Agenda - 06-15-2010 - 4a - Laserfiche WebLink

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3 1 approach that will be used every year; therefore, at some point there will need to be a 2 "correction" when the County will need to identify additional funding to support the current 3 operating budget. Perhaps, this is a risk that is worth taking at this time with the hope that 4 revenues will rebound as the economy recovers in future years, but we should acknowledge 5 that this may be more of a delaying tactic than a solution. Most economists are predicting that 6 this will be a very slow recovery and that it will take several more years for our state and local 7 revenues to match those that were generated before the recession began. 8 9 The second concern is the impact this will have on our capital budget. The Manager's 10 recommendation reduces our capital budget by approximately $1.1 million. This results in our 11 being able to fund from the pay-as-you-go budget only our technology projects ($1.5 million), 12 many of which are multi-year commitments, and rental of facilities ($100,000). This projection 13 is based on the assumption that we will enter into a three-year lease-purchase agreement for 14 $450,000 worth of computers, which will reduce our upfront costs next year by $300,000. 15 Altogether, this loss of funding would result in approximately $800,000 worth of CIP school 16 construction projects being delayed. 17 18 Greater Flexibility on Budgeting of Lottery Revenues 19 We had budgeted $1.3 million in lottery revenues for the balance of our 2010-2011 Board 20 approved CIP. The shortfall in the Manager's pay-as-you-go recommendation could be made 21 up by a relaxation of the County's�policy to budget lottery funds a fully year in arrears. It is ' 22 estimated that by the end of the 4t quarter (June 30, 2010) we will have accumulated $1.7 �I 23 million in lottery revenues. If we were allowed to expend all of these funds and revenues from 24 the first two quarters of the 2010-11 fiscal year once they have been received, we could 25 complete all of the projects that we had included in our 2010-11 CIP. Basically, we're asking 26 thaf the Commissioners revise their policy to allow for the budgeting and expenditure of lottery 27 funds once they are received. 28 29 We should point out that even though we may be able to fund all of the projects in our CIP for 30 2010-11, these projects come nowhere close to meeting all of our capital needs. Each year we 31 schedule the highest priority projects for completion, but the bulk of the projects are delayed to 32 future years or are labeled as "unfunded." In recent years we are falling farther and farther 33 behind in the maintenance of our facilities and in staying on schedule to construct new schools. 34 The number of square feet in our facilities and number of acres on our sites have grown 35 considerably while the projected revenues available for the CIP steadily decreases, in large part 36 due to the decline in sales tax and the elimination of the state's Public School Building Fund. 37 38 Quali�ed School Construction Bonds 39 We will be applying for Qualified School Construction Bonds (QSCB) to finance the McDougle 40 Elementary and Middle School roof replacement project. The budget for this project is $3 41 million. Only $85,000 is budgeted in 2010-11 for investigatory and design work. Consequently, 42 receipt of the QSCB will have a minimal effect in 2010-11 but will help us to balance our CIP 43 projects during the next three years by spreading the cost out over 12-15 years. The first 44 payment would not be due until 2011-12, which the County Manager has indicated will be 45 acceptable in terms of the County's debt limit. While our initial application focuses on the 46 McDougle roof, we anticipate another allocation being made to us similar to last year. We 47 would apply for other CIP roofing and paving projects in the second round of applications. With 48 both applications, we intend to apply for approximately $5 million in QSCBs for this year. We 49 will need the signature of the Chair of the County Commissioners on our application,