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VOTE: UNANIMOUS <br />6. SPECIAL PRESENTATIONS <br />a. Planning for Bond Sales and Alternative Capital Financing <br />The Board received a presentation on factors to be considered in the timing of incurring debt <br />through the sale of bonds approved by voters in November 2001 and through alternative financing <br />mechanisms. <br />Jahn Link noted that with the passage of the bond referendum in November, the County <br />Commissioners asked that the Manager and staff suggest a framework as to how to sell the $75 million <br />in bonds and pursue alternative financing to address high priority capital items that were not included in <br />the bond referendum. In a five-year period, the County can sell all of the bonds and be able to address <br />all of the needs identified in the band and those priority projects that were not included in the bond. The <br />first sale will include the school projects (renovations at Hillsborough Elementary School and Chapel Hill <br />High School, and address Elementary School #9}. <br />Budget Director Donna Dean made a PowerPoint presentation. The plan proposes financing <br />$111.7 million in needs. The $75 million bond equates to 4.7 to 5.1 cents on the tax rate in fiscal year <br />2006-2007. The other part is $36.7 million in alternative financing, which would address the needs <br />identified by the Capital Needs Advisory Task Force that were not included in the bond. These funds <br />would be issued from July 2002 to July 2007. The tax impact would be between 2.1 and 2.4 cents by the <br />fiscal year 2008-2009. The estimated tax rate impact for both pieces is about 7 cents. The proposals do <br />not include the plan for pay-as-you-go funding. These will be addressed in the County's upcoming 2002- <br />12Capital Investment Plan. <br />In addition to the renovations at Hillsborough Elementary, Chapel Hill High School, and <br />construction of Elementary School #9, there will be some planning for Elementary School #10 and <br />Orange County Middle School #3. Both of these schools will be opening in fiscal year 2006-2007. <br />Alternative financing will allow for renovations of current school facilities and initial planning for Chapel <br />Hill-Carrboro High School #3. <br />The new Chapel Hill Senior Center will be opening in the summer of 2006. There is also time <br />to plan and select the site for the NorthernlCentral Orange Senior Center. <br />Possible paints to address in parks, recreation, and open space include feasible timelines for <br />proceeding with jointly funded/planned projects and deciding if the policy retroactively applies to <br />undistributed 1997 bond proceeds. <br />Funding far affordable housing will be phased in over the first three bond sales and will <br />provide $4 million. The funds will help leverage federal, state, and private funds. <br />The community college satellite campus is funded through alternative financing. Funds could <br />be available for construction as early as June 2004. <br />Farmland Conservation easements will also be funded through alternative financing over a <br />period of five years far a total of $3 million. <br />Other alternative financing projects include the Orange Enterprises addition, the justice <br />facility, the Government Services Center addition, Planning and Agricultural Center renovations, and the <br />farmers market. <br />Once the facilities are constructed, the County faces increased costs -annual debt service to <br />repay bonds and alternative financing and annual operating costs of new facilities. <br />Chair Jacobs asked a clarifying question about the seven-cent tax impact. He said that when <br />we discussed the $75 million bond package, the tax impact was over athree-year period. Donna Dean <br />said that this was using interest rates between 6-6'h°lo. The time period has changed to a five-year <br />period and the amount being borrowed is now $112 million. She said that this shows same restraint and <br />conservatism in the way in which we are going about this. <br />Commissioner Brown said that she was glad that Donna Dean included the operating costs <br />since this is a piece of the debt to support all of these facilities. <br />Commissioner Carey clarified that the operating casts are not included in the tables that are <br />part of the agenda packet. <br />John Link made reference to table three, which is the combined tax impact of both bonds and <br />alternative financing for the year 2003-2004 of 2.4 cents. There are other issues such as whether or not <br />