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School and Seawell Elementary School. Construction has begun an Elementary School #9 located in the Meadowmont subdivision. The Orange County School system will open Cedar Ridge High School in August. The voters approved a $75 million bond referendum in November. This will offer residents across the County progressive opportunities for affordable housing, senior centers, parks, recreation, and educational facilities. Since April 2000, almost 800 acres in Orange County have been protected through the Lands Legacy Program. The Central Orange Senior Center opened in January. It is located in the Meadowlands Business Park in Hillsborough. This is the temporary building for the center. The two new senior centers are scheduled to be constructed by 2006. The County Commissioners appointed an Innavatian and Efficiency Committee, which recommended Segal and Associates, an independent CPA firm to review the County's purchasing practices which they found to be sound. The firm did discover additional sales tax reimbursements of $563,000. One school system has also participated in this review and the County hopes the other school system will as well. General Fund Revenue Highliqhts John Link reported that the County's financial picture remains solid. The fund balance remains strong. We are appropriating $2.4 million from the fund balance for this year's budget. This is $1.2 million less than last year's appropriation. The real property tax base increased 4-4.5%. This increased the real property tax base of $300 million from the original 2001-02 estimates. Property taxes remain the largest single source of revenue. Regarding the anticipated State withholdings for fiscal year 2001-02, the total anticipated loss far Orange County is $712,200. The tax rate equivalent is .78 cents. This includes inventory tax reimbursements of $454,700; beer and wine taxes of $195,000; and homestead reimbursements of $62,500. The budget includes $3.1 million in State reimbursements for intangible and inventory taxes that are due the County. This is intended to send a clear message to Raleigh that it is wrong and unacceptable for the State to seize funds that rightfully should come to the citizens of Orange County. During June work sessions, the Board should consider whether it wishes to reduce the proposed budget by $3.1 million. There is a passibility of an additional 1l2-cent sales tax effective July 1, 2003. This is referred to as Article 44 and is intended to replace the local government reimbursements from the State. There are other discussions about addressing the sales tax earlier than July 1, 2003. The public hearing is established for June 20, 2002. The interest earnings have decreased significantly this year due to the recession of the economy. General Fund Expenditure Highliqhts The total general fund appropriation for education increased by 4.9°~ and totals $60.6 million or 49.3% of the total County budget. He explained the State mandated funding formulas. The Chapel Hill- Carrboro City School system is projected to gain 234 students and the Orange County School system is projected to lose 160 students. The recommended increase based on the formula for CHCCS is $1,392,964 and for Orange County is $115,364. Since the funding formula has given the CHCCS more money than they requested in the budget, Jahn Link is recommending that the district tax be reduced by one cent to 19.2 cents, still leaving $230,000 beyond what was requested by the Chapel Hill-Carrboro City school board. He is also recommending that another $500,000 of interest earnings on the Certificates of Participation that were used in building Cedar Ridge High School be allocated for one time capital items for this new school. This money could be used to address initiatives identified by the District as important budget priorities such as minority student achievement efforts. There is another major increase in Medicaid expenditures for this year. The proposed budget allows for an increase of $600,000 for next year. The two-year cumulative increase in this mandated expenditure is $1.37 million. The County has created a reserve of existing funds of $110,000 which could be used to offset State related human service budget cuts that occur after the Board approves the County budget at the end of June. This fund was created by reallocating funds from the Department of Social Services and the Child Care Challenge Grant. The proposed budget provides the same funding allocations for non-profit agencies as the current year, including funding for the Towns for Recreation and Libraries.