Agenda - 04-25-2013 - 1 - Laserfiche WebLink

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Per the April 2011 Board approved County Capital Funding Policy, County and School recurring capital needs will be identified and reviewed during each annual operating budget cycle, and recurring capital appropriations will be approved by the Board of Commissioners as an element of each annual Orange County Budget Ordinance. For the current fiscal year, Commissioners funded $3.0 million (the equivalent of approximately 2 cents on the property tax rate) for schools recurring capital and approximately $330,000 for County recurring capital. Long -Range Capital - supports school capital projects through the County's Capital Investment Plan (CIP). Capital projects are funded through a combination of State and local bonds, NC bond financing and pay -as- you -go funding sources. Pay -as- you -go funding includes dedicated half -cent sales tax revenues and property tax earmarked under the Board's current Capital Funding Policy. The Capital Policy also allows for North Carolina Public School Building Capital funds and School Construction Impact Fees to offset School related debt service. Similar to Local Current Expense funding, the amount of money counties allocate to long -range capital expenditures is discretionary and varies from county to county. School Related Debt Service - repayment of principal and interest on School related debt, including general obligation bonds and private placement loans. North Carolina statutes require counties to pay for school related capital items such as acquisition and construction of facilities. In instances where counties borrow monies to pay for such items, the State mandates counties repay the debt. The amount of money counties borrow for school related projects is discretionary and varies from county to county. Fair Funding - monies, split equally between the two school districts, to offset costs of safety and health services such as School Resource Officers and Nurses. The State does not mandate counties to provide funding for these services. It is important to note, the 48.1% target only includes funding for the items identified above - current expense, recurring capital, long -range capital, school related debt service and fair funding. It does not include additional non - mandated County financial support Orange County Commissioners commit to schools. Examples of such appropriations include supplementing state funding for school health nurses to staff each school with at least one school health nurse. Funding in the current fiscal year for this contractual agreement between the County Health Department and each school district, is approximately $680,000. (This agreement/contract has been in place since 2001.) The County also financially supports non - profit agencies such as Communities in Schools that provide after school programs for middle school students. FY2013 -14 School Budgets State budgetary actions continue to negatively affect local education funding. Previous actions include the State seizing Public School Building Capital funds, reductions in lottery proceeds. To date these funds have not been restored or funded at prior levels. The General Assembly has not yet balanced the State budget. It is important to note, in past years, the State has balanced its budget by withholding monies to which counties are entitled. During past Manager's /Superintendent Meetings, the County Manager advised both School Superintendents of the budgetary issues facing the County in the preparation of the FY2013 -14 Budget. The County Manager has shared his opinion with the Superintendents, that it would be