Agenda - 12-05-2011 - 8a - Laserfiche WebLink

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2 BACKGROUND: On April 5, 2011 the Board of County Commissioners adopted a resolution calling for a November 8, 2011 Special Advisory Referendum concerning the levy of a One- Quarter-Cent (1/4¢) County Sales and Use Tax (Attachment 1). On November 16, 2011 the Orange County Board of Elections certified to the Board of County Commissioners that, in said advisory referendum held on November 8, 2011, the ballots were cast 10,749 (60.68%) FOR and 6,965 (39.32%) AGAINST the levy of the additional one-quarter cent (1/4¢) County Sales and Use tax in the County (Attachment 6). On April 19, 2011 the Board of Commissioners adopted A Resolution Regarding Uses of Potential Revenues from aOne-Quarter Cent (1/4¢) County Sales and Use Tax. The resolution established aten-year commitment to allocate 50% of the funding to the County's two school systems and 50% of the funding to Economic Development initiatives. On June 21, 2011 the Board of Commissioners approved an updated Resolution Regarding Uses of Potential Revenues from aOne-Quarter Cent (1/4¢) County Sales and Use Tax (Attachment 2). That attached Resolution provides greater detail related to funding for Economic Development initiatives. The Board requested that each school system furnish the Board of County Commissioners with a detailed list of prioritized projects that could be completed with anticipated funding over the next ten years. Attachments 3 and 4 include capital priority lists provided by both the Orange County Schools' Board of Education and Chapel Hill-Carrboro City Schools. During the annual budget process, the priorities for Fiscal Year 2012/13 will be developed and the first year's projects will be reviewed by the Board of County Commissioners. Economic Development Director Steve Brantley has provided an updated schedule of proposed Economic Development Uses for the One-Quarter Cent (1/4¢) County Sales and Use Tax (Attachment 5). The schedule provides an outline of focus areas and the County's commitment to Economic Development for the next ten years. This information is furnished to provide an overview of the economic development priorities and will be updated with detailed justification and explanation during the Fiscal Year 2012/13 annual budget process. A Special Revenue Fund will be established to receive and account for the One-Quarter Cent (1/4¢) County Sales and Use Tax. The funds will remain separate from the County's General Fund to allow for more accurate tracking of revenues and expenditures in accordance with the initial ten-year allocation plan. The progress of funded projects for both Education and Economic Development will be tracked on the County's web page and will include links from Orange County Economic Development and both school systems to detailed project information including updates on the status of projects. The One-Quarter Cent (1/4¢) County Sales and Use Tax funds will not supplant funding for the Board's endorsed funding target of 48.1 % for annual spending on both school systems. FINANCIAL IMPACT: With approval of the attached Resolution Levying the Article 46 One- Quarter Cent (1/4¢) County Sales and Use Tax Sales and Use Tax in Orange County (Attachment 8), the effective date of the new tax will be April 1, 2012. Approximately $625,000 of new sales tax revenues should be generated during the remainder/last quarter of FY 2011- 12. All funds collected in FY 2011-12 will be accumulated to build a fund balance as of June 30, 2012. The sales and use tax should generate approximately $2,500,000 annually for the County. Detail budgets will be developed for economic development priorities and school