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Options 5A, 5B, and 5C are the options requested by the County Commissioners. The major difference is, instead of including half of Cedar Ridge debt with OCS, this would remove half of the responsibility. The difference between 5A, 5B, and 5C is that 5A allows for all of the peak debt service to stay with the OCS, while the County would remove one half of the responsibility of their share of Cedar Ridge debt. Option 5B is a 50/50 split - OCS is responsible for one half of their share of Cedar Ridge debt and would receive one half of the peak debt service. In option 5C, OCS would be responsible for one half of their share of Cedar Ridge debt and would receive no peak debt service. There is no impact to CHCCS or the County on these three options. Lisa Stuckey arrived at ?: SS. Commissioner Jacobs asked for an explanation of peak debt service and Rod Visser said that this was a concept that was raised in 1996, when the County staff was developing options related to how to pursue a $40 million band referendum, primarily for new schools and renovations as well as for County projects. As the staff presented the options, the first batch raised concerns, because in providing funding far a $40 million bond referendum with no tax increase required that the pay-as-you-go monies had to be used to retire the debt service. The concern among both school systems at the time was that they would lose substantial amounts of money under pay-as-you-ga money over the next ten years compared to what they would have gotten in pay-as-you-go money under the then existing capital investment plan. The County Commissioners asked the staff to come up with other options. The revisions of the options put the CHCCS in a "hold harmless" situation, but still left the OCS somewhat short because they were paying about half of the debt service far Cedar Ridge High School. This is where the issue of peak debt service came up. This means that, in the years fallowing the issuance of the last batch of bonds, instead of reducing the amount that would go to capital projects, the amount would stay the same, and then the difference between that and the amount that was needed to retire the debt would be earmarked to the OCS to help make up some of the shortfall. Dennis Whitling said that he was told that the peak debt service does not come into play as fast as the County thought it would. Rad Visser said yes, and that the last batch of bonds was just sold for the Efland sewer. Dennis Whitling said that under each proposal he sees about $29.5 million being applied to total capital. He asked if each proposal would be the same total, but a different way of allocating. Donna Dean said no. There are different amounts because options 1, 3, and parts of 5 include the peak debt service. Other options do not include the peak debt service. Dennis Whitling asked where the peak debt service money comes from. Libbie Hough arrived at 8:15 p.m. Rad Visser said that the staff would recommend that the peak debt service notion ga away, because it is part of the problem with the current policy. There are a lot of different facets and it is very complicated. The concept is about nine years old and the estimated revenues associated with it have not been tracked. Donna Dean said that in 1996-97, no one knew that interest rates would be as low as they have been over the past several years. The County has had the opportunity to refinance mast of the band indebtedness. This was never factored into the equation. Chair Carey said that the County Commissioners asked the staff to simplify so that they da not have to keep track of all of the different facets of the policy.