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35 <br /> BACKGROUND: The County engaged two facility consulting firms to evaluate the condition and <br /> adequacy of both County and School facilities and to make prioritized recommendations on capital <br /> improvements over a ten-year planning horizon. Both plans utilize the Facilities Conditions Index <br /> which quantifies facility conditions and can be used to prioritize repairs and replacements. <br /> County Facility Plan <br /> The County selected O'Brien Atkins Associates in March 2022 to review the state of County <br /> facilities from both a facility condition and space planning context over a ten-year period. O'Brien <br /> Atkins Associates presented a final draft to the Board of Commissioners on November 9, 2023. <br /> That draft identified eight decision points to improve public safety, justice, social services, and <br /> recreational facilities over the next ten years. The lowest cost alternative identified a total of$130 <br /> million in renovation and construction needs. <br /> School Facility Plan <br /> The County and School Districts selected Woolpert in March 2023 to review the state of the school <br /> facilities from a facility condition, space planning, and educational adequacy context. Woolpert <br /> last presented to the County Board on December 4, 2023 outlining four options to address the <br /> next five to fifteen years of school facility needs. The total cost of those options ranges from $219 <br /> million to $1.1 billion. Woolpert is recommending an option that would require $1 billion in capital <br /> investment over the next 15 years. <br /> County staff has worked with the County's financial advisors to determine alternative plans of <br /> finance that would be needed to fund the various options. This presentation details the debt <br /> metrics that are used to evaluate the amount of debt the County carries, the revenue and <br /> expenditure assumptions contained in the debt model, and the tax rate and debt policy <br /> implications of the options presented by Woolpert. <br /> Debt Metrics <br /> As credit rating agencies evaluate the County's financial condition, they examine three primary <br /> metrics related to the amount of debt the County is obligated to pay. <br /> • Ten Year Payout Ratio <br /> This metric measures the amount of principal to be paid in the next ten-year period to <br /> prevent backloading debt payments. One rating agency adds a positive adjustment if the <br /> ten-year payout ratio is 65% or greater. This means that 65% of outstanding principal <br /> payments are paid within ten years. The County's current payout ratio is 67.1% and is <br /> managed by structuring level principal payments over the entire term of the debt issue. <br /> • Debt to Assessed Value Ratio <br /> This metric measures the amount of outstanding tax supported debt as a percentage of <br /> the County's assessed value (tax base). This is one measure of the County's ability to <br /> raise revenue to make debt service payments. As assessed values increase, the County's <br /> ability to generate enough revenue to pay back existing debt also increases. The County's <br /> current policy is that total outstanding debt will not exceed 3% of assessed value. The <br /> County's current debt to assessed value ratio is 1.28%. Having a ratio under 3% also <br /> results in a positive credit rating adjustment. All of the financing scenarios discussed <br /> below maintain a debt to assessed value ratio of under 3%. <br /> • Debt Service to General Fund Revenue Ratio <br /> This metric compares the amount of debt service payments the County is obligated to pay <br /> on an annual basis to total projected general fund revenues. This is a quantitative <br />