Agenda - 03-01-2007-1 - Laserfiche WebLink

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$23.3 million with $22.1 million planned for Elementary #10 and $1.2 million planned for County's share of infrastructure) with active value engineering collaboration by County and CHCCS to reduce difference between budget and project costs or approve funding for sewer construction and have CHCCS re-bid the construction bids for Elementary #10. Option 2. Commissioners approve funding for Elementary #10 at requested $24.3 million ($1 million above the amount presently included in the County's current debt issuance plans for Elementary #10 and Twin Creeks Infrastructure) and approve a project funding plan whereby Chapel Hill Carrboro City Schools uses other funding source(s) to cover the project cost overruns. Other funding options that the Chapel Hill Carrboro City Schools might consider using to cover the $1 million shortfall includes aone-time increase in the special district tax, use of the district's pay-as-you-go capital funding stream and/or use of the district's fund balance or some combination of these revenues. FINANCIAL IMPACT: On September 14, 2006, the Board approved debt issuance plans for individual County and School projects totaling $96.2 million ($92.2 million in non-enterprise fund debt plus $4 million in enterprise fund debt). In addition to completion of Carrboro High School and a number of County related projects, those plans included $22.1 million for Elementary #10 plus $1.2 million for the County's share of water and sewer infrastructure to the Twin Creeks school/park campus. The County's Debt Management Policy sets the County's non-enterprise fund debt limit as fifteen percent of the .annual General Fund budget. Based on the project funding plans approved by the Board on September 14, 2006, the County will come very close to its debt capacity limitation over the next three to four years. The result of increasing the debt amounts already endorsed for individual projects would be that there would need to be a corresponding decrease in an individual project previously endorsed by the Board, or that the County would exceed its debt capacity limitation. With regard to the CHCCS special district tax, staff anticipates that one-cent will generate approximately $793,000 in fiscal year 2007-08. An increase of 1.26 cents in the tax would be required in order to generate $1 million. The current CHCCS special district tax equals 18.85 cents per $100 valuation. Historically, CHCCS has requested increases in the special district tax to fund opening of new schools. According to budget information presented by CHCCS staff at the Board of Education's Annual Planning Conference in mid-February 2007, new operational costs associated with opening Carrboro High totals $1.9 million (approximately 2.43 cents on the district tax rate) and programming of Elementary #10 totals $237,000 (approximately 1/3 of a penny on the district tax rate) for fiscal year 2007-08. RECOMMENDATION(S): The Manager recommends that the Board of County Commissioners pursue Option 1 and that the Board review and consider the parameters within that option.