Agenda - 05-24-2018 Item 1 - FY 2018-19 Budget Work Session with DTCC, OCS, and CHCCS

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Recurring Capital Recurring capital for both School districts remains the same as the prior year appropriation of $3 million dollars. The recommended budget for FY 2018-19 includes $1,821,900 for Chapel Hill- Carrboro City Schools and $1,178,100 for Orange County Schools. For FY 2018-19, instead of funding the Recurring capital from pay-as-you-go funds, debt financing will be utilized. Recurring capital pays for facility improvements, equipment, furnishings, and vehicle and bus purchases. State statutes mandate counties to fund recurring capital. However, the amount of money counties allocate to this function is discretionary and varies from county to county. Long Range Capital The County plans and programs long-range school capital funding through the County’s Capital Investment Plan (CIP). The recommended budget for FY 2018-19 includes $2,388,792 for Chapel Hill-Carrboro City Schools and $1,544,671 for Orange County Schools, for a total of $3,933,463, which represents an increase of $77,127 from FY 2017-18. Historically, a 1.5% annual growth rate has been used for Long Range Capital. Beginning in FY 2018-19, and throughout the years of the CIP, a 2% annual growth rate is included. For FY 2018-19, instead of funding the long-range capital from pay-as-you-go funds, a combination of two-thirds net debt bond financing and regular debt financing will be utilized in FY 2018-19. Similar to Local Current Expense funding, the amount of money counties allocate to long-range capital expenditures is discretionary and varies from county to county. School Debt Service The recommended budget provides for $17,625,421 in School Related Debt Service, which represents repayment of principal and interest on School related debt, including general obligation bonds and private placement loans. North Carolina statutes require counties to pay for school related capital items such as acquisition and construction of facilities. In instances where counties borrow funds to pay for such items, the State mandates counties to repay the debt. The amount of money counties borrow for school related projects is discretionary and varies from county to county. Health and Safety Service Contracts The recommended budget includes $3,558,428 for the Health and Safety Service Contracts for both school districts to cover the costs of School Resource Officers in every middle and high school, and a School Health Nurse in every elementary, middle, and high school in both school systems. School Districts Budget Requests Both School Districts requested increases in per pupil funding for FY 2018-19. Orange County Schools requested an increase of $396.00. This requested increase in the local per pupil allocation for current expenses would increase the per pupil allocation to $4,387. This funding level would represent an increase in the current expense for Orange County Schools of $3,180,965. Chapel Hill-Carrboro City Schools requested an increase of $253.00. This requested increase in the local per pupil allocation for current expenses would increase the per pupil allocation to $4,244. This funding level would represent an increase of $4,069,615 in the current expense for Chapel Hill-Carrboro City Schools.