Minutes - 06-18-2001 - Laserfiche WebLink

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that this part be in the bond referendum. The renovations are also recommended to be in the bond referendum. The total bonds for the Orange County school system would be $20.9 million, with $1.6 million coming from alternative financing. John Link explained the bottom of the chart, which indicated a total of $75 million for bonds, $21.5 million for alternative financing, and $390,000 for pay-as-you-go funds. Commissioner Gordon asked John Link why he did not include money for a third high school in the Chapel Hill-Carrboro City School district. John Link said that this is an issue that the County Commissioners need to address. His caution to the Board as they address another high school is that committing to this high school is a commitment of $35 to $40 million. He feels that the County Commissioners need to look at the overall capacity of the high schools in the County before making this commitment. Commissioner Carey asked if some of the renovations to the older schools could be done out of the fund balance for each system in order to reduce the amount of the bond referendum. Commissioner Jacobs asked for a discussion about fund balance and how much each school system should keep as a minimum. Assistant County Manager Rod Visser said that there is no statutory requirement that a school system must have a fund balance. The major reason the school system does not have an issue with fund balance is that they have a cash flow that they can depend on. Finance Director Ken Chavious verified that there is no minimum level required far the fund balance of a school system. Rod Visser made reference to a letter from 1986 regarding the working margins of fund balances for the two school systems. For the Orange County system, it is 2.7% of its annual expenditures, and for the Chapel Hill-Carrboro system, it is 5.5%. Chapel Hill-Carrboro City Schools has received $450,000 more in the current fiscal year from the district tax than was actually budgeted. This brings their fund balance to $4.4 million. The threshold would be $1.8 million. Far the Orange County system, it would need another $450,000 to maintain the 2.7°Io threshold in the fund balance. Commissioner Carey asked if there is any reason why renovations cannot be done from fund balance. John Link said that with the Chapel Hill-Carrboro City Schools they could use the district tax monies for current expense and capital. Commissioner Jacobs questioned why Chapel Hill-Carrboro City Schools is requesting an increase in the district tax since they have a fund balance of $4.5 million. Commissioner Carey said that the fund balance gives the County and the schools more flexibility to accomplish some of their specific goals. Neil Pedersen said that he does not feel the $4.5 million fund balance takes into account the outstanding bills they have which may be $700,000. Ken Chavious said that the $4.5 million fund balance takes into consideration outstanding bills of $900,000. John Link said that the good news is that the unappropriated fund balance provides the flexibility for both school districts to address some of their needs. Commissioner Jacobs asked that a press release be written to correct incorrect information about the fund balances for each system. He said that there has also been misleading numbers for enrollment figures. Also, we need to explain that we try to address mandates and make it clear to our citizens that we are responsive to the school needs and good stewards of the citizens' money. Commissioner Carey agreed saying that we need to try to correct misconceptions. John Link will develop a draft press release and submit it to the Board for their review. Environment and Resource Conservation Director David Stancil made reference to the salman- colored document entitled, "Consideration of Bond Recommendations for Parks and Open Space." The Capital Needs Task Force did not recommend any specific projects for the Lands Legacy program, leaving it to the Board. He summarized each project and indicated whether it met each of the criteria. John Link made reference to the bond requirements. The County Commissioners will need to indicate the maximum amount they are willing to have on the bond referendum. They are not required this month to make the final decision on the projects or the amount. They can make the final decisions on the projects and the amounts in August.