Loading...
HomeMy WebLinkAboutAgenda - 05-22-2003-2ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: May 22, 2003 Action Agenda Item No. 2 SUBJECT: School Capital Investment Plans (CIP) for 2003-2013 DEPARTMENT: County Manager/Budget/ PUBLIC HEARING: (Y/N) No CHCCS/OCS ATTACHMENT(S): CHCCS 2003-2013 CIP OCS CIP 2003-2013 (both under separate cover) Charts -County's Annual Debt Service Projections 5/18/03 CHCCS Superintendent Memo INFORMATION CONTACT: John Link or Rod Visser, ext 2300 Donna Dean, ext 2151 Neil Pedersen, 967-8211 Mike Williams, 732-8126 TELEPHONE NUMBERS: Hillsborough Chapel Hill Durham Mebane 732-8181 968-4501 688-7331 336-227-2031 PURPOSE: To discuss the proposed 10-year capital investment plans submitted by the Orange County Board of Education and the Chapel Hill-Carrboro Board of Education. BACKGROUND: Each year, the County Manager and staff update the County's ten-year Capital Investment Plan (CIP). The CIP is a multi-year plan that addresses County and school needs for long-lived assets. Items typically included in the CIP are construction, refurbishment, or purchases of buildings; land acquisition or improvement; and major equipment and vehicle acquisition and financing. This process offers an opportunity to review long-term capital needs and enables timely acquisition and phased financing of major assets. This year, the school portion of the CIP is being presented later in the budget process than the County portion of the CIP, which was presented on April 21. With the advent of the Schools Adequate Public Facilities Ordinance (SAPFO) system, school capital planning in this and subsequent years will need to be pushed back several months from the historical pattern. Actual student membership figures as of November 15 each year are used as the basis for annually updated student projections generated and analyzed by County, school, and municipal staffs between December and February each year. Once school building capacities and student projections are certified by representatives of all SAPFO partners each February, those projections become the basis for forecasting additional school facility needs during the subsequent 10 year CIP period. During the January 2003 annual planning retreat, the BOCC expressed the desire to have this year's update provide a comprehensive view of the ten-year capital planning period. To that end, both the County and school recommended CIPs include all capital needs that have been identified, regardless of whether there is sufficient anticipated pay-as-you-go revenue or designated debt financing to pay for them. In the interests of comprehensiveness, the CIP also integrates projects that have been or will be funded fully or in part from $75 million bonds approved by voters in November 2001 and $37.875 million to be funded over the next five years through alternative financing mechanisms. The timing of bond sales and alternative financing for those projects was approved by the BOCC on September 3, 2002. The Board of Commissioners may want to focus on at least two specific issues in addition to any general review of individual project proposals from either school system. First, the Board mentioned its interest in knowing specifically how the County's debt capacity calculations (self- imposed through BOCC policy, at 15 percent of annual General Fund expenditures) would affect the ability to finance all projects, including those listed in the proposed CIP as "unfunded". The Budget Director has prepared several charts (attached) and will explain in more detail at the work session the relationship between projected debt capacity over the next 5-10 years and the additional debt that would be needed to finance unfunded projects. The second topic the Board may wish to address in more depth is the siting and budget for the proposed third high school in the Chapel Hill-Carrboro School system. That topic will be the subject of a public hearing on May 27, and is tentatively slated for discussion at several meetings and/or work sessions during the month of June. The Superintendent has submitted a number of responses (memo attached) to various concerns about the project scope and budget, as raised by the County Manager during an April 24, 2003 work session on the proposed Rock Haven Road high school site. The Board is not expected to make any decisions on project allocations at this meeting. Changes to the CIP can be made during several work sessions over the coming weeks before the Board formally adopts the plan in late June 2003. The May 20 and June 5 public hearings on the proposed 2003-04 operating budget will also afford citizens the opportunity to comment on the schools portion of the 2003-2013 CIP. FINANCIAL IMPACT: There is no direct financial impact associated with the preliminary discussion of the schools' CIPs. However, the Board will make substantial allocation decisions, for both County and school capital projects, involving millions of dollars later this spring. Board funding decisions for FY 2003-04 will be enacted through capital project ordinances that will be adopted in June 2003. RECOMMENDATION(S): The Manager recommends that the Board discuss school capital related topics and identify additional information about specific projects that the Board may need during upcoming budget work sessions. Chapel Hill -Carrboro City Schools Lincoln Center, Merritt Mill Road Chapel Hill, NC 27516 Telephone: (919) 967-8211 Fax: (919) 933-4560 Neil Pedersen, Superintendent Stephen ,A. Scroggs, Assistant Superintendent for Support Services To: John Link, Manager Orange County From: Neil Pedersen, Superinte Chapel Hill-Carrboro Ci Schools Re: Responses to Manager's Concerns of Apri124, 2003 Date: May 18, 2003 I am providing the following responses to concerns you raised during the April 24, 2003 County Commissioners meeting. Please feel free to contact me if further clarification is needed. Responses to the Manager's Concerns 1. "lt'Ixole Package" decision - s[te price slrouCd be in context of overall t~roject budget The "Whole Package" concept is the basis for the proposed interlocal agreement that the Board of County Commissioners will consider on May 20th. The School Board has repeatedly taken the position that it is willing to move forward with this project and will assume responsibility for any expenses that exceed the projected budget of $33,870,000. If the cost exceeds this amount and then causes an overall budget overrun, the School Board would expect to make adjustments in its CIP to cover this condition. 2, Sriuare footage at upper end, cost ~rcee~Js, air~rored HS cotzstructirm standards 1~'llile the square footage is at the upper end of the ran~,~c and tl~c project costs do exceed. the budgjet prescribed in the standards, it is important to note the reasons ~vhy. I..anci costs in Chapel 1-11.11. clearly exceed. those i_r~ c}ther parts of'the cour~t~~. i_,and costs exceeduig $30,Ot)0 per acre art common. Site preparation due to topography, rock, environmental concerns and governTUeutal i°egulations are also 1ligher. Storm water retention, I~CI_) conservation, and bio retention are examples of higher site costs in Chapel Hill and Carrboro. L;xcess casts are entircl` attributable to site and site, development costs. tin the issue of square footage, it should be noted thG~t the only .high school built i7~ C)range County afiter the high school 5taiidards were adopted il~ 1099 was Cedar Ridge I-Iigh School. That school came in at 20{3,0110 square feet, for 1,1100 students. 'What well exceeds the 182,710 square feet dictated by the standards. i`he District is making every effort to have the proje~ come ii1 at the 182,710 square foot standard, a task that will. prove to be d~i fficult. T~~ reduce the sq~~are footage any further would produce a high. school that is plot evet7 close to co~~nl~arable to our t~vo existing high schools or to Cedar Ridge. 3. Lr~calll= untested` clirau>>zsir~ra - GHCC:S exercise c? f ~ enxinent rlr~n~crin While the CHCCS has not exercised the right of eminent domain in recent years, the county has recently used the process with the condemnation of t:he Construction and Debris site off Eubanks Road. Therefore, there is precedent for the County to use eminent domain to acquire sites that would benefit the entire community. The issue of land procurement costs has been a concern to all oil us. It should be noted, however, that the potential high cost for the Glover property is based on successful rezoning by the Town of Carrboro. That application is still pending. JPI, the Dallas developer, has asked for additional time to make its presentation due to the death of the principal developer. The original presentation had been scheduled for this week. According to the owner of the property, the contract between the owner and JPI has been terminated in part over concerns about the use of eminent domain. The owner claims that renegotiations are taking place. Based on this information, the District has concluded that there is reason to believe that the appraised price is reasonably accurate. While the District believes that the land acquisition prices are within the budget, the School Board understands that it will be fiscally responsible for any increased costs due to land purchases. 4. Requires Cr~~ctzty issuance of ,~6+ra~illian in uuhrngrarnnied debt As the graphs provided by the County's Budget Director illustrate, the additional debt would not place the County over the debt limits it has set. Although her graphs are predicated on all the bonds and alternative financing taking place at one time, the Budget Director has indicated that some of these sales could be spread out to reduce the indebtedness in a particular year. This provides an additional fiscal cushion for other projects. Therefore, the Board does not see the County's debt policy as a limitation to moving forward. S. <4tl~tersely affects CHCCS ability to arlclress other ide~zti~e~l/emergent cu~itr~l f~eerls The proposed 10-year CIP demonstrates the District's commitment to existing facilities. The impact of the debt service on the District is much less than the reduction of projected impact fee revenue and the loss of the Public School Building Fund. Those reductions exceed $ 1,183,000 per year, well over the expected debt service of $808,000. The project financing plan also leaves over $2,400,000 annually through 2006-07 for existing projects. That amount decreases slightly to $2,200,000 in 2007-08. The amount then increases gradually for the next several years. It would be a misrepresentation to compare the situation in CHCCS to that of OCS and Cedar Ridge High School, which left the County schools with virtually no CIP funds for other projects for several years. Although our aging facilities do need more attention, the School Board believes there are sufficient funds for essential projects and renovations, and technology upgrades to maintain the existing facilities in the district. t. Cozzstrrzitzs future Cnzznty debt cupcr~it}' in the fiz~e of S.~FFO obligcztiQns Utilizing present projections, SAPFO obligations for the County Schools will be zero upon completion of the new middle school, which is already funded. In CHCCS, under the current projections, a new elementary school will be needed in 2006-07 and a middle school in 2008-09. As the Budget Director's graph illustrates, the funding of elementary #10 can be accomplished under the present debt service scenario. The additional funding of $6,000,000 for the third high school would not make a significant difference in the County's total debt service picture where funding for additional projects is concerned. 7. t'ompzoniises fc`scal tlisciplizze tzntl ccnrzlyticul rig~zr envisioned irz estublishtnent of HS canstructi~tz sttruclartts The District has taken every measure it can to comply with the standards as presented. The only high school project to be built in the County once the standards were in effect exceeded the standards in square footage. That school has 206 square feet per student. The standards call for 182 square feet per student. On a national basis, high performance schools average 210 square feet per high school student. This mirrors the efforts at Cedar Ridge and East Chapel Hill High. The analytical rigor required to reduce that number to 182 square feet per student will be a major task. Fiscally, the major factor in the cost differential between the two districts is obvious. Not only is land more expensive, but also governmental regulations pertaining to site development and construction tend to drive total project costs up. The fiscal discipline required during this process was the realization that land costs and site preparation costs would exceed the budget provided by the standards and the development of a plan to fund the additional costs. This is not "Chapel Flat" but "Chapel Hill." We must realize that parcels of flat land without rock are non-existent and future school costs will reflect that scarcity. Due to its commitment to this project, the Board of Education has committed to funding the e;xcess costs above the standard. 8. Need for public hearing Utz rerxll©e~zti~tz of 2tI111 hatzds fratn ,Eletnetztrary #10 to High Selzo©l #3 A public hearing on the reallocation of 2001 bond funds is, certainly, supported by the district. With the County Commissioners already schedulin€; a hearing for May 27, 2003, this issue has been addressed. VJ 0 .~ . _._., r~ V . ~~..r..~., rW V J -~--~ V~ _~ a t3 N O a- 0 O G :~ N N r r O N r d 0 N O i O O N O i 00 O O N co 0 t~- O 0 N r- a t9 0 0 N 0 0 0 N O i O a N ~t 0 M Q O N O_ ~ ~~ ~~ ~ ~ c -~ N ~ ~ ~ v~ wW Z3 .~ C ~ (6 ~ M ~ ~~ O ~ O O U U a~~ ~~ U.~ ~ tS3 = _ >, ~~~ O LL a~ U ;~ ~ ° o2S cow ~ ~~U o ~NU~ ~C3a= U ~~«-Ucn ~ ~~~ m o ~ ~ ~°w~~ '~ pa' ~~ U $~ ~ ~ ~- c~ ~ ~U U~~~a~i O pli~~ mU ~~ ~ N a.~ c ~ - 0~.~~ ~ ~ ~ ~ C O~~CO rnOQ~U If!I '~{ (i7 d'NOOOC4~t'NOOOCUd'NC300CUd'NO t`7 cY? cam? M N N N N N ~ ~ r ~ c-- E~ ffl~ ffl~ d~ E~ D CO 0 N v~ ^ ~~ ^~ W U ._ r•i~./ V 1 v _~ u -~-~ L ~ c ~ z c Q U Z C C C O ~ ~ . T .~.{ l`f. n~ ~-/ W A~ Q W W N ~ ~ O ~ O O U U ~-~~ ~~~ U ~ ay tCl = _ ?+ CO O to ~ 'D C U3 ~ ~ ~ O a~ u- U ~ GN :~ ~ ° otS (a N ~ cn ,~ U o ~ N U ~ ~ ~ U ~ ~ ~ ~ .n m o ~ ~ ~ y-- - ~. ~ ~ ~ ~ O O ~ a' O U ~ ~' O _ ~~~ N Q ~ ~ U t6 o ~~ ~ U ' s o ~ Uc~ o ~ a °~ - - p O U 00 ~ ~ ~ N O ~ ~ >+ o~°~~ c~ ~ ~ ,~ ~ rnOQ~U ~ '~~ M O O N O o0 tt7 d' N O 00 Cfl d' N O o0 CU ~' N O M N N N N N ~~ r~~ ~' ~~~ ~ f~ Efl ffl~ fig- Ei9~ Efl- E~} EA~ Efl~ 6F~ Ef}