HomeMy WebLinkAboutAgenda - 05-18-2010 - 4mORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: May 18, 2010
Action Agenda
Item No. - — (Yl
SUBJECT: The Establishment of a County Capital Reserve Fund
DEPARTMENT: Financial Services PUBLIC HEARING: (Y /N) No
ATTACHMENT(S):
Attachment 1: Resolution to establish a
County Capital Reserve
Fund
INFORMATION CONTACT:
Clarence Grier, (919) 245 -2453
Michael Talbert, (919) 245 -2153
PURPOSE: To establish a County Capital Reserve Fund for future County Capital needs.
BACKGROUND: On June 11, 2009 the Board of County Commissioners approved the
establishment of a County Capital Reserve Fund for the proceeds from the sale of surplus
property with 60% of the proceeds designated for the needs of older schools and 40% for
County needs.
As stated is General Statute 159 -18 Capital Reserve Funds; "A local government may establish
and maintain a capital reserve fund for any purposes for which it may issue debt. A capital
reserve fund shall be established by resolution or ordinance of the governing board which shall
state (i) the purpose for which the fund is created, (ii) the approximate periods of time during
which the moneys are to be accumulated for each purpose, (iii) the approximate amounts to be
accumulated for each purpose, and (iv) the sources from which moneys for each purpose will
be derived."
CURRENT SITUTATION: The Board of county Commissioners established a School Capital
Reserve Fund many years ago. This School Capital Reserve Fund has been used successfully
for identifying and reserving funds for future School Capital Projects.
Orange County has several Capital Projects, in the County Capital Projects Fund, clearly
established to serve as a reserve. These projects exist only to act as a reserve for future
projects and funds are not expended from the project, but rather transferred to other projects
when needed. These projects better fit the definition of a County Capital Reserve Fund rather
than a County Capital Project Fund. In a County Capital Reserve Fund the funds can be
identified and reserved for specific purposes, but the BOCC can appropriate these funds for
individual projects approved by the Board.
The Board of Commissioners previously discussed this item at its May 11, 2010 work session.
FINANCIAL IMPACT: The establishment of a County Capital Reserve Fund will allow the
BOCC to reserve funds for future County Capital Projects but will not have an immediate impact
on the County's financial condition.
RECOMMENDATION(S): The Manager recommends the Board establish a County Capital
Reserve Fund by approving the attached resolution.
REVISED Resolution for 9f5 — 2• o 10 — 041
Item 4 -m — 5/18/10 BOCC Meeting
ORANGE COUNTY BOARD OF COMMISSIONERS
Resolution
Establishment
of the
County Capital Reserve Fund
WHEREAS, there is a need in Orange County, North Carolina to
accumulate funds for future County Capital needs;
NOW, THEREFORE, BE IT RESOLVED BY THE ORANGE COUNTY
BOARD OF COMMISSIONERS THAT:
Section 1. The Governing Board hereby creates a Capital Reserve Fund
for the purpose of funding future County capital needs.
Section 2. The fund will remain operational until such time as it is no
longer needed.
Section 3. The County Capital Reserve Fund will be funded by:
• Pay as you go funds (i.e. property tax, sales tax)
• General Obligation Bonds
• Alternative Financing
• Other revenue sources the Board of Commissioners chooses to
dedicate.
Section 4. The Board of County Commissioners may designate funds to
be reserved for a specific future project that will be tracked individually,
until the funds are appropriated for a specific capital project in the
County Capital Projects Fund. From time to time, the Board will
designate specific projects within the reserve fund, and those funds that
are allocated are obligated by the Board to be reserved for those
projects and those projects only.
Section 5. This resolution shall become effective upon adoption.
Adoption certification: I hereby certify that this is a true and correct copy
of the Resolution entitled, "Establishment of the County Capital Reserve
Fund" as adopted by the Board of County Commissioners of Orange
County, North Carolina, on the day of ,
2010.
WITNESS my hand and the official seal of, this the day of
, 2010.
Seal:
Clerk to the Board of County Commissioners