Agenda - 03-06-2014 - 6a - Laserfiche WebLink

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12 1 million. He noted that if real property growth and sales tax growth continued with 2 current projections, we would need about .28 cents on the tax rate to be able to cover 3 the $221.3 million in expenditures. 4 5 In response to Commissioner McKee's question, Clarence Grier confirmed that he 6 assumed that the projected growth in revenues is not consumed by other expenses. 7 8 Clarence Grier explained how CIP and possible new jail debt are incorporated in the 9 spreadsheet. He noted options of how some of the $300 million in capital needs 10 identified by the two school systems' assessments might be addressed with a $100 11 million bond. Discussion ensued about how jail debt service might be addressed 12 through an alternative financing mechanism and not be included in a bond referendum, 13 as it might be considered a controversial element that might lead to failure of a bond 14 referendum. Clarence Grier reiterated that this particular scenario is just for illustrative 15 purposes — no decisions have been made yet about a bond referendum. 16 17 Commissioner Price asked about school needs and the need to build a new school. 18 19 Michael Talbert said the schools had done their facility assessments and included some 20 remodelings and additions of older schools, which may push out some of this further in 21 time so that a new school might not be needed for 2, 5, or 10 years.. 22 23 Commissioner Pelissier asked if there are longer term items in their CIP with debt 24 service that are excluded in this scenario. 25 26 Clarence Grier said all is included in the CIP Debt Service column. He wanted to show 27 them how a $100 million bond referendum would affect their debt capacity going 28 forward. The components of a bond referendum have not been decided. 29 30 Chair Jacobs said he expected the school systems to come back to the Board with a 31 couple hundred million dollars worth of proposed upgrades for health & safety reasons, 32 structural reasons, and capacity reasons. There might be discussion of perhaps three 33 separate $70million bond packages. They are looking to expand capacities of existing 34 facilities, for example the new Culbreth Middle School wing. He noted the current plan 35 for a new jail is for a 300-bed capacity, but it could start out as a phased project. 36 37 Clarence Grier confirmed this, that the full capacity cost would be $30,250,000, saying 38 that if they cut it in half, then debt capacity would go up. 39 40 Chair Jacobs remarked on a visit he and Commissioner Pelissier made to the Guilford 41 County Jail that had been built in pods that can be phased in over time. 42 43 Clarence Grier cautioned that these estimates are based on current interest rates. If 44 future rates rise, additional debt capacity will be lowered. That is why it is so important 45 to maintain their high bond ratings to keep the cost of borrowing as low as possible. He 46 also noted that a $100 million bond would represent half of the County's annual 47 operating budget. 48 49 Michael Talbert emphasized that even though debt service estimates are conservative, 50 so are their budget estimates. With revenue growth of 1.5-2%, they are coming out of 51 the great recession. He hoped that they will get to 3, 4, or 5 per cent at some point. He 52 indicated that Clarence Grier has provided estimates on a very conservative basis. 53 54 The Board discussed concerns and implications of holding a referendum at different 55 scheduled elections in 2014, 2015, or 2016. Reluctance was expressed about holding a