Minutes 05-11-2010 - Laserfiche WebLink

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As stated in North Carolina General Statute 159-18 Capital Reserve Funds; "A local government may establish and maintain a capital reserve fund for any purposes for which it may issue debt. A capital reserve fund shall be established by resolution or ordinance of the governing board which shall state (i) the purpose for which the fund is created, (ii) the approximate periods of time during which the moneys are to be accumulated for each purpose, (iii) the approximate amounts to be accumulated for each purpose, and (iv) the sources from which moneys for each purpose will be derived." Michael Talbert said that the current situation is that the Board of County Commissioners established a School Capital Reserve Fund many years ago. And this Capital Reserve Fund has been used successfully for identifying and reserving funds for future School Capital Projects. Michael Talbert said that 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, and the BOCC can appropriate these funds for individual projects approved by the Board. Michael Talbert said that 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. Michael Talbert said the Manager's recommendation is for the Board to establish a County Capital Reserve Fund by approving the attached resolution. The money can be labeled as it goes in, but it does not get appropriated until the Board votes to do so. Commissioner Nelson asked if this reserve fund was different or the same as the one that the Board approved in June 2009 and Michael Talbert said that the one in June 2009 was never established and it is one and the same. Commissioner Nelson said that is not correct because the motion in June 2009 was to set up a specific fund for particular designated projects — renovations at older schools and the proposed southwest library. Frank Clifton said that a motion was made at the June 11, 2009 meeting, but no resolution was ever brought back. Commissioner Nelson said that he has asked for a resolution at least three times and it has never come back. Frank Clifton said that the last time Commissioner Nelson asked him about it, the County had not sold any property yet and there was no resolution on file. The resolution is here now. Commissioner Nelson said that this is not the same as the motion that was made on June 11, 2009. He said that he wanted to tag the money for the reasons stated. Frank Clifton said that the Board can change the motions of a previous board. The money can be tagged so that there can be an accounting of the money. Some future Board can redirect the money or put additional money with it. Commissioner Nelson asked to bring this proposed resolution back rewritten and for it to reflect the motion from June 2009. Michael Talbert said that this capital reserve fund can be used for anything and it does not specify.