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MINUTES
ORANGE COUNTY BOARD OF COMMISSIONERS
SPECIAL MEETING
SCHOOL CAPITAL NEEDS WORK SESSION
OCTOBER 5, 1993
The Orange County Board of Commissioners met in Special Session on
Tuesday, October 5, 1993, at 7:30 p.m. at the EMS Training Facility on New
Hope Church Road, Hillsborough, North Carolina, for the purpose of
discussing School Capital Issues.
COUNTY COMMISSIONERS PRESENT: Chairman Moses Carey, Jr., and
Commissioners Don Willhoit, Verla Insko, and Alice Gordon.
COMMY COMMISSIONER ASSENT: Commissioner Stephen Halkiotis
STAFF PRESENT: County Manager John Link, Jr., Assistant County
Manager Rod Visser, Deputy Clerk to the Board Kathleen Baker, Finance
Director Ken Chavious, and Budget Director Sally Kost, .
John Link listed the major School Capital issues as stated below:
(1) the present funding policy of earmarking 80% of Article 40 Sales
Tax, 60; of Article 42 Sales Tax, $800,000 in property tax
(netting out debt service for 1977 school bonds) and the
equivalent of 2 cents in property tax (2.3 cents prior to
revaluation) to be applied toward debt service,
(2) additional school capital funding needs, including funding
additional elementary school space; financing options, and
(3) school construction standards and classroom size standards for
construction of new facilities
John Link mentioned that the School Issues Task Force recommended
starting with the State standards and establishing a method for explaining
the need for higher standards within the two school districts.
. Commissioner Insko suggested creating a document which would list
state and local standards side-by-side, with an explanation for each local
standard which exceed the State recommendations.
Chair Carey indicated that it is essential to define standards so
that the public understands why there is a difference. Citizens are
willing to accept higher standards if they see the reason for them and
agree with that reasoning.
Commissioner Insko mentioned that historically Chapel Hill has
emphasized funding the operating budget, particularly teacher supplements.
The philosophy has been that the educational experience was primarily the
relationship between the student and teacher. The facility has been
considered secondary to the teaching relationship. If the facility has
become as important as the teaching relationship, the reasons for that
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must be articulated so that taxpayers are able to understand the reasons
for that shift.
Neil Pedersen, Superintendent of the Chapel Hill-Carrboro School
System stated that the class size needs to be reduced and that cannot be
accomplished unless additional schools are built. Also, advanced,
technology requires that a higher level of funding be approved.
Chair Carey asked that agreement be reached on which policy issues
need to be discussed. The issues include reallocation of the sales tax,
options for pay-as-you-go funding for elementary schools, and year-round
schools.
Exceeding state standards must be tied to additional functions being
performed by an individual school. Countywide standards need to be
established with the understanding that site based management will require
each school to also establish specific standards.
Commissioner Willhoit requested that strategies be identified to
maximize the efficient use of tax dollars. The point of origin for sales
tax will be researched so that the maximum benefit possible will come to
orange county.
Commissioner Gordon stressed the importance of the "SHOP ORANGE"
campaign.
Sally Kost distributed handouts on the following issues:
--Current Facilities Size, Capacity and 10th Day Membership
Current School Capital Policy
--Tax Base Growth Compared to 1/2 Cent Sales Tax Growth
--Estimated Debt Service Payments - School Debt
-Debt Service for School Construction/Expansion for PAYG
-Per Cent of Revenue from Impact Fees as outlined in the Technical
Report
Sally Kost explained that if General Obligation Bonds are issued they
would be financed over a 20 year period. The principal would be paid at
a flat rate with interest paid at fluctuating rates.
John Link mentioned that county staff and school district
Superintendents have been in dialogue about ways to finance schools in the
future. The School Issues Task Force has reached consensus that
increasing the property tax for this purpose is not an option at this
time.
Chair Carey agreed that using a property tax increase was not an
acceptable option at thzs time. Certificates of Participation (COP) or
bonds are both possible options. Whichever options are chosen need to be
discussed with the School Boards and be clearly articulated to the general
public.
Commissioner Insko agreed the property tax should not be used to fund
school facilities at the present time.
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Commissioner Gordon mentioned that all parties will need to agree
that the chosen approach is viable. There must be agreement between the
School Boards and the Commissioners.
John Link pointed out that the future, identified school needs are
too great to be funded using a pay-as-you-go approach.
Chair Carey indicated that it may be necessary to put this issue to
the voters in order to reach resolution on which method is best for the
community. The possibility of a new bond issue for an elementary school
needs to be discussed. If a bond is not a choice, the school boards will
need to discuss this issue and make recommendations. A bond would not be
his choice at this time.
Commissioner Willhoit suggested using the option of year-round,
multi-tract schools while money is being accumulated for a new school.
Pay-as-you-go, as well as single-tract schools, could also be used.
The Board of County Commissioners reached the following consensus:
No bond will be considered at this time. The Certificate of
Participation approach will be pursued. There will be no increase in
property taxes for use as a revenue source. Increasing the Impact
Fees will be considered as will the possibility of changing the ratio
of the sales tax.
The Orange County and the Chapel Hill-Carrboro School Boards will
review and discuss the options listed above and make a report. If
they have additional unmet needs they will be discussed with the
Board of Commissioners.
Year-round schools will be considered as possible components of the
overall solution.
OPERATIONS:
It was also decided that in order to properly explain the need for
higher local standards, a document needs to be created that will clearly
define those needs. For example, community uses of school facilities need
to be articulated.
A meeting of both School Boards and the Board of County Commissioners
will be scheduled to discuss capital issues as they relate to the funding
of elementary schools.
Ted Parrish commented that the school's product is a well educated
student. That is what needs to be measured. Chair Carey agreed that a
well educated student is a product, however, information on how well each
program is operating is also important information.
Commissioner Insko suggested that the list of needs for each school
district be analyzed each year to assure that it stays current and
complete.
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Superintendent Pedersen indicated that the Chapel Hill-Carrboro
School Board discussed and agreed upon the immediate need for an
elementary school.
School Board Member Ted Parrish agreed that an elementary school is
needed now. He asked that a bond not be considered as a funding option.,
commissioner Gordon asked that "continuation, additional
continuation, and expansion" be clearly defined. Also, that equity and
recurring capital be defined.
There being no additional items to discuss, the meeting was
adjourned. The next regular meeting of the Board of commissioners will be
held on October 19, 1993 at 7:30 p.m. in the Orange Water and Sewer
Authority Community Meeting Room, Jones Ferry Road, Carrboro, North
Carolina.
Respectfully submitted,
Moses Carey, Jr., Chair
Kathleen Baker
Deputy Clerk