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ORANGE COUNTY <br />BOARD OF COMMISSIONERS <br />ACTION AGENDA ITEM ABSTRACT <br />Meeting Date: March 11, 2008 <br />Action Agenda <br />Item No. 1„ <br />SUBJECT: Discussion Regarding Proposed Distribution Formula for Land Transfer Tax <br />Proceeds <br />DEPARTMENT: Budget PUBLIC HEARING: (Y/N) No <br />ATTACHMENT(S): INFORMATION CONTACT: <br />Donna Coffey, (919) 245-2151 <br />PURPOSE: To discuss and provide feedback to staff regarding a proposed distribution formula <br />for the proceeds from a .4 percent Land Transfer Tax that allocates 60 percent of the proceeds <br />to Chapel Hill Carrboro City and Orange County Schools and 40 percent of the monies to the <br />County for parks. <br />BACKGROUND: At its March 6, 2008 regular meeting, the Board of Commissioners agreed to <br />use the proceeds from the proposed land transfer tax for currently unfunded or under funded <br />school and park capital projects. Should voters approve the transfer tax referendum in May <br />2008, the proceeds from the tax will become an additional revenue source for the County's ten- <br />year Capital Investment Plan (CIP). <br />Over the next two months, the County will be educating voters about the transfer tax and its <br />proposed uses. It will be important to the education effort to be able to identify for voters how <br />the tax proceeds will benefit the community. While the Board stated the purpose for which it <br />plans to use the new revenues, it did not identify a formula defining distribution of the proceeds <br />between the beneficiaries of the monies - a key component to identifying specific community <br />benefits. <br />Staff recommends that the distribution formula be consistent with the one outlined in the current <br />County Capital Funding Policy. The current funding formula allocates 60 percent of available <br />pay-as-you-go funds to schools with that 60 percent divided between the two school systems, <br />Chapel Hill Carrboro City Schools .and Orange County Schools, based on certified student <br />membership as of November 15 each year. In accordance with the policy, the formula allocates <br />the remaining 40 percent of available pay-as-you-go funds to County capital projects. <br />Based on Board discussion during the work session and potential approval of the distribution <br />formula at a future meeting, staff will update the County Capital Funding Policy at the <br />appropriate time dependent on the outcome of the May 6, 2008 referendum. <br />