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met in a fiscally sound manner. The basis for the forecast is the then - current fiscal year. Forecasts for subsequent years rely on previous year expenditures and revenues as a starting point. Increases and decreases are itemized. The County acknowledges pay -as- you -go financing as a significant capital financing source, but recognizes that debt issuance is sometimes the most appropriate financing structure for a capital project. Current debt obligations as well as planned debt issuance are also factored into the County's long term financial planning. Relevant Financial Policies In accordance with state statute, appropriated fund balance in any fund will not exceed the sum of cash and investments minus the sum of liabilities, encumbrances, and deferred revenues arising from cash receipts. The County will maintain an undesignated fund balance that exceeds eight percent (8 %) in accordance with North Carolina Local Government Commission's (LGC) recommendation. For a County our size, a recommended target goal of fifteen percent (15 %) should be maintained. These funds will be used to avoid cash -flow interruptions, generate interest income, eliminate the need for short-term borrowing, assist in maintaining an investment -grade bond rating, and sustain operations during unanticipated emergencies and disasters. In June 14, 2005 ( Revised march 15, 2010), the board of Commissioners adopted a resolution formalizing the following fiscal management policies to be incorporated into the County's budget document beginning with the 2006 fiscal year: 1. Recurring, operational expenses of the County government will only be funded through recurring revenue sources: 2. The County will maintain an undesignated fund balance equal to 15% of general fund expenditures; and 3. Upon completion of the annual audit of the County finances, any undesignated fund balance above 15% will be transferred to the capital Reserve Fund, to reduce reliance on debt financing; for to the Self- Funded Hospitalization Fund, the Self- funded Liability Fund or the Self- Funded Workers' Compensation Fund as required to maintain the integrity of those funds. 4. Notwithstanding the requirements of items 1, 2, and 3 above, fund balance may be appropriated for any use in the general fund to overcome revenue shortfalls related to significant downturns in the economy. Major initiatives On September 22, 2010, the County refinanced all of the callable 2001 Certificates of Participation debt. The savings over the remaining 11 years totals $2,366,350 or 10.47 %. The overall yield is now 2.390 %. Rates have not been this low since May of 1967. The County will experience this savings over the next 10 years at an amount of approximately $235,000 per year. On October 5, 2010, the County had two applications with the Local Government Commission for approval of a refinancing in an amount not to exceed $45,000,000 and Qualified School Construction Bonds (QSCB) in an amount of $14,637,160. The County intends to refund $34,395,000 of the callable 2002/2003 Certificates of Participation when market conditions are favorable. The QSCB's will be placed with BB &T with a 5 year deferral of principal and an estimated term of 14 years and zero interest. These bonds will be sold when the fed rate is equal to or less than the BB &T loan rate. The Board of Commissioners' initiative to build a sustainable community consists of many efforts. Among them are programs in the county organization and retrofits of county facilities to conserve energy and water. Other organization efforts include maximizing the prevalence or reusable products, minimizing the use of those that are disposable and purchasing products that contain recycled content when possible G -2 Page 491