HomeMy WebLinkAboutAgenda - 03-11-2008-1ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: March 11, 2008
Action Agenda
Item No. 1„
SUBJECT: Discussion Regarding Proposed Distribution Formula for Land Transfer Tax
Proceeds
DEPARTMENT: Budget PUBLIC HEARING: (Y/N) No
ATTACHMENT(S): INFORMATION CONTACT:
Donna Coffey, (919) 245-2151
PURPOSE: To discuss and provide feedback to staff regarding a proposed distribution formula
for the proceeds from a .4 percent Land Transfer Tax that allocates 60 percent of the proceeds
to Chapel Hill Carrboro City and Orange County Schools and 40 percent of the monies to the
County for parks.
BACKGROUND: At its March 6, 2008 regular meeting, the Board of Commissioners agreed to
use the proceeds from the proposed land transfer tax for currently unfunded or under funded
school and park capital projects. Should voters approve the transfer tax referendum in May
2008, the proceeds from the tax will become an additional revenue source for the County's ten-
year Capital Investment Plan (CIP).
Over the next two months, the County will be educating voters about the transfer tax and its
proposed uses. It will be important to the education effort to be able to identify for voters how
the tax proceeds will benefit the community. While the Board stated the purpose for which it
plans to use the new revenues, it did not identify a formula defining distribution of the proceeds
between the beneficiaries of the monies - a key component to identifying specific community
benefits.
Staff recommends that the distribution formula be consistent with the one outlined in the current
County Capital Funding Policy. The current funding formula allocates 60 percent of available
pay-as-you-go funds to schools with that 60 percent divided between the two school systems,
Chapel Hill Carrboro City Schools .and Orange County Schools, based on certified student
membership as of November 15 each year. In accordance with the policy, the formula allocates
the remaining 40 percent of available pay-as-you-go funds to County capital projects.
Based on Board discussion during the work session and potential approval of the distribution
formula at a future meeting, staff will update the County Capital Funding Policy at the
appropriate time dependent on the outcome of the May 6, 2008 referendum.
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FINANCIAL IMPACT: Based on current land transfer activity, staff projects annual revenues
from the proposed .4% Land Transfer Tax to generate $3.5 million. Using this assumption,
should the Board approve staff's recommendation that the distribution formula be consistent
with the current County Capital Funding Policy, monies available for schools and parks would
be:
RECOMMENDATION(S): The Manager recommends that the Board discuss the proposed
distribution formula for the proceeds from a .4 percent Land Transfer Tax that allocates 60
percent of the proceeds to Chapel Hill Carrboro City and Orange County Schools and 40
percent of the monies to the County for parks, and provide feedback to staff.
.4% Land Transfer Tax Distribution Formula Consistent With Current County
Capital Funding Policy: 60% to Schools and 40% to County