Agenda - 04-08-2008-3 - Laserfiche WebLink

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County Capital Funding Policy, adopted April 24, 2007 (Attachment 5) However, none of these policies specifically speaks to how the Board wishes to handle capital project under expenditures or project over expenditures. Staff feels that it is important to take a more holistic look at policy implications regarding the use of unanticipated capital revenues and capital under/over expenditures, since there are both positive and negative impacts to consider in developing future capital related policies. While actual sales tax refunds for Carrboro High School were more than originally anticipated, in future Board considerations, it is also important to give thought to how to handle situations when sales tax refunds are less than originally anticipated. For example, the Board may recall that construction for Gravelly Hill Middle School had already started when the General Assembly made the legislative changes to sales tax reimbursements. In addition, there was approximately asix-month lag time between the time the General Assembly amended the Statute and the County's actual implementation of the interlocal agreements. An unintended consequence of the time lapse was that Orange County Schools received just over $170,000 in sales tax reimbursements compared to the original budget of $300,000. During discussions regarding the request from Chapel Hill Carrboro City Schools, staff talked about possible options to consider in developing future policies for remedy for use of unanticipated capital project revenues and under/over budgeted funds. Among those options are: / Budgeting for Sales Tax Reimbursements -Budget some or all anticipated sales tax reimbursements "in arrears" meaning that rather than the County anticipating sales tax revenues in the original project ordinance, Commissioners could amend the capital project ordinance after actual sales tax revenues are received. This approach is similar to how the County budgets for NC Education Lottery proceeds. / Use of Sales Tax Reimbursements -Among the options for how the Board could, use some or all anticipated sales tax reimbursements for (1) allowable project expenditures not included in the original project budget; (2) offset debt service for the project; and (3) reserve for future school planning. The Board may have considered additional options that staff has not considered. Tonight's meeting will offer an opportunity to discuss the Board's desires for future capital policy considerations. FINANCIAL IMPACT: Should the Board approve the request from Chapel Hill Carrboro City Schools, staff will prepare an amended Carrboro High School Capital Project Ordinance for the April 15, 2008 regular Commissioners' .meeting to increase the project by $400,000. RECOMMENDATION(S): The Manager recommends that the Board: 1. Review and discuss a request received from the Chapel Hill Carrboro City Schools Board of Education to use unanticipated sales tax refunds for Carrboro High School; 2. Discuss and provide direction to staff regarding future policy considerations associated with use of unanticipated capital project revenues and under/over budgeted funds; 3. Direct staff to consult with Bond Counsel and develop a policy for use of unanticipated capital project revenue and under/over budgeted funds and present to the Board for consideration of adoption in fall 2008.