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HomeMy WebLinkAboutAgenda - 01-29-2008-2ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: January 29, 2008 Action Agenda Item No. SUBJECT: Discussion of Recommended Orange County FY 2008-18 Capital Investment Plan (CIP) DEPARTMENT: Budget PUBLIC HEARING: (YIN) No ATTACHMENT(S): Recommended FY 2008-18 CIP located INFORMATION CONTACT: online at Donna Coffey, (919) 245-2151 http://www.co.orange.nc.us/budget/2008- 18CIP-ManagerRecommended.asp PURPOSE: To discuss the Recommended Orange County FY 2008-18 Capital Investment Plan (CIP) including options for allocating anticipated proceeds from the Local Revenue Options scheduled for the May 6, 2008 referendum. BACKGROUND: 2008-18 Capital Investment Plan (CIP) The Board of County Commissioners received the proposed FY 2008-18 County and Schools Capital Investment Plan (CIP) (hftp://www.co.orange.nc.us/budget/2008- 18CIP-ManagerRecommended.asp) on November 5, 2007 and has, on a number of occasions since then, had an opportunity to exchange ideas with staff and the public about the proposal. As presented to the Board, the plan includes funded as well as unfunded capital needs for the County, Chapel Hill Carrboro City Schools and Orange County Schools. Definition of Funded and Unfunded Capital Needs It is important to clarify the differences between funded and unfunded capital needs. 4 Funded capital needs include projects whose costs fall within current and future revenues available to the County. o For purposes of the FY 2008-18 CIP includes pay-as-you-go funding and unspent 1997 and 2001 voter approved bonds funds. Pay-as-you-go funding consists of the net proceeds of dedicated sales and property tax CIP revenues after School and County debt service obligations have been satisfied plus project related grants and fees. 4. Unfunded capital needs include projects whose costs fall beyond current and projected revenues available to the County. In order to complete the projects that are currently considered unfunded, the County would have to either acquire new debt through voter approved bonds and alternative third party financing or have access to a new local government authorized revenue. It is important to note that while projects fall into the unfunded category, it does not mean that the County does not plan to complete the project. It does mean that in order to complete individual project plans, Commissioners and project partners, such as School Boards, must engage in further discussion regarding infrastructure/facility needs, capital funding and annual operating costs. Next Steps for 2008-18 Capital Investment Plan The chart below offers an updated timeline for adoption of the FY 2008-18 Capital Investment Plan. The timeline incorporates the addition of a second FY 2008-18 CIP related Public Hearing and discussions during January and February 2008 regarding the recently authorized local revenue options. February 5, 2008 Second FY 2008-18 CIP Public Hearing 2008 February 12 BOCC Work Session - further discussion of CIP, if , needed, and Local Revenue Options February 19, 2008 BOCC Approval of FY 2008-18 School and County CIPs March/April 2008 Formal Adoption of School and County Capital Project Ordinances Local Revenue Options During the 2007 legislative session, the General Assembly granted counties the ability to enact new revenue options. The new revenue options available for counties include a .4% land transfer tax and an additional %-cent sales tax. There are several important factors related to the new options: Counties must have voter approval in order to enact either of these taxes 4. The ballot can include referenda for both the land transfer tax and the %-cent sales tax There are no restrictions on the use of either of the new local revenues Should the Board choose to voluntarily designate the uses of the new revenue(s) (for example for capital infrastructure or to retire debt), the ballot language cannot stipulate uses of the new revenues 4 Counties cannot enact both revenues - should Commissioners include both referenda on the ballot and voters agree to both of them, Commissioners would have to choose which local revenue to authorize On September 19, 2007, Commissioners decided to seek voter approval of the local revenue options on the May 6, 2008 ballot. Remaining Decision Points and Timelines for Local Revenue Options The following items remain for the Board to decide with regard to the Local Revenue Options: Use of New Revenues - While counties are not restricted with regard to the use of the new local revenues and the ballot language cannot stipulate uses of the new revenues, the Board may wish to state their intent to designate the proceeds from the new revenues for specific purposes. 4 Which Tax(es) to Include on the Ballot - As stated 'earlier in this agenda abstract, the Board has the discretion to put the land transfer tax, the 1/-cent sales tax or both of the new revenue referenda on the ballot. Per information from the Orange County Board of Elections, the deadline for Commissioners to notify the Board of Elections of their intent to seek voter approval of the local revenue options is February 29, 2008. The Board plans to conduct a public hearing on February 5, 2008 in order to seek public input regarding the Local Revenue Options. Following the public hearing, Commissioners will have the opportunity at the February 7 and 12 work sessions to discuss the options further and at the February 19, 2008 regular meeting to make final decisions regarding the use of the new revenues and which tax(es) to include on the ballot. FINANCIAL IMPACT: During the work session, Budget Director Donna Coffey plans to share alternatives for use of the proposed Local Revenue Options. For details on individual County and Schools funded projects, refer to the on-line version of the proposed FY 2008-18 County and Schools Capital Investment Plan (CIP) (http://www.co.orange.nc.us/budget/2008-18CIP- ManagerRecommended.asp). RECOMMENDATION(S): The Manager recommends that the Board of County Commissioners discuss the Recommended FY 2008-18 Capital Investment Plan and Local Revenue Options and provide direction to staff.