Agenda - 09-04-2014 - 6a - Laserfiche WebLink

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8 1 He said the necessary tax increase to fully fund the Chapel Hill Carrboro City Schools' 2 requests would be 2.7 cents, and it would be 2.32 cents to fully fund the Orange County 3 schools. 4 Clarence Grier said the total amount for the County Capital Investment Plan would be 5 $22,816,805. He said this includes county capital projects, special revenue fund (article 46 6 sales tax), proprietary capital projects, and schools capital projects. 7 Clarence Grier reviewed the concerns and issues for the 2015-16 fiscal year. He said 8 there are $330 million in older school needs. He said there is an increase of 14.5 percent in the 9 health insurance costs this year. He said there is a liability of$63 million dollars for the post 10 employment insurance benefit for retirees. He said this is fully funded by setting aside $3 11 million per year, and he would recommend that this practice continue. 12 He noted the revaluation coming in 2017. He said the state currently does a calculation 13 of property values versus property sales. He said the current County tax valuation numbers are 14 5.5 percent over the sales price. He said that would equate to a 4.42 cent property tax increase 15 if the revaluation occurred now. 16 Clarence Grier said the general fund revenues are expanding, but more and more of the 17 fund balance is being used to balance the budget. He said the gap continues to get larger and 18 a mechanism needs to be found to reduce this. He reviewed numbers from the chart for the FY 19 2015-16 Budget. He noted that this budget would bring the budget over the general fund target 20 of 48.1 percent. He said there is an expected increase of$600,000 in the debt service. He 21 said this puts the expected adjustments to expenditures at $2,605,431, and the estimated 22 preliminary expenses for 2015-16 at $198,243,936. He said this would be a shortage of 23 $3,934,185, which would mean a potential property tax increase of 2.49 cents. 24 Michael Talbert thanked the departments for putting together a very conservative budget 25 that maximizes the service to citizens. 26 He said the schools asked for $750,000 in planning funds for upcoming older schools 27 construction. He felt this was premature without priorities or a schedule from the Board. He 28 said if this was to happen sometime mid-year, it would be reasonable to go back and establish 29 planning funds for both school systems 30 Commissioner Gordon asked for an explanation on the target percentages for schools. 31 She asked for an explanation of what is and is not included in that target percent and how the 32 school capital projects relate to this. 33 Clarence Grier said the 48.1 percent target for schools is comprised of current 34 expenses, long range and recurring capital, and fair funding. He said the current expense is 35 $67 million; the recurring and long range capital is about $6.7 million; and the fair funding is 36 $988,000 divided equally between both school districts. He said the County debt service for 37 schools is $16.6 million. He said those make up the 48.1 percent target of the general fund 38 revenues. He said the general fund revenues total $187,131,286, and that is the determining 39 factor for the 48.1 percent target, which would be $90 million. He said the fund balance is not a 40 component of this because it is not a general fund revenue. 41 Commissioner Gordon asked if school capital projects numbers are figured in to the 42 48.1 percent target. 43 Clarence Grier said yes. 44 Commissioner Gordon asked if the school nurses were for both school systems, and the 45 school resource officers were for only the Orange County schools. 46 Clarence Grier said Chapel Hill Carrboro City schools use the fair funding with the police 47 department to fund their school resource officers. He said the Orange County Schools use 48 officers funded in the sheriff's department, which equates to $556,424. 49 Commissioner Gordon said the capital expenditures will all be reflected in the operating 50 budget, as they will be debt service or outright dollars in recurring or long range capital.