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3 <br /> k ' <br /> Attachment 1 <br /> Summary of Capital Policy <br /> (Note changes made to the November 19 draft are shown in bold print) <br /> A. Sources of Funds <br /> The following sources of funds will be allocated for Capital Projects and Debt <br /> Service: <br /> 1. All proceeds from the Article 40 and Article 42 one half sales tax <br /> The North Carolina General Statutes require that 30 percent of the <br /> Article 40 and 60 percent of the Article 42 sales tax revenue be <br /> earmarked for school capital projects or debt service on debt issued for <br /> school capital projects. <br /> 2. Revenue from the property tax as follows: <br /> • $800,000 <br /> • The equivalent of 2.7 cents on the tax rate based on valuation as of <br /> 1996-97. This earmarking will be adjusted each revaluation cycle. <br /> • The amount necessary to retire the 1992 School Bonds. (In 1997-98 <br /> this amount is $4.7 million.) <br /> • The amount of the reduction in the Human Services function of the <br /> County budget (equivalent of one half of one percent of the budget or <br /> $50,000) in 1994-95 for automation projects in Human Services. <br /> • Utilities Extension Fund - This amount may vary in that it based on <br /> the increase in property tax base as a result of expenditures in the <br /> Utilities Extension Capital project. The amount currently planned is <br /> $35,000 for 1997-98 and $25,000 for each year thereafter. <br /> 3. Impact Fees for each school system. <br /> 4. Public School Building Fund <br /> 5. Other revenues that are restricted including, payment-in-lieu, grant funds, <br /> rental revenue and inmate fees as a result of the new jail addition. <br /> B. Debt Service <br /> Prior to funds being allocated for specific projects, all debt service, including <br /> private placement financing will be subtracted from the unrestricted funding <br /> sources. <br /> C. Allocation <br /> All sources of unrestricted revenue, less debt service is then allocated between <br /> County and School projects based on 50 percent of the net amount for School <br /> projects and 50 percent of the net amount for County projects. Funding between <br />