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HomeMy WebLinkAboutLong Range School Capital Funding Revised Policy Jl- l9 -etG 9 � Summary of Capital Policy (Note changes made to the November 19 draft are shown in bold print) Sources of Funds The following sources of funds will be allocated for Capital Projects and Debt Service: All proceeds from the Article 40 and Article 42 one half sales tax The North Carolina General Statutes require that 30 percent of the Article 40 and 60 percent of the Article 42 sales tax revenue be earmarked for school capital projects or debt service on debt issued for school capital projects. Revenue from the property tax as follows: $800,000 The equivalent of 2.7 cents on the tax rate based on valuation as of 1996-97. This earmarking will be adjusted each revaluation cycle. The amount necessary to retire the 1992 School Bonds. (In 19)7-98 this amount is $4.7 million.) The amount of the reduction in the Human Services function of the County budget (equivalent of one half of one percent of the budget or $50,300) in 1994-95 for automation projects in Human Services. Utilities Extension Fund - This amount may vary in that it based on the increase in property tax base as a result of expenditures in the Utilities Extension Capital project. The amount currently planned is $35,000 for 1997-98 and $25,000 for each year thereafter. Impact Fees for each school system. Public School Building Fund Other revenues that are restricted including, payment-in-lieu, grant funds, rental revenue and inmate fees as a result of the new jail addition. Debt Service Prior to funds being allocated for specific projects, all debt service, including private placement financing will be subtracted from the unrestricted funding sources. Allocation All sources of unrestricted revenue, less debt service is then allocated between County and School projects based on 50 percent of the net amount for School projects and 50 percent of the net amount for County projects. Funding between the two school systems will be allocated based on the 10th day enrollment adjusted each year. For examp le, the 10th day enrollment as of September 1996 will be the basis of the 1997-2007 Capital Improvements Plan. These percentages will be rounded to one decimal place. Impact fees will be projected and allocated to each school system, although these fees may be used to pay debt service. When impact fees are used to pay debt service, the equivalent amount of the projected impact fee will be allocated to each school system. For the first three years of the planning period (1997-98, 1998-99 and 1999-2000) impact fees are dedicated to the cost of the new schools. Funding Levels It is the intent of the Board of Commissioners to"hold harmless" School projects and County projects as identified by the amount of funding projected in the 1906-2006 Capital Improvements Plan. To achieve this intention, the following funding options will be used: The difference between the amount of general obligation debt service payments at the peak year of the debt schedule and the actual debt service payment will be earmarked for the Orange County Schools until the time that any shortfall that would have been realized by that system is made up. For County projects, beginning in 1998-99 the equivalent of one cent on the general fund property tax rate will be necessary. The Board of Commissioners in adopting this policy instructed staff to identify other funding options rather than a tax increase to make up this shortfall. The Board of Commissioners may consider shifting the one cent capital reserve fund to be dedicated to County projects (see Capital Reser"e section below). E. Capital Reserve The capital reserve fund, established by the Board of Commissioners in 1995-96 is equivalent to one cent on the General Fund Property Tax Rate (not adjusted for the 1997 revaluation of property but adjusted for revaluation of real property beyond the 1997 revaluation.) This reserve will accumulate during 1996-97 and 1997-98 with these funds used for site acquisition for schools and or recreation, or the combination of both. The Board of Commissioners will evaluate this reserve fund during 1998-99 to determine if this one cent reserve should continue. F. School/Parks/Recreation It is the intent of the Board of County Commissioners to evaluate each new proposed school in both School Districts for joint use to include park and recreation use. Recurring Capital Recurring capital for each School System will be based on the equivalent of three cents on the General Fund Property Tax Rate (not adjusted for the 1997 revaluation of real property but adjusted each revaluation thereafter.) Funds will be allocated to each school system based on the State Department of Public Instruction planning allocation which is the same method used to allocate current expense appropriation. Planning Period During each fiscal year, the Board of Commissioners shall adopt a ten year Capital Improvements Plan. The ten year plan shall include anticipated County capital expenditures costing $30,000 or more excluding equipment and anticipated school capital expenditures costing $50,000 or more, excluding equipment. Equipment, costing $1,000 or more can be considered as part of the Capital Improvements Plan. The first year of the adopted Ten Year Capital Improvements Plan shall be incorporated into the next annual operating budget recommended by the County Manager.