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Agenda <br />June 21, 1999 <br />Page 2 <br /> <br />Some "near term" excess revenue from sales tax generated by the Mills project along with some <br />"one-time" revenues generated from land sales at Lake Concord and Harrisburg Elementary may <br />offset some costs associated with the two schools (land purchase, etc.), but are not enough to <br />offset all of those costs. Further budgetary considerations will be required. <br /> <br />Basically, (under N. C. law) there are four approaches to funding the added debt service that <br />would be available for years FY 2001-2006: <br /> <br />(1) <br />(2) <br /> <br />(3) <br /> <br />(4) <br /> <br />An increase in the property tax rate in FY 2001 (approximately 2.5 - 3 cents) <br />Allocation of new revenues from growth (or some portion thereof) if sufficient to cover <br />new debt (local revenues = local sales taxes and property taxes) <br />Without 1 or 2, reduction of local expenditures elsewhere in County government subject <br />to Board control <br />Some combination of 1, 2 and 3. <br /> <br />Notes: <br /> <br />(A) Assuming the Board stands by its pledge to reach N. C. State average ADM education <br /> funding in FY 2001, school current expense will increase by roughly $1.2 million in FY <br /> 2001 without any student growth. <br />(B) Student growth at 650 new students per year adds about $700,000 annually at current <br /> ADM levels beginning in FY 2001. <br />(C) School capital outlay spending may eventually decline, but based on existing priorities, <br /> that is unlikely for several years. <br />(D) County non-education infrastructure can be delayed but growth in population does impact <br /> on county services other than education. <br />(E) After FY 2006, incentives on the Mills project end. This will provide approximately $2 <br /> million annually for Board directed expenditures or as an offset to the tax rate. <br /> <br />Alternative Funding Approaches <br /> <br />Exhibit A, "Funding Options for New Schools" provided by Commissioner Fennel at the May <br />17th meeting is attached. It is important to address each of the suggestions with added input. <br />Impact fees and School Taxing Districts are addressed in detail later in this memo. References to <br />"Current Revenue Growth", "Undesignated Fund Balance", and "Adopt-A-School Programs" are <br />provided as noted. <br /> <br />2 <br /> <br /> <br />