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4 <br /> • Revenue projections are based on the current Capital Improvements Plan. This is a <br /> conservative approach inasmuch that these projections were made prior to the Board <br /> of Commissioners' action to increase the impact fee for the Chapel Hill/Carrboro City <br /> Schools from $1,500 per residential unit to $3,000 per residential unit. The reason for <br /> not revising these projects as part of this report is to allow easier comparison of the <br /> current funding plan to proposed capital funding options. <br /> • The costs of facilities are based on the School Standards adopted by the Board of <br /> Commissioners in Spring 1996. Based on the recommendations of the State <br /> Department of Public Instruction, future construction costs are inflated by 5 percent <br /> each year until the project is scheduled to begin. For the two new schools to be built <br /> by the Chapel Hill/Carrboro City School system, land costs are not included since <br /> these schools are planned to be constructed on land donated by the developers of the <br /> Southern Village and Meadowmont projects. <br /> Options <br /> The first four options identified to address school facilities are based on current capital <br /> financing policy, leaving funding basically as it is presented in the 1996-2006 Capital <br /> Improvements Plan. (A summary of the current capital policy is included as Appendix 1 <br /> of this report.) The one major adjustment to the current capital plan is for the State-wide <br /> bond proceeds. State bond funds are to be used to fund all but $800,000 of the $11.8 <br /> million East Chapel Hill High School addition and a portion of the costs for the <br /> additional elementary school for the Orange County Schools. <br /> Options 2 through 4 are derivatives of Option 1. All four of these options are listed in <br /> Appendix 2 of this report. <br /> The major shortfalls of these options are: <br /> • The Chapel Hill/Carrboro City Schools middle school is not funded. <br /> • Options 1 through 3 do not address redistribution of funds between the two <br /> school systems. <br /> Option 5 is a"clean slate" approach, testing many of the assumptions and capital policies <br /> that have been used in the past. To do this, the scope of this study must be broadened <br /> beyond looking just at school capital financing but to also include County capital <br /> projects. <br /> Option 5 includes funding $2.9 million for new school facilities through a combination of <br /> State bond funds, impact fees, private placement borrowing and a $40 million bond <br /> referendum in November 1997. The bond referendum would include $35 million for <br /> schools, with the remaining $5 million for County projects and parks. Of the $35 million <br />