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Agenda 05-19-2026; 8-a - Minutes for April 16, 2026, April 21, 2026, and April 30, 2026
1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: May 19, 2026 Action Agenda Item No. 8-a SUBJECT: Minutes for April 16, 2026, April 21, 2026, and April 30, 2026 DEPARTMENT: Board of County Commissioners ATTACHMENT(S): INFORMATION CONTACT: Draft minutes (under separate cover) Laura Jensen, Clerk to the Board, 919- 245-2130 PURPOSE: To correct and/or approve the draft minutes as submitted by the Clerk to the Board as listed below. BACKGROUND: In accordance with 153A-42 of the North Carolina General Statutes, the Governing Board has the legal duty to approve all minutes that are entered into the official journal of the Board's proceedings. Attachment 1: April 16, 2026 Budget Work Session — Capital Investment Plan (CIP) Attachment 2: April 21, 2026 Business Meeting Attachment 3: April 30, 2026 Joint Meeting with Schools FINANCIAL IMPACT: There is no financial impact associated with this item. ALIGNMENT WITH STRATEGIC PLAN: This item supports: • GUIDING PRINCIPLE — COMMUNICATION AND AWARENESS We provide information and opportunities for engagement in a transparent manner so that all in our community have knowledge, understanding, and a voice. RECOMMENDATION(S): The Manager recommends that the Board approve the minutes as presented or as amended. Attachment 1 1 1 DRAFT MINUTES 2 ORANGE COUNTY 3 BOARD OF COMMISSIONERS 4 BUDGET WORK SESSION -CIP 5 April 16,2026 6 7:00 p.m. 7 8 The Orange County Board of Commissioners met for a Budget Work Session on the CIP on Thursday, April 9 16, 2026, at 7:00 p.m. at the Whitted Human Services Center in Hillsborough, NC. 10 11 COUNTY COMMISSIONERS PRESENT: Chair Jean Hamilton, Vice-Chair Amy Fowler, and Commissioners 12 Marilyn Carter,Jamezetta Bedford, and Earl McKee 13 COUNTY COMMISSIONERS ABSENT: Commissioners Sally Greene and Phyllis Portie-Ascott 14 COUNTY ATTORNEYS PRESENT: John Roberts 15 COUNTY STAFF PRESENT: County Manager Travis Myren, Deputy County Manager Caitlin Fenhagen, and 16 Clerk to the Board Laura Jensen. (All other staff members will be identified appropriately below) 17 18 Chair Hamilton called the meeting to order at 7:00 p.m. All commissioners were present except 19 Commissioner Greene and Commissioner Portie-Ascott. 20 21 1. Discussion of Manager's Recommended FY 2026-36 Capital Investment Plan (CIP) 22 The Board discussed the Manager's Recommended FY 2026-36 Capital Investment Plan. 23 24 BACKGROUND: Each year,the County produces a Capital Investment Plan (CIP)that establishes a budget 25 planning guide related to capital needs for the County and Schools.The 10-Year CIP is evaluated annually 26 to include year-to-year changes in priorities, needs,and available resources. Approval of the CIP commits 27 the County to the first year funding only of the capital projects; all other years are used as a planning tool 28 and serves as a financial plan 29 30 Capital Investment Plan—Overview 31 The FY 2026-36 CIP includes County Projects, School Projects, and Proprietary Projects. The School 32 Projects include Chapel Hill-Carrboro City Schools, Orange County Schools, and Durham Technical 33 Community College—Orange County Campus projects. The Proprietary Projects include Water and Sewer, 34 Solid Waste Enterprise Fund, and Sportsplex projects. 35 36 The CIP has been prepared anticipating moderate economic growth of approximately 2% in property tax 37 growth and 4%in sales tax growth annually over the next ten years. The CIP will rely substantially on debt 38 financing to fund the projects and these required debt amounts are fully integrated in the County's Long- 39 Term Debt Model (page 45 provides a bar chart of the ten year funding plan). 40 41 The meeting discussion will focus on the specific projects in the County and Proprietary CIP. Note: Page 42 numbers are referenced below as they appear in the CIP document. See Attachment A for the Overall CIP 43 Summary (page 41), County CIP Projects Summary (page 53), the Proprietary CIP Summaries (page 121) 44 and School CIP Summary(page 132).There will also be a general overview of the School Major Projects. 45 46 Discussion at this meeting will also be directed to the Debt Service and Debt Capacity — General Fund 47 (page 161), the Water and Sewer Debt Service requirements paid with Article 46 Quarter Cent Sales Tax 2 1 proceeds (page 163), and Debt Service requirements for Solid Waste (page 164) and Sportsplex (page 2 16S). 3 4 Travis Myren made the following PowerPoint presentation: 5 6 Slide#1 ORANGE COUNTY NORTH CAROLINA ©RANGE COUNTY CAPITAL INVESTMENT PLAN FY2026-36 Board of Commissioners' Work Session April 16, 2026 1 7 8 9 Slide#2 Purpose • Purpose of the Capital Investment Plan — Board Approves Year 1 of the Plan as the FY2026-27 Capital Budget — Ten Year Planning Horizon (FY2026-36) • 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 10 3 1 Travis Myren explained that the purpose of the CIP is to approve year one as the capital budget, 2 establish a ten-year planning horizon to avoid future surprises, and project what will be needed in the 3 operating budget to finance large capital projects. 4 5 Slide#3 FY2026-36 Recommended Capital Investment Plan • Implementation of Guiding Plans — Long-Range School Optimization Plan — County Long-Range Facilities Plan • Projects Aligned with Strategic Plan - Strategic Plan Priorities — Responsive Projects • Environmental Protection and Climate Action Climate Action Plan Projects • Healthy Community Emergency Services Projects Housing for All Affordable Housing • Multi-modal Transportation Transit Plan Update,Bus Shelters • • Public Education/Learning Community School Construction and Planning and Design • Diverse and Vibrant Economy Piedmont Food Processing Center • ORANGE COUNTY 3 NORTH C—:AROLINA 6 7 Travis Myren noted that the projects in the CIP are aligned with the Long-Range School 8 Optimization Plan, the County Long-Range Facilities Plan, and the County's Strategic Plan. 9 10 Slide#4 FY2026-36 Recommended Capital Investment Plan • Year 1 — FY2026-27— Focus of Work Session Presentation Recommended FY2026-27 Capital Expenditures-$150.8 million County Capital $29.5 million (19.6%) Proprietary Funds $2.5 million (1.7%) School Capital $118.8 million(78.7%) FY2026-36 Recommended Expenditures by Year 1eo,ao9,o0a $Ifi5,254,1]8 164,000,000 $150,]5],889 5142,263,444 140,000,099 120,000,000 46% •scnani sand araient 100 b09,a90 $9%,199,%2 scnooi capiaai 80,000,000 5]5'851'689 •Proprietary-d, County[appal $ 60,000,000 $d4,i52,588 548,734,735 TOTAL $40,824A52 4a,Doo,otb 20,900,000 0 FY 2026-2] FY 202]-28 FY 2928-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY P033-34 FY 2P}q-35 FV 2035-35 11 4 1 Travis Myren said county capital, propriety funds, and school capital make up 19.6%, 1.7%, and 2 78.7%of year one of the CIP respectively. He said the graph on slide#4 demonstrates the split across these 3 categories as well as the school bond projects over time. He explained that the high proportion of school 4 capital in year one reflects the two elementary school builds currently underway, and that the split shifts 5 in year two to approximately 46% schools and 51% county projects, owing to the planned Emergency 6 Services Headquarters and the Viper radio system. 7 Commissioner McKee asked whether the $118 million projected for schools in FY 2026-27 would 8 be drawn immediately upon construction commencement or in tranches. 9 Travis Myren clarified that borrowing occurs when the Guaranteed Maximum Price (GMP) is 10 received from the schools and bids are in hand, at which point the full amounts for both construction 11 projects are borrowed simultaneously. 12 Vice-Chair Fowler asked whether debt service on the proprietary funds is paid from those funds 13 rather than from the general fund. 14 Travis Myren confirmed this, specifying that Sportsplex revenue covers the Sportsplex, and the 15 Solid Waste Fund revenue covers Solid Waste,with some Article 46 debt service also flowing through that 16 is not general fund money. 17 18 Slide#5 FY2026-36 Recommended Capital Investment Plan • 2700 Homestead Rd Facility $339,500 (p.55) Housing For Ail Objectives Resilient Community Goals — Lease pending approval by UNC Board of Trustees and Board of Commissioners • Sublease—30%of facility to Town of Carrboro Public Works • Town would share operating costs and cost of system improvements — Renovation for Cold Weather Cots for fall/winter 2026127- $30,000 — Design of HVAC, roof replacement, renovation for housing human services resources-$309,500 • Pending concept plan to the Board of Commissioners in Fall 2026 x' • Create spaces for broader use for Housing and Social Services resources 2700 Homestead Road,Chapel Hill — Renovation costs estimated at$3.3 million in FY2027-28 ORANGE COUNTY e NORTH CAROLINA 19 20 Travis Myren introduced the 2700 Homestead Road project, reminding the Board that this UNC- 21 owned facility had been identified in September as the primary southern location for the county's cold 22 weather cot program. He noted the lease is a ten-year ground lease at effectively no cost,pending approval 23 by the UNC Board of Trustees, after which it would return to the Board of Commissioners for approval. 24 Start-up costs for the cold weather cot program were estimated at $30,000, requiring no additional 25 renovations. He further proposed bringing back a concept plan in the fall for other potential uses of the 26 facility, at which point planning funds might be requested. 5 1 Commissioner Bedford said she is leery about committing$300,000 in year one for planning costs. 2 She asked if the timing could be handled differently. 3 Travis Myren offered to remove the planning funds from the CIP entirely and instead bring them 4 back as a budget amendment in the fall if the Board preferred that approach. He confirmed the relatively 5 small amount would have no impact on the debt model. 6 The Board reached consensus on removing this cost from the CIP. 7 8 Slide#6 FY2026-36 Recommended Capital Investment Plan Fnvironmental Protection and Climate Action • Climate Change Mitigation $211,110 All Climate Action Plan Focus Areas (p-59)59) Urban Sustainability Solutions — Climate mitigation grants to non-profit and public agencies through a formal competitive grant process — General fund support decreased by$62,000 to ,r support Sustainability staffing in Operating Budget ,.p — Future years assume 2%annual growth in grant funds Students planting a rain garden as pan of Urban Sustainal Solutions Community Climate Action Grant Project ORANGE COUNTY s NORTH CAROLINA 9 10 Travis Myren presented the Climate Change Mitigation grant program, which historically funds 11 nonprofits and the schools for sustainability initiatives. He signaled that the operating budget would 12 propose reducing the grant program by approximately$62,000 to fund staffing needs in the sustainability 13 office, leaving approximately$211,000 for climate change grants,growing at the standard 2%annually. He 14 noted this was being flagged now so it would not come as a surprise when the operating budget is formally 15 presented. 16 17 18 19 20 21 22 23 24 25 26 6 1 Slide#7 FY2026-36 Recommended Capital Investment Plan • Climate Change Mitigation Project Status FY2024-25r Shade for Schools Trees for the Triangle $50,000 In progress Tree planting program with Trees for the Triangle $30,000 In progress Green Infrastructure Workforce Urban Sustainability educational workshops Development Program Solutions $58,100 Completed Green Infrastructure Workforce Urban Sustainability $38,000 In progress Rooftop Solar on r Joseph's Development Program Solutions CME Church Solar Equity $50,000 In progress Renewable energy infrastructure Red Hawk Farm $30,000 In progress Electrical Panel for Solar EMPOWERment $19,800 In progress Carolina Community Project Compost program expansion $21,300 In progress Prairie Restoration and Compost Reforestation Projects Eno River Association $22,600 In progress Energy Efficient Windows Weaver Community $61,305 In progress Housing Association Food Forest Jubilee Healing Farm $12,000 In progress Rooftop solar installation Solar Equity $28,000 In progress Rooftop Solar on Habitat Fomes Habitat for Humanity $50,000 Completed Carrboro Energy EfficiencyProgramfor Residents Town of Carrboro $29,145 In progress Twin Creeks Farm expansion to provide locally sourced food Table Ministries $30,000 In progress for children served by Table. ORANGE COUNTY NORTH CAROLINA 2 3 Travis Myren acknowledged that some projects take time to complete after the award is made, 4 drawing a comparison to the lag seen in some housing projects, and characterized this as not uncommon 5 for this type of project. 6 Commissioner Carter asked about the workforce development program. 7 Travis Myren said staff will provide a description of that. 8 Commissioner McKee asked whether staff tracks how far along grantees are toward completion, 9 expressing concern that the same organizations should not be eligible for new grants while an existing 10 award remains uncompleted. 11 Travis Myren indicated staff would follow up with more detail, noting that "in progress" status 12 means the contract has been let and funds are available, but the project is not yet complete. 13 14 7 1 Slide#8 FY2026-36 Recommended Capital Investment Plan .-n vironmental Protection and Climate Action Built Environment and Energy Goals • Electrical Upgrades $350,000 (p.61) — Server Room Uninterruptable Power Supply - (UPS) replacement-$300,000 — Energy Efficiency LED Upgrades-$50,000 • Primary focus on West Campus Office Building ORANGE COUNTY NORTH CAROLINA 2 a 3 4 Slide#9 FY2026-36 Recommended Capital Investment Plan Environmentai "Timate Action Mission Support • Facades $71,040 (p.64) — Animal Control replacement of vehicular access gate to secure Animal Control vehicles-$13,040 — Efland Cheeks Community Center dumpster enclosure for new dumpster- $58,000 ORANGE COUNTY s NORTH CAROLINA 5 6 Commissioner Carter questioned the $58,000 figure for the dumpster enclosure on slide#9. 7 Angel Barnes, Capital Projects Manager, responded that the estimate is based on recent builds 8 and costs of similar enclosures, such as the enclosure behind the current facility,though a firm contractor 9 quote has not yet been obtained. 8 1 Commissioner Bedford asked how trash is currently being managed at the location. 2 Alan Dorman, Asset Management Director, responded that trash is currently taken to the street, 3 and that a permanent dumpster has long been desired given heavy use of the facility for weekend events. 4 Commissioner McKee questioned whether a chain link fence would suffice rather than a full 5 enclosure. 6 Alan Dorman indicated the enclosure is primarily a beautification and code requirement rather 7 than a security issue but agreed to verify the applicable code requirements. 8 Commissioner McKee said he's concerned about such a high cost for an enclosure. 9 10 Slide#10 FY2026-36 Recommended Capital Investment Plan Environmental Protection and Climate Action Mission Support • Facility Accessibility, Safety, and Fire Alarm and Fire Suppression System Security Improvements - $100,000 Replacements - $25,000 (p.69) (p.66) — Chapel Hill Courthouse security system and — Fire door replacements Countywide- cameras—$36,000 $25,000 — Drakeford access control for staff parking, Building code requires annual inspections leading to elevator, and stairwell -$39,000 more replacements — Countywide accessibility improvements- $25,000 ORANGE COUNTY to NORTH CAROLINA 11 12 Travis Myren presented several facility accessibility projects. He noted that the Chapel Hill 13 Courthouse houses traffic court, misdemeanor court, and several treatment courts.The Drakeford access 14 control project addresses issues of individuals accessing stairwells and elevators after hours when staff are 15 not present. 16 Commissioner Carter said the Board received an email recently about security at the Historic 17 Courthouse in Hillsborough. She asked if those concerns would be addressed in the CIP. 18 Travis Myren said staff has reached out to Chief Superior Court Judge about that issue, but it won't 19 be addressed in the CIP. 20 Commissioner McKee affirmed the need for improvements at the Drakeford Complex, noting he 21 had received constituent comments about unauthorized individuals being in the facility. 22 Vice-Chair Fowler asked if those improvement costs for the Drakeford will be shared with 23 Carrboro. 24 Travis Myren said yes. 25 Chair Hamilton asked how much the county portion will be. 26 Alan Dorman said the total price of$39,000 will be shared between both jurisdictions. 27 28 Slide#11 9 FY2026-36 Recommended Capital Investment Plan Mission Support • Fuel Station — Pump, Tanks &Tank Monitoring Replacement - $297,200 (p.71) r — Replacement of underground fuel storage tanks at the end of life with above-ground fuel storage with barriers T 51 ORANGE COUNTY tt NOR"I H CAROLINA 1 2 Travis Myren explained the proposal to replace underground fuel tanks at the motor pool with 3 aboveground tanks. He said it is the environmentally right thing to do, as it eliminates the risk of 4 undetected soil contamination. He said barriers would also be constructed around the new aboveground 5 tanks, and spill detection equipment would be replaced. 6 Commissioner Bedford asked whether testing for soil contamination would be required. 7 Travis Myren indicated the underground tanks would be left in place but filled with an inert 8 material rather than removed. 9 10 Slide#12 FY2026-36 Recommended Capital Investment Plan Environmental Protection and Climate Action ,.inity Goats • Historic Courthouse Square - $371,243 (p.74) I .V — Historic Courthouse design • Exterior restoration and structural repairs Interior upgrades to elevator,electrical system,HVAC system,fire alarm,audiolvisual devices and lighting — Construction costs in Year 2-$4.5 million _ ORANGE COUNTY 12 NOR-rH CAROMNA 11 10 1 Travis Myren said the planning funds detailed on the slide will lead to construction costs in year 2 2 of the plan. 3 Commissioner Carter asked if the Town of Hillsborough is a financial partner in this project. 4 Travis Myren said no. 5 6 Slide#13 FY2026-36 Recommended Capital Investment Plan Environmental Protection and Climate Action Rnil,t Fnvirrr)rrPr,t ;nri Fnrrrr-r,nnls; • Heating, Ventilation, and Cooling (HVAC) Projects - $1,472,540 (p.75) — Countywide component replacement- $50,000 — Efland Cheeks Community Center HVAC replacement- $37,380 — Justice Facility- Fan Coil Unit, Unit Heater Replacements -$198,400 — West Campus Server Room HVAC replacement-$285,000 — Whitted professional services Phase 1 of comprehensive HVAC replacement -$42,000 — Whitted Complex Phase 1 HVAC Replacement- Boilers & Pumps -$859,760 • Total four-year project cost-$6.1 million ORANGE COUNTY s N(7RTH CAROLINA 7 8 Travis Myren reviewed the various HVAC improvements at county facilities. He identified the 9 Justice Facility,West Campus Server Room,and Whitted Complex as the highest cost projects. He indicated 10 that the remaining phases of the Whitted complex improvements will take place over 4 years. 11 Commissioner Bedford asked if Medicaid reimbursement dollars the Health Department receives 12 could be used to offset costs. 13 Travis Myren said staff will investigate that option for the medical and dental clinics specifically. 14 15 11 1 Slide#14 FY2026-36 Recommended Capital Investment Plan Environmental Fr, lion and Climo.' Built Environment and Energy Goai:. . • Interior Finish Replacements - $157,000 (p.77) - Passmore Center to replace movable partition wall -$115,000 - AMS assistance required to close existing partition ! - Fleet Services renovation to create office f �, space-$42,000 - Fleet Manager and Supervisor do not currently have private office space ORANGE COUNTY NO1411I C'AMILINA 2 3 Travis Myren presented two interior finish replacements. The first is a replacement movable 4 partition at the Passmore Center gymnasium —the partition between two usable spaces has deteriorated 5 to the point that staff cannot operate it themselves, requiring Asset Management Services assistance. 6 Travis Myren noted the partition could be used as frequently as weekly to allow two simultaneous 7 programs in the space, but that difficulty in using it has reduced that frequency significantly. 8 Commissioner McKee expressed concern about the cost, asking what it costs in AMS staff time to 9 open and close the partition, suggesting those ongoing costs might be weighed against the capital 10 investment. 11 Travis Myren acknowledged that AMS staff resources are primarily dedicated to cleaning and 12 repair functions rather than event operations. 13 Commissioner McKee questioned why regular staff could not perform the task. 14 Travis Myren responded that those staff have other duties. 15 Commissioner Carter noted that no rental revenue is foregone, as the space is not rented out. 16 Commissioner Bedford framed the benefit in terms of service capacity — enabling two senior 17 programs simultaneously rather than one. 18 Vice-Chair Fowler said she assumes from this proposal that the current partition is not reparable. 19 Travis Myren said that's right. 20 Chair Hamilton agreed the cost is high and suggested looking into alternative options to achieve 21 the desired outcome. 22 Regarding the project for Fleet Services, Commissioner Bedford asked where it is located. 23 Travis Myren said the motor pool offices. 24 Commissioner McKee asked why staff couldn't continue without private offices. 25 Travis Myren said this would certainly be an improvement to the space because managers and 26 supervisors are not currently able to talk to staff privately. 27 Commissioner Bedford said it is worth the money to provide private office spaces. 28 Commissioner Carter advocated for private office space for Fleet Services but agreed with the 29 discussion about the partition at the Passmore Center. 30 Slide#15 12 FY2026-36 Recommended Capital Investment Plan 1 nvuonmentai Ptoldurun and C;dffnaie AGIui. Rlrji t Fnvirnnmenf and•moron(-n:?k • Link Center Renovations - $15,514,576 (p.81) Link Building renewal to relocate the Sheriff's office, providing more adequate and functional space i o Creates vacant space in the Justice Facility for District Attorney's Office, Public Defender's Office, and Criminal Justice Resource Department o Justice Facility renovation to backfill prior Sheriff's Office is scheduled in Years 2 and 3 at a cost of$3.9 million ORANGE COUNTY $ NORTH CAROLINA 1 2 Travis Myren described a"renewal"of the Link Center,explaining it would involve a transformation 3 of both the interior and exterior to accommodate the Sheriff's Office, which would relocate from the 4 Justice Center. He said relocation would initiate a sequence of other improvements: the Public Defender 5 would move out of leased space into the vacated Sheriff's Office space, and the District Attorney would 6 move from a building in need of significant repairs into the space backfilled by the Sheriff.The remodel of 7 backfill offices at the Justice Center is estimated at approximately $3.9 million in years two and three of 8 the plan. 9 Commissioner McKee observed that the Link Center work might have been done several years ago 10 at a lower cost. 11 Travis Myren acknowledged that the prior estimate related only to exterior work, whereas this 12 project creates an entirely new space for the Sheriff's Office. 13 14 13 1 Slide#16 FY2026-36 Recommended Capital Investment Plan aaithy Community. i,eurtrmodai Transportation B'riilt Environment and Energy Goats • OCTS Esus Shelters- $68,750 (p.82) - Funds the procurement and installation of two (2) bus shelters to improve access to transit services • One shelter will serve the Crisis Diversion Facility l- • Second shelter prioritized based on need a-� - Partially funded ($55,000) by Federal Transit Administration (FTA) Section 5339 grant • County cost-$13,750 - Future funding programmed to install two (2) - - bus shelters annually over the next four years Orange County Public Transportation Bus Stop in Hillsborough,IVC ORANGE COUNTY e NORTH CAROLINA 2 3 4 Slide#17 FY2026-36 Recommended Capital Investment Plan Mission Support 7P!L OCTS Grant Funded Vehicles - N $367,919 (p.83) `` r - Funds 2 replacement ADA minivans for Mobility on Demand/Demand Response and 1 replacement ADA bus for Fixed Route Services - 80% of cost is reimbursable through Federal Transit Administration (FTA) Section 5307 ` a []r777l[] and North Carolina Department of Transportation (NCDOT) FTA 5339 grants — County cost-$73,584 OP,ANGE COUNTY 7 NOR'rH CAROLINA 5 6 7 8 9 10 14 1 Slide#18 FY2026-36 Recommended Capital Investment Plan Environmental Protection and Climate Action Environmental Protection and Climate Action Resillent Community Goals Built Environment and Energy Goals • Parking Lot Improvements - $55,000 Piedmont Food Processing Center (p.85 ) $98,944 (p.87 ) — Animal Services study for potential parking — Replace the condensing units for the walk-in expansion-$25,000 freezers and update the existing security camera system — Other Repair, Patching, Striping, Sealing - Currently no security system in place for facility in $30,000 continuous use — Funded from Article 46 Sales Tax Proceeds. ORANGE COUNTY e NORTH CAROLINA 2 3 Travis Myren explained that the front parking lot at Animal Services is routinely full, and that 4 during clinics such as rabies or spay/neuter events, overflow parking creates safety hazards on Eubanks 5 Road,which has led to the request of a study for potential parking expansion. 6 Chair Hamilton noted that if Article 46 funds are used for the Piedmont Food Processing Center 7 project, less will be available for other projects that are eligible. 8 Travis Myren said that is how he is recommending it be paid for, but that can be changed. 9 10 Slide#19 FY2026-36 Recommended Capital Investment Plan environmental Protection and Climate Action Mission Support Resource Conservation Goals • Plumbing Repairs - $38,400 (p.89) Register of Deeds Automation - $80,000 (p.92) — Cedar Grove Community Center sewage pump ejector-$3,400 — Multiyear account to finance technology improvements in Register of Deeds Office — Seymour Center shower drains-$15,000 — Collection of funds is mandated under — Seymour Center dedicated water heater for General Statute showers-$20,000 ORANGE COUNTY i9 NORTH CAROLINA 11 15 1 Commissioner Bedford asked whether the Seymour Center's fund balance might cover some of 2 the costs for improvements at that facility. 3 Travis Myren agreed that can be explored. 4 Vice-Chair Fowler asked if Cedar Grove has showers. She recalled that a prior renovation at Cedar 5 Grove involved a $148,000 discussion about whether the septic system could handle addifional capacity. 6 Travis Myren said it has been explored but is not feasible. 7 Commissioner Carter asked whether the Tax Assessment Work Group's efforts might create an 8 integration opportunity between the Register of Deeds recording system and the Tax Office's system. 9 Travis Myren said the Register of Deeds software is not up for replacement, and that a direct 10 interface between the two systems would need to be examined. 11 Vice-Chair Fowler noted that some of the issues raised in the work group appeared to involve data 12 entry errors rather than systemic software deficiencies. 13 Travis Myren said they were related to human error. 14 15 Slide#20 FY2026-36 Recommended Capital Investment Plan Environmental Protection and Climate Action Built Environment and Energy Goals • Roofing - $55,000 (p.94) — Annual inspections and repair program - $55,000 ORANGE COUNTY zo NORTH CAROLINA 16 17 18 19 20 21 22 23 24 25 26 27 16 1 Slide#21 FY2026-36 Recommended Capital Investment Plan County Fleet EV Charging Stations Environmental Protection and Climate Action Transportation Goals " '. �, y Electric Vehicle Charging Stations for County Vehicles - $373,321 (p.99) r — Install six (6) charging stations at Southern Human Services — Install four (4) stations at Whitted Human Services — Install one (1) station at the Parks Operations Base - h — Funding in future years will be guided by the charging station feasibility study C^ «-w ® Preg.ese rt:A. 2 '22 GIP 2 3 Commissioner McKee asked if these charging stations are available for public use as well. 4 Travis Myren said these charging stations are going to be installed in places that are intended to 5 be used by county vehicles. 6 Commissioner McKee said he would like to explore billing users who use the charging stations 7 intended for county vehicles. He said he believes that someone who can afford an electric vehicle should 8 not be using county resources to fuel it. 9 Alan Dorman added that the new charging stations will be smart chargers to prevent unauthorized 10 users from using them. 11 Travis Myren agreed to price out the software required to enable billing at public chargers and 12 provide a return-on-investment analysis. 13 Alan Dorman clarified that the current feasibility study is focused primarily on staff chargers rather 14 than public chargers, but that the analysis Commissioner McKee requested could be added. 15 Vice-Chair Fowler raised the related climate benefit consideration. 16 Commissioner Bedford noted that some installation funding for public chargers had previously 17 come from state dollars that may no longer be available. 18 19 20 21 22 23 24 25 26 17 1 Slide#22 FY2026-36 Recommended Capital Investment Plan Multi-modal Transportation Mission Support • Transit Plan Update- $300,000 (p.100 ) — Update the Orange County Transit Plan — Long range vision plan for local and regional transit services in Orange County — Update cycle every five years — Annual work Plan authorizes expenses and projects for each fiscal year — Funded with Article 43 Transit sales Tax Proceeds ORANGE COUNTY 22 NORTH CAROLINA NA 3 Travis Myren described an update to the Orange County Transit Plan, noting it is on a five-year 4 update cycle as required by the interlocal agreement (ILA) with the MPO, Go Triangle, and municipal 5 partners, and that this is the year it is due. The estimated cost is $300,000, funded through the transit 6 sales tax fund (Article 43), which does not flow through the general fund and therefore has no direct 7 impact on the property tax rate. 8 Commissioner Carter asked about the distinguishing part of this project that makes it capital. 9 Travis Myren said it is because of the use of Article 43 tax proceeds, and it could lead to capital 10 expenses, but could be part of operating budget just as easily. 11 Commissioner Carter asked whether the$300,000 could be split across two fiscal years. 12 Travis Myren acknowledged this could be explored, as the update schedule is self-imposed. 13 Kirk Vaughn noted that splitting the cost over two years would have no impact on property tax 14 rate directly because it would be funded through the transit sales tax fund (Article 43), which does not 15 flow through the general fund and therefore has no direct impact on the property tax rate. 16 Sarah Williamson, Interim Transportation Director, noted that the ILA with the MPO and Go 17 Triangle requires the plan to be updated every five years,and that until a new plan is approved,the county 18 is restricted as a stakeholder in the projects it can implement. She added that without a new transit plan, 19 there would be no additional projects sequenced for years beyond the current plan's fifth year. 20 Chair Hamilton questioned whether the plan update needs to cost $300,000, expressing a sense 21 that transit plans are more plentiful than almost any other area of government planning, and asking 22 whether the scope could be tightened. 23 Commissioner McKee suggested the ILA itself might be amendable by the partners. 24 Travis Myren committed to a competitive solicitation process to ensure the scope and cost are 25 appropriate. He said a lot of the cost has to do with the amount of public engagement required. 26 Commissioner Fowler expressed support for updating the plan given the county's growth, the 27 near-completion of the bike-ped plan, and recent transportation corridor adoptions. 18 1 Commissioner Bedford asked whether bus shelters are funded through the transit plan funds. 2 Sarah Williamson clarified that shelters are funded separately through state and federal grant 3 dollars and are purchased on state contract. 4 5 Slide#23 FY2026-36 Recommended Vehicle Replacements Environmental Protection and Climate Actioi Transportation Goals • Vehicle Replacements - $2,399,424 total (p. 101) — Public Safety Priorities • Emergency Services $806,480 — Ambulances(1)-$480,000 — Administrative Vehicles(3)—$326,480 • Hillsborough Fire Marshall(reimbursed) $9,000 • Sheriff's Office vehicles $602,954 • Total Public Safety $1,418,434 ORANGE COUNTY 23 NORTH CAROLINA 6 7 8 Slide#24 FY2026-36 Recommended Vehicle Replacements Environmental Protection and Climate Action Transportation Goals — Administrative Vehicles Electric Vehicles in County Fleet Current With FY27 • AMS Service Vehicles(2) $129,950 Recommended lents(1) Total County Fleet 363 365 • DEAPR Vehicle Replacement(2) $125,334 Less Public Safety 188 188 • DSS Vehicle Replacement(3) $177,341 • Health Vehicle Replacement(4) $189,133 Total Non-Public Safety ns 177 • IT Vehicle Replacement(1) $57.539 Total EV and Hybrids 61 74 • Plannw, 2) EV and Hybrid%of County 35% 42% • Taxes,Tags, Registration $49,706 Fleet • Total Administrative $980,990 Total EV Only 45 57 EV Only%of County Fleet 26% 32% Strategic Plan performance measure to replace at least 8 non-public safety vehicles per year with electric FY2026-27 CIP recommends a total of 12 electric vehicles and 1 hybrid vehicle ORANGE COUNTY NORTH CAROLINA 24 9 10 Travis Myren noted that the administrative vehicles are electric and hybrid. 11 19 1 Slide#25 FY2026-36 Recommended Emergency Services Projects Healthy Community 9tWt Environment and Energy Gnat, • Emergency Services Headquarters — $3,900,000 (p.103) - Professional design services to construct new Emergency Services Headquarters - Provides enhanced hardened/secure space for Communications and Emergency Operations - Embeds EMS Substation to serve Northern Orange County - Backfill of 510 Meadowlands forAMS, Civil Rights and Civic Life,and County Attorney, - Year 2 construction cost-$44.5 million - Cost escalated based on experience from other counties that have renovated spaces for like functions ORANGE COUNTY 25 NORTH CARCILINA 2 3 Travis Myren emphasized that this project would initiate a beneficial sequence of facility 4 consolidations: Emergency Services would vacate its location at 510 Meadowlands Drive, allowing the 5 County Attorney to move from leased space into that building; Asset Management Services and Civic 6 Rights and Civic Life— both currently at Revere Road —could then move to Meadowlands,and the Revere 7 Road property could potentially be made available for affordable housing, given its connection to 8 municipal services and its central location. 9 10 Slide#26 FY2026-36 Recommended Emergency Services Projects Healthy Community Mission Support • Emergency Services Replacement and Renewal — $533,817 (p,104) - Replacement of Emergency Medical Services Equipment • EMS video laryngoscopes and hardened laptop replacement-$106,095 • Animal Services new portable radios to move to the Viper/800mHz.-$123,771 • Sheriff's Office portable radio replacement-$145,430 • Emergency Services portable radio and consolette replacement-$158,521 ORANGE COUNTY zs NORTH CAROLINA 11 20 1 Travis Myren described a consolidation of radio purchase tracking across county departments into 2 a single Emergency Services renewal and replacement account. Items in year one includes radios for 3 Animal Services, the Sheriff's Office, and Emergency Services, as well as replacement of EMS video 4 equipment including video laryngoscopes and field laptops. 5 Vice-Chair Fowler noted appreciation for the video laryngoscopes, recalling performing the 6 procedure without video assistance. 7 8 Slide#27 FY2026-36 Recommended Emergency Services Projects rur,r M, Mission Support • VIPER Radio Tower Construction — $1,365,292 (p.107) Project is programmed to be completed over a four-year period in two phases at a total cost of$25 million — FY2026-27-$1,365,292 • Project management, permit development,technical bid specifications,and pre-construction engineering services — FY2027-28-$11,270,478 • Funds for construction and equipment costs for Phase 1: Replacement of the Eno Mountain Tower and equipment upgrades at existing tower sites — FY2028-29 request-$1,875,333 • Phase 2 professional services FY2029-30-$10,431,853 • Construction and equipment for three(3)new tower sites ©RANGE COUNTY 27 NORTH CAROLINA WA 10 Travis Myren reminded the Board that some of the cost of the VIPER project has been reduced but 11 is still a $25 million project over four years. 12 Commissioner McKee asked if it's possible to rent space on these towers to private entities. 13 Travis Myren said yes and confirmed it is consistent with the county's practice with other vertical 14 assets, noting that public safety equipment retains priority in terms of tower placement. 15 16 21 1 Slide#28 FY202.6-36 Recommended Information Technology Projects Mission Support • Information Technology Governance Council Initiatives - $197,128 (p.108) - Advanced aerial imagery and change detection software F — Primarily used by the Tax Office for assessment purposes ^. — Updated imagery for most recent construction activity — Identifies changes to size and scale of improvements — Highlights parcels that may require additional field verification - New technology initiatives are programmed for up to $250,000 annually LM a- Operating costs of software maintenance included by year ORANGE COUNTY NI"RTH CARC)LINA 28 2 3 Travis Myren described this year's IT Governance Council recommendation to fund EagleView, an 4 aerial imagery and change detection product primarily for the Tax Office. The product provides updated 5 aerial imagery more frequently than the state's orthophotography program — two updates every three 6 years — and includes change detection software that identifies new structures, changes in structure size 7 or scope, or structures that have been removed or significantly damaged.This would trigger field reviews 8 by assessors to ensure accurate assessment of changed properties. 9 Commissioner Carter asked whether a cost-sharing arrangement with other local governments 10 might be possible,given that the product could benefit multiple jurisdictions. 11 Travis Myren said he would look into it. 12 Commissioner Bedford described a practical application for Planning. She described when her 13 children purchased a home in Carrboro and an unpermitted three-story deck was discovered. 14 Travis Myren said that Planning and the 9-1-1 System, would benefit from this technology, with 15 updated building footprints available to first responders entering structures, though the primary impetus 16 is for tax purposes and to improve assessments. 17 Commissioner Carter asked whether the system could detect major condition changes relevant to 18 the depreciation question raised in the Tax Assessment Work Group. 19 Travis Myren said it would if there was any evident external issue but noted that most of the 20 deferred maintenance is interior. 21 Commissioner McKee said would be a benefit to pick up any additions or major structure changes 22 that were not reported properly. 23 24 22 1 Slide#29 FY2026-36 Recommended Information Technology Projects Mission Support • Information Technologies Infrastructure - (p.109) - FY2026-27 expenditures of $1,089,000 will be funded using balances from prior year appropriations - Server upgrades, laptop replacements, data storage, software implementation, network improvements, wireless expansion and replacements, time clock devices and cybersecurity prevention and mitigation ORANGE COUNTY 29 NORTH CAROLINA WA 3 4 Slide#30 FY2026-36 Recommended Parks, Open Space, and Trail Development Projects Healthy Community Green Community Goals • Hollow Rock Nature Park - $224,000 (p.112) - Accessible loop trail restroom facilities and barn conversion for nature programming }: - Costs are shared equally with Durham County - Orange County share$112,000 ORANGE COUNTY so NOR'rH CAROLINA 5 6 7 23 1 Slide#31 FY2026-36 Recommended Parks, Open Space, and Trail Development Projects Environmental Protection and Climate Action • Neuse River Rules for Nutrient Management - $175,000 (p. 116) Projects to reduce total nitrogen and phosphorus levels in Falls Lake Reservoir according to the Upper Neuse River Basin Association implementation approach Includes a mix of stormwater control or wetlands creation improvements,conservation acquisitions and practices 312 3 4 Slide#32 FY2026-36 Recommended Parks, Open Space, and Trail Development Projects Healthy Community Green Community Goal, • Park and Recreation Facility Renovations, Repairs, and Safety Improvements - (p. 117) FY2026-27 expenditures of$215,000 will be funded using balances from prior year appropriations Funds ongoing safety, lighting, park infrastructure, signage, preventive maintenance in the County's ten parks identified in the 2030 Parks & Recreation Master Plan ORANGE COUNTY 32 NORTH CAROLINA 5 6 7 24 1 Slide#33 FY2026-36 Recommended Parks, Open Space, and Trail Development Projects Healthy Community Community Goals • Twin Creeks District Park- $325,000 (p.119) - _{ — Renovations& repairs to the farmstead buildings to maintain historic features ® � — Permitting&replacement of a culvert for the main -� east-west entry driveway -- — Farmhouse could be rented to a Caretaker to prevent *' future vandalism — Rental income could offset renovation and repair expenses • 20-year borrowing could be offset by$2,173 monthly rent ORANGE COUNTY 33 NORTH CAROLINA 2 3 Travis Myren described a proposal to renovate and repair the historic farmstead buildings on the 4 Twin Creeks District Park property along with installation of an east-west driveway. Park development 5 funds for the property itself are beyond the 10-year planning horizon. The renovated house could 6 accommodate a caretaker who would pay rent and provide an on-site presence 7 Commissioner McKee asked about the mechanics of the caretaker arrangement, expressing 8 concern about how compensation and rent would interact. 9 David Stancil, Department of Environment, Agriculture, Parks, and Recreation described the 10 existing caretaker model at Little River Regional Park, where a house was relocated from Dogwood Acres 11 and a caretaker has lived there for many years paying nominal rent in exchange for opening and closing 12 gates and other minor duties. He indicated the Twin Creeks house, once renovated, could command 13 meaningful rental revenue given its location on the north side of Carrboro. 14 Commissioner McKee acknowledged the conflict-of-interest considerations inherent in a caretaker 15 arrangement with county employees 16 David Stancil confirmed there is an established process for structuring such arrangements to avoid 17 conflicts of interest. 18 Chair Hamilton asked whether the property is currently open to the public. 19 David Stancil responded that the greenway connecting Morris Grove Elementary to Lake Hogan 20 Farms is open, but the farmstead portion is not, though hikers do occasionally reach the house despite 21 signage. He described various security measures that had been tried, including alarm systems with voice 22 messages, but concluded that on-site human presence is what is ultimately needed. 23 Commissioner Bedford suggested using this property for affordable housing or short-term housing 24 options. 25 Chair Hamilton suggested exploring what a chain link fence around the structures would cost as 26 an alternative or interim measure. 25 1 David Stancil said, unfortunately, that isn't a strong deterrent either, but agreed to price out 2 fencing options. 3 4 Slide#34 FY2026-36 Recommended Solid Waste Projects Environmental Protection a�;d Climate Action • Solid Waste Vehicle and Equipment Replacements - $544,636 (p. 123) • Replace Hook Truck#2023- $318,890 • Replace Walking Floor Trailer#1963-$112,873 • New Walking Floor Trailer- $112,873 — c F t 34 5 6 7 Slide#35 FY2026-36 Recommended Sportsplex Projects Healthy Community -- • Sportsplex Projects - $1,940,000 Parking Lot Resurfacing, Replacement of Entrance Doors, Installation of 2 Electric Fast Chargers, and Updated Exterior Signage-$640,000(p.125) 3-Year Replacement of Cardio/Exercise Equipment-$125,000(p.126) — Ice-Resurfacing Replacement-$200,000(p.127) a �r — Renovation of Pool &Fitness Locker room and Additional New Family Change Area -$900,000 (p. 129) — Recreation Pool Plaster Replacement-$75,000(p. 130) ORANGE COUNTY ss NORTH CAROLINA 8 9 26 1 Slide#36 Funding the FY2026-36 Recommended CIP Debt Service Schedule through 2026-36 $90,000,000 $82,972,281 $84,492,697 $83,036,144 $81,213,277 $60,o0B,a60 574,sse,aoa $70,815,863 $71,632,373 $70,000,000 502,90Y,683 $60,000,000 $50,000,000 545$43 $40,611,813 $40,000,000 Borrow first Bond $30,000,000 Pr Jets $20,000,000 $10,000,000 3- rY2028-27 FY2027-28 FY2028-29 "2029-30 "2030-31 rV2031-32 PY2032-33 "2033-34 FY203435 FY2031-3e ORANGE COUNTY 36 NORTH CAROLINA 2 3 4 Slide#37 Funding the FY2026-36 Recommended CIP • Total FY2026-27 Capital Budget Impact—2.90 cents per$100 of value — Pay-Go—0.89 cent tax rate equivalent increase — Debt—2.01 cent tax rate equivalent increase • FY2028-29—Increase of 4.58 cents per$100 of value Fiscal Year Incremental Tax Rate Equivalent — Principal and interest payments on FY2026-27 borrowing 2026-27 2.01 • $190 million—Carrboro Elementary,New OCS Elementary 2027-28 1.09 Link Center Renovation Authorized county or school projects that have not 2028-29 4.58 been borrowed 2029-30 1,61 — Interest payments on FY2027-28 borrowing 2030-31 • $150 million—Estes Hills Elementary ES Headquarters 2031-32 Viper Radio System 2032-33 1.48 Historic Courthouse Total 10.77 2700 Homestead ORANGE WOORTH CAROLTY YNA 37 5 6 7 27 1 Slide#38 Options to Smooth the FY2028-29 Increase in Debt Service 1. Delay Authorized Projects - County Manager can delay projects that have been authorized in prior Capital Investment Plans - Examples include: Vehicle Replacements Facility Improvement Projects - Carrboro Elementary and the new 4CS Elementary projects have already incurred planning and design expenses in connection with planned construction • If those design funds are not financed with the construction;the county would have to use pay-go funds for those soft costs ORANGE COUNTY 38 NORTH CAROLINA 2 3 Travis Myren transitioned to a discussion of options for smoothing the projected tax rate increase 4 of over 4.5 cents in FY 2028-29 associated with debt service. He explained that delaying borrowing for year 5 one projects is largely not feasible because design funds for the two elementary school projects are already 6 spent or obligated and canceling those projects would require the county to find cash to cover 7 approximately$11 million in design costs. 8 9 Slide#39 Options to Smooth the FY2028-29 Increase in Debt Service 2. Delay$123.7 million in Major Projects from Year 2 to Year 3 - Estes Hills Elementary $59.5 million Fiscal Year Current CIP Delay Major - ES Headquarters $48.4 million Projects - Viper Phase 1 $11.3 million 2026-27 2.01 2.01 - Historic Courthouse $4.5 million 2027.28 1.09 1.09 2028-29 4.58 3.27 — Impact of Delaying Projects 2029-30 1.61 0.85 • Adds-3%inflation to project budgets 2030.31 1.78 • Delays projects contingent on ES Headquarters 2031.32 0.33 - Cedar Grove Storage 2032.33 1.48 1.58 - 510 Meadowlands Retrofit • Cumulative tax impact increases from 10.77 cents per Total 10.77 10.91 $100 of value to 10.91 cents ORANGE COUNTY 39 NORTH CAROLINA 10 28 1 Travis Myren indicated that the more meaningful options lie in deferring projects currently 2 programmed in year two — namely, Estes Hills Elementary School (design in year one,construction in year 3 two),the Emergency Services Headquarters($48.4 million in year two),the Viper system first phase($11.3 4 million), and the Historic Courthouse renovations ($4.5 million) — from year two to year three. Planning 5 funds currently in year one associated with those deferred projects would similarly shift to year two. 6 Commissioner Bedford expressed interest in modeling what a two-year delay of Estes Hills 7 Elementary in particular would do to the tax rate,noting that such a delay remains within the bond window 8 and the LGC parameters, and that the school districts may benefit from additional time to better 9 understand enrollment trends — for example, whether a middle school deconstruction might affect 10 planning for Estes Hills. She also noted the need to evaluate pay-go competition with Orange Middle 11 School's pre-design scoping if projects overlap. 12 Chair Hamilton stated she would like to see what other projects could also be pushed out, not just 13 the school projects. 14 Travis Myren said this proposal captures everything over$1 million but can look again. 15 Commissioner McKee supported the idea of pushing projects out. He said the potential 4.58-cent 16 increase is an extreme imposition on lower-wealth residents, especially given that this figure represents 17 only the CIP-related portion of any potential tax increase, with cumulative increases potentially 18 approaching six or seven cents when operating budget pressures are included. He recalled measures taken 19 after 2008 recession. 20 Commissioner Bedford raised the RENA Community Center as a project that she believed should 21 be removed from the plan entirely, rather than merely deferred. She noted that even after reducing the 22 scope from two stories to one, costs remained at approximately $2.5 to 2.7 million due to requirements 23 for a commercial kitchen and other features. 24 Commissioner Carter disagreed with acting too quickly on that project, citing significant 25 community feedback over the years, and suggested it could be moved further in the plan. 26 Chair Hamilton agreed that conversations with the community about the realities and necessary 27 trade-offs would need to take place. 28 29 29 1 Slide#40 Options to Smooth the FY2028-29 Increase in Debt Service 3. Explore Bond Anticipation Notes(BAN's)for School Construction Projects — Total construction costs are typically financed when bids are received,but on large construction projects,actual construction costs are incurred over the subsequent next two or three years — BAN's allow county to borrow for projects as cash flow requirements dictate — BAN's are paid off using bond proceeds when General Obligation Bonds are issued — County would incur additional interest at a cost to be quantified as analysis proceeds — BANs are only allowed for voter approved General Obligation Bonds ORANGE COUNTY 40 NORTH CAROLINA 2 3 Travis Myren described bond anticipation notes (BANs) as a financing tool available for general 4 obligation bonds that would allow the county to borrow short-term for cash flow purposes and then retire 5 those notes when the full GO bond borrowing occurs, at some additional interest cost. 6 Commissioner McKee described his experience with commercial draw-down lending. 7 Kirk Vaughn confirmed that while analogous mechanisms exist in the private sector,governmental 8 restrictions largely preclude that approach except in the limited case of General Obligation Bond 9 anticipation notes. 10 Kirk Vaughn, Budget Director, made the following PowerPoint presentation: 11 12 Slide#1 ORANGE COUNTY NORTH +CAROLINA School Capital Investment Plan FY 2026-36 April 16, 2026 Board of Commissioners Work Session 13 30 1 Slide#2 What hes changed from prior School CIPs Adoption of the School Capital Funding Policy(Page 168)& Major Project Planning Addendum (Page 172). - School CIP has been reorganized into three sections(Major Projects,High Priority Needs,Other Capital Uses) - All parties have also signed CORE Team Interlocal Agreement,which will provide updates to Board on construction progress. Inclusion of Major Project plans by both school districts,with county staff assisted sequencing. • Phasing in of Pay-Go funds to assist Major Project funding-$3.5 M in FY 27, $6.5 M in FY 28, full $10 M in FY 29. Slight inflation to$94.8 M over 10-year plan. ORANGE COUNTY 2 NORTH CAROLINA 2 3 Kirk Vaughn explained that the county restructured its approach from project-based allocations 4 to organizing spending into three categories: major projects, high-priority needs, and other capital uses, 5 with the core team presenting project progress updates to the Board each year. 6 7 Slide#3 Woolpert Report to Current GIP Plan Back in 2023, Woolpert did a systematic review of both school districts; both the condition and the educational adequacy of the facilities. Woolpert also made recommendations for replacements and renovations of facilities over multiple bonds, requiring more funds than the county could afford. The recommendations assumed each facility would be replaced or renovated over time,and enrollment was flat-no closures for decreased enrollment. The County funding policy requires schools use the limited bond funds to replace old buildings and improve the educational adequacy of the district. So long as the projects are in line with that requirement,the county only reflects the school replacements as requested by the district. - The County's CIP can be amended to change which schools are being replaced each year at school district request. 3 ORANGE COUNTY NOR-rHNA 8 9 Kirk Vaughn noted that when Woolpert reviewed the school facilities in 2023,they recommended 10 replacing or renovating all schools over multiple bond cycles, with enrollment assumed to be essentially 11 flat and no closures contemplated. He clarified that the county is only reflecting the school replacements 31 1 that the districts are requesting, and that if districts change their plans, they can submit revised projects 2 at any time through budget amendments. 3 4 Slide#4 Major Projects — Projects and Sequencing , 0FY2032-33 Carrboro Design Construction Chapel Hill-Elementary Carrboro Estes Hills Design Construction City Schools Elementary Frank Porter p.133-136 Graham Design Construction Close Out Elementary Orange New Elementary Design Construction County School Schools Orange Middle Pre-Design Renovation Scope Design Construction Close Out .147-48 - OCS may not be able to fund third major project due to increased cost of orange Middle School County used the following rules to sequence these plans - Bonds must be borrowed within 7 years of referendum-FY 2031. May ask for 3-year extension with LGC. - Once borrowed,funds must be drawn down for actual expenses within 3 years. - Funds are allocated between the districts fairly ORANGE COUNTY 4 NORTH CAROLINA 5 6 Kirk Vaughn noted that in the current project sequence, the Orange Middle School project is the 7 only renovation, and requires pre-design phase to determine what is needed to meet educational 8 adequacy needs. 9 Vice-Chair Fowler asked why Estes Hills Elementary was sequenced so closely behind the Carrboro 10 and OCS elementary projects. 11 Kirk Vaughn explained that sequencing projects one at a time allows pay-go funds to be fully 12 dedicated to a single large project, avoids competition between projects for limited cash, and reflects 13 school staff considerations about redistricting timing. He also noted that the schools receiving the first 14 projects are also getting the last project, which helps even out the average timing of funding across both 15 districts. 16 Commissioner Bedford said she doesn't believe there will be enough money to fund a third school. 17 Kirk Vaughn acknowledged the uncertainty but noted that the pay-go is flexible and that districts 18 could choose to direct more pay-go toward the major projects rather than smaller district building repairs. 19 20 32 1 Slide#5 Major Projects — Project Costs and Funding Source • Major Projects are funded using a combination of Pay-Go and Bond Funds CHCCS Projects Bond Funds Pay-Go Total Funds OCS Projects Bond Funds Pay-Go Total Funds Funds Funds Carrboro Elementary Elementary $53,000,000 $0 $53,000,000 Replacement $54,500,000 $2,500,000 $57,000,000 Estes Hills Elementary Orange Middle $59,510,937 $3,319,063 $62,830,000 Renovation $67,700,000 $12,300,000 $80,000,000 Frank Porter Graham $61,189,063 $8,952,237 $70,141,300 Contingency+HPN $1,000,0()o $38,482,699 $39,482,699 Contingency+HPN $3,100,000 $19,246,001 $22,346,001 Total $174,700,000 $50,753,999 $225,453,999 Total $125,300,000 $34,046,001 $159,346,001 ORANGE COUNTY 5 NORTH CAROLINA 2 3 Kirk Vaughn explained that pay-go is essential to the bond program because there is not enough 4 bond money to do the projects without it. 5 6 Slide#6 Major Projects — Project Costs and Funding Source • 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. - 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 ORANGE COUNTY 6 NORTH CAROLINA 7 8 9 33 1 Slide#7 Major Projects — Pay-Go Phase-in To spread out tax burden, the Manager's Recommended CIP splits Pay-Go introduction into three steps, so no increase is larger than 1 cent on the tax rate. Last year's CIP had incremental increases to offset recommended phase-in, so total increases by$240k years 5-9. Not increased in year 10 pending discussion Year 1 Year 2 Year 3 Year 4 Year 5 Year6 Year7 YearEl Yearg 1 Ten Use of Pay-Go By Project I I I 2029-30 2030-31 1 I I t2035-36 Year Total CS Major Projects 2,500,OOC 500,000 4,000,OOC 5,468,70C 2,331,30C 14,800,00 .L.Stanback-HVAC Replacement 2,180,937 2,180,93 CS-Remaining Bond and Pay-Go 2,378,816 2,000,OOC 569,515 3,028,78 3,007,947 6,080,00C 17,065,06 ojects HCCS Major Projects 3.319,06 3,771,30C 4,280,937 900,00C 12,271,30 HCCS-Remaining Bond and Pay-Go 6,121,184 5,000,00 867,76 8,250,48 6,931,21 7,192,05 41120,00 38,482,69 ,rejects ajor School Construction Project 1,000,00 1,000,00 1,000,00 1,000,00 1,000,00 1,000,00 1,000,00 1,000,00 1,000,00 1,000,00 10,000,00 anagement Total 3,500,000 6,500,00d 10,000,000 10,000,00 10,240,00 10,480,00 10,720,00 10,960,00 11.,200;00 11,200,00 94,800,00 ORANGE COUNTY 7 NORTH CAROLINA 2 3 Kirk Vaughn presented the pay-go allocation schedule,showing increases from$3.S million to$6.S 4 million to$10 million and then annual increments of approximately$240,000 per year through year nine, 5 before leveling off. He noted this structure had been designed to reach a target of$100 million over ten 6 years in a prior plan but acknowledged the county is not at that level. 7 Commissioner Bedford noted that the pay-go assumptions had not yet accounted for the fact that 8 two to three fewer schools would need renovation or pay-go support after the major replacements are 9 completed,though she acknowledged there might be deconstruction costs for older buildings. 10 Kirk Vaughn suggested that one use of pay-go in the outer years could be a new facility condition 11 assessment to refresh the data and drive investment decisions. He noted that both school districts typically 12 conduct their own assessments, but that a county-funded coordinated assessment would provide equal 13 insight into both systems. 14 Vice-Chair Fowler suggested aligning any county-sponsored assessment with each district's 15 independent assessment schedule to avoid duplication. 16 Kirk Vaughn agreed that if the county covered the cost and communicated that,the districts would 17 not need to conduct their own separately. 18 19 34 1 Slide#8 Major Projects — Board Options to adjust projects Current Pay-Go Phase-in structure sufficient for current district bond plans with small margins. Reducing or delaying implementation of pay-go from this amount would require asking school districts to submit new bond plans with smaller scopes. Instead of reducing Pay-Go, the County can lower upcoming tax rate increases and the cumulative tax increase by pushing back the upcoming school projects. Inflationary cost increases from delaying construction projects would reduce the amount of pay-go funds available for High Priority Needs. ORANGE COUNTY 8 NORTH CAROLINA 2 3 Kirk Vaughn noted that if Estes Hills were pushed back specifically by two years rather than one, 4 the pay-go would then have to compete between Estes Hills and the pre-design scoping phase of Orange 5 Middle School. He said one of the things is trying to segment them such that there's one project at a time, 6 so that the pay-go can be best delivered to that big project. 7 Commissioner Bedford emphasized the flexibility of the pay-go each year. 8 Commissioner Carter agreed. 9 Chair Hamilton said the Board will be having continuous conversations with the school boards. 10 11 Slide#9 High Priority Needs High Priority Needs—$6.4 million • Appropriated by Project • Specific Projects Enumerated Annually for Flexibility • Financed Using Annual Debt,Lottery Proceeds,and Remaining Bond or Supplemental Pay-Go High Priority Needs Recommended East Chapel Hill High Roof Replacement $3.0 million Carrboro High Roof Replacement $1.2 million Mary Scroggs Elementary Trailer HVAC Replacement $56,400 AL Stanback Middle HVAC Replacement—Paired with$5.28 M Major $2.1 million Project Funding in FY 2028 based on$7.4 M total project cost TOTAL $6.4 million ORANGE COUNTY 9 NORTH CAROLINA 12 35 1 Kirk Vaughn clarified that the small amount for Scroggs Elementary is for a trailer and that the 2 Standback Middle project is more than $7 million in total cost, with different funding buckets being 3 combined to reach that figure. 4 5 Slide#10 Other Capital Uses Other Capital Uses—$6.5 million Chapel Hill Carrboro City Schools-$3.9 million Orange County Schools-$2.6 million • Appropriated by Category • Financed Using Recurring Capital and Article 46 Sales Tax Proceeds — Rental Space — Technology Plans — Equipment Replacement — Lifecycle Capital Replacements ORANGE COUNTY 10 NORTH CAROLINA 6 7 8 Slide#11 Questions? ORANGE COUNTY NORTH CAROLINA 9 10 11 36 1 2. Operating Budget Model Update 2 The Board received an update on the Operating Budget model since the January 16, 2026 Board Retreat. 3 4 BACKGROUND: At the January 16th Retreat, the Board received a budget update that estimated a $21.5 5 million gap between estimated revenue growth and known cost factors. Since then, the County has 6 refined multiple estimates going into the budget, which has decreased the estimated gap to 7 approximately $15 million, and the County Manager continues to work with departments to close that 8 gap as much as possible before considering a recommendation to increase the tax rate. Below are some 9 of the largest changes to the operating model that will be detailed in the presentation: 10 11 Property Tax: The property tax base has stabilized since the January Retreat. At that time, the property 12 tax base was estimated to grow by 2% from FY 2025-26. Since that time, valuation appeals have been 13 finalized, and large exemptions have been recognized. The County had assumed a tax base loss of 3%due 14 to valuation appeals; however, based on informal and formal appeal decisions, the actual loss is 1.47%. 15 Although the lower percentage has a positive impact on the tax base, the County also lost significant tax 16 base due to complex exemptions of properties that qualify as affordable housing and properties that have 17 been redeveloped on brownfields. The FY 2026-27 tax base is also affected by property damage from 18 Tropical Storm Chantal.When taken together,those fluctuations result in a new growth estimate of 2.27% 19 from FY 2025-26. 20 21 Sales Tax: Based on new data related to the County's Hold Harmless payment, the sales tax revenue 22 projection has been decreased by $500,000 as State Medicaid expenses significantly exceeded sales tax 23 growth in FY 2025-26. Other sales tax categories are left unchanged since the Retreat. Although FY 2025- 24 26 actual collections are exceeding estimated growth, uncertainty about the global economy requires 25 caution in projecting future growth. 26 27 Living Wage:Since the presentation at the Retreat,the County has reviewed its living wage requirements. 28 The living wage calculation is directly tied to fair market rent in Orange County and surrounding counties 29 in which employees are likely to live. Based on average rent in Orange County and its adjacent counties, 30 the living wage will be $20.02 in FY 2026-27. This represents an increase of $1.84 per hour from the 31 current year. 32 33 The new living wage will drive increases in temporary and seasonal budgets for departments like 34 Environment,Agriculture, Parks and Recreation(DEAPR)and Library and will impact the first four(4)salary 35 grades on the pay scale for permanent employees. Adjusting to the new living wage rate is estimated to 36 cost $500,000 for both temporary and permanent employees. The increase in the wage scale for 37 permanent employees does cause some wage compression within the impacted salary grades, but the 38 Recommended Budget will likely not include sufficient funding to correct that compression. 39 40 Recommended Capital Investment Plan: The Recommended Capital Investment Plan changed the 41 planned phase-in of pay-go for the school capital plan. The retreat presentation assumed that pay-go 42 would be funded at $6 million in FY 2026-27. Due to operating budget constraints, the Recommended 43 pay-go amount was reduced to$3.5 million in FY 2026-27. 44 45 Debt Model: Between the time of the Retreat and the introduction of the Manager's Recommended 46 Budget, County staff assess the progress of School and County capital projects and determine which 47 projects are ready to recommend for financing. The amount of projects that are included in the financing 48 package influences the amount of debt service required in the subsequent year's operating budget. Based 37 1 on the set of projects that are ready for financing in FY 2025-26, the tax rate equivalent to fund debt 2 service in FY 2026-27 decreases from 2.53 cents discussed during the Retreat presentation to 2.01 cents 3 to fund impending debt obligations. 4 5 Strategies: The County Manager is reviewing several strategies to reduce the gap between expected 6 revenues and expenditures. Some of those strategies include increasing user fees to more fully represent 7 the cost of providing services, reducing operating costs through service modifications, and reducing 8 funding to partner agencies that may be duplicating services to residents. The County Manager is also 9 carefully reviewing all vacant positions in an effort to reduce employee headcount and long term cost 10 pressures. 11 12 Travis Myren made the following PowerPoint presentation. 13 14 Slide#1 a ORANGE COUNTY NORTH CAROLINA Operating Budget Model Update as of April 15, 2026 April 16, 2026 Board Work Session 15 16 Travis Myren presented updates to the operating budget model reflecting new information 17 received since the January retreat. 18 19 38 1 Slide#2 FY2026-27 Operating Budget Model Update Updates to Operating Budget Model - Initial Operating Budget Gap of$21.45 million Property Tax Base Sales Tax Projection • Living Wage Pay-Go Funding Debt Service Crisis Diversion Operating Costs • Health Insurance Costs 2 ORANGE COUNTY CAROLIWA2 3 4 Slide#3 FY 2026-27 Property Tax Base FY 2026-27 Property Tax Base—($400,000) savings to model Real Property Tax Actual FY 26 Final Tax Base $ 30,620,975,377 Final PY2025-251ax Base includes FY 27 Growth $ 435,594,941 • 1.47%tax base loss due to FY 27 Exemptions $ (91,783,000) appeals•-$460 million Chantal Property Loss $ (10,000,000) $50 million loss from affordable FY 27 Appeals.005% $ (154,773,937) housing exemptions FY 27 Real Tax Base $ 30,800,013,381 $62 million Brownfield exemption — $435.6 million in natural growth due to new construction Natural growth has declined from 2%in prior years to IA% Growth in Motor Vehicles(10.6%)increases total tax base to 227%_$400,000 in new property tax revenue - $91.8 million additional exemptions for properties qualifying as affordable housing - $10 million loss in value due to Tropical Storm Chantal damage as of January 1, 2026 - $154.8 million loss assumed for additional appeals of 2025 values �1 ORANGE COUNTY 3 NORTH CAROLINA 5 6 Travis Myren reported that the appeals process has largely stabilized,with all informal and formal 7 appeals for the current tax year processed, and a small number still pending before the Property Tax 8 Commission. He said the final FY 2025-26 tax base is approximately $30.6 billion, reflecting a 1.7% 9 reduction due to appeals. He identified two significant exemption categories affecting the base: affordable 10 housing exemptions totaling approximately$50 million in FY 2025-26, and a brownfield exemption under 39 1 a DEQ agreement totaling approximately$60 million. He said new affordable housing exemptions will bring 2 total exemptions in FY 2026-27 to approximately$90 million, resulting in approximately $1 million in lost 3 property tax revenue. 4 Commissioner Carter asked about the loophole being examined by the House Select Committee 5 on property tax reform related to ownership structures for LIHTC properties. 6 Travis Myren confirmed exposure of approximately $120 million in removed valuation, equating 7 to approximately$750,000 in lost tax revenue. 8 Commissioner Carter also noted that motor vehicle tax growth appeared high in the notes. 9 Kirk Vaughn explained that motor vehicles are reappraised annually rather than every four years, 10 so growth reflects both reappraisal activity and any shift to newer, more valuable vehicles. 11 Travis Myren also noted that properties damaged by Tropical Storm Chantal did not receive tax 12 relief in FY 2025-26 because property condition is assessed as of January 1st, but those reduced values 13 will be reflected in the FY 2026-27 base at approximately$10 million. An additional approximately$154- 14 155 million in appeals of the FY 2025 values is anticipated for the FY 2026-27 base. Overall, largely driven 15 by motor vehicle tax growth,the county anticipates approximately$400,000 more in property tax revenue 16 than projected at the January retreat. 17 18 Slide#4 FY 2026-27 Sales Tax FY 2026-27 Sales Tax Assumptions—$500,000 cost to model - Projecting$1.7 M increase from FY2025-26 Budget with significant uncertainty. - Reduction in Hold Harmless payment—($500,000) - Resulting sales tax projection is$1.2 million or 2.7%over FY2025-26 Budget - When State Medicaid Expenses Grow faster than Sales Tax Revenue, Hold Harmless revenue decreases Orange County Hold Harmless Trends 25,00% 20.00% 15.00% x0.00% 5.00% 0.00% ply y'+ bye ry.y0 $. Xe, -5.00%ti�'l �'t d ryQti ry0's ql 10.DP% X5,1,,Tax Revenue Y,Y% -5R M,dI,aid Expenses Y.Y% ORANGE COUNTY 4 NORTH CAROLINA 19 20 Travis Myren said the county is now anticipating at least a $500,000 reduction to its hold-harmless 21 payment in FY 2026-27 based on current trends, representing a new and adverse change from the January 22 model. 23 24 40 1 Slide#S FY 2026-27 Living Wage • Living Wage -$500,000 cost to model - Living Wage=Hourly rate required to rent a one bedroom apartment so that no more than 30%of income is used for housing - Rent=Prior Four Year Average Fair Market Rent(FMR)as defined by HUD for a One Bedroom Apartment - Orange County Living Wage=blended rate using six adjacent counties where 86%of County employees currently live County Monthly Fair Hourly Rate @ t. Market Rent Income for Rent Burlington MSA FMR Alamance $919 $17.67 Caswell County FMR - -. Caswell $724 $13.92 Chatham $1,305 $25.10 Derham-Chapel Hili MSA Durham $1,305 $25.10 FMR Orange $1,305 $25.10 Person County FMR Person $688 $13.23 6 County $1,041 $20.02 Average ORANGE COUNTY S NORTH CAROLINA 2 3 Travis Myren said departments like DEAPR and Solid Waste will be most impacted by the increase 4 to the living wage, and indicated fee increases in those departments are likely to be recommended to 5 offset living wage costs. 6 7 Slide#6 FY 2026-27 Pay-As-You-Go Funding • Pay-Go for Schools and County Projects—($3 million)savings to model - January Budget Model included $6 million in Pay-Go for School Projects - Manager's Recommended CIP includes$3.5 million in Pay-Go for School Projects=$2.5 million savings to model - Pay-Go also reduced for County IT Infrastructure and Parks Facility Renovation, Repair, and Safety Projects where prior balances were applied = $500,000 savings to the model Amended Pay-Go increases in FY 26-36 Manager Recommended Budget $3 million increase in FY2026-27 $3 million increase in FY2027-28 $3.5 million increase in FY 2028-29 ORANGE COUNTY 6 NORTH CAROLINA 8 9 10 41 1 Slide#7 FY 2026-27 Debt Service • Debt Service—($2.8 million) savings to model - January Retreat estimated$9.5 million in new debt expenses based on maximum potential borrowing of $100 million - Project list refined for spring financing based on bids-in-hand down to$55 million Reduces debt service increase to$6.7 million in FY2026-27 - Remaining $45 million of authorized projects carried forward for potential financing in spring 2027 ORANGE COUNTY 7 NORTH CAROLINA 2 3 Travis Myren reported that the spring borrowing package has been refined and reduced from 4 approximately $100 million to approximately $45-55 million, anchored by the Durham Tech expansion 5 ($11 million, Series A) and the Crisis Diversion Facility (approximately $30-plus million, Series B). This 6 reduction yields approximately$2.8 million in savings to the operating model. 7 Commissioner Carter asked about the typical timing and frequency of debt offerings. 8 Travis Myren explained the county generally executes one spring borrowing per year to minimize 9 transaction costs, which include attorney, bond counsel, and financial advisor fees, though a second 10 borrowing could occur in a favorable market. He noted that LGC requirements mandate having a bid in 11 hand before borrowing is authorized,which tends to concentrate activity in the spring. 12 13 42 1 Slide#8 FY 2026-27 Crisis Diversion Operating Expenses Crisis Diversion Operating Costs—($800,000) savings to the model - Crisis Diversion Facility had anticipated operating costs beginning in 41h Quarter of FY2026-27 - Startup costs(provider)is delayed to beginning of FY2027-28 due to construction schedule Results in an$800,000 savings to the Operating Budget model - Alliance Health to contract with provider—Request for Proposal to be issued in May 2026 County to lease facility directly to provider Provider start-up costs begin in FY2027-28 Approximately$3 million in annual operating costs ORANGE COUNTY S NORTH CAROLINA 2 3 4 Slide#9 FY 2026-27 Employee Health Insurance Employee Health Insurance—($400,000) savings to model - Implementation of Rx Save Card for GLP-1 medications - Spousal surcharge of$200 per month for spouses/domestic partners with access to other insurance coverage $70,000 in new revenue to the Health Plan Serves as a disincentive for spousal migration to the County plans from other options available to them— decreases premium equivalent and claims costs - Plan costs increase limited to 9%or$1.3 million 9 ORAoN GE�COUNATY 5 6 7 43 1 Slide#10 FY 2026-27 Operating Model Update Summary Updated Operating Model—April 2026 Initial Model Gap-January 2026 1 $21.45 million Property Tax Base Update ($400,000) Sales Tax'Hold Harmless $500,000 Living Wage $500,000 Pay-Go Funding ($3 million) Debt Service ($2.8 million) Crisis Diversion Operating Costs ($800,000) Health Insurance ($400,000) Other Changes Net ($50,000) Updated Operating Model Gap $15 million Tax Rate Equivalent 4.45 cents per$100 of value ORANGE COUNTY 10 NORTH CAROLINA 2 3 Travis Myren reported that, accounting for all the changes in slide #10, the current gap between 4 revenues and expenses stands at approximately$15 million, equivalent to approximately 4 to 4.5 cents on 5 the tax rate. He noted that work with department directors is ongoing and is expected to reduce that 6 figure further. 7 8 Slide#11 FY 2026-27 Balancing the Budget Options for Reducing Tax Increase • County Manager is reviewing a variety of options as tools to reduce the gap and potential tax increase Education Current Expense Each I%=$1 million Per pupil funding increase is based on total enrollment of 18,492 Percent Increase to _Pr-Pupil Funding FY2026-27 enrollment is 451 less Total Funding ____-_----- than FY2025-26 budgeted Current Expense Increaseenrollment Base Amount $111,328,011 2.4% This represents a 2.4%decrease from FY2025-26 1% $112,441,291 3.5% 1.5% $112,997,931 4.0% 2% $113,554,571 4.5% 2.5% $114,111,211 5.0% 3% $114,667,851 5.5% ORANGE COUNTY 11 NORTH CAROLINA 9 44 1 Slide#12 FY 2026-27 Balancing the Budget Existing Personnel Cost Drivers Across the Board Wage Adjustment-$930,000 for each 1% Step Increases(Department of Social Services,Sheriff's Office, Emergency Services)—($410,000) - Developed as recruitment and retention incentive in highly competitive labor market - Employees on the Step Program continue to receive across the board increase as well as lump sum merit payment of up to $1,144 based on performance evaluation Merit Increases-$455,000 - Wage increases based on performance up to$1,144 ORANGE COUNTY 12 NORTH CAROLINA 2 3 4 Slide#13 FY 2026-27 Balancing the Budget Vacant Positions and Service Levels 42 vacant positions currently under hiring freeze $3.7 million salary and benefits Department #of Vacancies IDepartment of Vacancies 1 Housing 2 Animal Services 1 Human Resources 1 Arts Commission 1 Library 2 Asset Management 1 Planning 3 Emergency Services 3 Register of Deeds 2 DEAPR 1 Sheriff 8 Finance 1 Social Services 6 Health 8 Solid Waste 1 TOTAL 42 ,s ORAN GE COUNTY TTO5 6 Travis Myren reported that he froze all hiring about a month ago to stabilize the vacancy count.As 7 of that date, approximately 42 vacancies exist across county government, proportionally concentrated in 8 the largest departments — Health, DSS, and the Sheriff's Office. He said recommendations will likely 9 include eliminating some vacancies and shifting positions from general fund to non-general fund sources 45 1 where possible, with an acknowledgment that some service-level reductions will result. He emphasized 2 the goal of avoiding a reduction in force affecting occupied positions, while not ruling it out entirely as a 3 tool of last resort. He also stressed the importance of preserving flexibility during the coming fiscal year 4 given broader economic uncertainty. 5 Vice-Chair Fowler asked whether the hiring freeze is generating savings in the current fiscal year 6 that might be applied toward next year's budget via fund balance. 7 Travis Myren confirmed that the model already assumes applying approximately$7 million in fund 8 balance,consistent with prior years,and that the hiring freeze is additionally intended to build up a surplus 9 at fiscal year-end. 10 Commissioner Bedford noted that high vacancies in some departments may reflect inadequate 11 compensation rather than overstaffing, and that eliminating multiple vacancies in a large department may 12 be more feasible to absorb than eliminating even one or two in a small essential-services department. 13 14 Slide#14 FY 2026-27 Balancing the Budget User Fees Why use fees to pay for services... - Beneficiary Pays: The cost of a service is paid by those who use it,rather than being subsidized by the general public - Voluntary Access: user fees are generally paid voluntarily by those choosing to use a service - Equity Consideration: user fees can create barriers to access for residents with lower ability to pay County fee study provided a framework to calculate cost recovery for services,focusing on Planning and Inspections, DEAPR,and Emergency Services Other departments provide nonessential programming with direct benefits to individuals - Aging - Arts Commission - Animal Services ORANGE COUNTY 14 NORTH CAROLINA 15 16 Travis Myren noted that as property tax revenue is increasingly dedicated to mandated essential 17 services, user fees will become the only mechanism for sustaining discretionary programs. 18 19 46 1 Slide#15 FY 2026-27 Balancing the Budget Partner Funding Analyze Funding to External Organizations for Effectiveness, Necessity,and Duplication - Payments to Towns - Payments to Nonprofits in Department Budgets - Payments to Outside Agencies - Memberships and Dues to External Organizations ORANGE COUNTY 15 NOR-F]I CAROLINA 2 3 4 Slide#16 FY 2026-27 Balancing the Budget - Other Operating Costs Limitations on operational costs like utility expenses and some contractual obligations Conference and Training Budgets $409,000 total in the General Fund Analyze necessity of out of state travel and training - Preserving Flexibility to Respond to Economic Uncertainty Uncertainty around the global economy,inflation and fuel costs Options used to reduce the tax increase in FY2026-27 will not be available to respond to a recession or other economic shocks during the fiscal year 16 ORAN GE COUNTY TTO5 6 Commissioner Carter raised the question of cost-sharing with municipalities for Tax Administration 7 Office services. 47 1 Kirk Vaughn indicated that preliminary discussions have not yielded significant progress and that 2 the existing interlocal agreement structure would require approximately one year's notice before changes 3 could take effect. He noted that Board direction to give that notice had not been previously provided. 4 Chair Hamilton said that the municipalities should hear about these fiscal pressures from both 5 staff and their elected counterparts, and suggested that the county needs to have those conversations in 6 a timely fashion to position itself for the following year. 7 Travis Myren said staff is cognizant of additional staffing resources that will need to be allocated 8 to Tax. He offered to bring this back as an agenda item at a future meeting. 9 10 Adjournment 11 12 A motion was made by Commissioner McKee,seconded by Commissioner Bedford,to adjourn the 13 meeting at 9:25 p.m. 14 15 VOTE: UNANIMOUS 16 17 Jean Hamilton, Chair 18 19 20 Recorded by Tara May, Deputy Clerk to the Board 21 22 Submitted for approval by Laura Jensen, Clerk to the Board Attachment 2 1 1 DRAFT MINUTES 2 ORANGE COUNTY 3 BOARD OF COMMISSIONERS 4 BUSINESS MEETING 5 April 21, 2026 6 7:00 p.m. 7 8 The Orange County Board of Commissioners met for a Business Meeting on Tuesday, April 21, 9 2026, at 7:00 p.m. at the Southern Human Services Center in Chapel Hill, NC. 10 11 COUNTY COMMISSIONERS PRESENT: Chair Jean Hamilton, Vice-Chair Amy Fowler, and 12 Commissioners Jamezetta Bedford, Marilyn Carter, Earl McKee (arrived 7:02 p.m.), and Phyllis 13 Portie-Ascott 14 COUNTY COMMISSIONERS ABSENT: Commissioner Sally Greene 15 COUNTY ATTORNEYS PRESENT: John Roberts 16 COUNTY STAFF PRESENT: County Manager Travis Myren, Deputy County Manager Caitlin 17 Fenhagen, and Clerk to the Board Laura Jensen. (All other staff members will be identified 18 appropriately below) 19 20 Chair Bedford called the meeting to order at 7:00 p.m. All commissioners were present, 21 except for Commissioners Greene and McKee. 22 23 Chair Hamilton invited members of the Government Academy forward to take a picture 24 with the Board of Commissioners. 25 26 1. Additions or Changes to the Agenda 27 Chair Hamilton read the public charge. 28 29 Commissioner McKee arrived at 7:02 p.m. 30 31 2. Public Comments (Limited to One Hour) 32 a. Matters not on the Printed Agenda 33 Jody Eimers read the following statement: Good evening. I'm Jody Eimers, retired US Geological Survey hydrologist. I'm representing over Zoo people who've signed a petition asking County Commissioners to net allow development 34 of a disc golf course at Blackwood Farm. Park. 35 36 2 This evening I'll present two of the reasons we oppose siting a disc golf course at Blackwood Farm Park: 1 ) to preserve its forest hydrology and aquatic ecosystem health, and 2) to protect hikers. Barbara Driscoll will. also present on this topic after me. First, development of a disc golf course in this forested area ,will change the local hydrology and adversely effect the aquatic ecosystem. At present, the forest is an area of groundwater recharge. Much of the rainfall slowly infiltrates down through the subsurface some of that is slowly released to streams, and some slowly makes its way to replenish aquifers. A relatively small amount of that rainfall travels as overland flow to streams. Construction of a disc golf course would change that dynamic. As fairways are cleared of trees and shrubs, and as footpaths are 1 made connecting the fairways, there will be more overland flow, more soil erosion, and groundwater infiltration will reduce. Sediment transport is particularly detrimental when the holes cross the 2 streams or the lake. In these cases soil erosion will 3 4 5 3 increase sediment loading to the streams and lake. EPA has named sediment as the number one surface water pollutant. The increased sediment load will cause fish to move out of the area, and some species of benthic macro invertebrates will die off. It's worth mentioning that the lake at Blackwood Farm Park is now a popular fishing hale. Second, the disc golf course would be in close proximity to a popular hiring trail, creating a dangerous situation for hikers. At many locations, hikers would crass the golf course or hike adjacent to the course. when approaching a crossing, hikers would be advised by signage to look before crossing the course. But disc golfers throw heavy discs long distances. Hikers could get hit with those discs as they loop to see if a disc has been thrown. Hikers could also 1 be hit by discs that are thrown off course, carried off course by wind, or hit by discs that strike a tree and veer off course. An internet search has confirmed that injuries to the public do occur at disc golf courses. 2 Perhaps the most notorious example was reported 3 4 Perhaps the most notorious example was reported in the Insurance Journal, In 2015 a woman lost an eye when a disc hit her at a park. in Manhattan Beach, California. She received a $3 million settlement from the city, and the course was closed. Thanks for the opportunity to share with you two of the reasons that over 200 petitioners would prefer you not fund a disc golf course at Blackwood. Farm. Park; namely to maintain its forest hydrology and aquatic ecosystem health, and to protect hiker safety. 1 2 Barbara Driscoll read the following statement: I'm the Conservation Co-Chair for New Hope Bird Alliance which is the local Audubon Chapter for Durh rn, Orange and Chatham counties. Our mission is to protect birds, wildlife, and their local habitats through conservation, education, advocacy, and outdoor enjoyment. On behalf of our 2010+ members, and more importantly on behalf of the bird species which nest and raise their chicks in Blackwood Farm park, we want to express our significant concerns about the disc golf course planned for the park. Although the Wood Thrush is of particular concern, a number of other forest bird species use the Alice's Loop area to breed including: • Ovenbirds - observed juveniles being fed by their parents on the Alice's Loop trail in 2021 • Louisiana Waterthrushes 3 • Orchard Orioles - observed nesting in the Alice's Loop area in 2021 4 • Scarlet Tanagers 5 5 • Summer Tanagers All of these birds travel thousands of miles from where they overwinter in Central and South America to nest and raise their chicks in Blackwood Farm. The Wood Thrush is considered the most beautiful songster in the eastern United States. The flute like song of the Wood Thrush, however, is slowly fading away, as this shy bird declines across its range. The Wood Thrush's population has decreased by 50 percent in the last four decades, which has made it the second- most rapidly declining songbird in North America. About the size of an American Robin, the Wood Thrush seeks dense, undisturbed forest to make its nest typically close to the ground. Development is the biggest threat to this species. Maintaining areas of healthy deciduous forest is crucial to the future of the Wood Thrush. These birds have high site fidelity — meaning they return to exact same location year after year. Similarly, Ovenbirds also require extensive, uninterrupted forests with relatively closed canopies. 1 Since 2021, New Hope Bird Alliance has reached out to Orange County Parks and Rec expressing our concerns about the location of the proposed disc golf course at Alice's Loop in Blackwood Farms. In 2021, we began meeting with the County and were told that the disc golf course was budgeted and would be built. At that point we entered negotiations to try and lessen the extent of the damage to the bird populations. I want to be clear that our first priority would always be that the course be built elsewhere. The impact of the numerous holes and people walking through the woods as well as the disturbance of the discs will be detrimental to many species nesting in the undergrowth at the park. it will be most harmful for the Wood Thrush and Ovenbirds as they require undisturbed forest. The current trails are not an issue in that people rarely leave the paths. The actual movement of players within the woods, clearing of the underbrush, and walking between holes is a greater disturbance and we cannot ensure that the birds will continue to nest 2 in the area. 3 4 6 Our members and others enjoy the beauty of the park but especially it's conservation value to the many birds that also use the park— For these reasons, we are requesting that the Commissioners reconsider building this disc golf course in Blackwood Farm Park. 1 2 LaTarndra Strong spoke about funding cuts to Medicaid and food stamps. She requested 3 that the Board avoid making cuts to human services in Orange County. She requested that any 4 caps to property tax increases include people making 50% AMI or less. She asked the Board to 5 make sure that the land use plan includes housing considerations. She expressed appreciation 6 for the Board's consideration of a moratorium on data centers. 7 8 b. Matters on the Printed Agenda 9 (These matters will be considered when the Board addresses that item on the agenda below.) 10 11 3. Announcements, Petitions and Comments by Board Members 12 Commissioner Carter reported attending the National Association of Counties Annual 13 Legislative Conference in Washington, D.C., alongside Commissioner Phyllis Portie-Ascott. She 14 said bipartisan panels urged counties to review their land use policies regarding large-scale data 15 centers, and that representatives from Loudoun County, Virginia — home to the greatest 16 concentration of data centers in the nation — spoke to both the benefits and the need for 17 guardrails. She said she was gratified that bringing the conference report back to the Board led 18 to the public hearing scheduled for the evening. 19 Commissioner Portie-Ascott provided an update on the Tax Assessment Work Group, 20 which she said had reviewed county assessment processes, received an update on contract 21 negotiations with an appraisal consultant, and heard from the NC Housing Coalition on the impact 22 of rising property taxes on seniors, heirs' property owners, and long-term residents. She said the 23 North Carolina House Select Committee on Property Taxes is proposing a constitutional 24 amendment to require a property tax levy limit. She said she also attended the Junior Livestock 25 Show, noting the impact of 4-H and FFA programs on youth development, and a Night of Poetry 26 hosted by Orange County Schools, guided by NC Poet Laureate Jaki Shelton Green. She 27 congratulated Jason Johnson, Principal of Orange High School, on being named National High 28 School Principal of the Year by the National Association of Secondary School Principals. 29 Commissioner Bedford said the Orange County Partnership to End Homelessness had held 30 a kickoff meeting to reconfigure into a HUD-compliant Continuum of Care structure, replacing the 31 prior partnership framework, and that the new terminology "Continuum of Care" should become 32 familiar vocabulary going forward. She said the DSS Board had met and that new software for 33 tracking Child Protective Services cases would go live the following Monday, with staff 34 commended for their extensive preparation; she noted the software would allow case 35 information to follow families as they move across county lines. She said the Durham Tech 36 Community College Board of Trustees was nearing completion of its next five-year strategic plan 37 and that she wished to remind residents that Orange County funds two years of tuition at Durham 38 Tech for graduates of Orange County Schools and Chapel Hill-Carrboro City Schools, and that an 39 additional $100,000 in sales tax economic development funds is available for workforce 40 retraining. 7 1 Vice-Chair Fowler attended the Intergovernmental Parks Work Group meeting, where 2 Chapel Hill presented its Parks and Recreation Comprehensive Master Plan and its "Everywhere 3 to Everywhere" trail connectivity plan. She said a rail-to-trail feasibility study had been kicked off 4 earlier in the spring and the Orange County Trails Plan was also discussed. She reminded those 5 present that Earth Day was to be celebrated the following day at Blackwood Farm Park from 5:30 6 to 7:30 PM. She said she had recently visited Central Elementary School and was impressed by its 7 STEM lab, which operates in collaboration with Duke Engineering. She reported that the school's 8 collaboration meeting addressed mental health referral processes and resources, and that the Tax 9 Assessment Work Group had reviewed observations from the Tanner Group, with a key 10 recommendation being the need for more field research in heterogeneous neighborhoods. She 11 said the Triangle West TPO had met and discussed an environmental justice report as well as calls 12 to action on projects including electric vehicles and the Sportsplex. 13 Commissioner McKee explained the history of the 4-H Junior Livestock show. He said he 14 attended the kick-off supper for the Caldwell Hunting Club's Wounded Warrior Hunts, a program 15 that provides guided deer and turkey hunts twice annually for injured veterans. He said he wished 16 to highlight that hunting organizations frequently provide meaningful opportunities for people 17 who would otherwise have few options. 18 Chair Hamilton said she attended the school collaboration meeting and the quarterly 19 luncheon meeting with NC DOT and town staffs. She said she attended the Emergency Services 20 recognition event, and expressed appreciation for the work of Emergency Services staff. She said 21 she attended the ribbon cutting for the Morinaga expansion with Commissioners Portie-Ascott 22 and Carter. She said the event was a testament to the county's economic development efforts, 23 led by Steve Brantley. 24 25 4. Proclamations/ Resolutions/Special Presentations 26 a. Proclamation of Appreciation for Cold Weather Cots Collaboration 27 The Board approved a proclamation recognizing and appreciating the collaborative work 28 supporting the County's Cold Weather Cots program. 29 30 BACKGROUND: Orange County started operating a Cold Weather Cots(CWC) program in FY 2023- 31 2024 due to the increasing need for emergency cold weather shelter. The Inter-Faith Council for 32 Social Services (IFC) operates two (2) shelters that provide 20 emergency cold weather cots in the 33 winter(17 for men and 3 for women). However,these cots were consistently full and had a waiting 34 list. 35 36 As the community's unsheltered population increased, Orange County launched the current CWC 37 program three (3) years ago to serve men and women on nights when the temperature was 32 38 degrees or below. For the first year, the BOCC Meeting Room at Southern Human Services was 39 used as the site. In the second year, University Baptist Church in downtown Chapel Hill provided 40 space to the County for the site. 41 42 This winter, the Town of Chapel Hill provided its former police department building at 828 Martin 43 Luther King, Jr. Boulevard for the CWC location. The Housing Department, in close collaboration 44 with many partners, manages the CWC program. Each year, the program has grown and served 8 1 more community members. Additionally,the funding, staffing and support needs have increased. 2 Under the coordination of Heather Pack Aponte, the County's Homeless Programs Coordinator, 3 the CWC program was open 56 nights this winter and served 217 individuals.The program would 4 not have been possible without the work and collaboration of many dedicated permanent staff, 5 temporary staff and volunteers. 6 7 Caitlin Fenhagen introduced the item. 8 9 The commissioners read the following proclamation in turn: 10 11 ORANGE COUNTY BOARD OF COMMISSIONERS 12 PROCLAMATION 13 APPRECIATION FOR COLD WEATHER COT COLLABORATION 14 15 WHEREAS, in 2023, Orange County started a Cold Weather Cot program to ensure unhoused 16 community members had access to safe and warm overnight shelter when temperatures reached 17 32 degrees or below; and 18 19 WHEREAS, Orange County has operated this warming shelter every winter since 2023 at a 20 different, but accessible, location in Chapel Hill that is open to anyone in need throughout the 21 County; and 22 23 WHEREAS, the Town of Chapel Hill provided the former Chapel Hill Police Department at 828 24 Martin Luther King, Jr. Boulevard for this winter's Cold Weather Cot location and between 25 November and March, 217 individuals were served over 56 nights; and 26 27 WHEREAS, Orange County's Housing Department has coordinated and managed the Cold 28 Weather Cots program since its start and has seen an increased need and more challenges each 29 year, with an average overnight population of 40 guests; and 30 31 WHEREAS, the Cold Weather Cot program would not be possible without the work of Heather 32 Pack Aponte, the County's Homeless Programs Coordinator, a dedicated team of temporary 33 overnight coordinator staff, the Street Outreach, Harm Reduction and Deflection (SOHRAD) staff, 34 other Housing department leadership and staff, and from multiple County departments providing 35 support as needed including Asset Management Services, Social Services, Health, Aging, and 36 Community Justice Resources; and 37 38 WHEREAS, the faith community, including University Baptist Church, University Presbyterian 39 Church, First Baptist Church, Holy Trinity Lutheran, Kehilah Congregation, St. Matthew's Episcopal 40 Church and Hillsborough Presbyterian Church, all provided critical support including the 41 preparation of nightly home-cooked meals; and 42 43 WHEREAS, many community groups and individuals, including Triangle Mutual Aid, Alpha Pie/the 44 Gathering Place, Community Empowerment Fund, Inter-faith Council for Social Service, and the 9 1 Chapel Hill/Carrboro Mother's Club, all contributed food, supplies and donations that were 2 essential to operations; and 3 4 WHEREAS, the Town of Chapel Hill has provided generous ongoing support to the Cold Weather 5 Cots Program through its Police Department, Crisis Unit and Chapel Hill Transit; and 6 7 WHEREAS, while Orange County is committed to reducing homelessness and increasing low- 8 barrier housing opportunities, we also recognize the need to ensure that residents are able to 9 stay safe, warm and sheltered when temperatures are dangerously low; 10 11 NOW THEREFORE, we, the Orange County Board of Commissioners, do hereby proclaim our 12 appreciation and gratitude to all of the County staff, faith groups, community members and 13 organizations, and the Town of Chapel Hill for their collaboration and support of the Cold Weather 14 Cots Program. 15 16 This the 21st day of April, 2026. 17 18 19 Jean Hamilton, Chair 20 Orange County Board of Commissioners 21 22 23 A motion was made by Commissioner McKee, seconded by Commissioner Carter, to 24 approve and authorize the Chair to sign the proclamation. 25 26 VOTE: UNANIMOUS 27 28 The community members and staff who assisted with the Cold Weather Cots program 29 took a picture with the commissioners. 30 31 5. Public Hearings 32 a. One-Year Moratorium Ordinance on"Data Centers"as a Land Use 33 The Board held a public hearing and received comment on a proposed ordinance to impose a one- 34 year moratorium on large-scale data centers as a land use, inclusive of Artificial Intelligence Data 35 Centers, Cryptocurrency Mining Facilities, Data Centers, Data Processing Facilities, and similar 36 uses. 37 38 BACKGROUND: At its March 5, 2026, Business meeting, the BOCC voted unanimously to direct 39 staff to prepare a presentation addressing the following: 40 41 1) The potential impacts of large-scale data center development in Orange County, including 42 electricity demand, water usage, land use compatibility, environmental considerations, 43 and potential impacts on residents' utility costs, and water quality. 44 10 1 2) Policy options available to the County, including, but not limited to, a temporary 2 moratorium on data center development, revising the Orange County Land Use Plan and 3 UDO, and the legal process required to implement each option. 4 5 3) Recommendations) for Board action. 6 7 The staff provided the presentation at the March 17, 2026, Business meeting. The Board voted 8 unanimously to hold a public hearing at its April 21, 2026, Business meeting to allow for the 9 opportunity to declare a one-year moratorium on large-scale data centers as a land use, inclusive 10 of Artificial Intelligence Data Centers, Cryptocurrency Mining Facilities, Data Centers, Data 11 Processing Facilities, and similar uses.The Board also voted unanimously to direct staff to develop 12 amendments to the County's Unified Development Ordinance (UDO)to define and regulate both 13 "large-scale" data centers, inclusive of Artificial Intelligence Data Centers, Cryptocurrency Mining 14 Facilities, Data Centers, Data Processing Facilities, and similar uses during this moratorium. 15 16 Pursuant to North Carolina General Statute (NCGS) 160D-107, "local governments may adopt 17 temporary moratoria on any development approval required by law, [and] the duration of any 18 moratorium shall be reasonable in light of the specific conditions that warrant imposition of the 19 moratorium and may not exceed the period of time necessary to correct, modify, or resolve such 20 conditions." 21 22 John Roberts, County Attorney, made the following presentation: 23 24 Slide #1 ORANGE COUNTY NORTH CAROLINA Item 5a: Public Hearing to consider a Moratorium on "Data Centers" as a Land Use 25 26 27 11 1 Slide #2 General Definition of a Data Center A large group of networked computer servers typically used by organizations for the remote storage, processing,or distribution of large amounts of data. ORANGE COUNTY NORTH CAROLINA 2 3 John Roberts said to his knowledge there are no large-scale data centers in Orange County. 4 He said there are limited areas where a data center could be located in the county because of the 5 lack of water. He said data centers use substantial amounts of water. 6 7 Slide #3 Air Quality Impact of Data Centers • Evidence shows communities living in close proximity (i.e., one mile) to EPA-regulated data centers have higher air pollution burdens • Evidence shows low-income communities and communities of color within one mile of EPA-regulated data centers face worse air pollution than other communities near data centers • Recent evidence suggests data center operations cause "heat island" effects in surrounding areas ORANGE COUNTY NORTH CAROLINA 8 9 12 1 Slide #4 Electrical, Noise, and Water Impact • Data centers require large cooling systems to function, which emit a steady hum • Evidence shows data centers can require large amounts of power similar to a medium-sized city • Evidence shows large data centers can consume up to 5 million gallons per day ORANGE COUNTY NORTH CAROLINA 2 3 John Roberts said utility providers would likely offset the increased cost of providing 4 service by increasing the costs to other users. He said most of Orange County does not have 5 piped water in the ground. 6 7 Slide #5 Local Land Use Compatibility of Data Centers • Not currently defined or regulated by the Orange County UDO • Staff must examine what land use categories might be compatible with Data Centers and recommend appropriate standards • For these reasons a moratorium on Data Center development in Orange County is recommended ORANGE COUNTY NORTH CAROLINA 8 13 1 John Roberts said that any adjustments to the UDO would proceed as any other 2 adjustments. He said recommendations would be made to the Planning Board by staff, and the 3 Planning Board would vote, make recommendations, and those would come to the Board of 4 County Commissioners. He said that is a months long process. 5 6 Slide #6 Manager Recommendations The Manager recommends that the Board take the following actions: 1) Conduct the public hearing and receive public comment; 2) Close the public hearing; and 3) Vote to Approve the Ordinance to Apply a One-Year Moratorium on Data Centers as a Land Use in Orange County. ORANGE COUNTY NORTH CAROLINA 7 8 9 A motion was made by Commissioner McKee, seconded by Commissioner Bedford, to 10 open the public hearing. 11 12 VOTE: UNANIMOUS 13 14 PUBLIC COMMENTS: 15 Laura Love thanked the Board for considering a moratorium on data centers. She listed 16 the local governments in North Carolina that have already passed moratoriums. She described 17 how data centers operate, including the typical electricity usage for those facilities. She 18 cautioned against believing promises made by tech companies, because information given at the 19 time will be obsolete in the future. 20 Abby Parcell said governments should resist the false sense of urgency created by tech 21 companies. She said government can set constraints on how this technology is used. She said 22 corporations should not dictate that to the public, especially given the consequences to the labor 23 force, land, water, and electric utilities. She said it is the Board's responsibility to consider the 24 costs. She encouraged the Board to approve the moratorium. 14 1 Jesse advocated a stronger stance, warning companies might skirt regulations during the 2 moratorium. They pointed out the misleading claims about closed-loop cooling systems and 3 noted data centers already account for 7% of national electricity use. 4 Jessica Benton Lobdell supported a cautious pause concerning data center development, 5 emphasizing the need to address significant issues such as land use and water protection before 6 approving any new projects. She highlighted the contentious nature of large Al data centers and 7 pointed out that job creation and tax revenue are often cited benefits, but these benefits require 8 careful evaluation against potential negative impacts. She emphasized that impacts on 9 infrastructure like land and water must be considered and effectively managed. She endorsed 10 the idea of eliminating state tax breaks for data centers. Her comments reflected a broader 11 concern that local communities should not subsidize these centers through tax incentives when 12 they potentially lead to environmental stresses. 13 Ashley Parker spoke in favor of the moratorium on data centers. She noted that 14 agricultural lands are prime targets for data centers, pointing out NC's rapid farmland loss. She 15 argued that large data centers would hinder the county's Climate Action Plan, stressing that 16 current drought conditions exacerbate these challenges. She requested that the Board support 17 the moratorium. 18 19 A motion was made by Commissioner Bedford, seconded by Vice-Chair Fowler, to close 20 the public hearing. 21 22 VOTE: UNANIMOUS 23 24 A motion was made by Vice-Chair Fowler, seconded by Commissioner Carter, to approve 25 the Ordinance to Apply a One-Year Moratorium on Data Centers as a Land Use in Orange County. 26 27 VOTE: UNANIMOUS 28 29 6. Regular Agenda 30 a. Resolution Authorizing Loan to Orange Grove Fire District for Fire Station Improvements as 31 Part of FY 2025-26 Spring Financing and Approval of Budget Amendment#9-A 32 The Board approved a resolution authorizing a loan to the Orange Grove Fire District in the 33 amount of $1.7 million for capital improvements to Fire Station #2 and approved Budget 34 Amendment #9-A. The County will in turn include the loan amount in its FY 2025-26 Spring 35 Financing amount. 36 37 BACKGROUND: Orange Grove Fire District, Inc. (OGFD) has requested financial assistance to 38 support renovations and upgrades to Rocky Ridge Fire Station #2 within the Orange Grove Fire 39 District.The project will convert the existing facility from a garage structure into a fully functioning 40 fire station with living quarters, office space, and kitchen facilities to support long-term 41 emergency service delivery in the district. The estimated project cost is approximately $1.7 42 million. 43 15 1 To facilitate the project, staff proposes that Orange County provide a loan in the amount of 2 $1,700,000 to OGFD. The loan will be evidenced by a promissory note and repaid through annual 3 payments of principal and interest due each January 15 beginning in 2027, with final maturity no 4 later than January 15, 2047. 5 6 Schedule I of the Promissory Note references the OGFD debt service schedule through final 7 maturity. It is important to note that the debt service schedule uses a planning rate of 5%. (Note: 8 The 5%planning rate is subject to the final bond pricing rate.The final interest rate will be updated 9 in the signed Promissory Note.) 10 11 OGFD Annual Tax Levy 12 The Fire District has adjusted its tax rate from 5.81 cents to 7.00 cents per $100 of assessed 13 valuation beginning in FY 2025-26 to ensure sufficient revenues to cover operating costs and the 14 required annual debt service payments to the County. 15 16 Under the proposed structure, the Fire District will reimburse the County annually for the full 17 amount of debt service. If the Fire Department fails to make the required payment, the County 18 will have the authority to offset overdue amounts from district tax distributions or other funds 19 payable to the department, and per the promissory note can impose a 5% penalty on the amount 20 due. 21 22 County Recourse for Annual OGFD Repayment 23 The County provides annual property tax revenues to OGFD in four equal quarterly payments 24 each fiscal year based on their district tax levy. The OGFD debt service repayment date will be 25 set for January 15 every fiscal year which coincides with peak tax collections for OGFD. If debt 26 service payment is not received by January 15, the County will deduct and apply, through a right 27 of set-off, an amount from the fourth quarter (March) property tax distribution to OGFD 28 sufficient to satisfy the annual debt service requirement. The OGFD repayment will be recorded 29 in the County's Debt Service Fund. 30 31 Gary Donaldson, Chief Financial Officer, introduced the item. He said the Orange Grove 32 Fire District is in a sound position to pay back the loan. He reviewed the repayment schedule for 33 the county. 34 Daniel Snipes, Board President of the Orange Grove Fire Department, said the project was 35 initially proposed in 2023. He said they've set aside money annually for the project. He said they 36 considered borrowing funds from other sources, but borrowing with Orange County was a great 37 opportunity. He said all their meetings, board meetings, and trainings are open to the public. He 38 said they communicate with the public through social media and the newspaper. He said most of 39 the department's calls are served by the site in question. He said the project would allow them 40 to serve the area more efficiently. He said the station is currently a metal building, with a small 41 heater just big enough to keep the trucks from freezing and one bathroom. He said if they build 42 the new station, they can move daytime staff from Station 1 and decrease response times to the 43 area. 16 1 Ricky Baker, Chief of the Orange Grove Fire Department, said they currently have an ISO 2 rating of 5. He said lowering it will likely not decrease insurance premiums to homeowners, so 3 they are trying to maintain the rating. He said they want to decrease response time for calls in 4 the area. He said their call volume has increased drastically, especially medical response calls. He 5 said they increase staff during the daytime when many of their volunteer personnel are working. 6 He said they do not have any places for staff to sleep in any of their three stations. He said they 7 are trying to prepare for the future when they might need to staff stations 24 hours. He said the 8 bulk of their personnel are volunteers, but the number of volunteers is decreasing. He said at 9 some point they will have to find a new way of providing services. 10 Commissioner McKee asked if there is additional work planned for Station 1. 11 Ricky Baker said there are needs in the other facilities, but it's not currently planned. 12 Commissioner McKee asked if they plan to staff Stations 1 and 2 at the same time. 13 Ricky Baker said yes, during peak times. He said it will be contingent on the budget. He 14 said the decision will be driven by call volumes. He said they are currently experiencing the most 15 population growth in their fire district, but they are seeing fewer volunteers. 16 17 PUBLIC COMMENTS: 18 Susan Walser asked the Board to delay approving the loan to Orange Grove Fire 19 Department. She said many community members were unaware of the project and described 20 the lack of information on social media or at community events. She said no project details were 21 shared at the July annual meeting notice or at the community breakfast. She said she requested 22 the department's bylaws and said there was no active permit application with the planning 23 department. 24 25 Commissioner McKee explained that he had originally requested the item be pulled from 26 the consent agenda at the prior meeting. He said his concern was not with the fire department's 27 needs but with the precedent being set, as this would be the first time Orange County had made 28 a loan of this kind to a fire district under county auspices. He said he had already been approached 29 by another department inquiring about similar financing, which confirmed his concern about 30 unintended consequences. He said he understands the need for the service and project, but it 31 should have been a policy discussion first. 32 Commissioner Bedford aid she appreciated the additional information and recognized the 33 difficult position volunteer fire departments find themselves in. She supported loaning the funds 34 to Orange Grove Fire Department. She asked Gary Donaldson for more detail on previous 35 requests for fire trucks, ambulances, or other equipment. 36 Gary Donaldson said there is another mechanism under federal statutes for fire 37 departments that are borrowing funds, but it must be approved by the Board. He said that the 38 fire district would likely receive a lower interest rate by borrowing under the county's credit 39 worthiness. 40 Commissioner Bedford thanked Commissioner McKee for clarifying the change in the 41 process. She said it gets the fire district the best interest rate. She said she was prepared to 42 support the motion and offered to attend Orange Grove Fire Department meetings as the 43 commissioner liaison. She urged community members who wanted more engagement with the 17 1 department to attend its meetings and raise their concerns directly. She this project will help the 2 department better serve the community. 3 Commissioner Portie-Ascott thanked the fire district for the presentation. She encouraged 4 the district to increase communication with community members. She supported moving 5 forward considering the lower numbers of volunteers and that the department has the financial 6 capacity to pay back the loan. She said call volumes have increased and every household and 7 business are impacted by their services. She supported the resolution. 8 Commissioner Marilyn Carter said she was encouraged by the financial analysis presented 9 by Director Donaldson and supported providing the fire department with the opportunity to build 10 a facility that would allow personnel to respond more effectively. She thanked Commissioner 11 McKee for prompting the community conversation before the vote. 12 Vice-Chair Fowler said she agreed that the department should improve its community 13 communication practices, but that securing a better interest rate through county financing was in 14 the best interest of district residents and she would support the motion. 15 Chair Hamilton asked if this is the first time the county is borrowing on behalf of one of 16 the fire districts. 17 Gary Donaldson said yes. 18 Chair Jean Hamilton confirmed with Director Donaldson that this was the first instance of 19 the county making such a loan to a fire district. She said she found the argument for county- 20 facilitated financing compelling given the repayment security and the county's need to be 21 prepared for the future,and encouraged continued improvement in the department's community 22 communications. 23 Commissioner McKee said the fire district is not alone in needing to improve 24 communication with the public. He said that increased county involvement with the fire district 25 may lead to more scrutiny. 26 27 A motion was made by Commissioner Bedford, seconded by Vice-Chair Fowler,to approve 28 to adopt the resolution authorizing Orange County to make a $1,700,000 loan to Orange Grove 29 Fire District, approve the Promissory Note and Budget Amendment#9-A in substantially the form 30 presented, and authorize the County Manager and Chief Financial Officer to take all actions 31 necessary to implement the loan. 32 33 VOTE: UNANIMOUS 34 35 b. Additional Discussion on Strategic Communications Approaches 36 The Board discussed and considered possible approaches to the County's Strategic 37 Communications efforts,specifically community listening sessions,and provided direction to staff. 38 39 BACKGROUND:The Board of County Commissioners (BOCC) discussed strategic communications 40 approaches during its April 7, 2026 Business meeting. At that time,the Board considered options 41 for enhancing collaboration with residents, including the creation of project-based stakeholder 42 groups and the implementation of quarterly updates to the BOCC. 43 18 1 This item provides an opportunity for the Board to continue the discussion,with a particular focus 2 on potential approaches to community listening sessions. 3 4 Wil Glenn, Community Relations Director, made the following presentation: 5 6 Slide #1 -00—� ORANGE COUNTY NORTH CAROLINA Strategic Communications Will Glenn Community Relations Director Apri 17, 2026 7 8 9 Slide #2 Strategic Communications Work Group • Established in 2014 (Communications Committee) • Purpose: To develop a Strategic Communications Plan (part of a three- phased approach) • Original Work Group Composition: — Two Members of the Board of Commissioners — Deputy County Manager — County Department Representatives(designated by County Manager) • Most Recent Work Group Composition: — Two Members of the Board of Commissioners — Community Relations Director • Sunset on Nov. 11, 2025 2 ORANGE COUNTY 10 11 12 19 1 Slide #3 Current Landscape • The Work Group was Sunset on Nov. 11, 2025. • No Formal Communications Advisory Body Currently Exists. • The Strategic Communications and Engagement Plan (due in June 2026) will include opportunities to collaborate with residents and gather input on communications initiatives and functions. NGE 3 ORAR 11 CAROLINA COUNTY 2 3 4 Slide #4 Strategic Collaboration Options • Ongoing Community Listening Sessions — Topic-specific, held throughout the year — Open to all residents, rotating locations • Project-Based Stakeholder Groups — Short-term input groups tied to specific initiatives(e.g.,website redesign,bond referendums) — Disband after project completion • Periodic Board Updates at BOCC Meetings — Updates and feedback loops with Commissioners — Keeps oversight with BOCC rather than a separate body ORANGE COUNTY 4 NCJIC'I'H C:ARC)LINA 5 6 7 20 1 Slide #5 Strategic Collaboration Options (Continued) • Engagement Tools — Surveys, polls,and feedback forms integrated into County platforms, events and meetings — Broader participation without formal structure • Department-Level Engagement — Direct outreach by departments based on service area needs — Tailored, subject-matter-specific feedback ORANGE COUNTY 5 NORTH CAROLINA 2 3 4 Slide#6 Board Discussion and Direction Board Discussion and Direction ORANGE COUNT)' 6 NOR)-H CAROLINA 5 6 Chair Hamilton said that Commissioner Carter wanted to have more formal listening 7 sessions with commissioners in attendance. She asked for feedback from all the commissioners 8 on the idea. 9 Commissioner Carter said at the prior meeting she proposed a pilot with two 10 commissioners sitting informally with community members in both Northern and Southern 11 Orange County. She said that approach did not appear to have broad support among the Board 12 and acknowledged there may be other avenues worth considering. She said she remained open 13 to various approaches but invited discussion on whether there was appetite for a pilot program 14 of that nature. 21 1 Commissioner Portie-Ascott said she is in support of listening sessions in the north and 2 south of the county with two commissioners in attendance. She would want attendance to rotate 3 between commissioners to reduce the burden on busy schedules. 4 Commissioner Bedford said she does not think the Board should have ongoing listening 5 sessions. She noted a housing listening session with low attendance. 6 Commissioner McKee said there were about 10 people in attendance. 7 Vice-Chair Fowler said she was not in favor of listening sessions, but was supportive of 8 topic-specific sessions led by county staff. She said she had personal experience giving extended 9 time to community members in informal settings and found that it often did not change 10 perceptions or reach new audiences. She said she preferred having staff conduct targeted 11 sessions and report findings back to the Board on a quarterly basis. 12 Commissioner McKee said he's attended several community meetings that were ad hoc in 13 nature. He did not see a significant problem with multiple commissioners attending a community 14 session, if it was noticed appropriately, since the county already holds gatherings that attract 15 commissioners informally. 16 Vice-Chair Fowler asked if Commissioner McKee would like to have a formal listening 17 session with two commissioners rotating. 18 Commissioner McKee asked the Board what type of information they are looking for that 19 they aren't getting now. 20 Chair Hamilton said she was cautious about commissioners leading formal listening 21 sessions because individual commissioners cannot speakforthe full Board,and that inconsistency 22 in how decisions are characterized could create confusion. She said the more appropriate model 23 was for commissioners to attend community events and informal gatherings individually and 24 bring constituent input back to the full Board and county staff. 25 Commissioner McKee said if he is discussing policy with the public, he always prefaces it 26 by saying it that it is his opinion. He said he did not think they needed to have formal listening 27 sessions, but if commissioners wanted to attend, the Clerk to the Board could provide notice to 28 the public. 29 Commissioner Portie-Ascott said she would like to provide an opportunity for people to 30 speak who wouldn't normally contact the Board or attend business meetings. 31 Chair Hamilton said there are two ways to provide opportunities to the public. She said 32 they could have listening sessions in different parts of the county that any commissioner can 33 attend, but commissioners can also meet with community members individually and bring 34 information back to the Board. 35 Wil Glenn suggested a coffee meeting with commissioners, which will be very informal. 36 Commissioner McKee recalled informal meetings that he and former commissioner Renee 37 Price held with the community. 38 Chair Hamilton said commissioners could still do that. She said there are options to set up 39 informal meetings without staff. She said that there did not seem to be Board support for formal 40 listening sessions, but commissioners can meet with the public individually and share information 41 with the rest of the Board. 42 Commissioner Portie-Ascott said one of the most important points listed on the 43 community survey was communication with residents. 22 1 Chair Hamilton said she advocated in the past for a strategic communications advisory 2 committee drawing from community members to help network county information, but that 3 proposal had not been supported. She said she hoped an upcoming strategic communications 4 plan would address the measurement and tracking of communications effectiveness. 5 Commissioner Bedford said she hoped that project-based stakeholder groups will show 6 improvement in the county's communication with the public. She pointed out that the Board's 7 meetings are listed on social media, and that there is a half-page section in the News of Orange 8 each week. She said that they could increase communication to the radio station in Hillsborough. 9 Chair Hamilton asked for ideas on other ways to communicate better with the community 10 and understanding what they are thinking about. 11 Commissioner Portie-Ascott said a weekly session on WHUP would be good, like how the 12 Chair does a weekly radio show on Chapelboro. 13 Commissioner Bedford said the chamber of commerce sponsors the weekly show and 14 maybe someone could do that for the northern part of the county. 15 Vice-Chair Fowler said she liked the idea of ongoing listening sessions that are on specific 16 topics, and to rotate locations. She asked Wil Glenn if that would be hosted by staff. 17 Wil Glenn said that staff would lead the session and report back to the Board. 18 Vice-Chair Fowler said the county does that already and noted a couple of examples. She 19 said it would be good to hear what people think on specific topics. 20 Chair Hamilton said one of the topics she would like to engage the community on is around 21 budget issues. She said the Board should consider taking time in a business meeting to address 22 pre-submitted community questions about the budget. 23 Wil Glenn said the county will have two budget information sessions were being planned 24 for May 26th and May 28th, from 5:30 to 6:30 PM, before the BOCC meetings. 25 Commissioner Bedford also noted the importance of engaging faith-based organizations 26 as a communications channel, pointing to their effectiveness during the census, and identified 27 Justice United as a group that had at times operated without full information about county 28 activities, suggesting that more proactive outreach to that organization and similar groups would 29 improve mutual understanding. 30 Vice-Chair Fowler said BOCC meetings are an opportunity for the public to learn about 31 what the county is doing. She gave a couple examples of issues the county and commissioners 32 were working on for some time, but the public and community groups did not know that they 33 were being addressed. She asked how they can share this work with the community. 34 Wil Glenn gave a couple of examples of how the county can publicize initiatives, including 35 attending community events. 36 Commissioner Portie-Ascott said she liked the idea of attending community events. 37 Chair Hamilton said the county could proactively get community groups information. 38 Wil Glenn said that is part of the strategy. 39 Commissioner Portie-Ascott said she would the county to track information and 40 comments from the public to determine what issues are becoming important to the community. 41 Vice-Chair Fowler said she would like for the strategic communications group to bring back 42 information from the public and to share which strategies have been effective to reach a wider 43 audience. 23 1 Chair Hamilton said this won't be the end of the conversation because it's an important 2 topic for the community. She said that it's important that the commissioners are using their time 3 for the county wisely. 4 5 7. Reports 6 None. 7 8 8. Consent Agenda 9 10 • Removal of Any Items from Consent Agenda 11 • Approval of Remaining Consent Agenda 12 • Discussion and Approval of the Items Removed from the Consent Agenda 13 14 A motion was made by Vice-Chair Fowler, seconded by Commissioner Bedford,to approve 15 the consent agenda. 16 17 VOTE: UNANIMOUS 18 19 a. Minutes 20 The Board approved the draft minutes for the March 19, 2026, March 21, 2026, and March 23, 21 2026 BOCC Meetings as submitted by the Clerk to the Board. 22 b. Tax Collector's Partial FY 2025-26 Settlement for July 1, 2025 through March 31, 2026 23 The Board: 24 1) Received the Tax Collector's partial settlement on current and delinquent taxes for Fiscal 25 Year 2025-2026 through March 31, 2026, based on the retirement of Tax Administrator 26 Nancy Freeman as of March 31, 2026; 27 2) Approved and authorized the Chair to sign the resolution for the accounting thereof; and 28 3) Approved, authorized the Chair to sign, and issued the Order to Collect to the Acting Tax 29 Collector for the remainder of Fiscal Year 2025-2026. 30 c. Fiscal Year 2025-26 Budget Amendment#9 31 The Board approved budget, grant, and capital project ordinance amendments for Fiscal Year 32 2025-26. 33 d. Enhanced Voluntary and Voluntary Agricultural District Designation— Multiple Farms 34 The Board approved applications from four (4) landowners/farms to certify qualifying farmland 35 within the Caldwell and Cedar Grove Agricultural District Regions; and enroll the lands in the 36 Orange County Farmland Preservation Program's Enhanced Voluntary Agricultural District or 37 Voluntary Agricultural District program. 38 e. Services Contract Award for Animal Services and Whiffed Complex Fire Alarm Systems 39 Replacement 40 The Board: 41 1) Approved the County entering into a service contract with Siemens Industry, Inc. for the 42 replacement of the Animal Services and Whitted Complex Fire Alarm systems; and 24 1 2) Authorized the County Manager to execute the Agreement, subject to final review by the 2 County Attorney, and any subsequent amendments for contingent and unforeseen 3 requirements up to the approved budget amount on behalf of the Board. 4 f. Approval of Senior Lunch Caterer Contract Extension 5 The Board approved a food service caterer contract one-year extension to provide noon meals 6 for the Home and Community Care Block Grant-funded Senior Lunch Program at the Seymour 7 and Passmore Centers for the period July 1, 2026 to June 30, 2027. 8 g. Approval of a Cost Share Memorandum of Understanding (MOU) between Orange County 9 and City of Mebane (Mebane) for the West Ten Road Waterline Connector 10 The Board approved a Memorandum of Understanding (MOU) between Orange County and the 11 City of Mebane (Mebane) to jointly fund the costs of professional engineering design, 12 construction, and construction administration of the West Ten Road Waterline Connector. 13 h. Approval of a Cost Share Memorandum of Understanding (MOU) between Orange County 14 and Orange County Schools (CICS) for Professional Surveying Services on the Efland-Cheeks 15 Elementary School and Community Center & Park Site 16 The Board approved a Memorandum of Understanding (MOU) between Orange County and 17 Orange County Schools (OCS) to jointly fund the costs of professional surveying services on the 18 properties encompassing the Efland-Cheeks Elementary School and the Efland-Cheeks 19 Community Center & Park Site. 20 i. Approval of Interlocal Cooperation Agreement with Durham,Orange and Granville Counties 21 for the Energy Burden and Emissions Reduction Program 22 The Board approved an Interlocal Cooperation Agreement for the Energy Burden and Emissions 23 Reduction (EBERP) Program and authorized the County Manager to sign the agreement on behalf 24 of Orange County. 25 j. Designating an Acting County Manager During the County Manager's Temporary Absence 26 The Board approved the County Manager's appointment of Caitlin Fenhagen, Deputy County 27 Manager, to serve as Acting County Manager during the County Manager's temporary absence 28 or disability. 29 k. Removal of Boards and Commissions Members Due to 2025 Attendance 30 The Board approved the removal of appointees from several boards and commissions due to 2025 31 attendance in follow-up to Board discussion at the April 14, 2026 work session. 32 I. Boards and Commissions—Appointments 33 The Board approved the Boards and Commissions appointments as reviewed and discussed 34 during the April 14, 2026 Work Session. 35 36 9. County Manager's Report 37 Travis Myren reviewed the topics for the April 30th joint meeting with the schools. 38 39 10. County Attorney's Report 40 John Roberts said that the state legislature had returned to session and that 41 approximately 80 bills had been filed that day. He said he would begin distributing legislative 42 reports to the Board shortly. 43 25 1 11. Appointments 2 None. 3 4 12. Information Items 5 • April 7, 2026 BOCC Meeting Follow-up Actions List 6 7 13. Closed Session 8 None. 9 10 14. Adjournment 11 12 A motion was made by Commissioner McKee, seconded by Vice-Chair Fowler, to adjourn 13 the meeting at 9:07 p.m. 14 15 VOTE: UNANIMOUS 16 17 Jean Hamilton, Chair 18 19 20 Recorded by Laura Jensen, Clerk to the Board 21 22 Submitted for approval by Laura Jensen, Clerk to the Board Attachment 3 1 1 DRAFT MINUTES 2 ORANGE COUNTY 3 BOARD OF COMMISSIONERS 4 JOINT MEETING WITH 5 CHAPEL HILL-CARRBORO BOARD OF EDUCATION AND 6 ORANGE COUNTY BOARD OF EDUCATION 7 April 30, 2026 8 7:00 p.m. 9 10 The Orange County Board of Commissioners met for a joint meeting with the Chapel Hill-Carrboro Board 11 of Education and the Orange County Board of Education on Thursday,April 30, 2026 at 7:00 p.m. at the 12 Whitted Human Services Center in Hillsborough, NC. 13 14 COUNTY COMMISSIONERS PRESENT: Chair Jean Hamilton, Vice-Chair Amy Fowler, and Commissioners 15 Jamezetta Bedford, Marilyn Carter, Sally Greene, Earl McKee, and Phyllis Portie-Ascott 16 COUNTY COMMISSIONERS ABSENT: None. 17 COUNTY ATTORNEYS PRESENT: John Roberts 18 COUNTY STAFF PRESENT: County Manager Travis Myren, Deputy County Manager Caitlin Fenhagen, 19 and Deputy Clerk to the Board Tara May(All other staff members will be identified appropriately below) 20 CHAPEL HILL-CARRBORO BOARD OF EDUCATION PRESENT: Chair Riza Jenkins, Vice-Chair Barbara 21 Fedders, and Board Members Meredith Ballew, Rani Dasi, Vickie Feaster Fornville, George Griffin, and 22 Melinda Manning 23 CHAPEL HILL-CARRBORO BOARD OF EDUCATION ABSENT: None. 24 CHAPEL HILL-CARRBORO SCHOOLS(CHCCS)STAFF PRESENT: Superintendent Rodney Trice(All other staff 25 members will be identified appropriately below) 26 ORANGE COUNTY BOARD OF EDUCATION PRESENT: Chair Will Atherton, Vice-Chair Wendy Padilla, and 27 Board Members Carrie Doyle, Bonnie Hauser,Anne Purcell,Andre Richmond, and Sarah Smylie 28 ORANGE COUNTY BOARD OF EDUCATION ABSENT: None. 29 ORANGE COUNTY SCHOOLS (OCS) STAFF PRESENT: Superintendent Danielle Jones (All other staff 30 members will be identified appropriately below) 31 32 Chair Hamilton called the meeting to order at 7:00 p.m. All commissioners and school board 33 members were present. 34 35 WELCOME,CALL TO ORDER,AND AGENDA OVERVIEW 36 Chair Hamilton welcomed the elected officials and staff from Chapel Hill-Carrboro City Schools 37 and Orange County Schools. 38 Chair Hamilton reviewed the agenda for the meeting.She shared that the agenda was developed 39 collaboratively at the School Collaboration Meetings.She acknowledged that all elected boards are facing 40 difficult times and stressed the importance of working collaboratively and communicating openly with the 41 public. 42 Commissioners, school board members, and staff introduced themselves. 43 44 1. Budget with Performance/State Accountability Data and Career Technical Education (CTE) Update 45 a. Orange County Schools 46 OCS Superintendent, Danielle Jones, began by thanking the OCS Board of Education for their 47 continued support, the trust they had placed in her, and their commitment to always put students first. i 1 She said that their shared commitment guides every decision the district makes and keeps the needs of 2 children at the center of their work. 3 Danielle Jones said that the presentation would begin by showcasing great work happening across 4 OCS, which represents a collective effort from every educator in the district. She stated that the effort 5 begins with her and her leadership team, but is carried out every day in the classrooms, cafeterias, buses, 6 front offices, athletic fields, and school buildings by hardworking administrators, teachers, and staff. She 7 emphasized that OCS educators are passionate about ensuring that every child in this community 8 graduates with options — options to attend college, enter the workforce, serve in the military, pursue 9 technical training, or follow whatever path matches their gifts and aspirations. 10 Danielle Jones acknowledged that the district is not perfect and does not shy away from its 11 challenges. She cited chronic absenteeism and student discipline as two areas of ongoing focus, noting 12 that staff would discuss efforts to combat absenteeism with limited resources and during a time when 13 many families were and, in some cases, still are hesitant to send their children to school for reasons 14 beyond their control. She noted that despite those circumstances, OCS educators continue to build 15 relationships, remove barriers, and do the difficult work they're called to do. 16 Danielle Jones also addressed the financial environment. She said the district understands the 17 reality of the financial environment and acknowledged these are challenging times and public resources 18 must be managed responsibly. She expressed hope that the BOCC would find OCS budget requests 19 reasonable, thoughtful, and aligned with the needs of students. She said their presentation is not simply 20 a funding request, but is an investment in children and the families that OCS serves in the workforce 21 development and in the future of Orange County. She then turned the presentation over to OCS Chief 22 Finance Officer Rhonda Rath. 23 24 Rhonda Rath began the following presentation: 25 26 Slide#1 Attachment B FY 2027 Local Operating Budget Request April 30, 2026 Orange Mrs.Rhonda Rath,Chief Finance Officer County Dr.Danielle Jones, Superintendent SchooIs 27 28 29 3 1 Slide#2 DISTRICT HIGHLIGHTS 2 ORANGE COUNTY SCHOOLS 20DE.KhgSt,� H11I,b....gh,N,fthC1i,,27278 919312.8126 WWW.ORANGECOUNTYFIRST.COM 3 4 Slide#3 District Highlights OCS IS TOP IN THE STATE as one of only three districts in North Carolina where every school met or exceeded growth in 2024-2025! • For the first time ever, 100 percent of OCS schools Met or Exceeded Growth for the 2024-2025 school year. • For the first time since 2017, five schools earned a School EARN'13'SCHOOL Performance Grade of'B,"up from three in 2023-2024. " OLS GRADES FOR FIRST TIME S1 NOE 2017.UP FROM THREE IN 2023-2024 • Grade-level proficiency increased by 3.5 points to 58.4%on state-mandated EOC (end-of-course)and EOG (end-of-grade) exams. This composite performance (all grades and all tested subjects)is 3.4 points above the state average(55.0%). SWtwide • OCS four-year cohort graduation rate increased by eight points. AM 5 6 Rhonda Rath shared that for the first time ever, 100%of OCS schools met or exceeded growth for 7 the 2024-2025 school year. She said that for the first time since 2017, five schools earned a school 8 performance grade of B or higher, and that grade-level proficiency increased to 58.4%, which is 3.4 9 percentage points higher than the state average.The four-year cohort graduation rate increased by eight 10 points. 11 12 4 1 Slide#4 District Highlights • Five schools ranked in the top 12% in the state for growth. • All subgroups in OCS grew in grade level proficiency. • Black students were the highest performing subgroup for growth with 7 percentage points. c This is the highest GLP performance for Black students since 2013-2014. • OCS EL progress increased by 6.4 percentage points. c Third consectuve year OCS has made gains. • In partnership with DTCC, OCS increased the number of students pursuing dual enrollment courses with the goal of earning a degree or certification prior to graduation. Aft Is l F �L T 2 � iENGAGE. CHALLENGE. INSPIRE. r • t> 3 Rhonda Rath reported that five schools ranked in the top 12%in the state for growth, and that all 4 subgroups in Orange County Schools grew in grade-level proficiency. She highlighted that Black students 5 were the highest-performing subgroup for growth, at seven percentage points. EL progress increased by 6 6.4 percentage points. She also noted that in partnership with Durham Tech, the district increased the 7 number of students pursuing dual enrollment courses to earn a degree or certification before graduation. 8 9 Julie Pack, OCS Chief Academic Officer, continued the presentation: 10 11 Slide#5 District Highlights Career&Technical Education • 90+CTE courses available • 40 Industry Recognized Credentials 1100+student credentials earned ell• 73.1%concentrators earned a credential • 50+work internship partnerships - • 95%graduation rate • 74.5% of Middle School Students and 69.34%of High School Students participated in a CTE course for the 2023-24 School Year - - • In the fall issue of the Association of CTE (ACTE's) Techniques magazine, OCS's work was nationally higS Shlighted CHALLENGE. 12 13 Julie Pack said that CTE provides students the opportunity to explore potential careers while 14 developing durable, real-world skills needed to be future-ready. She noted that OCS offers over 90 CTE 15 courses across seven program areas: agricultural education; business, finance, and marketing; career 5 1 development; computer science, information technology, and technology education; family and 2 consumer sciences; health sciences; and trade and industrial education. She reported that the district 3 offers over 40 industry-recognized credentials, and that last year OCS students earned more than 1,100 4 of those credentials. She said that CTE concentrators — students who have taken multiple levels of CTE 5 — earn credentials at a rate of 73%, and that the cohort graduation rate for CTE concentrators is regularly 6 95%or above.She added that approximately 75%of middle school students take at least one CTE course, 7 and almost 70%of high school students have taken at least one.She noted that the district was recognized 8 by the National Association of CTE in their national publication Techniques, highlighting OCS's work. 9 10 Sheldon Lanier, OCS Chief Equity and Student Achievement Officer, continued the presentation: 11 12 Slide#6 Chronic Absenteeism Definition A student is defined as chronically absent when they are enrolled in a North Carolina public school for at least 10 school days at any time period during the school year, and whose total number of absences is equal to or greater than 10 percent of the total number of days that the student has been enrolled at any school during a given school year. Student chronic absence differs from both truancy and average daily attendance. Student chronic absence refers to missing so much school, for any type of absence (excused, unexcused, disciplinary), that a student is at risk of falling behind academically. Am ENGAGE. CHALLENGE. INSPIRE. 13 14 Sheldon Lanier said that chronic absenteeism is defined as a student who is enrolled in a public 15 school for at least 10 days and whose total absences — excused or unexcused or for disciplinary reasons 16 — equal or exceed 10%of the total days enrolled. 17 18 6 1 Slide#7 Chronic Absenteeism Rate July 1,2025 to January 1,2026 40% 30% 20% 10% - 5ubgroup Subgroup 30 <30 0% White Btack Hispanic- Multiracial Asian- Amer.Indian Nat.Hawaiian/ Tota[District /Alaska Native Pac.Islander ENGAGE. CHALLENGE. INSPIRE. 2 3 Sheldon Lanier noted that the district's chronic absenteeism rate was 21.1% as reported to the 4 Board of Education in January and stated that this figure is below the state average. He noted that the 5 timeframe begins in July due to the district having one year-round school. 6 7 Slide#8 OCS Efforts to Improve Attendance Attendance Worics:Preventative/Targeted Tiered Supportive Measures • Attendance lessons and incentives • Small groups to foster a sense of belonging(school professional counselors) • Check in/Check out and mentoring of students by school professional counselor, social worker,or MTSS member • Parent contact/individual parent/student conferences with school social workers • School/district progress monitoring • Attendance notifications to families • Referrals to community agencies and school-based programming • Home visits (school social workers) AM ENGAGE. CHALLENGE. INSPIRE. 8 9 Sheldon Lanier outlined the preventative and targeted strategies used by school professional 10 counselors, social workers, and MTSS teams. 11 12 7 1 Slide#9 "Attendance Matters: Be Here to Get There!" (Link) OCS ATTENDANCE WEEK #BeHereToGetThere! #OCSAttendanceWeek ■ Mpg! WEEK OF r SCHOOL COLORS MENTAL HEALTH/ ENLISTMENT ENTREPRENEURSHIP/ COLLEGE DAY SEL DAY DAY CAREER DAY ENROLLMENT DAY Wear school or Wear green In Wear red,white,and "press to Impress"tD Wear your district colors Co support of mental blue in solidarity with match the profession college gear! represent with pridel health awareness our troops you seek 0 e ENGAGE. CHALLENGE. INSPIRE. 2 3 Sheldon Lanier described the district's"Attendance Week"initiative.This year's theme is"Be Here 4 to Get There." Attendance Week consists of daily videos aimed at educating students and families on the 5 importance of attendance,the mental health supports available,and the connection between attendance 6 and "the three E's": enlistment, entrepreneurship, and enrollment. He noted that the Eastern Regional 7 Outreach Director from CFNC would be featuring one of the district's videos on their social media as a 8 model for other districts. 9 10 Slide#10 Attendance and Mental Health Research • Research from the Education Policy Initiative at UNC-Chapel Hill cited student absenteeism and student mental health and well-being tied as the top issues facing schools. o The survey results showed that providing mental health supports for students will reduce absenteeism rates in schools. • Research from the Journal of Education for Students Placed at Risk (JESPAR) published in October of 2024 as well as the National Association of Elementary School Principals directly ties funding for district efforts around addressing student mental health needs(curriculum, training, resources) to a reduction in absenteeism. o Research also cites student mental health as a root cause of high absenteeism rates in schools/districts. • Attendance Works (July 2025)warns of avoiding funding cliffs to ensure adequate Am resources are available for districts to target root causes of absenteeism and support students. e ENGAGE. CHALLENGE. INSPIRE, 11 12 13 Sheldon Lanier thanked the commissioners for their funding and support for students and 14 families. He cited research from the Education Policy Initiative at UNC Chapel Hill, linking mental health 15 support to a reduction in absenteeism rates, and warned of the risks of avoiding funding cliffs if this work 16 is to continue. 8 1 Slide#11 STUDENTS/ENROLLMENT 2 3 4 Rhonda Rath continued the presentation: 5 6 Slide#12 FUNDED STUDENTS FY 2026 FY 2027 Change Funded ADM 6,915 6,733 (182) Charter School 1,125 1,157 32 (less) Out of District 115 139 24 Total Student Billing Base 7,925 V ODENGAGE, CHALLENGE. INSPIRE. 7 8 Rhonda Rath reported that for fiscal year 2027, OCS would be funded based on 6,733 students, 9 representing a decline of 182 students from the prior year. With charter school enrollment slightly 10 increasing and out-of-district students also slightly increasing, the net impact is a total decrease of 174 11 students. 12 13 9 1 Slide#13 Average Daily Membership 10-Year Trend 9000 8,313 8,168 8,238 8,264 8,218 8,181 8,121 8.082 8,040 7,890 8000 7,5 44 7,345 7,388 7,381 7,299 71,182 7,122 6,990 6,915 5,733 7000 ■ 6000 — 5000 4000 3000 2000 1000 769 823 850 883 919 999 999 1,092 11125 1,157 0 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 T.I al SIX'S �Lhartai 2 3 Rhonda Rath noted that over the last 10 years, the district has lost approximately 811 students, 4 while charter enrollment increased by 388, for a net decrease of 423 students. 5 6 Slide#14 OCS Student Enrollment Demographics Trend 8000 7118 7000 6899 6000 5000 4WD 3601 3181 3000 2060 2000 1860 aoD s9s 000 131 11 15 112 151 I'I I' B 0 111'51 INDIGENOUS ASIAN HISPANIC BLACK WHITE PACIHCISLAND TWOo,MORE TOTAL 2026 reflective of month 4 ■2022 ■2023 ■2024 ■2025 ■2026 actual student enrollment PACIFIC TWOor Year INDIGENOUS ASIAN HISPANIC BLACK WHITE ISLAND MORE TOTAL 2022 11 112 1860 1000 3601 534 7118 �1 2023 10 329 1932 959 3533 552 7115 Ij'■�/ 2024 17 132 1938 986 3388 520 6991 2025 19 142 2069 990 3324 503 7046 ENGAGE. CHALLENGE. INSPIRE. 7 2026 15 151 2060 985 3181 507 6899 8 Rhonda Rath noted that the main decrease has been in the white student population, down 9 approximately 12%, which is consistent with state trends. 10 11 10 1 Slide#15 Statewide Change in ADM by Grade FY 2025 and 2026 �0 Most LEA's saw an ADM 5,348 decrease and will therefore see a decrease in FY27 allotments. .,000 Overall,ADM decreased 3,350 35,554 statewide zro� ti Kind. 1.11 2nd Etrd 4th Lith 00h 7th 0th 8th 10th 11th 12th (4931 (222) 1373) (1,279) (2,480) 12,313) n , 12,7451 {2840) + l3,0699 (V' 14.06,7; 14.G62 Shuae NCDPI Dart 612.Fiscal Year 2025-2026 best 1 of QA-rage Daily Membership 3 Rhonda Rath noted that the state lost 35,554 students over the prior year,with decreases in every 4 grade except 41H and 121H 5 6 Slide#16 FINANCIAL TRENDS ORANGE COUNTY SCHOOLS r 7 8 9 11 1 Slide#17 TEACHERS VS. STUDENTS 550 7500 545 543 7400 540 737 7300 535 7200 530 7100 525 7000 520 518 6900 515 6915 510 6600 505 6700 Represents all funding sources 500 6600 2020 2021 2022 2023 2024 2025 I -Teachers -ADM 2 3 Rhonda Rath said that teacher counts have been aligned with student enrollment. 4 5 Slide#18 EXPENDITURES BY FUNDING SOURCE 58.OM - 56.4M 53.3M 53.OM 48.7M 49.9M 50.OM1� 46..3M 47.OM 439M 40.9M 40.OM 36.6M 38.2M LOCAL IIUOCEFIMPACTS FY 2023. FY2024 FV2075 FY2026 30.OM MmW Health 9,623 68,033 93,273 94,333 Exceptional Children 1,710,105 2,122955 2267,327 2311.215 Limited English P.&ienry 374,123 387,104 595,656 649,998 TOTAL 1,993,851 2,57802 2„956,206 3,055$96 9.3M 9AM 6.3M 5.9M 4.2M 2.7M 2021 2022 2023 2028 � ��Shte ��Lxal Fede=al 6 7 Rhonda Rath said that federal funding is decreasing, and that state funding is not increasing 8 enough to keep up with the impacts that the district is seeing.She highlighted that over the last four years, 9 the district had to shift over $1 million more to its local budget to cover mental health, exceptional 10 children, and limited English proficiency services. 11 12 1 Slide#19 EMPLOYER BENEFIT COSTS $9.000 $8,812 25.50% $8.500 25.15% 25.00% 24.50% $8.000 24.00% $7.500 23.50% $7,019 $7.000 23.00% $6.500 22,89% z25a% 2200% 2022 2023 2024 2025 102E 2027 XA 'Projected • -Hospitalization -Retiremer 2 3 Rhonda Rath noted that retirement and employer hospitalization rates have been significantly 4 increasing year over year. 5 6 Slide#20 STATE BUDGET ORANGE COUNTV SCHOOLS 200E WWW.CRANGECOUNTYFIRST.COM7 8 13 1 Slide#21 Projected State Reductions due to Enrollment Decline State Allotment Category Dollars Positions Months Classroom Teacher(Position Allotment) $(247,741) (7.50) (75.0) Central Office(Dollar Allotment) $(74,052) Non-Instructional Support(Dollar Allotment) $(61,347) Program Enhancement Teacher(Position Allotment) $(81,186) (1.00) (10.0) School Building Administrator(MOE Al(otment) $(63,632) (0.20) (2.0) CTE(MOE Allotment) $(51,343) (0.40) (4.0) Exceptional Children(Dollar Allotment) $(282,285) Teacher Assistant (Dollar Allotment) $(118,416) .-(5.50) -(55.0) Academically Et Intellectually Gifted(Dollar Allotment) $(11,725) Transportation (Dollar Allotment) $(625,253) OVERALL: OCS State Funding is projected to decrease: 8.0 - Positions 6.0 - Months Of Employment 2 $ 1,659,450 - Dollars 3 Rhonda Rath reported that the district is in line for approximately a $1.7 million cut to its state 4 budget because of, primarily, enrollment decline, equating to roughly 14.5 positions. She stated that the 5 district's focus remains to recruit and retain a high-quality workforce and to grow students. 6 7 Slide#22 CONTINUATION 8 ORANGE COUNTY SCHOOLS 200E.KingStr� 1T11sbugh,WqhC1ina27278 919.732.8126 WWW ORANGECOUNTYFIRST.COM 9 10 14 1 Slide#23 Budget Priorities • Recruit and retain a high quality workforce • Student proficiency and growth 'r. e "s� • Allocate resources to best meet the needs of students and staff �� ENGAGE. CHALLENGE. INSPIRE. 2 3 4 Slide#24 Unfunded State Mandate = $700K Local Impact • I ,,Unfunded FY2026 Certified Step Increase • Mini budget legislated step increases for all staff paid on a licensed salary scale • $0,00 received from state resources ` • `,$700K local funding required to implement for all staff • j\FY2026 reserves reduced $700K to fund state requirement • ,Future state action may increase local cost burden ENGAGE CHALLENGE. INSPIRE. 5 6 Rhonda Rath addressed an "unfunded state mandate" this year, noting that the state mandated 7 a step increase for all certified staff but did not provide any state dollars to fund it. She said, as a result, 8 the district had to rely totally on the local allocation to fund that, amounting to approximately $700,000 9 drawn from reserves. She cautioned that if the state were to now pass a budget and award one-time 10 bonuses,the district has already expended $700,000 of its reserve. 11 12 15 1 Slide#25 Unfunded State Mandate = $704K Local Impact • �TJf Legislators pass a FY2026 budget implementing a retroactive 3% salary increase for all staff • OCS anticipates state funding to support state allotted positions • $1.6M would be needed from local funds to support local and federal allotted positions • !,,$700K of local fund balance would be required to implement Am ENGAGE. CHALLENGE. INSPIRE. 2 3 4 Slide#26 FY 2027 Continuation Budget 2026-27 Continuation-Estimate: Fr 2026 Annualized 4%raise next year Salaries $14,017,822 $14,578,534 Supplement 6,943,211 $7,220,940 Continuation Item 4%raise n year Social Security 1,668,184 $1,734,911 Salaries $560,713 Retirement(proj.25.15%) 5,088,191 5,395,436 supplement 277,728 Social Security 66,727 Hospital(proj.$8,812) 2,031,840 2,106,408 Retirement(proj.25.68%) 307,245 Other Salary Items 2,170,140 $2,256,946 Hospital(proj.$8,812) 74,569 Non-Salary Items(4% Inflationary) 14,876,830 15.471.903 Other Satary Items 86,805 Non-Salary Items 4%CPI 595,073 Total Projected Spending $46,796,217 $48,765,078 AftlEstimated Continuation Need $1,968,861 ENGAGE- CHALLENGE. INSPIRE. 5 6 Rhonda Rath presented the continuation budget request of approximately $2 million, which 7 includes a 4% salary increase and projected increases in retirement benefits and employer-provided 8 hospitalization.The total continuation budget would bring the district to $48.8 million. 9 10 16 1 Slide#27 EXPANSION , INITIATIVES 2 3 4 Slide#28 FY 2027 Expansion Requests • Teacher Local Supplement increase o Increase current certified supplements 3% in each band • Classified Supplement increase o Increase for lowest paid classified staff currently only receiving 7% • Bus Driver Hourly Pay Increase o Increase hourly rate to align with Chapel Hill-Carrboro City Schools LhGFl GE.CHALLENGE.INSPIRE. 5 6 7 Slide#29 l _; L-J L-J l+ar OR c i lwtd 9 CERTIFIED LOCAL SUPPLEMENTS fHGAGE CHALLENGE. INSPIP'[. 8 17 1 Slide#30 Current Certified Supplements Service Years Supplement —Staff Percentage 0 -5 years 12% 146 23% 6 - 13 years 14% 170 27% 14 - 19 years 16% 104 17% 20+ years 18% 206 33% Total 626 ENGAGE. CHALLENGE. INSPIRE. 2 3 4 Slide#31 2025-2026 Local Supplements for Certified Teachers&Instructional Staff U =:�Coy t� ,crooiti H :.,. :✓CI";. U'S F'L-S tie>: 13 10 10 10 6-13 years 14-19 years 20=years Alm ENGAGE. CHALLENGE. INSPIRE. 5 6 Rhonda Rath noted that GCS's certified supplements,which currently range from 12%to 18%, lag 7 significantly behind surrounding districts. 8 9 10 18 1 Slide#32 LOCAL SUPPLEMENT CHALLENGES Vacancy Rate and Avg Local Supplement ' 25-26 Avg 2025 18.0% Local Teacher Vacancy 16.0% LEA Supplement Rate* 14.0% X2.0% Chapel Hill-Carrboro City $11,612 5.2% ¢ Orenga County Schools X00% .,,¢ Schools Wake County Schools $11,493 2.2% 4:0% Chatham County Schools $9,649 9.3% 2.0% • Person County Schools $9,475 6.1% 0.0% $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 614.000 Durham Public Schools $8,904 5.6% Avg Local Supplement Orange County Schools $8,254 9.8% Data Sources:NC DPl Statistical Profile(supplements)and NC DPf State of the Teaching Guilford County Schools $7,282 6.0% Profession Dashboard(vacancy rates) Alamance-Burlington Schools $6,630 14.0% Caswell County Schools $5,600 15.5% 'Vacancy-a teaching positron in an LEA that is not filled by an educator who holds a qualifying license. ENGAGE. CHALLENGE. INSPIRE. 2 3 Rhonda Rath observed that vacancy rates tracked at the state level appear correlated with 4 supplement levels. 5 6 Slide#33 Certified Supplement Possibilities Supple nt-621 Certified InstructionamclS.S.8FICA=32.fi7°b $6,884,924.08589,879.40 $9,119.096.70 59,153,698.39 $0.00 F,:,33,4,955.32 $2,234,172.62 $2 268 774.31 ' 4 Y 1 Y Additional Supplement Supple�j&Supplement Supplement to CHCC 0-5 years 12% 1 0-5 ears=15°/a 1 0-5 years=17% 1 0-19 years=18% 6-13 years=14% 6-13 years=17% 6-13 years=19% 20-24 years=22% 14-19 years=16% 14-19 years=19% 14-19 years=21% 25+years=27% 20+years=18% 20+years=21% 20+vears=2311/o i� SYwRN-1 YM SlPni11 j I YEAR YF AR F AS AN EDUCATOR! -___ � orange G°onto - Sang°Vs'. 1 AMY J4]9tgA 7 8 Rhonda Rath stated that a 3% increase per tier to the certified supplement would cost 9 approximately$1.3 million. She said OCS is trying to retain teachers. 10 19 1 Slide#34 L � 1 , ;qg5.^5 1 CLASSIFIED LOCAL A SUPPLEMENTS '• _ FNGAG' CHALLENGE. INSPIRE. 2 3 4 Slide#3S Current Classified Supplements Supplement —Staff ssified Employees 7% 2 Classified Coordinators 9% 18 Classified Directors 13% 20 5 ENGAGE, CHALLENGE. INSPIRE. 6 7 Slide#36 Classified Supplement Recommendation • Focus on classified staff receiving lowest percentage - 7% Includes: ■ Teacher Assistants ■ School Bookkeepers ■ School Receptionists ■ office Support l • Custodians ■ Technicians ■ Child Nutrition 8 ENGAGE CHALLENGE. INSPIRE. 20 1 Slide#37 Classified Supplement Possibilities • 2% Local Supplement increase (from 7% to 9%) ■ -$3001000 ■ 250+ Employees ■ Average annual ' increase $617 2 RIGAGE. CHALLENGE. INSPIRE. 3 Rhonda Rath said the proposed increase to 9% supplement for classified staff would cost 4 approximately$300,000, representing an average increase of$617 per employee. 5 6 Slide#38 BUS DRIVER PAY 8 9 21 1 Slide#39 2025-26 Bus Driver Hourly Pay $40.00 2025-26 Hourly Pay Scales Level Perron Orange Co.Durham Chatham Chapel Hill Wake AB55 $35.00 0Exp $16,30 $17.68 $19.43 $18.00 5 $20.00 $18.34 5 Yrs Exp $17.40 $20.43 $20.27 $19.18 $ 22.63 $21.25 $18.81 1OVrs Exp $18.09 $20.85 $21.13 $20.35 $ 24.68 $22.50 $19.28 $30,00 15 Vrs ExP $18.55 $21.28 $22.55 $21.53 $ 26.91 $23.75 $19,77 20Yrs Exp $19,12 $21.73 $23.99 $22.70 $ 29.35 $25.00 5M27 25Yrs Exp $19.12 $22.16 $25.69 $23.88 $ 32.01 $26.25 $ID.78 $25.00 30Yrs Exp $19.12 $22.43 $28.14 $25.05 $ 34.91 $27.50 $21.30 $20.00 Level Number of (Yrs Exp) OCS Drivers $15.00 0-5 9 $10.00 6-10 8 11-15 7 $5.00 16-20 5 $0.00 20+ 12 0 Exp 5 Yrs Exp 10 Yrs Exp 15 Yrs Exp 20 Yrs Exp 25 Yrs Exp 30 Yrs Exp ■Person ■Orange Co. ■Durham ■Chapel Hill ■Wake ■Chatham ■ABSS ENGAGE. CHALLENGE. INSPIRE. 2 3 4 Slide#40 Bus Driver Hourly Pay Increase Current OCS Match Durham atch CHCCS TOTAL $1 ,052,625 + $93,282 + $30411773 yyy Alm ENGAGE. CHALLENGE. INSPIRE. 5 6 Rhonda Rath said the last component of the expansion budget request would be an increase to 7 the bus driver hourly rate to match Chapel Hill-Carrboro City Schools, at a cost of approximately$305,000, 8 with the goal of enabling shared driver pools between the two districts. 9 10 22 1 Slide#41 Local Operating Continuation Budget FY 27 PROJECTED ENROLLMENT 6,733 CHARTER SCHOOL Funded 1,157 less out of district county estimate 139 TOTAL STUDENT BILLING BASE 7.751 Fines&Forfeitures/Interest 270,300 Local County Appropriation 46.525.917 Grand Total Revenue 46.796.217 Continuation Non Personnel Increase 595,073 (")Reflects: 4%State salary increase and anticipated retirement State Mandated Increases 1,373,788 and health'insurance premium increases Total Continuation Budget (-)18,765,078 Total per pupil need of$6,131(-$254/pp increase) Estimated Continuation.Shortfat $(1,968;861) ENGAGE. CHALLENGE. INSPIRE. 2 3 4 Slide#42 Local Operating Expansion Budget Request Additional Continuation/Expansion Certified Teacher Supplement Increase 1,334,955 Classified Supplement Increase for lowest band 300,000 Bus Driver Hourly Increase to match CHCCS 305,000 Total Expansion Request 1,939,955 Continuation -$254/pp increase Expansion -S250/nn increase P� l 1 Total -$504/pp increase J V Aft 6 7 23 1 Slide#43 Local Operating Fund Balance 7,000,000 6,610,000 6,120,OOQ�r�� 6,000,000 5,456,494 5,000,000 4,,930,000 4,340,000 a,00o,am �420,00 3,000,000 2,000,000 1,000,000 0 2020 2021 2022 2023 2024 2025 []Actual ENGAGE. CHALLENGE. INSPIRE. 2 3 Rhonda Rath presented the district's last audited fund balance of$5.5 million. She cautioned that 4 this figure looks good on the chart, but if there is an emergency or if something comes up, it won't be 5 enough. She noted that current operating expenses run between $3.4 and $3.5 million per month and 6 that best practice calls for three to six months of operating expenditures held in reserve. 7 8 Slide#44 Capital Improvement Update • Community Engagement • Gallery Walks (April 7, 9 Et 10) • Survey: 236 Responses (March -April 8) • "Draw Your Dream School" (April 15, Gravelly Hill MS) • Site Survey in Process • Joint Meeting between Orange County Schools, City of Mebane, and Orange County • Programming-Design Guidelines Phase in Process ENGAGE. CHALLENGE. INSPIRE. 9 24 1 Frederick Davis, OCS Chief Operations Officer, began presenting here. He provided an update on 2 the new elementary school project, which is a high-priority project. He said the district has been engaged 3 in extensive community engagement, including gallery walks covering sustainability, physical activity, and 4 lighting;surveys with over 200 respondents;and a"Draw Your Dream School"event on April 15th at Grave 5 Hill, adjacent to the Greenfield site. He stated that the district is currently working with the county under 6 an MOU to begin initial site surveying to identify opportunities and challenges, such as wetlands. He 7 described monthly meetings with Orange County Schools, the City of Mebane, and Orange County, 8 expressing confidence that the early collaboration would lead to a successful school opening in 2029. He 9 noted that the school is currently in a pre-design and programming stage and that a design committee 10 has been formed, including maintenance operations and academic liaisons. 11 12 Slide#45 Capital Improvement Update New K-5 Elementary,Greenfield Site near Gravelly Hill MS Scheme I Scheme 2 1 _ 1 ,1 .,r V Detail f} D Emil f 13 CHALLENGE_ 14 15 25 1 Slide#46 Capital Improvement Update 0 Summer CIP Projects (High Priority) Cedar Ridge Agricultural Learning Lab New Hope Roof Replacement - Cedar Ridge mob lift New Hope 2 1 CHALLENGE. IN1 Ill N'_ 3 Frederick Davis highlighted two completed high-priority capital projects: the New Hope 4 Elementary roof, a $2 million project completed in December 2025, and the Cedar Ridge Agricultural 5 Learning Lab. He said the latter would wrap up its punch list this month and hoped for a ribbon-cutting 6 invitation to be sent out toward the end of May. 7 8 Slide#47 Questions? �9 ENGAGE. CHALLENGE, INSPIRE. 10 Chair Hamilton thanked OCS for this presentation. 11 Commissioner Carter expressed appreciation for the detailed CTE presentation and the focus on 12 mental health in addressing absenteeism and said she looked forward to updated data in June. She also 13 appreciated hearing the capital updates. 14 Commissioner McKee offered congratulations on the achievement data, saying he believed the 15 academic performance improvements would help alleviate losses to charter schools by changing public 16 perception. He was glad to hear about the Cedar Ridge Agricultural Learning Lab, and noted he had 17 received many calls about it. 18 Commissioner Portie-Ascott congratulated OCS on their student growth metrics.She commended 19 the eight-point rebound in the graduation rate and the work being done to address chronic absenteeism. 20 Chair Hamilton invited CHCCS to begin their presentation. 26 1 b. Chapel Hill-Carrboro City Schools 2 CHCCS Superintendent, Rodney Trice, opened by thanking the commissioners for the opportunity 3 to present CHCCS's local operating budget request for fiscal year 2027. He acknowledged the challenging 4 times others mentioned, and offered a quote from Henry Ford he keeps in his office: "When everything 5 seems to be going against you, remember the airplane flies against the wind, not with the wind". He said 6 it serves as a reminder that tough times will test us, but it also represents an opportunity to reimagine, 7 rethink, and innovate the work that we do. 8 Rodney Trice began the following presentation: 9 10 Slide#1 LU ry UJI FY 2027 Local Operating Budget u-- Request 0 . • :• '• Dr. Rodney Trice, Superintendent Est.1909 STRATEGIC PLAN Jonathan Scott, Chief Financial Officer 2022-2027 11 12 13 Slide#2 StudentOutcomes Drivin • U_ Our • continuesCHCCS . see strong student outcomes, including academic growth, expanded access to advanced coursework, and increased particiloction in college and career pathways. Progress in early literacy, and attendance, and among multilingua.1 learners reflects the impact of targeted supports and high-quality z programming, reinforcing the need to sustain and invest in what is working. < 14 v 1 Slide#3 Celebrating District Successes and Academic Progress • 5 of 11 elementary schools have returned to or exceeded pre-COVID proficiency levels, closing the gap with 2018-19 performance • Elementary ATSI school successfully exited federal designation status • All three comprehensive high schools earned the Platinum AP Honor Roll and AP Access Award (2025) • Kindergarten students exceeded expected growth over a two-year period (mCLASS) • First-grade students met expected growth over a two-year period (mCLASS) Cnape IHlll-Carrb-co 'itySchools i g THINK (AND ACT) 2 3 Rodney Trice said that student outcomes are at the core of the district's daily work and its budget 4 requests. He acknowledged that,while time has passed since,the pandemic had a real impact on students. 5 He reported that 5 out of 11 elementary schools have either returned to or exceeded pre-pandemic levels 6 of proficiency. He highlighted that Northside Elementary School exited TSI (Targeted Support and 7 Improvement)status this year, a federal designation given to schools when certain subgroups fail to meet 8 expectations, noting it was largely due to the hard work of district leadership and the staff over a two or 9 three-year period, which demonstrated significant growth. He described it as a difficult lift and said it 10 deserves to be highlighted. Rodney Trice noted that the district's three comprehensive high schools 11 earned AP designations, including a platinum AP honor roll and an AP access award recognizing the 12 district's equity focus in making AP opportunities available to all students. He highlighted that 13 kindergarten cohorts have exceeded expected growth on the mCLASS assessment for the past couple of 14 years, and that first graders have met or exceeded expected growth on in-class assessments. He credited 15 high-quality curriculum resources, particularly literacy resources at the early grade levels, for this 16 progress. 17 18 28 1 Slide#4 CHCCS Multilingual Learners English Learner Proficiency 50.00% From NC School Report Cards Website: 40.00% ,.., English Learner Proficiency:Percent of students who met North Carolina's 30.00% r ,r r.r. definition of progress toward English language attainment,as demonstrated on 20.00% the state's English language proficiency assessment.North Carolina uses the 10.00% ACCESS for ELLS to measure proficiency. 0.00% Slate of NC CHCCS Orange Durham Wake County Chatham County County County Chapel Hill-Carrboro City Schools l cinccs.orcg Prepared by the Office of Assessment B Research THINK (AND ACT) UUMMUM 2 3 Rodney Trice reported a proficiency rate of 41%for multi-language learners. He noted that multi- 4 language learners often come to the district with gaps in their education,and teachers and administrators 5 work hard filling in those gaps. 6 7 Slide#5 AVID Excel: Accelerating Multilingual Learner Growth "AVID Excel is a middle school elective for experienced multilingual scholars that accelerates language acquisition, develops literacy, and places scholars on the path to high school AVID and college preparatory coursework." Culbreth Middle: McD©ugle Middle: 800 of scholars met or exceeded expected • Average Reading Growth on ACCESS: growth on ACCESS +0.58 compared to a median growth The number of scholars reaching a CPL of 4.0+ more than doubled, increasing 122%(from 9 to 20) of+0.30 On average, AVID Excel scholars achieved more 9 58%of AVID Excel students growth in one year than in the prior three years demonstrated measurable growth combined 41, AA College Readiness ar English Chapel Hill-Carrboro City Schools I chccsorg ® Learners THINK (AND ACT) 8 9 Rodney Trice described the AVID Excel program, a middle school elective for multi-language 10 learners piloted by several principals and the Chief Academic Officer, designed to help with language 29 1 acquisition, literacy skills development, and readiness for college-level coursework. He said at Culbreth 2 Middle School, 80% of AVID Excel students demonstrated or exceeded expected growth on the ACCESS 3 test. He highlighted that these scholars achieved more growth in one year than they had demonstrated 4 in the past three years combined. He said at McDougle Middle School, 60% of enrolled students 5 experienced measurable growth. 6 7 Slide#6 Career and Technical Ed: Expanding Student Pathways • Over 105 CTE courses offered across the district ^� • 42 industry-recognized credentials available to students • More than 1,491 student credentials earned • 67.2%of concentrators earned a course credential • 94 work-based learning partnerships supporting real-world experience `! 45%graduation rate • CTE participation includes 55.6%of middle school students and 65.9%of high school students during ii the 2025-26 school year _- Chapel HWCarboro city schools I chccs.org THINK (AND ACT) g 9 Rodney Trice provided CTE highlights, noting that CHCCS offers over 105 CTE courses, with 42 10 recognized credentials available to students. He said the graduation rate among CTE students is 95%. He 11 noted that just over 55%of middle school students and just over 65%of high school students participate 12 in CTE and expressed confidence that more students would participate if additional space and opportunity 13 were available. 14 15 30 1 Slide#7 SY24-25 Career and Technical Ed Credentials CHCCS 2024-2025:All Credentials Credentials Earned:2021-2022 through 2024-2025 0 ALL MG PAHS 0 ECHHS CHHS CHS 5000 1250 — —1090 922 1 4000 3661 1CCg 2773 2917 �5C 659 667 3000 231b 376 69 — 500 323 2000 250 — 1000 C �� 1 Credentials As Reported Nan. Non-Reported Non-Reported Non-Reported 0 POL Proofs of Credentials Credentials- Credentials- 2021-2022 2022-2023 2023-2024 2024-2025 Learning Aligned WorkKeys Mid le Grade Academic Year Credentials Credentials Chapel Hill-Carrboro City Sehools I ehees.arg THINK (AND ACT) 2 3 Rodney Trice highlighted that between 2022 and 2025, there was a 1,300-credential increase in 4 the number of credentials earned by students 5 6 Slide#8 SY25-26 Career and Technical Ed Enrollment Profile Grand SY2526:Enrollment Count By Cluster By Campus campusAG 13FM CID CSITT FCS Gen HS T1 Total ■n ■HS ■Gen ■FCe ■CSITT ■Co ■SFM ■Ac Carrboro High 138 13 302 93 5 3 _7T 6 620 100% School Chapel Hill High 10.66% g School 1 176 20 716 186 24 349 147 1619 21 75% East Chapel Hill 1 High School 1 345 1 727 110 68 384 5 1641 1L w% Phoenix Academy 19 1 1 21 High School Culbreth Middle 125 183 171 479 School a McDougle Middle 217 223 197 637 School 0% Cartboro High Chapel Hill East Chapel Phoenix C.1-1h M-Sk Phillips Mitltlle Smhh Midak Phillips Middle 198 193 177 568 Schoel High SCrWl HIII High M my High MkUle Scheel Aril School Scheel SChool School School Smith Middle 109 205 194 W8 ,..passe School 2 1327 94 2649 1129 97 736 219 6093 Chapel Hill-Carrboro CityScnaok ch,c,..,g THINK (AND ACT) 7 8 Rodney Trice credited the school board's support in shifting the high school schedule to better 9 accommodate CTE courses and other opportunities. 10 31 1 Slide#9 College and Career Pathways: CCP Enrollment at Durham Tech _rm Number of •- of DTCC is our largest Career and Students Courses College Promise partner with a dedicated liaison who works in our schools 4 days per week. SY 2025 124 213 Q�%%aM Fall 2025 239 362 , � �GOSpring 2026 157 322 a1 . at Chapel HBbCorrhoro City Schools i chccs..org THINK (AND ACT) 2 3 Rodney Trice reported significant growth in the Durham Tech dual enrollment partnership. In 4 school year 2025, 124 students took 213 courses. In the current year, the number of students nearly 5 tripled. He praised Durham Tech as a full partner in this effort. 6 7 Slide#10 Attendance Trends Overview of chronic attendance changes through the intentional work of our Sfudent Services Department. 8 9 10 32 1 Slide#11 Average Daily Attendance Trends (August-December, 2023-24 to 2025-26 199 8P An intentional focus on improving attendance has led fib to higher Average Daily 0 Attendance from August through 40 December across all levels since 4 2023-24. 20 0 E1,:ni Hiddi. Higrt .2023 24 94.9 94.7 90.7 •2024-25 95.1 95.0 92.9 •2925-26 95.3 95.1 41.0 Chapel Hill-Carrboro City schools I chccs.org Prepared by the Office of Assessment&Research THINK (AND ACT) 2 3 Rodney Trice reported that average daily attendance has remained high across elementary, 4 middle, and high school levels, consistently in the 90% range. 5 6 Slide#12 Chronic Absence Trends by Student Group (August- December, 2023-24 to 2025-26) 30 25 For six of eight student groups, the percentage of students with 2° Chronic Absences(200 or more of 5 days missed)dropped by 4 approximately 5 percentage points g ,° over three years;among Lafinx students,it decreased by 1.8 5 III percentage points, and among Multilingual Learners, it declined in ° All Asian Black Latio, Multiracial Whir, ML sWD 2024-25 but increased in 2025-26. m2023-24 17.6 11.3 27.1 25.4 17.2 14.1 23.3 29.4 e 2024-25 145 8.8 24.9 20.8 15.0 11.0 19.3 26.4 •2025-26 12.7 5.8 21.1 23.6 10.6 8.4 24.8 23.3 Chapel Hill-Carrboro city schools I chccs.org Prepared by the Office of Assessment&Research THINK (AND ACT) 7 8 Rodney Trice noted that chronic absenteeism has shown a downward trend from 2023-24 9 through 2025-26 but called attention to an increase in the 2025-26 year among Latinx students and multi- 10 language learners. He believes this is due to federal immigration policy, noting that for those two 33 1 populations, the positive trend had held in prior years, but that something disrupted the work and the 2 trust of parents. He said the district still has work to do to win back the trust of parents and students. 3 4 Slide#13 Student Enrollment Trends Overview of enrollment ch• r- • • projections us-• to guide staffing, resources, and planning. 5 6 Jonathan Scott, CHCCS Chief Financial Officer, continued the presentation: 7 8 Slide#14 Student Data for County Education Funding Allocation • NCDPI is utilizing FY2025-26 40th day Average Daily Membership(ADM) of ,� k 10,773 for FY 2026-27 membership , , projections _ • Preliminary out-of-district enrollment is r , projected to be 260 • Preliminary charter school enrollment is projected to be 228 q� • Projected ADM minus Out-of-district enrollment plus Charter School enrollment gives a net estimation of 10,741 budgeted students • This represents a projected decrease of 277 students compared with FY 2025-26 «np,IHiL�9nCc„�_�,, .�n�t,,. �,�� THINK (/-SND ACT) 9 10 Jonathon Scott explained that DPI moved to a funding-in-arrears model as enrollment began to 11 drop statewide, to stabilize funding for public schools. He reported that the district's average daily 12 membership for the second month of the current year came in at 10,773 students—approximately a 350- 13 student drop from the prior year. He said after reconciling through the county funding formula,the budget 34 1 enrollment for the coming year is 10,741 students, a decrease of 277 students. He noted that charter 2 school enrollment has remained relatively constant,with only about a two-student increase projected. 3 4 Slide#1S Average Daily Membership 10-Year Trend 12,180 12,390 12,390 12,462 12,478 12.694 12,000 11,663 l 1,568 11,445 — 12,017 t 2,239 12,239 12,29fi 12,312 12.448 l 1.001 11,466 11.334 11,219 10,000 8,000 — 6,000 4,000 — 2,000 93 l 7 151 166 l 6 l 4 226 226 0 201317 2017-18 2018-19 201420 2020-21 2021-22 2022-23 202324 2024-25 2025-26 1 Total 0 Enrollment 0 Charter Students Chapel Hill-Carrboro city Schools i&--g THINK (AND ACT) 5 6 Jonathon Scott noted that in in 2021-22, approximately 12,600 children were enrolled between 7 charter schools and CHCCS combined.That figure is now projected to be around 11,000. 8 9 Slide#16 CHCCS Student Enrollment Demographic Trends 12000 11713 ,1043 Since 2021-22, two groups had 10000 increased enrollment: Latinx and 8000 Multiracial students. 5829 8000 E 5199 The group with the largest decline Z was White students, down 2.7 4000 percentage points from 2021-22 to 2000 1 2116 2'97 p 543 1488 g p 11 11 11 115 1111 the present. 8311 in 645 Asian Black Latinx Multiracial LVhl. All •2021-22 1543 1380 2116 831 5829 11713 •2022-23 1529 1413 2145 886 5705 11696 2023-24 1536 1400 2274 839 5585 11653 Source,Mergedemo FDS 2021-22 to 2024-25,Infinite .2024-25 1546 1353 2234 841 5394 11386 Ccrnpu520th Day 2025-26 ■2025-26' 1488 1295 2197 845 5199 11043 chapel Hill-Comb—CitySchOOls i ch.--g THINK (AND ACT) 10 10 35 1 Slide#17 Statewide Change in ADM by Grade FY 2025 and 2026 5,34II Most LEAs saw an ADM decrease and will therefore see a reduction in FY27 allotments. Overall, ADM M..a., 1- 2..a 3. 9th stn Bth 7� eth sen 10th 11th 121h decreased by `222' 35,554 students 8791 ' 1.279' statewide. (2.9801 aoao (2.795) (2.890) L3,069) 49.67) $9urce'NCDPI Dal B12,R-1 Year 2025-2026 Best 1 oft Average❑aily My Mberehip ehapeltiill-C—b..City Schools i et,.—s.64a THINK (AND ACT) 2 3 Jonathon Scott noted the statewide context, saying he understood only about five school 4 districts in the entire state gained any enrollment going into this year. 5 6 Slide#18 LU LU ILL LL E Financial TOver Over the past five years, CHCCS has experienced rising costs relianc- on local - • - • sustain core services. These trends unclerscor� the need for continued strategic planning to maintain financial �d stability while supporting ongoing student success. z 7 8 9 36 1 Slide#19 Staffing Levels vs. Student Enrollment: Five-Year Trend Total Staff Vs.ADM Trends Last Five Years Total Student:Staff Ratio Last Five Years Imo t,a55 ez s0o 6.6 1,BOD 66 ,500 6 5 6.2 63 1,4W C 2 62 6.1 1 �0�0 mz� mzz moa mza m�5 6.0 2020 2021 2022 2023 2024 2026 Fiscal Year 2020 2021 2022I I2025 ADM 12,333 11,807 11,424 11,408 11,262 11,114 Total District Staff 1,834 1,829 1,828 1,866 1,821 1,772 Chapel Hill-Carrboro City Schools.I chccs.crg THINK(AND ACT) 2 3 Jonathan Scott said that the district has been reducing staff following a peak in 2023, which he 4 attributed to a large amount of ARPA money coming from the state and federal government. He noted 5 that a significant portion of the third tier of a three-tiered reduction in force did not take effect until July 6 1, 2025, so its full impact would not yet be visible in the graphs presented. He said when the district 7 returns in a year,the slope of the first graph would turn down sharply, estimating approximately 60 FTEs 8 in that third tier. 9 10 Slide#20 Expenditures by Funding Source: Five-Year Trend $125.0M $105.7M $103.81M $98 1 M $100.O1M $923M _ LOCAL BUDGET 8�s HIM IMPACTS FY 2023 FY2024 FY 2021 FY2026 S $81.0M Exceptional $6,508,435 $10,832,719 $11,344.595 $12,094,955 $75.OM $861M-S86.4M Children(032) $84.1M S81.OM $76.1M 578.5M Other EC Teachers(001) 368,158 383,044 392,114 356,733 $50.0M EC 5eh"ieral Support(029) 173,352 206,882 185,411 304,550 $25:OM TOTAL 57,324,088 511,809,749 512,517,776 $13,406,236 $2.9M $4.1M -$115M $10.6M $6.5M $5.2M Lt Over the last five years,the gap between State $O.OM and Local funding has increased from$4.9m in 2020 2021 2022 2023 2024 2025 FY 2020 to$17.4m in FY 2025.This is most apparent in the Exceptional Children budget in *State * Federal * Local which expenditures have nearly doubled in the local fund since FY 2020. Chapel Hdll-Carrboro City schools I chccs.org THINK(AND ACT) 11 37 1 Jonathon Scott noted that the gap between state and local funding has grown dramatically. He 2 said that in 2020 there was a difference of about$5 million between the district's state and local budgets, 3 and now it's approaching $17 million five years later. He attributed this to both lower per-pupil state 4 allocations due to reduced student enrollment and the state's failure to keep pace with actual operating 5 expenses. He also highlighted that Exceptional Children's needs have grown, with the local cost of EC 6 nearly doubling since 2023,from $7.3 million up to a projected $13.4 million for the current year. 7 8 Slide#21 LUa LU LL LL State Budget Impa State funding is driven primarilyby declines, reduces resources throigh the State Public School Fund. These reductions • pact available fun• . require a adjustments to maintain current staffing and services. �9 9 10 11 Slide#22 Projected State Reductions due to Enrollment Decline State Allotment Category Dollars Posirlons Classroom Teacher(Position Allotment) $ (1,408,533) Central Office(Dollar Allotment) (71,305) Non-Instructional Support(Dollar Allotment) (60,983) Program Enhancement Teacher(Position Allotment) (103,165) (1.0) School Building Administrator(MOE Allotment) (88,317) (4.0) CTE(MOEAllotment) (184,895) (6.0) Teacher Assistant(Dollar Allotment) (189,561) Academically&Intellectually Gifted(Dollar Allotment) (26,148) Transportation(Dollar Allotment) 154,385 Chapel Hill-Carrboro City Schools I chccs.org THINK (AND ACT) � 12 38 1 Jonathon Scott explained that the district anticipates approximately a $1.98 million reduction in 2 state funds due to the 350-student enrollment decline. 3 4 Slide#23 Adjustments to Offset State Funding Reduction To maintain current class size allotment levels,the District will reduce the following positions: • 9 elementary teacher positions + 6 elementary teacher assistant positions • 8 high school general education teacher positions • 2 high school Exceptional Children(EC)teacher assistant positions Financial Impact These adjustments will offset approximately$1.93 million of the State revenue reduction Chapel Hill-corrihom City schools I chccs.org THINK (AND ACT) ■ 5 6 Jonathon Scott said that through careful position control and allotment management,the district 7 was able to offset approximately$1.93 million of the anticipated $1.98 million reduction in state funding 8 by not allotting nine elementary teachers, six elementary teaching assistants, eight high school general 9 education teachers, and two high school EC teaching assistants. 10 11 Slide#24 ■ LL LL i Continuation Budget y 12 39 1 Jonathon Scott noted the difficulty of planning without a state budget. He acknowledged that we 2 are now in April of the first of two budget years in the state of North Carolina, where we were supposed 3 to have a biannual budget and we still do not have a budget from the General Assembly. He said he has 4 been doing this work a long time and it is very difficult to plan for the following year when there isn't a 5 budget at this point in the year. 6 7 Slide#25 Key Continuation Drivers and Cost Pressures DescriptionBudget Driver included in FY27 estimates Salaries and Supplement 4%Increase calculated across the board 4.00% Social Security Matching (FICA) Expected to remain at 7.65%,but cost 4.00% increases 4%for salary increases 5-year regression analysis projects an State Retirement Matching increase to 25.15%,up 1.96%from the current 6.04% rate of 24.67%.Also needs to account for the 4%salary increase Employer Portion of State Health 5-year regression analysis projects an 3.67% Insurance Premiums increase to$8,812,up from$8,500. Non-Salary Budget Items 4%Inflationary adjustment included for non- 4.00% salary items CpclHill-Coir—CitySo ,i c-csoir5 THINK (AND ACT) 8 9 Jonathon Scott presented the continuation budget, noting the district is planning for a 4% salary 10 increase, a 6% increase in state retirement, and approximately a 3.7% increase in health insurance. He 11 included a 4%inflationary adjustment for all non-personnel expenditures,which represents about 15%of 12 the local budget. 13 14 40 1 Slide#26 Key Continuation Budget Cost Drivers Continuation Item Cost Base Salaries Base Salaries $ 1,294,864 Lccal Supplements Local Supplements 542,410 State Retirement State Retirement Matching 731,335 Matching Employer Paid Health Insurance Employsurance er Paid Premiums Premiums 236,515 "ea'th'° m�ams Social Security(FICA) 147,783 so`ial s�Fica8147,783 Non-salary Operating Costs 723,483 "onlary operating costs Total Budgeted Continuation Costs $3,676,390 $0 13500,000 $1,000,000 Chapel Hill-Carrb—City Schaals i chcc,..,g THINK (AND ACT) 2 3 4 Slide#27 Projected Local Revenue Changes Special District Tax: • A 2%inflationary increase in the tax base is projected to generate$591,153 in additional revenue from the Special District Tax • Projection assumes no change to the current tax rate County Appropriation: • County appropriation levels are determined by the Board of County Commissioners and their staff • A 3%increase in the County appropriation would generate approximately$1.94 million in additional revenue Chapel Hill-C.arrbara City Schools i cho-org THINK (AND ACT) '® 5 6 Jonathon Scott noted that the district benefits from a special district tax,from which it anticipates 7 approximately $600,000 in additional revenue from annual inflationary growth in property values. He 8 indicated that a 3% increase in the county appropriation would generate approximately $1.95 million in 9 additional revenue. 10 11 41 1 Slide#28 Impact of Estimated Revenue Changes Budgetary Consideration Impact Total Continuation Costs before Revenue Changes $(3,676,390) Inflationary special District Tax Revenue Increase 591,153 Total Continuation Need after State and Local Revenue Changes $(3,085,23 Local Revenue Changes:2%Inflationary increase to the Special District Tax State Revenue Changes:Projected staffing adjustments adequately cover the State revenue deficit indicated by the planning allotments provided by DPI chats Hill Carr co City Schoals iaas,a,g THINK(AND ACT)PREMIUM 2 3 Jonathon Scott said,accounting for the special district tax,the continuation need is approximately 4 $3.1 million. 5 6 Slide#29 AL LU LU LL Forward Together An expansion budget that reflects our commitment to moving forward •• - by - • in opportunity • • long-term success. Chapel Hill-Carbors,City Schools I chi 7 8 Jonathon Scott said CHCCS firmly believes that the district budget reflects its values, and it would 9 be disingenuous not to advocate on behalf of district employees and students. 10 11 42 1 Slide#30 Overview of Proposed Local Supplement Adjustments Certified Staff: • Baseline FY 2026 supplements range from 18%to 27%by experience. • A 3%increase in the local supplement percentages beginning in FY 2028. • Estimated cost $1.65 million(including benefits). • Assumes stable staffing and 3%annual state-funded salary growth. Classified Staff: • Baseline supplements range from 5.5%to 9.5%by experience. • A 3%increase in the local supplement percentages beginning in FY 2028. • Estimated cost per 1%increase:-$1.05 million(including benefits). • Designed to address equity and competitiveness across experience bands. Note:assumes stable staffing and no staffing reductions. Chape91k06C—berg City School,i chcc,..,g THINK (AND ACT) 2 3 Jonathon Scott said the expansion budget request included a 3%increase in certified supplements 4 at an estimated cost of approximately$1.65 million, including benefits, and a 3% increase in all classified 5 supplements at an estimated cost of approximately$1.05 million. 6 7 Slide#31 Instructional Curriculum Fund Investment • NCDPI regularly updates curriculum standards, requiring districts to refresh instructional materials. • State funding for textbooks and instructional resources has declined significantly over time. • Instructional resources have shifted from periodic textbook purchases to annual digital and subscription-based models, often without built-in professional development Proposed Investment: • Establish a Designated Instructional Resources Sustainability Fund. • $1.0 million total investment. Chapel Hl6Corrboro City Schools i clic—org THINK (AND ACT) • 8 9 Jonathon Scott said the expansion request also proposes establishing a sustainable, recurring 10 curriculum investment fund of$1 million, explaining that state funding for textbooks has been declining 43 1 and that the district is starting to struggle with providing a robust curriculum across the board. He 2 described curriculum resources as core to student achievement. 3 4 Slide#32 Local Operating Expansion Budget Request Expansion Item Budgetary Impact Certified Staff(Supplement-3%Increase) $1.65 million Classified Staff(Supplement-3%Increase) $1.05 million Instructional Curriculum Fund Investment $1.00 million Total Expansion Request i million Cl-ape H-CarrbaraCltySchaals i ch—org THINK (AND ACT) 5 6 7 Slide#33 Local Operating Budget Request Summary Budget Item Budgetary Impact Continuation Cost $ 3,676,390 Expansion Request 3,700,000 Estimated Inflationary Revenue Adjustment (591,153) OperatingTotal Local Chapel Hill-Carrboroclty Schools i ahaas.ar9 THINK (AND ACT)RMUMMUM 8 9 10 11 44 1 Slide#34 Fund Balance Historical Analysis and FY 2026 Forecast $20 OM $15.5N1 $15.DM S11.3M $l2.DM $1D.DM $5 am $5.5M S6.3M $5.0M $3.6M 53.SM $0.3M $D.DM $0.6M -$D.1 M -$0.4M -$5.0M 2021 2022 2023 2024 2025 2026' ■ Total General Fund Balance . Local Unassigned Fund Balance *Based on District estimates that FY2026 will add-$5m to the fund balance as a result of operations.Of that,it is estimated That about$1.8m would be reserved for various reporting requirements.Actual results will vary once the fiscal year is officially closed and audited. Chapel Hill-Carrboro City Schools I&—s.ore THINK(AND ACT) 2 3 Jonathon Scott presented an update on the district's fund balance, noting that the last audited 4 financial statements showed an increase in fund balance of approximately$350,000. He said the district 5 is now three-quarters through the fiscal year and estimates it will end the year with approximately $5.5 6 million in fund balance. He noted that the school board's priority in the coming years is to grow that fund 7 balance to a more sustainable level, expressing hope that the district would end the following year closer 8 to $10 million. He said this indicates the structural deficit has been resolved. 9 10 Slide#35 Our • • Our — currentStrategic Budget Response Addressing . - .- through - while creating capacity to reinvest in innovation, strengthen academic prograrns, and develop future-ready school models that < expand opportunities for students and support long-term enrollmer' �d growth. z 11 12 45 1 Rodney Trice continued the presentation: 2 3 Slide#36 Strategic Budget Levers Purpose of Strategic Budget Levers: • Set direction for how CHCCS navigates current and future challenges Focus on strategic lever categories, not individual actions • Ground our work in shared values:equity,sustainability,excellence • Position CHCCS to thrive in a changing educational landscape Budget Lever Categories: • Organizational Structure: How we align roles,teams,and responsibilities • Resource Allocation: How we deploy funding, staffing,and time • Operational Efficiency: How we optimize systems,facilities,and operations • Innovation&Reinvestment: How we build future-ready models that elevate opportunity and enrollment Chapel Hill Carrboro city Schools I chcc5.or9 THINK (AND ACT) 4 5 Rodney Trice said the district has talked a lot about strategic budget levers that they can deploy 6 to make sure money is being spent effectively and efficiently, and that they're providing the level of 7 service and programs for students that the community expects. He noted that over the past year, the 8 district has held more than 25 community engagement sessions around the budget. 9 10 Slide#37 Strategic Actions to Align Resources and Drive Efficiency Potential School Closures to address underutilized facilities Tight Adherence to Enrollment-Based Staffing Formulas Development of a Multi-Year Staffing Plan Central Office Reduction in Force(RIF) • Organizational realignment • -$2.OM in ongoing structural savings Instructional Software Consolidation • Collaborative review and reduction of Software subscriptions • -$500K In recurring savings redirected to curriculum resources High School Staffing Formula Revision • Adjusted after base year of block scheduling implementation • Aligns staffing with actual course demand Drives ongoing operational efficiency C—P.1 Hill Carr—o CityScaoo,I c.a,o,g THINK (AND ACT) 11 12 Rodney Trice outlined actions taken across several categories. He said regarding organizational 13 structure,the district conducted a central office reduction in force to the tune of approximately$2 million. 46 1 He said regarding staffing, the district developed a multi-year staffing plan and is holding schools to 2 staffing formulas based on actual enrollment, including at the high school level —having held high schools 3 harmless during the transition to a block schedule but now confident enough to apply the formula there. 4 He said the district anticipates between $350,000 and $500,000 in savings from a review of software 5 spending. He said the district is having serious conversations about school closure, and part of that is 6 because of the number of students lost since the pandemic. He said he is proud of the way that the 7 community has shown up and supported the district administration. 8 9 Slide#38 ■ Ci Questi • STRATEGIC . , 2022-2027 10 11 12 Al Ciarochi, Deputy Superintendent for Operations, continued the presentation: 13 14 Slide#39 Capital i • • The Carrboro Elementary School replacement project is progressing through the schematic design phase, with continued coordination between CHCCS and Orange County to align scope, budget, and < 15 47 1 Slide#40 r t 2 3 Al Ciarochi described progress on the replacement of Carrboro Elementary School, noting that 4 since the Joint Meeting in the Fall,the project has advanced significantly. He said the district has engaged 5 in numerous listening sessions with school staff, community members, central office staff, and design 6 professionals, and has toured comparable schools. 7 8 Slide#41 I i CARRBOROELEMENTARY SCHOOL-CONCEPT 9 400 SHELTON ST.CARBORRO-NORTH CAROLINA 103252028 TIMMONS GROUP 10 Al Ciarochi explained that the plan is to build the replacement school on-site, behind the existing 11 elementary school while children remain in session. He described Carrboro Elementary as one of the 12 greatest internal residential schools in the CHCCS district. He noted the community's deep investment in 13 the school, and appreciated being able to walk to it from far distances. 48 1 Al Ciarochi shared preliminary renderings of the new school, emphasizing they are not final 2 designs: 3 4 Slide#42 EC { ""CPRE K INTERVENTIONIST ............. :................... I't GRADE K FOREIGN MEDIA / �'� SART LANG. ADMIN M t151C GYMATORIUM—+\ DININU\ r,nmCEPTUAL PLOOR PLAN 5 6 7 Slide#43 2nd FLOOD ..--r-GRADE 4 .............. ................... FE „'I MAKER '•.....f......:•.......t.....: ......... SPACE 511GRADE VIGRADE 31d GRADE 8 � 9 Al Ciarochi described the plan as a 90,000 square foot, two-story facility brought up to modern 10 DPI NC educational standards, within a $53 million budget funded through the 2024 bond referendum. 11 He noted the school will feature a core area with a cafeteria and gymnasium on one side, and academic 12 spaces on the other. 13 14 49 Slide#44 �II'III„1III Al Ciarochi said design features include earth-tone materials reflecting the IIIIIII � � _ school's .. prominent Slide#45 -, �� � I I -•3.f � A r• - 50 1 Slide#46 rt _ IM 3 4 Slide#47 1 } ZARR :•-• ELEMENTARY S IT qV Tentative Milestones: 2026 • Schematic Design A. . • 2026 • Begin Construction • • 2027 5 • • - ♦ 2028 6 Al Ciarochi reviewed the site plan, noting it addresses long-standing community concerns about 7 vehicle and bus queuing on public streets. He described two recent community meetings during which 8 neighbors raised concerns about traffic, outfall, noise, and wetlands, all of which the design team is 9 working to address. He outlined the tentative project timeline, with continued listening sessions through 10 the end of May, followed by schematic design approval by the school board, then design development, 51 1 and then construction documents.The goal is to begin construction in spring 2027,with an opening in fall 2 2028 or 2029. He said the project team has been meeting with the Town of Carrboro and NCDOT and 3 remains on target. 4 Vice-Chair Fowler congratulated both school districts on their numerous successes. She noted 5 that as a pediatrician, she frequently hears from students that AVID is their favorite class, and said it is 6 transformational for them. She expressed appreciation for all the fiscal tightening, acknowledging it took 7 a lot of work and was not fun. She described the current financial climate as a panic-inducing situation in 8 terms of financial realities at both the state and federal levels, but said the county would do everything 9 possible to try to help schools continue to thrive. She added that continued advocacy at the state and 10 federal levels is necessary. She was excited to see updates on the planned new schools. 11 Commissioner McKee congratulated the districts on their focus on CTE. He congratulated Rodney 12 Trice on acknowledging the possibility of school closures based on the declining student numbers. 13 Commissioner Carter echoed gratitude for all the hard work taken on by both school districts to 14 take on structural changes that have been and will continue to be painful. She said she appreciates them 15 thinking strategically and looking forward. She agreed it was exciting to see the new school designs. 16 Commissioner Bedford congratulated Principal Jason Johnson on being named National Principal 17 of the Year, noting a proclamation would be forthcoming. Commissioner Bedford also commended the 18 superintendents on their honesty with the community and their staff regarding student enrollment and 19 upcoming changes. She recounted attending the recent community meeting about the Carrboro 20 Elementary footprint and praised the detailed engagement with neighbors on issues including flooding, 21 multimodal paths, and bicycle safety. She asked about the continuation budget figures and whether they 22 reflected a cumulative 7%increase over two years,given that the prior year's approximately 3%raise had 23 not been distributed and was being held in reserves. 24 Jonathan Scott responded that while no raises beyond step increases had been applied,the funds 25 had been partially consumed by increases in benefit costs, including state retirement and health insurance 26 costs. He said he could not recall the exact prior year continuation figure, but noted it was somewhere 27 around $3.2 million. He stated that if the district had to implement the full 3% salary increase today, it 28 would cost $2 million for the year. He clarified that in planning the current budget, both he and Rhonda 29 Rath had to do their due diligence and assume worst case scenario and plan the 4% on top of the 3% 30 increase. 31 Commissioner Bedford asked what NC House of Representatives' proposed budget includes. 32 Chair Hamilton invited, Brian Link, President of the CHCCS Association of Educators to the podium 33 to answer Commissioner Bedford's question. 34 Brian Link stated that there are three proposals currently outstanding: the House proposal 35 averages 8.7%, the Governor's latest proposal (his third) is at 11% across the board, and the Senate 36 proposal is closer to the House but still higher than the 3-4% being assumed by the financial officers. He 37 said if there's action, it's going to be larger than the conservative estimates that the district financial 38 officers have proposed. 39 Commissioner Portie-Ascott offered additional kudos to CHCCS for its AVID program and CTE 40 programming, referencing a tour she and Commissioner Carter had taken. She also shared that during a 41 Black History Month read-in at Carrboro Elementary, one student made sure she knew he did not want 42 his school closed. 43 Sarah Smylie, OCS School Board member, clarified that the money received by the districts in the 44 prior budget year— which fell short of the full 3% request — was being held in anticipation of a possible 45 retroactive state action, but noted that OCS already spent$700,000 of it on the mandated step increases, 46 and that inflationary increases and rising insurance costs had consumed additional portions. 47 48 52 1 2.Capital Update 2 a. County Manager's Recommended Capital Investment Plan 3 4 Kirk Vaughn, Orange County Budget Director, made the following presentation: 5 6 Slide#1 GRANGE COUNTY NORTH CAROLINA School Capital Investment Plan FY 2026-36 April 30, 2026 Joint Meeting 7 8 9 Slide#2 What has changed from prior School CIPs Adoption of the School Capital Funding Policy(Page 168)&Major Project Planning Addendum (Page 172). - School CIP has been reorganized into three sections(Major Projects,High Priority Needs,Other Capital Uses) - All parties have also signed CORE Team Interlocal Agreement,which will provide updates to Board on construction progress. Inclusion of Major Project plans by both school districts, with county staff assisted sequencing. Phasing in of Pay-Go funds to assist Major Project funding -$3.5 M in FY 27, $6.5 M in FY 28, full $10 M in FY 29. Slight inflation to$94.8 M over 10-year plan. ORANGE COUNTY 2 NORTH CAROLINA 10 11 Kirk Vaughn described the CIP as organized into three sections: major projects (new builds), high 12 priority needs for existing facilities,and other capital uses(less restricted funding). He noted that in recent 13 years, the CIP format was changed based on new policies from the Board of Commissioners around 53 1 funding and expectations for major project planning. He also noted that all parties have signed a Core 2 Team Interlocal Agreement, providing updates to each representative organization on construction and 3 design progress for major projects. He said the recommended budget includes a Pay-Go phase-in of$3.5 4 million in the coming year, $6.5 million in the following year, and then $10 million per year by fiscal year 5 2029, generating approximately$94.8 million over 10 years due to slight inflation. 6 7 Slide#3 Woolpert Report to Current CIP Plan • Back in 2023, Woolpert did a systematic review of both school districts; both the condition and the educational adequacy of the facilities. Woolpert also made recommendations for replacements and renovations of facilities over multiple bonds, requiring more funds than the county could afford. The recommendations assumed each facility would be replaced or renovated over time,and enrollment was flat—no closures for decreased enrollment. The County funding policy requires schools use the limited bond funds to replace old buildings and improve the educational adequacy of the district. So long as the projects are in line with that requirement, the county only reflects the school replacements as requested by the district. The County's CIP can be amended to change which schools are being replaced each year at school district request- ORANGE 3 OOCA OUNTY NA 8 9 Kirk Vaughn explained that the Woolpert Report had assessed the condition and educational 10 adequacy of both school districts'facilities and made recommendations for replacements and renovations 11 across multiple bonds requiring more funding than the Board of Commissioners believed the county could 12 afford. He noted that those recommendations assumed flat enrollment and did not factor in school 13 closures. He said the county funding policy requires major projects to replace old buildings and improve 14 educational adequacy, but does not dictate which schools are selected. He said the county reflects only 15 what the school boards have approved, and amendments can be made during the year. 16 17 18 19 20 21 22 23 24 25 26 27 54 1 5lide#4 Major Projects — Projects and Sequencing Carrboro Design Construction Chapel Hill-Elementary Carrboro Estes Hills Design Construction City Schools Elementary Frank Porter p.133-135 Graham Design Construction Close Out Elementary Orange New Elementary Design Construction County School Schools Orange Middle Pre-Design Renovation Scope Design Construction Close Out 147-48 - OCS may not be able to fund third major project due to increased cost of Orange Middle School County used the following rules to sequence these plans - Bonds must be borrowed within 7 years of referendum-FY 2031. May ask for 3-year extension with LGC. Once borrowed,funds must be drawn down for actual expenses within 3 years. Funds are allocated between the districts fairly ORANGE COUNTY 4 NORTH CAROLINA 2 3 Kirk Vaughn presented the sequencing of projects by district, explaining that the county 4 attempted to borrow within the first seven years of the referendum, noting there is a possibility of a three- 5 year extension with the Local Government Commission. He explained that once funds are borrowed,they 6 must be drawn down with actual expenses within three years,and that the county tried to ensure projects 7 were fairly allocated between the two districts so neither had to wait disproportionately. 8 9 5lide#5 Major Projects — Project Costs and Funding Source • Major Projects are funded using a combination of Pay-Go and Bond Funds CHCCS Projects Bond Funds Pay-Go Total Funds OCS Projects Bond Funds Pay-Go Total Funds Funds Funds Carrboro Elementary Elementary $53,000,000 $0 $53,000,000 Replacement $54,500,000 $2,500,000 $57,000,000 Estes Hills Elementary Orange Middle $59,510,937 $3,319,063 $62,830,000 Renovation $67,700,000 $12,300,000 $80,000,000 Frank Porter Graham $61,189,063 $8,952,237 $70,141,300 Contingency+HPN $1,000,()0() $38,482,699 $39,482,699 Contingency+HPN $3,100,000 $19,246,001 $22,346 001 Total $174,700,000 $50,753,999 $225,453,999 Total $125,300,000 $34,046,001 $159,346,001 ORANGE COUNTY 5 NORTH CAROLINA 10 11 55 1 slide#6 Major Projects — Project Costs and Funding Source • 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 Mlyear project. 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 Deeds ©RANGE COUNTY 6 NC>RTI-r CAROLINA 2 3 Kirk Vaughn described how Pay-Go funds support the bond program by absorbing soft costs like 4 design and project management, and noted that without Pay-Go,the current set of major projects would 5 not be possible. 6 7 slide#7 Major Projects — Pay-Go Phase-in To spread out tax burden,the Manager's Recommended CIP splits Pay-Go introduction into three steps,so no increase is larger than 1 cent on the tax rate. Last year's CIP had incremental increases to offset recommended phase-in, so total increases by$240k years 5-9. Not increased in year 10 pending discussion Use of Pay-Go By Project Year 1 Year2 Year3 Year4 Year 5 Year6 Year7 YearEl Yearg r Ten i 212 t 2029-30 rt r- 1 1 t2035-36 Year Total CS Major Projects Z500.00C 500.000 4,000.00 5.468.70. 2 331.3CC 14,500,0 N.L.Stanback-HVAC Replacement 2,180,937 2,180,93 CS-Remaining Band and Pay-Gc 2,376,816 2,000,00C 569,51E 3.028,78f 3,007.947 6,060rOOC 17,066,064 rojects HCCS Major Prejects 3.319,063 3.771,30 4 280,93 900,00C 12.271,3DO HCCS-Remaining Bond and Pay-Go 6,121,164 5,000,00 567,76 6,250,48E 6,931,21 7,192,053 4,120,00. 36,462,69 rojects ajorSchool consImctionProject 1,660,00 f.000.00 1,60%00 1,000,90 7,00000 1,000,OQ 9,000,00 1,000,00 7,00©-Lb 1,000,00 70,000.0 anagement - otal 3,500,00 6,500,000 10,000,06 10,000,06 10,240,00 10,48G,000 10,720,000 10,960,000 11,200,00 11,200,00 94,900,00 ORANGE COUNTY 7 NC7RTI S CA Rl7I.INA 8 9 Kirk Vaughn noted that the goal of the recommended Pay-Go phase-in is that there's no increase 10 larger than a cent on the tax rate in any given year. He said a phase-in was applied to years five through 11 nine of the plan but not to year 10, pending further discussion. 12 56 1 Slide#8 Major Projects — Board Options to adjust projects Current Pay-Go Phase-in structure sufficient for current district bond plans with small margins. Reducing or delaying implementation of pay-go from this amount would require asking school districts to submit new bond plans with smaller scopes. Instead of reducing Pay-Go,the County can lower upcoming tax rate increases and the cumulative tax increase by pushing back the upcoming school projects. - Inflationary cost increases from delaying construction projects would reduce the amount of pay-go funds available for High Priority Needs. s ORANGE COUNTY 2 3 Kirk Vaughn observed that the current Pay-Go phase-in is just sufficient for the district bond plans 4 with small margins. He explained that if the board chose to reduce or delay Pay-Go implementation, it 5 would likely require returning to the school districts and asking for revised plans with a smaller budget. 6 Alternatively, spreading projects out into the seven-to-ten-year window could lower near-term and 7 cumulative tax rate increases but would reduce the amount of Pay-Go available for maintenance of 8 remaining school buildings. 9 10 Slide#9 High Priority Needs High Priority Needs—$6.4 million • Appropriated by Project • Specific Projects Enumerated Annually for Flexibility • Financed Using Annual Debt,Lottery Proceeds,and Remaining Bond or Supplemental Pay-Go High Priority Needs Recommended East Chapel Hill High Roof Replacement $3.0 million Carrboro High Roof Replacement $1.2 million Mary Scroggs Elementary Trailer HVAC Replacement $56,400 AL Stanback Middle HVAC Replacement-Paired with$5.28 M Major $2.1 million Project Funding in FY 2028 based or$7.4 M total project cost TOTAL $6.4 million ORANGE COUNTY 9 NOR"I'H CARCf LINA 11 57 1 Kirk Vaughn presented the high priority needs bucket of$6.4 million across four projects, noting 2 that the county uses borrowing, lottery proceeds,and remaining bond and Pay-Go funds to support these 3 needs. 4 5 6 Slide#10 Other Capital Uses Other Capital Uses—$6.5 million Chapel Mill Carrboro City Schools-$3.9 million Orange County Schools-$2.6 million • Appropriated by Category • Financed Using Recurring Capital and Article 46 Sales Tax Proceeds - Rental Space - Technology Plans - Equipment Replacement - Lifecycle Capital Replacements ORANGE COUNTY 10 NORTH CAROLINA 7 8 Kirk Vaughn said other capital uses are covered using recurring Pay-Go and Article 46 funds, 9 mainly for technology equipment replacement. 10 11 Slide#11 Questions? ORANGE COUNTY NORTH CAROLINA 12 58 1 Vice-Chair Fowler asked Kirk Vaughn to clarify whether the current Pay-Go plan would be 2 sufficient as presented in the recommended CIP. 3 Kirk Vaughn said yes. 4 Commissioner McKee asked how closing schools would impact the need for the bond funds. 5 Kirk Vaughn said the bond money is being used for new schools and renovations. 6 Commissioner McKee said that total county borrowing over the next 10 years is approximately 7 $900 million, with schools representing about $300 million of that, and that debt service costs are 8 projected to reach 19%of expenditures. He asked how the county and school systems planned to contain 9 costs given that the $300 million bond and $100 million in Pay-Go may not be sufficient to complete all 10 the originally planned projects. He also asked what would happen if the capital plan began to fold up. 11 Chair Hamilton responded by noting that it was always understood when the bond was placed 12 before voters that inflation could mean not all projects would be completed within the $300 million. She 13 noted that OCS had already determined they could only complete two of their originally planned three 14 projects due to cost increases. She acknowledged Commissioner McKee's broader point about the 15 county's total capital obligations, and said it is an issue for the commissioners to address collectively. 16 Commissioner McKee expressed concern about the burden of tax increases on lower-income 17 residents, referencing six pages of tax delinquency listings in local papers during previous high-tax- 18 increase periods of the 1980s and 1990s. He acknowledged that the bond was passed with full 19 transparency about tax implications but said it does not help those people who are wondering how they 20 are going to pay their tax bill. 21 Chair Hamilton acknowledged that the information the Board has received indicates there needs 22 to be a tax increase, and that that will be a burden on residents. She agreed the Board has work to do to 23 address those two realities. 24 Commissioner McKee said the school systems' decisions will impact the Board's ability to keep 25 tax increases low. 26 Rani Dasi noted concern and wanted to add proper context to the conversation.She said that the 27 schools are being looked at as the primary driver, but there are $600 million in other county costs in the 28 CIP. She said that the voters came to the ballot understanding that the schools had significant unmet 29 needs that had existed for decades, and they agreed to absorb a tax increase to make sure the schools 30 are in proper condition. She emphasized that school facilities contribute to economic development, that 31 many families receive healthcare services in schools, and that children eat in schools.She said schools are 32 hugely valuable community facilities and didn't want that to get lost in the conversation. 33 Chair Hamilton raised the possibility of delaying a second project, in the context of smoothing the 34 tax rate, and asked whether the school boards would be open to that conversation. 35 Riza Jenkins said that the districts have been planning with the 10-year timeline in mind and that 36 any shifts in the schedule would mean more money. 37 Commissioner Bedford shared that when looking at CIP increases, moving projects out one or two 38 years helped smooth the tax increase. She said the bigger concern long term is whether the Board will 39 stick with the plan for the Pay-Go. 40 Will Atherton, OCS School Board member, stated clearly that OCS has had no discussions about 41 closing schools at this point, and did not want to cause panic in the community over that point. He 42 emphasized that while OCS would be willing to engage in that conversation, they do not want the cost 43 pressures to be placed solely on the school systems. He reiterated that OCS would work together with the 44 county but wanted to do with clear understanding regarding the financial impacts. He also noted that the 45 CIP is a 10-year plan, but the commissioners adopt it one year at a time, meaning the Board would revisit 46 all of this annually. 59 1 Riza Jenkins said she wanted the county to balance fiscal reality while considering the need to get 2 students and staff into adequate school buildings as quickly as possible. She acknowledged the point 3 about constituents'financial hardship, saying that both things are true at the same time. 4 Commissioner McKee said he will be analyzing county projects just as much. 5 Commissioner Greene said,to Riza Jenkin's point,the Woolpert Report identified about$1 billion 6 worth of capital needs for the schools. After a lot of discussion, the Board settled on $300 million hoping 7 that the voters would approve that, which they did by a wide margin. She said she doesn't think they can 8 be thinking about some of that$300 million not being spent because of school closures, because the need 9 is much larger than $300 million. 10 Sarah Smylie said these projects are almost all new schools and that pushing projects out 11 decreases the value of the projects and value the community gets for their money. 12 Bonnie Hauser asked how much flexibility there really is with Pay-Go.She asked if all Pay-Go must 13 go towards capital expenses. 14 Travis Myren confirmed that there is no legal restriction between a Pay-Go dollar and an operating 15 dollar. 16 Bonnie Hauser noted that when Pay-Go was reduced the prior year, it did not benefit the schools' 17 operating budgets but rather prevented a larger tax increase. 18 Rani Dasi asked how this decision about pushing out projects will be made. 19 Chair Hamilton described the budget adoption process for the benefit of all participants. She 20 noted that the County Manager would present the recommended operating budget on May 5th; public 21 hearings are scheduled for May 12th and May 28th; budget work sessions are scheduled for May 14th, 22 21st, and 26th, and June 4th; and the budget adoption is expected at the June 16th meeting, with the 23 prior meeting serving to lock down the intent to adopt. She also noted that the public cannot speak at 24 work sessions, but that email is always available, and public hearings are the designated forum for public 25 comment. 26 George Griffin expressed concern about the pattern of revisiting the Pay-Go component. He 27 recalled that when the Pay-Go amount was reduced in the prior year, it was a bait-and-switch situation. 28 He said the school boards were selling a $300 million bond issue to build new schools to the community, 29 and they voted 65%in favor of it, and then out of the gate,the amount was reduced. He said he had been 30 assured at that time that the money would simply be pushed to year 10. He said it caught him and likely 31 some others by surprise that less than 12 months later, the school boards were again being asked if they 32 could back off on timing. 33 Chair Hamilton acknowledged his concern directly, saying she understood how it can feel like the 34 situation keeps changing. She said it is not intentional but reflects the fiscal realities and how the Board is 35 trying to manage the many needs. She said the intent of raising the subject at the joint meeting was to be 36 transparent early in the process, noting that there is only about a month for the Board to figure out how 37 to fund the whole county. She noted the pressures that all parties face. 38 Commissioner Bedford shared her own view, saying she believes Pay-Go is at risk, and that based 39 on increasing construction costs and the current financial environment, she does not anticipate three 40 major school construction projects ultimately being completed. She acknowledged this could change in 41 three or four years but pointed to the costs of new federal and state mandates, including SNAP 42 administration and Medicaid re-enrollment, as additional pressures on the county budget. 43 Bonnie Hauser acknowledged the Board is in a difficult spot, but said that OCS certified 44 supplements have not increased in 10 years. She said the capital discussion, while important, felt a little 45 limited and called on commissioners to hear the operating budget requests with equal compassion. 46 Commissioner Portie-Ascott asked staff to review the dates for budget information sessions. 47 Wil Glenn, Orange County Community Relations Director, announced the dates for the budget 48 information sessions on May 14th, May 20th, and May 21St 60 1 Vickie Feaster-Fornville, CHCCS School Board Member, offered broader remarks about the 2 interconnected challenges facing Orange County. She said the county must come together and figure out 3 a way to do more with less so that the people who have not had the less, who are the less than, can feel 4 that they are respected,they are seen,and they are given an opportunity to live in the county that's theirs. 5 She noted that the displacement of long-time residents, particularly those who have been in the county 6 for generations, is not a new problem and that many students have been lost not to charter schools but 7 because their families could no longer afford to live in Orange County. She said, if they don't look at the 8 housing epidemic and realize the same students served in the school districts are the same children that 9 are being served by social services, then they are missing the mark. 10 Chair Hamilton offered closing remarks with a summary of the presentations and discussion. She 11 returned to Rodney Trice's quote he shared earlier in the meeting. She committed to communicating the 12 Board's thinking throughout the upcoming budget process and invited school board members and the 13 public to attend, listen, and engage over the following month. 14 Rani Dasi expressed appreciation for the commissioners and noted that the choices before them 15 are not easy. She said the difficult conversation is occurring largely because the state is not doing what 16 it's supposed to do. She invited everyone listening to attend Kids Over Corporation Advocacy Day in 17 Raleigh the following day from 11 AM to 2 PM. She also publicly recognized Rodney Trice for his steady 18 leadership, noting that he has spent many hours going to Raleigh and talking to the House Oversight 19 Committee about the books in school libraries.She said he is a hero for his temperament, knowledge,and 20 leadership under pressure. 21 22 Adjournment 23 24 Being that there was no further business,the meeting was adjourned at 9:24 p.m. 25 26 VOTE: UNANIMOUS 27 Jean Hamilton, Chair 28 29 Recorded by Tara May, Deputy Clerk to the Board 30 31 Submitted for approval by Laura Jensen, Clerk to the Board