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o LGC wants to prevent a change in scope such that we <br />don’t finance soft costs and then don’t follow through <br />with the related construction/capital project <br />o Operating Cost Impacts are projected to understand the <br />impact of capital projects to our operating budget <br /> Ex: Southern Branch Library staff, utilities, etc. <br />• Patrick shared that SAPFO frequently discusses how to fund <br />future growth and renovations of schools <br />• Bonnie requested that we review the Finance definitions from <br />the school usage perspective <br />o Are computers considered capital equipment? Gary <br />shared that we have financed them in the past <br />• Bonnie shared that she still has questions about deferred <br />maintenance. District CFOs had no comments. Bonnie asked <br />why are maintenance items deferred rather than being funded <br />and pursued? Requested that we discuss further when we talk <br />about specific priorities. <br />• Jean commented that she wondered when we get caught-up? <br />What are the actual costs to do everything and how do we do <br />know the funding gap so we can catch up? <br />• Jean asked about the definition of recurring capital vs capital <br />asset – are they the same? <br />o Gary clarified they are different and have different useful <br />life <br /> Recurring capital items that are debt financed always <br />match the useful life of the assets with the bond <br />principal amortization schedule. <br /> The County delineates recurring capital items separate <br />from longer term projects in its NC Local Government <br />Commission application. <br /> Ex: vertical building = capital asset but the <br />furniture inside is recurring capital (shorter <br />useful life) <br /> The county would like to shift towards using <br />more PAYGO funding for recurring capital <br />rather than financing <br />o Would like to have a better idea of school needs and then <br />figure out how to finance <br />• Bonnie asked if ongoing maintenance staff are considered <br />operating or capital? <br />o Gary shared they should be operating. If you hire a <br />project manager for a specific capital project, that could <br />be financed as a part of the construction cost <br />o Bonnie shared that if we aren’t making improvements <br />that are needed, it will overinflate our operating budget <br />causing more needs for handymen to fix ongoing <br />DocuSign Envelope ID: F3ECCCC4-11C5-4B8B-A148-28FAABFF6334