathy Baker, and Budget Director Sally Kost. MEETING CALLED TO ORDER The meeting was called to order by Vice-Chair of the Commissioners Stephen H. Halkiotis. 1. REPORT ON LONG TERM SCHOOL CAPITAL FUNDING: Budget Director Sally Kost presented a brief overview of long-term School Capital Funding options. She highlighted the major new facilities in the 1996-2006 Capital Improvements Plan. Those facilities include a new CHCCS Middle School and an East CH High addition and for the Orange County School Systems new Elementary School. Current capital and debt service funding sources are: (1) the one half cent sales taxes revenue; (2) property taxes, including $800,000 to pay the 1977 bond debt service with the remaining amount used for School capital projects, the equivalent of 2.7 cents on the tax rate, the amount of the debt service on the bonds authorized by the voters in 1992, $50,000 for human services automation, and funds for the utilities extension fund; (3) Impact Fees; and (4) Public School Building Fund (state funds). Current policy is that sales tax revenue is split between County and School projects and then general obligation debt is paid. Funds are then allocated to each School System based on 10th day enrollment (adjusted every two years). After allocated between the two school systems, the amount of the private placement debt service is paid. Under the proposed policy, all debt service, including general obligation debt and private placement debt for both School and County projects is subtracted before any of the funds are allocated for capital projects.. 2 In response to the concerns expressed by the Chapel Hill/Carrboro City Schools regarding reduced funding in the early years of the Capital plan, it was suggested that bonds be sold in three installments of $10 million, $20 million, and $10 million. This change reduces debt service payments in the first several years of the plan thus freeing up funds for on-going projects. The drawback of splitting the bonds into three separate bond sales is the issuance costs, which are approximately $50,000 each sale. However, issuance fees have in the past been paid from interest earnings on bond proceeds sold and not yet expended- Staff proposes to continue this practice. The actual decision on the number and amount of each bond sale is based on cash flow projections which are usually prepared by the project architects. Although the assumptions in this plan seem reasonable to meet the cash flow requirements of the planned projects, staff will need flexibility in how and when these bond sales are actually structured and carried out. The long range funding plan includes bond funds for each school system for renovations/school improvements. The plan includes $3,002,535 for CHCCS and $3,795,953 for the Orange County Schools. In the plan as presented in September, these funds were projected to be appropriated beginning in 1998-1999, with one third of the total amount included in each of the next three years. Since bond proceeds will be available during fiscal year 1997-1998, the first year of appropriation of these funds under Option 5B was advanced one year so that the funds distributed would be more in line with the currently adopted Capital Improvements Plan. The revised plan would have had about a one million dollar negative impact on the Orange County Schools because of the difference in the peak year amount and the actual debt service payment. To adjust for this impact, an additional $1 million in bond funds from the $5 million in County bond funds will be allocated to the Orange County Schools. The Board of Commissioners had earlier expressed concern about using the one cent that is earmarked for a capital reserve account for County projects beginning in 1998-99. The only funding source that could be identified to replace these lost funds for County projects is a one cent increase in the general fund property tax rate. This tax increase would occur in 1998-99. Copies of the slides used in this presentation are in the permanent agenda file in the Clerk's office. The meeting was opened for questions and comments from the Board of Commissioners, members of both School Boards and staff. Those comments follow. • tt is not anticipated that there will by any negative impact on the school systems' schedule to complete new facilities from the $10/20/10 sale of the bonds. • There will be approximately $400 million dollars in statewide school bond funds available across the state each year starting with 1997-98. • An effort needs to be made to find the additional funds for County projects rather than the one cent property tax increase. • This plan is not cast in stone. For example, if the school population in Orange County grows faster than currently anticipated there may need to be a reevaluation of the situation • The Orange County School System would receive about $6 million dollars in State bond funds which could be spent for any capital program identified as acceptable by the State. 3 • The plan that is currently being discussed is based on the CIP received from both School Boards. • The Orange County School Board would probably not support a future County Bond effort if it increased property taxes. • Should the State bond not pass, the planning for future school CIP needs would begin anew. UPDATE ON VOTER EDUCATION ON THE STATEWIDE SCHOOL BOND: The Orange County Statewide School Bond Education Committee had its organizational meeting on October 8th. The members of this Committee will create flyers to be sent home with students. They will also speak at churches, civic groups and school functions in the next month. BOARD OF COMMISSIONERS AND CHAPEL HILUCARRBORO BOARD OF EDUCATION REVIEW CARRBORO BRANCH LIBRARY CONTRACT: Brenda Stephens distributed a copy of the most recent draft of this contract. There was a brief discussion. Several requests for changes/additions to the contract were suggested. These changes will be incorporated into the final draft. ADJOURNMENT: There being no further business, the meeting was adjourned. The next regular meeting of the Board of Commissioners will be held on Tuesday, October 15, 1996 at 7:30 p. m. in the OWASA community meeting room, Jones Ferry Road, Chapel Hill, North Carolina. Respectfully submitted, Kathy Baker, Deputy Clerk