Agenda - 10-08-2024; 2 - School Capital Funding Policy Discussion

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5 Attachment A October 8, 2024 Recurring Capital The county also provides a recurring stream of funding for all minor capital expenses, such as equipment purchases, component replacement, athletic and field repairs. The county provided $3,060,000 to the districts in FY 2025. This funding will increase by 2% annually and will be used to support both districts Other Capital Uses. Allocation For the 10-year period from FY 2025-26 through FY 2034-35, the county will allocate all funds towards the combined Major Project and High Priority Needs categories on the basis of 58.86% to Chapel Hill Carrboro City Schools and 40.14% to Orange County Schools. This allocation is based on the Woolpert Inc. School Optimization Report. After the expiration of this ten-year period, future Boards can choose either to commission a new school optimization report to determine future allocation or revert back to budgeted Average Daily Membership. For Other Capital Uses, Article 46 proceeds will be allocated annually based on the budgeted Average Daily Membership for each district, excluding charter students. Recurring Capital will be allocated annually based on budgeted Average Daily Membership. Capital Project Ordinances — Project, Function and Purpose All funds allocated to capital projects are to be accounted for in the School Capital Fund as authorized by a Board of County Commissioner approved Capital Project Ordinance. Capital Ordinances can be authorized and amended by the board either annually through the Capital Investment Plan (CIP) or through budget amendments at any Board Business Meeting during the year. Each category of expense shall use different rules of authorization for Capital Project Ordinances to best balance the county's requirement for fiscal oversight against the need for the districts to manage capital projects quickly and efficiently. Major Projects will be authorized on a project basis, restricting funds to the specific purpose identified by the Board. Funds for major projects will be allocated in two tranches, design and construction. First, the county will authorize the funds to begin designing the major project through the annual Capital Investment Plan. The county will anticipate authorizing the construction funds in the following fiscal year for debt management purposes. However, the board can withhold authorization of construction funds until county staff can review the designs for compliance with any Board approved construction standards and scope requirements. High Priority Needs will be authorized on a project basis, restricting funds to the specific purpose identified by the Board. These projects will be identified by the school districts each year through the ten-year annual Capital Investment Plan. School staff will work with County staff to present projects for the CIP that comply with the Woolpert definitions and are within county funding parameters. Other Capital Uses will be authorized by function or purpose, which group similar expenses into broad categories like "technology" or "athletic improvements". These will be allocated by school district staff each year through the Capital Investment Plan.