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HomeMy WebLinkAboutAgenda - 09-25-2008AGENDA Orange County Board of Commissioners Orange County Board Of Education Chapel Hill-Carrboro Board of Education WORK SESSION September 25, 2008 7:30 p.m. Southern Human Services Center 2501 Homestead Road, Chapel Hill 7:30 - 8:20 1. Preliminary FY 2009-10 General Fund Budget Outlook 8:20 - 9:00 2. Education Facilities Impact Fee Reports 9:00 - 9:25 3. Draft School Districts Local Current Expense Fund Balance Policy 9:25 - 9:50 4. Municipal Requirements Impacting Schools' Capital Projects including Cost Implications 9:50 - 10:00 5. Discussion of Possible Topics for Collaboration Work Group ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: September 25, 2008 SUBJECT: Orange County/Chapel Hill Carrboro City Schools/Orange County Schools Joint Meetin DEPARTMENT: County Manager/Budget/ PUBLIC HEARING: (Y/N) No CHCCS/OCS ATTACHMENT(S): Attachment 1-a - Preliminary FY 2009-10 General Fund Budget Outlook Attachment 1-b -CHCCS Summary of Legislative Update Meetinq Attachment 2-a -School Construction Impact Fees -Chapel Hill Carrboro City Schools Attachments 2-b -School Construction Impact Fees -Orange County Schools Attachment 2-c - 9/8/08 Letter from CHCCS Board Chair Regarding Impact Fees Attachment 3 -Draft School Districts Local Current Expense Fund Balance Policy Attachment 4 -CHCCS New Schools And Related Infrastructure Improvements INFORMATION CONTACT: Laura Blackmon, (919) 245-2300 Donna Coffey, (919) 245-2151 Neil Pedersen, (919) 967-8211 Patrick Rhodes, (919) 732-8126 PURPOSE: To discuss various issues with policy and/or financial implications that are of interest to the Orange County Commissioners, Chapel Hill Carrboro City Schools Board of Education and/or Orange County Schools Board of Education. BACKGROUND: 1. Preliminary FY 2009-10 General Fund Budget Outlook While it is early in the fiscal year, it is not too early to begin sharing fiscal needs that will potentially affect the County's upcoming FY 2009-10 annual operating budget. Tonight's work session offers an opportunity for the County and both school districts to discuss preliminary budget drivers for the upcoming fiscal year. During the County's September 9, 2008 work session, staff shared a preliminary financial outlook with the Board of County Commissioners. Attachment 1-a of this agenda abstract 2 is intended to offer a preliminary outlook of budget drivers likely to influence the FY 2009- 10budget. Highlights of the preliminary outlook include: Projections for property taxes assume 3% natural growth in real property. Orange County is nearing the completion of its property revaluation process. Revaluation is a systematic, in-depth process of reappraising all the real property in the county to the current market value and is necessary in order to maintain equitable and uniform property values among property owners throughout the county. North Carolina General Statutes require counties to revalue real property at least every eight years. The Orange County Board of Commissioners has chosen to authorize revaluations every four years. The next revaluation of real property will become effective on January 1, 2009. A direct result of revaluation is that the County's tax rate wilt be adjusted to be "revenue neutral". Revenue neutral is defined as the rate estimated to produce revenue for the next fiscal year equal to the revenue that would have been produced for the next fiscal year by the can-ent tax rate if no reappraisal had occurred. Orange County's current tax rate is 99.8 cents per $100 of valuation, and it is much too early in the budget planning process to anticipate what the revenue neutral rate will be. • Fiscal year 2009-10 sees the final year of the three-year phase in of Medicaid Relief/Sales Tax Swap legislation approved by the General Assembly in August 2007. The financial impact on Orange County includes a reduction of about $4.9 million in safes tax revenues with an offsetting expenditure reduction in Medicaid expenditures. • Over the last two-to-three years, the County has embarked on a number of major capital construction projects and long-term leases including schools, parks, libraries and other County and partner facilities. Given the County's limited pay-as-you-go capital funding, it has been necessary to debt finance these projects. It wilt be necessary, in the upcoming fiscal year, to begin repaying the borrowed monies as well as begin funding day-to-day operating costs such as utilities and leases. The projected increase in debt service and annual operating costs associated with new facilities totals $5.25 million. During fiscal year 2006-07, Commissioners approved an employee pay and classification study. As the Board will hear later tonight, the consultant is nearing the completion of the study. Last spring, the consultant indicated a good benchmark for study implementation cost projections would be 10 percent of total salaries. The number of students attending school in the County's two school districts has increased, on average, 385 students each year. The anticipated FY 2009-10 fiscal impact of 385 students at the current per pupil allocation of $3,200 totals $1,232,000. It is too early to predict the tax rate impact of the preliminary budget drivers. However, it is safe to say that the combination of anticipated revenue reductions and expenditure increases will have an upward impact on the revenue neutral tax rate. Members of the Chapel Hill Carrboro City Schools Board of Education received legislative updates during a meeting they attended late last week. Attachment 1-b of this agenda abstract summarizes information they received at that meeting. 2. Education Facilities Impact Fee Reports In May 2007, Orange County contracted with TischlerBise, Inc. to analyze and update the County's adopted student generation rates and education facilities impact fee levels for both school districts. TischlerBise completed its work in late 2007 and all Boards have received copies of the draft reports. By the time staff had completed its initial review of the draft, the County and the school districts were well into the time-intensive budget process that occurs each Spring and concludes at the end of June, so the reports were delayed for consideration until this time. The draft reports were sent to the School Districts for their review and comment on July 22, 2008 and comments were requested by August 22, 2008. A letter was received from Chapel Hill -Carrboro City Schools on September 8, 2008 (see Attachment 2-c). Comments have not yet been received but are expected from Orange County Schools. The draft reports were also sent to the BOCC and to the Planning Directors of Chapel Hill, Carrboro, Hillsborough, and Mebane for their information on July 22. Student generation rates have increased in both school districts from the rates calculated in 2001. The Adopted (2001) student generation rates are as follows: Ado ted Student Generati on Rates 2001 Cha el H ill-Carrboro School s Oran a Coun Schools Elem. Middle Hi h All Grades Elem. Middle Hi h All Grades Single- Famil 0.168 0.095 0.123 0.386 0.150 0.075 0.084 0.309 Other 0.094 0.042 0.043 0.179 0.084 0.033 0.030 0.147 All Housing T es 0.134 0.070 0.086 0.290 0.140 0.068 0.076 0.284 The analysis for the 2007 draft report found the student generation rates in the following table. Some data was aggregated slightly differently for the school districts since the housing types found in each district vary (i.e., Single Family Attached /Multifamily was combined for OCS since there is minimal single family attached housing in the OCS district). 2007 Stud Student Gener ation Rates Cha el Hill-Carrboro Schools Oran a Coun Schools Elem. Middle Hi h All Grades Elem. Middle Hi h All Grades Single-Family 263 0 0.143 0.197 0.603 0.168 0.090 0.126 0.384 Detached . Single-Family 158 0 0.077 0.115 0.350 - - - - Attached . Multifamil 0.038 0.015 0.017 0.070 - - - - Single-Family Attached / - - - - 0.066 0.022 0.034 0.122 Multifamil Manufactured 141 0 0.066 0.061 0.268 0.096 0.041 0.049 0.186 Homes . All Housing 0.149 0.078 0.105 0.332 0.145 0.074 0.102 0.321 T es Impact fees were last updated in 2001 and were adopted at the following levels: Adopted School Impact Fees (2001) [NOTE: Fee levels were adopted at 60% of the Maximum Supportable Impact Fee (MSIF) for CHCCS and 56% of the MSIF for OCS Cha el Hill-Carrboro Schools Oran a Coun Schools Single-Family & Multi-wide Manufactured Homes $4,407 $3,000 Multi-Family & Single-wide Manufactured Homes $1,979 $1,420 Since 1995, Orange County has offered an impact fee reimbursement program, funded by the County's General Fund, for school impact fees paid on affordable housing units. From FY02-03 through FY07-08, $196,698 in collected impact fees was reimbursed for the 59 affordable housing units constructed in that time period. Since 2001, construction costs have risen dramatically and land prices have appreciated. The 2007 TischlerBise study has found the following Maximum Supportable Impact Fee (MSIF) for each district: 2007 Stud Maximum Su ortable Im act Fees Cha el Hill-Carrboro Schools Oran a Coun Schools Sin le-Famil Detached $19,039 $8,372 Sin le-Famil Attached $11,016 - Multifamil $2,144 Single-Family Attached / Multifamil - $2,905 Manufactured Homes $8,232 $4,463 Updating the student generation rates to the levels determined by this recent study would affect the CAPS (Certificate of Adequate Public Schools) system that is part of the SAPFO (Schools Adequate Public Facilities Ordinance) process. Per Section 1.d of the SAPFO MOUs, the BOCC "may change the projected student membership growth rate, the methodology used to determine this rate, or the student generation rate if the Board concludes that such a change is necessary to predict growth more accurately. Before making any such change, the Board shall receive and consider the recommendation of a staff committee consisting of the planning directors of the Town(s) and the County and a representative of the School District appointed by the Superintendent." (Staff note: this is the SAPFOTAC [Schools Adequate Public Facilities Ordinance technical Advisory Committee]). Additionally, the BOCC "shall provide an opportunity for those governing Boards to comment on the recommendation." Finally, the BOCC shall inform the other parties to the MOUs "prior to February 1St in any year in which such change is intended to become effective what change was made and why it was necessary." Updating the Education Facilities Impact Fee Ordinance would require that the BOCC hold a public hearing to provide interested parties an opportunity to be heard. After the public hearing, the BOCC can direct finalization of the draft reports. The current contract with TischlerBise, Inc. can require the Consultant to attend two public meetings (one of which is the public hearing) to explain the analysis and conclusions contained in the reports. If additional meetings beyond these two are requested of the Consultant, TischlerBise has indicated the charge would be $2,500 per meeting. Steps in Process The following progression illustrates the potential steps in the process of updating the Educational Facilities Impact Fee Ordinance and the student generation rates: July 22, 2008 Draft reports sent to School Systems, BOCC, and municipal Planning Directors. August 22, 2008 Date stated in transmittal letter for submittal of comments from School Districts CHCCS comments received, OCS comments ex ected . September 16, 2008- Draft reports on BOCC agenda for formal receipt of reports and direction. Dela ed due to time constraints September 25, 2008 Educational Facilities Impact Fees scheduled to be a topic for discussion at the Joint BOCC/School Board meetin . October 7, 2008 Draft reports on BOCC agenda for formal receipt of reports and direction. October 21, 2008 Public Hearing on Draft Reports (consultant attends to present reports and answer uestions . November 6, 2008 BOCC discusses course of action for updates, directs finalization of reports, and asks the SAPFOTAC to make a recommendation on the updated student generation rates in time for the steps required by the SAPFO MOU to occur prior to the February 1St deadline for changes sti ulated in the MOU. December 1, 2008 BOCC adopts updated impact fee levels (new fee levels effective Janua 1, 2009 . December 11, 2008 BOCC receives SAPFOTAC recommendation on student generation rates update and directs staff to send the recommendation to SAPFO artners for review and comment comments dues back mid-Janua Prior to February 1, BOCC adopts updated student generation rate and informs SAPFO 2009 artners of decision. Attachments 22=a and 22=b provide historical data regarding actual revenues generated by the impact fees. Attachment 22=c is a September 8, 2008 letter from CHCCS Board Chair Pam Hemminger regarding impact fees. Tonight's work session provides an opportunity for all boards to discuss the proposed fees and schedule. 3. Draft School Districts Local Current Expense Fund Balance Policy Members of the School Collaboration Work Group at their September 3, 2008 meeting reviewed a draft Orange County's. School Districts Local Current Expense Fund Balance Policy. Attachment 3 Draft School Districts Local Current Expense Fund Balance Policy, is a result of those staff discussions. 4. Municipal Requirements Impacting Schools' Capital Projects including Cost Implications During the September 3, 2008 School Collaboration Work Group, Board members requested information regarding municipal requirements affecting schools' capital projects. Attachment 4 of this agenda abstract contains information provided by the Chapel Hill Carrboro City Schools. 5. Discussion of Possible Topics for Collaboration Work Group At the September 3, 2008 meeting of the School Collaboration Work Group, members of the Group agreed to ask their colleagues during the September 25, 2008 joint meeting for possible future work group topics for discussion. Tonight's meeting allows an opportunity for that exchange. 6 FINANCIAL IMPACT: Financial impacts are either identified in the individual items listed above and or will be covered in discussions during tonight's meeting. Decisions that the school board and Commissioners will make at subsequent meetings are likely to have significant implications for future capital and operating budgets. RECOMMENDATION (S): The Manager recommends that the boards discuss the issues noted and provide direction to staff, as appropriate. A~~~r"~ ~..- a osiosi2ooa FY 2009-10 Preliminary General Fund Budget Outlook The list below is intended to give the Board a prelim/nary outlook of budget drivers that will potentially affect the County's fiscal year 2009-10 budget. Given the fact that it is very early in the budget planning process, the list is not intended to be all inclusive at this point Staff plans to update the Board on a regular basis between now and the time that the Manager's fiscal year 2009-10 budget is presented to the Board in May 2009. 1 General Fund Revenue Assumptions, By Revenue Category d08~09 B $ Change p ~ u ro ction Pro Taxes 3 Assu Lions: No tax rate increase over revenue neutral rate $0 5 3% natural rowth in real ro $3,849,111 6 Total Property Taxes $128,303,689 $3,849,111 $132,152,799 les Taxes 8 Assum lions: 9 Decreases based on full implementation of Medicaid Relief/Sales ($4,892,224) Tax Sw 10 No increase assumed in consumer s ndin $0 11 Total Sales Taxes $18,857,310 ($4,892,224) $13,965,086 1 Inter ovemmental 13 Assum Lions: 1 No Chan es assumed 0 15 Total Intergovernmental $18,303,163 $0 $18,303,163 1 s Licenses & Permits 1 Assum lions: 18 No chap es assumed $0 19 Total Licenses & Permits $288,000 $0 $288,000 20 har es for Services 21 Assum lions: Loss of Chapel Hill Carrboro City Schools School Construction 22 Impact Fees related to decline in new housing starts experienced in ($660,000) Chapel Hill and Carrboro (Per County Capital Funding Policy, these revenues offset costs of school related debt service.) 23 Total Char es for Services 10859 803 660 000 10199 803 2 nvestment Earnin s 25 Assum lions: 2s No chan es assumed $0 2 Total Licenses & Permits 000 000 28 iscellaneous 2 Assum lions: 3o No chan es assumed $0 31 Total Miscellaneous 00 070 900 070 3 ransfers to Other Funds 33 Assum lions: 3 No chan es assumed $0 35 Total Transfers to Other Funds 653 545 653 545 36 ro reaaed Fund Balance 3 Assum lions: No appropriation in FY 2009-10; FY 2008-09 appropriation mainly 3s used to offset cost of recurring capital items, including vehicle and ($2,000,000) ui ment urchases, for Count de artments 3 Total ro riaaed Fund Balance 2000 000 2 000 000 4 Total Projected General Fund Revenues for FY 2009-10 $183,005,580 ($3,703,113) $179,302,466 Page 1 of 2 osiosi2oos FY 2009-10 Preliminary General Fund Budget Outlook The list below is intended to give the Board a prelfminary outlook of budget drivers that will potentially affect the County's fiscal year 2009-10 budget. Given the fact that it is very early in fhe budget planning process, the list is not intended to be all inclusive at this point. Staff plans to update the Board on a regular basis between now and the time that the Manager's fiscal year 2009-10 budget is presented to the Board in May 2009. 41 General Fund Expenditure Assumptions ~ 2008-09 $ Chan e 9 ~ ~~-10 ' Bud et Pro ection 4 otai FY 2008-09 General Fund Expenditures $183,005,580 43 Debt Service Increase associated with issuance of new debt 45 County Share $1,891,000 46 Schools Share $850,000 4 Education Allow for 385 new students funded at FY 2008-09 per pupil 48 allocation of $3,200 (385 is the average annual increase in actual $1,232,000 student membership between school years 2000-O1 and 2007-08) 49 Em to ee Pa & Benefits 5o Implementation of Classification Study (calculated ~a 10% of total $4 100 000 salaries , , Health and Dental Insurance Increases (including retiree health - 51 calculated L7a 15% annual increase beginning January 1, 2010) $500,000 5 nin New Facilities Preliminary staffing and operations! costs associated with opening 53 of new facilities. Examples include: Central Orange Senior Center, $2 500 000 Northern Park, Fairview Park, Library, Emergency Services Facility , , ~ Meadowlands, Hillsborough Commons and Office Building 5 Medicaid Reduction 5 In accordance with 2007 Medicaid Relief/Sales Tax L islation $5,239,550 5 5 58 Total Projected General Fund Expenditures for FY 2009-10 $183,005,580 $5,833,450 $188,839,030 5 Shortfall Between FY 2009-10 General Fund Revenues and FY 2009-10 General Fund Expenditures ($9,536,564) Page 2 of 2 A~ae~~' ~-b NCSHA ?.OQ9-?A!0 Legislative Agenda Sc6o®Y'fec6nology - Finea and Fuxfeitures In AugusE, 2008, the North Carolina Courts ruffed that the State owed the public schools x'147 million far fines and forfeitures co[Xected from January 1, 1996 to June 30, 2005. Under North Camlina's Canstitntiatt, alt !`u;s1s and forfeitures are to go to the public schools, The ruling furthrr' stipulates that these funds are to be used solely for school teclmo[agy. ADD LAN(IUAGE ABQUT THE NEED FOR SCHOOL TI:~CHNOLOGY FOR NC'S SCHOOLS. SO FAR NCSHA HA3 hFOT BEEN ABLE TO OBTAIN THIS 1]ATA FROM DpI. In order to comply with the ruling, new fiu~ds must be identified for school technology. School boards acmes North Carolina recognize that this is a substantial sum of money. NCSHA contirxues t4 be willing and ready to work out a payment schedule for these funds. NCSHA calls upon the General Assembly to work cooperatively to design and implement a payment schedule fox Were funds so that North Carolina's pttbiic school students are given the resources, far wl4uich they are entitled, and that they can tae educated to be globally conxpetitive in the GIs` century. Outer Fitredirtg Friorit~c Sales Tax Refund/Exemption Reinstating a sales tax refund or waving to a sales tax cxemptioa is one of NCSBA's top funding priorities. In 199$, the General Assembly granted local boards of education the authority to collect a sales tax refund, just as cities, counties, private schools and other entities were able to do, $eginrung with the 20fl6-0? fiscal year, school boards could only receive a refund for the local sales tax and were na longer entitled to a refund of the state sales lave. Thin resulted in a $33 million 5nancial hardship to North Carolina public school classrooms t>:roughoux the state. This amount has gra~wn to over $40 million. Additionally, this change lass forced many school boards to transfer ownership of school property during the constrttctian phase to the county comtnissianers in order to collect some of the refund. This creates a great deal of paperwork and needless legal expenses. School Constncction Notch Casolina's public schools face a need of over $9.7 billion for school construction Dues five years (DPI 12l18~2006}. Additionally, the average construction cost for schools increased in 20(Y! to $155.11 per square foot from $146.76 in 2006. NCSHA calls upon the State W assume more fin~cial responsibility and~provide tools tQ local govemmtnts to address this staggering need. First, and foremost, the State needs to ply on the ballot a statewide school bond referendum. that would provide a significant infusion of dollars for help atleviate the backlog of necds..Additionally the State should either pass a local. ~~. option sales tax specifically dedicated to school construction or a local option revenue dedicated to school canstructian. Dropout Prevention While the number of high school dropouts has not changed significantly aver the years in North Carolina, it has become increasingly more important for citizens to at least have a high school education to function in today's society. Over the last eight years the state has focused mast of its financial resources on the early years {More-at-Four) and on high school initiat3.ves (e.g. Learn and-Earn, Virtual High School). In the ftrture a more concentrated effort should be directed on additional resources in the early grades and in Huddle schools. ,Adding additional seat time, by either extettd the day and/or number of school days, starting in the early grades and then adding the same tune as that cohort of studenrts moves up the system, would both help continue the gains made by students in the More-at-Foeu program and make our students more competitive internationally. Replacing the funding for middle school vocational education classes would help make the curricutum more relevant for those students most at-risk of dropping out. Until significant progress has been made at the elementary and middle school level, NCSBA opposes increasing the mandatory attendance age from 16. Teacher Carripensatfort North Carolina continues to faca significant challenges in the recruitment aztd retention of teachers. Tn arde~c for teaching profession to bo attractive in North Carolina, it is critical that alI teachers receive adequate compensation. Beyond general increases in compensation, Forth Carolina needs to provide additional pay to attract teachers in critical needs areas and needs to consider individual performance based models. Scltod ,Board Fiscal AccouKtab,uTfty NCSBA supports making school boards fiscally accountable. Over ~0 percent of the local boards of education is the country do not rely upon another loco! government far local fiuading. North Garalina should pass legislation that would allow the communities where both the school baaxd and tho county commission agree to transfer fiscally accountability for public schools to the school board. This urould .snake local boards of education directly accountable to the public for all aspects of public education in their SGrVlce "eq'eR. Ackievement Gup NCSBA supports legislation, consistent with the guiding principals (see below}, that would help close the achievement gap for African American, Hispanic, Native American, economically disadvantaged, Iimited)rnglish prat'icient and disabled students. 2 School C`alendrer In 20Q~, the General Assembly passed legislation that took away the authority of local beards of education to make the best decision for their community and students cancerx-ing when the school year begins and ends. This change has had significant repercussions on how education is delivered to the Children of North Carolina. This legislation should be repealed. Qiut~af-State Scholarship Provision In Za05, the General Assembly approved language that would a11ow out=of-$tate scholarship students who attend one of the state supported universities to be classified as in-state status for both tuition aad the 1$ percent out-of-state cap. This change has taken Beats away from desezving North Carolina children and shifted North Carolina tax dollars to people that are npt from this state. This pro~visian should be repealed. Collet#ve Bargaining ;tiCSBA opposes any,legisiation that v~-ould lift the ban in North Caralinu on state and local governments from entering into collective bargaining a~,rcements with public employee lobar unions. O,peratron pf,School Bulldings NCSBA opposes any legislation that transfers school buildings to the country commission for any reason other than for financing (COPS, sales tax). A tranafcr of this responsibility would continue to blur the liaaes of authority botween county commissions and school boards. The placement and design of the schools js an integral component of program offerings and this responsibility must remain with the local. boards of education. Charter ~choois NCSBA opposes any expansiotl or lifting of the charter school cap, T'uftiran ~'ax Credits and Vouchers for ~dttcattan 1riCSBA opposes ~e use of public funds for educational vouchers and tuition tax credits including those fox special education cluidren. NCSBA. believes that i£' additional financial resources are going to be allacatcd for exlucatian it should be invested in improving the system that is available for all children not just a few, Gulitimg Principals During each legislative session there are always unanticipated bills introduced thAt affect public schools. The following are guiding principals that NCSBA will use to evaluate legislation that is introduced during the legislative session, • NCSBA apposes any legislation that would violate federal laws or the state constitution. • NCSBA opposes any legislation that would require school systems to expend additional financial resources without the state providing those necessary resources, AiCS$A also w1ll continue to advocate far funding for mandates that currently exist. • NCSBA opposes any legislation that attempts to diminish or take away local control az~d supports legislation that provides additional local control ~~d decision making. • The General Assembly should provide sufficient funds to guarantee that all fu~ading formulas are fully funded, NO'S' TO BE PI1BL1<Slf)FD Corporarl punishment NCSF3A opposes legislation banning the practice of corpora! punishmezit and believes local boards of education should make the decision on this issue that is best for their respective ooznmunity. Loccxl Bills NCSBA will take no position on a local bill that is contrary to one of NCSBA's positions or goading principals except for the transfer of responsibility of school buildings of the county commissioners. FT `1 $3,000,000 c ~° $2,500,000 ~a c. v $2,000,000 0 N O $1,500,000 .a V °' $1,000,000 0 v e~ a $500,000 $0 School Construction Impact Fee Chapel Hill Carrboro City Schools School Construction Impact '~ Fee Increase Effective June 972 25, 2001 ~ 851 628 571 3361 67 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 Fiscal Year (1) Building permit data provided by Towns of Chapel Hill and Carrboro Planning Departments 1,200 ~'. 1,000 t V 0 800 ~ ,~ ~~ ~ o '~ o 7 ~ 600 y v 'v E ~ x- 400 c~ _ v .~ m 200 ~ a 0 $1,400,000 ~ $1,200,000 c ' ;:.. C ~ R $1,000,000 v V c $800,000 ~ ~ OO a o . $600,000 ~ H m ~ ~_ o ~= ~ ~ $400,000 eo C «~ a $200,000 $0 School Construction Impact Fee Orange County Schools Does Not Reflect School Construction Impact Fees Collected on Behalf of City of Mebane 09/16/2008 654 71 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 Fiscal Year (1) Includes School Construction Impact Fees Collected for Certificates of Occupancy Issued by Orange County Planning Department. Does not inlcude School Construction Impact Fees collected on behalf of City of Mebane. (2) Certificates of Occupancy data provided by Orange County Planning Department. Impact Fee Increase I *620 Effective June 25, 2001 /1 700 600 .c 500 ~ N ~ ~ c c ,_ 400 ~ eca ~~ o ~ 300 .y°. v c~ ~ r ~ 200 ~ O eo a 100 0 +~- v- School Construction Impact Fees Orange County Schools $i,soo,ooo $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 09/16/2008 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 Fiscal Year ^ Collected by Orange County Planning for Certificates of Occupancy Issued Collected by Orange County Planning on Behalf of City of Mebane ,4~„~ ~-~ 1 1_ll~l_~~ o~ CITY SCHOOLS September 8, 2008 Barry Jacobs. Chair Boani of County Commissioners PO Box 8181 Hillsborough, NC 27278 Dear Commissioner Jacobs: RECFS':TED SEP b 9 2006 At its meeting on September 3, 2008, the Chapel Hill-Carrboro Boani of Education approved the following n~olution: Be ~ therefore, resolved that the Board of Education urges the On3nge County Board of Commissioners "to inkxease the school impact fees in order to provide a source of funding to construct new schools to keep pace with the district's growing student population and the escalating cost of construction. Be it further resolved that the Board of Education urges the Orange County Board of Commissioners to continue to reimburse the impact fee for newly constructed affordable housing. We look fonnrard to further discussion on this important topic at our joint meeting on September 25, 2008. Sincerely, Pamela S. Hemm'rnger, Chair Board of F-duration C: Laura Blackmon Neil Pedersen Llradn CeMSr. 750 S. llAerritt MN Road • fhaPel Hill. NC 27518-2878 • (91~ 96T-8211 • vrww.~.kl2.nc.us ANul«..I 3 Draft Presented at Joint Meeting of Board of County Commissioners and Boanis of Education on 09/25/08 School Districts Local Current Expense Fund Balance Policy Joint Policy Between Orange County Board of County Commissioners Chapel Hill Carrboro City Schools Board of Education Orange County Schools Board of Education 1. Guidelines The School Budget and Fiscal Control Act (SBFCA) establishes accounting, budgetary and fiscal control guidelines for School Systems. The SBFCA is codified in G.S. Chapter 115C, Article 31, beginning at G.S. 115C-422. This act parallels the statutes established for Local Government with a few exceptions. 2. Definitions 2.1.Total Fund Balance -The difference between a school system's total assets and its total liabilities at the end of the fiscal year. 2.2. Fund Balance Available for Appropriation -The sum of a school system's assets held in cash and investments minus the sum of the school system's liabilities and encumbrances at the end of the fiscal year as outlined in G.S. 115C-425 of the SBFCA. 2.3. Designated Fund Balance -The amount of the available fund balance that has been appropriated for the budget year through budgetary action of the School Board. 2.4. Undesignated Fund Balance -The difference between Fund Balance Available for Appropriation and Designated Fund Balance. 3. Policy 3.1. Fund Balance for Cash Flow Purposes -Each school district will make a good faith effort to maintain a level of undesignated fund balance that will ensure sufficient funds are available to address its cash flow needs. The following levels are to be maintained for cash flow purposes only: 3.1.1. Chapel Hill Carrboro City Schools - The targeted level of undesignated fund balance for cash flow purposes will be at a minimum of 5.5 percent of budgeted expenditures. 3.1.2. Orange County Schools -The targeted level of undesignated fund balance for cash flow purposes will be at a minimum of 3 percent of budgeted expenditures. Draft Presented at Joint Meeting of Board of County Commissioners and Boards of Education on 09/25/08 3.2. Accumulated Fund Balance Above Cash Flow Purposes - In the event that either school district accumulates more than the percentage amounts allowed for cash flow purposes, the respective Boards of Education will have a plan in place for spending the accumulated fund balance surplus for non- recurring purposes. The Board of Education will share that plan with the Board of County Commissioners 3.3. Fund Balance Appropriation Occurring Outside the Normal Annual Budgeting Process -Appropriation of fund balance is a budgetary action that rests with elected bodies of each school system. It is highly desired that fund balance appropriations be limited to non-recurring expenses. Both school districts have historically appropriated fund balance as a part of their normal budgeting process, and this practice will remain until additional revenue is available to eliminate the use of fund balance. The Board of Education should note and explain significant deviations in the normal budgetary appropriation as a part of the budget narrative accompanying the recommended and adopted budgets. If the Board of Education finds it necessary to appropriate fund balance, outside the normal annual budgeting process, the Board of Education shall highlight the appropriation in their next fiscal year's budget request. The County Commissioners are not obligated to increase local current expense in order to fund recurring. items for which the Board of Education appropriates fund balance outside of the normal budgeting process. 4. Undesignated Fund Balance -Undesignated fund balance may be allowed to accumulate above the cash flow percentages under certain circumstances. School Boards should have a detailed plan for future use of accumulated fund balance. Boards of Education are to use undesignated fund balance to address unforeseen events or opportunities. In these instances, it is the responsibility of the Board of Commissioners to work with the School Boards to address the extraordinary issues. 5. Extraordinary Emergency Needs -There may arise a time in the future when one or both school district(s) experience(s) an unforeseen extraordinary uninsured event that greatly compromises how the district(s) serve(s) children. In such instances, there may be a need for the school district(s) to use some or all of its fund balance. In such instances, the Board(s) of Education is(are) to take appropriate action to correct the problem, and following necessary budgetary action by the Board of County Commissioners, the County will reimburse the School Board(s) for the necessary expenditures. 6. Policy Review -The School/County Collaboration Work Group shall review this policy every 18 months to determine if changes to the policy are necessary. A{I~I,„~,+4 NEW SCHOOLS AND RELATED INFRASTRUCTURE IMPROVEMENTS Construction of new schools often includes work associated with road and utility improvements not directly associated with the building or located on the school property. This non-related work is expensive and can consume a major portion of the project budget. Some specific examples include: • When East Chapel Hill High School was built in 1996, Weaver Dairy Road was widened and paved, OWASA lines were improved and relocated, and electric lines were buried. Approximately $1,000,000 was spent for these improvements. • Smith Middle School was built on existing district owned property in 2001. Associated costs for improvements to Seawell School Road and High School Road exceeded $500,000. • In 2007, Carrboro High School opened. Included in this project were intersection improvements at Smith Level Road and the paving of Rock Haven Road. The cost for these improvements exceeded $750,000. Additionally, more than $400,000 was spent to extend Rock Haven Road and connect it with Tar Hill Road. • Morris Grove Elementary School opened in 2008. Eubanks Road improvements, installation of a roundabout and a section of a future connector road have been completed. Initial utility improvements at the intersection of Eubanks Road and Old 86 have also been finished. To date, the cost for these improvements is over $800,000. Interestingly, Scroggs and Rashkis Elementary Schools were built within new developments at Southern Village and Meadowmont. In both cases, offsite infrastructure work was not required as part of the school project. Instead, associated improvements were addressed by the developers. Storm water management costs are also required in every new school project. The most recent costs associated with the Morris Grove project exceeded $660,000. While storm water management costs are high, they are included in the project not only to meet regulatory requirements but also to comply with CHCCS High Performance Building Design Criteria Policy 9040.