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Home My WebLink AboutORD-2011-004 Capital Projects Budget Ordinance Amendments – Budget Amendment #6-Aa 9 ,D- 00 11 - 00 + 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 ATTACHMENT(S): Attachment 1. Lands Legacy Background Attachment 2. Conservation Easements Background Attachment 3. Efland Sewer Extension Development Background PUBLIC HEARING: (Y /N) No 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. 2 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). Approved Project Ordinance $17,229,577 Less: Double Budgeting of Projects 8,024,720 Over Budgeting of Bond Revenues 2001 GO Bonds 1,500,000 2009 Alternative Financing 1,700,000 Plus: Accounting System Correction 2003 5,595 Lands Legacy Correct Project Budget $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. 3 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 corning 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 proiect: Appropriated for this proiect: FY 2010 -11 Revised FY 2010 -11 Correction FY 2010 -11 Revised Sales Tax & Dedicated Property 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 Financing 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 Funding $17,229,577 $11,219,125 $6,010,452 Appropriated for this proiect: FY 2010 -11 Revised FY 2010 -11 Correction FY 2010 -11 Revised Land /Building $15,521,564 $11,219,125 $4,302,439 Eno River Confluence Prop 250,000 250,000 Kirb Pro erty 1,458,013 1458,013 Total Costs 1 $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 maybe 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. The following amount is appropriated for this project: 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 Financing $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 Section 4. The following amount is appropriated for this project: Section 5. The following amounts have been transferred to other County Capital Projects: Through FY 2009 -10 Amended June15,2010 Through FY 2009 -10 Land/Building Land/Building $15,971,564 ($450,000) $15,521,564 Design $0 $0 $0 Construction $0 $0 $0 Eno River Confluence Property $250,000 $0 $250,000 Kirby Property $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 Section 6. The following budget remains in the project: Original Budget (see Section 4 above) Through FY Amended Through FY Total Project Budget 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 Capital Project $151,000 $0 $151,000 Total Transfers $483,010 $0 $483,010 Section 6. The following budget remains in the project: Original Budget (see Section 4 above) $17,229,577 Less Transfers to Other Projects (see Section 5 above) ($483,010) Total Project Budget $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. Adopted this 15th day of June 2010. 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. Approved Project Ordinance $7,362,707 Less: Over Budgeting of Grant Revenues 2004 638,840 2005 845,686 Conservation Easements Correct Budget $5,8781181 Conservation Easements: Project # 20006 Ravani iac fnr this nroiect' Annrnnriated for this nroiect_ FY 2010 -11 Revised FY2010 -11 Corrections FY 2010 -11 Revised Sales Tax & Dedicated Property 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 Capital Project 143,000 143,000 Total Project Funding $7,362,707 $1,484,526 $5,878,181 Annrnnriated for this nroiect_ Through FY 2009 -10 FY2010 -11 Corrections FY 2010 -11 Revised Walters Easement $725,000 $725,000 Volpe Easement 104,100 104,100 Cheek Easement 580,000 580,000 McPherson Easement 68,000 68,000 Ward Easement 444,750 444,750 Lloyd 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) 1 $5,878,181 N 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 Hill 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 pr o'ect: Appropriated for this Droiect: FY 2010 -11 Revised FY2010 -11 Corrections FY 2010 -11 Revised Sales Tax & Dedicated Property Tax $50,000 $50,000 Private Placement $685,654 $394,000 $291,654 Grant Funds 867,300 $394,000 867,300 Transfer from other Funds 639,286 $394,000 639,286 Total Project Funding $2,192,240 $394,000 $1,798,240 Appropriated for this Droiect: Through FY 2009 -10 FY2010 -11 Corrections FY 2010 -11 Revised Site Development $50,000 $50,000 Professional Services 30,250 30,250 Construction 2,111,990 $394,000 1,717,990 Total Project Costs $2,192,240 $394,000 $1,798,240 7� Commissioner Jacobs made reference to the first page and the full red line about the one million gallon per day allocation. He said that this is something that bothers him. He said that Hillsborough did have an allocation and they decided that they did not want to pay for it and gave it up. Orange County has been paying every year. He said that if this resolution is going to say how much OWASA has paid, this resolution needs to say how much Orange County has paid. He said that it seems that if the State has had the County paying all these years and then there is a new plan with no payment, then he would like to get the money back. He would like to ask for this money back in a separate resolution because it has had no bearing on an allocation of water from Jordan Lake. He suggested that OWASA do the same thing. Ed Kerwin said that during the last round of allocation, OWASA voluntarily asked to reduce the allocation from 10 to 5 million gallons per day and the State did reimburse. Commissioner Jacobs made reference to the point that Commissioner Gordon is making and said that there is a context to this. This agreement was carefully crafted to balance concerns of four governments and OWASA. He said that this is a very truncated version. He urged staff to give more context, so that the Board is grounded with the right kind of information. Commissioner Gordon said that she thinks that there is time to get it right. Chair Pelissier asked when OWASA needed to have this done and when this is scheduled to be considered by the Towns of Chapel Hill, Carrboro, and Hillsborough. Frank Clifton said that Hillsborough will review it on January 24th. Craig Benedict said that Chapel Hill and Carrboro bdttfT ave it scheduled within the next two weeks. Commissioner Jacobs s6i6lhat'he does not think that Orange County needs permission from Chapel Hill and Carrboro to apply for an allocation from Jordan Lake. Ed Kerwin said that it is ridt'necessary to act tonight, but it is important to wrap this up by the spring and absolutely before summer break. Commissioner Yuhasz saidthat'the County Attorney has said that the language as presented here would void all of the "boundary restrictions included in the rest of the agreement, and he would like him to review the language to make sure that this is not done. He does not want the flexibility of the languagelo void the rest of the agreement. A motion was made by Commissioner Gordon, seconded by Commissioner Hemminger to refer this back to Manager /Attorney /relevant staff and the towns to provide a review of the proposed language changes in the context of the entire agreement, give the pros and cons for the proposed changes, and confer with the staff of the towns so as to craft language that takes into account the input from the staff of the county and towns. The information will also include how much money the County hat'spent to date on this. Craig Benedict asked if thbr6 was intent to include Orange County and the Town of Hillsborough in this agreement arid the Board said yes. VOTE: UNANIMOUS c. County Capital Projects Budget Ordinance Amendments – Budget Amendment — T� #6 –A The Board considered approving Budget Amendment #6 -A for $13,097, 651 for the County Capital Projects Fund. The proposed correct project budgets for the Lands Legacy (Attachment 1), Conservation Easements (Attachment 2), and Efland Sewer Development (Attachment 3) are shown in the background section of the agenda materials. Michael Talbert presented this item. He referred to the rose - colored handout which pertains to this item. The last two pages the County Commissioners have not seen before. Page 9 gives additional information describing how the proposed corrected budget figure of $6, 010, 452 was derived for the Lands Legacy Project Budget. Page 10 gives a description of the Lands Legacy Project Ordinance Duplicate Projects. The information on pages 9 and 10 is L 7-- - attached and hereby made a part of these minutes. This is a very large budget amendment of $13,097,651. He said that there is no financial impact of this amendment. This is a correction of prior years' double budgeting of three basic projects — Lands Legacy, Conservation Easements, and Efland Sewer extension and development. There is background on each of these three items in the abstract.. Information given below contains staff responses to Commissioner Gordon and Commissioner McKee's questions regarding this item. Questions from Commissioner Gordon: All, Here are my initial comments and questions for Item 7 -c (County Capital Projects - Budget Amendment #6 -A) with special attention to the Lands Legacy section of this item. My intent is to make sure that we all agree on the basic information that is the foundation on which the dollar amounts in this agenda item are based. After that is done, I may or may not need more information. A. General obligation bonds My recollection concerning the 2001 "Parks and Open Space Bond" and the budget for the "Lands Legacy Program" is different from some of the information shown in this agenda item. For example, on page 3 of the agenda abstract it is stated that the 2001 bond referendum included $17,000,000 for Parks and Open Space. I have attached the bond brochure which shows that the amount for Parks, Recreation and Open Space was $20,000,000, not $17,000,000. Of that amount there was $13,000,000 for specific projects and $7,000,000 for "Land Acquisition for Future Parks and Nature Preserves (Lands Legacy Program)." See page 4 of the attachment. My recollection of the 1997 bond` referendum is that it included $3 million for land acquisition (Lands Legacy) and $3 million for parks projects. My first request is that staff verify this information on the two bond referenda. What are the correct amounts for the 1997 bond and the 2001 bond? B. Lands Legacy budget The next thing to do is to determine the correct amount for the 1997 bonds and the 2001 bonds in the Lands Legacy Project Budget, and how those amounts were determined. We should be clear about what is included in the Lands Legacy Program and what is not. For example, on page 4 of the agenda abstract, it is stated that funding the following three projects should have reduced the Lands Legacy project by $1,700,000: Homestead Aquatics, Cedar Grove Park, Fairview Park. According to my understanding, these three projects were to be funded from the $13 million dedicated to specific projects and not from the $7 million for Lands Legacy. That is because the Lands Legacy Program is for land acquisition for future parks and nature preserves. What is the staff understanding of which projects are to be funded from Lands Legacy funds, and which projects are to be funded from funds for parks and other specific projects? Thank you in advance for your response to these questions and comments. Alice Gordon MEMORANDUM To: Clarence Grier, Director of Financial Services From: Michael Talbert, Deputy Director of Financial Services 4 Date: January 19, 2011 Re: Response to Question frorr Commissioner Alice Gordon Question: Item 7 -c A. General Obligation Bonds Yes you are correct in 2001 the voters of Orange County approved the issuance of $75 million dollar of General Obligation Bonds. Included in the $75 million total was $20 million approved for Parks and Open Space. And, in 1997 the voters approved a $56 million dollar Bond Referendum which included $6 million for parks and recreation facilities. There was $3 million, included the $6 million, pledged for the development of park facilities. November 2001 Parks and Open Space Bonds: Authorized $20,000,000 Issued as of 12/31/08 $14,500,000 Authorized and unissued 12 /31/08 $ 5,500,000 On April 24, 2009 the BOCC approved the issuance of $28.2 million of alternative financing bank qualified tax exempt debt;-,including $2.8 million for parks and open space. The BOCC approved the $2.8 million to replace part of the $5.5 million originally authorized in 2001 but lapsed in 2008. It is the intent of BOCC to issue the remaining $2.7 million for Parks and Open Space when financing is sought for elementary #11. 4/24/09 Alternative Debt Financing $ 2,800,000 6/16/09 Capital Project Ordihance Amendments - Projects Funded Homestead Aquatics $ 500,000 Closed Cedar Grove Park 500,000 Active Fairview Park 700,000 Active Lands Legacy 1,100,000 Active Total `?` '$ 2,800.000 Attached are the minutes from the BOCC meeting on 6/16/09 cm as general obligation bonds, or as alternative financing. 3. Provide to the BOCC in the fall, preferably in September 2009, a status report on the 2001 bond projects, including the amount of 2001 bond funds (or substituted alternative financing) that was spent on each project. 4. Adopt the "Capital Project Monitoring and Administrative Procedures" in principle and provide the two school systems with an opportunity to comment. TWO ADDITIONAL POINTS Commissioner Gordon made two additional points about the capital project ordinances. A. The Lands Legacy capital project ordinance was added to the agenda. Commissioner Gordon noted that the Lands Legacy capital project ordinance was added to the agenda for this item, and therefore that ordinance should be included in the ones that are approved. See the dark pink sheet that had the revised agenda item along with the ordinance. !•D t` B. Gary Humphreys provided answers to questions in the second memo (6 -2e). Commissioner Gordon also noted'that the Commissioners received an email from Gary Humphreys giving artswdrs to questions in her second memo, and she read some of the answers into the record. Commissioner Jacobs said that at the meeting in May he raised a question about the School Capital Reserve Fund, which Gary Humphreys was not clear about — what it was, where the money came from, and what its original purpose had been. Gary Humphreys said it has been budgeted for construction and a lot of other different purposes in the past: Some of it was transferred back to the general fund. Commissioner Jacobs asked for staff to go through and find when the fund was started and history and how-it was used and if it is necessary in 2009- 10. A motion was made byCommissioner Gordon, seconded by Commissioner Nelson to: 1. Approve the amended capital project ordinances, as revised by the Commissioners during their discussion. This means that it is the capital project ordinances themselves that are being approved, and not the text explaining the ordinances in other parts of the agenda materials. 2. Approve the following statement,with respect to the relationship of the 2001 bonds and alternative financing:°,._,, 37 The Board of County Commissioners (BOCC) has authorized the substitution of alternative financing for certain projects approved by the voters in the 2001 bond referendum. In the future the remaining $2.7 million debt may be issued as general obligation bonds, or as alternative financing. 3. Provide to the BOCC in the fall, preferably in September 2009, a status report on the 2001 bond projects, including the amount of 2001 bond funds (or substituted alternative financing) that was spent on each project. 4. Adopt the "Capital Project Monitoring and Administrative Procedures" in principle and provide the two school systems with an opportunity to comment. 5. Direct staff to make a report on the School Capital Reserve Fund, including a definition of what it is and the history of its use. VOTE: UNANIMOUS B. Lands Legacy Budget David Stancil provides the Board an annual update called the "Lands Legacy Funds Status Report" each year. He is scheduled to present this update to the BOCC at the February 15, 2011 Board Meeting. Attached is; information on Lands Legacy expenditures furnished to the Board as of July 1, 2009. With the approval of items 7.c & 7.d on 1/20/11 we will close out much of the Lands Legacy 10 year history. Financial Services; and the Department of Environment, Agriculture, Parks and Recreation are in agreement as to. the remaining funds available for future Lands Legacy projects as of July 1, 2010. I will be glad to sit down with every Commissioner and go over all projects funded over the past 11 years and the funding sources for each project if that will help you understand the history of Lands Legacy. MEMORANDUM To: Clarence Grier, Director`of Financial Services From: Michael Talbert, Deputy Director of Financial Services Date: January 14, 2011 Re: Response to Question from Commissioner Earl McKee Question: What was the amount of alternative debt financing sold to replace Parks and Open Space Bonds authorized in 2001, since the authorization lapsed in 2008? Specifically what was the amount of alternative debt financing sold for Lands Legacy projects, and which projects were financed with the proceeds from the sale? Background: In 2001 the voters of Orange County approved the issuance of $75 million dollar of General Obligation Bonds. Included in the $75 million total was $20 million approved for Parks and Open Space. There is a 7 year window to issue General Obligation Bonds after the voters authorized the bonds in November 2001. As of the end of 2008 only $14.5 million of the authorized Parks and Open Space bonds had been issued and the authorization to issue the additional $5.5 million lapsed. Or April 24, 2009 the BOCC approved the issuance of $28.2 million of alternative financing bank qualified tax exempt debt, including $2.8 million for parks and open space. The BOCC approved the $2.8 million to replace part of the $5.5 million originally authorized in 2001 but,'19ipsed in 2008. It is the intent of BOCC to issue the remaining $2.7 million for Parks and Open Spafce when financing is sought for elementary #11. ;Iko , 4/24/09 Alternative Debt Financing Projects Funded Homestead Aquatics Cedar Grove Park Fairview Park Lands Legacy Total Lands Legacy $ 500,000 $ 2,800,000 500,000 ' 700,000 1,100,000 $ 2,800.000 Status Closed Active Active Active 4/24/09 Alternative Debt Financing $ 1,100, 000 Available Balance as of June 30, 2010 After 1/20/11 BOCC Action Closing of Prior Years Activities $ 860,809 Fiscal 2009/2010 Activity Purchase of Historic Moorefield property As an addition to Seven Mile Creek Preserve $ 151,000 Fiscal 2007/2008 Activity Purchase of Eno River Confluence Property 88,191 Total $ 1,100,000 Commissioner Gordon thanked Michael Talbert for sitting down and meeting with her about this issue and for the inforr-paton he gave to her and gave in answer to Commissioner McKee's email questions. She s "id'that the background materials from Michael Talbert need to be in the minutes.` Chair Pelissier thanked Michael Talbert and the Finance staff for helping to find these errors and correcting them. Commissioner McKee said that he also spent time with Michael Talbert reviewing this information and it does not bother him so much that the County has to fix this error, but that it occurred in the first place. He hopes that this is never repeated. He said that the worst scenario did not occur, which would have been for the County to have approved the $10 million Lands Legacy purchase and then °find out six months later that there was no money. He asked Michael Talbert about the actual cash on hand in the Lands Legacy Program. Michael Talbert said that it is $1.86 million. Commissioner Hemminger feels confident that the staff is being very proactive with this. A motion was made by Commissioner Hemminger, seconded by Commissioner Jacobs to approve Budget Amendment #6 -A for $13,097,651 for the County Capital Projects Fund. Commissioner Jacobs made. reference to the rose sheet and asked about the statement, "it is our intent to issue the remaining $2.7 million for parks and open space when financing is sought for Elementary School #11." Michael Talbert said that this was part of the motion when the County Commissioners approved the $2.8 million, which was sold in April 2009, knowing that they had authorized $20 million in 2001 bonds. Up until that point, in December 2008, the County had sold $14.5 million that was dedicated to parks and open space. When the County decided to issue $33 million in new debt there were some technicalities in the size of the bond issue to keep it qualified and get a preferred interest rate. Therefore, the County Commissioners decided to only issue slightly less than $30 million instead of $33 million. When this was done, there was a downsizing from $5.5 million to $2..8 million. The $2.7 million will be additional proceeds over and above the $1.86 million. Frank Clifton said that there are a lot of accounting and budgeting transactions that were going on simultaneously with two different departments. Now these two departments are combined — Finance and Budget — and this should never happen again. Commissioner Foushee arrived at 8:27 PM. Commissioner McKee said that he is concerned that the original bond funds were put before the voters and approved and in 2008 the unissued bond money lapsed. With that lapse it was no longer possible to issue'the remaining amount of the bonds for any of these programs. Rather than going back to the voters, the money was obtained through alternative financing. He does not think that there is anything wrong with doing that, but it is circumventing the original intent. He said that he knows that the reallocation of monies from one fund to another to make up for shortfalls'is a standard practice, but he thinks that the funds should be returned to the original designated -rise as quickly as possible to account for that return. Clarence Grier said that dhe of the things that staff recognized was that a lot of the communication in the past that should have been provided to the Board of County Commissioners was not provided. He assured the County Commissioners that he would always communicate with them. " VOTE: UNANIMOUS d. Closing of County Capital Projects The Board considered closing seven completed County Capital Projects and closing prior years' activities in six active County Capital Projects. The details for closing these projects are shown in the schedules on page 3 of the agenda materials. Michael Talbert summarized this item. BACKGROUND: The Comprehensive Annual Financial Report for June 30, 2010 has 86 capital projects with activity in the County Capital Projects Fund. Over the past eight years, few if any capital projects were closed even though many have been completed for several years. On October 26, 2010, the Board was presented the second draft of a revised Five Year Capital Investment Plan. The format was discussed and changes were requested to improve that format and provide the Board with information that is necessary to make Capital Funding decisions. One component of the Capital Investment Plan is to review active Capital Projects and close projects as completed. As of June 30, 2010, there are seven completed County Capital Projects that can be closed. Attached is a detail schedule of the completed projects with the total project budgets of $9,688,609 to be closed, if approved by the Board. Revenues exceed expenditures by $6,300 and these funds will be closed to County Capital Projects Fund Balance. The County also funds County Capital Projects that have a scope of ten or more years and have had significant activity over the past ten years. The funding sources for these projects involve multiple funding sources, including Bond Issues and Pay -as- you -go funding. These projects will be part of future Capital Investment Plans and the projects will remain active. Closing prior years' activities will improve accountability, transparency, and understanding of available balances. Attached is a schedule of six projects with the total project budgets of $16,490,118 to be closed, if approved by the Board. Michael Talbert said that it is,not the accounting system's function to keep up with the project history from inception until 15 -20 years later. It is only to keep up with the current budgets and the ability to go forward with that. The staff will track and keep up with historical information. Commissioner Gordon asked for changes in some of the titles of the schedules to make them more understandable and Michael Talbert said he would do that. A motion was made by Commissioner Foushee, seconded by Commissioner Hemminger to approve the closing of seven completed County Capital Projects and close prior years' activities in six active County Capital Projects. VOTE: UNANIMOUS Consideration of Item 4 -f: f. Amendment to the Oran'46 County Personnel Ordinance, Article IV, Section 6.0. Sick Leave and Correction of "Previous Amendment to Article VI Sections 5.1 and 5.2 of The Position Classification Plan The Board considered an amendment to the Orange County Personnel Ordinance, Article IV, Section 6.0, Sick Leave, to align Sick Leave accrual and usage with Annual Leave and to correct the September 2, 2010 amendment to Article VI, Theo Position Classification Plan, Sections 5.1 and 5.2. Since Commissioner Foushee had arrived, Chair Pelissier asked that the Board consider this item in order to get a unanimous vote. A motion was made by Commissioner Hemminger, seconded by Commissioner McKee to approve the amendment to the Orange County Personnel Ordinance, Article IV, Section 6.0, Sick Leave and corrected the September 2, 2010 amendment to Article VI, Sections 5.1 and 5.2 of the Position Classification Plan. VOTE: UNANIMOUS 8. Reports a. Progress Report on Telecommunication Issues within Orange County and Review of Request to Place Telecommunication Plan Tower Site Map on February 28, 2011 Quarterly Public Hearing The Board received an update on staff activities concerning the County's communication(s) needs and reviewed a request to place the Telecommunications Plan Tower Site Map on the February 28, 2011 Quarterly Public Hearing agenda. Progress Report on Telecommunication Issues and Review of request to Place Telecommunication Plan Tower Site Map on the February 2011 Quarterly Public Hearing Agenda. January 20, 2011