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HomeMy WebLinkAboutAgenda - 01-20-2011 - 7c ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: January 20, 2011 Action Agenda Item No, ~7 ' G SUBJECT: County Capital Projects Budget Ordinance Amendments -Budget Amendment #6-A DEPARTMENT: Financial Services PUBLIC HEARING: (Y/N) No ATTACHMENT(S): Attachment 1. Lands Legacy Background Attachment 2. Conservation Easements Background Attachment 3. Efland Sewer Extension Development Background INFORMATION CONTACT: Clarence Grier, (919) 245-2453 Michael Talbert, (919) 245-2153 PURPOSE: To approve Budget Amendment #6-A for $13,097,651 for the County Capital Projects Fund. BACKGROUND: Capital Project Ordinance: Three County Capital Project Ordinances approved for the County Capital Projects Fund show total Projects Budgets $13,097,651 over the correct budget amount. The three projects are as follows: Legacy Project Ordinance - $11,219,125 over the correct budget, Conservation Easements Project Ordinance - $1,484,526 over the correct budget, and the Efland Sewer Extension Development Project Ordinance - $394,000 over the correct budget. Attachment 1 LANDS LEGACY BACKGROUND Attachment 2 CONSERVATION EASEMENTS BACKGROUND Attachment 3 EFLAND SEWER EXTENSION DEVELOPMENT BACKGROUND FINANCIAL IMPACT: There is no financial impact to the County. All project revenues and expenditures have been property accounted for. The double budgeting has inflated budgets but had no impact on individual projects. RECOMMENDATION(S): The Manager recommends the Board of County Commissioners approve Budget Amendment #6-A as outlined in the Background for the County Capital Projects Fund. Attachment 1 LANDS LEGACY BACKGROUND: Capital Project Ordinance: The Lands Legacy Project Ordinance has an approved budget of $17,229,577 and is $11,219,125 over the correct project budget of $6,010,452. The Lands Legacy program started as a recommendation from the Open Space Task Force to the Board of Commissioners on April 4, 2000. On May 3, 2000 the Board adopted the Interim Action Plan for Lands Legacy. On June 25, 2001 the Board of County Commissioners approved a Resource Lands Conservation (Lands Legacy) Project Capital Project Ordinance for a total project budget of $6,154,527 that included many of the projects identified in the Action Plan. This Capital Project Ordinance included the following project elements: McGowan Creek: Preserve, Little River Natural Area and Regional Park, Eubanks Road Property, Walters Farmland Conservation Easement, Seven Mile Creek Preserve and Unallocated Funds. Over the past nine years, project elements have been added, such as the Blackwood Property, and the total project ordinance has grown to $17,229,577 (see the attached June 15, 2010 approved Project Ordinance). A roved Project Ordinance $17,229,577 Less: Double Bud etin of Projects 8,024,720 Over Bud etin of Bond Revenues 2001 GO Bonds 1,500,000 2009 Alternative Financin 1,700,000 Plus: Accountin S stem Correction 2003 5,595 Lands Le ac Correct Project Bud et $6,010,452 Double Budgeting of Projects: Since the inception of the Lands Legacy Program, five projects have been budgeted twice. Attached is a Summary of Lands Legacy projects originally included in the Lands Legacy Project Ordinance and that were also established as individual Project Ordinances. Individual project ordinances were established for: McGowan Creek Preserve, Little River Natural Area & Regional Park, Eubanks Road Property, Seven Mile Creek Preserve and Blackwood Farm. The Lands Legacy Project Ordinance was never reduced after the new individual project budgets were established. These double budget projects result in the Lands Legacy Project Ordinance being overstated by $8,024,720. Over Budgeting of 2001 Bond Revenues: Between June 25, 2001 and June 14, 2010, the Board of County Commissioners approved amendments to the Lands Legacy Capital Project Ordinance that included $5,250,000 of proceeds from the 2001 authorized bonds. A total of $3,500,000 of the 2001 Bonds were ultimately issued for Parks and Open Space. This revenue budget line item in the Lands Legacy Project Ordinance is overstated by $1,750,000. However, $250,000 of the 2004/05 Capital Investment Plan (CIP) was incorrectly budgeted as 2001 Bond Proceeds and should have been pay-as-you-go funding. Transferring $250,000 from 2001 Bond Proceeds Budget line item to pay-as-you-go funding reduces the budget to $5,000,000. The end result is that the line item budget for 2001 Bonds in the Lands Legacy Project Ordinance is overstated by $1,500,000. On June 2, 2009, .the Board of County Commissioners approved a budget amendment to the Lands Legacy Project Ordinance in the amount of $2,800,000, with the revenues coming from 2009 Alternative Financing. A total of $1,700,000 was subsequently transferred to three other parks projects on June 16, 2009, leaving $1,100,000 for the Lands Legacy project. The Lands Legacy Project ordinance needs to be reduced by $1,700,000 to reflect the reallocation to other parks projects. The remainder of the background outlines the steps taken that led to the need for this $1,700,000 budget amendment. On November 6, 2001, the voters of Orange County approved $75,000,000 of General Obligation Bonds, which included $17,000,000 for Parks and Open Space. As of June 30, 2008, a total of $68,100,000 of the original $75,000,000 had been issued. A total of $6,900,000 original approved 2001 bonds were unissued as of June 30, 2008. The original distribution for the remaining 2001 authorized bonds was $1,400,000 for Affordable Housing and $5,500.000 for Parks and Open Space. On November 6, 2008 the original authorization expired and the Board proceeded to issue the remaining $6,900,000 as part of the April 2009 alternative financing. The American Recovery and Reinvestment Act of 2009 (ARRA) raised the small issuer exemption for municipal tax exempt financing to $30 million annually. ARRA allows the banks to deduct 80% of the interest expense of carrying qualified tax exempt debt. This translates into substantially lower interest rates from banks for qualified municipal debt obligations. In order for the County to qualify for the preferred interest rates, the Board approved the issuance of $30 million for the April 2009 issue. To receive lower interest rates, the Board approved the issuance of only $2,800,000 of Parks and Open Space ($5,500,000 was originally planned). The remaining $2,700,000 is planned to be issued when financing is sought for elementary #11. At the meeting of March 17, 2009, the Board of County Commissioners approved the issuance of $29,917,000 of bank qualified installment financing as authorized under section 160A-20 of the North Carolina General Statutes to finance capital projects and equipment. As a part of the total issue, $2,800,000 was issued for Parks and Open Space. The debt was issued on April 24, 2009 at a rate of 3.6% for 15 years. On June 2, 2009, the Board approved the Capital Project Ordinance Amendments which included $2,800,000 for the Lands Legacy Project. 4 At the February 3, 2009, meeting the Board approved the County Manager's two year plan to address additional funding needs of the School and County Capital Project Funds. As part of this plan, on June 16, 2009 the Board approved amendments to capital project ordinances for projects which exceed the current project ordinance appropriations and made the corrections to the capital project ordinances. There were three project ordinances amended in this action on June 16, 2009 that replaced $1,700,000 of funding from 2001 bond proceeds with bond proceeds from alternative financing issued on April 24, 2009. The following three projects make up the $1,700,000 transfer between funding sources: Homestead Aquatics $ 500,000 Cedar Grove Park 500,000 Fairview Park 700,000 Total $1, 700, 000 The action of the Board on June 16, 2009 correctly funded these projects, but failed to reduce the budget of the Lands Legacy project by $1,700,000. All funds have been transferred and two of the projects are complete. Approval of a project ordinance amendment for Lands Legacy project budget for $1,700,000 as follows will correct the project's budget. Accounting System Conversion - 2003: Orange County moved to the MUNIS Financial Management System in 2003. When the balances for the Lands Legacy Project were brought forward into the new system, both the budgets and actual revenues and expenditures were $5,595 greater than the BOCC approved Capital Project Ordinance. The Capital Project Ordinance for Lands Legacy was never amended and needs to be increased by $5,595 to correct this error. Lands Legacy Project Budget: Project # 20011 Revenues for this project: FY 2010-11 Revised FY 2010-11 Correction FY 2010-11 Revised Sales Tax & Dedicated Pro a Tax $3,516,016 ($3,516,016) 0 1997 Bonds 2,700,000 $2,700,000 0 2001 Bonds 5,250,000 $1,750,000 3,500,000 2004 2/3's Net Debt 300,000 300,000 2009 Alternative Financin 2,800,000 $1,700,000 1,100,000 Grant Funds 421,950 421,950 0 Transfer from Other Funds 2,241,611 1,131,159 1,110,452 Total Project Fundin $17,229,577 $11,219,125 $6,010,452 Appropriated for this project: FY 2010-11 Revised FY 2010-11 Correction FY 2010-11 Revised Land /Buildin $15,521,564 $11,219,125 $4,302,439 Eno River Confluence Pro 250,000 250,000 Kirb Pro a 1,458,013 1,458,013 Total Costs $17,229,577 $11,219,125 $6,010,452 5 Lands Legacy Capital Project Ordinance Be it ordained by the Orange County Board of County Commissioners that pursuant to Section 13.2 of Chapter 159 of the General Statutes of North Carolina, the following capital project is hereby adopted. Section 1. The project authorized provides funds to protect identified natural areas and prime forestlands, and preserve critical cultural and archaeological sites. In addition funds may be used to acquire lands for future park sites, farmland conservation easements, and nature preserves. The BOCC approves transferring $450,000 of this project to the Unallocated Project Account to be closed as of June 30, 2010. The BOCC approves the appropriation of $111,636 ($102,299 sales tax revenues and $9,337 County Capital Projects Fund Balance) to replace 2001 Bond Funds. Section 2. The officers of the County are hereby directed to proceed with the project within the budget contained herein. Section 3. The following revenue is anticipated to complete this project: Section 4. Through FY 2009-10 Amended June 15, 2010 Through FY 2009-10 Sales Tax $3,966,016 ($440,663) $3,525,353 1997 Bonds $2,700,000 $0 $2,700,000 2001 Bonds $5,250,000 -$111,636 $5,138,364 2004 Two-Thirds Net Debt $300,000 $0 $300,000 Grant Funds $421,950 $0 $421,950 Debt Financin $2,800,000 $0 $2,800,000 Other(Transfer from Other Funds & Fund Balance) $2,241,611 $102,299 $2,343,910 Total Funding $17,679,577 ($450,000) $17,229,577 The following amount is appropriated for this project: Through FY 2009-10 Amended June15,2010 Through FY 2009-10 LandBuildin $15,971,564 ($450,000) $15,521,564 Design $0 $0 $0 Construction $0 $0 $0 Eno River Confluence Pro erty $250,000 $0 $250,000 Kirby Pro erty $1,458,013 $0 $1,458,013 Total Costs $17,679,577 ($450,000) $17,229,577 Section 5. The following amounts have been transferred to other County Capital Projects: Attachment 4 Through FY Amended Through FY 2009-10 June 15, 2010 2009-10 Transfer to Conservation Easements Capital Project $143,000 $0 $143,000 Transfer to New Hope Preserve Capital Project $298 $0 $298 Transfer to Millhouse Road Park Project $188,712 $0 $188,712 Transfer to Seven Mile Creek Preserve Ca ital Project $151,000 $0 $151,000 Total Transfers $483,010 $0 $483,010 Section 6. The following budget remains in the project: Ori final Budget (see Section 4 above) $17,229,577 Less Transfers to Other Pro'ects (see Section 5 above) ($483,010) Total Project Bud et $16,746,567 Section 7. This ordinance shall be in effect from the original date of adoption, March 24, 2003 until the project is complete and closed by the BOCC. 6 Adopted this 15th day of June 2010. 7 Attachment 2 CONSERVATION EASEMENTS BACKGROUND: Capital Project Ordinance: The Conservation Easements Project Ordinance has an approved budget of $7,362,707 and is $1,484,526 over the correct project budget of $5,878,181. The purpose of the Conservation Easements Preservation Project is to purchase open-space within the County. The Board created this project during the CIP planning process in the spring of 1998 and funded the first year with $100,000 from property taxes. The Conservation Easement Project is designed to provide funds for the acquisition of conservation easements. On June 23, 2004, the Board of County Commissioners approved a Capital Project Budget Amendment for the Conservation Easement Capital Project for three matching grants totaling $638,840 from the US Department of Agriculture's Farm & Ranch Lands Protection Program to help acquire conservation easements. These grants are to be matched by County funds set aside for conservation easements. In 2002, the Board of County Commissioners approved $3.0 million for easements to augment the 2001 Parks and Open Space bond funds (which can not be used for easements). Over the next 2 years, these funds were budgeted again when each individual conservation easement was approved by the Board. On June 7, 2005, the Board of County Commissioners approved a Capital Project Budget Amendment for the Conservation Easement Capital Project for $845,686. The purpose is to purchase farmland preservation conservation easements in Orange County. The funds are from the US Department of Agriculture's Farm & Ranch Lands Protection Program. These grants are to be matched by County funds set aside for conservation easements. Over the next 2 years these funds were budgeted again when each individual conservation easement was approved by the Board. Two grant awards were budgeted when awarded. The first was for $638,840, and the second was for $845,686. These awards totaling $1,484,526 were then budgeted again when the Board of County Commissioners approved each individual conservation easement. These double budget revenues result in the Conservation Easement Project Ordinance being over stated by $1,484,526. A roved Project Ordinance $7,362,707 Less• Over Bud etin of Grant Revenues 2004 638,840 2005 845,686 Conservation Easements Correct Bud et $5,878,181 Conservation Easements: Project # 20006 Revenues for this project: FY 2010-11 Revised FY2010-11 Corrections FY 2010-11 Revised Safes Tax & Dedicated Pro a Tax $350,000 $350,000 Private Placement 3,000,000 3,000,000 Grant Funds 3,869,707 $1,484,526 2,385,181 Transfer from Lands Legacy Ca ital Pro~ect 143,000 143,000 Total Pro'ect Fundin $7,362,707 $1,484,526 $5,878,181 Appropriated for this project: Through FY 2009-10 FY2010-11 Corrections FY 2010-11 Revised Walters Easement $725,000 $725,000 Vol a Easement 104,100 104,100 Cheek Easement 580,000 580,000 McPherson Easement 68,000 68,000 Ward Easement 444,750 444,750 Llo d Easement 219,000 219,000 Keith Easement 116,000 116,000 Fickle Creek Farm Easement 277,658 277,658 McKee Easement 612,000 612,000 Latta Easement 601,400 601,400 Tate Easement 333,750 333,750 Lee Farm Easement 306,250 306,250 Breeze Farm Easement 952,000 952,000 Underwood Easement 2,620 2,620 Unallocated 2,020,179 $1,484,526 535,653 Total Costs $7,362,707 ($1,484,526) $5,878,181 9 Attachment 3 EFLAND SEWER EXTENSION DEVELOPMENT BACKGROUND: Capital Project Ordinance: The Efland Sewer Extension Project Ordinance has an approved budget of $2,192,240 and is $394,000 over the correct project budget of $1,798,240. On May 4, 2006, the Board of County Commissioners met to award bids for the construction of water and sanitary sewer services to the Buckhorn Area, including the new Gravelly Hifl Middle School. The low bid was above the available budget and the Board approved a plan to debt finance the remaining $394,000 of the project with the next debt issuance planned for the fall of 2006. The $394,000 was included in the Efland Sewer Extension Project Ordinance amendment and was approved by the Board. A $400,000 Budget Amendment for Efland Sewer Extension Project Ordinance was approved by the Board on June 27, 2007 in coordination with the issuance of debt. A total of $400,000 of new debt was sold for the Efland Sewer Project. This double budgeting of debt proceeds results in the Efland Sewer Extension Development Project Ordinance being overstated by $394,000. Efland Sewer Extension Development: Project # 30017 Revenues for this project: FY 2010-11 Revised FY2010-11 Corrections FY 2010-11 Revised Sales Tax & Dedicated Pro e Tax Private Placement $685,654 $394,000 $291,654 Grant Funds 867,300 867,300 Transfer from other Funds 639,286 639,286 Total Pro'ect Fundln $2,192,240 $394,000 $1,798,240 A ro riated for this ro'ect: Through FY 2009-10 FY2010-11 Corrections FY 2010-11 Revised Site Develo ment $50,000 $50,000 Professional Services 30,250 30,250 Construction 2,111,990 $394,000 1,717,990 Total Pro'ect Costs $2,192,240 $394,000 $1,798,240