Agenda - 01-23-2014 - 6a - Laserfiche WebLink

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10 1 4. Potential Bond Issuance 2 Clarence Grier said there have been recent discussions with the school boards regarding 3 bonds. He said the top two bond issues are the schools and the jail, and the number comes in 4 at around $100 million. He said this includes $30 million for the jail and $43 million for Chapel 5 Hill/Carrboro middle school #5. He said these two projects would take up 73 percent of the 6 bond. 7 He said there have not been any projects received for Orange County Schools that would 8 be included in a bond referendum. He said Orange County Schools has mentioned Elementary 9 School #8 at a cost of$22 million. He said if this was included it would leave about $5 million. 10 Clarence Grier said $100 million could be afforded with the current structure of the bond. 11 He said the maximum amount would be $125 million, and this would put the County right up 12 against the 15 percent debt capacity policy. 13 He said if this was issued at $100 million, it would be $6.7 million dollars over 20 years at 14 current rates. He said this means 4.18 cents on the tax rate increase to fund that debt. He said 15 the bond rating agencies look to see that the County stays with its policies. 16 He said that if the capital plan is moved forward as-is things should be good. He said the 17 budget would have to increase, as stipulated, by 1.5 -2 percent each year to provide cover. 18 Commissioner Gordon asked about the rationale for having a bond referendum. She 19 asked if this is to get permission from the taxpayers to raise the tax rate. 20 Clarence Grier said this could be part of it. He said if there is a project that the public 21 may have issue with, this is put on a bond referendum for approval. He said if there is a project 22 that the Board is going to go ahead with, it would not be put on the bond referendum to risk 23 defeat. 24 He said there has been some flexibility provided over the past fiscal year. He said 25 limited obligation bonds, installment debt, and financing for elementary#11 were all issued. 26 He said the jail is already listed in the Cl P, and that would probably be the only 27 controversial project. He said jails, schools and courthouses are automatically approved for 28 financing, without approval from the general assembly. 29 Commissioner Gordon asked, if the jail and school are already on the Cl P, why this 30 needs to be put on a bond referendum. She said the Orange County schools don't need any 31 new schools, and Elementary School #8 is not scheduled until 2022. She said there are needs 32 in the older Orange County facilities that might be voted on. 33 She said she does not think the jail and the middle school should be put up for a vote. 34 Clarence Grier said the Orange County School Board has mentioned the need for 35 Elementary #8, and this is the only reason it is included. He said there have been recent 36 discussions of the older school facilities and those needs. He said priorities may change as the 37 discussion continues. 38 He said Chapel Hill has said that if some of the older schools' needs are met, it may push 39 back the need for Middle School #5. 40 He said these things can be evaluated and re-prioritized by the capital needs task force 41 in the future. 42 Clarence Grier wants the Board to understand that there is flexibility up to $125 million; 43 however, he would recommend only doing $100 million, as there is no way to know how stable 44 the economy will be. 45 Chair Jacobs said the public voted down the skills development center in 1997. He said 46 the Commissioners did it anyway, and this was very irritating. He said the Chapel Hill School 47 system already assured the Board that improvements would delay Middle School #5 by 2 years. 48 Clarence Grier clarified that there is now a possible increase to 4 years of delay.