Minutes 05-27-2010 - Laserfiche WebLink

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At its meeting on May 20th, the School Board did express concern that, under the Manager's recommendation, the operating budget was being supported by a major reduction in our Capital Pay-as-you-go budget. This has two negative implications. One concern is that this is a one- year fix that uses capital funds to support the operating budget. Presumably, this is not an approach that will be used every year; therefore, at some point there will need to be a "correction" when the County will need to identify additional funding to support the current operating budget. Perhaps, this is a risk that is worth taking at this time with the hope that revenues will rebound as the economy recovers in future years, but we should acknowledge that this may be more of a delaying tactic than a solution. Most economists are predicting that this will be a very slow recovery and that it will take several more years for our state and local revenues to match those that were generated before the recession began. The second concern is the impact this will have on our capital budget. The Manager's recommendation reduces our capital budget by approximately $1.1 million. This results in our being able to fund from the pay-as-you-go budget only our technology projects ($1.5 million), many of which are multi-year commitments, and rental of facilities ($100,000). This projection is based on the assumption that we will enter into a three-year lease-purchase agreement for $450,000 worth of computers, which will reduce our upfront costs next year by $300,000. Altogether, this loss of funding would result in approximately $800,000 worth of CIP school construction projects being delayed. Greater Flexibility on Budgeting of Lottery Revenues We had budgeted $1.3 million in lottery revenues for the balance of our 2010-2011 Board approved CIP. The shortfall in the Manager's pay-as-you-go recommendation could be made up by a relaxation of the County's policy to budget lottery funds a fully year in arrears. It is estimated that by the end of the 4th quarter (June 30, 2010) we will have accumulated $1.7 million in lottery revenues. If we were allowed to expend all of these funds and revenues from the first two quarters of the 2010-11 fiscal year once they have been received, we could complete all of the projects that we had included in our 2010-11 CIP. Basically, we're asking that the Commissioners revise their policy to allow for the budgeting and expenditure of lottery funds once they are received. We should point out that even though we may be able to fund all of the projects in our CIP for 2010-11, these projects come nowhere close to meeting all of our capital needs. Each year we schedule the highest priority projects for completion, but the bulk of the projects are delayed to future years or are labeled as "unfunded." In recent years we are falling farther and farther behind in the maintenance of our facilities and in staying on schedule to construct new schools. The number of square feet in our facilities and number of acres on our sites have grown considerably while the projected revenues available for the CIP steadily decreases, in large part due to the decline in sales tax and the elimination of the state's Public School Building Fund. Qualified School Construction Bonds We will be applying for Qualified School Construction Bonds (QSCB) to finance the McDougle Elementary and Middle School roof replacement project. The budget for this project is $3 million. Only $85,000 is budgeted in 2010-11 for investigatory and design work. Consequently, receipt of the QSCB will have a minimal effect in 2010-11 but will help us to balance our CIP projects during the next three years by spreading the cost out over 12-15 years. The first payment would not be due until 2011-12, which the County Manager has indicated will be acceptable in terms of