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HomeMy WebLinkAboutAgenda - 10-26-2010 - 31 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: October 26, 2010 Action Agenda Item No. 3 • SUBJECT: Review of the new format for the County's Capital Investment Plan (CIP), including revisions to the existing Capital Funding Policy and Debt Mana ement Policy. DEPARTMENT: County Manager & Financial Services PUBLIC HEARING: (Y/N) No ATTACHMENT(S): Attachment 1: 2"d Draft of the 2011-16 Orange County Capital Investment Plan Attachment 2: 2"d Draft of the Orange County Capital Funding Policy Attachment 3: 2"d Draft of the Orange County Debt Management Policy INFORMATION CONTACT: Frank Clifton, County Manager, 245-2300 Clarence Grier, Financial Services, (919) 245-2453 Michael Talbert, Financial Services, (919) 245-2153 PURPOSE: To review and discuss proposed changes in format for the County's Capital Investment Plan, as well as changes in the Capital Funding Policy and Debt Management Policy included in the CIP. (All financial information presented in the CIP is for illustration only) BACKGROUND: On September 14, 2010, the Board was presented and reviewed the first draft of a revised Five Year Capital Investment Plan. As the format was presented and discussed, changes were requested to improve that format and provide the Board with information that is necessary to make Capital Funding decisions. Attached is the revised 2"d draft of the format for the Orange County Capital Investment Plan; which includes the 2"d drafts of the County's Capital Funding Policy and Debt Management Policy For over 20 years, the County has produced a Capital Improvement Plan that establishes a program of improvements for the County as well as Schools. The CIP was originally prepared as a 5 year planning document that was re-evaluated annually to include year-to-year changes in priorities, needs, and available resources. Over the years, the CIP evolved to a 10 year plan and the name was changed to the Capital Investment Plan. The CIP has evolved over the years • to also include a Capital Funding Policy and Debt Management Policy. The 2008-18 Capital Investment Plan was the most recent 10 year CIP approved by the Board. 2~ North Carolina and Orange County are adjusting to the new economic realities of life after a recession and slow economic growth for the foreseeable future. The assumptions made with regard to funding sources are no longer valid. The growth assumptions of state shared revenues and revenues generated from economic activity are no longer valid. Historical trends are no longer reliable to forecast future economic activity. Life as we knew it in 2008 has changed. Orange County is evolving into what will be the new normal. As we make this transition; we are recommending changes to both the format and policies included in the CIP. Outlined below are the highlights of those changes: CIP Recommended Format Changes: 1. Migrating back to a 5 year plan from the existing 10 year CIP. 2. Changing the presentation date of the CIP to the Board to January. 3. Including County Capital, Solid Waste, and Schools Capital in one CIP. 4. Including a schedule of Active County Capital Projects. 5. Including Capital Reserve Balances. 6. Including a Debt Service and Debt Capacity Schedule. FINANCIAL IMPACT: There is no financial impact associated with changing the format of the • County's Capital Investment Plan and updating the Capital Funding Policy and Debt Management Policy. RECOMMENDATION(S): The Manager recommends the Board review the proposed changes in format to the County's Capital Investment Plan and provide direction to staff regarding changes to the Plan format, Capital Funding Policy, and Debt Management Policy. 3 Orange County 2011-16 Capital Investment Plan Table of Contents (All financial information presented in the CIP is for illustration only) Purpose & Overview Capital Funding Policy (2"d draft) Debt Management Policy (2"d draft) Summaries Orange County Capital Investment Plan County Capital Projects Summary County Capital Operating Impact Summary Solid Waste Projects Summary Schools Capital Projects Summary • Requested County Capital Projects ABC Project Requested Schools Capital Projects (Last years documents are not included for this presentation but will be included in the CIP) Chapel Hill Carrboro City Schools Orange County Schools Appendices Active County Capital Projects Capital Reserve Funds Balances County Debt Service and Debt Capacity Schedule • ~ • - Orange County Capital Investment Plan Fiscal Years 2010-16 Current Year 1 Year 2 Year 3 .Year 4 Year 5 Five Year 6 Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Year 'to 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 Total Year 10 County Capital Projects Solid Waste.. Projects (1}; Schools Capital Projects Chapel HiII Carrboro Cify Schools Orange County Schools Total Revenues/Funding Source General Fund -County Capital General Fund -Schools Capital County Capital Fund Balance Solid Waste Fund Balance Schools Capital Reserves Lottery Proceeds Transfer from Visitors Bureau Fund Financing: Debt Financing -Equipment Debt Financing -County Capital Debt Financing -Schools Capital Total 1,700,000 1,493,125 1,500,000 1,750,000 2,000,000 2,000,000 8,743,125 10OOO,OQO 53,536 :2,153.,978 982,813 s 300;000 3,436,791 3,000,000 2,534,911 2,550,876 2,567,002 2,591,431 2,616,227 2,649,785 12,975,321 13,250,000 1,563,850 1,573,786 1,583,821 1,599,024 1,614,455 1,635,338 8,006,424 .8,250,000 5,852,297 7,771,765 5,650,823 6,923,268 6,530,682 6,285,123 33,161,661 34;500,000. 300,000 750,000 1,500,000 1,750,000 2,000,000 2,000,000 8,000,000 .':10,0.00,000.: 3,040,117 3,066,018 3,092,179 2,681,811 2,722,038 2,776,479 14,338,525 ` 13,975;000 500, 000 743,125 743,125 53;536 2,153,978 982,813 300,000. 3,436,791 3,000,000 1,058,644 1,058,644 1,058,644 1,508,644 1,508,644 1,508,644 6,643,220 7,.525,000: 200,000 - 700,000 5,852,297 7,771,765 5,650,823 6,923,268 6,530,682 6,285,123 33,161,661 ~ .34,500;000. (1) Solid Waste/Landfill Fund is a selfsupporting Proprietary Fund that is used to account for revenues and expenses related to the provision of solid waste disposal'and recycling activities for the citizens of Orange ,County .p Related Operating Costs Personnel Services Twin Creeks Park phase 11 Operations Twin Creeks Park phase Il Debt Service Twin Creeks Park phase 11 800 MHz Radios Total Revenues/Funding Source General Fund Total 124,500 128,235 132,082 136,045 520,862 550,000 37,000 37,000 37,500 37,500 149,000 - 149;000. 385,000 385,000 385,000 385,000 1,540,000 1,925,000 160,000 160,000 160,000 160,000 160,000 800,000 - - 160,000 706,500 710,235 714,582 718,545 3,009,862 2,624,000 160,000 706,500 710,235 714,582 718,545 3,009,862 - 2,624;OQ0 160,000 706,500 710,235 714,582 718,545 3,009,862 2,624,000 • • • County Capital Operating Impact Summary Fiscal Years 2010-16 Current Year 1 Year 2 Year 3 Year 4 Year 5 Five Year 6 Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Year to 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 Total Year 10 • Projects Appropriation Municipal Solid Waste Landfill Closure Relocate Recycling & TransferArea Organics Processing Facility Total Projects Costs Solid Waste Related Operating Costs Personnel Services Operations Debt Service Total Operating Costs Total Revenues/Funding Source Sold Waste Fund Balance Total Solid Waste Projects Summary Fiscal Years 2010-16 Current Year 1 Year 2 Year 3 Year 4 Year 5 Five Year 6 Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Year to 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 Total Year 10 53,536 2,153,978 2,153,978 2,000,000 982,813 982,813 - 300,000 300,000 - 53,536 2,153,978 0 982,813 300,000 0 3,436,791 2,000,000 536 I 2,153,978 0 982,813 300 0 3,436,791 53,536 .2,153,978 982,813 300,000 3,436,791 2,000,000 53,536 2,153,978 0 982,813 300,000 0 3,436,791 2,000,000 Solid Waste/Landfill Fund is a self supporCi~g Proprietary"Fund hat is used to account for revenues and expenses related to the provisiomof solid waste disposal-and. recycling activities for the citizens of Orange County rn • • • Schools Capital Projects Summary Fiscal Years 2010-16 Projects by School System Current Fiscal Year 2010-11 Year 1 Fiscal Year 2011-12 Year 2 Fiscal Year 2012-13 Year 3 Fiscal Year 2013-14 Year 4 Fiscal Year 2014-15 Year 5 Fiscal Year 2015-16 Five Year Total .Year 6 to Year 10 Chapel Hill Carrboro City Schools ADA 25,000 75,000 75,000 60,000 75,000 75,000 360,000 385,000 Abatement Projects 33,000 70,000 290,000 50,000 75,000 75,000 560,000 593,000. Athletic Facilities 295.,000 160,000 125,000 150,000 100,000 300,000 835,000 1,130;000 Classroom/Building Improvements 248,222 249,973 415,000 664,973 ' 913,195 Doors/Hardware/Canopies 75,000 50,000 125,000 250,000 250;000 Electrical Systems 125;000 75,000 75,000 80,000 50,000 50,000 330,000 .455;000 Energy Efficiency/Lighting Improvements 50,000 50,000 50,000 Fire/Safety/Security Systems 65,000 50,000 53,179 150,000 253,179 318,179 Indoor Air Qualify Improvements 125,000 40,000 50,000 90,000 215;000 Mechanics! Systems 435,000 324,440 197,582 522,022 957;022 Mobil Classrooms/Rental Space 180,000 100,000 103,000 106,000 110,000 113,000 532,000 712;000 Paving:ParkingLots/Driveways/Walkways 370,000 200,000 420,000 620,000 990,000 Roofing Projects .310,000 1,096,123 1,400,143 1,600,000 825,000 4,921,266 5;231.,266 Window Replacements 275,000 250,000 525,000 525,000 Technology 1,831,000 2,041,097 2,068,143 2,099,180 2,134,440 2,170,582 10,513,442 12;344,442 (Unfunded) 1,507,311 (1,531.,317) (1,569,284 (1,606,928) 1,652,653 (1,691,379 8,051,561 9,558,:872) Total 2,534,911 2,550,876 2,567,002 2,591,431 2,616,227 2,649,785 12,860,447 15,510;232 Orange County Schools Cameron Park Elementary 35,000 655,000 200,000 45,000 165,000 150,000 1,215,000 1;250;000 Central Elementary 481,500 55,000 336,000 165,000 170,000 726,000 1,207,500 Efland Cheeks Elementary 481,500 - 481,500- Grady Brown Elementary 171,000 6,000 20,000 350,000 376,000 547,000 Hillsborough Elementary 387,000 150,000 220,000 150,000 520,000 907,000 New Hope Elementary 100,000 100,000 20,000 20,000 30,000 170,000 270,000 Pathways Elementary School 30,000 12,000 42,000 '-42,000 A L Stanback Middle 100,000 640,000 300,000 30,000 312,000 150,000 1,432,000 1;532;000`, C W Stanford Middle 4,315,000 612,000 490,000 225,000 375,000 1,702,000 6,:017;000- Orange High 420,000 310,000 580,000 34,000 5,000 8,000 937,000 1,357,000 Schools Capital Projects Summary Fiscal Years 2010-16 Current Year 1 Year 2 Year 3 Year 4 Year 5 Five Year 6 Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Year to Projects by School System 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 Total Year 10 Partnership Academy Alternative School 5,000 100,000 105,000 105,000 Gravelly Hill Middle School 17,500 12,000 3,000 15,500 30,500 48,000 Cedar Ridge High School 125,000 415,000 30,000 10,185,000 2,405,000 14,010,000 27,045,000 27,170.,000 Transportation Department 77,000 . 187,000 107,000 77,000 375,000 746,000 823,000 District 1,466,000 1,082,500 1,119,900 1,115,000 1,072,500 985,000 5,374,900 6,840,900 (Unfunded) (6,612,650) 2,644,714) (1,634,079) (10,537,976) (2,830,545) 14,767,662 32,414,976 39,027,626 Total 1,563,850 1,573,786 1,583,821 1,599,024 1,614,455 1,635,338 8,006,424 9,570,274 Total all Schools 4,098,761 4,124,662 4,150,823 4,190,455 4,230,682 _ __4,285,123 20,795,383 25,080,506 Revenues/Funding Source General Fund (Pay-As-You-Go) 2,590,117 2,616,018 2,642,178 2,681,811 2,722,038 2,776,479 13,252,163 Lottery Proceeds (1) 1,508,644 1,508,644 1,508,644 1,508,644 1,508,644 1,508,644 7,543,220 Debt Financing 4,098,761 4,124,662 4,150,822 4,190,455 4,230,682 4,285,123 20,795,383 * The article 46 one quarter cent sales tax, if approved, could add $977,500 of additional revenues for Schools Capital (1) For fiscal 2010-11 the State reduced lottery proceeds from 40% of net proceeds to $25.8% in order to reallocate funds to the State Budget for classroom teachers and university scholarships. The CIP assumption is that this amount will remain constant for the next 16,028,642 9,051,864 506 • • • m • • County Capital Projects Fiscal Years 2010-16 Project Name ABC Project Project Status Active Functional Service Area Public Safety Starting Date 90/1/2010 Department Sheriff Com letion Date 8/31/2092 Current Year 1 Year 2 Year 3 Year 4 Year 5 Five Year 6 Prior Years Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Year to Project Budget Funding 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 Total Year 10 Appropriation Land/Building 500,000 10,000,000 ~ 10,000,000 Construction/Repairs/Renovations Equipment/Fumishings Total Project Budget - 500,000 10,000,000 - - - 10,000,000 General Fund Related Operating Costs Personnel Services 125,000 128,125 128,125 131,328 512,578 673;057 Operations 50,000 52,500 57,500 57,500 217,500 294,688 New Debt Service 900,000 900,000 900,000 900,000 3,600,000 4;500,000 .rota! Operating Costs - 1,075,000 1,080,625 1,085,625 1,088,828 4,330,078 - 5,467,744 Revenues/Funding Source Transfer from General>fund 500,000 - 1,075,000 1,080,625 1,085,625 1,.088,828 4,330,078 .5,467,744 Transferfrorn County Capital,Reserve 2,000,000 Debt Financing 8,000,000 Total 500,000 10,000,000 1,075,000 1,080,625 1,085,625 1,088,828 14,330,078 <:5t467.744` Project Description/Justification Project description and justification. Project description and justification Project description and justification. Project description and justification Project description and justification. Project description and justification Project description, and justification. Project description and justification Project description and justification. Project description and justification Project description and justification. Project description and justification Project description and justification. Project description and justification Project description and justification. Project description and justification Project description and justification Project description and justification. Project description and justification Project description and justification. Project description and justification Project description and justification. Project description and cn • • • Active County Capital Projects 30-Sep-10 Estimated Start Original - Amended Revenues Revenue Expenditures Available Percent Completion Project Date Budget Budget 9/30/2010 Shortage 9/30/2010 Funds Complete Date Emergency Management Center 7/1/2004 .315;00.0: 325,500 142,215 (183,285). 142,215 - 100% 6/30/2010 Homestead Community .Center 7/1/2002 15,000' 185,468 188,834 3,366. 188,634 200 101.71% 6/30/2009 Jail Expansion 11/15/2005 1,20DQ00 1,375,000 978,935 (396,065) 148,468 830,467 10.80% Not Started Justice Facilify 7/1/2002 .330,000. :12,277,329 12,277,329 - 12,349,655 (72,326) 100% 6/30/2010 New Courthouse 7/1/2004 308,000 270,521 220,560 (49,961) 218,797 1,763 100% 6/30/2010 Northern Human Services Center 7/1/1998 .200,000. ':714,545 714,546 - 370,085 344,461 51.79% Unknown Senior Center Central Orange 7/1/2003 100,000 6,460,533: 6,460,533 - 6,177,344 283,189 95.62% 6/30/2011 Seymour Center 7/1/2003 400;000 6,265,271 6,265,270 (1j 6,260,270 5,000 99.92% 6/30/2010 Animal Services 7/1/2005 ~ 870,000 9,168,864 9,168,864 - 9,098,921 69,943 100% 6/30/2010 EMS Relocation 11/9/2006 1;685,OQ0 3,531,714 3,531,715 - 3,508,457 23,258 99.34% 6/30/2011 County Campus 7/1/2008 700;000 25,874,000 25,874,000 - 25,864,626 9,374 99.96% 6/30/2010 Solid Wasfe Operation Center 6/26/2007 2;200;000 2,482,370 2,482,370 - 2,481,913 457 99.98% 6/30/2009 Hillsborough Commons 7/1/2008 500;00.0 3,790,000 2,648,204 .(1,141.,796) 3,777,314 (1,129,110) 99.67% 6/30/2010 Board of Elections 6/2/2009 97,000 97,000 97,000 - 32,975 64,025 33.99% 6/30!2011 Value-Added Processing Center 6/16/2009 132;000. 1,127,319 49,496 {1,077,823.): 104,600 (55,104) 9.28% 6/30/2011 Emergency Services Reserve 7/1/2009 1,200,000 1,200,000 1,200,000 - 1,132,000 68,000 94.33% 6/30/2011 Lake Orange Maintenance 7/1/2009 185,000 165,000 165,000 - 64,502 100,498 39.09% 6/30/2012 Observation Well 7/1/2009 10,:130 11,330 11,330 - 11,297 33 99.71% 6/30/2011 Reserve for Sportsplex Repairs 7/1/2009 100,000 100,000 100,000 - - 100,000 0.00% Reserve Blackwood Farm 6/23/2004 75,000 2,451,935 2,451,935 - 2,275,367 176,568 92.80% Unknown Cedar Grove Park 5/1/1998 110,000 1,848;000 1,848,000 -- .1,843,628 4,372 99.76% 6/30/2011 Twin Creeks Park 7/1/2001 200,000 1,550;000 1,550,000 - 880,878 669,122 56.83% 6/30/2011 Fairview Park 10/1/1987 75;000 1,615,023 1,209,132 (405;891) 1,612,063 (402,930) 99.82% 6/30/2011 Conservation Easements 7/1/2000 1;000,000 7,362;707 5,472,476 (:1;890,23.1:): 4,953,605 518,871 67.28% Continuing Lands Legacy 7/1/2000 100,000 7,710,452 5,747,520 '(1;962,932) 4,158,174 1,589,347 53.93% Continuing Parkland & Recreation Facilities 7/1/1998 105,000 188,570. 188,570 175,011 13,559 92.81% 6/30/2011 Seven Mile Creek 7/1/1997 359,826 151,000 151,000 _ - 145,689 5,312 96.48% 6/30/2011 West Ten Soccer 10/19/2004 974,530. 4,012,128 4,012,127 - 4,010,913 1,215 99.97% 6/30/2011 Central Recreation Repairs 11/15/2005 635,000 448;940 448,940 - 412,323 36,617 91.84% 6/30/2011 Lake Michael Park 7/1/2006 25,000 75;000 75,000 - 75,000 - 100.00% 6/30/2010 Recreation & ParksCapitat Maint 7/1/2006 5;000 25,000 25,000 _ - 24,360 640 97.44% 6/30/2010 Millhouse Road Park 9/12/2006 50;000 238,712 238,712 - 198,217 40,495 83.04% 6/30/2011 Ufility Extension Development - 7/1/1993 75,OQ0 330;000 262,878 (67,123) 262,875 3 100.00% 6/30/2010 0 Roofing Projects Affordable Housing Technology Register of Deeds Medicaid Max Loan Pool Reserve Efland Sewer Extension HVAC Projects ADA Building Entry Systems Utilities Demand Reduction Upfit Link Center Telephone System 800 MHz Radios for Sheriff Dental Equipment Buckhorn Econ Dev Dist Phase 2 Total County Capital Projects 7/1/1998 473,Q00 1;433,100 1,433,100 - 1,052,950 380,151 73.47% Continuing 7/1/1999 900,000 6,115;000 .6,102,500 (12,500) 4,223,291 1,879,209 69.06% Continuing 7/1/1991 480,000 5;826-,000 5,750,000 (76,000) 4,508,836 1,241,164 77.39% Continuing 7/1/2003 184,317 990,694 1,013,101 22,407` 750,315 262,786 75.74% Continuing 6/12/2003 515,126 1,816;093 2,392,162 576;069 360,830 2,031,331 19.87% Continuing 7/1/1998 150,000 350,00.0 350,000 - 150,000 200,000 42.86% Continuing 7/1/1998 100,000 2,192,240 793,930 (1,398,.31.0). 28,910 765,020 1.32% Unknown 7/1/2003 150,000 7Q8,000 708,000 - 617,222 90,778 87.18% Unknown 7/1/1992 50,000.. 100,000 100,000 - 16,058 83,942 16.06% Unknown 7/1/2005: 50,000 75,000' 75,000 - - 75,000 0.00% Unknown 7/1/2005 60.;:000 130 00,0 115,374 (14,626), 114,125 1,249 87.79% 6/30/2011 11/1/2007 1-00:,000 1;100,000 675,000 _(425,000).. 579,032 95,968 52.64% Unknown 7/1/2009 575,000 575;000 - :(575,000) 565,299 (565,299) 98.31% 6/30/2011 7/1/2010 -< 700,000 700,000 - (700;000). - - 0.00% 6/30/2011 7/1/2010 100,000 100;000.. 100,000 - - 100,000 0.00% 6/30/2012 7/1/2010 > 200,000 200;000... 200,000 - - 200,000 0.00% Unknown 19,123;929 12b,840;358 116,065,659 (9;774,700)` 105,927,046 10,138,614 Last Activity in 09-10 Project Can Be Closed • • • • • Capital Reserve Funds Balances 30-Jun-10 Library Older School County Capital Reserve Fund Facilities Facilities Undesignated Total Revenues Board Designated Sale of Fixed Assets Library Facilities 60% Transfer from County Capital Projects Library Facilities Undesignated Total Revenues County Capita! Reserve Fund Balance July 1, 2009 Fund Balance June 30, 2010 214,670 150,000 364,670 164,670 164,670 50,000 50,000 150,000 150,000 214,670 150,000 364,670 0 0 School Capital Reserve Fund Revenues 19 19 Undesignated Investment Earnings Board Designated Sale of Fixed Assets Older School Facilities 40% Total Revenues School Capital Reserve Fund Balance July 1, 2009 109,780 109,780 109,780 19 109,799 1,882 1,882 Fund Balance June 30, 2010 109,780 1,901 111,681 N County Debt Service and Debt Capacity Fiscal Years 2010-16 Current Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Debt Service 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 Total Annual Debt Service 28,632,445 26,060,464 23,668,072 23,119,283 22,139,814 21,103,221 General Fund Budget 175,313,920 Annual Growth Projections Projected General Fund Budget Annual Debt Service as a % of General Fund 16.33% Debt Service Policy 15.00% Future Debt Service Capacity -1.33% 14.72% 13.23% 12.74% 12.02% 11.23% 15.00% 15.00% 15.00% 15.00% 15.00% 0.28% 1.77% 2.26% 2.98% 3.77% Projected Debt Financing County Renovations & Equipment -2010-2011 -$2,000,000 453,260 442,608 431,956 421,304 410,652 Qualified School Construction Bonds ...2010-2011 - $10;000,000 675,000 675,000 675,000 675,000 675,000 Schools Facilities 2011 - 2012 - $30,000,000 2,730,000 2,730,000 2,730,000 2,730,000 New Debt Service 1,128,260 3,847,608 3,836,956 3,826,304 3,815,652 Projected Annual Debt Service 28,632,445 27,188,724 27,515,680 26,956,239 25,966,118 24,918,873 Projected Annual Debt Service As A Percent of fhe General Fund Budget 16.33% Available Annual Debt Service Capacity -Based on the 15°!° Debt Service Policy (2,335;357) 15.36% 15.39% 14.85% 14.09% 13.26% (628.,665) (690;021) 27:1,.805 1,670,347 3,270,321. _ __ " $1,000;000 of annual debt service = $11,000,000 of debt issued at current interest. rates for 15 yearn 1.00% 1.00% 1.50% 1.50% 2.00% 177,067,059 178,837,730 181,520,296 184,243,100 187,927,962 • ~ • w ,raft Revised 9!17/10 _ - - -" Style Definition: Body Text 2: Font: Aria!, Italic, Indent: Left: 0.25", Orange County Board of Commissioners ~ Tabs: o.s6",Left Approved ~' Deleted: Adopted oM2a/2oo7 • Capital Funding Policy Preamble This capital funding policy is the product of extensive analysis and deliberation. The intent of this policy is to reflect greater priority than there has been historically on providing funding for County projects, with particular emphasis directed at enhanced upkeep of existing County facilities. The policy reflects the implementation of the Board of Commissioners' resolution of November 16, 2004 that the Board "does hereby adopt in principle a policy of allocating a target of 60 percent of capital expenditures for school projects and 40 percent of capital expenditures for county projects over the decade beginning in calendar year 2005". This policy continues the County's principle and historical practice of funding all School and County related debt service obligations before allocating any other School or County capital funds for other purposes. Long Range Capital Investment Plan During January of each fiscal year, the County Manager shall present, to the Board, five- year County and School capital needs and funding plans in the form of a Capital ,Deleted:. ¶ Investment Plan. Each year, the Board of Commissioners shall conduct a public hearing ¶ on the Manager's Recommended CIP during March and subsequently adopt afive-year ;` Deletes:. Capital Investment Plan (CIP) as part of the annual operating budget in June. i Deleted: ¶ :• ';~ Formatted: Body Text 2 ount and School recurrin ca ital needs will be identified and reviewed during each ,~ ~;: ~ .C.._..-Y.-._ .......... ... .. ... ...9._.._P.._._.._ -... ----- - ----------...-._...._..----: -... _..-_ ... - .. .. .. ;,. Deleted: 4t>¶ annual operating budget cycle, and recurring capital appropriations wlll be approved by the ;;; Deleted: Board of Commissioners as an element of each annual Orange County Budget ,~ ; Deleted: ~It is the intent of the Ordinance. i; Board of County Commissioners to j: dedicate the equivalent of four cents ;; on the annual ad vabrom property tax The five-year plan for long-range capital funding shall include anticipated County and ~;` ;; to funding rewrring capital y; ex end'Rures for schods (three cells) _,, School capital expenditures costing $10Qa000 or more. . __. -._ _-.- _. _.._.._-. ~ ~ P - - ~- --- - - ;, and county (f cell). However, there Sources of Funds - .. wig betimes when the County will be The County will allocate the following sources of funds for County and School debt service~'~ and long-range and recurring capital: • All proceeds from the Article 40 and Article 42 half-cent sales taxes. (The North Carolina General Statutes require that 30 percent of the Article 40 (NCGS§105-487(a)) and 60 percent of the Article 42 (NCGS§105-502(a)) sales tax revenue be earmarked for public school capital outlay as defined in NCGS§105-4260 or to retire any indebtedness incurred by the county for these purposes) • School Construction Impact Fees for each school system. • ~roperty_tax revenue as needed and_approved_by the_Boardt_____________________ bound fiscally and unable to achreve fug funding. During those times, Commissioners may find k necessary to depart from the Policy. During the 2008-78 Capital Investm~t Plan development process, the Boats will consider a timetable for phasing in the addiflonal twa-cells necessary to fully the recurring capital component of this policy.¶ (This 9-cent rate may, but need not, he adjusted with each quadrennial revaluation fo a 'revenue neutral" earmarking)¶ gpBeginning in fiscal year 2007-08, the County will budget NC Education lottery proceeds'in arrears" - meaning that funds will be budgeted in the year after the State distributes i them. For example, briery proceeds distributed to the County during the upcoming 2007-08 fiscal year would be budgeted the following fiscal year, 2008-09.¶ gaff Revised 9/17/10 -__ • The County will budget NC Education Lottery proceeds as the revenues are distributed by the State each quarter once the revenues are identlfled for an Indlvldual school capital project and requested by each district. Debt Service All County and School related debt service obligations would be funded prior to allocation of programmed funding for any other capital purposes. ~Orange.County Schools' impact-fees will be earmarkefi ~o_pay for debt-service-on projects _`-_- . that involved the construction of new school space in the Orange County Schools system. Chapel Hill-Carrboro City Schools' impact fees will be earmarked ~o_pay-for-debt service-,.~-~"- on projects that involved the construction of new school space in the Chapel Hill-Carl-boro City Schools system. These expenditures will be tracked and- verified by each district annually. NC Education Lottery Proceeds ~~ ;' •• ach school district,vvill have the option- to dedicate its share. of the, annual. NC Education';.;- ,. Lottery monies ~o address schoo_I fa__cifity renovation needs,. orbs additional revenue to the :."~.: districts pay-as-you-go funding to address school facility renovation needs. nnua(I _. _... either district an request that the County dedicate Lottery-proceeds to repay-debt service,. ...- and he count w-II substitute pay as you-go-funding to expedite approved capital projects ~- '~-----------Y--- -•- in the cs~hools capital_im ro_..~., vement pfan-----------------------------------------------------------------------------•"~'". Allocation Department of Public Instruction each fiscal year. Capital Project Qrdinances -Form and Purpose All funds allocated to capital projects are to be accounted for in a Capital Project Fund as authorized by a Board of County Commissioner approved Capital Project Ordinance. The Capital Project Ordinance will include a detailed break down of each major cost category related to the project. In accordance with the Board of County Commissioners November 2000 adopted "Policy on Planning and Funding School Capita! Projects°, whenever School capital project bids are either higher or lower than originally projected, or any other factor affecting the project budget occurs, the affected school system is expected to work with County-Management and Budget staff to present revised capital project ordinances for adoption by the Board of Commissioners. The same expectations shall be applicable for changes to County Capital project budgets. Community Use of Schools It is the intent of the Board of County Commissioners to evaluate each new proposed school in both School Districts for joint community use opportunities, including, but not limited to, park and recreation use. , ~~ Deleted: Adopted 04/24!2007 Deleted: All proceeds from annual allocations d North Carding Public School Building Capital Funds will lie earmarked explictly to pay for eligible school debt service.¶ Deleted: explictly Deleted: explicitly Deleted: Beginning in fiscal year Formatted: Body Text 3, Space Before: 0 pt Deleted: either (1) to repay debt service for debt Issued after fiscal year 200rr07 Deleted: (2) Deleted: an Deleted: If Deleted: chooses to Deleted: ,Lottery proceeds, sufficient to cover annul debt payments for principal Deleted: Interest, Deleted: be dedicated for the Iffe of the financing.Q 9 eeginning in fiscal year2008-09, Deleted: first quarter of each year, County stall will reques4 from the State, the amount of monies accumulated in the Lottery fun both Scl10d dlSblcfS Wlth fhe Info expending those fins during the fiscal year for either debt service payments orindividual School caplfal pryjecfs as idenNfred by each disMcts during their annual update of their Deleted: With the exception d the revenues earmarked Tor School and County retorting capital and the Construction Management Function, the net proceeds of all programmed revenue sources after debt service obligations have been satisfied will be allocated on the basis d 60% to schools and 40% to the County. ¶ Capital funding for each.ten-year capital planning period will be allocated between the two school systems based on certified student membership as of November 15 each year. ¶ n Formatted: Normal, Indent: Left: o.zs° • • Draft Revised 9117/10 - -j -- Deleted: Adopted 04/24/2007 ~ - Deleted: Recurring Capital¶ :. ._ __ .. ._ --._ _.... ---. - ..._ - ..- ..-_.... ..... - __ ._...... ._ .... ..... .. ... . Schools Ade uate Public Facilities Ordinance q . . As outlined in he uroesofFunds" ' "so section of this policy, recurring capital Orange County's Schools Adequate Public Facilities Ordinance (SAPFO) and Memoranda 1 fundingiortheschoolsandCounty will be based on the estimated of Understanding (MOUs) between the County and its municipal and school partners ~ proceeds of4 cents on the annual establish the machine to assure that, to the extent ossible, new develo merit will take ry p p General Fund property tax rate. The proceeds from 3 cents will be place only when there are adequate public school facilities available, or planned, which will earnazked for schools, with funds accommodate such new develo merit. The Board of Count Commissioners is committed p y ~ allocated to each school system for the next fiscal year based on each to the principle that new school space documented as needed through the annual SAPFO system's respective share of the technical review rocess will be reflected in the next ado ted CIP, and will be funded so p p ~ student membership as of November 15 immediately preceding fhe next as to be constructed to be available before the relevant level of service threshold is ~ fiscal year. Proceeds from 1 cent on exceeded. co n~ rtcurrilnbca i al ne as.or Y 9 P ~ 4 Rescission ~ Vehicle acq si ~s accompl shedand using third party financing, the Board . ,This policy supersedes an rLpolicy inplace prior to this date. I of County Commissioners will -... _- . _... , determine the source of funding to repay the assoctated debt service at the point that the Board approves the Approved _ , 2010. l ~ fnandng arangement.9 Construction Management I Functlon¶ Beginning with the 2005-06 fiscal year, the Board of Commissioners will appropriate funding to establish a ement function to a t cti M C an g ons ru on oversee County and School capital ~ projects. In fiscal years 2005-06 , ~ through 2007-08, $100,000 will be , allocated annually to fund this function. The source of funding for the Construction Management function will be split on a 60/40 basis with each school district sharing the ~, S schools portion of funding (60°~) in accordance with certified student membership as of November 15 each year. Each entity's share of this function will be deducted from its ~,: share of long-range capital funding ~, prior to allocating capital funds.¶ Formatted: rront: Bold t '~ Formatted: Normal, Tabs: 0.5", left Deleted: This policy resctnds the 7 Orange County Board of Commissioners Capftal Funding Policy, as originally approved on ~, December 7, 1996 and as amended on February 3, 1996 and June 23, 2005.¶ Deleted: April 24, 2007. ti Draft Revised 9/17/10------ Formatted:Right ORANGE COUNTY BOARD OF COMMISSIONERS DEBT MANAGEMENT POLICY The County has long recognized the importance of proper long-range planning in order to meet capital improvement needs as they arise without experiencing dramatic impacts on operational cost and debt service. The following policy statements will provide guidance on the issuance of dept to help insure that the County maintains a sound debt position and that its credit quality is protected. In conjunction with the County's Capital Policies, these policy statements rationalize the decision making process, identify objectives for staff to implement, and demonstrate a commitment to long term financial planning objectives. In addition, this debt management policy will allow for an appropriate balance between the establiftgdebt parameters and providing flexibility to respond to unforeseen ---.- Deleted:ins circumstances and new opportunities. POLICY STATEMENTS Purpose and Type of Debt 1. Incurrence of debt or long-term borrowing will only be used for the purpose of providing financing for capital projects to include, but not Jimited to: --.--.. oeteted:be a. Construction of new School and County facilities b- Renovation and repair of existing School and County facilities c. Acquisition of real property (land and/or buildings) d. Construction r expansion of all Public Utilities Deleted: P-- -p----------- - - e. Providing funds for Affordable Housing Projects Deleted:Sanitary Sewer Systems f. Construction, acquisition and development of Parks g. Purchase of major equipment Debt issuance will not be used to finance current operations or normal maintenance. 2. The types of debt instruments to be used by the County include: a, General Obligation Bonds b. Bond Anticipation Notes c. Installment Purchase Agreements (private placement) d. Special Obligation Bonds (landfill only) e. Certificates of Participation, when feasible f. Revenue Bonds 3. All debt issued, including installment purchase methods, will be repaid within a period not to exceed the expected useful life of the improvements or equipment financed by the debt. 4. The County will not issue tax or revenue anticipation notes. Draft Reviscd 9/17/10 Formatted:Right Purpose and Type of Debt (continued) 5. The County will not issue bond anticipation notes with maturities in excess of one year. 6. The County will strive to maximize the use of pay-as-you-go financing for capital improvements. Issuance of Debt 7. The County will strive to issue bonds no more frequently than once in any fiscal year. The scheduling of bond sales and installment purchase decisions and the amount of bonds to be sold and installment financing to be sought will be determined each year by the County Commissioners. These decisions will be based upon the identified cash flow requirements for each project financed, market conditions, and other relevant factors. These factors will be ascertained from the school systems and County departments. If cash needs for bond projects are insignificant in any given year, the Board may choose not to issue bonds. Instead, the Board may fund up frog project costs and.......... Deleted:m reimburse these costs when bonds are sold. In these situations the Board will adopt Reimbursement Resolutions prior to the expenditure of project funds. 8. The County will seek level or declining debt repayment schedules and will avoid issuing debt that provides for balloon principal payments reserved at the end of the term of the issue. 9. The County will avoid over-reliance on variable rate debt. Variable rate debt will only be considered when market conditions favor this type of issuance. When variable rate debt is considered, careful analysis will be performed and techniques applied that will ensure that the County's sounc(debt_position will be maintained. At no time will variable rate_debt Deleted:s exceed 20% of the County's total outstanding debt. 10.The County is required by Statute to issue general obligation debt through a competitive process. The competitive process will also be used for other debt issuance unless time factors, interest rates or other factors make it more favorable to the County to use a negotiated process. 11.In the planning process for debt issuance the County will assess the need to maintain its "Bank Qualification" if installment purchase Deleted: financing is being considered. r Draft Revised 9%17/10- ----- Formatted:Right Level of Debt 12.The County will maintain its net bonded debt at a level not to exceed three Deleted:strive to .- ------ - ---- - ---- - -- percent of the assessed valuation of taxable property within the County. 13.The County will strive to maintain its annual debt service costs at a level no greater than fifteen percent of general fund revenues, including installment purchase debt. This is a recommended "best practice" from the Government Finance Officers Association. Advance Refunding of Debt 14.The County will make every effort to issue advance refunding bonds to --- Formatted:Bullztr and Numbering ) achieve cost savings of at least 3% percent net of the refunding bonds. Net savings includes gross savings less issuance costs and any cash contributions to the refunding. The 3% savings is the minimum savings permissible before the North Carolina Local Government Commission will consider advance refunding bonds- These decisions will be based upon the maturitV date of the refunded bonds the call date and premium on the refunded bonds and the interest rates at which the refunding bonds can be issued. Undesignated Fund Balance 15.The County will strive to maintain an undesignated balance in the general '---- '" Formatted:Bullets and Numbering fund of 17%percent of budgeted general fund operating expenditures each Deleted:at fiscal year, The amount of undesignated fund balance maintained during each Deleted: fiscal year should not fall below R- ---cent of bud eted eneral fund y Y 4_p_ g. _ _ ----------------------------- _ Deleted:a level sufficient to meet its operating expenditures gs recommended by the North Carolina Local budgeted goals,to be determined annually. Government Commission. Deleted: be less than 16.To the extent that general fund �undesignated fund balance exceeds 17% Deleted:eight percent he balances may be utilized to fund capital expenditures,or pay down Deleted:that fiscal year outstanding County debt ;. Formatted:Bullets and Numbering - . -- -- --- ------- ----- . --- --- Deleted:the budgeted goals Deleted:County could consider Investment of Capital Funds drawing upon the balance fund major equipment purchases or one time expert 16.investment of capital funds will_be performed in accordance with the North Deleted:ses on a pay-as-you-go Carolina General Statutes (159-30). Funds will be invested in instruments that basis will provide the liquidity required to meet the cash flow needs of each project Deleted:,_. 1 funded. Formatted:Indent:Left: 0", Hanging: 0.25" J {Deleted:q ti Draft Rcviscd 9/17/10- Formatted:Right 17. nvestment earnings on capital funds, after subtracting required or potential Deleted:¶ l - arbitrage, will be used for project costs and/or debt service ------- 17. _ ----- Deleted:¶ Deleted: Bond Ratings¶ Bond Ratings L>The County will maintain good communications with bond rating agencies about its financial condition and will follow a policy of full 18. The County will maintain good communications with bond rating agencies disclosure on every financial report regarding its financial condition and will follow a policy of full disclosure on and offering statement.¶ every financial report and offering statement. <#>The County will strive to maintain bond ratings at or better than Aal (Moody's)and AA+(Standard& 19. The County will strive to maintain bond ratings at or better than AAA (Fitch) Poor's).q Aa2 (Moody's Investor Services) and AA+ (Standard & Poor's). ¶ ----------Page Break----- ------ Formatted:Bulletr and Numbering Arbitrage Rebate and Secondary Market Disclosure Requirements Formatted:Bullets and Nurrthering 20. The County will comply with all arbitrage rebate requirements as established by the Internal Revenue Service and all secondary market disclosure requirements established by the Securities and Exchange Commission. 21. Arbitrage will be calculated at the end of each fiscal year and interest earned on investment of bond or installment purchase proceeds will be reserved to any penalties due. Enterprise Funds 22. For any Enterprise Fund that is supporting debt, an annual rate study will be performed to ensure that fees or rates are sufficient to meet the debt service requirements. Capital Reserve Funds 23. The County will create and maintain capital reserve funds as appropriate, such as for school and county projects. 24. The Capital Reserves will be funded from T. t property tax revenues sales tax ------ Deleted:unallocated, cent ----------- revenues and/or any other revenue source that the County Commissioners may choose. 25. Funds accumulated in the Capital Reserve Funds will be used on a pay-as- you-go basis to finance renovations and repairs to existing buildings and the purchase of major equipment. The Board may also choose to fund other pay- as-you-go initiatives from Reserve Funds. f Draft Revised 9/17/10-— Formatted:Right `5-Year Capital Investment Plan (CIP) Delete d' o 26. The County will review and adopt a jive-year-CIP annual) Deleted:ten DIted- year ) 27. This Debt Management Policy will be incorporated into the CIP. 28. The County will strive to include plans for debt issuance within the CIP. Deleted:q ReSCISSIOn Formatted:Font: 12 pt This policy supersedes any policy in place prior to this date. Approved 12010. Formatted:Indent:Left: 0"