The URL can be used to link to this page

Home My WebLink About042605 AttachmentUPDATED 04/26/05 ORANGE COUNTY BOARD OF COMMISSIONERS CAPITAL FUNDING /SCHOOL EQUITY FUNDING NOTEBOOKS 2004 -05 TABLE OF APPENDICES Appendix Reference Appendix Title Description 1 Fiscal Year 2005 -06 Capital Funding 4 pages of tables Options 2 Summary of School and County 5 pages of tables Funding Options 3 Capital Funding Options — Staff 5 page Q &A paper Considerations 4 School Funding Equity 6 PowerPoint slides on 3 pages 5 Orange County /Chapel Hill Carrboro 5 page Executive Summary of City Schools Study: Description and Educational Excellence Work Analysis of Educational Resources Group Report 6 4/13/05 CHCCS Memo — Follow -up 1 page memo from CHCCS to the Educational Excellence Report Chair 7 4/21/05 OCS Letter 2 page letter from OCS Superintendent re: MS #3 and Educational Excellence Report 8 High School #3 — A Status Report 16 page CHCCS color report 9 4/22/05 CHCCS Memo — Request for 3 page memo from CHCCS Additional Funding for the Superintendent Completion of High School #3 10 4/19/05 CHCCS Memo — High 5 page memo from CHCCS School #3 Bids Assistant Superintendent 11 4/26/05 Orange County Memo — 2 page memo from Assistant Historical Context of Capital Funding County Manager Policy 12 School Construction Impact Fees 1 page table Current 13 New School Construction — 1991 1 page table through 2005 14 Projected Debt Service 2 page table Requirements — FY 2005 -06 15 Historical Tax Rates — Orange 1 page table County ORANGE COUNTY HILLSBOROUGH NORTH CAROLINA ana 7er's 611ce �isfa�fs�eo�17S2 MEMORANDUM TO: Orange County Board of Commissioners John Link, County Manager FROM: Rod Visser, Assistant County Manager DATE: April 26, 2005 RE: Historical Context of Capital Funding Policy The Board has suggested that it might be helpful to provide elected officials and staff with a brief summary of the historical context within which Orange County's capital funding policy was developed nearly ten years ago. This memo is intended to explain some of the issues that arose during that time period that helped to shape the capital funding policy under which we have operated since it was adopted by the BOCC in 1996. While far from exhaustive, this review may prove useful not only to those learning the information for the first time, but also to participants in the process whose recollections likely have become less sharp with the passage of time. Information presented below was largely gleaned from public documents, particularly from agenda materials of various meetings of County Commissioner or advisory boards. In 1995 and 1996, there were numerous public discussions about the emerging needs for new school facilities. During the first half of 1995, there was discussion about the desirability of establishing formal criteria that would shape the sizing and cost of new schools to be constructed in Orange County. In October 1995, the school construction standards process was initiated with a workshop at A. L. Stanback Middle School involving representatives of the County and school systems, the State Department of Public Instruction, and experts in school construction. issues from across the Triangle. A set of construction standards for elementary and middle schools was developed through a work group comprised of representatives of the County and. both school systems. That work group met on a number of occasions in late 1995 and early 1996, and presented its recommendations to the BOCC in Spring 1996. The BOCC approved those standards, which are still in use, in May 2006. Because there was no immediately pressing need for high school standards (what became East Chapel Hill High School was already past the design stage), development of those was postponed until several years later. Meanwhile the 1996 -2006 Capital Investment Plan was under development. In April 1996, both school systems presented their highest priority needs to the BOCC. For OCS, these included a new elementary school by 2001 and a major addition to the high school by 2002. For CHCCS, these included a new elementary school in Southern Village and an addition to East Chapel Hill High School (ECHHS) in 1999 -2000 and a new middle school in Meadowmont in 2000 -01. At a May 1996 work session, the Board directed the Manager and staff to work with the school staffs to develop a comprehensive school capital funding plan, including a potential bond referendum, with a report to be made in August 1996. On August 20, 1996, staff presented a plan to the BOCC regarding Long Range School Funding Options. Four options were based on existing policy, and a fifth would fundamentally change the way County and school capital projects would be funded in Orange County. Option 5 included a potential $40 million bond referendum, with proposed funding for a new CHCCS middle school at $22.5 million, AREA CODE (919) 245 -2300 • 688 -7331 • FAX (919) 644 -3004 Ext. 2300 expansion of ECHHS at $11.8 million, and a new OCS elementary school at $14.5 million. Renovation funding of $3.7 million for CHCCS and $3.1 million for OCS was also contemplated. The BOCC adopted Option 5 in concept, but asked staff to adjust the numbers to address concerns that both school systems would "lose" funding over the ten year period compared to funding that was estimated in the then - current 1996 -06 CIP. On September 17, 1996, staff presented Option 5A to the BOCC based on updated 10 year revenue estimates, an earmarking of 3 cents on the property tax rate for school recurring capital, and an allocation of "peak debt service" funds to OCS to help make up their potential 10 year shortfall. The notion was introduced, although not formally adopted, of earmarking at some point in the future the one cent for the school /park reserve to help make up some of the capital funding shortfall the County would experience over the 10 year period. Based on direction from the BOCC to try to address remaining school concerns, particularly about constrained pay -as- you -go funding in the early years of the CIP period, staff returned at the October 15, 1996 meeting with revisions to the funding plan. These changed plans for two bond sales to three and to include certain bond funded projects for FY 1997 -98 (subject to voter approval in November 1997), which had the effect of freeing up more funds in the early years for PAYG projects. The proposed $35 million /$5 million bond split for school /County projects was changed to $36 million /$4 million, with an additional $1 million going to OCS renovations. The Board adopted this plan, which has been referred to since as "Option 513". In December 1996, the Board adopted the Capital Funding Policy that implemented this plan. We have operated under this policy, with only a few minor changes, since then. Without going into much more detail, I will note that the BOCC appointed a Capital Needs Advisory Task Force that met in Spring 1997. Starting with the proposed $40 million bond package considered by the BOCC the previous Fall, the Task Force made its recommendations in May 1997 that the BOCC hold bond referenda in November 1997 totaling between $59.9 and $61.8 million. Debt service on the first $40 million would be covered without a required tax increase, as outlined in Option 5B, with the balance of the anticipated debt to be covered by a tax increase of 3.5 to 4 cents per $100 valuation. The BOCC ultimately approved bond orders totaling $60.6 million for the November 1997 referenda. One last point of interest relates to the development of what ultimately became Cedar Ridge High School. It is apparent from reading background documents of the period that the need for additional high school space in the Orange County system was emerging throughout 1996 and into early 1997. What was presented initially as a proposed addition to Orange High became a proposal for a second high school during the Capital Needs Advisory Task Force process. The Task Force considered several proposals for funding a new $25 million high school. Ultimately, it recommended to the BOCC (based on an OCS- generated idea) that $12.5 million in bonds be provided for a second OCS high school, and "the other half of the costs for a new high school be paid by borrowing funds by private placement, with the payments made from the Orange County Capital Improvement Plan funds" (outlined in Appendix E of the Task Force report). I will be happy to research further any questions the BOCC may have about this subject. Prepared for April 26, 2005 Board of County Commissioners and Boards of Education Meeting School Construction Impact Fees (Current) As Approved June 25, 2001 (1) Per the 2001 Tischler and Associates technical study x� -a Orange County Schools Chapel Hill - Carrboro City Schools Maximum Current Fee Maximum Current Fee Current Fees Supportable % °f Current Fees Supportable % of Impact Fee t'> Maximum .Impact Fee (1) Maximum Impact Fee Impact Fee Single Family Detached Dwellings and Multi - $3,000 $5,364 56% $4,407 $7,345 60% wide Mobile Homes (per unit fee) Multi - Family Attached Dwellings such as apartments or condominiums, townhomes, $1,420 $2,539 56% $1,979 $3,298 60% duplexes and Singlewide Mobile Homes (per unit fee) (1) Per the 2001 Tischler and Associates technical study x� -a R t p R��, 1f.r"Af F^ V ESt New School Construction 1991 through 2005 (1) School Year Opened Chapel Hill- Carrboro City Schools McDou le Middle 1994 East Chapel Hill High 1996 Smith Middle School 2001 East Chapel Hill High Addition 1999 Rashkis Elementary 2003 McDou le Elementary 1996 Scroggs Elementary 2000 Orange County Schools New Hope Elementary 1991 A.L. Stanback Middle 1995 Pathways Elementary 2000 Cedar Ridge High 2001 (1) Includes new school construction only; does not include addition of new classrooms at existing schools � f J Projected Debt Service Requirements - FY 2005 -06 Schools County Total FY 2004 -05 % of % of Final Original Total Original Total Total Total Date of Issue Description Payment Issue For Payment Issue For Payment Payment Payment Due Date School County Projects Projects 1. General Obligation Bonds and Alternative Financing to be Paid from Dedicated Property Tax April -03 1988 & 1992 Bonds June 90.0% 3,161,898 10.0% 351,322 3,513,220 3,676,720 (Refunding Series) 2013 August -01 1992 School Bonds February 100.0% 2,164,900 0.0% 0 2,164,900 2,234,900 (Refunding Series) 2014 April -00 1997 Bonds (Installment April 2018 92.4% 2,570,790 7.6% 211,450 2,782,240 2,839,990 April -01 1997 Bonds (Installment February 67.0% 1,061,746 33.0% 522,949 1,584,695 1,626,095 ##2) 2021 April -03 2001 Bond Issue March 71.7% 1,002,971 28.3% 395,717 1,398,688 1,424,686 (Installment #1) 2023 1997 Bonds (Installment #3 - $1.2 July -04 Million Efland Sewer March 31.6% 516,350 68.4% 1,117,825 1,634,175 442,087 Bonds) and 2001 Bonds 2024 (Installment #2 - $19.74 Million 2001 Bond Issue 2005 (Installment #3) 31.6% 151,665 68.4% 328,335 480,000 0 Anticipated to Be Sold - Summer 2005 Total Voter Approved General Obligation Debt: 10,630,319 2,927,599. 12244,478 December -02 2001 Alternative October 2017 27.0% 97,816 73.0% 264,464 362,280 372,394 Financing Package #1 7ODTAlternative . Summer 2005 Financing Package #2 58.4 /° ° 216,234 41.6% 153,766 370,000 0 (anticipated to be sold glimmpr 2005) Total 2001 Alternative Financing Package 314;049 n , n 418,231 732,280 372,394 Total GO Bonds and Alternative Financing 10,944;369 3,345,829' 14,290,198 12,616,872 Package to be Paid from Dedicated Property Tax 2. Non - General Obligation (non -voter approved) Debt Service Not Paid by Dedicated Property Tax 2000 Two - Thirds Net Debt Reduction Bonds April -00 for County Buildings April 2018 0.0% 0 100.0% 223,885 223,885 229,135 (Whiffed & Northern HS Centers) Two - Thirds Net Debt July -04 Reduction Bonds for February 0.0% 0 100.0% 322,875 322,875 86,437.0 County Buildings 2023 Repair Projected Debt Service Requirements - FY 2005 -06 Increase from FY 2004 -05 to 2005 -06 2,211,997 Schools County Total FY 2004 -05 %of %of Final Original Total Original Total Total Total Date of Issue Description Payment Issue For payment Issue For Payment Payment Payment Due Date School County Projects Projects School (McDougle May -99 Elementary construction July 2009 100.0% 889,096 0.0% 0 889,096 889,096 private placement loan) School (Scroggs December -96 [Southern Village] February 100.0% 472,232 0.0% 0 472,232 498,295 construction private 2006 placement loan) School (Scroggs March -97 [Southern Village] February 100.0 /° ° . 859,241 0.0% 0 859,241 897,050 construction private 2006 placement loan) County Buildings January-96 (Jail /Courthouse January 0.0% 0 100.0% 248,806 248,806 248,806 construction private 2006 placement loan) County Buildings (non - July-96 taxable portion of July 2008 0.0% 0 100.0% 99,596 99,596 99,596 purchase of Skills Development Center) County Buildings (taxable March -98 portion of purchhse of July 2006 0.0% 0 100.0% 150,643 150,643 150,643 Skills Development Center) Purchase of building & October -00 land for relocation of Octobe 0.0% 0 100.0% 26,518 26,518 79,554 Purchasing and Central 2005 Services October -02 112/118 Churton Street October ° 0.0 /° 0 100.0% 62,405 62,405 64,430 Property (Clerk of Courts) 2012 2003 Business Systems 0.0% 0 100.0% 106,290 106,290 106,290 Software Summer 200 Lease /Purchase of 0.0% 0 100.0% 82,387 82,387 82,387 Ambulances Spring 2005 Lease /Purchase of 0.0 % o 0 100.0% 487,500 487,500 0 Equipment & Vehicles Orange County Schools Novembe December -00 share of New High r2010 100.0% 1,711,369 0.0% 0 1,711,369 1,772,453 School Total Non - General Obligation (non -voter approved) Debt Service Not Paid by Dedicated 3,931,938 Y 1,810,905 5,742,843 5,204,172 Property Tax Total Debt Service Obligations 14,876,307 5,156,734 20,033,041 17,821,044 Increase from FY 2004 -05 to 2005 -06 2,211,997 Appve,��I EE, F1j[' 'I-i Historical Tax Rates (Per $100 Assessed valuation) (1) Real Property Revaluation Years - Per NC General Statutes, counties are required to revalue property every 8 years or less. As of January 1, 1993, the Orange County Board of County Commissioners elected to perform real property revaluations on a 4 -year cycle. Prior to that date, the following revaluation periods were effective: 6 year period between 1987 and 1993 and between 1981 and 1987. Year to Year- Difference in Difference in Year to Year Change in Revenue Neutral Effective Tax Revenue Change in County Tax Tax Rate and Effective Tax Rate and Neutral Tax CHCCS Special County Tax County Tax Rate (in Approved Tax Rate (for Approved Tax Fiscal Year Rate (for District Tax Rate (in cents Rate cents per Revaluation Rate (in cents Rate per $100 Revaluation Rate (in cents $100 per $100 Years Only) per $100 Years Only) assessed assessed assessed valuation) assessed valuation) valuation) valuation) 1985 -86 58.00 7.00 (4.40) 3.90 6.50 5.50 4.00 3 y 17.60 1986 -87 65.00 19.80 2.20 1987-88(l) 60.60 16.50 (3.30) 1988 -89 64.50 17.75 1.25 1989 -90 71.00 17.75 0.00 1990 -91 76.50 17.75 0.00 1991 -92 80.50 17.35 (0.40) 1992 -93 84.25 3.75 17.35 0.00 1993 -94 �� 83.60 (0.65) 74.25 9.35 15.75 (1.60) 15.75 0.00 1994 -95 88.50 4.90 0 15.40 (0.35) - _ 1995 -96 94.75 6.25: 15.40 0.00 1996 -97 99.75 5.00 19.00 3.60 1997 -98 �'� 87.30 (12.45) 84.00 3.30 17.90 (1.10) 15.90 2.00 1998 -99 90.20 2.90 19.20 1.30 1999 -00 91.90 1.70 22.00 2.80 2000 -01 92.90 1.00 22.00 0.00 2001 -02 �� 80.50 (12.40) 78.50 2.00 20.20 (1.80) 18.20 2.00 2002 -03 83.00 2.50 19.20 (1.00) 2003 -04 84.50 1.50 20.00 0.80 2004 -05 88.00 3.50 20.00 0.00 (1) Real Property Revaluation Years - Per NC General Statutes, counties are required to revalue property every 8 years or less. As of January 1, 1993, the Orange County Board of County Commissioners elected to perform real property revaluations on a 4 -year cycle. Prior to that date, the following revaluation periods were effective: 6 year period between 1987 and 1993 and between 1981 and 1987.