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To: Board of County Commissioners <br />Rod Visser, interim County Manager <br />From: Donna Dean Coffey, Budget Director <br />Re: Capital and Debt Related Matters <br />Date: October 11, 2006 <br />The attached materials are offered as additional information that will hopeful{y clarify lingering questions about <br />capital and debt related materials that you received ducjng August and September. Pages 1 through 3 of this <br />memo surnrnarize staffs understanding of capital and debt-related actions and endorsements that the Board <br />has made since the beginning of the fiscal year. Page 4 offers a guide for understanding the Annual Debt <br />Service Gapacit}r and Tax Rate impact spreadsheet (page 5). Fee! free to contact me if there are questions or if <br />my understanding of the Board's recent actions differ from yours. <br />Background Information <br />Orange County's major funding sources far school and County capital projects include pay-as-yau-go monies <br />(examples include dedicated sales and property taxes, school construction impact fees and Public School <br />Building Fundsj and debt financing. The County has several capital•related policies in puce that govern <br />planning and funding capital projects and debt management. <br />Recently the Board has focused discussions on school and County capital projects that require funding beyond <br />the amount of money that pay-as-you-go resources generate - i.e. projects that require debt financing. Most <br />recent discussions have centered around "affordability" -what capital projects can the County afford to fund with <br />respect to debt service as well as on-going annual costs? <br />The August 31 BOCC Work Session was the first step in providing a picfure of what the County could afford <br />with regard to funding capital and operating costs of future County and School capital projects. Therefore, <br />materials prepared for that work session offered a wholisttc view of total amounts of debt that the County could <br />afford in future years without regard to individual project timelines or cash needs. <br />At the August 31 Work Session, the Board provided direction regarding specific projects_ That direction allowed <br />staff to take the next step and project specific cash flaw requirements and funding needs far individual projects <br />with face value debt of $92.Z million that the Board wished to pursue over the next three or so years. Chart <br />1idenGfies those projects. The outcome of that step was the Capital and Debt Work Book presented at the <br />September 14, 2006 work session. In addifian to providing historical data, the work book also offered financial <br />data including projected annual costs (including debt service and tax rate impacts) for individual school and <br />county projects. <br />10/11/06 <br />17 <br />Page 1 of 5 <br />