HomeMy WebLinkAboutAgenda - 10-08-2024; 2 - School Capital Funding Policy Discussion 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: October 8, 2024
Action Agenda
Item No. 2
SUBJECT: School Capital Funding Policy Discussion
DEPARTMENT: County Manager
ATTACHMENT(S): INFORMATION CONTACT:
A. Draft School Capital Funding Policy Kirk Vaughn, (919) 245-2153
B. June 4, 2024 Board Item —
Establishing a Framework for
School Bond Projects and Capital
Funding
C. Current Capital Funding Policy
D. 2008 School Capital Funding Policy
PURPOSE: To review and provide feedback on a draft School Capital Funding Policy prepared
by staff.
BACKGROUND: Over the past year, County staff and elected officials have reviewed significant
portions of County's school capital policies and practice in advance of the upcoming November
5, 2024 Bond Referendum. At the May 7, 2024 Business meeting, the Board received a
presentation from staff on the statutes and policies that drive school capital funding and County
oversight. At the June 4, 2024 Business meeting, the Board adopted a financial framework for the
upcoming bond referendum (Attachment B). The attached draft policy (Attachment A) attempts to
codify both discussions and provide direction to County and school staff. Current and prior school
funding policies (Attachments C and D) are also provided to provide context to this new proposed
policy.
The first section of the policy details the funding framework, explicitly detailing the sources of
funding and the new categories of usage as approved on June 4t" and how these funds shall be
allocated to each district. The second section details the methods that the County will use to
direct and oversee the spending of capital funds. These include project-based allocation,
allocation in stages, amendment to budgets and emergencies. These financial controls can be
used independently or in coordination with other joint agreements between the County and the
two school districts. These include school construction standards policy and a joint project
management resource managed by the County.
Staff requests that the Board provide feedback on the proposed policy. Next steps are to await
the vote on the referendum on November 5t", and then request feedback from both districts. The
finalized draft policy will be presented again to the Board before the presentation of the Manager's
Recommended Capital Investment Plan in April 2025.
FINANCIAL IMPACT: There is no immediate financial impact of this discussion.
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ALIGNMENT WITH STRATEGIC PLAN: This item supports:
• GOAL 5: PUBLIC EDUCATION/LEARNING COMMUNITY
OBJECTIVE 4. Improve learning environments by investing in facilities over a 10-year
period that address repair, renovation, and educational adequacy needs.
OBJECTIVE 5. Invest in and implement a plan that supports schools operational and
facility funding needs.
RECOMMENDATION(S): The Manager recommends that the Board review and provide
feedback on the draft School Capital Funding Policy.
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Attachment A October 8, 2024
Orange County Board of Commissioners
School Capital Funding Policy - Draft
Preamble
Since 2022, the Board of County Commissioners has engaged in reviewing its capital
funding for the two Orange County school districts. This began with the creation of the
School Capital Needs Workgroup, which included staff and elected officials from all three
bodies. They recommended the county engage with a consultant to review and make
recommendations about school capital investments. The Board engaged with Woolpert Inc.
which presented four School Optimization Plan options based on different funding
commitments. During the January 17, 2024 Board Retreat, the Board discussed the four
strategies and settled on its preferred investment level. The Board proposed a $300 million
dollar bond [which was subsequently approved by the voters in November 2024], as well as
a significant increase in county annual capital funding in the form of Pay-Go (or cash). This
significant investment, as well as its tax impact on county residents, has necessitated that
the Board review its capital funding policies and expenditure controls for school construction.
This funding framework was adopted by the Board on June 4, 2024 and codified into this
funding policy below.
Capital Spending Categories
Major Projects
At the June 4th, 2024 Board meeting, the Board adopted the framework for new capital
spending and asked that both districts submit bond plans based on their approved funding
levels. These plans are to be based on the framework of the Woolpert Optimization Plan.
This framework prioritizes replacing old facilities with new facilities and improving the
educational adequacy of school buildings. The Bond and Supplemental Pay-Go funds
would be used to fund these major projects as described below.
High Priority Needs
At the same June 4th, 2024 meeting, the Board adopted a framework for identifying and
prioritizing High Priority Needs. Woolpert identified a priority list of all major component
replacements for each campus for both districts. While Woolpert provided a specific
replacement schedule, both districts may identify alternative replacement schedules.
Specific high priority needs will be formally determined on an annual basis and be
consistent with the Woolpert high priority definitions:
i. Level 1 — Critical — Failure of components impact the facility's ability to
remain open
ii. Level 2 — Essential — Failure of components impact the health of major
systems (i.e. leaking roofs)
iii. Level 3 — Necessary— Failure of components could impact the facility's
efficiency and usefulness
iv. Life cycle replacements with one to three (1-3)years of remaining useful
life at the time the study was completed.
High Priority Needs will be funded using Annual County Debt Financing, Lottery Proceeds,
as well as any remaining Bond or Supplemental Pay-Go funds as described below.
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Attachment A October 8, 2024
Other Capital Uses
The county recognizes that there are expenses that may not be consistent with the Woolpert
definitions of priority, nor can be covered in the Current Expense budget. These could
include athletic upgrades, component replacements, capital leases, technology purchases.
Other Capital Uses will be funded by Recurring Capital and Article 46 Sales Tax Proceeds
as described below.
Sources of Funds
Bond Funds and Supplemental Pay-Go
In order to meet the funding requirements for the school optimization plan, the County
Commissioners voted to seek a $300 M Bond Referendum and to supplement this bond
with an additional $100 M of tax supported Pay-Go (or cash) funding. The intent of the
bond funds is to fund the Six (6) Manor Projects identified by the school districts. The
supplemental Pay-Go funds are intended to cover all professional services, project
management and design costs related to construction. After the six projects are
completed, the supplemental pay-go will provide additional annual funding for High Priority
Needs and increase the county's annual maintenance funding for the school district
portfolio.
Annual County Debt Financing
The county currently borrows funds on an annual basis to fund both district's annual capital
projects, in the amount of$4,429,718 in FY 2025. These funds are programmed to
increase by 2% annually. These funds will be used to support both district's High Priority
Needs.
Lottery Proceeds
Lottery proceeds represent the state of North Carolina's contribution towards funding
school construction. The state currently manages three lottery programs for school capital:
Public School Building Capital Fund, Public School Repair and Renovation Fund, and
Needs-Based Public School Capital Fund. These funds are allocated by the state to
specific school districts, but the county is responsible for applying for and drawing down
the state funds. The County shall aggressively apply for and drawn down all funds
available to both districts. In cases where the county draws down lottery proceeds to offset
debt service costs on prior school debt issuances; the county shall do so. The county will
then provide the districts the same amount of funding as Pay-Go, to provide additional
flexibility to the districts. These funds will be used to support the districts' High Priority
Needs.
Article 46 Proceeds
In FY 2012, the County authorized the use of Article 46 proceeds and set a policy of
allocating 50% to school capital and 50% to economic development initiatives. The Article
46 funds dedicated to school capital funding are commonly used to fund both districts'
technology needs. However, these funds are not restricted for that purpose and can be
used for any Other Capital Uses as needed by both districts.
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Attachment A October 8, 2024
Recurring Capital
The county also provides a recurring stream of funding for all minor capital expenses, such
as equipment purchases, component replacement, athletic and field repairs. The county
provided $3,060,000 to the districts in FY 2025. This funding will increase by 2% annually
and will be used to support both districts Other Capital Uses.
Allocation
For the 10-year period from FY 2025-26 through FY 2034-35, the county will allocate all
funds towards the combined Major Project and High Priority Needs categories on the basis
of 58.86% to Chapel Hill Carrboro City Schools and 40.14% to Orange County Schools. This
allocation is based on the Woolpert Inc. School Optimization Report. After the expiration of
this ten-year period, future Boards can choose either to commission a new school
optimization report to determine future allocation or revert back to budgeted Average Daily
Membership.
For Other Capital Uses, Article 46 proceeds will be allocated annually based on the
budgeted Average Daily Membership for each district, excluding charter students. Recurring
Capital will be allocated annually based on budgeted Average Daily Membership.
Capital Project Ordinances — Project, Function and Purpose
All funds allocated to capital projects are to be accounted for in the School Capital Fund as
authorized by a Board of County Commissioner approved Capital Project Ordinance. Capital
Ordinances can be authorized and amended by the board either annually through the Capital
Investment Plan (CIP) or through budget amendments at any Board Business Meeting
during the year. Each category of expense shall use different rules of authorization for
Capital Project Ordinances to best balance the county's requirement for fiscal oversight
against the need for the districts to manage capital projects quickly and efficiently.
Major Projects will be authorized on a project basis, restricting funds to the specific purpose
identified by the Board. Funds for major projects will be allocated in two tranches, design
and construction. First, the county will authorize the funds to begin designing the major
project through the annual Capital Investment Plan. The county will anticipate authorizing
the construction funds in the following fiscal year for debt management purposes. However,
the board can withhold authorization of construction funds until county staff can review the
designs for compliance with any Board approved construction standards and scope
requirements.
High Priority Needs will be authorized on a project basis, restricting funds to the specific
purpose identified by the Board. These projects will be identified by the school districts each
year through the ten-year annual Capital Investment Plan. School staff will work with County
staff to present projects for the CIP that comply with the Woolpert definitions and are within
county funding parameters.
Other Capital Uses will be authorized by function or purpose, which group similar expenses
into broad categories like "technology" or "athletic improvements". These will be allocated
by school district staff each year through the Capital Investment Plan.
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Attachment A October 8, 2024
Oversight and Amendments
Per Statute § 115C-433 (b) districts may increase or decrease specific project budgets by a
specified percentage as adopted by the BoCC. This policy specifies that the districts must
seek prior approval to amend the county allocations for any allocations approved by
purpose, function or project by a cumulative amount of 15% or more. The districts are still
expected to submit budget amendments to county staff to rectify all changes throughout the
year and reconcile both district's general ledgers to meet the statutory preaudit
requirements.
In addition, for all Major Projects, a working group of school and county staff should meet
monthly to review progress on these major construction projects and their cost projections.
This working group will include county budget staff and management, as well as school
district operations and construction personnel. This working group will ensure that the
county staff can advise the board on any change orders, delays or cost overruns.
Emergencies
This policy recognizes that adopting a project-based allocation method for High Priority
Needs could restrict the districts' ability to react to sudden failures or emergency situations.
Therefore, when emergencies or sudden failures occur, school staff are to provide a written
request for immediate reallocation to the County Manager and the Budget Director. The
county will then reallocate funds at the next available board meeting.
Enrollment and Capacity
The county will annually review student growth and enrollment as it relates to school
capacity. The county is committed to provide adequate educational space for all levels of
education in both districts. However, due to the significant investment already allocated
towards school construction during the FY 25-35 period, the County will likely not be able to
finance another significant expansion. District Staff should propose funding any expansion
in capacity by redirecting Major Project or High Priority Needs funds prior to requesting
additional funding.
Rescission
This policy supersedes any policy in place prior to this date.
October 8, 2024
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ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: June 4, 2024
Action Agenda
Item No. 6-a
SUBJECT: Establishing a Framework for School Bond Projects and Capital Funding
DEPARTMENT: County Manager
ATTACHMENT(S): INFORMATION CONTACT:
Travis Myren, (919) 245-2308
Kirk Vaughn, 919-245-2153
PURPOSE: To establish a framework for School capital project funding associated with the 2024
Bond Referendum and other high priority capital needs.
BACKGROUND: The Board of County Commissioners is in the process of formally adopting a
school bond question to be placed on the November 2024 ballot. The Board has established a
not to exceed bond amount of$300 million and intends to pair the bond with a significant increase
in pay-go funding with the goal of providing an additional $100 million in new pay-go funds over
the next ten years.
At the May 21, 2024 Business meeting, the Board received presentations from the County and
the two Districts on their preferred spending plans for the bond. At the May 23, 2024 budget work
session, the Board discussed the plans presented and the framework that will be used for
allocating capital funds to each District in the future. Based on that discussion, the Board will
proceed with the following framework for allocating capital funding for school projects:
1. Project Funding
School capital projects will be funded based on consistency with the principles of the
Woolpert Plan that endeavors to replace old facilities with new facilities, improve the
educational adequacy of the buildings, and address high priority capital needs throughout
each district. During the course of the ten-year capital plan, the County recognizes that
circumstances change and priorities and projects may need to be adjusted. As a result,
the capital plan will be reviewed at least annually to make any necessary adjustments.
a. Based on available funding, the Board intends to fund three major projects in the
Chapel Hill Carrboro City Schools District: a new middle school to replace existing
school capacity, a replacement of Carrboro Elementary, and a replacement of
Culbreth Middle School.
b. Based on available funding, the Board also intends to fund three major projects in
the Orange County Schools District: a new elementary school to replace existing
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school capacity, a replacement of Orange Middle School, and a rebuild or significant
renovation of an additional elementary school that improves educational adequacy.
c. Specific high priority needs will be formally determined on an annual basis and be
consistent with the Woolpert high priority definitions:
i. Level 1 —Critical — Failure of components impact the facility's ability to remain
open
ii. Level 2 — Essential — Failure of components impact the health of major
systems (i.e. leaking roofs)
iii. Level 3 — Necessary — Failure of components could impact the facility's
efficiency and usefulness
2. Funding Amounts
a. If the bond referendum is approved, bond funding will be distributed to the Districts
based on Woolpert's project recommendations. $174.7 million will be allocated to
Chapel Hill Carrboro City Schools and $125.3 million will be allocated to Orange
County Schools.
b. New pay-go funding will also be distributed based on the Woolpert
recommendations with the goal of providing project management to both districts
and design funds for new construction starting in FY 2025-26.
c. High priority needs will be funded using any remaining bond and pay-go funds,
annual maintenance funds, lottery proceeds, and existing capital balances.
d. Combined, the Board's goal is to provide approximately $263 million or 59.86% of
total funding to Chapel Hill Carrboro City Schools and approximately $176 million or
40.14% of total funding to Orange County Schools for the ten-year period of FY
2025-26 through FY 2034-35.
e. Article 46 funds will continue to be distributed to the Districts based on the average
daily membership excluding charter students, and recurring capital will be
distributed to the Districts based on average daily membership including charter
students.
3. Project Budgeting
The County will specifically enumerate major projects and high priority needs in separate
project budgets by facility. Staff will draft an updated School Funding Policy that details
the project budgeting process and present that revised policy to the Board of
Commissioners in the Fall of 2024.
FINANCIAL IMPACT: The financial impact of the bond has already been estimated at an 8.88
cent tax increase in FY 2025-26. This estimate will be refined as projects are sequenced over the
ten-year plan and could be phased in over several years.
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SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goals are applicable
to this item:
• GOAL: ENSURE ECONOMIC SELF-SUFFICIENCY
The creation and preservation of infrastructure, policies, programs and funding necessary
for residents to provide shelter, food, clothing and medical care for themselves and their
dependents.
• GOAL: CREATE A SAFE COMMUNITY
The reduction of risks from vehicle/traffic accidents, childhood and senior injuries, gang
activity, substance abuse and domestic violence.
ENVIRONMENTAL IMPACT: The following Orange County Environmental Responsibility Goal
impacts are applicable to this item:
• ENERGY EFFICIENCY AND WASTE REDUCTION
Initiate policies and programs that: 1) conserve energy; 2) reduce resource consumption; 3)
increase the use of recycled and renewable resources; and 4) minimize waste stream impacts
on the environment.
• RESULTANT IMPACT ON NATURAL RESOURCES AND AIR QUALITY
Assess and where possible mitigate adverse impacts created to the natural resources of the
site and adjoining area. Minimize production of greenhouse gases.
RECOMMENDATION(S): The Manager recommends that the Board approve the framework for
school capital funding as detailed in this abstract.
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Attachment C May 7, 2024
Orange County Board of Commissioners
Capital Funding Policy
Preamble
This capital funding policy is the product of extensive analysis and deliberation. The intent
of this policy is to reflect greater priority than there has been historically on providing funding
for County projects, with particular emphasis directed at enhanced upkeep of existing
County facilities. This policy continues the County's principle and historical practice of
funding all School and County related debt service obligations before allocating any other
School or County capital funds for other purposes.
Long Range Capital Investment Plan
During each fiscal year, the County Manager shall present to the Board the ten-year County
and School capital needs and funding plans in the form of a Capital Investment Plan. The
Board of County Commissioners will adopt a ten-year Capital Investment Plan (CIP) as part
of the annual operating budget in June.
County and School recurring capital needs will be identified and reviewed during each
annual operating budget cycle, and recurring capital appropriations will be approved by the
Board of Commissioners as an element of each annual Orange County Budget Ordinance.
Sources of Funds
The County will allocate the following sources of funds for County and School debt service
and long-range and recurring capital:
• All proceeds from the Article 40 and Article 42 half-cent sales taxes.
(The North Carolina General Statutes require that 30 percent of the Article 40
(NCGS§105-487(a)) and 60 percent of the Article 42 (NCGS§105-502(a)) sales tax
revenue be earmarked for public school capital outlay as defined in NCGS§105-426(f)
or to retire any indebtedness incurred by the county for these purposes)
• Property tax revenue as needed and approved by the Board.
• The County will budget NC Education Lottery proceeds as the revenues are distributed
by the State each quarter, once the revenues are identified for an individual school capital
project and requested by each district.
Debt Service
All County and School related debt service obligations would be funded prior to allocation of
programmed funding for any other capital purposes.
NC Education Lottery Proceeds
Each school district will have the option to dedicate its share of the annual NC Education
Lottery monies to address school facility renovation needs or as additional revenue to the
districts pay-as-you-go funding to address school facility renovation needs. Annually either
district can request that the County dedicate Lottery proceeds to repay debt service and the
county will substitute pay-as-you-go-funding to expedite approved capital projects in the
school's capital improvement plan. The County will then file separate school applications
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Attachment C May 7, 2024
with the NC Department of Public Instructions and make withdrawals of lottery proceeds for
both school systems.
Allocation
Capital funding for each ten-year capital planning period will be allocated between the two
school districts based on the student membership planning allotments, provided by the NC
Department of Public Instruction by March 1 of each year.
Capital Project Ordinances — Form and Purpose
All funds allocated to capital projects are to be accounted for in a Capital Project Fund as
authorized by a Board of County Commissioner approved Capital Project Ordinance.
The Capital Project Ordinance will include a detailed breakdown of each major cost category
related to the project.
In accordance with the Board of County Commissioners November 2000 adopted "Policy on
Planning and Funding School Capital Projects", whenever School capital project bids are
either higher or lower than originally projected, or any other factor affecting the project
budget occurs, the affected school system is expected to work with County Management
and Budget staff to present revised capital project ordinances for adoption by the Board of
Commissioners. The same expectations shall be applicable for changes to County Capital
project budgets.
Capitalization Thresholds for Government Auditing Standards Board (GASB) 87
(Leases) and 96 Subscription Based Information Technology Agreements (SBITA)
The County implemented GASB Statements Number 87 and 96 in fiscal years 2022 and
2023, respectively. To further streamline implementation of both GASB 87 (Leases) and
GASB 96 (Subscription Based Information Technology Arrangements) (SBITA), the
County will establish capital thresholds of $50,000 for meeting the reporting requirements.
This policy threshold of $50,000 is effective for the fiscal year ending June 30, 2024, for
both GASB 87 and 96.
Community Use of Schools
It is the intent of the Board of County Commissioners to evaluate each new proposed school
in both School Districts for joint community use opportunities, including, but not limited to,
park and recreation use.
Schools Adequate Public Facilities Ordinance
Orange County's Schools Adequate Public Facilities Ordinance (SAPFO) and Memoranda
of Understanding (MOUs) between the County and its municipal and school partners
establish the machinery to assure that, to the extent possible, new development will take
place only when there are adequate public school facilities available, or planned, which will
accommodate such new development. The Board of County Commissioners is committed
to the principle that new school space documented as needed through the annual SAPFO
technical review process will be reflected in the next adopted CIP, and will be funded so as
to be constructed to be available before the relevant level of service threshold is exceeded.
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Attachment C May 7, 2024
Rescission
This policy supersedes any policy in place prior to this date.
May 7, 2024
13
Revised April 2008
ORANGE COUNTY
Policy on Planning and Funding School Capital Projects
(This document is intended to clarify the expectations of the Orange County Board of Commissioners in
collaborating with the Boards of Education in planning for and implementing school capital projects)
1. Background
The County's ten year capital investment plan is a planning document that is updated annually.
Before the beginning of each fiscal year, the Board of County Commissioners approves the
funding plan in concept. However, funding of individual projects is contingent upon the scope
of work required to complete the project.
• Level 1 Projects: Level one projects are those projects that have a relatively small scope
of work and can be accomplished using a single prime contractor, in-house staff or entail
purchasing equipment and vehicles. Specific examples of Level 1 projects include
roofing projects,parking lot paving and re-wiring of existing buildings. The Board
approves the entire project ordinance at one time.
• Level 2 Projects: Level two projects are major projects that require several phases to
complete. For these projects, the Board of County Commissioners approves a four-phase
appropriation process to include:
• Concept/Pre-Planning Phase (includes preliminary programming and design work
that would result in conceptual drawings and preliminary cost estimates.
• Planning Phase (including siting& infrastructure)
• Design and Construction Approval Phase (including final design, equipment,
furnishings, non-recurring start up,technology, contingency)
■ Schools have the latitude to shift funds between major components without
prior BOCC approval, providing that the actual cost of the project does not
exceed budget.
■ Superintendents will provide the County Manager with written project
updates at their regular monthly meetings. In turn, the County Manager will
provide the Board of County Commissioners with written progress reports
related to the project.
• Final Accounting Phase
■ Upon completion of the project, School and County staff will reconcile actual
project expenditures with approved budget and provide the BOCC with a
"final accounting" of project.
Page 1 of 6
Policy on Planning and Funding School Capital Projects
14
Revised April 2008
2. Site Standards
In accordance with North Carolina State Statutes, a local board of education cannot execute a
contract nor expend funds to purchase a facility site without the consent of the local board of
county commissioners. As each school system in Orange County plans for future school-related
facilities, it is important that they adhere to the following guidelines related to the potential
acquisition, either by purchase or donation, of a site, in addition to any siting criteria they may
have established internally:
Potential Sites - The Board of Education is to notify the Orange County Board of
Commissioners, in writing, whenever they have tentatively identified a potential
school site for purchase, or if a potential donor indicates interest in donating a site to
the system. The written correspondence should provide the following information for
Commissioner consideration:
• Location, including tax map numbers, of the potential site;
• Opportunities for additional facilities to be co-located as a park site, as
outlined in the "Memorandum of Agreement for Providing Coordinated Site
and Facility Planning";
• The availability of public utilities within the urban services boundaries of the
County;
• If a donated site:
• Any knowledge of a donor's plans for adjacent development;
• Special considerations or expectations the donor may have referenced in
initial discussions pertaining to the donation;
Upon receipt of the Board of Education's notification, the Commissioners will
appoint,by a majority vote of the Board, a representative to work directly with the
Board of Education. As a partner with the school system, the Commissioner
representative will receive information and provide input regarding talks and
negotiations related to the potential site. The Commissioner representative will share
information regarding the progress of talks and negotiations of the potential site with
other members of the Board of Commissioners.
Environmental Factors—A school system is to pay particular attention to the physical
environment surrounding the site and new facility.
• In order to avoid future flood hazards, a facility should not be located in close
proximity to wetlands, stream buffers, or in a flood plain. Facility siting should
also avoid other physical factors that create either additional construction or
longer-term maintenance problems, or other unfavorable environmental impacts.
Page 2 of 6
Policy on Planning and Funding School Capital Projects
15
Revised April 2008
• Once a system acquires a site and before grading begins, each school system
receives State approval of its erosion control plan and additional County review to
ensure that unnecessary cutting of trees or clearing of land does not occur.
Adequate natural buffers are to be left intact with existing trees, or replanted if the
areas are disturbed during construction. Special attention should be paid to
"specimen"trees as outlined in the County land development code.
Road and Utility Requirements—Major elements for a system to consider in siting a
new facility relate to infrastructure requirements by a Town or other public utility. In
some recent instances, the systems have been required to provide costly infrastructure
such as sidewalks and road improvements. These elements greatly inflate
construction costs of new facilities. As a system begins initial planning, there should
be a joint meeting between elected Town, County and Education officials to discuss
particular requirements that all parties expect of other project partners.
3. Building Design Standards
As a school system selects a particular facility design, it is important that the most cost-effective
design alternative be pursued. Historically in Orange County, new school buildings have been
designed uniquely for each particular project. The Board of Commissioners encourages systems
to pursue non-traditional, or prototype, designs that can be replicated for use on more than one
project. Should a system choose a unique design, it is to provide a detailed cost comparison
analysis and justification in writing of why that particular approach was chosen over a prototype
design.
4. Construction Standards
Over the past few years, the County has given special attention to defining construction
standards for each school level—elementary, middle and high schools. The standards provide a
minimum and maximum square footage and student capacity for each level. As a system
undertakes construction of a new facility, it is critical that the system adheres to the most recent
school construction standards (estimated project cost should include a reasonable allowance for
inflation).
The Commissioners agree to provide funding for new school facilities that are designed within
the adopted standards. They do not agree to fund projects that go beyond the adopted standards
unless there is sufficient justification provided in writing by the Board of Education. One
justification for going beyond the standards relates to co-location of facilities, in particular
recreational facilities. In this case, the system must provide detailed explanations outlining the
benefits to be offered to the community and citizens, in the context of the intergovernmental
"Memorandum of Agreement for Providing Coordinated Site and Facility Planning" and the
"Orange County Parklands Acquisition and Evaluation Criteria" adopted by the Board of
Commissioners on December 7, 1999.
Page 3 of 6
Policy on Planning and Funding School Capital Projects
16
Revised April 2008
5. Project Approval
A project's inclusion in the ten-year plan does not give the Schools or the County legal authority
to expend funds. The legal authority to expend funds lies in County Commissioner approved
capital project ordinances. Therefore, the schools should not incur any expenses for any capital
project until the Board of County Commissioners approves the capital project ordinance.
In order to provide timely flow of the approval process and ensure that all elements are
addressed, the following steps should be followed:
• Details included in each system's ten-year Capital Investment Plans regarding the scope and
timing of various phases of individual capital projects is limited. To that end, as individual
Boards of Education begin discussions related to new capital projects (new construction, site
acquisitions, major renovations, etc), they will be expected, in writing, to notify the Board of
County Commissioners of the substance of those discussions. The memorandum from the
School Board will:
• Provide the Commissioners with an overview of the project concept along with other
project specifics that the Board of Education has defined to that point;
• Justify the need based on current school capacities and projected student enrollments
consistent with the School Adequate Public Facility Ordinance (if the Ordinance is in
effect at this time);
• Provide a preliminary cost projection of the project based upon the adopted school
construction standards and provisions of the Cost Effective Facilities Initiative (CEFI),
which has derived from earlier discussions about "value engineering" (if this policy is in
effect at this time);
• Request that the Board of Commissioners approve a capital project ordinance to provide
funding for the initial planning phase of the project;
• Instruct the Superintendent to update the County Manager, in writing, of the project's
progress at his/her monthly meetings with the County Manager.
• Upon receipt of the memorandum from the Board of Education, the Board of
Commissioners will:
• Act upon the project concept by either approving it or asking the Board of Education to
amend the concept plan;
• Instruct County staff to confirm the project's cost estimate and student capacity in
accordance with the County's adopted School Construction Standards Reports along
with student enrollment projections;
Page 4 of 6
Policy on Planning and Funding School Capital Projects
17
Revised April 2008
• If the Board of Commissioners approves the project concept, the County Budget Director
will prepare an agenda abstract and related capital project ordinance that provides
funding for the concept and pre-planning phase of the project;
• Appoint,by majority vote of the Board, either a Commissioner representative (preferably
the same representative that participated in the siting phase of the project) and one staff
representative, or two staff representatives, to partner with the school system as the plans
develop;
• Instruct the County Manager to update the Commissioners on a regular basis regarding
the written information shared by the School Superintendent.
6. Expenditure of Project Funds
Funding for Project Planning- School systems will not expend or encumber for planning of
any project until the Board of County Commissioners has approved the plan concept.
Background- For several years, the Board of Commissioners has approved a capital project
ordinance entitled Planning for Future Projects for each school system. The creation of
these ordinances enabled a system to expend a portion of their pay-as-you-go funds for
planning during a project's conceptual stages. Once a project grew beyond the concept
stages, systems requested the Commissioners to approve a"project specific" capital project
ordinance allocating all funds anticipated to carry out the planned project. In turn, each
district expended their monies up-front for planning, design, architect, construction,
furniture and equipment. In return, the County reimbursed each District with all of the
project-related expenditures up to the total project budget.
With the changes implemented by the County Commissioners in June 1999, this process
has changed. It is important to note that unless a County approved capital project ordinance
is in place (i.e. adopted by the County Commissioners), that the County is not legally or
otherwise obligated to reimburse the school system for their expenditures. If the Board of
County Commissioners approve the project concept and capital project ordinance as
outlined in Item 5 above, the following steps occur:
• Following Board of Commissioner approval of final plans for the project, the school
system advertises for construction bids;
• Once the system receives the bids, the School Superintendent notifies the County
Manager, in writing, of the result of all bids received.
• The County Manager informs the Board of Commissioners, in writing, of the
construction bid results.
7. Submission Timelines
• While the Board of Education may receive the bids, it should not execute any contract
until the Board of County Commissioners receives bid information and approves a
capital project ordinance for the construction phase of the project;
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Policy on Planning and Funding School Capital Projects
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• Generally, the Board of Commissioners conducts regular meetings on the first and
third Tuesday of each month. To allow for timely preparation of the meeting agenda,
the following timelines should be followed by staff:
• Twenty-one days prior to the Board of Commissioners meeting, the School Finance
or Budget Director or the Director of Facilities provides the County Budget Director
with:
• Bid Tabulation of School Construction or Major Renovation Project (example
included as Attachment 1 of this Memorandum)
• Any other pertinent information regarding the project.
• Fourteen days prior to the meeting, the County Budget Director submits a draft
agenda abstract including the bid tabulation and capital project ordinance to the
County Manager's office for review. The Budget Director forwards (via e-mail or
fax) a copy of the abstract and attachments to the School Finance or Budget Director
and the Director of Facilities for review and comments.
• Ten days prior to the meeting, the School Finance or Budget Director and the
Director of Facilities provide abstract revisions and comments to the County Budget
Director.
• Seven days prior to the meeting the County Budget Director submits final agenda
abstract and attachments to the County Manager's Office. A copy of the abstract and
attachments are forwarded(via e-mail or fax)to the school system.
Upon adoption by the Board of Commissioners,the County Budget Director informs the School
Finance and Budget Director and the County Finance Director of the abstract approval and the
assigned account number(s). This is done via a standard memorandum that indicates purpose and
account codes.
• All requests for payment from the School Finance Directors are forwarded to the County
Finance Department for payment. The County Finance Department ensures that the
requisition for payment falls within the purposes approved by the Board of Education.
8. Change Orders
The School Superintendent submits, in writing,to the County Manager all contract change
orders for the project. Upon receipt of the information, the County Budget Director prepares an
agenda abstract and an amended capital project ordinance for approval by the Board of
Commissioners at their next scheduled meeting. If there are change orders that cause project
expenditures to be over budget, the School district must receive approval from the Board of
Commissioners prior to approving the change order.
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Policy on Planning and Funding School Capital Projects