HomeMy WebLinkAboutAgenda - 12-12-2006-8bORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: December 12, 2006
Action Age a~
Item No.
SUBJECT: Public Hearing on Proposed County and School Capital Projects and
Related Debt Issuance Plans
DEPARTMENT: Commissioners PUBLIC HEARING: (Y/N) Yes
ATTACHMENT(S):
10/11!06 Budget Director Memo
INFORMATION CONTACT:
Commissioners Moses Carey or Alice
Gordon, 919-245-2125
PURPOSE: To conduct a public hearing on matters related to proposed County and school
capital projects and related debt issuance plans.
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 construction. At the September 14, 2006 work
session, staff presented additional information intended to help the Board regarding various
decision points related to debt issuance for these projects, and asked the Board to endorse
projects to be included on the County's debt issuance schedule.
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, reviewed at the September 14 work session, 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 focal 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.
At the September 14, 2006 work session, the Board considered which projects to endorse for
the debt issuance schedule for the next few fiscal years. The endorsed projects worth $92
million in new debt are listed in the October 11, 2006 memorandum (Attachment 1), which
shows that they are scheduled for this and the next three fiscal years, through fiscal year 2009-
10. It is the Board's intent to proceed with plans to issue debt for those projects.
Then on November 2, 2006, the Board endorsed plans for.an expanded County campus, library
building, and parking facilities at a cost of about $23.5 million. This project was one of the
projects listed in the October 11 memorandum.
The focus of this December 12 public hearing is the Board's recent decision to issue just over
$92 million in debt over the next three to four years. The Budget Director will make a brief
presentation that will include information related to those particular debt issuances, timetables,
and project descriptions along with anticipated tax rate impacts.
FINANCIAL IMPACT: Financial impacts are as noted in the October 11, 2006 Memorandum,
and the materials for the August 31 and September 14 work sessions. Additional information on
the impacts of operating costs for endorsed projects; and for capital and operating costs for
projects on the horizon, are still being developed. In addition, the financial impacts of the space
needs~study are still being assessed. Finally, the Board's decisions on the capital funding policy
could have an effect on the financial impact.
RECOMMENDATION(S): Conduct the public hearing.
10H1/06
To: Board of County Commissioners
Rad Esser, interim County Manager
From; Oonna Dean Coffey, Budget Director
Re: Capital and Debt Related Matters
Date: October 11, 2006
The attached materials are offered as additional information that will hopefully clarify lingering questions about
capital and debt-related materials that you received during August and September. Pages 1 through 3 of this
memo summarize staffs understanding of capital and debt-related actions and endorsements that the Board
has made since the beginning of the fiscal year. Page 4 offers a guide for understanding the Annual Oebt
Service Capacity and Tax Rate Impact spreadsheet (page 5). Feel free to contact me if there are quesfians oc if
my understanding of the Board's recent actions diner from yours.
Background Information
Orange County's major funding sources for school and County capital projects tnciude pay-as-you-go monies
(examples Include dedicated sales and property taxes, school construcfion impact fees and Public School
Building Fundsj and debt financing. The County has several capitaMrelated policies in place that govern
planning and funding capital projects and debt management
RecenNy the Board has focused discussions on school and County cap'dai projects that require funding beyond
the amount of money that pay-as-you-go resources generate - i.e, projects that require debt financing. Most
recent discussions have centered around "affordability" -what capital projects can the County afford to fund wish
respect to debt service as welt as on-going annual costs?
The August 31 BOCC Work Session was the first step in providing a picture of what the County could afford
with regard to funding capital and operating costs of future County and School capital projects. Therefore,
materials prepared for that work session offered a wholisfic view of total amounts of debt that the County could
afford in future years without regard to individual project timelines or cash needs.
At the August 3i Work Session, the Board provided direction regarding specific projects. That direction allowed
staff to take the next step and project specific cash flow requirements and funding needs for individual projects
with face value debt of $92.2 million that the Board wished to pursue over the next three ar so years. Chart
lidentifres those projects. The outcome of that step was the Capital and Debt Work Book presented at the
September 14, 2006 work session. in addition to providing historical data, the work book also offered financial
data including projected annual costs (including debt service and tax rate impacts) for individual school and
county projects.
3
Page 1 of 5
10/11/06
Proposed Sehedufe of County and Sehoot Capttai ProJaet Debt issuances (Aiphahettcal Order by Protect Titlei
Fail 2006 through Spring 2009
Proposed _. BOCC Endorsod
~-
Protect Total
Chart 1. Non-Enterpdso Fund Protects with Cost
Estimates andTimelUes Issuance
Date 2001 Bonds Aitemative
Financing (BOCC
Endorsed)
1 ANordahle Housing Spring 2008 $1,400,000 $0 $1,400,000
2 Animal Services Facility Construction Faii 2007 $0 $5,000,000 $5,000,000
3 Central Orange Senior Center (to be Spring 2007 50 $2,500
000 $2
500
000
constructed in tandem with SportsPlexJ , ,
,
4 'CHCCS Carrboro High School (tormedy High Spring 2007 $0 $9
000
000 $9
000
000
Schaol #3 ,
, ,
,
CHCCS Elementary #10 Spdng 2007 $0 $22,102,023 $22,102,023
6 CHCCS Renova0ons Unfunded tram 2001 Spring 2007 $0 $3
450
000 $3
850
000
Bond ,
, ,
,
7 County Campus and Ubrary Development Summer 2009 $0 $25,000,000 $25,000,000
8 EOand Water and Sewer (BUCkhom Spring 2007 SO $400
000 $400
000
EDD/Graveii Hills , ,
9 Greenways Development Spring 2008 $575,000 $0 $575,000
10 Homestead AquaOCS Spring 2008 53,175,000 $0 $3,175,Og0
11 Jaii S rln 2007 SO 5600,000 5600,000
1 JusOce FaciBty (inGuding Farmers Market & Sprang 2007 $D $10
000
200 $10
200
000
River Park ,
, ,
,
13 Lands Lea S do 2008 51.750,000 $0 $1,750,000
14 Satellite Cam us for DTCC S do 2007 50 53,000,000 $3,000,000
15 Satellite Campus for DTCC - Sustatnabie Spdng 2007 $0 $008
000 5408
000
Desi n Elements , ,
i6 Satellite Campus for DTCC -Park t3 Ride Lot Sprang 2007 $0 $180,000 5180,000
17 Twin Creeks/Elementary #10 InfrashuGure Spring 2007 $0 51,250,000 $1,250,000
18 West Ten Soccer Com lex Com IeOon S rin 2007 $D 52 267 000 52 267 000
19 Total 56,900,000 $65,357,023 592,257,023
Pro
osed BOCCEndorsed proj
t T
t
l
p ec
o
a
Chart 2. Enterprise Fund Debt Issuances Issuance
2001 Bands Attemattve (BOCC
Dato Financing Endorsed)
Sportsptex Addliton (to be constructed In
1 tandem with Central Orange Sensor Center- Spdng 2007 50 $1,500,000 $1,500,000
see footnote 7{a above) p°t
2 Solid Waste,OperaOons Center Spring 2007 $0 $2,200,000 52,200.000
In addition to.financial data related to capital projects U1at the Board endorsed for funding in the next three-to-
foaryears, the September i4 work book fdantified "on-tile-horizon" projects. These projects, whose timetables
extend beyond the Immediate three-to-four year planning period, are ones that the Board has discussed over
the past year and identified as priorities for future years capital funding. Chart 3 offers a listing of these projects.
Page 2 of 5
iDl11/06
Chart 3. Protects on the Horizon (Cost and Timel(ne Estimates Ba1n0 Oevalopeit)
c
E
7
t'.
E
1G
11
1i
12
14
Agdculture Center
GHCCS ~ementary#11 (Based on November 15, 2DD5 SAPFO projections, CHCCS would reach 106.4% Elementary Level of
Service in school year 2011-12)x'1
CHCGS Middle School #5 (based on Novemher 15, 2005 SAPFO pra)ections, CHCCS would reach 106.3°~ Middle School
Level of Service in school year 2012-13)x'1
CHCCS Ganhoro High Addi0on {Based on Novemher 15, 2005 SAPFO proledlons, CHCCS would reach 110.3% High School
Leval of Service In school yeaz 2D1415)k'1
Efland Water and Sewer - Central Efland/Norihem Buckhom
Ex anslon of Efland Cheeks Communi Center
Fire Training Fad'lity
Hedta a Cenisr
Lihre Fadii
New Hope Park @ Blackwood Farm
Northeast Regtonal Pack
Parks Opera0ons Base
Renova0ons of buildings being vacated
SHSG Oental Clinic
1'1 In accordance wish Orange County's Schools Adequate Public Fadllfles Ordinance (SAPFO), ten year student membership
projections are updated annually In November. The timing of new school conswc0on Is subject to change with each annual update.
Levels of Service as defined by SAPFO allow for 105% oFppadty for elementary,1079'0 oFcepadty for middle school and 110% level
of cepacty for high school. The School Collabore0on Work Group is curren0y revlewing the County's School ConsWCtlan Standards -
after Commissioners approve updates to the Standards, costs can be assodated with the now schools.
O
Page 3 of 5
iD/1 i106
Readers Guides to Anrnrai Deht Servlee Capacity and Tar Rafe Impact .Genera! Fund Onrv Chart
Col- Column Title pescripUon of Contents
umn
A Ffscal Year The County's fiscal year runs from Juiy 1 through June 30.
For years 1999-00 through 2006-07, th{s column reflects the original
B Total General Fund Budget BOCC approved General Fund Budget In accordance with 8000
direction provided at the August 31, 2D06 work session, fiscal years
beginning with 2007-06 reflect a 7 percent annual increase.
For years 1999.OD through 2006.07, this column reflects the actual
percentage increase in the County's total General Fund. in
C Annual % Increase accordance with 80CC direction provided at the August 31, 2006
work session, fiscal years beginning with 2007-OB reflect a 7 percent
annual increase.
in accArdance with the County's current Debt Management Policy,
annual General Fund debt service payments are to be no more than
D Total Debt Service Capacity 15 percent of total General Fund. The amounts shown in this column
equate to 15 percent of each years total General Fund budget '
(column B multiplied by 15%}
Note: columns E through J are relevant to currently issued debt and debt planned for issuance between fiscal years 2006-
07and 2009-10 (as endorsed by Commissroners on September 14, 2006)
E General Fund Debt Service for Currently Amounts in ihis column reflect the total General Fund debt service
Issued Oebt payments for debt chat the County issued on or before June 30, 2006.
Amounts in This column reflect projected debt service payments for ih
projects ($92.2 million face value debU that the BOCC endorsed for
F Projected Addiflonai Debt Service by Fisgl future debt funding at the September 14, 2006 work session. Chart 1,
Year above, provides a list of individual projects: Debt payback projections
are based on 6 percent annual interest over a twenty year financtng
period with fixed principal payments.
G Total Debt Service This column reflects a total of debt service far curtenfly issued debt
plus protected additional debt service (column E plus column F)
Remaining Debt Service Capacity After Amounts m this column reflect the debt service capacity that remains
H
Issuing Additional Proposed Debt after issuing the additional proposed $922 million in face value debt.
(column D minus column G)
Note: Columns ! and J re(ale to projected tax rate impacts of projected addiliona! debt service, operating and slatting of
new fara7ities. Slatf is currently working on developing operational co-etTicrencies to determine lutura operating,
maintenance and staffing needs of Individual capital projects.
Amounts m this column reflect the protected tax rate Increase
I Tax Rate Impact of Additional Debt Service attributed to addiflanai debt issued ($922 million) in accordance wish
BOCC direction on September 14, 2006 (column F divided by column
J}
Amounts reflected in this column pro/ect how much money each
J 1 Cent Equivalent penny on the tax rate would generate each year. Staff anttctpates that
assessed property valuation in non-Ravaluafian years would increase
at 3 percent and at 15 percent in Revaluation years.
Nate: Columns K through M identify a range of debt ser-nce and borrowing capacii beyond the currently Jssued debt and
debt planned far issuance between fiscal years 2006.07 Utrough 2009-i0
Amounts in this column reflect the amount of debt service capacity
K Debt Service that would remain each year after the debt service amounts identified
in column G were paid. For presentation purposes, it is assumed that
100 percent of prior year debt capacity is issued.
Amounts in ihis column represent the face value debt that the County
L Bonawing Capacity Range would be able to borrow with the annual debt service capacity
identified In column K
V
Page 4 of 5
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