Minutes 09-11-2014 - Laserfiche WebLink

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Clarence Grier discussed the school needs, and said there has also been a request for an additional building on the Durham Tech Orange County campus, as well as needs for affordable housing. He referred to the listing of fiscal year debt capacity. He said, based on what we know now, he would estimate that the County can afford $125 million in debt capacity. He said he will work on whatever the Board would like to do. He said the additional $25 million would add about $1.6 million, based on current interest rates and property tax rates. Clarence Grier said he took the existing debt service in the current County budget and then added on debt service and the new County jail. He reviewed the numbers listed in the spreadsheet Attachment A. He said this basically says that the $10 million in appropriated fund balance may not need to be used. He said the policy for debt service is 15 percent of general fund expenditures and there will potentially be $29 million available. He said right now there is additional debt service capacity of$3.4 million. Clarence Grier said the assumption is that revenues grow at least 1 percent each year. He said the jail is listed at $2 million and the debt service on the jail would not be $2 million. He said there have been discussions that the jail may actually be only half of the amount listed in the CIP, which would free up an additional $15 million in debt capacity. He said this is in the early stages, so it is hard to estimate what can be afforded until all of the components are known. He said if revenue grows or projects are downsized, it frees up debt capacity. Clarence Grier said he would like to highlight that in 2025, their total debt capacity goes up $100 million, and this is based on revenues increasing 1 cent per year and no property tax increase. He said the biggest thing is to structure the bond package to meet the needs that everyone has. He said with the credit ratings and low rates, there should not be an issue with increasing the debt service. Chair Jacobs said if there is going to be a bond committee the timeline would partially dictate what could be put in a bond. He said establishing this will provide guidance to the group. Clarence Grier said he agrees that time is of the essence. He said he also forgot to note that Bob Jessup would bring back a detailed analysis of capital after the first of the year. Commissioner porosin said if staff goes back to the Local Government Commission (LGC) for approval of more than $150 million, and then they decide to go with less, it will not be necessary to go back to the LGC again. He said the amount can always be scaled back but not up. He said it might be the best plan to make a ceiling and then get a green light. Clarence Grier said even if there is a voter approved referendum there are 7 years after that to issue the debt. He said it may be better to have a series of bond referendums and split them up. Chair Jacobs said they have talked about doing that with the older school facility needs. Commissioner Gordon asked for clarification on what the general assembly has said about when they can have a referendum. Clarence Grier said he does not remember the general assembly passing that item, but the plan is to have this on a major election in May or November of 2016. Bob Jessup said the election law changes included a provision that said counties can only have a bond referendum in even years and only on primary or general election dates. Commissioner Gordon asked if staff has to inform the LGC of the specifics on what they are doing when asking for formal approval. Clarence Grier said they have to be specific as to what they are going to do with the debt issuance.