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Based on County staff discussions with Local Government Commission <br />(LGC) staff over the last few months, it is important to note, that the LGC <br />considers capital leases as outstanding debt for County governments. <br />b) "Large Developer" Status <br />For the most part, local communities view school systems and <br />governmental agencies as "large developers ". While this situation offers <br />purchasing advantages on some fronts, it is also a situation that staffs <br />must manage effectively. Being viewed as a "large developer" often sets <br />"higher than normal" pricing standards in the construction market. As an <br />example, past practice has been that local governments and school <br />districts make construction project budgets known before the bid process <br />beginning. An unintended consequence of this practice has been that <br />development and construction markets tend to "re- adjust' their standards <br />upwardly, and bids more than likely come in at the "pre approved" level or <br />higher rather than coming in at less than the "pre- approved" level. <br />c) Value Transference to Stakeholders <br />"Value Transference" is defined as the value that an external entity or <br />stakeholder receives when schools and governmental entities such as <br />counties or towns invest in particular communities. Individuals, <br />businesses, and other public as well private entities benefit from school <br />and other governmental capital investments into a community. The impact <br />of such investments should be recognized in development practices and <br />principles relative to the potential revenues from the private sector that this <br />value transference creates. For example, schools and co- located <br />recreational facilities inure to the retail value of residential building lots and <br />existing homes. This value transference to the owner and /or developer of <br />this real estate may be recouped in the form of impact fees, transfer taxes <br />or other reasonable proffers. <br />d) Financial Strength <br />Strong financial conditions of Orange County and both the Chapel Hill <br />Carrboro and Orange County school districts should allow for negotiating <br />positions and purchasing power within land use design, development and <br />operations. <br />All of the practices outlined above offer guidelines to consider as each district <br />proposes new school construction projects. <br />111151 <br />