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4 <br /> approach to debt financing and comparably resilient economy,the County has been assigned the <br /> highest credit rating(AAA) by three rating agencies for the past eight(8)years. This rating secures <br /> the lowest possible interest rates and, therefore, the lowest cost of borrowing in the bond <br /> market. <br /> The FY2022-32 CIP also places a renewed focus on identifying the operating budget impact of <br /> capital investments. In addition to the new debt service that is generated by the capital budget, <br /> new infrastructure often comes with staffing, operating, and maintenance costs that impact the <br /> operating budget. The FY2022-32 CIP is more carefully tracking and reporting those costs so that <br /> decisions are fully informed. This CIP also includes $2.6 million in pay-as-you-go or cash funded <br /> investments in the first year of the plan for design and architectural services as well as small <br /> capital items with short useful lives to conform to best practices. The long range debt model <br /> assumes a continuation of cash financing in future plan years. <br /> The first year of the Recommended CIP totals $40.6 million in capital investments. Of this <br /> amount, $10.9 million is recommended for County capital projects, $1.3 million is recommended <br /> for proprietary fund spending including Solid Waste, and Sportsplex, and $28.5 million is <br /> recommended for capital improvements to educational facilities. <br /> The recommended FY 2022-23 CIP represents a decrease of approximately $10.3 million <br /> compared to the FY2021-22 Approved CIP. This decrease is attributable to the 203 S. Greensboro <br /> project moving into the current year and the completion of the final 2016 general obligation bond <br /> draw for school facilities. <br /> The balance of this memorandum describes projects supported by the General Fund that are <br /> recommended in the first year of the FY2022-32 CIP as well as any significant changes that are <br /> recommended for consideration in future years. <br /> Education Capital Improvements <br /> The FY2022-23 Recommended CIP includes a total of$28.5 million to finance a variety of school <br /> capital improvements and to expand the facility on the Orange County Campus of Durham <br /> Technical Community College. <br /> • Annual School Facility Repair and Improvement Projects - $10.8 million <br /> The CIP includes annual allocations for school repair and improvement projects in each year <br /> of the plan. For FY2022-23, the annual allocation is $10.8 million. This annual allocation is <br /> used to fund a variety of smaller scale capital improvements in schools ranging from <br /> accessibility and classroom improvements to technology and sustainability projects. This <br /> allocation is financed by a mix of sources including debt financing, additional pay-as-you-go <br /> (from lottery proceeds), and Article 46 sales tax proceeds. The Plan assumes that the amount <br /> of debt financing increases by 2%each year while the amount of Article 46 proceeds increases <br /> by 4% annually. <br /> Page 1 2 <br />