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HomeMy WebLinkAboutAgenda - 09-14-2006-1ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: September 14, 2006 Action Agenda Item No. 1 SUBJECT: DEPARTMENT ital and Debt Related Matters Manager/Budget PUBLIC HEARING: (YIN) No ATTACHMENT(S): Soccer Field Development Status Capital and Debt Capacity Notebook INFORMATION CONTACT: Rod Visser, 919-245-2308 Donna Dean Coffey, 919-245-2151 PURPOSE: To review information prepared by staff regarding the debt and tax rate impacts of various County and school capital projects, and to provide direction to staff regarding debt issuance plans to address these capital projects. BACKGROUND: At the August 31, 2006 work session, the Board reviewed background materials prepared by staff and asked for additional information related to the County's debt capacity and the affordability of a variety of County and school capital projects that are in various stages of planning, development, and constnaction. Specifically, Commissioners provided direction and requested additional information at that meeting (or in subsequent communication) about the paints listed below: o An assumption of 9% annual growth in the General Fund is too high. Focus debt capacity calculations on a 7% annual growth assumption. Consider an 8% growth assumption option as well. o Some preference was expressed not to exceed the current BOCC policy limiting debt service payments to 15% of General Fund expenditures. However, staff will solicit information from additional jurisdictions about established debt capacity ceilings, any examples of exceeding those, and circumstances involved (if applicable). o Show individual annual tax rate increases that accompanied the annual expenditure increases in the General Fund since 1989 that have produced average annual growth of 8.25%. o Provide rough estimates of operational, maintenance, and staffing cost increases associated with the specific projects listed at the August 31 work session for possible additional debt issuance. Provide an estimate of the tax rate impacts of those anticipated budgetary increases. o Show a 10-year planning horizon for additional debt capacity, reflecting band/alternative financing/pay-as-you-go projects, and plugging in cost estimates for other anticipated unfunded projects. o Provide an update on the overall status of soccer field development. To the extent possible in the time between work sessions, staff have conducted additional analysis and developed additional decision support materials regarding these points , These have been arranged in an accompanying notebook. At this September 14 work session, staff will present that research and other information intended to help the Board regarding various decision points related to debt issuance for these projects,. The conclusion of the staff analysis is that the projects reviewed from the August 31 work session, totaling roughly $67 million, as well as a County Campus and Library project with an estimated cost of $25 million, can be funded within the County's debt capacity for this and the subsequent three fiscal years. The Board's established debt management policy provides that no more than 15 percent of annual General Fund expenditures shall be allocated for debt service. Using a 7 percent annual General Fund growth assumption and structuring debt service payments in a manner reviewed with North Carolina Local Government Commission staff, debt to fund all the projects noted could be issued between 2006-07 and 2009-10 while the County remains below its own self-imposed debt ceiling, Several of the projects noted have estimated price tags that could shift up or down somewhat, subject to final Board decisions on project budget allocations (e,g, Elementary School #10, Animal Services facility) and possible grant or partnership funding opportunities (e.g, Durham Tech Satellite Campus sustainable design elements, West Ten Soccer Park) that could reduce County funding requirements for certain projects. An impending deadline, as well as projects requiring additional cash outlay to complete the project scope, requires that debt funding decisions be made soon, To that end (and with the qualifications noted above on certain project costs) staff will proceed with plans to issue debt for the projects noted along the timelines noted on the individual project pages in the accompanying notebook, subject to Board confirmation or modification at this work session. FINANCIAL IMPACT: As noted in the accompanying background materials, RECOMMENDATION(S): The Manager recommends that the Board provide direction to staff regarding plans to issue debt for the projects outlined in the accompanying background materials, PREPARED 9/12/06 SOCCER FIELD DEVELOPMENT STATUS • Soccer field development in Orange County is moving forward at an increasing pace now that master planning has taken place and funding has been provided for a variety of projects. • Completed projects involving County funding include: Smith Middle School lighting (2), Efland-Cheeks lighting, Scroggs Elementary, field. • Three fields at Southern Community Park in Chapel Hill will be under construction within the next months. • Projects at Northern Human Services Center and Twin Creeks (4) are in the final design phase. • West Ten Soccer Center (5-6) is planned, but not yet fully funded. • $1,350,000 has been allocated for the West Ten project from the Soccer Superfund, The remaining $650,000 from this fund was set aside for Twin Creeks Park, • An additional $350,000 was allocated from 2/3 net debt reduction bond funding for West Ten. Currently, with expenditures for the purchase of the property, pre-grading and utility improvements to the site, $733,168 remains in the West Ten Soccer Center account. • Recently, staff has been encouraged by initial dialogue with a potential partner entity, with whom apublic/private pilot partnership could be explored. A proposal was submitted to this entity in mid August.. Staff has not received confirmation or further communication on this matter to date, but remains optimistic. • Within the next week, applications will be available for apre-grant application for funds from the lJS Soccer Foundation. Staff is poised to submit necessary materials for this application, The maximum award in this program is $200,000, • Should funding above the current allocation of $733,000 be unavailable in the near term, it would be possible to move forward with the project in an initial phase, Consulting engineers estimate that two fields without lighting could be completed with the funds currently available.