HomeMy WebLinkAboutAgenda - 04-27-2010 - 1ORANGE COUNTY
BOARD OF COMMISSIONERS
. ACTION AGENDA ITEM ABSTRACT
Meeting Date: April 27, 2010
Action Agenda
Item No. 1
SUBJECT: Presentation of Chapel Hill Carrboro City Schools and Orange County Schools
Boards of Education Approved FY 2010-11 Operating and Capital Budgets
DEPARTMENT: County Manager and Financial PUBLIC HEARING: (Y/N) No
Services
ATTACHMENT(S):
1. CHCCS Board of Education 2010-11
Budget Request
2. CHCCS Elementary #11 Discussion
3. OCS Board of Education 2010-11
Budget Request
4. Allocation of Projected Revenue for
FY 2010-11
INFORMATION CONTACT:
Name, Phone Number
Frank Clifton, (919) 245-2300
Neil Pedersen, (919) 967-8211
Patrick Rhodes, (919) 732-8126
•
PURPOSE:: To receive the Chapel Hill Carrboro City Schools and Orange County Schools Boards of
Education approved FY 2010-11 operating and capital budgets.
BACKGROUND: The Board of County Commissioners decided the funding target for schools in
previous years would be 48.1 % of County General Fund revenues. The target is exclusive of the
County's share of Durham Technical Community College funding and is consistent with the school
funding target endorsed by Commissioners in May 2000. The following school related components are
included in calculation of the target percentage:
Local Current Expense -supplements State and Federal funds received by each district for the day-to-
day operation of schools. Examples of expenses paid from these funds include salaries and benefits for
locally paid teachers and utilities. Counties having more than one school administrative unit, as is the
case in Orange County, are required to provide equal per pupil appropriations to each system. The
funding level, however, is discretionary and varies from county to county.
Recurring Capital -pays for facility improvements, equipment, furnishings, and vehicle and bus
purchases. State statutes mandate: counties to fund recurring capital, however the amount of money
counties allocate to this function is discretionary and varies from county to county. Equal per pupil
allocations required by law for current expense appropriations are not applicable to this category of local
• school funding.
2
•
Per the April 2007 Commissioner approved County Capital Funding Policy, it is the intent of the Board of
County Commissioners to dedicate the equivalent of four cents on the annual ad valorem property tax to
funding recurring capital expenditures - 3 cents for school projects and 1 cent for county projects. The
Policy further states, "However, there will be times when the County will be bound fiscally and unable to
achieve full funding. During those times, Commissioners may find it necessary to depart from the
Policy." To date, Commissioners have funded the equivalent of 2 cents for schools recurring capital and
no monies for County recurring capital.
Long-Range Capital -supports school capital projects through the County's Capital Investment Plan
(CIP). Capital projects are funded through a combination of State and local bonds, NC bond financing
and pay-as-you-go funding sources. Pay-as-you-go funding includes dedicated half-cent sales tax
revenues and property tax earmarked under the Board's April 2007 Capital Funding Policy. The Capital
Policy also allows for North Carolina Public School Building Capital funds and School Construction
Impact Fees to offset School related debt service. Similar to Local Current Expense funding, the amount
of money counties allocate to long-range capital expenditures is discretionary and varies from county to
county.
School Related Debt Service -repayment of principal and interest on School related debt including
general obligation bonds and private placement loans. North Carolina statutes require counties to pay
for school related capital items such as acquisition and construction of facilities. In instances where •
counties borrow monies to pay for such items, the State mandates counties to repay the debt. The
amount of money counties borrow for school related projects is discretionary and varies from county to
county.
Fair Funding -monies, split equally between the two school districts, to offset costs of safety and health
services such as School Resource Officers and School Social Workers. The State does not mandate
counties to provide funding for these resources.
It is important to note, the 48.1 % target only includes funding for the items identified above -current
expense, recurring capital, long-range capital, school related debt service and fair funding. It does not
include additional non-mandated County financial support Orange County Commissioners commits to
schools. Examples of such appropriations include supplementing state funding for school health nurses
to staff each school with at least one school health nurse. Funding for this contractual agreement
between the County Health Department and each school district is approximately $600,000 per year.
(This agreement/contract has been in place since 2001.) In addition, County departments provide a
number of services and programs to each school district. An example of such a program is the Tobacco
Cessation program operated through the Orange County Health Department. The County also
financially supports non-profit agencies such as Communities in Schools that provide after school
programs for middle school students.
•
3
•
FY 2010-11 School Budgets
Budgetary and financial actions in order for the State to have sufficient funds to pay its bills and balance
its budget have continued in this fiscal year. This action included the State seizing Public School Building
Capital funds (ADM) in FY 2009-10, and to date these funds have not been restored. The General
Assembly has not met and has not balanced the State budget. It is important to note, in past years, the
State has balanced its budget by withholding monies to which counties are entitled, such as Public
School Building Fund monies.
During early part of the Manager's/Superintendent Meetings, the County Manager advised both School
Superintendents of the budgetary issues and deficits facing the County in the preparation of the
FY2010-11 Budget. Additionally, the County Manager informed each of the School Superintendents to
prepare for a reduction in funding due to the anticipated reduced budget of the County. During tonight's
presentation, each system will share their FY 2010-11 operating and capital budgets with the Board of
County Commissioners.
FINANCIAL IMPACT: Preliminary FY 2010-11 revenue projections anticipate the County's General
Fund revenues would be $174.2 million, a reduction of $3.4 million from FY 2009-10 General Fund
revenues. Staff has assumed no receipt of Public School Building Fund monies in this projection for the
County's General Fund. (Note: NC Education Lottery proceeds are revenues budgeted in individual
• capital projects and not considered General Fund Revenue.)
Assuming the Board's funding target of 48.1 % of County General Fund revenues, the County's total
allocation to schools for current expense, recurring and long-range capital, debt service and fair funding
would be $83.8 million in FY2010-11, a reduction of $1.6 million. Attachment 4 outlines revenue
available for appropriation to school related functions.
RECOMMENDATION(S): The Manager recommends that the Board discuss the issues noted
and provide direction to staff, as appropriate.
•