Minutes 05-09-2017 - Laserfiche WebLink

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3 1. Discuss and Prioritize Capital Projects in the Manager's Recommended FY 2017- 22 Capital Investment Plan BACKGROUND: On April 4, 2017, the Manager's Recommended FY 2017-22 Capital Investment Plan (CIP) was presented to the Board of County Commissioners (See Attachment 1). The Five-Year Plan includes County Capital projects, School Capital projects (including Chapel Hill-Carrboro City Schools, Orange County Schools, and Durham Technical Community College — Orange County Campus), as well as Proprietary projects (including Water and Sewer, Solid Waste Enterprise Fund, and Sportsplex Enterprise Fund). The projects listed in the FY 2017-22 CIP totaled $274,423,538, with Debt Capacity Ratios (Debt Service to General Fund revenues) ranging from 12.8% in FY 2017-18 to 17.4% in FY 2021-22. The County has a Debt Management Policy, which states, "The County will strive to maintain its annual debt service costs at a level no greater than fifteen percent of general fund revenues, including installment purchase debt". This policy is consistent with the Government Finance Officers Association best practice. On September 10, 2015, the Board of County Commissioners held a work session to review potential General Obligation Bond Referendum packages and its impact on the CIP related to Debt Capacity and Debt Affordability. The County's financial advisor, Davenport and Company, presented a series of potential cases related to the Bond Referendum amount. As part of the presentation, the CIP funding case included the FY 2015-20 Approved CIP and a $125 million referendum. (See Attachment 3) Tonight's discussion will be focused on prioritizing Capital projects to achieve the Debt Capacity of 15%, to restructure debt to fund the scheduled CIP projects within the policy threshold, and to reflect tax rate equivalent impacts to achieve Debt Affordability by minimizing or eliminating cash flow shortfalls. County staff has made an attempt to help remedy exceeding its policy and/or addressing the cash flow shortfall by delaying or removing County Capital projects until they can be funded within the parameters of the adopted policy. Also, consistent with Year 1 of the Manager Recommended FY 2017-22 CIP, it includes substituting pay-as-you-go funds for school projects to debt financing in Years 2-5. The following are the adjustments made to County Capital projects, as reflected in FY 2017-22 CIP Alternative 1: • Parking Lot Improvements - $1,625,000 moved from Year 5 to Year 6 related to OPT/ AMS North and Passmore Center improvements; and removed $300,000 for Efland- Cheeks Community Center as it is included in the construction of a new Efland-Cheeks Community Center in Year 3. • Southern Orange Campus Expansion - changed funding source to $3,269,500 in Medicaid Maximization funds for the Health clinics portion, and $1,555,500 in debt financing. • Information Technology Fiber Connectivity— moved $1,045,675 out of both Years 2 and 3 to Years 6-10. • Information Technology Governance Council Initiatives — removed $500,000 in Years 2 and 4. • EMS Substations — moved $700,000 from Year 3 to Year 5; moved $1,500,000 from