Orange County NC Website
Browse       Search
3 <br /> Attachment 1 <br /> ORANGE COUNTY <br /> NORTH CAROLINA <br /> April 6, 2021 <br /> TO: Board of Orange County Commissioners <br /> FROM: Bonnie Hammersley <br /> County Manager <br /> Travis Myren <br /> Deputy County Manager <br /> RE: Manager's Recommended FY 2021-26 Capital Investment Plan <br /> We are pleased to submit the County Manager's Recommended Capital Investment Plan (CIP)for <br /> FY 2021-26 for your consideration. During the past fiscal year, the Board conducted a detailed <br /> review of the Plan in an effort to accelerate the $26.5 million Durham Technical Community <br /> College (Durham Tech) building expansion in Orange County. This review resulted in the deferral <br /> several other capital projects in order to minimize the impact that the Durham Tech project <br /> would have on the County's overall five-year debt profile. The Recommended CIP maintains <br /> those adjustments and continues to focus on supporting public health and safety needs as well <br /> as capital investments in both School and County facilities to extend the life and viability of those <br /> buildings. <br /> Although the Board only appropriates funds for the first year of the Capital Investment Plan, the <br /> other four years serve as the basis for the County's long range debt model and long range <br /> financial planning. The debt model relies on the five-year plan to project debt service <br /> requirements and monitor compliance with the County's debt to revenue policy. Projected debt <br /> service ultimately manifests in a tax rate equivalent to pay the annual installments on borrowing. <br /> The debt service to revenue policy measures the County's ability to pay these annual installments <br /> relative to the amount of revenue forecasted. This metric is also used by credit rating agencies <br /> to assign a credit rating when the County issues new debt. The County's current debt policy <br /> target is fifteen percent (15%) of general fund revenues. Based on the County's thoughtful <br /> approach to debt financing and resilient economy, the County has been assigned the highest <br /> credit rating (AAA) by three rating agencies for the past seven (7) years. This rating secures the <br /> lowest possible interest rates and, therefore, the lowest cost of borrowing in the bond market. <br />