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10 <br /> 1 grounds the discussion, and there needs to be a short hand way to articulate this to the school <br /> 2 boards and the public, as to what the County will be able to afford. He said the County needs <br /> 3 to revisit its priorities each time it considers taking on new debt. <br /> 4 <br /> 5 Summary of Results — <br /> 6 2017 CIP Alternative#1 with Structured Principal <br /> 7 Observations / Items for Discussion <br /> 8 • Orange County has formalized a series of Financial Policy Guidelines and has a formal <br /> 9 CIP process in place. <br /> 10 • Orange County has historically managed its debt in a conservative fashion, as <br /> 11 evidenced by a strong 10-year Payout Ratio. <br /> 12 — Note: This conservative debt structure contributes to a higher Debt Service to <br /> 13 Budget Ratio. <br /> 14 • Based on a series of conservative CIP projections / assumptions, the 2017 CIP <br /> 15 Alternative#1 results in a projected cash flow shortfall (after the FY 2018 borrowing) <br /> 16 and the County is projected to exceed its Debt Service to General Fund Revenues <br /> 17 Policy (after the FY 2020 borrowing). <br /> 18 • The County has a number of options to consider as it relates to exceeding its policy <br /> 19 and/or addressing cash flow shortfalls: <br /> 20 — Consider delaying projects until they can be funded within the confines of the <br /> 21 adopted policies. <br /> 22 — Consider requesting alternative debt structuring flexibility from the LGC in <br /> 23 order to fund the currently scheduled CIP projects within current policy limits <br /> 24 and/or reduce cash flow shortfalls. <br /> 25 — Implement tax rate adjustments to minimize / eliminate cash flow shortfalls. <br /> 26 — Consider amendments to County policies: <br /> 27 o Change Policy Targets or Ratios. <br /> 28 o Add provisions that allow for policy exceptions subject to Board <br /> 29 review/ approval. <br /> 30 Potential Next Steps <br /> 31 • County Board reviews the current draft of the CIP and projected results. <br /> 32 • County Board provides guidance on preferred option or options for addressing cash flow <br /> 33 shortfalls and policy non-compliance. <br /> 34 • Davenport and County staff develop potential alternative scenarios and present a series <br /> 35 of options for the Board's consideration and feedback. <br /> 36 • Final CIP developed and adopted by the County Board. <br /> 37 <br /> 38 Appendix <br /> 39 Details of Principal Structuring Cases <br /> 40 Principal Structuring <br /> 41 <br /> 42 Chair Dorosin referred to page 24, and said the incremental option jumps all over the <br /> 43 place. He asked if these numbers are based on the amount of projects happening in any given <br /> 44 year. <br /> 45 Ted Cole said these numbers are driven by the amount of debt they are issuing. <br /> 46 Travis Myren made the following PowerPoint presentation: <br /> 47 <br /> 48 Capital Investment Plan Prioritization <br /> 49 Board of Orange County Commissioners <br /> 50 May 9, 2017 <br />