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Home My WebLink AboutORD-2011-009 School Capital Projects Budget Ordinance Amendments – Budget Amendment #7-BOZD -90H - ooq ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: February 15, 2011 Action Agenda Item No. — h SUBJECT: School Capital Projects Budget Ordinance Amendments — Budget Amendment #7 -B DEPARTMENT: Financial Services PUBLIC HEARING: (Y /N) No ATTACHMENT(S): Attachment 1: Reconciliation of Under- funded Projects as of 6/30/10 ' Attachment 2: Capital Project Monitoring and Administration Procedures INFORMATION CONTACT: Clarence Grier, (919) 245 -2453 Michael Talbert, (919) 245 -2153 PURPOSE: To approve Budget Amendment #7 -13 appropriating $192,719 of fund balance in the General Fund for transfer to the School Capital Project Fund. BACKGROUND: The Board of County Commissioners was presented a two year plan on February 3, 2009 related to School and County Capital Projects. The plan has been followed the past two years with funds appropriated to fund under - funded County and School Capital Projects. Funds transferred from completed projects to fund under - funded projects, and projects completed in the past 10 years have been closed. As part of the on -going process of reviewing School Capital Projects, County staff has met with both School Systems to reconcile project budgets as of June 30, 2010. This reconciliation has led to the need to appropriate additional revenues to fund under - funded projects. Attachment 1 lists under - funded and over - funded projects and the net shortfall in the Schools Capital Projects Fund as of June 30, 2010. After completed projects were closed and resources reallocated within the School Capital Projects Fund, the remaining revenue needed to fund under - funded projects is $192,719. On June 16, 2009 the Board was provided a copy of a new internal administrative monitoring procedure for School Capital Project Ordinances. Financial Services is following that procedure by: 1. Meeting with both school systems twice a year to compare records and resolve any differences. 2. Closing out project budgets when a project is complete. 3. Communicate with both school systems to reconcile accounting records as needed to address changes in priorities, funding issues, changes in funding sources and bring these issues to the Board as needed. 2 A copy of the capital project monitoring procedures (previously included as an attachment to a June 16, 2009 Board agenda item) are provided as an attachment to this abstract as information. FINANCIAL IMPACT: An appropriation of $192,719 of fund balance in the General Fund for transfer to the School Capital Project fund is necessary to complete the funding needed to bring project funding into alignment. RECOMMENDATION(S): The Manager recommends the Board approve Budget Amendment #7 -B as outlined below for the County Capital Projects Fund: Budget Amendment 7 -13 General Fund Expenditures: Transfer to Schools Capital Projects $192,719 Revenues: Fund Balance Applied $192,719 3 Attachment 1 Schools Capital Projects Reconciliation of Under - funded Projects as of 6/30/10 Revenues: Under - Funded Projects 50005 Hillsborough Elementary $ 95,000 50006 Orange High School $ 68,235 50008 Stanford Middle School $ 190,947 51011 Technology $ 244,099 51016 Central Elementary Air $ 9,000 54007 Mobile Classrooms $ 15,000 $ 622,281 Over- Funded Projects 53024 School Other $ 279,904 53050 Morris Grove Elementary $ 113,715 54008 Parking Lot Improvements $ 50,000 $ 443,619 Net Revenue Under- Funded $ 178,662 Expenditures: Prior years project to be closed 51018 Bus Garage $ 14,057 Transfer from the General Fund Needed $ 192,719 A�+o,c h( en% a Gapital Project Monitoring and Administration Procedures 1. Capital Project Ordinances Abstracts for the adoption of Capital Project Ordinances will clearly explain the purpose of the Capital Project, anticipated timeframe for the project, the revenue sources funding the project and the anticipated timing for receiving those revenue sources. Abstracts for Amendments to existing Capital Project Ordinances shall clearly state the reason for the amendment. Project Ordinances will be balanced as to revenue and expenditures. When funding is being moved from one project to another project the term "Transfer to other Project' and 'Transfer from other Project' will not be used in Capital Project Ordinances to identify the Source of Revenue in a project or the use of funds. This type of account will not used in MUNIS. The original source of funds (ex. 2001 Bond Funds, Alternative Financing, Transfer General Fund) will be maintained in order to properly identify and track'the type of funds being used. This will also eliminate the use of transfers within the same fund which is not in accordance with Generally Accepted Accounting Principles (GAAP). 11. Contracts related to Capital Projects Departments should not proceed with a capital project until a Capital Project Ordinance is approved which provides adequate funding to proceed. Contracts related to capital projects which are brought to the Board of County Commissioners for approval will be reviewed by the Financial Services Budget Office to determine- if there is currently a Capital Project Ordinance in place to totally fund the contract. If sufficient funds are not currently- appropriated a Capital Project Ordinance or Amendment will be brought forward to fund the contract at the time the contract is presented to the Board for approval. 11I.Reviewing Capital Prolect Activity Departments will be responsible for reviewing the information and financial activity on the Munis system related to their capital projects on a regular basis. Any potential problems identified or questionable transactions should be addressed on ' a proactive basis. This would include such items as anticipated revenue that is not showing on MUNIS as being received, transactions on Munis for which there are questions, or project budget amounts which do not appear to agree with approved Project Ordinances. The Financial Services Department will review the Capital Project Funds quarterly. Project budgets in Munis will be reviewed by the Budget Office to insure that they agree with adopted ordinances and that budgeted project revenue* and expenditures are equal. The projects will also be reviewed for indications of problems such as budgeted revenue which has not been received 4 5 or potential over - budget conditions. Indicated problems will be discussed with the responsible department to determine any action that is needed and who is responsible for taking the action. IV. Closing Capital Project Ordinances Capital Project Ordinances are considered to be for the life of the project. Projects should be closed out in as soon as possible once the project is completed. For audit and financial 'reporting purposes Capital Project Ordinances and activity have to remain in the financial records till the fiscal year is closed if any activity has taken place during a fiscal year. Active Capital Projects Ordinances will be reviewed by the Financial Services Department after the completion of each fiscal year. A determination will be made in consultation with the responsible Department or School System if there will be any further activity beyond the end of the fiscal year related to the project. Those capital projects that will have no further activity will be brought to the Board of County Commissioner for closure of the Capital Project Ordinance: Capital Projects Ordinances which have continual funding through annual amendments will be amended to close prior year funding for which activity is completed. V. Use of Capital Project Funds Capital Project funding should be used for capital purposes. Exceptions to this would be startup costs associated with new schools. Renovation and major replacements (roofs, HVAC) can be included within the definition, of capital projects however normal ongoing maintenance expenditures are not. Note —these guidelines are to be discussed with the school system staff to arrive at agreement about such things as. what should be purchased-from capital funds; the definition of start-up costs, review processes and project closure. Attachnment 1 Schools Capital Projects Reconciliation of Under - Funded Projects as of 6130/2010 By School System Orange County Schools 50005 Hillsborough Elementary 50006 Orange High School 50008 Stanford Middle School 51011 Technology 51016 Central Elementary Air 51018 Bus Garage Total Orange County Schools Chapel Hill Carrboro City Schools 54007 Mobile Classrooms 53024 School Other 53050 Morris Grove Elementary 54008 Parking Lot Improvements Total Chapel Hill - Carrboro City Schools U Over Under Funded Funded $ $ 95,000 68,235 190,947 244,099 9,000 14,057 621,338 - 15,000 279,904 - 113,715 50,000 - 443,619 15,000 Total Both Schools Systems $ 443,619 $ 636,338 1 2 Net transfer need from General Fund to Balance Projects (1 -2) $ 192,719 Orange County Schools was under funded by $636,338. Chapel Hill — Carrboro City Schools was overfunded by $443,619. Just as a point of clarification, how are project amounts handled for an item that could be common to both CHCCS and OCS (e.g. technology)? For example, does project "51011 Technology" include amounts for both school systems combined, or is this project just for one of the systems? Answer: Both School Systems capital projects are accounted for separately. Each school system will have individual projects titled Technology. The 51011 Technology referred to above represents Orange County School A motion was made by Commissioner Jacobs, seconded by Commissioner Hemminger to approve Budget Amendment #7 -B appropriating $192,719 of fund balance in the General Fund for transfer to the School Capital Project Fund. VOTE: UNANIMOUS I Proposed Changes to the Upper Neuse River Basin Association Bylaws The Board considered proposed changes to the Upper Neuse River Basin Association bylaws and related information. County Attorney John Roberts reviewed this item: Chair Pelissier echoed Commissioner Foushee's comments. She said that this plan addressed items in the County's Comprehensive Plan. Commissioner Hemminger agreed with planning for the future. She said that because there are no monies, it is a good time to develop a new parks and recreation master plan so that they can focus on the resources available now. David Stancil said that this is the plan. Commissioner Jacobs said that one reason that this program has been a success is because the County has sought funding partners and initiated communication. He also pointed out that farmland and other conservation easements did not come through the bonds, so the Commissioners set aside $3 million for conservation easements. Commissioner Gordon supported the other comments about planning. She is in support of this plan. A motion was made by Commissioner Foushee, seconded by Commissioner Gordon to approve the Lands Legacy Action Plan for the current and upcoming fiscal years (FY 2010 -11 and FY 2011 -12). VOTE: UNANIMOUS b. School Capital Projects Budget Ordinance Amendments — Budget Amendment #7 -B The Board considered approving Budget Amendment #7 -B appropriating $192,719 of fund balance in the General Fund for transfer to the School Capital Project Fund. Financial Services Director Clarence Grier said staff is asking the Board to approve this appropriation to reconcile project budgets. Deputy Director of Financial Services Michael Talbert said that he hopes that this ends what he has been doing for the last year in reconciling budgets. Attachment 1 lists the individual projects. Commissioner Gordon thanked the staff for answering her email questions. These questions and answers are shown below: FEB. 15, 2011 BOCC MEETING - QUESTIONS ON ITEMS 7b - COMMISSIONER GORDON ITEM 7 -b - Budget Amendment In Attachment 1, page 3, please identify the costs associated with the Chapel Hill - Carrboro City Schools (CHCCS) and those associated with the Orange County Schools (OCS). Answer: See reconciliation below