Agenda - 03-03-2015 - 6a - Laserfiche WebLink

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13 1 Chair McKee referred to Bonnie Hammersley's response to a question from a 2 commissioner in reference to the Chapel Hill Carrboro City Schools (CHCCS) request of 3 $750,000 for older schools, as included below: 4 "My reluctance for recommending additional funds to the schools at this time is threefold. One, 5 1 am always concerned about appropriating additional funds, even from fund balance, outside of 6 the normal budget process. Even if the purpose is worthy, as the CHCCS request is, it gives 7 special treatment to that request when competing requests cannot be equally considered. To 8 do so, would necessitate conducting a mini budget process. As I am sure you know the County 9 has a number of needs that go unmet every year that should be considered as well. It has been 10 reported that state revenues are coming in lower than expected which might necessitate that we 11 appropriate more in county funds to avoid further reductions. Two, as you suggest, with only 6 12 months into the fiscal year, we do not have a good idea of where we will end up at year- 13 end. Although, I am sure we won't have a problem with keeping the budget balanced, I wouldn't 14 want to end up with a fund balance at year-end lower than what the credit rating agencies 15 consider necessary or prudent to maintain our credit rating. The County just earned our third 16 AAA rating this past summer, which helps ensure reasonable borrowing costs for both the 17 County and schools. Third, as with any budget there are uncertainties that may result in urgent 18 or unexpected requirements that the county has to fund and we need to be in a position of 19 having funds available to meet those needs. At the January 27 BOCC work session, I will 20 provide more information on the upcoming budget revenue and expenditure projections." 21 22 Bonnie Hammersley said she and Clarence Grier felt it was also important, with the 23 $450,000, to restore the social justice fund, as all of this fund money has been fully allocated 24 and the childcare issue may not be fully resolved. 25 Commissioner Dorosin asked if the $59 million in outstanding liability for OPEB is a 26 static amount, or if it changes every year. 27 Clarence Grier said it changes every year based on actuarial assumptions of employees 28 coming on to the plan and those retiring. He said over the next 4 to 5 years the liability should 29 come down. 30 Commissioner Dorosin said the state wants local governments to make deposits into this 31 fund, and he asked if there is a formal requirement or time for the contribution of specific 32 amounts. 33 Clarence Grier said no. He said the state would like for the County to fund at least 90 34 percent. He said Orange County is one of very few counties in the state that are making actual 35 contributions to the OPEB fund. He said this will become an issue over the next couple of 36 years, as there is a new standard out for pension liabilities that is the same as the OPEB 37 liabilities. He thinks there may be more stringent requirements about contributions for both of 38 these at that time. 39 Commissioner Dorosin asked if the coverage is ten percent. 40 Clarence Grier said yes. 41 Commissioner Dorosin asked if there is a formal policy as to what the Board of County 42 Commissioners should be contributing. 43 Bonnie Hammersley said Orange County does not currently have a policy regarding 44 OPEB; however, she will be looking at this during their budget process. She said this is 45 important, and 10 percent is not a good number, so it is important to have a policy. 46 Clarence Grier said one of the stipulations from the bond agency a few years ago was 47 that Orange County needed to decide how to address OPEB. 48 Commissioner Dorosin said there is an impression in the public that excess fund balance 49 is found money, and then everyone wants a piece of the pie. He said it would be easier to 50 address this if there was some structure or policy in place. He appreciates that this is going to 51 be more formalized, and he thinks it is important.