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APPROVED 3/6/2008 MINUTES ORANGE COUNTY BOARD OF COMMISSIONERS BUDGET WORK SESSION February 7, 2008 7:30 p.m. The Orange County Board of Commissioners met for a Budget Work Session on Thursday, February 7, 2008 at 7:30 p.m. at the Southern Human Services Center in Chapel Hill, North Carolina. COUNTY COMMISSIONERS PRESENT: Chair Barry Jacobs and Commissioners Valerie P. Foushee, Alice Gordon, and Mike Nelson COUNTY COMMISSIONERS ABSENT: Moses Carey, Jr., COUNTY ATTORNEYS PRESENT: Geoffrey Gledhill COUNTY STAFF PRESENT: County Manager Laura Blackmon and Assistant County Managers Willie Best and Gwen Harvey, and Clerk to the Board Donna Baker. All other staff members will be identified appropriately below). Commissioner Carey was unable to attend due to illness. 1. Annual Operating Budget— Budget Drivers Laura Blackmon referred to the yellow sheet, which is a Preliminary Fiscal Outlook (yellow handout) Donna Coffey said that tonight there is not much more new information since October and she would like to just review what next year might bring. The current year's budget is about $173.6 million (graph 1). Graph 2 shows the funding history over the past ten years for education. Graph 3 shows that $80 million this year is dedicated to education, which includes current expense. Graph 4 shows the per pupil expenditures over the last ten years. Chair Jacobs said that this is a 50% increase since 1999 and he asked how this compared to other counties. Donna Coffey said that she would research this. Donna Coffey said that, according to graph 5, Orange County has experienced growth every year since 1998-99. The student membership numbers are based on historical data and though the CHCCS grows, OCS have not seen this growth yet, but it is anticipated. Graph 6 shows debt service and how it has continued to increase. She said that in 2008-09, the County will reach its peak debt service. The current debt service is $27 million. Chair Jacobs asked about 60-40 policy and Donna Coffey said that is for capital expenditures. Graph 7 is the anticipated funding needs for County and schools. The current year budget is $173.6 million, and based on historical average increases, next year's budget will be at least $186 million. This number will pale in comparison to what the budget drivers actually look like. Donna Coffey made reference to graph 8 and said that the County has always relied on property taxes. She said that she just left a meeting with the revenue options committee, and this percentage may change with a local revenue option. If nothing else changes, and the County continues to rely on property taxes, the tax rate could go well over $1.00 per hundred- dollar valuation. Graph 9 was ad valorem property tax rate history and graph 10 was tax rate equivalent of appropriated fund balance.