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7 <br /> Debt Capacity Target <br /> County policy establishes a debt service capacity target of fifteen percent (15%) of general fund <br /> revenues. Based on prior borrowing approved by the Board, this target is achieved in FY2024-25 <br /> at 13.09%. However, as money is borrowed for new school and County projects, the debt to <br /> general fund revenue ratio may reach as high as 19.89% in FY2033-34 if the general obligation <br /> bond is approved by voters. <br /> Both the projected tax rate impact and the debt to general fund revenue ratio are subject to <br /> change. Both are sensitive to factors such as tax base growth and project timing. As the tax base <br /> grows, each one cent on the tax rate generates more revenue. In addition, if project <br /> implementation lags the budgeted implementation date, the taxes required to pay for that debt <br /> are also postponed. <br /> Recommended Year 1 (FY2024-25) Projects <br /> Education Capital Improvements <br /> The FY2024-34 Recommended CIP includes a total of $32.3 million in traditional school capital <br /> improvements. <br /> • Annual School Facility Repair and Improvement Projects - $12.1 million <br /> The CIP includes annual allocations for school repair and improvement projects in each year <br /> of the plan. For FY2024-25, the annual allocation is $12.1 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 /> The Plan assumes that the amount of debt financing increases by 2% each year while the <br /> amount of Article 46 proceeds increases by 4% annually. <br /> • Supplemental Deferred Maintenance - $21.2 million <br /> The Supplemental Deferred Maintenance Program was started in FY2020-21 to address <br /> deferred maintenance and life and safety improvements in school facilities. The program was <br /> designed to finance $30 million in school projects over three years on a schedule and <br /> sequence determined by the Districts. A second $30 million was authorized in FY2022-23 for <br /> a total authorization of$60 million intended to address deferred maintenance needs. <br /> Both installments of supplemental deferred maintenance were divided between the Districts <br /> using the average daily membership percentages at the time of the authorization. Chapel <br /> Hill-Carrboro City Schools has been allocated $35.7 million while Orange County schools has <br /> been allocated a total of$24.3 million. To date, the Districts have requested and the County <br /> has authorized $30.8 million. The balance of the funds has been scheduled over the next two <br /> years. <br /> Page 15 <br />