HomeMy WebLinkAboutAgenda - 06-05-2014 - 12
• ORANGE COUNTY_
BOARD OF COMMISSIONERS
•
ACTION AGENDA ITEM ABSTRACT
Meeting Date: June 5, 2014
Action Agenda
Item No. 1
SUBJECT: FY2014 -15 Budget Work Session
DEPARTMENT: County Manager and Finance PUBLIC HEARING: (Y /N) No
and Administrative Services
ATTACHMENT(S):
A. North Carolina Association of County
Commissioners — FY 2013 -14 Budget
and Tax Survey
B. NC Public Schools /DPI -Per Pupil
Allocations by County
C. School Fund Balance Policy
D. Sportsplex FY2014 -15 Operating
Budget Detail
INFORMATION CONTACT:
Michael Talbert (919) 245 -2308
Clarence Grier (919) 245 -2453
PURPOSE: For the Board to have an opportunity to review and discuss the Durham Technical
Community College, Orange County Schools and Chapel Hill - Carrboro City Schools Districts
FY2014 -15 Budgets, Sportsplex and County departmental budgets, including any fee schedule
change requests and associated non - departmental items.
BACKGROUND: The County Manager released the FY2014 -15 recommended budget on May 20,
2014. Since that time, the Board would have conducted two public hearings to receive residents'
comments regarding the proposed funding plan. Tonight's work session is the first opportunity the
Board has had to discuss next year's proposed funding plan in regards to funding for the local
School Districts, Durham Technical Community College, the Sportsplex, and begin discussions with
County departments, including proposed fee schedule changes, and associated non - departmental
items. The Manager followed the following guidelines in preparing the recommended budget:
The County's operating budget was balanced without an increase in the property tax rate.
The current property tax rate is 85.8 cents per $100 assessed valuation.
The funding provided to the local School Districts to fund day -to -day operations (current
expense and recurring capital), long -range capital, fair funding, and the repayment of school
related debt totals $92.3 million, which equals 49.3% of the County's FY2014 -15
Recommended General Fund Revenues. Educational Funding, including additional non -
mandated services (school health nurses and school resource officers) totals $89.7 million,
which equals 49.9% of the County's FY2014 -15 Recommended General Fund Revenues.
• During tonight's work session, the Board plans to discuss the following budget related topics:
3
Durham Technical Community College, Chapel Hill Garrboro City Schools and Orange •
County Schools FY2014 -15 Operating Budgets
Sportsplex
County Departmental budgets, including any fee schedule change requests, and associated
non - departmental items
County Support of Local Boards of Education
In previous meetings and discussions with the County Manager, . the Board of County
Commissioners decided the funding for schools for FY2014 -15 should be as close to the 48.1%
target of County General Fund revenues. The target is exclusive of the County's share of Durham
Technical Community College funding and is consistent with the school funding target endorsed by
Commissioners in May 2000. The following school related components are included in calculation of
the target percentage:
Local Current Expense - supplements State and Federal funds received by each district for
the day -to -day operation of schools. Examples of expenses paid from these funds include
salaries and benefits for locally paid teachers and utilities. North Carolina statutes mandate
boards of county commissioners provide local current expense monies to school districts.
Counties having more than one school administrative unit, as is the case in Orange County,
are required to provide equal per pupil appropriations to each system. The funding level,
however, is discretionary and varies from county to county.
• Recurring Capital — pays for facility improvements, equipment, furnishings, and vehicle and
bus 'purchases. State statutes mandate counties to fund recurring capital. However, the
amount of money counties allocate to this function is discretionary and varies from county to •
county. Equal per pupil allocations required by law for current expense appropriations are not
applicable to this category of local school funding.
Long -Range Capital — supports school capital projects through the County's Capital
Investment Plan (CIP). Capital projects are funded through a combination of State and local
bonds, non -bond financing and pay -as- you -go funding sources. Pay -as- you -go funding
includes dedicated half -cent sales tax .revenues and property tax earmarked under the
Board's April 5, 2011 Capital Funding Policy. The Capital Policy also allows School
Construction Impact Fees to offset School related debt service. Similar to Local Current
Expense funding, the amount of money counties allocate to long -range capital expenditures
is discretionary and varies from county to county.
Per the April 5, 2011 Commissioner approved County Capital Funding Policy, it is the intent
of the Board of County Commissioners to continue a capital funding policy that reflects the
implementation of the Board of Commissioners' resolution of November 16, 2004 that the
Board `does hereby adopt in principle a policy of allocating a target of 60 percent of capital
expenditures for school projects and 40 percent of capital expenditures for county projects
over the decade beginning in calendar year 2005" The Policy further states, "However, there
will be times when the County will be bound fiscally and unable to achieve full funding. During
those times, Commissioners may find it necessary to depart from the Policy."
School Related Debt Service — repayment of principal and interest on School related debt,
including general obligation bonds and private placement loans. North Carolina statutes •
require counties to pay for school related capital items such as acquisition and construction
of facilities. In instances where counties borrow funds to pay for such items, the State
mandates counties to repay the debt. The amount of money counties borrow for school
related projects is discretionary and varies from county to county.
• Fair Funding — represent funds, split equally between the two school districts, to offset costs
of safety and health services such as School Resource Officers and School Nurses. The
State does not mandate counties to provide funding for these resources.
It is important to note, the 48.1 % target only includes funding for the items identified above — current
expense, recurring capital, long-range capital, school related debt service and fair funding. It does
not include additional non-mandated County financial support Orange County Commissioners
commits to schools. Examples of such appropriations include supplementing state funding for school
health nurses, and school resource officers. The total cost for these non-mandated expenses is
approximately $1.25 million. In addition, the County also financially supports non-profit agencies
such as Communities in Schools that provide after school programs for middle school students. The
chart below summarizes Orange County's financial support to the two school districts.
Orange County Financial Support to
Chapel Hill - Carrboro City and Orange County Schools
FY 2014-2015 Recommended Budget
Current Expense $ 67,959,528
Recurring Capital 3,000,000
Long - Range Capital 3,724,849
School Related Debt Service 16,608,984
Fair Funding 988,000
School Health Nurses 697,380
School Social Workers -
School Resource Officers 556,424
Total Orange County Support to Local Schools Districts 93,535,165
Proceeds from CHCCS Special District Tax 21,767,826
Total Financial Support to Local Schools Districts $ 115,302,991
Both School Districts have requested increases in per pupil funding that would require combined
increases in funding ranging between $6.8 to $7.3 million dollars. To fund the request of each district, it
will require additional revenues from apropertv tax increase or maior reductions in Countv funded
services elsewhere. We have included funding the increased student enrollment of 294 students and an
increase of $95 per pupil to a total per pupil funding at $3,364, which represents a $2.9 million increase
in the funding between both districts.
Historical Mandated Education Funding Provided to Local School Districts over the Past Seven Years:
•
4
5
FY
Current
Expense
Recurring
Capital
Long Range
Capital
Fair
Funding
Debt -
Service
Mandated .
Total
2009
$ 60,582,479
$ 2,750,635
$ 7,818,826
$ 988,000
$
18,488,022
$ 90,627,962
2010
$ 58,508,208
$ 3,000,000
$ 4,311,827
$ 988,000
$
19,570,005
$ 86,378,040
2011
$ 59,371,992
$ 3,000,000
$ 5,159,091
$ 988,000
$
18,616,833
$ 87,135,916
2012
$ 59,375,382
$ 3,000,000
$ 2,628,969
$ 988,000
$
18,182,682
$ 84,175,033
2013
$ 62,389,900
$ 3,000,000
$ 3,724,849
$ 988,000
$
15,352,784
$ 85,455,533
2014
$ 63,466,704
$ 3,000,000
$ 3,724,849
$ 988,000
$
16,632,550
$ 87,812,103
2015
$ 67,959,528
$ 3,000,000
$ 3,724,849
$ 988,000
$
16,608,984
$ 92,281,361
If the Board of County Commissioners agree to increase the property tax rate to generate additional
revenues to address the current expense request of both school districts, increases in the property tax
rate outlined below will produce the following property tax revenues:
Property Tax Per Pupil
Tax Increase Revenues Generated Equivalency "
1 cent $1,638,241 $81.09
2 cents $3,276,482 $162.19
2.4 cents $3,931,778 $194.62
4 cents $6,552,964 $324.37
5.5 cents $9,010,326 $446.01
*Based on 20,202 Students
Additionally, the Chapel Hill - Carrboro City School District has requested the Board of County
Commissioners consider an increase in the special district property tax rate to fund their budget request.
If approved, the revenues generated by an increase in the special district tax would be as follows:
Property Tax Per Pupil
Tax Increase Revenues Generated Equivalency'
1 cent $1,029,085 $84.56
2 cents $2,058,170 $169.11
3.5 cents $3,655,824 $295.95
*Based on 12,353 Students projected for the CHCCS School District
Details - regarding recommended funding levels for local school districts and Durham Technical
Community College are located in the Education section of the budget document.
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•
• During tonight's work session, Commissioners will have the opportunity to dialogue with the Boards
of Education about county funding and anticipated State funding for schools next year. Attachments
A & B provide additional information of how Orange County compares with other counties within
North Carolina related to Current Expense funding per pupil, and other educational related funding
issues.
County Support of Orange County Campus of Durham Technical Community College
As with local school districts, counties in North Carolina are responsible for supplementing state and
federal appropriations to community colleges. For the most part, counties are responsible for day -to-
day operating costs such as utilities, security and custodians. Counties are not responsible for
teaching staff.
The recommended budget provides $1,008,123 to Durham Technical Community College for
FY2014 -15, which includes appropriations of current expense of $557,280, recurring capital of
$155,000, and $295,843 for debt service.
Sportsplex
Attachment D provides detail of the Sportsplex FY2014 -15 Operating Budget.
County Departments
During tonight's work session, Commissioners will have an opportunity to begin discussion with
County departments regarding their budgets, including fee schedule change requests and
• associated non - departmental items. Additional departments will be present at the June 11, 2013
work session. The total County appropriated initiatives total $102 million or 53% of the Manager's
Recommended FY2014 -15 General Fund Budget.
FINANCIAL IMPACT: Included in the Background Section.
RECOMMENDATION(S): The Manager recommends that the Board discuss the topics noted
and provide direction to staff, as appropriate.
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