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4 <br /> Projected debt service ultimately manifests in a tax rate equivalent to pay the annual installments <br /> on borrowing. Based on the Recommended FY2023-33 CIP, a tax rate increase of 2.85 cents <br /> would be required in FY2026-27, and an additional 1.75 cents would be required in FY2028-29 <br /> assuming that all of the planned projects are executed as scheduled in the Plan. <br /> In addition to projecting future debt service payments, the CIP also identifies how capital <br /> investments are expected to impact the operating budget. New infrastructure often comes with <br /> staffing, operating, and maintenance costs that impact the operating budget. The FY2023-33 CIP <br /> tracks operating costs for individual projects as well as a summary table showing the cumulative <br /> impact over the planning horizon so that decisions on capital spending are fully informed. <br /> This CIP also includes $4.3 million in pay-as-you-go or cash funded investments in the first year <br /> of the plan for design and architectural services as well as small capital items with short useful <br /> lives to conform to best practices. The long range debt model assumes an annual increase of <br /> $500,000 in cash funded investments as a way to increase debt capacity for school capital needs. <br /> The first year of the Recommended CIP totals $53.4 million in capital investments. Of this <br /> amount, $23.9 million is recommended for County capital projects, $3.6 million is recommended <br /> for proprietary fund spending including Solid Waste, and Sportsplex, $15.5 million is <br /> recommended for capital improvements to educational facilities, and $10.5 million is programed <br /> to fund an expansion of the building serving the Orange County Campus of Durham Technical <br /> Community College. <br /> The recommended FY2023-33 CIP represents an increase of approximately $12.8 million <br /> compared to the FY2022-32 Approved CIP. This increase is primarily attributable to the Durham <br /> Tech expansion moving into Year 1 of the plan and the addition of$2.1 million for the design of <br /> a Crisis Diversion Facility. <br /> The balance of this memorandum describes projects supported by the General Fund that are <br /> recommended in the first year of the FY2023-33 CIP as well as any significant changes that are <br /> recommended for consideration in future years. <br /> Education Capital Improvements <br /> The FY2023-33 Recommended CIP includes a total of $26 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 - $11.5 million <br /> The CIP includes annual allocations for school repair and improvement projects in each year <br /> of the plan. For FY2023-24, the annual allocation is $11.5 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 general fund pay-as-you-go funding, debt <br /> financing, additional pay-as-you-go (from lottery proceeds), and Article 46 sales tax proceeds. <br /> Page 1 2 <br />