Agenda - 05-11-2010 - 2 - Laserfiche WebLink

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CURRENT SITUTATION: The Board of County Commissioners established a School Capital Reserve Fund many years ago. This Capital Reserve Fund has been used successfully for identifying and reserving funds for future School Capital Projects. Orange County has several Capital Projects, in the County Capital Fund, clearly established to serve as a reserve. These projects exist only to act as a reserve for future projects and funds are not expended from the project, but rather transferred to other projects when needed. These projects better fit the definition of a Capital Reserve Fund rather than a Capital Project Fund. In a Capital Reserve Fund the funds can be identified and reserved for specific purposes, but the BOCC can appropriate these funds for individual projects approved by the Board. FINANCIAL IMPACT: The establishment of a Capital Reserve Fund will allow the BOCC to reserve funds for future County Capital Projects but will not have an immediate impact on the County's financial condition. RECOMMENDATION(S): The Manager recommends the Board establish a County Capital Reserve Fund by approving the attached resolution. ACTIONS REQUESTED 4. Review and Close completed and active County Capital Projects. BACKGROUND: As of June 30, 2009, the Comprehensive Annual Financial Report for Orange County had 84 active capital projects in the County Capital Project Fund. Over the past eight years, few if any capital projects were closed even though many have been completed for several years. The purpose of a Capital Project Ordinance is to fund the acquisition or construction of a capital asset. A Capital Asset is defined by Governmental Accounting, Auditing, and Financial Reporting (GAAFR) as: land, improvements to land, easements, work of art, and historical treasures, infrastructure and all other tangible or intangible assets that are used in the operations and that have initial useful lives extending beyond a single reporting period. As stated in North Carolina General Statute 159-13.2 (c) Project Ordinances, "A project ordinance shall clearly identify the project and authorize its undertaking, identify the revenues that will finance the project, and make the appropriations necessary to complete the project." CURRENT SITUTATION: Orange County has established two types of projects in the County Capital Projects Fund. The first type of project has been established in whole or in part to construct or acquire a capital asset. The second type of project has been established to act as a reserve to fund other projects. Both types of projects have rarely been closed even after the scope of the original project is complete. Attachment 2 lists twenty-six County Capital projects that are still active even though they have either been substantially completed or never had any activity. Closing these projects would provide $245,560 in capital resources that can be used for other capital priorities. Attachment 3 lists twelve active County Capital Projects with available balances, that have had limited activity over the past few years and could be closed as of June 30, 2010. This action would provide $737,868 in capital resources that can be used for other capital priorities.