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HomeMy WebLinkAboutMinutes 04-02-2024 - Business Meeting 1 APPROVED 5121/24 MINUTES ORANGE COUNTY BOARD OF COMMISSIONERS BUSINESS MEETING April 2, 2024 7:00 p.m. The Orange County Board of Commissioners met for a Business Meeting on Tuesday, April 2, 2024, at 7:00 p.m. at the Whitted Human Services Center in Hillsborough, NC. COUNTY COMMISSIONERS PRESENT. Chair Jamezetta Bedford, Vice-Chair Sally Greene and Commissioners Amy Fowler, Jean Hamilton, and Anna Richards COUNTY COMMISSIONERS ABSENT: Commissioners Earl McKee and Phyllis Portie-Ascott COUNTY ATTORNEYS PRESENT. John Roberts COUNTY STAFF PRESENT. County Manager Bonnie Hammersley, Deputy County Manager Travis Myren, and Clerk to the Board Laura Jensen. (All other staff members will be identified appropriately below) Chair Bedford called the meeting to order at 7:00 p.m. All commissioners were present, except Commissioners McKee and Portie-Ascott. 1. Additions or Changes to the Agenda Chair Bedford asked for a motion to add a closed session to the agenda. A motion was made by Chair Bedford and seconded by Commissioner Hamilton to add a closed session to the agenda. VOTE: UNANIMOUS Chair Bedford read the public charge: The Board of Commissioners pledges its respect to all present. The Board asks those attending this meeting to conduct themselves in a respectful, courteous manner toward each other, county staff and the commissioners. At any time should a member of the Board or the public fail to observe this charge, the Chair will take steps to restore order and decorum. Should it become impossible to restore order and continue the meeting, the Chair will recess the meeting until such time that a genuine commitment to this public charge is observed. The BOCC asks that all electronic devices such as cell phones, pagers, and computers should please be turned off or set to silent/vibrate. Please be kind to everyone. Chair Bedford explained the procedures for making public comments. She also said there had been a mediation session earlier in the day between the Hillsborough Hogs recreational ice hockey group and the contracted management for the Sportsplex. She said a follow-up session will be scheduled. 2. Public Comments (Limited to One Hour) a. Matters not on the Printed Agenda Willo Charns said her statement was written before the mediation. She said she learned to skate with her dad when she was three years old. She said that she taught, played, and coached there for 20 years. She said that she resigned recently from her position as the hockey director at the SportsPlex. She said that Kevin Caminski was hired recently, and she left after he was hired. She said that it is not worth her breath to speak ill of anyone, but her actions speak for 2 themselves. She said the future of hockey at the Sportsplex is in trouble if it is not placed in the hands of volunteers and coaches that love the game. She said that it is currently headed to a business that wants to profit from the game rather than instill the love of it. She said that the coaches have been disregarded by the SportsPlex management. She said that she chose to speak because she selfishly wants to go back to skating and coaching with a clear heart and she knows that there are little girls there now learning to skate just like she did when she was three, and she knows that they are watching. Chris Bolduc, Hillsborough Hogs Hockey Director, said that many of his colleagues, parents, and coaches have spoken about the spirit of Hogs Hockey. He said that it is similar to the Hillsborough Hog Day Festival. He said that in 2019, the owner of the Carolina Hurricanes asked their PR department to expose Hurricanes Hockey to all of the hockey programs in and around Raleigh. He said that almost every rink within a 50-mile radius of PNC arena was emblazed with Hurricanes posters and colors. He said that Shane Willis, the Hurricanes manager of youth and amateur hockey, made a special phone call to the Hogs then-president, Gary Howard. He said that Shane Willis asked Gary Howard if they would be interested in rebranding their Triangle Youth Hockey (TYH) club to a more Hurricanes oriented look and feel. Gary explained to the board what was proposed by the Hurricanes and emphatically made it clear that they were not trying to take over but rather enhance and support our extraordinary efforts. He said that TYH has met and exceeded what they would expect from a grassroots organization, and they were proud of what they had accomplished, and they wanted to support their efforts to keep hockey accessible and affordable for all youth in Orange County. He said that his PR team discovered the Hillsborough Hog Days Festival when doing research on their community. He said that this festival has been going on since 1983 and raises funds for youth services throughout the county. He said it is the county's oldest and largest event and 100% of revenues go to support children's projects. He said that it is fitting that their mascot and organization go along with the iconic festival. He said it is rumored that the Hillsbrough Hog Mascot, Hamilton, and the Hurricanes Mascot, Stormie the Pig, are first cousins. He joked that the TYH mascot is the third cousin once removed, on Stormie's side of the family. He thanked the Board for their continued support of their organization. Joel Ackereizen said he is the parent of three Hillsborough Hogs players. He said he is also a certified coach. He said the past two meetings he has sat and read the emails. He thanked the Board for helping them out. He then turned to Willo (previous speaker)and said that he wants her to know that there is a two-year-old girl learning to skate with her dad and 17 year old brother. He thanked the Board for their time. Martin Molloy said he received an email that the mediation session was positive. He thanked the Board for their role in making that happen. He said they are not out of the woods and asked the Board to keep the pressure on the Sportsplex. He said that he took his son skating this past weekend and the Carolina Thunder have signups for three or four more teams that are coming soon. He said that will be two or more practices a week plus games, and that will take away from house recreational hockey. He said they needed the Board's support for house recreational hockey in the community. He said that the Hogs are working to create a compromise so they can serve as many kids as possible. He thanked the Board for their assistance and asked them to keep supporting local community groups. Nichole Palombo said she is a 16-year-old member of the Hillsborough Hogs. She said that she was hired by the Sportsplex and the Hogs. She said she is involved with both parties. She said that since COVID, the Sportsplex management has created a loss of community and it is now a toxic environment and not the family fun place that it used to be. She said that management will not talk to any person that does not agree with their programs. She said they lost the best coach, female hockey player, and employee when Willo left due to the hostility. She said they do not give notice about any decisions. She said the Hogs did not know they were unable to use the pucks anymore and that they also removed the women's locker room. She said 3 there is a lack of respect for women in hockey. She said before the women's locker room was removed, male referees and employees were allowed to use it without warning. She said that she has walked into the women's locker room and found a group of grown men staring at her. She has also been in the women's locker room when a male employee walked in. She said this is unfair for women hockey players and she used to use it as a safe place to get ready. She said the ice is not properly maintained and there are constant issues of cracking concrete, uneven ice, uneven boards, and thin spots that cause damage when the skates hit the bottom concrete. She said that as of right now, the Hogs have a one-year guarantee to use the SportsPlex and as a 43- year-old organization, feels the Hogs are as much a part of the Sportsplex as the Sportsplex is to the Hogs. She said she feels that they should be guaranteed a spot at the Sportsplex for many more years to come. She said that she is concerned that if the Hogs leave, the Sportsplex management will not be able to secure enough coaches to sustain the number of kids playing and that are reached at an affordable price. She said that other programs run by the management company should be allowed to run at the Sportsplex because the diversity in programming allows the Sportsplex to represent the whole community. She said that she hopes to call the Sportsplex home after college and into adulthood. Gretchen Holquist said she is a parent of a current Hillsborough Hogs player. She said that there is an unspoken sense that travel is better than rec sports, but rec sports are a very important aspect of kids' lives. She said her son chose not to pursue travel hockey. She said this month he will be representing Orange County in band. She said that would not have been possible without the Hogs being flexible and encouraging him to do both. She said the management is offering programs at more cost. She said they will place travel above the rec program. She said the travel teams also represent a higher stream of revenue and the decisions will default to travel due to the income needed to support the Sportsplex. She asked that the commissioners continue to work to make sure that the Hogs are allowed to lead the recreational hockey program. Alex Charns said the recreational hockey program is very important to him. He said he is the father of Willo Charns that spoke earlier. He said that as a coach, he is at level four out of a total of five in his certifications. He said that his son is a Zamboni driver and sometimes comes home at 5:00 a.m. because he is out fixing the ice and he loves making sure it is ok. He thanked the Board for what they have done and asked them to continue to do it. b. Matters on the Printed Agenda (These matters will be considered when the Board addresses that item on the agenda below.) 3. Announcements, Petitions and Comments by Board Members Commissioner Hamilton had no comments. Commissioner Fowler said she attended the Board of Health meeting and heard from the Campus and Community Coalition on their efforts to prevent alcohol abuse. She said they had a thorough overview of the Community Health Assessment study. Chair Bedford had no comments. Vice-Chair Greene had no comments. Commissioner Richards said she attended the Visitor's Bureau meeting on March 21. She said a major international soccer match will be held in Orange County on July 23. She said she attended the Jordan Lake stakeholder meeting, and that the Jordan Lake rules re-adoption is underway. She said she also attended the NC Rural Summit on March 21 and 22. She said people from all over the state attended and discussed many of the issues Orange County is interested in, such as housing and land preservation. 4 4. Proclamations/ Resolutions/ Special Presentations a. Child Abuse Prevention Month Proclamation The Board approved a proclamation designating April 2024 as Child Abuse Prevention Month. BACKGROUND: April is National Child Abuse Prevention Month. The Department of Social Services and other community organizations are concerned about the continued incidence of child abuse and neglect in Orange County and in the state of North Carolina. In the fiscal year 2022- 2023, 556 reports of suspected child maltreatment were assessed in Orange County. For the state of North Carolina, there were 61,624 reports assessed within the same period. Currently, 89 children are in the custody of Orange County Social Services due to serious abuse and neglect issues within their families. In January 2024, there were 10,803 children in the custody of social services across the state. Most child abuse and neglect issues reported to Social Services involve substance use, domestic violence, unsafe discipline, supervision, or care of children. Social Services is working to increase education and awareness of these issues and to try to find strategies to improve the safety of children in the community. Community members can make a difference in the life of a child by making connections. Lending a helping hand or listening ear to a parenting neighbor or friend can help alleviate stress and provide a positive impact on a child's life. Increasing social connection and providing concrete support are integral protective factors. Parents, grandparents, and family members can ensure children are safe in their care by properly securing firearms and ensuring all medications or potentially harmful substances are inaccessible to children. Social Services and the County Health Department will be providing awareness materials to community members at the Health on the Block event at Hargraves Park on April 6, 2024, and at the Sportsplex Family Fun Day on April 20, 2024. Social Services will also be providing Pinwheels for Prevention and Child Abuse Prevention Month signs to be displayed outside of public elementary schools in Orange County. The Board of Commissioners is asked to support this effort and to encourage the community to become more aware of the issues impacting children and families. Vice-Chair Greene read the proclamation: ORANGE COUNTY BOARD OF COMMISSIONERS PROCLAMATION CHILD ABUSE PREVENTION MONTH April 2024 WHEREAS, child abuse and neglect is a serious problem affecting every segment of our community, and finding solutions requires input and action from everyone; and WHEREAS, in fiscal year 2022-2023, 556 reports of suspected child maltreatment were assessed by child protective services in Orange County; and WHEREAS, child abuse can have long-term psychological, emotional, and physical effects that have lasting consequences for victims of abuse; and 5 WHEREAS, children who are loved and nurtured grow up to be healthy, creative, and productive community members; and WHEREAS, it is the goal of Orange County to improve the quality of life of all children who live here; and WHEREAS, we acknowledge that we must work together as a community to increase awareness about child abuse and contribute to promote the social and emotional well-being of children and families in a safe, stable, and nurturing environment; NOW, THEREFORE do we, the Board of County Commissioners of Orange County, North Carolina, hereby proclaim April 2024 as "Child Abuse Prevention Month" and call upon all residents to join together to prevent child abuse. THIS IS THE 2nd DAY OF APRIL, 2024. Jamezetta Bedford, Chair Orange County Board of Commissioners Brittany Mann, Social Work Supervisor, said recognition of Child Abuse Prevention Month calls attention to child maltreatment and to the role the community can play in preventing it. She said in FY 2022-23, there were 62,624 assessed reports of child maltreatment in North Carolina. She said as of January 2024 10,803 children in North Carolina were in the custody of Social Services due to maltreatment concerns. She said 89 were in custody in Orange County. She said April is a month to call attention to the many children across the state that have been abused or neglected. She said it is a call to action for the community to acknowledge and work toward eliminating child maltreatment. She said positive childhoods are possible through community and partnership. She said raising children is difficult and, at times, stressful. She said the department urges individuals to reach out to parents and lend an ear or provide support. She said social connection and congregate support are important protective factors for children. She asked parents, grandparents, and caregivers to be sure to secure firearms, medications, and harmful substances away from children. She encouraged families to reach out to the Department of Social Services to learn about available resources. In recognition of Child Abuse Prevention Month, she said the department asks the community to wear blue on Friday, April 5. She thanked the Board for the proclamation and for their support to prevent child maltreatment. A motion was made by Vice-Chair Greene and seconded by Commissioner Fowler to approve the proclamation. VOTE: UNANIMOUS b. Presentation of Manager's Recommended FY 2024-34 Capital Investment Plan (CIP) The Board received the Manager's Recommended FY 2024-34 Capital Investment Plan. BACKGROUND: Each year, the County produces a Capital Investment Plan (CIP) that establishes a budget planning guide related to capital needs for the County and Schools. The 10- Year CIP is evaluated annually to include year-to-year changes in priorities, needs, and available resources. Approval of the CIP commits the County to the first year funding only of the capital projects; all other years are used as a planning tool and serves as a financial plan. 6 Capital Investment Plan — Overview The FY 2024-34 CIP includes County Projects, School Projects, and Proprietary Projects. The School Projects include Chapel Hill-Carrboro City Schools, Orange County Schools, and Durham Technical Community College — Orange County Campus projects. The Proprietary Projects include Water and Sewer, Solid Waste Enterprise Fund, and Sportsplex projects. The CIP has been prepared anticipating moderate economic growth of approximately 2% in property tax growth and 4% in sales tax growth annually over the next ten years. The CIP will rely substantially on debt financing to fund the projects and these required debt amounts are fully integrated in the County's Long-Term Debt Model. Travis Myren, Deputy County Manager, made the following presentation: Slide #1 Agenda Item 4-b ORANGE COUNTY NOQRTH CAROMINA Introduction of the Capital Investment Plan for FY2024-34 Board of Commissioners Business Meeting April 2, 2024 Slide #2 Purpose • Purpose of the Capital Investment Plan - Board Approves Year 1 of the Plan as the FY2024-25 Capital Budget - Ten Year Planning Horizon(FY2024-34) Imposes Planning Discipline No Surprises - Debt Service Requirements • Amount of Funds Required in the Operating Budget Measures Debt Capacity-Debt Service Compared to Expected General Fund Revenue Predicts Potential Tax Increases Required to Pay Debt Service ORANGE COUNTY 2 NORTH CAROLINA 7 Slide#3 FY2024-34 Recommended Capital Investment Plan • Plan Alignment — Countywide Strategic Plan —Priorities — Responsive Projects • Environmental Protection and Climate Action Affordable Housing • Healthy Community Behavioral Health Crisis Diversion • Housing for All Climate Action Plan Projects • Multi-modal Transportation Mebane Water Line • Public Education/Learning Community Public Safety • Diverse and Vibrant Economy School Facilities Affordable Housing Proietl Category County project 5tatus: New Proie<tType 1—tional Serviee Area: Human Services Oro posed Bid Date: TO New x Department: Housing Department Staging Date: 7f1J2024 Expansion Irolect Number: 14001 Completion Date: 6/30/2033 Renovation 5tratelc Alignment Housln PorAp 06-ectne 1 Cmuate ArtiSn plan NA Replacement ORANGE COUNTY 3 NORTH CAROLINA Travis Myren said each page will show if it is aligned with the Strategic Plan or the Affordable Housing plan and that if they would like a different way to indicate that, to let him know because this is the first year they are doing this. Slide #4 FY2024-34 Recommended Capital Investment Plan • Plan Alignment — Long Range School Optimization Plan • Following woolpert Option C • Project Discussion with School Boards on May 21 • $300 million School Bond — Requires Authorization from Board of Commissioners — Subject to Voter Approval in November — Modeled as Three Installments of$100 million in FY2026-27,FY2028-29,FY2031-32 • $100 million Pay-As-You-Go (not borrowed) — Provides Flexibility — Reduces Impact of Borrowing on Debt Service to General Fund Revenue Measure — Enduring Source of Maintenance Funds After Bond is Exhausted — No Interest ORANGE COUNTY 4 NORTH CAROLINA 8 Slide#5 FY2024-34 Recommended Capital Investment Plan • Plan Alignment — County Long Range Facilities Plan County Long Range Facility Plan Projects • Following O'Brien Atkins Recommendations Recommended in FY2024-34 Up to$90.1 million Year of Construction Project County Cost Seven Major Projects FY2D25-26 Justice System Space Needs $15,479,233 FY2027-28 Cedar Grove Conditioned Storage $2,635,200 Refinements FY2D27-28 Emergency Services Headquarters $31,871,484 FY2D28-29 AMS Office Conversion $3,641,385 Justice System Space Needs FY2D29-30 Recreation Facility $21,630,703 Emergency Services Headquarters Sub-Station FY203D-31 Deconstruct Old Recreation Facility $1,095,784 Southern Human Services Medicaid FY2031-32 Southern Human Services $9,628,672 Maximization Revenue TOTAL $85,982,461 ORANGE COUNTY 5 NORTH CAROLINA Travis Myren said that since the long-range facilities plan was approved, staff had spoken with criminal justice stakeholders who asked the county to consider space needs related to current operations and workflows. He said that projects related to the criminal justice system have been combined into one larger project as they work with the stakeholders. He said they are recommending adding a substation to the Emergency Services Headquarters, which allows them to remove a stand alone facility in the latter part of the plan. He said they will use Medicaid revenue to fund part of the Southern Human Services expansion project. He said the total project is $19 million, of which $10 million will be funded with Medicaid maximization revenue. 9 Slide #6 FY2024-34 Recommended Capital Investment Plan • Plan Alignment — Climate Action Plan Four Major Projects Year(s)of Construction Project County Cost FY2024-25-FY2033-34 EV Charging for County Vehicles $2,579,374 — Sustainable Building Policy FY2024-25-FY2033-34 Public EV Charging Stations $500,000 Directs County departments when FY2024-25-FY2033-34 Solar Photovoltaic Installations $2,435,812 designing,constructing,and operating FY2030-34-FY2033-34 Community Resilience Hubs $848,000 County buildings in a manner aligned TOTAL $6,363,186 with stated Climate Action Plan goals — Other Sustainability Related Investments Community Climate Change Mitigation Grant Program($9,531,900) Premium Associated with Purchasing Fourteen(14)Electric Vehicles Sustainable Building Features-geothermal heating and cooling;solar photovoltaic systems ORANGE COUNTY 6 NOR-UH CAROLINA Travis Myren said that the $6.4 million recommended for sustainability projects does not include the other sustainability related investments listed at the bottom of slide #6. Vice-Chair Greene asked what he meant by "the premium" of purchasing the EVs. Travis Myren said they normally they are more expensive upfront but there is an incremental premium. He said they do pay off over time. Slide #7 FY2024-34 Recommended Capital Investment Plan • Education Projects — Annual School Facility Replacement and Repair Funds-$12.1 million by ADM — Remaining Supplemental Deferred Maintenance Previously Authorized $17,563,400 $13,239,600 FY2024-25 $9,067,600 $11,129,400 FY2025-26 $9,000,000 TOTAL $35,631,000 $24,369,000 — Working to Reconcile Prior and Future CIP Projects with High Priority Needs Identified in the Woolpert Plan ORANGE COUNTY 7 NORTH CAROLINA 10 Slide #8 FY2024-34 Recommended Capital Investment Plan • Year 1 - Other Major County Projects — Behavioral Health Crisis Diversion Facility $2.1 million Design Funds in FY2023-24 $1.1 million Site Acquisition in FY2024-25 $22.7 million Construction in FY2025-26 $1.4 million Revenue Applied from Cardinal Innovations One Time Transition Funds Operating Cost Estimate-$3 million annually — Computer Aided Dispatch—911 Center $2.3 million County Cost $1.3 million from E-911 Fund Incorporation of Sheriff's Records Management and Jail Management Systems for Ease of Integration — Bidirectional Antenna Systems for Schools $1.84 million Previously Authorized $800,000 for FY2024-25 to Complete the Project ORANGE COUNTY 8 NORTH CAROLINA Commissioner Fowler said that she thought the amount left over in Cardinal Innovations from Orange County was $1.8 million. Travis Myren said he would double check the figures. Vice-Chair Greene asked if staff had considered how much opioid funding could be used for the behavioral health facility. Travis Myren said the projects that have been funded to date have been on the operating side, so they have been applied to one time expenses. He said that he is sure it will come up next week in the Opioid Funding meeting. Slide #9 FY2024-34 Recommended Capital Investment Plan • Capital Investment Plan by the Numbers — Total Recommended FY2024-25 Capital Expenditures-$51.5 million County Capital $16.2 million • Proprietary Funds $3.0 million School Capital $32.3 million — Total Ten Year Plan—$902.6 million Increase of$339.2 million Compared to FY2023-33 CIP - School Projects - County Projects - Climate Action Plan - Public Safety ORANGE COUNTY 9 NORTH CAROLINA 11 Slide #10 FY2024-34 Recommended Capital Investment Plan FY2024-34 Recommended Expenditures by Year $wo,000,000 $159,376,175 $mo,W0,000 $152,591,407 $151,259,310 $140,000,000 $120,00D,ODD $107,421,636 ■School Bond Projects $1W,WD,ODD $88,427,072 ■School Capital ■Pwprlstary Funds $eD,D00,DDD •County Capital $60,000,000 $57,126,379 TOTAL $51,452,527 $51,]]3,802 $45,025,543 54a,0o0,00a $38,156,712 $20,00D,000 S FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-23 FY 2026-29 FY 2029-30 FY2030-3] FY 2031-32 FY 2032-33 FY 2033-34 ORANGE COUNTY 10 NORTH CAROLINA Slide #11 FY2024-34 Recommended Capital Investment Plan Debt Service Schedule through 2024-34 $90,000,DOD $80,000,000 $78,W5,491 $74,697,428 $71,797,611 $71�215 S70,0w,wu $65,059,640 Bor $60,000,DOD $57,859,929 $20 $48,850,0 Borrow $50,o0g000 546,1sa,z4s 5100 million $41,049,445 $40,OW,WD $36,744,657 Boa]ow One Tlme Tax $100 million Increase $30,000,DOD $20,o00,000 $10,000,D00 FY2024-25 FY2025-26 FY2026-27 FY2027-28 FY202829 FY202930 FY2030-31 FY2031-32 FY2032-33 FY2033-34 ORANGE COUNTY 11 NORTH CAROLINA 12 Slide #12 FY2024-34 Recommended Capital Investment Plan Annual Debt Service Payments on Existing and Proposed CIP Debt $90.000= $ea,pop,opo $]a.00p.opv Sea.00p.opo MON.Wo $..0..., $a eN.ow $20.aoa.oao $+a,aoa,oao s .Existing Debt Service •Proposed C I P Debt Service -Proposed School GO Bond Debt Service ORANGE COUNTY 12 NORTH CAROLINA Slide #13 FY2024-34 Recommended Capital Investment Plan Distribution of Debt Service $90,0w,w0 $80,000,wO $]E,605,491 $]4,69],429 $71,438,205 $70,0w,w0 $65,059,640 $60,000,000 $57,E59,919 $4B,asD,aD9 $50,000,w0 546,118,245 $41,049,445 $40,000,000 $36,]44,657 $30,0w,000 $20,000,000 $10,aw,wo $- FY2024-25 FUD25-26 FY2026-27 H2027-28 FM28-19 FY2029-30 FY203631 FY2031-32 MD32-33 FY2033-34 ■5choul Debt Service ■County Debt Service ■DTCC TOTAL 13 ORANGE N COUNTY CAROL INA 13 Slide #14 FY2024-34 Recommended Capital Investment Plan Debt Service to General Fund Revenue Policy Compliance FY2024-34 22% 20% 19.67% 19,89% 19.32% 19.01% 18.34% I8% 16.79% 16% 14.18% 14% 13.09% 12.839E 12% 10% FY2024-25 FY2025-26 FY2026-27 FY2027-29 FV2028-29 FY2029-30 FY2030-31 FY2031-32 FY2032-33 FY2033-24 �PCHCVTarget �Projeaed ORANGE COUNTY 14 NORTH CAROLINA Slide #15 FY2024-34 Recommended Capital Investment Plan Schoolcenario New County New One Time Tax Peak Debt Minimum 10 Title Funding Funding Rate Impact Service to Year Payout I Revenue Ratio Bond $90.1 million $300 million bond 8.29 cents 19.14% 58.8%, Planning $100 million pay-go FY2024-34 $86 million $300 million bond 8.88 cents 19.89% 59.7% Rec. CIP $100 million pay-go • Significant Adjustments Compared to Bond Planning Breakdown of Projected Tax Increase Over Ten Year Planning Horizon School Bond 3.41 cents Public Safety Vehicles $15.6 million School Pay-as-You-Go 2.68 cents Climate Action Plan Projects $6.4 million County Facilities 1.04 cents Public Safety Software(CAD) $2.2 million Balance of CIP 1.75 cents Remove Stand Alone EMS Station -$3.3 million net savings TOTAL 8.88 cents ORANGE COUNTY 15 NORTH CAROLINA 14 Slide #16 FY2024-34 Recommended Capital Investment Plan Assessed Value Projected Tax Increase 8.88 cents $200,000 $177.60 $300,000 $266.40 $400,000 $355.20 $500,000 $444.00 $600,000 $532.80 ORANGE COUNTY 16 NORTH CAROLINA Slide #17 FY2024-34 Recommended Capital Investment Plan • Significant Long Range Projects — Affordable Housing • Three Five(5)million installments throughout FY2024-34 — Community Center Space Needs • Rogers Road Expansion-$2.9 million in FY2025-FY2027 • Chapel Hill and Carrboro Contributions-$1.7 million • County Share-$1.2 million — Emergency Radio System Buildout • Four New Towers+Equipment Enhancements on Five Existing-$32 million in FY2027-28 Town Public Safety Agencies-$8 million County Share-$24 million ORANGE COUNTY 17 NORTH CAROLINA 15 Slide #18 FY2024-34 Recommended Capital Investment Plan • Significant Long Range Projects — Millhouse Road Park • Planned Cooperative Project with Town of Chapel Hill with Construction in FY2026-27 • New 31d Party Interest in Partnership May Want to Advance Timing • Total Cost of Phase 1-$3.45 • Estimated Partner Contributions-$2.3 million County Share of Phase 1-$1.15 million — Additional School Capital Needs • Total School Capital Needs-$1 billion • Continued Planning and Vigilance — County Facility Long Range Facility Plan • Total Ten Year Recommendation-$130 million • Justice System Space Workgroup • Continued Planning Vigilance1 18 ORAN HE COUNTY Slide #19 FY2024-34 Recommended Capital Investment Plan • Schedule for Consideration — Introduction of the Capital Investment Plan April 2 — Work Session on Capital Investment Plan April 9 — Further Consideration through Budget Work Sessions May-June — Approval of the Operating and Capital Budget June 18 ORANGE COUNTY 19 NORTH CAROLINA Commissioner Fowler asked if the bond is approved and the first tranche is spent but they aren't ready to spend the others, would the borrowing be pushed back. Travis Myren said everything would be project dependent. Chair Bedford asked if it is better to ask questions tonight so that staff can research before the CIP work session the following week. 16 Travis Myren said yes. Commissioner Richards asked Travis Myren to line up the charts on #3. Travis Myren said he would revise the chart. Commissioner Richards asked him to talk a little more about the school project review on the 21 1'. Commissioner Hamilton said the schools had amended some of the recommendations from Woolpert. She said they would come to a meeting on May 21st and present what their plans are so they can be aligned with the principles of Woolpert. Chair Bedford petitioned for the Board to receive information on the policy, powers, and options they have related to school facility funding, especially if it is project-based before their summer break. Commissioner Richards clarified that the meeting on May 21 It would be a reconciliation of the school and Woolpert plan with a focus on specific projects. Commissioner Hamilton said if there is a specific project that is different than what Woolpert proposed, they would explain the changes. She said it will help commissioners and county residents to know exactly what tax money is being spent on. Chair Bedford said there may be conflict or disagreement on the projects. She recalled that in 2016, actual projects were not on the bond, but there were approvals made after the bond was approved. She said they want a plan, and they want it to be using the facility indexes, but they may not get there on May 21 It. Commissioner Hamilton said there are so many great needs that they know they will spend the bond funds and because of the steps to get the bond onto the ballot, the money is being requested first and then they will determine what projects they can fund later. She said that it is very important for commissioners to know what the county's policies are and how they will make sure the bond is spent the way they intend it to be. Commissioner Richards asked if all of the capital costs for the Southern Branch Library were covered. Travis Myren said they do not expect any additional expenses for the Orange County Southern Branch Library. Chair Bedford said she would like to understand the timing of county projects. She said it doesn't seem possible for the Justice Center to be ready in a year. She asked about the behavorial health as well. She said she thinks that EMS should be the number one priority, but that is three years out. She asked staff to bring that information back to the CIP work session. Chair Bedford thanked all of the staff for their work in creating the recommended CIP. c. 2025 Orange County Revaluation Update The Board received a high-level overview presentation on the process for the 2025 countywide property revaluation. BACKGROUND: North Carolina counties must conduct a property revaluation at least once every eight years. Orange County's last revaluation took effect January 1, 2021. With Orange County having chosen to conduct a revaluation every four years, the next revaluation will have an effective appraisal date of January 1, 2025. Tax Office staff began working on the 2025 revaluation in mid-2022. In March 2023 the Tax Office sent each owner of improved real property a Data Validation form. Property owners were asked to return the form with any corrections to the data provided. This has been a practice for the last three revaluation cycles as an effort to ensure accurate records. A revaluation is necessary to realign the values of real property throughout the County to maintain equitable and uniform property values among property owners. Market values are shaped by property sales, and the Tax Office's responsibility is to look at those sales, interpret the market 17 data, and estimate market values for all properties within Orange County. Orange County has approximately 58,500 real property parcels, and 1,002 delineated neighborhoods. To assist with the review and revaluation of commercial properties, the Tax Office has contracted with Analytical Consultants. The schedule for commercial properties is currently on track, with all sections of Phase I having been completed. The effective appraisal date for the 2025 revaluation is January 1, 2025. Revaluation Notices are scheduled to be mailed in February or March 2025. Appeals Forms will be included with the notices. The Tax Office has recently reviewed and developed an updated Appeals Form and Instruction Sheet, with the emphasis on simplifying completion of the form. The Tax Office is currently working on the 2025 Appraisal Manual, which includes information on appraisal and data collections procedures, and is required by the N.C. Department of Revenue. In addition, staff is working to complete the 2025 Schedule of Values. The Schedule of Values will be presented to the Board of Commissioners in Fall 2024, and a Public Hearing will also be set at that time. The official adoption by the Board of County Commissioners will scheduled be prior to the end of 2024. Chad Phillips, Deputy Tax Assessor made the following presentation: Slide #1 f ORANGE COUNTY NORTH CAROLINA 2025 Revaluation Update April 2, 2024 Presenter: Nancy T Freeman Orange County Tax Administrator 18 Slide#2 What is Revaluation? • Process of updating real property tax assessment to market value and present-use value as of a single appraisal date • Includes land and permanent structures, both residential and commercial • Does not include business personal property, motor vehicles, boats, airplanes, public utilities,which are reappraised annually. ORANGE COUNTY 2 NORTH CAROLINA Slide #3 Why Have a Revaluation? • Re-establish the fairness of the tax burden between properties, which change in value at different rates by location and property type. • Required by N.C. General Statute 105-286 at least every 8 years. • Resolution signed May 7, 2013, Orange County conducts every 4 years. 3 ORANGE COUNTY Slide #4 What is market value? • N.C. General Statute 105-283 defines market value as "the price estimated in terms of money at which the property would change hands between a willing and financially able buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of all the uses to which the property is adapted and for which it is capable of being used." 4 ORANNGE�COUNNTY 19 Chad Phillips said that while the state has determined that market value is the most accurate way of determining value, the county does not have to use that method. Slide #5 Commercial Appraisal Process • Contracting with Analytical Consultants • Data Collection completed • Phase I of project completed • Completion of entire project in November 2024 �, $ ORANGE COUNTY NORTH C-AROLMA Chad Phillips said they have contracted with a firm that is experienced in commercial values. Slide#6 Residential Appraisal • Neighborhood Delineation completed • Increase from 975 in 2021 to 1,002 for 2025 • Data Validation Forms — mailed prompt to review property data&notify Tax Office of corrections — mailed 44,300 March 2023, have received 3,300 responses 20 Projects created to complete in coordination with Revaluation - 50% have been completed ORANGE COUNTY 6 NOR'Ili C:AROLINA Chad Phillips said that a neighborhood is not defined as a "neighborhood" or subdivision as one usually uses those terms but rather it is a group of like properties that are together. He said that they work on neighborhood delineations throughout the year. He said they received 3,300 responses on the data validation review form. 20 Slide #7 Residential Appraisal, continued Manufactured Home Project Purpose: correcting manufactured home classification to reflect current North Carolina General Statute Results: 185 changing classification to real property, another 195 changing classification to personal property Impacts: • For 2025, 195 owners must newly list their manufactured home • Some value changes due to classification changes • Notification letters sent Fall 2024 to affected owners. • Staff to assist affected owners with 2025 listing ORANGEcCOUNnTY ROLIN Chad Phillips said the manufactured home project is part of the biggest projects they are working on. He said that the law changed in 2003 and they are coming into compliance with that as it pertains to manufactured homes. Slide #8 Residential Appraisal, continued Manufactured Home Project, continued N.C.General Statute 105-273(13)d: A manufactured home as defined in G.S.143-143.9(6), unless it is considered tangible personal property for failure to meet all of the following requirements: 1. It is a residential structure. 2. It has the moving hitch,wheels,and axles removed. 3. It is placed upon a permanent foundation either on land owned by the owner of the manufactured home or on land in which the owner of the manufactured home has a leasehold interest pursuant to a lease with a primary term of at least 20 years and the lease expressly provides for disposition of the manufactured home upon termination of the lease. ORANGE COUNTY Commissioner Hamilton asked what the tax difference is between real property and personal property. Chad Phillips said the tax rate would be the same, but the real property would be valued higher in real property due to the permanent foundation. He said that personal property can be moved and still has wheels. Vice-Chair Greene asked about item 3 on slide#8. She asked if that is common for mobile homes to be placed on leased land for 20 years. 21 Chad Phillips said that is not something they see very often and do not check that. He said that they look at the DMV records and see if the record exists with name on a title and if not, they check the deed. He said as far as the 20 year term, it is not something staff looks at. Vice-Chair Greene said she was curious how that got into the statute. Chair Bedford asked if fewer homes would be classified as real property. Chad Phillips said they have 150-200 they are looking at now and it will likely stay as personal property unless they own the land. Slide #9 Residential Appraisal, continued Current Market Conditions Mass appraisal effectiveness is measured by calculating the median sales ratio,which shows what percentage of market value is represented by current tax assessment. Current estimate of Countywide Sales Ratio:63.9%. Median sales ratio has fallen significantly over the last three years,and this indicates that sales prices have been on the rise since the 2021 Revaluation.Tax assessments assigned January 1,2021 are approximately 64%of current market sales. The overall percentage of increase in tax assessments will likely be higher than the increase experienced in the 2021 Revaluation. ORANGE COUNTY 9 NORTH CAROLINA Chad Phillips said this means that Orange County values are only 64% of what they are being sold for and that is why the state mandates that a reappraisal process be performed. Slide #10 Residential Appraisal, continued Neighborhood Reviews To date,appraisers have conducted 5,718 field reviews in preparation for the 2025 Revaluation.This is almost triple the number completed prior to the 2021 Revaluation,where field review efforts were reduced by the onset of COVID. The starting point for field reviews were neighborhoods that have experienced the most appeals since 2021,in order to ensure that there are no underlying issues that would affect all properties in the neighborhood. Field reviews will continue until the end of 2024. ORANGE COUNTY 10 NORTH CAROLINA 22 Slide#11 Timeline — What is Left To Do • Neighborhood Delineation & Field Visits - Neighborhood Delineation completed - Current count on field visits is 5,718 and will continue through the end of 2024. • Sales Analysis ongoing through December 2024 • Land Valuation began July 2023, +50% completed, Goal of August 2024 with reviews continuing well after • Building of Schedules of Values: completion targeted for September 2024 ORANGE COUNTY 11 NORTH CAROLINA Commissioner Fowler asked if they are continuing to accept sales through the end of the year and if that changes how all property is valued. Chad Phillips said it only applies to an individual neighborhood. Commissioner Fowler asked if where there are sales then the value could change between now and the end of the year. Chad Phillips said that is correct and that values will fluctuate through the end of the year depending on sales. Slide #12 Timeline — What is Left To Do, continued • Public Hearing and Adoption of Schedules of Values: September to December 2024 • Notices of Value mailed February - March 2025 • Appeals January - June 2025, appeals received prior to Board of Equalization and Review Adjournment, in late June 2025, will continue to be heard after adjournment. 12 23 Slide #13 Community Outreach Key takeaway from 2021 Revaluation: need for more community involvement. We have: • increased the number of community center meetings, showcasing the revaluation process, the appeal process, and tax assistance opportunities • attended and presented at County Roadshows • created informational videos on our website —Appealing Your Value —What is Revaluation? • simplified our Appeal Form • use of Social Media to share information 13 ORAN HE COUNTY NORTHChad Phillips said that staff had met with different community groups to discuss revaluation. He said they have created videos to explain all aspects of the project. Slide #14 Questions? ORANGECOUNTY 14 NORTH CAROLINA Chair Bedford asked when the informal appeals process begins. Chad Phillips said the informal appeals process technically begins in January, but notices won't go out until February, so they will have the appeals process open through April. Chair Bedford said the easiest way is to just tell people they can come in and appeal it. Chad Phillips said the informal review goes through April, but the formal process starts at the end and runs through June. Commissioner Hamilton thanked staff for going out into the field and learning more about the communities and neighborhoods. 5. Public Hearings None. 24 6. Regular Agenda a. Preliminary Resolution Stating an Intent to Proceed with a November 2024 Referendum on $300 Million General Obligation School Bonds The Board approved a preliminary resolution expressing the County's intent to proceed with a voter referendum on November 5, 2024, to authorize up to $300 million of County general obligation school bonds. The resolution states the County's preliminary intent to proceed, directs County staff to proceed with an application for approval from the North Carolina Local Government Commission (LGC), and makes certain "findings of fact" requested by the LGC staff, including the need for the bonds and the expected tax rate impact. BACKGROUND: Since the presentation of the Woolpert School Facility Study in December 2023, the Board has considered at several meetings plans to respond to the funding needs described in the study and how to balance school capital needs, other County capital needs and the resources available. At the January 19, 2024 Board Retreat, the Board made the determination to start the bond authorization process based on a referendum amount of$300 million in County general obligation school bonds for both school districts. The attached resolution represents the first formal step in calling for a November 5, 2024 bond referendum. Based on revisions as noted in the Manager's Recommended FY 2024-34 Capital Investment Plan (CIP), the County's assumptions for repaying the $300 million in proposed County general obligation school bonds and related interest is estimated to have a tax rate equivalent impact of 3.41 cents per$100 of valuation, with all that increase scheduled for the County's 2025-26 Fiscal Year. The attached presentation delineates the additional CIP tax rate impacts separate from the general obligation bonds tax rate impacts. If the Board adopts the attached preliminary resolution, the Board will be asked to take additional action at subsequent meetings, currently scheduled as follows: Consider the authorizing bond order on May 7, 2024 first reading and call for a required public hearing Hold public hearing June 4, 2024 Take final action on bond order on second June 18, 2024 reading In any event, the Board must complete its formal authorization process before the summer break to allow the County Board of Elections adequate time for ballot printing and other organizational matters for the referendum. If the Board adopts the preliminary resolution for $300 million in School bonds, the Board can later in the process reduce the bond amount, but the Board cannot increase the amount beyond whatever amount is included in the attached resolution (unless the process was re-started). Both the Orange County Schools and Chapel Hill — Carrboro City School Boards of Education have adopted resolutions in support of the bond referendum process. SECURITY FOR BOND REPAYMENT. A general obligation bond, as proposed, is not secured by any physical collateral. Instead, the County promises to levy property taxes in whatever amount 25 is necessary to provide for repaying the bonds, including the interest on the money borrowed through the bonds. Gary Donaldson, Chief Financial Officer, made the following presentation: Slide #1 ORANGE COUNTY NORTH CAROLINA Preliminary Resolution for General Obligation School Bonds Board of County Commissioners Business Meeting April 2, 2024 Slide #2 Background • School Capital Needs Taskforce recommended School Facility Study to prioritize both School District facilities with Facility Conditions Index as a key measure. • At the Board of Commissioners Retreat on January 19,2024, the County approved moving forward with a funding plan for County and School Facility Needs. Funding for this plan includes: A$300 million General Obligation School Bond Referendum and additional Pay- Go School Funding of$100 million. Limited Obligation Bond funding for identified County Facility Needs and previously approved CIP projects. • New State Law requires GO Bond Ballot to include Total Debt Service(Principal and Interest)and GO Bond Tax Rate. Prior Bond Ballots had included the Principal amount. • Local Government Commission has reviewed the County Plan of Finance and Debt Policies with Staff, Financial Advisors and Bond Counsel to ensure compliance with the new State Law.. • Four separate Board Actions required from April 2 through June 4,2024. ORANGE COUNTY NORTH CAROLINA 26 Slide#3 Total Tax-Supported Debt to Assessed Value and Debt Service to General Fund Revenues Tax Rate Breakdown of Capital improvement Plan DS to GF Tax Rate Year Debt to AV Base Revenues Equivalent 2.790 0 2024 1.64% 13.60% 2025 1.66% 13.09% School Pay-Go: 2026 1.21% 12.83% 8� 268¢ 2027 1,44% 14.181A 2028 1.54% 14.59% School 2029 1.77% 16.79% GO Bonds: 3.410 2030 1.58% 18.34% 2031 1.51% 19.67% 2032 1.67% 19.01% 2033 1.55% 19.32% 2034 1.34% 19.89% 2035 1.21% 18.89% - Total Impact 8.88$ ORANGE COUNTY NORTH CAROLINA Slide #4 Annual Debt Service Payments on Existing Debt 540,o00,000 $35,000,000 $30,000,000 S25,000,000 szo,oco,oco $15,000,000 S10,000,000 $510Do,o00 2624 2025 2026 2027 2029 2029 2030 2031 2032 2033 2034 2035 ■County Annual Debt Service ■Schools Annual Debt Service ■Durham Tech Annual Debt Service ORANGE COUNTY NORTH CAROLINA Chair Bedford asked a clarification on the math of the general obligation bond and the pay-go rate and why it was not as simple as it seems it should be. 27 Gary Donaldson said the pay-go is a shorter amount of time. Chair Bedford asked if they have different interest rates. Gary Donaldson said the rates are the same. Slide#5 Annual Debt Service Payments on Existing and Proposed CIP Debt $90,000,000 $80,000,000 $70,000,000 $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 - $10,000,000 - $- ... lhbbh� It l0 00 O N d' t0 00 O N �t 0 00 O N C N N N M M M M M -Z d' C 'r C eft Ln l!7 O O O O O O O O O O O O O O O O N N N N N N N N N N N N N N N N ■Existing Debt Service ■Proposed CIP Debt Service Proposed School GO Bond Debt Service ORANGE COUNTY NORTH CAROLINA Gary Donaldson said the wrap-around shows the debt on top to be able to support the capital program. Slide #6 Additional School Funding FY GO Bonds Add'I School Pay-Go Total 2024 2025 - - 2026 - 10,000,000 10,000,000 2027 100,000,000 10,000,000 110,000,000 2028 - 10,000,000 10,000,000 2029 100,000,000 10,000,000 110,000,000 2030 - 10,000,000 10,000,000 2031 - 10,000,000 10,000,000 2032 100,000,000 10,000,000 110,000,000 2033 - 10,000,000 10,000,000 2034 10,000,000 10,000,000 2035 - 10,000,000 10,000,000 Total 300,000,000 100,000,000 400,000,000 ORANGE COUNTY NORTH CAROLINA 28 Gary Donaldson said slide #6 is an illustration of the tranches and the pay-go, and that is a critical piece. He said this is one of the items that came out of the school task force meeting but based on other areas, they have learned that the pay-go is critical. Slide #7 General Obligation Bond North Carolina General Obligation Financing Key Provisions General Obligation Bonds Voter Approval Required;exception for Refunding and Two-Third Bonds - Security Pledge-Full faith,credit/taxing power of the County Maturity Term-20 years statute permits 40 years Senior position and takes priority to all other County Limited Obligation Bonds and Installment Notes. Source of repayment-Property Tax Finances;Buildings,School Facilities and Renovations with long useful life - Ratings-Aaa/AAAlAAA by Moody's,Standard&Poor's and Fitch Ratings LGC approval required ORANGE COUNTY NORTH CAROLINA Slide #8 AAA GO Bond Ratings from the Three Nationally Recognized Rating Agencies ■ Orange County has maintained AAA ratings from Fitch, Moody's and Standard & Poor's the past ten years. ■ One of few counties with this distinction nation-wide. ■ AAA rating designation allows for lowest possible borrowing rates. ■ Prior three rating agencies'analyses have cited; •3 Stable tax and economic base. ❖ Strong financial performance and financial policies. ❖ Regular monitoring of budget versus actuals with quarterly financial reporting to the Board. ❖ Long-term financial modeling and proactive operating and debt management strategies. ORANGE COUNTY NORTH CAROLINA 29 Gary Donaldson said they have finished the 2016 Bond Referendum and they have come out with AAA rating from all agencies. He said that not many counties have that strong of a rating. Slide #9 GO Bond and CIP Total Tax Rates Home 3.41 GO Bond Tax Rate Per 8.88 CIP Total Tax Rate Per Value $100 Assessed Value Assessed Value $100,000 $34.10 $88.80 $200,000 $68.20 $177.60 $300,000 $102.30 $266.40 $400,000 $136.40 $355.20 $500,000 $170,50 $444.00 ORANGE COUNTY NORTH CAROLINA Slide #10 Bond Referendum Key Dates Tentative GO Bond Plan January 19,2024, Board Retreat (Not to Exceed Amount) Staff and Financing Team Meets with Local February 13, 2024 Government Commission on Plan of Finance Preliminary Resolution-Intent to Proceed on April 2, 2024, Business Meeting Not to Exceed$300 Million First Reading-Authorizing the Bond Order May 7,2024, Business Meeting and Call for Public Hearing Hold Public Hearing June 4,2024, Business Meeting Second Reading-Take Final Action on June 18, 2024, Business Meeting Bond Order Bond Education Committee Summer-Autumn 2024 Bond Referendum November 5,2024 30 Slide #11 SAMPLE BALLOT Orange County School Bonds Additional property taxes may be levied on property located in Orange County in an amount sufficient to pay the principal of and interest on bonds if approved by the following ballot question. Shall the order authorizing$300,000,000 bonds plus interest to pay capital costs of providing school facilities and paying related costs and providing that additional taxes may be levied in an amount sufficient to pay the principal of and interest on the bonds,as adopted by the County's Board of Commissioners on June 4,2024,be approved,in light of the following: (1)The estimated cumulative cost over the life ofthe bond,using the highest interest rate charged for similar debt over the last 20 years,would be $480,360,000. (2)The amount of property tax liability increase for each one hundred thousand dollars($100,000)of property tax value to service the cumulative cost over the life of the bond provided above would be$34.10 per year. YES NO ORANGE COUNTY NORTH CAROLINA Gary Donaldson said that the county previously received confirmation from the LGC and now the language in slide #11 shows all of the details. Slide #12 QUESTIONS ORANGE COUNTY NORTH CAROLINA Commissioner Richards asked how the interest rate would be reflected in the sample ballot. She asked for confirmation that it is not reflected in the actual tax increase. 31 Gary Donaldson said the tax rate increase includes both the principal and interest rate. He said the prior ballot would have only showed the $300,000,000. He said that only the principal was shown then. Commissioner Richards said this will create a complication in communication. Gary Donaldson said it complicates it, but the bond education committee will be able to break it down and explain that. He said there will be additional points to be included during the bond education phase. Commissioner Hamilton asked if the ballot title could be changed to "School Bonds for Orange County," since there are two school systems. Gary Donaldson said that they could take that suggestion to the bond education committee for consideration. Vice-Chair Greene suggested "Bonds for Orange County School Districts." Gary Donaldson said they would take that information to the bond education committee. Commissioner Fowler asked if the sample ballot reflects the ballot from 2016. Gary Donaldson said it does. He said the Local Government Commission has approved the sample ballot, so any changes will go back to them for review. Chair Bedford said the date may need to be updated to June 18, 2024. She said the language in the sample ballot is at a high reading level. Commissioner Fowler said there is no question mark in the ballot to indicate that it is a question to the voter. Gary Donaldson said they would work on the language to the extent that it does not compromise the meaning. A motion was made by Commissioner Hamilton, seconded by Chair Bedford, to approve a resolution stating an intent to proceed with a referendum for up to $300 million in general obligation school bonds. VOTE: UNANIMOUS b. Recommendations for Employee Health Insurance and Other Benefits The Board approved the Manager's recommendations regarding employee health and dental insurance effective July 1, 2024, through June 30, 2025. BACKGROUND: The County provides employees with a comprehensive benefits plan that includes participation in robust health and dental insurance plans for employees and their families. Each year, the Board of Commissioners is asked to review and approve health and dental insurance rates in advance of the annual budget so that open enrollment can be completed prior to the beginning of the plan year which starts on July 1. Health Insurance Since the Board of County Commissioners approved Orange County's participation in the North Carolina Health Insurance Pool in FY 2018-19,the County maintained the same monthly premium equivalent rates for health insurance and dental coverage for employees and pre-65 retirees based on stable claims experience until FY 2022-23. In both FY 2022-23 and FY 2023-24, the Board approved an increase of 5% to the Health Insurance Premium Equivalents for both active and pre-65 retirees as the Health Insurance plan experienced an increase in the overall number of claims and higher costs per claim compared to prior years. The higher cost of claims also resulted in a drawing down of reserves kept within the North Carolina Health Insurance Pool. The increased cost was paid entirely by the County and not passed on to employees through increased employee contributions. 32 Funding for the health plan is based on estimated premium equivalent rates that are calculated to pay for incurred claims, administrative and reinsurance costs, and expected liability of claims incurred but not reported (IBNR). The plan also carries a reserve balance which ensures the County's ability to pay claims if the total cost of claims exceeds the total funding generated by the premium equivalents. A reserve policy or the fund ratio target should range between 1.5 and 3.0 over IBNR to ensure the ability to pay for future claims based on current claims experience. This means that the County's reserve target should be between $1.1 million and $2.2 million. The County's current fund ratio is 0.2 through January 2024 or a total balance of$167,000. In FY 2024-25 and beyond, staff recommends a targeted reserve amount of two times of the expected IBNR liability. This means that the targeted reserve would grow to $1.5 million over time. Although the plan currently has a negative balance of $574,261, the reserve is expected to be positive by year end due to significant rebate payments due in March and June 2024. However, additional funding is necessary to cover projected total plan costs for FY 2024-25 and to continue to build reserve levels up to the targeted two times of expected IBNR liability. The actuarial analysis conducted by the North Carolina Health Insurance Pool recommends an increase of five percent (5%). Comparatively, increases for self-funded plans in general have averaged 8.4% for FY 2023-24, 7.4% in FY 2022-23 and 7.3% in FY 2021-22. For fully insured plans, increases are 2% to 4% points higher than self-funded trends depending on the employer size. Contributing to the increase in cost of services is the rising popularity and utilization of weight loss medications. Pharmacy trends overall are up 11% in FY 2023-24 compared to prior years. Orange County, costs have increased by 5% annually in the past three years, which outperforms market trends in the same comparison period. In addition, sharing costs as a member of NCHIP for high-cost claimants has benefitted the County. The Manager recommends that the County assumes 100% of the recommended 5% increase and that the employee contribution continues at current rates. This represents a total budget increase of$740,643. FY 2024-25 Health Insurance Rate Renewal Year Rates Monthly Cost Annual Cost Employee Employer Contribution Contribution 2023 Current Rates $1,234,404 $14,812,846 $1,438,222 $13,374,624 2024 Current Rates with Employer $1,296,124 $15,553,489 $1,438,222 $14,115,267 Increase Only(Renewal) Netlncrease $61,720 $740,643 $0 $740,643 Dental Insurance Delta Dental is the County's Dental provider, and the County would continue to provide coverage with Delta Dental. No rate increase is recommended for FY 2024-25. The total annual Dental budget is currently $685,376. 33 Brenda Bartholomew, Human Resources Director, introduced the item. She introduced Wes Grigston, a broker from Gallager and Tonya Parker, Senior HR Benefits Manager. Brenda Bartholomew reviewed the information in the agenda abstract. Commissioner Fowler asked if the 5% increase was for all plans. Brenda Bartholomew said it was for anyone enrolled in the program and across all tiers. Chair Bedford said it was good that the increase was below what others are experiencing. She said that they want to encourage employees to look at their entire salary and benefits package when considering compensation. She said she supported the recommendations. A motion was made by Commissioner Fowler, seconded by Commissioner Richards, to approve the following: 1) an increase of 5% to the Health Insurance Premium Equivalents for both active and pre-65 retirees and the amount of the increase to be fully paid by the County; 2) an increase of Health Insurance funding of$740,643; and 3) the County's continued participation as a member in the North Carolina Health Insurance Pool (NCHIP). VOTE: UNANIMOUS 7. Reports None. 8. Consent Agenda • Removal of Any Items from Consent Agenda • Approval of Remaining Consent Agenda • Discussion and Approval of the Items Removed from the Consent Agenda A motion was made by Commissioner Fowler, seconded by Commissioner Hamilton, to approve the consent agenda. VOTE: UNANIMOUS a. Minutes The Board approved the draft minutes for the February 20, 2024 BOCC Meeting as submitted by the Clerk to the Board. b. Motor Vehicle Property Tax Releases/Refunds The Board adopted a resolution to release motor vehicle property tax values for five (5)taxpayers with a total of twenty-seven (27) bills that will result in a reduction of revenue. c. Property Tax Releases/Refunds The Board adopted a resolution to release property tax values for twelve (12) taxpayers with a total of fourteen (14) bills that will result in a reduction of revenue. d. Removal of Appointee from the Affordable Housing Advisory Board The Board removed an appointee from the Affordable Housing Advisory Board (AHAB). e. Amendment to the Eno Fire Protection and Emergency Services Agreement The Board approved an amendment to the 2019 Fire Protection and Emergency Services Agreement between Orange County and Eno Fire Department for the East Orange Fire Service District (the "District') to extend the Agreement until a new agreement has been developed and approved by both parties and implemented. 34 f. Amendment to the Orange Rural Fire Protection and Emergency Services Agreement The Board approved an amendment to the 2019 Fire Protection and Emergency Services Agreement between Orange County and Orange Rural Fire Department for the Central Orange Fire Service District (the "District') to extend the Agreement until a new agreement has been developed and approved by both parties and implemented. g. Contract Amendment with New River Tire Recycling, Inc. The Board approved and authorized the County Manager to sign a contract amendment with New River Tire Recycling, Inc. for the loading, transport, and recycling/disposal of scrap tires. h. Letter of Support— GoTriangle Climate Pollution Reduction Grant The Board approved and authorized the Chair to sign a Letter of Support for GoTriangle's Climate Pollution Reduction Grant (CPRG) application. i. Orange County FY 2024 Quarter 4 Annual Work Program Amendments The Board approved FY 2024 Quarter 4 Amendments to the Annual Work Program (AWP). j. Orange County FY 2025 Annual Work Program The Board approved the Orange County FY 2025 Annual Transit Work Program (AWP). 9. County Manager's Report Bonnie Hammersley reviewed the agenda items for the April 9 CIP work session: Projected April 9, 2024 Budget Work Session Items Discussion on Manager's Recommended FY 2024-34 Capital Investment Plan 10. County Attorney's Report John Roberts said two commissioners were not present at the meeting but had expressed interest in participating in the meeting. He said there was nothing in the Rules of Procedure that discusses how remote participation by a commissioner can occur. He said that could be addressed with some limitations if the Board would like to discuss it at a future work session. 11. *Appointments None. 12. Information Items • March 19, 2024 BOCC Meeting Follow-up Actions List • Tax Collector's Report— Numerical Analysis • Tax Collector's Report— Measure of Enforced Collections • Tax Assessor's Report— Releases/Refunds under$100 • Memorandum —Justice System Space Needs Work Group 13. Closed Session A motion was made by Chair Bedford and seconded by Commissioner Fowler, to enter in to closed session at 8:49 p.m. for the purposes listed below: "To consult with an attorney employed or retained by the public body related to Capitanio V. Orange County, in order to preserve the attorney-client privilege between the attorney and the public body," NCGS § 143-318.11(a)(3). VOTE: UNANIMOUS 35 RECONVENE INTO REGULAR SESSION A motion was made by Commissioner Richards, seconded by Commissioner Fowler, to reconvene into regular session at 9:09 p.m. VOTE: UNANIMOUS Upon reconvening into regular session, the Board decided to move forward with a proposed settlement with the plaintiff in Capitanio v. Orange County. A motion was made by Commissioner Fowler, seconded by Commissioner Richards, to approve a settlement of$80,000 with the plaintiff. VOTE: UNANIMOUS Adjournment A motion was made by Commissioner Fowler, seconded by Commissioner Hamilton, to adjourn the meeting at 9:10 p.m. VOTE: UNANIMOUS Jamezetta Bedford, Chair Laura Jensen, Clerk to the Board Submitted for approval by Laura Jensen, Clerk to the Board