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15 <br /> Travis Myren said the chart in slide #18 shows how much funding goes to school debt service, <br /> county debt service, and Durham Technical Community College debt service. <br /> Slide#19 <br /> FY2026-36 Recommended Capital Investment Plan <br /> Debt Service to General Fund Revenue Policy Compliance FY2026-36 <br /> 22% <br /> 2os 19.n% <br /> 16.61% 1g,6p95 18.63% <br /> 1s3Dsc <br /> 14% 3fi4 <br /> 12% <br /> 10% <br /> FY2026-27 FY2027-28 FY202329 FY2029-30 FY2030 31 FY2D31-32 FY2032-33 FY2033-34 FY 2034-35 FY 2035-36 <br /> —kyTarget —.1—d <br /> ORANGE COUNTY <br /> 19 NORTH CAROLINA <br /> Travis Myren explained that the debt service to general fund revenue rises above the 15%target <br /> for several years beginning in 2028-29. <br /> Commissioner Carter asked about interest rate impacts in the current environment. <br /> Travis Myren explained they conservatively estimate around 4% rate over the course of a 20-year <br /> bond. He noted that general obligation bonds for schools are backed by the county's full faith and credit <br /> and carry lower rates, especially for AAA-rated counties like Orange County. <br /> Commissioner Portie-Ascott noticed that the CIP was prepared estimating a moderate economic <br /> growth of 2%. She asked if that is consistent with previous years' estimates. <br /> Travis Myren confirmed this was consistent with prior years. He said that metric is important for <br /> debt service calculations, as tax base growth increases the value of a penny for debt service. <br /> Commissioner Portie-Ascott asked what will happen if there is a recession and no growth. <br /> Travis Myren said that is something to be cognizant of when taking on general obligation bonds <br /> because the county must legally make those payments before paying back any other obligations. He said <br /> he will be implementing some tools in the operating budget to respond to an economic downturn, <br /> especially as it relates to fuel prices and there will be more to come on that front. <br /> Commissioner McKee expressed concern about the debt service implications, noting that over the <br /> 10-year period,they were pushing$1 billion of borrowing and that debt service would increase from 12% <br /> of revenue to 17-18%from 2028-29 through 2034-35, representing about 3 cents in tax increases just for <br /> debt service without any operating changes. <br />