Agenda - 08-20-1996 - X-A - Laserfiche WebLink

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1 6 The debt service on $40 million in bonds, is about $4.5 million in 1999-2000 (the peak year), the equivalent of about an 8 cent property tax rate increase. It is possible however, to minimize or even eliminate this tax rate impact by changing the current policy of earmarking sales and property taxes. The worksheets shown in Appendix 3 show how debt service on a$ 40 million bond can be paid without impacting the general fund property tax rate. Under this plan, all revenue currently being used for school capital , school recurring capital, county capital, and debt service are combined. From this revenue debt service (existing and future) is paid. The remaining amount, which in 1997-98 is $5.88 million, is then evenly allocated between the County and Schools. Note that there are restrictive revenues, such as the Public School Building Fund that can only be used for schools, or parkland payment in-lieu that can only be used for County parks. These restrictive revenues are adjusted as appropriate. The cumulative impact of this no-tax increase plan on projects currently approved in the 1995-2006 Capital Improvements Plan is as follows: Currently Approved Proposed Years Difference for 1997-2006 and 97-06 Recurring Capital (1) County (2) $24,460,542 $23,341,394 ($1,119,148) Orange County Schools $29,952,410 $16,417,524 ($13,534,896) Chapel Hill/Carrboro City $28,786,401 $24,748,561 ($4,037,840) Schools (1) Based on funds available for capital projects,less any private placement debt service payments and proceeds. (2) The County portion does not include$3 million in bond revenue for parks since these funds are not included as part of the current Capital Improvements Plan. Note that in this comparison for the Chapel Hill/Carrboro City Schools, the adopted Capital Improvements Plan in years 1997 through 2006, does not include funding for a middle school. In this possible plan, a middle school is funded as part of the $40 million bond referendum. In response to this proposal, the Superintendent of the Chapel Hill/Carrboro City Schools supports the approach to change the existing policies. However, the Chapel Hill/Carrboro City Schools Superintendent is not supportive of a plan that would reduce the amount of funding for Chapel Hill/Carrboro City Schools projects. The Orange County Schools Superintendent supports Option 1 (see Appendix 2) which is based on maintaining current policy and funding as adopted in the Capital Improvements Plan. To mitigate the fiscal impact on each School system as identified in the above table, there are certain conditions or changes to this plan that are possible: