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10 <br /> Ted Cole said it would be striking a balance between wanting projects sooner and the <br /> projects being too costly until a later date. He said the luxury of pushing out the debt issuance <br /> may not be possible. <br /> Commissioner McKee said a lot of these projects are very big and would eat up most of <br /> the issuance debt. He said the County will be obligated to go at a faster rate, rather than <br /> further out. <br /> Ted Cole said for this very reason, the County may find that general fund revenues are <br /> growing more quickly, and the future policy issue may work itself out because the revenue <br /> component is higher than projected. <br /> Commissioner Jacobs said this has conceptual implications on how the County deals <br /> with large CIP projects going forward. He said even two bonds will not cover all the many <br /> issues in the schools: health, safety, capacity, modernization, etc. He said this presentation <br /> grounds the discussion, and there needs to be a short hand way to articulate this to the school <br /> boards and the public, as to what the County will be able to afford. He said the County needs <br /> to revisit its priorities each time it considers taking on new debt. <br /> Summary of Results — <br /> 2017 CIP Alternative #1 with Structured Principal <br /> Observations / Items for Discussion <br /> • Orange County has formalized a series of Financial Policy Guidelines and has a formal <br /> CIP process in place. <br /> • Orange County has historically managed its debt in a conservative fashion, as <br /> evidenced by a strong 10-year Payout Ratio. <br /> — Note: This conservative debt structure contributes to a higher Debt Service <br /> to Budget Ratio. <br /> • Based on a series of conservative CIP projections / assumptions, the 2017 CIP <br /> Alternative #1 results in a projected cash flow shortfall (after the FY 2018 borrowing) <br /> and the County is projected to exceed its Debt Service to General Fund Revenues <br /> Policy (after the FY 2020 borrowing). <br /> • The County has a number of options to consider as it relates to exceeding its policy <br /> and/or addressing cash flow shortfalls: <br /> — Consider delaying projects until they can be funded within the confines of <br /> the adopted policies. <br /> — Consider requesting alternative debt structuring flexibility from the LGC in <br /> order to fund the currently scheduled CIP projects within current policy limits <br /> and/or reduce cash flow shortfalls. <br /> — Implement tax rate adjustments to minimize / eliminate cash flow shortfalls. <br /> — Consider amendments to County policies: <br /> o Change Policy Targets or Ratios. <br /> o Add provisions that allow for policy exceptions subject to Board <br /> review/ approval. <br /> Potential Next Steps <br /> • County Board reviews the current draft of the CIP and projected results. <br /> • County Board provides guidance on preferred option or options for addressing cash <br /> flow shortfalls and policy non-compliance. <br /> • Davenport and County staff develop potential alternative scenarios and present a <br /> series of options for the Board's consideration and feedback. <br /> • Final CIP developed and adopted by the County Board. <br />