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Home My WebLink AboutAgenda 05-15-25; 1 & 2 - FY 2025-26 Budget Work Session - Discussion Regarding Outside Agencies, Durham Technical Community College, Chapel Hill-Carrboro City Schools, and Orange County Schools 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: May 15, 2025 Action Agenda Item No. 1 & 2 SUBJECT: FY 2025-26 Budget Work Session — Discussion Regarding Outside Agencies, Durham Technical Community College, Chapel Hill-Carrboro City Schools and Orange County Schools DEPARTMENT: County Manager ATTACHMENT(S): INFORMATION CONTACT: FY 2025-26 Recommended Outside Travis Myren, (919) 245-2308 Agencies Presentation Caitlin Fenhagen, (919) 245-2303 FY 2025-26 Education Presentation Kirk Vaughn, (919) 245-2153 PURPOSE: To review and discuss: • Outside Agency Funding; • the Durham Technical Community College — Orange County Campus FY 2025-26 Operating Budget; • the Chapel Hill-Carrboro City Schools FY 2025-26 Operating and Capital Investment Plan Budget; and • the Orange County Schools FY 2025-26 Operating and Capital Investment Plan Budget. BACKGROUND: The County Manager presented the FY 2025-26 Recommended Budget (https://www.orangecountync.gov/budget) at the Board of Commissioners' May 6, 2025 Business meeting. Since that time, the Board has conducted one (1) public hearing to receive residents' comments regarding the proposed funding plan. This is the first opportunity for the Board to discuss next year's recommended funding plan related to Outside Agency and Education funding. Outside Agency Funding: The recommended Outside Agency Funding can be found on page 201 of the Manager's Recommended Budget. The recommended budget for FY 2025-26 is $800,146 Education Operating Funding: The Manager's Recommended Education Funding can be found starting on Page 148 of the Recommended Operating Budget. Per-pupil Current Expense funding is recommended to increase from $5,666 to $5,877. Durham Tech Funding: Durham Tech's recommended funding is also found in the education section of the Recommended Operating Budget, on Page 148. The Manager is recommending a 2 3% increase to Durham Tech's current expense. Durham Tech also receives additional funds through the Article 46 sales tax. Education Capital Funding: The Manager's Recommended Capital Investment Plan details the School Funding Summary on Page 131. There are $549.9 million of school capital projects in the 10-year capital window. FINANCIAL IMPACT: Information on the financial impact is included in the above Background section. ALIGNMENT WITH STRATEGIC PLAN: This item supports: • MISSION STATEMENT — Orange County is a visionary leader in providing governmental services valued by our community, beyond those required by law, in an equitable, sustainable, innovative and efficient way. • VISION STATEMENT — We are a diverse, inclusive, and healthy county working together to strengthen our community and enhance the quality of life for all residents. RECOMMENDATION(S): The Manager recommends that the Board discuss the topics noted and provide direction to staff, as appropriate. 3 llq%��W—mftomm. ORANGE COUNTY NORTH CAROLINA FY2025-26 COUNTY MANAGER RECOMMENDED BUDGET Outside Agencies May 15, 2025 BOCC Work Session 4 FY2025-26 PROCESS CHANGES • Inclusion of Orange County Strategic Goals and Objectives ➢ In Application, Scorecard and Quarterly Progress Reports • Performance Measures in Application Must Align with a County Strategic Goal and Objective • County Strategic Plan Manager Consulted on Revisions to Materials and Reviewed Submitted Applications and Scorecards and Provided Feedback to County Manager • Outside Agencies Coordinator, Relevant Department Director and Deputy Manager Attended Joint County and Towns Agency Presentations and Completed Scorecards • Separate Scorecards for New Agencies • Manager Received Scorecards and Prioritized Z Funding for County Needs ORANGE ouNn FY2025-26 RECOMMENDED BUDGET OUTSIDE AGENCIES Outside Agencies FY2023-24 i iIMOE and Approved Approved Recommen. i ea Recommend - Agencies Funded 42 39 35 4 a �r$ 1,037,016 $ 89%439 $ 800,146 $ 11%307 • A total of 39 outside agencies applied for FY 25-26 funding. These requests totaled $1,100,157, which is $200,718 above the current FY appropriation. • There were six (6) new agencies requesting funding of $50,838; four (4) new agencies are recommended to receive funding for a total of $17,500. • One (1) outside agency will be moved to Maintenance of Effort (MOE) funds to improve collaboration with Alliance. Three (3) outside agencies will be moved to the Visitors Bureau Fund for tourism-related programming. ORANGE COUNTY NORTH CAROLINA 6 FY2025-26 RECOMMENDED BUDGET OUTSIDE AGENCIES Funding Formula Application S • • 90 — 100 (All Agencies) Up to $7,500 plus base 80 — 89 (Existing Agencies) Cut of 10% to base 80 — 89 (New Agencies) $2,500 flat 79 or Below $0 *Funding for existing agencies is based on the requested amount over or below last year's award (base). For new agencies, the base is $0. For new agencies with scores between 90 - 100, they received the amount requested up to $7,500. For new agencies with scores between 80 - 89, they received a flat $2,500. All agencies scoring below 79 are not recommended fir funding. ORANGE COUNTY NORTH CAROLINA FY2025-26 RECOMMENDED BUDGET 7 OUTSIDE AGENCIES Transferred to MOE Funds FY2024-25i i Award Request Recommend Score OE Enterprises $70,000 $80M00 $74,757 92 ORANGE COUNTY NORTH CAROLINA FY2025-26 RECOMMENDED BUDGET 8 OUTSIDE AGENCIES Transferred to Visitors Bureau Fund FY2024-25i Award Request Recommend Historic Hillsborough $12,000 $125000 $105800 80 Commission (Burwell School) Alliance for Historic $5,000 $10,000 $4,500 80 Hillsborough (Visitor's Center) Historical Foundation $321500 $341500 $29,250 80 of Hillsborough and Orange County (Museum) ORANGE COUNTY NORTH CAROLINA FY2025-26 RECOMMENDED BUDGET 9 OUTSIDE AGENCIES Strategic Goal: Housing for All FY2024-25iFY2025-26 Application Award Request Recommend Community Empowerment $30,000 $403000 $37,500 95 Fund Hope Renovations $7,500 $40,000 $15,000 94 Habitat for $100,000 $120,000 $107,500 91 Humanity Empowerment, $67,500 $80,000 $75,000 90 Inc. Oxford House, $9,000 $17,500 $8,100 87 Inc. Pee Wee Homes $14,000 $16,000 $12,600 88 FY2025-26 RECOMMENDED BUDGET 10 OUTSIDE AGENCIES Strategic Goal: Housing for All FY2024-25I IApplication Award • .quest Recommend Score Marian Cheek Jackson $50,000 $60,000 $57,500 96 Center Rebuilding Together $15,000 $15,000 $13,500 82 of the Triangle, IncTOTAL (AH Housing) ORANGE COUNTY NORTH CAROLINA FY2025-26 RECOMMENDED BUDGET 11 OUTSIDE AGENCIES Strategic Goal: Healthy Community Application Award Request Table Ministries, Inc $23,000 $27,500 $27,500 99 Meals on Wheels Orange $7500 $75,000 $75,000 98 County El Centro 98 $38,377 $44,133 $44,133 Porch Chapel Hill $21,020 $25,000 $251,000 98 Refugee Community $10,000 $15,000 $15,000 98 Partnership Orange County Rape $51,000 $53,000 $53,000 97 Crisis Center ORANGE COUNTY NORTH CAROLINA FY2025-26 RECOMMENDED BUDGET 12 OUTSIDE AGENCIES Strategic Goal: Healthy Community 024-25 FY2025-26 FY2025-26 Apphcation Award Request Recommend Reentry House Plus $25,000 $25,000 $25,000 Porch Hillsborough $15,000 $221,000 $22,000 Exchange Club's Family Center of the Central $15,901 $16,186 $16,186 93 Piedmont Refugee Support Center $5,000 $7,500 $71500 92 Volunteers for Youth $11,000 $11,500 $11,500 90 Hillsborough Community Garden N/A $135338 $25500 88 01 (New) FY2025-26 RECOMMENDED BUDGET 13 OUTSIDE AGENCIES Strategic Goal: Healthy Community Application Award Request Recommend Score Planned Parenthood $20,000 $20,000 $18,000 82 Swim for Charlie $9,141 $215000 $85227 82 Charles House $265000 $285000 $235400 81 Association ORANGE COUNTY NORTH CAROLINA FY2025-26 RECOMMENDED BUDGET 14 OUTSIDE AGENCIES Strategic Goal: Public Education/Learning Community Application RequestAward Recommend Family Reading Partners $125000 $155000 $1500 98 YMCA — Chapel Hill and N/A $10,000 $7,500 98 Carrboro (New) Boomerang $275500 $365000 $355000 97 Empowering Excellence T $2,000 $2,500 $2,500 95 Through Exploration (E3) Orange County Partnership $8,000 $85000 $85000 91 for Young Children Orange County Literacy $20,000 $24,000 $24,000 90 Council FY2025-26 RECOMMENDED BUDGET 15 OUTSIDE AGENCIES Strategic Goal: Environmental Protection and Climate Action FY2024-25iFY2025-26 Application Award Request Recommend Chapel Hill — Carrboro Farmer's Market (New) N/A $5,000 $5,000 92 Triangle Bikeworks (New) N/A $2,500 $2,500 85 ORANGE COUNTY NORTH CAROLINA FY2025-26 RECOMMENDED BUDGET 16 OUTSIDE AGENCIES Agencies Not Funded* FY202425- I 1 Application RequestAward Recommend . Orange County Disability Awareness $15,000 $30,000 $0 77 Council Transplanting Traditions $15,000 $18,000 $0 76 Big Brothers/Sisters N/A $153000 $0 7 (New) Monet Richardson Community N/A $55000 $0 51 Foundation (New) * In FY 24-25, 10 outside agencies were not funded. ORANGE COUNTY NORTH CAROLINA 17 Questions ?■ ■ ORANGE COUNTY NORTH CAROLINA 18 ORANGE COUNTY NORTH CARC3LINA Budget Work Session # 1 Education Outside Agencies Board of Commissioners Work Session May 15, 2025 19 Durham Technical Community College • Operating Costs (non-instructional) — page 148 Durham Tech Funding FY 2024-25 Funding FY 2025-26 Request FY 2025-26 Recommend Difference from FY 25 Current Expense 945,363 1,192,252 973,724 28,361 Recurring Capital 75,000 75,000 75,000 - Debt Service 191,318 183,935 183,935 (7,383) General Fund Subtotal 1,211,681 1,451,187 1,232,659 20,978 Article 46 Supplement 398,755 399,083 399,083 328 Total 1,610,436 1,850,270 1,631,742 21,306 • Current Expense increase of 3% $28,361 does not meet Continuation by $44,379 • Durham Tech Promise Scholarships $200,000 budgeted in Article 46 Sales Tax • Return to Work Financial Aid $100,000 budgeted in Article 46 Sales Tax • Small Business Center Support $70,000 budgeted in Article 46 Sales Tax ORANGE COUNTY 2 NORTH CAROLINA 20 Durham Technical Community College • Article 46 Investments — page 76 Program Ilk Durham Tech Promise Scholarship $200,000 $200,000 Back to Work Initiative $100,000 $100,000 Small Business Program $70,000 $70,000 Carolina Innovation Hub Rent $20,000 $20,000 Apprenticeship Coordinator $8,755 $9,038 Total $398,755 $399,038 ORANGE COUNTY 3 NORTH CAROLINA 21 Durham Technical Community College • Back to Work Initiative — page 76 • $100,000 Recommended Appropriation for FY2025-26 — Scholarships target unemployed and underemployed residents in Orange County » Short-term offerings with service area industry trends/projected sector growth such as Life Sciences, Construction Trades, Health Care, Information Technology. — $500 scholarships to 200 students Cover average tuition costs of$250 and funding to support additional student needs such as textbooks, technology, and transportation. 1 112024-25 Cohort by Year 88 98 127 ORANGE COUNTY 4 NORTH CAROLINA 22 Durham Technical Community College Back to Work Participants by Age Back to Work Participants by Race 36 35 35 American Indian/Alaska 34 Native 1% 33 32 31 31 31 30 ' 30 ' 29 28 27 Asian Or 18-25 26-35 36-45 Over 45 Islander • Back to Work Participants by Educational Pathway Science and Math ■ 2 Information Technology ■ 2 Human Services and Public Safety 13 Health and Wellness 17Non- Hispanic Center for the Global Learner 68 Business and Entrepreneurship 18 Building,Engineering,and Skilled Trades 8 0 20 40 60 80 23 Education Work Session Agenda • Terminology • Total Budgeted Students and Enrollment Trends • Per Pupil Amount • Impact of the Special District Tax • Funding Recommendations • Undesignated Fund Balance Policy and Amounts ORANGE COUNTY 6 NORTH CAROLINA 24 Terminology • Average Daily Membership (ADM) — Based on Department of Public Instruction's composite best of 20th or 40th day average daily membership • Out of District Students — Students from outside of the district attending a traditional Orange County public school — County is not responsible for funding Out of District Students • Charter School Students — Students living in one of the Orange County school districts but attending a charter school including charter schools in other counties — School districts must transmit the local per pupil amount to the charter schools serving Orange County students — County provides funds to the District to pay for those Charter Students through the Current Expense Budget — If a student transfers from a Traditional School to a Charter School, the amount is prorated for the time the student spends in each location • Total Budgeted Students — Number of students for which Orange County government provides funding on a per pupil basis ORANGE COUNTY 7 NORTH ( ARC)LIDTA 25 Total Budgeted Students FY2025-26 M Chapel Hill-Carrboro City SchoolsOrange County Schools Average Daily Membership 11 ,114 6,915 Out of District Deduction (318) (115) Charter Students r 222 1 ,125 Total Budgeted Students 11,018 7,925 % of Total Budgeted Students 58.16% 41.84% • The number of total budgeted students dictates the amount of current expense funding each District receives. The County must provide the same amount per pupil to each District. • The percentage of total budgeted students influences how capital and recurring capital funding has historically been divided between the Districts. ORANGE COUNTY 8 NORTH CAROLINA 26 Student Enrollment History Total Budgeted Students by District 13,000 12,242 12,339 12,239 12,387 12,274 12,236 12,351 12,115 11,993 12,160 11,820 12,000 11 1,442 11,382 11,253 11,141 11,018 11,000 10,000 9,000 --$--CHCCS 8,134 8,156 fOCS 7,966 8,072 8,011 8,110 8,023 8,003 7,936 7,925 8,000 7,863 7,801 7,148 7,227 71172 71357 7,437 7,000 6,000 5,000 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 CHCCS Budgeted Student Decrease of 123 Students Budgeted student percentage decreases from 58.40% to 58.16% OCS Budgeted Student Decrease of 11 Students ORANGE COUNTY 9 Budgeted student percentage increases from 41.60% to 41.84% NORTH CAROLINA 27 Student Enrollment Over Time Chapel Hill-Carrboro City Schools Average Daily Membership 15,000 14,000 13,000 12,129 12,256 12,203 12,239 353,12 474 12,355 12,321 12,448 12,000 11,666 11,740 11,834 12,017 11,343 11,393 11,219 11,114 11,000 11,466 10,000 9,000 8,000 7,000 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 Budget Average Daily Membership decreased by 105 ORANGE COUNTY 10 NORTH CAROLINA 28 Student Enrollment Over Time Chapel Hill-Carrboro City Schools Out of District and Funded Charter Students 400 350 350 309 318 300 241 241 242 250 251 253 250 222 Charter 210 200 t Out of District ;6f 162 169 155 166 156 205 150 117 117 100 50 0 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 Budget Out of District Students increased by 9 Charter Students decreased by 9 ORANGE COUNTY 11 Charter Students Represent 2.0% of Budgeted Students NORTH CAROLINA 29 Student Enrollment Over Time Orange County Schools Average Daily Membership 10,000 9,000 8,0007,698 7,420 71501 7,526 7,551 7,544 7,345 7,388 7,381 7299 , 7,272 , 7182 7122 7,192 , 6,954 7,030 7,007 6,990 6,915 7,000 4 6,000 5,000 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 Budget Average Daily Membership decreased by 75 ORANGE COUNTY 12 NORTH CAROLINA 30 Student Enrollment Over Time Orange County Schools Out of District and Funded Charter Students 1,200 1,091 ' 999 1,000 1 1 8 843 85 800 769 tCharter 617 600 519 tout of District 400 364 254 254 254 254 254 254 254 254 200 110 108 110 118 145 115 60 57 89 89 89 89 89 89 89 104 89 103 97 0 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 Budget Out of District Students decreased by 30 r� Charter Students increased by 34 ORANGE COUNTY 13 Charter Students Represent 14.2% of Budgeted Students NORTH CAROLINA 31 Enrollment - Budget vs. Actual . . . Schools Budgeted Budget Actual Difference Cost Difference 2024-25* 11,219 11,083 136 $770,576 2023-24 11,393 11,266 127 $678,942 2022-23 I 11,466 11,371 95 $456,760 2021-22 12,448 11,420 1,028 $4,489,276 2020-21 12,321 11,645 667 $2,912,789 2019-20 12,355 12,270 85 $369,920 2018-19 12,474 12,296 178 $741,370 1 2017-18 12,239 12,239 0 $- 2016-17 12,017 12,113 -96 $(371,328) Orange Budgeted Budget Actual Difference Cost Difference 2024-25* 6,990 6,894 96 $543,936 2023-24 7,122 6,970 152 $812,592 2022-23 7,182 7,066 116 $557,728 2021-22 7,299 7,073 226 $986,942 2020-21 7,381 7,007 374 $1,633,258 2019-20 7,388 7,358 30 $130,560 2018-19 7,345 7,276 69 $287,385 2017-18 7,544 7,315 229 $913,939 2016-17 7,551 7,413 138 $533,784 htti)s://www.di)i.nc.gov/districts-schools/district-operations/financial-and-business-services/demographics-and-finances/ i *FY2024-25 Actual Average Daily Membership through Month 5 ORANGE COUNTY 14 NORTH CA-ROLII\TA 32 Per Pupil Allocation Per Pupil Allocation Total Current Expense Budget $111 ,328,011 Total Countywide Budgeted Students 18,943 Per Pupil Amount $5,877 Each budgeted student funded at the same per pupil amount CHCCS 11 ,018 $5,877 $64,752,786 OCS 7,925 $5,877 $46,575,225 ORANGE COUNTY 15 NORTH CAROLINA 33 Per Pupil Allocation Over Time County Per Pupil Funding Amount History $7,000 $211 increase from FY2024-25 $5,877 $6,000 $5,346 $5,000 $4,165 $4,352 $4,367 $4,367 $3,868 $3,991 $4,000 $3,571 $2,957 $3,069 $3,200 $3,096 $3,102 $3,167 $3,269 $3,000 $2,000 $1,000 O� 00 y0 yti yL y3 yo yh y� y� yob y� LO yti LL �3 p ti� ec tiff ti3' ti° ti� ti� tip' tiw tip' do ti� titi 3 ti° �� o ,�o do ,�o ,�o ,�o ,�o ,�o F, F, � F, �� F, <1 F, i� ORANGE COUNTY 16 NORTH CAROLINA 34 Impact of the Special District Tax Chapel Hill Carrboro City Schools District Tax Rate History 25.00 23.00 22.00 22.00 20.20 20.35 20.84 20.84 20.84 20.84 20.18 20.18 20.18 20.18 20.00 20.00 19.80 19.80 20.00 7.98.38.3 17.75 17.75 17.35 17.35 15.75 15.40 15.40 1 0 18.34 1 0 1 0 15.00 14.41 10.00 5.00 0.00 O N M V Ln l0 ^ 00 M O 1-4 N M V Ln l0 n 00 M O H N M V Ln l0 n 1-1 N 00 M O c M Ln O� 01 0� at Qt T O O O O O O O O O Ol O eq N M V Ln 1, 00 0) O 11 N M V Ln l0 I, 00 M O 14 N M V Ln (D I, 00 0) O N N 00 M M (l M 0) 0) 0) O1 Ol O O O O O O O O O O ti c-1 c-1 c-I c-I c-I H H H .--I N N N M tV kD Ol M 0) M 0) M 0) 0) Ol M 0) O O O O O O O O O O O O O O O O O O O O O O O N O 1-- N -4 -4 1 -1 -1 -4 -4 �--I 1-1 c-I 1--1 N N N N N N N N N N N N N N N N N N N N N N N O N LL L}L LL LL LL LL LL l}L L}L L}L LL LL LL LL LL L}L l}L LL L}L LL LL LL LL LL L}L L}L LL L}L LL LL LL LL LL l}L L}L L} Ln L NO N } LL ORANGE COUNTY 17 NORTH CAROLINA 35 Impact of the Special District Tax CHCCS Per Pupil History with District Tax $9,000 $8,217 $8,000 $7,811 $7,00 $7,000 $6,000 $5,769 $5,890 $6,085 $6,329 6,362 6,388 5,387 ' $4 824 $5,093 $5,000 4 684 $4 723 $4,770 $4,793 �District Tax Per Pupil Equivalent $4,000 County Per Pupil $3,000 -Total Per Pupil $2,000 $1,000 $- FY2007-08 FY2009-10 FY2011-12 FY2013-14 FY2015-16 FY2017-18 FY2019-20 FY2021-22 FY2023-24 FY2025-26 Rec. ORANGE COUNTY 18 NORTH CAROLINA 36 Provide Continuation Funding to Schools . - . . . Imp" FY2024-25 FY2025-26 $ Di Approved Recommended Difference % Increase Current Expense $108,090,282 $111 ,328,011 $3,237,729 3.0% Recurring Capital $3,060,000 $9,521 ,200 $6,461 ,200 211 .2% Debt Service $19,182,204 $20,840,115 $1 ,657,911 8.6% Health & Safety Contracts $4,004,666 $4,160,806 $156,140 3.9% + Enrollment Projections TOTAL $134,337,152 $145,850,132 $11,508,233 8.6% Calculation of Percentage of General Fund Revenues Dedicated to K-12 Education Total School Funding Rec. $145,850,132 = 47.9% Total General Fund Revenue $304,784,697 ORANGE COUNTY 19 NORTH CAROLINA 37 FY2025-26 Funding Recommendations Education Expenses by Category 120,000,000 111,328,011 108,090,282 102,942,576 100,000,000 93,578,78 88,820,720 88,829,114 89,353,187 84,957,670 80,745,847 74,097,465 77,201,412 80,000,000 tTotal Current Expense tTotal Recurring Capital 60,000,000 --*--Total Debt Service —*--School Health and Safety 40,000,000 Contracts 23,738,246 21,807,353 21,322,130 20,840,155 17,625,421 17,770,542 18,507,336 19,182,204 20,000,000 15,646,915 15,372,383 15,074,910 3,354,000 3,354,000 3,558,428 3,629,597 3,629,597 3,629,597 3,738,485 3,888,025 4,004,666 ,806 0 �• • • • FY 2015-16 FY 2016-17 FY 2017-18 FY2018-19 FY2019-20 FY2020-21 FY2021-22 FY2022-23 FY2023-24 FY2024-25 FY2025-26 Rec ORANGE COUNTY 20 NORTH CAROLINA 38 FY2025-26 Funding Recommendations Operating Budget Funding as a Percentage of General Fund Revenue Funding Target - 48.1% 52.00% 50.68% 50.58% 50.00% 49.699/o 50.05%49.68% 49-49% 49.3856 48.91% 48.99% 48.00% 47.09% 48.10% 48.10% 48.06% 48.22% 48.07% 47.85 o 46.74% 46.00% 44.00% 42.00% 40.00% o� do titi titi ti3 ti° ti� ti� ti� ti� tia yo titi titi y3 ti� ti� Qe� yC� ti° titi titi o��, d F ORANGE COUNTY 21 NORTH CAROLII\TA 39 FY2025-26 Capital Funding Recommendations FY2025-26 Capital Budget al Recommended School District Funding Article 46 Sales Tax $3,259,920 Proportion of Budgeted Students, less Charter Students Debt Financed — School Improvements $13,518,312 Project Based Debt Financed — Bond Proceeds $6,000,000 Planning and Design — Borrowed Lottery Proceeds $1 ,807,908 Proportion of Budgeted Students Recurring Capital & Pay-Go $9,521 ,200 Proportion of Budgeted Students Represented in Transfer from General Fund TOTAL $34,107,340 i� ORANGE COUNTY 22 NORTH CAROLINA 40 FY2025-26 Funding Recommendations Operating and Capital Budget Expendiures $200,000,000 $178,135,243 $180,000,000 $166,622,223 $160,000,000 $156,844,974 $144,2 25,894 148,3 38,779 $140,000,000 127,929,465 $120,257,320 $120,000,000 $101 ■Capital ,831,686$106,5 87,3 66 $99,191,737 Budget Total $100,000,000 ■Operating $80,000,000 Budget Total $60,000,000 $40,000,000 $20,000,000 $0 FY 2013-14 FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY2018-19 FY2019-20 FY2020-21 FY2021-22 FY2022-23 FY2023-24 FY2024-25 FY2025-26 FY2016-17 excludes$120 million 2016 Bond Rec i� ORANGE COUNTY 23 NORTH CAROLINA 41 FY2025-26 Funding Recommendations School Budget Requests and Manager's Recommended Budget ■FY2024-25 Budget ■Continuation Request Manager's Recommended ■Expansion Request $80,000,000 $73,428,061 $70,000,000 $63,124,906 $66,949,681 $64,752,786 $60,000,000 $50,000,000 $44,965,376 $46,780,376 $46,575,225 $49,055,746 $40,000,000 $30,000,000 $20,000,000 $10,000,000 Chapel Hill-Carrboro City Schools Orange County Schools • CHCCS Orange County Schools • Recommended Budget- $64,752,786 Recommended Budget- $46,575,225 • $1,815,697 below Continuation Request $205,151 below Continuation Request • $8,856,197 below Expansion Request $2,480,521 below Expansion Request ORANGE COUNTY 24 NORTH CAROLIII-4A 42 FY2025-26 Funding Recommendations Top Twenty County Per Pupil Appropriations for School Education Year 2024 by Local Educational Agency (LEA) Chapel-Hill/Carrboro City Schools ■ 8,822 Asheville City Schools $8,020 Dare County Schools IL $6,074 Orange County Schools $5,848 Durham County Schools $ ,740 Mooresville City Schools $5,51 Chatham County Schools $4,875 Hyde County Schools $4,307 New Hanover County Schools $4,177 Transylvania County Schools $4,113 Watauga County Schools 1 $3,975 Thomasville City Schools $3,900 Wake County Schools D3,859 Guilford County Schools D3,853 Carteret County Schools $3,827 Polk County Schools $3,821 Buncombe County Schools $ ,754 Forsyth County Schools $3 690 Charlotte-Mecklenburg County Schools 1 $3, 65 Warren County Schools $3, 50 Link to Data $- $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 $10,000 43 Fund Balance • Joint policy between the County and the School Districts — Last amended in 2018 to increase Orange County Schools undesignated fund balance target from 3% to 5.5% — Each District has targeted undesignated fund balance target of 5.5% of budgeted expenditures for "cash flow purposes only" — Undesignated fund balance may exceed targeted amount for "unseen events or opportunities" and other non-recurring purposes — Extraordinary emergency needs may exhaust fund balance • School Districts will take appropriate action to address the problem • County will reimburse the Districts for the necessary expenditures to address emergencies i ORANGE COUNTY 26 NORTH ( ARC)LII'14A 44 Fund Balance • Audited undesignated fund balance amounts for FY2023-24 — Does not represent fund balance appropriations made during FY2024-25 Year to Date — Chapel Hill-Carrboro City Schools -$445,968 -.5% of FY2023-24 actual expenditures — Orange County Schools $2,612,690 6% of FY2023-24 actual expenditures i ORANGE COUNTY 27 NORTH ( ARC)LII'14A 45 Recommended School Capital Funding FY 2025-26 Major Project Funding • CHCCS to begin design on replacing Carrboro Elementary — Initial designs to build on other side of campus to allow current school to continue operations during construction • OCS to begin design on replacing Elementary School — May 5th Board of Education voted to progress on a K-5 replacement plan that targets county owned land next to Soccer.com campus. — Conflicts with Soccer.com expansion in County CIP ORANGE COUNTY 28 NORTH CAROLINA 46 Recommended School Capital Funding FY 2025-26 Major Project Funding (cont. ) • Board of County Commissioners would have to agree to transfer land to OCS — Agreement could include a joint-use gym at new Elementary School, and to transfer land of surplus Elementary School back to County • If Board does not wish to provide that land to OCS, safest course is to delay funding planning of OCS Elementary School to FY 2026-27 .4� ORANGE COUNTY 29 NORTH CAROLINA 47 Recommended School Capital Funding • Pre-Design Maps of School Projects Carrboro Elementary OCS Proposed Elementary == - - ► dSi 4 I 4 OFF. M -: �� ti ■■i r � wn■ L 7 1 _ - 01 1 Ip a .1 -7■t r� � a.c. 11 1 ti } 30 Y' ` .r. IN"it1 I L1NA 48 Recommended School Capital Funding • Major Projects are funded using a combination of Pay-Go and Bond Funds. CHCCS Projects Bond Funds Pay-Go Funds Total Funds OCS Projects Bond Funds Pay-Go Funds Total Funds Carrboro Elementary $ 47,700,000 $ 5,300,000 $ 53,000,000 Elementary Replacement $ 57,283,000 $ 2,817,000 $ 60,100,000 Estes Hills Elementary $ 51,547,000 $ 11,283,000 $ 62,830,000 Major Elementary Renovation $ 27,000,000 $ 3,000,000 $ 30,000,000 Frank Porter Graham $ 63,901,300 $ 6,240,000 $ 70,141,300 Major Middle School Renovation $ 37,340,000 $ 7,660,000 $ 45,000,000 Contingency+ HPN $ 11,551,700 $ 31,050,999 $ 42,602,699 Contingency+ HPN $ 3,677,000 $ 22,649,001 $ 26,326,001 Total $ 174,700,000 $53,873,999 $228,573,999 Total $ 125,300,000 $36,126,001 $ 161,426,001 • Pay-Go funds provide four major uses to support the Bond Program: - Absorb soft costs like Design, Project Management • Project Management included in separate $1 M/year project not allocated to either district - Extend project budgets above what the Bond could support on its own. - Improve County debt metrics once county debt exceeds 15% of GF revenues - Once bond projects are done, support the districts' High Priority Needs i ORANGE COUNTY 31 NORTH CAROLINA 49 Recommended School Capital Funding Four possible adjustment frameworks: 1 . Reduce Pay-Go in early years, reallocate funds for additional Pay-Go in backend to maintain $100 M over 10 years. - Impact: Less funding available to Major Projects, increased funding for later High Priority Needs. 2. Reduce Pay-Go in early years, do not reallocate funds to future years. - Impact: Less funding available to Major Projects. 3. Delay district projects by a year, requiring later pay-go introduction. - Impact: Increased Major Project costs due to inflation, less time to complete projects. 4. Reduce Pay-Go allocation across ten-year plan. No longer target $10 M/year. - Impact: Less funding available total. Worse debt metrics. ORANGE COUNTY 32 NORTH CAROLINA 50 Recommended School Capital Funding • Current Output of Debt Model based on Recommended CIP - Updated to reflect new value of a penny, FY 25-26 Recommended General Fund revenues, final 2025 borrowing size. - Anticipating a 3.49 cent tax increase in FY 26-27 between Pay-Go and Debt. Year Debt to AV DS to GF Debt Tax Rate Pay Go Tax Rate Revenues Equivalent Equivalent 2026 1.24% 11.20% - 1.94� 2027 1.50% 13.10% 2.42� 1.07� 2028 1.77% 14.16% 1.42� - 2029 1.78% 16.50% 2.84� - 2030 1.61% 17.78% 1.55� - 2031 1.62% 17.87% 0.18� - 2032 1.81% 17.75% - - 2033 1.69% 18.61% 0.99� - 2034 1.46% 19.16% 0.8N - 2035 1.35% 18.00% - - Total Impact 10.19� IOU ORANGE COUNTY 33 NORTH CAROLINA 51 Pay-Go Phase-in Options Board Option - Half Pay-Go in FY 25-26 using framework 1 Staff Assumptions: FY 25-26 Pay-Go is reduced to $3.2 M, FY 26-27 Pay-Go is still $10 M, $3.2 M Pay-Go is added to years 7-10 incrementally Impact on School Projects DS to GF Debt Tax Rate Pay Go Tax Rate • No changes to either district major projects Year Debt to AV Revenues Equivalent Equivalent • Slight delay to districts ability to use Pay-Go on 2026 1.24% 11.32% - 0.97� High Priority Projects 2027 1.51% 13.10% 2.42� 2.02� 2028 1.78% 14.19% 1AU - Impact on Tax Impact 2029 1.78°% 16.55% 2.87� - 2030 1.61% 17.82% 1.53� - • Incremental Debt comes in slightly quicker in 28 and 29 2031 1.61% 17.87% 0.13� - (.03 cents a year), but total debt doesn't change 2032 1.81% 17.66% - 0.080 • Pay-Go impact in 26 reduced to .97 cents, but total tax 2033 1.69% 18.56% 0.88� 0.08� for both Pay-Go and Debt would total 4.44 cents in 27. 2034 1.46% 19.12% 0.90t 0.070 • Incremental increase in 32-35 would exceed natural 2035 1.35% 17.95% - 0.M growth in revenues, so may require slight tax increase. Total Impact 10.18� 3.28� ORANGE COUNTY 34 NORTH CAROLINA 52 Pay-Go Phase-in Options Board Option - Almost no Pay-Go in FY 25-26 using framework 2 Staff Assumptions: FY 25-26 Pay-Go is reduced to $500 K for project management, FY 26-27 Pay-Go is reduced to $6 M, FY 27-28 remains at $10 M. No additional Pay-Go is added back. Impact on School Projects DS to GF Debt Tax Rate Pay Go Tax Rate Year Debt to AV• $9.9 M reduction in total pay-go funding for schools Revenues Equivalent Equivalent over 10 years, pushing out multiple High Priority Needs - 0.15� 2026 1.24% 11.42% • Major Project budgets left intact, but flexibility is mostly 2027 1.53% 13.27% 2.42� 1.63� removed from plan. Putting pressure on either 3rd 2028 1.81% 14.26% 1.5U 1.160 project or rest of district portfolio 2029 1.81% 16.74% 3.020 - 2030 1.62% 18.05% 1.580 - Impact on Tax Impact 2031 1.63% 18.06% 0.090 - • Borrowing is accelerated so tax increases for debt 2032 1.80% 17.79% - - come in faster in 28-30, but same total. 2033 1.69% 18.67% 0.68� - • Pay-Go impact in 26 reduced to .15 cents, but 2034 1.46% 19.16% 0.87t - consecutive multi-cent tax increases between 27-29, 2035 1.34% 17.99% - - including 4.05 cent tax increase in 27. Total Impact 10.18� 2.95� ORANGE COUNTY 35 NORTH CAROLINA 53 Pay-Go Phase-in Options Board Option — No Pay-Go in FY 25-26 using framework 3 — delay projects Staff Assumptions: FY 25-26 Pay-Go is reduced to $0, FY 26-27 Pay-Go is reduced to $6 M, FY 27-28 remains at $10 M. Pay-Go will be $100 M over 10 years of 26-36, rather than 25-35. Impact on School Projects Year Debt to AV DS to GF Debt Tax Rate Pay Go Tax Rate Revenues Equivalent Equivalent • $10.4 M reduction in total pay-go funding for schools over 10 years. 2026 1.24% 11.44% " • 3 Major Projects delayed one year, adding $5.4 M 2027 1.19% 13.27% 2.42� 1.78� • $15.8 M reduction in total funding for High Priority 2028 1.64% 13.17% 0.27t 1.16t Needs or 3rd project. 2029 1.80% 14.54% 1.62� - 2030 1.63% 17.30% 3.13� - 2031 1.64% 18.10% 1.02� - Impact on Tax Impact 2032 1.82% 17.85% " • Borrowing is delayed so tax increases for debt 2033 1.71% 18.73% 0.7U - comes in slower in 28-30, and .13 lower overall 2034 1.48% 19.24% 0.890 - • No Pay-Go tax in 26, 4.2 cent total increase in 27 2035 1.36% 18.07% - Total Impact 10.06� 2.95� ORANGE COUNTY 36 NORTH CAROLINA 54 Questions? ORANGE COUNTY NORTH CAROLINA