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2 <br />In 2007, the Commissioners adopted the County's current Capital Funding Policy. The <br />Policy sets formulas for calculating pay-as-you-go revenue streams for School and County <br />capital projects. As stated in the Capital Funding Policy, it is the intent of Commissioners to <br />dedicate these funding levels to capital projects. However, to date the County has not fully <br />funded School or County capital needs because there has been little or no overall revenue <br />growth to cover competing operating needs for School and County programs. The chart <br />below compares funding levels designated by the policy with currently approved funding <br />levels. <br /> Schools Share Coun Share <br /> Level of <br />Funding In FY 2008-09 Level of <br />Funding In FY 2008-09 <br /> <br />Revenue <br />Accordance Level of <br />Accordance Level of <br /> <br />with Current Funding <br />with Current Funding <br /> <br />Polic provided <br />Polic provided <br /> 60% (distributed 60% (distributed <br />Pay-As-You-Go Funding to each district to each district <br />from dedicated property based on their based on their 40% 24% ~'~ <br />and sales taxes remaining percentage of percentage of <br />after debt service is paid student student <br /> membershi membershi <br /> Equivalent of 3 Equivalent of 2 Equivalent of 1 <br /> cents on the tax cents on the tax cent on the tax <br /> rate each year to <br />rate each year to rate each year to <br /> <br />Recurring Capital offset recurring <br />offset recurring offset recurring Not currently <br /> capital repair <br />capital repair and capital repair funded <br /> and <br />maintenance and <br /> maintenance <br />costs maintenance <br /> costs costs <br />~'~ FY 2008-09 approved annual operating budget redirected $1.4 million from the Manager's recommended pay-as- <br />you-go County CIP to the County's General Fund to fund the annual operating budget. The net effect of this <br />reallocation of funds is that it reduced the percentage of County CIP revenues from 40% (the equivalent of $3.2 <br />million) of total pay-as-you-go funding to 24% (the equivalent of $1.8 million) of total pay-as-you-go funding. <br />The Recommended 2009-19 CIP proposes full funding in accordance with the current <br />Capital Funding Policy for County capital projects. This step will allow the County to be <br />proactive in addressing costly recurring capital maintenance items such as roof and HVAC <br />replacements. This approach has served both school districts well -they have used their 2 <br />cents to maintain school buildings -doing things such as roof and HVAC replacements. <br />As a point of reference, the HVAC system located at the Jail is old, routinely in need of <br />repairs, and energy wise inefficient. Should the system fail completely the County would <br />have no choice on whether to repair/replace the system or not based on State and federal <br />mandates. The anticipated cost to replace the system ranges from $950,000 to $1 million. <br />Staff proposes using proceeds from the first year (FY 2009-10) of one cent recurring capital <br />funding to replace the existing system with a new more energy efficient system. In doing so, <br />the County would realize savings in repair and energy costs. Without- funding from the <br />recommended 1 cent for recurring capital, if the system fails during the upcoming fiscal year, <br />the County would likely have to use monies from fund balance to cover the replacement cost. <br />