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3 <br /> Attachment 1 <br /> ORANGE COUNTY <br /> NORTH CAROLINA <br /> April 4, 2023 <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 FY2023-33 Capital Investment Plan <br /> We are pleased to submit the County Manager's Recommended Capital Investment Plan (CIP)for <br /> FY2023-33 for your consideration. This CIP advances the Board's priorities in educational <br /> facilities, climate change mitigation and environmental sustainability, access to behavior health <br /> services, and financial resources to assist in the development of affordable housing. The FY2023- <br /> 33 CIP also invests in the County's core services with improvements in public safety software, <br /> public safety communications, and County facility maintenance. <br /> The CIP forecasts capital projects over a ten year period. Although the Board only appropriates <br /> funding for projects in the first year of the Plan, the CIP is a planning tool that also focuses on <br /> future needs and the financial capacity required to meet those needs. As these needs are <br /> enumerated in future years of the Plan, the County is able to employ a debt modeling tool to <br /> project debt service requirements and monitor compliance with the County's debt to revenue <br /> policy over the full ten year planning horizon. The debt service to revenue policy measures the <br /> County's ability to pay these annual installments relative to the amount of revenue forecasted. <br /> The County's current debt policy target is fifteen percent (15%) of general fund revenues. Based <br /> on the projects recommended in FY2023-24, that policy target is achieved at 13.65%. <br /> The debt service to revenue metric is also used by credit rating agencies to assign a credit rating <br /> when the County issues new debt. Based on the County's thoughtful approach to debt financing <br /> and comparably resilient economy, the County has been assigned the highest credit rating (AAA) <br /> by three rating agencies for the past nine (9) years. This rating secures the lowest possible <br /> interest rates and, therefore, the lowest cost of borrowing in the bond market. <br />