Agenda Item 1 - FY 2019-20 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 2019-20 includes $1,804,200 for Chapel Hill- Carrboro City Schools and $1,195,800 for Orange County Schools. For FY 2019-20, as was the case in FY 2018-19, debt financing will be utilized, instead of pay-as-you-go funding for Recurring capital. 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 2019-20 includes $2,412,896 for Chapel Hill-Carrboro City Schools and $1,599,236 for Orange County Schools, for a total of $4,012,132, which represents an increase of $78,669 from FY 2018-19. A 2% annual growth rate is included throughout the years of the CIP related to Long Range Capital. For FY 2019-20, as was the case in FY 2018-19, debt financing will be utilized, instead of pay-as-you-go funds for Long Range Capital projects. 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 $17,770,542 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 $3,629,597 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. Deferred Maintenance Funds for School Capital Projects The recommended budget includes $3,000,000 allocated by ADM towards deferred maintenance needs as addressed in both school districts' assessment of older facilities in the following amounts: Chapel Hill-Carrboro City Schools appropriation of $1,804,200, and Orange County Schools appropriation of $1,195,800. School Equity Training The recommended budget also includes $260,000 towards Foundational Equity Training which consists of the following: REI-Ground Water training will provide an historical context related to racism and its fundamental impacts on organizations; and Beyond Diversity training which will provide an in-depth analysis of systemic issues as they relate directly to schools and their