P-0290 - Summary of Capital Policy 12-07-1996

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ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: April 10, 2007 Action Agenda Item No. (0 _ b SUBJECT: County Capital Funding Policy Amendments DEPARTMENT: Budget PUBLIC HEARING: (Y/N) I No ATTACHMENT(S): INFORMATION CONTACT: Donna Coffey, (919) 245-2151 ............ ............................... PURPOSE: To amend the County's Capital Funding Policy to include use of the anticipated NC Education .Lottery proceeds, intent for funding for recurring capital and presentation of future Capital Investment Plans. BACKGROUND: Over the last few months, staff has provided to the Board a number of items of interest that may potentially affect the development of the upcoming 2007-17 County Capital, Investment [CI P) plan, the 2007-08 Annual Operating Budget, or future years' budgets. Examples of recent updates include discussions related to the anticipated decrease in projected revenues from the North Carolina Education Lottery along with the General Assembly's interest in providing local property tax assistance to taxpayers throughout the State. Both of those items would have negative impacts on the County's budget. Lottery Proceeds At the most recent work session on March 20, 2007, the County Manager led the Board through the County's current capital funding formula and outlined how staff determines annual pay-as- you-go revenues for the County and each school district. Absent from the current policy are the County's anticipated receipt of future NC Education Lottery proceeds. Staff has advised the Board, on a number of occasions this year, that it is imminent that the County's share of lottery proceeds will fall short of the original budgeted amount of $2.4 million because the State over estimated ticket sales. Based on the most recent projections from the State, the County can expect to receive about $2 million this fiscal year — around $400,000 short of budget. It is important to note that with receipts of only two quarters-so far this year, the State could possibly adjust its year-end projections again before June 30, 2007.- Given the County's experience with lottery proceeds this year, staff has recommended that the Board consider budgeting future proceeds "in arrears" — meaning funds would be budgeted in the year after the State distributes them. For example, lottery proceeds distributed to the County during the upcoming 2007-08 fiscal year would be budgeted the following fiscal year, 2008-09.