Agenda - 11-12-2024; 3 - Additional Discussion on School Capital Funding Policy

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2 Attachment A November 12, 2024 Orange County Board of Commissioners School Capital Funding Policy - Draft Preamble Since 2022, the Board of County Commissioners has engaged in reviewing its capital funding for the two Orange County school districts. This began with the creation of the School Capital Needs Workgroup, which included staff and elected officials from all three bodies. They recommended the county engage with a consultant to review and make recommendations about school capital investments. The Board engaged with Woolpert Inc. which presented four School Optimization Plan options based on different funding commitments. During the January 17, 2024 Board Retreat, the Board discussed the four strategies and settled on its preferred investment level. The Board proposed a $300 million dollar bond which was subsequently approved by the voters in November 2024, as well as a significant increase in county annual capital funding in the form of Pay-Go (or cash). This significant investment, as well as its tax impact on county residents, has necessitated that the Board review its capital funding policies and expenditure controls for school construction. This funding framework was adopted by the Board on June 4, 2024 and codified into this funding policy below. Capital Spending Categories Major Projects At the June 4th, 2024 Board meeting, the Board adopted the framework for new capital spending and asked that both districts submit bond plans based on their approved funding levels. These plans are to be based on the framework of the Woolpert Optimization Plan. This framework prioritizes replacing old facilities with new facilities and improving the educational adequacy of school buildings. The Bond and Supplemental Pay-Go funds would be used to fund these major projects as described below. High Priority Needs At the same June 4th, 2024 meeting, the Board adopted a framework for identifying and prioritizing High Priority Needs. Woolpert identified a priority list of all major component replacements for each campus for both districts. While Woolpert provided a specific replacement schedule, both districts may identify alternative replacement schedules. Specific high priority needs will be formally determined on an annual basis and be consistent with the Woolpert high priority definitions: i. Level 1 — Critical — Failure of components impact the facility's ability to remain open ii. Level 2 — Essential — Failure of components impact the health of major systems (i.e. leaking roofs) iii. Level 3 — Necessary— Failure of components could impact the facility's efficiency and usefulness iv. Life cycle replacements with one to three (1-3)years of remaining useful life at the time the study was completed. High Priority Needs will be funded using Annual County Debt Financing, Lottery Proceeds, as well as any remaining Bond or Supplemental Pay-Go funds as described below.