So many Orange County commissioners may show up for a tour of potential park 
sites on Millhouse Road and Twin Creeks on New Year’s Eve that the photo op has been deemed a special commissioners’ meeting. If a majority of commissioners attend an event, state law considers it an official meeting and must give the public notice.
Scheduling the tour before the year changes over, and coming on the heels of the announcement of $150,000 allocated for a soft opening for Blackwood Farm Park, a 152-acre parcel off New Hope Church Road between N.C. 86 and I-40, makes the tour feel almost like a deadline or at least a line drawn in the sand.
The request for the tour apparently came from some town advisory board members who wanted to see what land the county already owned and had designated for parks. The Millhouse Road parcels are near the proposed waste transfer station and where developers have applied for a special use permit to build the mixed-use subdivision of The Edge.
I was one of a few dozen people who sent a letter to county commissioners last month asking that they delay approving the outdated master plan for parks due to the more pressing need of repairing schools. The commissioners approved the plan, but County Commissioners Vice Chair Bernadette Pelissier assured us that the approval did not commit the county to spending the money as outlined in the plan, and that public input would be solicited before any money would be spent. The county has no serious money budgeted for parks on Millhouse Road or Twin Creeks for at least four more years.
While $150,000 won’t go far toward the big-ticket repairs the schools need, I was hoping for some reassurance that falling-down schools won’t be used as hostages for a bond referendum.
The county must wait until an even-year election, 2016, before asking voters to approve a bond referendum that would allow commissioners to borrow upwards of $100 million to spend as they see fit and that taxpayers would have to repay. I fear that commissioners won’t begin repairing schools now because adding “school repairs” to the reasons for wanting to borrow money will make the bond referendum hard for voters to turn down. Kind of like photos of sad-eyed, raggedy-dressed children that charities use on their solicitation materials.
The decades-old parks plan needs updating to reflect residents’ interest in including bikeways, in partnering with OWASA to make use of the thousands of acres it owns that could be used for parks, and in communicating with towns and other counties to find out what type of recreation spaces are missing. Careful planning could ensure that we aren’t duplicating services. And that will leave more money for school repairs sooner.
The tour starts at 10 a.m. on Wednesday, Dec. 31, at the former Julia Blackwood House, 6823 Millhouse Road. The event is free and open to the public, without reservation.
– Nancy Oates
Bonnie Hauser
/ December 29, 2014Hey Nancy. Happy Holidays. Thanks for clarifying the rush to a New Years Eve meeting. So much is changing in the area – including the Edge proposal, the now closed landfill and the nearby Green tract — that it’s a great time to relook at options for all of it – including the Julia Blackwood property,
Nice to hear that the meeting is at the town’s request, Maybe cooperation will be a New Years resolution.
Your other point is provactive. Why wait for a voter referendum to start school facilities improvements? Why not start them now?
George C
/ December 29, 2014BOCC
Media Contact:
Donna S. Baker, Clerk to the Board-Orange County Board of Commissioners
919.245.2130
FOR IMMEDIATE RELEASE
UPDATE – ORANGE COUNTY BOCC SPECIAL MEETING NOTICE
ORANGE COUNTY, NC (December 29, 2014)— Pursuant to North Carolina General Statutes, NCGS § 143-318.12, the Orange County Board of Commissioners provides notice of the following special meeting. A majority of the Orange County Commissioners may attend this event making the event subject to open meetings laws.
Members of the Orange County Board of Commissioners have been invited to attend an informal tour of park space at Twin Creeks and Millhouse Road on Wednesday, December 31, 2014. The tour start time has been changed from 2:00 p.m. to a start time of 10:00 a.m. at the former Julia Blackwood house, 6823 Millhouse Road in Chapel Hill. A majority of the Orange County Board of Commissioners may attend this event.
Nancy
/ December 29, 2014Thanks for the update, George. I’ll change the time in the original post so folks aren’t confused.
many
/ December 30, 2014Happy/Merry all.
Maybe someone can help me with a few questions. My reference is this document: http://www.co.orange.nc.us/finance/documents/capital_plan/2014-19/1419_approved_cip.pdf
Estimates are that Orange County has a population of ~133,000 people. Carrboro population is estimated at ~21,000, Chapel Hill ~60,000. So the rough calculation for population distribution is 60%of the county’s population lives in town. It looks as if that is rough distribution of the Article 46 tax (page 60), pay-go funds on page 10 from the county.
My question is about school funds distribution charts on page 88. Does the county really expect that the school population and therefore the distribution of funds will shift from 60/40 to 75/25 between now and 2019? What population projection data is this based on?
I cannot tell if the Sportsplex is fiscally able to stand on its own. I presume that the budget waters are muddied because it cannot. Does anyone know if there a plan to ever get there, and manage it as such?
Why does the plan discuss a “Bingham District Park” but have no money allocated through 2019? This seems bizarre to me, is this some sort of political game? I don’t get it.
Mark Marcoplos
/ December 30, 2014The first priority for that area should be to site a joint transfer station. There is no better location. Then we can stop bleeding $1mil per year and creating pollution by driving our trash all over the region.
Bonnie
/ December 30, 2014Many- it’s tough to figure out what’s happening based on the school capital plan. It has nothing to do with the per pupil funding. It’s the facilities plan and has been superseded by new plans developed by the schools and are not reflected in the capital plan. The commissioners are throwing around some big numbers ($300 million) but I’ve not seen a capital investment plan that supports it.
I’m not sure but I’d guess that the distribution of the article 46 sales tax is based on school enrollment (roughly 12,000 CHCCS, 8,000 OCS)
On the Sportsplex, the county is responsible for capital and has outsourced the operations.
Mark – I’m pretty sure that Julia Blackwood donated the land to the county with a provision that it would not be used for waste facilities, Chapel Hill is looking seriously at a WTS sited at its TownOperations Center. Personally I like the site they have selected.
I wonder if the town is looking at the park land in the context of its plans for the Edge.
Bonnie
/ December 31, 2014Many – on the parks, it’s a 10 year plan and you’ll find more on timing and costs at the link below (p148). ( The Northeast District park is in Schley)
http://orangecountync.gov/occlerks/141118.pdf.
There’s more walking trails but no plans for bikeways.
There’s nothing that I can see in the parks plan that can’t wait at least until the immediate facility needs of the schools are addressed. the county can use the time to update the parks plan to include bikeways and rethink the park needs with the towns
many
/ December 31, 2014Logically, the school capital plan has to be predictive.
What I am questioning is the apparent shift in the Town/County ratio from 60/40 to 75/25.
This shift seems to be a pretty radical in the space of 5-6 or even 10 years. I am just wondering what supporting demographic projections (if any) are being used.
Bonnie
/ December 31, 2014Those proportions are simply based on when new schools or additions will be built – which is presumably based on growth and the state of existing facilities, Since enrollment projections, standard costs per sq foot, and other assumptions are not included, it’s hard to tell whats behind the county’s CIP
the commissioners are quick to point out that they only approve the current year capital. The problem is that the projects on the books have not been vetted, and are tying up the county’s debt capacity which in turn will drive the bond proposal.
And again, the schools have new plans which supersede the county’s capital plan but none of it has been laid out on a timeline or reconciled with the projects that are on the books.
You have to wonder if it’s intentionally sloppy to help justify the bond and tax increase. And then everyone’s shocked when they find millions of dollars in the surplus,
Terri
/ January 1, 2015Just to make sure everyone understands how capital budgets and reserve funds work…..
Capital projects are typically estimated out at 5, 10 and 20 year intervals. Staff conducts these rough estimates to give budgeteers an idea of how much money they need to save (reserves) for future time periods. It doesn’t make any sense to get detailed estimates for the future projects since we all know costs change over time. Some capital items may have to be expedited in the schedule due to maintenance or other issues. Some may drop off due to changes in technology, etc. Generally, staff are shuffling these items around based on their current knowledge until the scheduled year, at which time (depending on the type of issue it is), they will either create their own detailed analysis of the costs or hire a contractor to do the detailed analysis.
Forecasing and managing capital budgets is an art At OWASA, our goal is to be as close to 100% on our annual capital budget as possible, but more often than not, we come in under budget. When that happens, the funds roll forward along with any projects that weren’t started on schedule. When a project comes in under budget, those funds allow us to move other projects into scope for the year or add new projects when needed.Capital budgets are firewalled off from operating budgets.
Reserves are savings accounts for different types of financial needs. For example, at OWASA we have a capital reserves fund, an operating reserves, and an equipment reserves. We still borrow money for big projects though as part of the strategy for keeping rates from increasing.
many
/ January 1, 2015Terri
Happy new year.
I understand future budget planning and forecasting very well. Thank you.
Far from an art, budget forecasting is science that is supported by interest rate trends, cost of capital and credit worthiness among other things, Projections are mapped against goals trends and ratios. This data becomes more accurate as an entity matures.
A basic premise of CapEx planning is that radical changes in ratios and or/trends require supporting data and a very clear explanation, To do otherwise suggests a failure in management or a significant change in underlying conditions or both, Any such radical change is also accompanied by supporting data, and explanation and usually a window of uncertainty.
Imagine for a moment OWASA budgetary staff changed the ratio of water/sewer CapEx from 60/40 to 75/25. As a board member, wouldn’t you expect that change to be supported by a detailed explaination? .
My question remains; What is the data behind apparently significant shift in the Town/County school spending ratio in a short term five year plan?.
Bonnie
/ January 1, 2015The real issue behind the county’s capital budgets ( about $400 million over 10 years) is whether the projects are relevant – especially since a cleanup might suggest that a bond referendum (tax increase) could be averted. The $200 million for schools doesn’t jive with the new proposals asking for $300 million without a timetable or enrollment projection.
I have never seen enrollment projections, standard costs, facilities aging or other assumptions behind the school capital requests. It’s disturbing and the commissioners are quick to raise taxes for schools but not so quick to vet the budget requests.
The percentages are FYI only. There are equity issues across the school districts in the per pupil spending but not in the cap ex. The capital budgets are based on the requests from the school districts, a new school or major expansion could easily throw the numbers off,
I’m surprised that you are not more alarmed by the capital spending on county vs school projects. Here’s the approved capital budget. Look at page 303.
http://orangecountync.gov/finance/documents/op_budget/2014-15/1415_approved_budget.pdf
Bruce Springsteen
/ January 2, 2015You don’t like creating pollution by driving our trash all over the region, Mark? Then tell me, of the many people driving to and from UNC for work each weekday morning from Mebane and Morrisville and Chatham County and Hillsborough, etc, etc, etc, of those people, if they could read your remarks about how we don’t want people driving around because it creates pollution, what do you think they’d say in response?
Terri
/ January 2, 2015Glad to know you understand budgets, Many. But I assume others read these posts even if they do not post, and they may not understand some of the details, which is why I submitted my explanation.
Regarding the school funding proportions….the local government entities (OC, CH, Carrboro) all work together on population trend projections. Like the school systems, OWASA takes the projections we receive from local governments to do our planning. Chapel Hill is currently projecting significant growth over the next 30 years (higher in percentage than Carrboro or OC). So the schools, like OWASA, has to accept those projections and plan accordingly.
The proportions you are referencing reflect the need for two new schools in CH as a result of those projections. Personally, I believe their growth estimates are inflated.
Three years ago, I requested a detailed explanation for how growth projections are made. The response was more than a little unsatisfactory, but not within my jurisdiction to challenge.
many
/ January 2, 2015Bonnie,
While I agree relevance is the key question, I can’t get past the lack of context on the spend side. I think our main difference is that I don’t disagree with debt. If there is a documented need, a plan and historically low rates can be locked in because of the county’s good credit this is a very good time to borrow.
I can’t get alarmed about anything until I understand the context. I am only asking the questions I hoped the county commissioners felt the same way and asked these questions before approving this CapEx budget. So if you are listening out there BoCC, please enlighten me.
There is apparently a need to renovate schools, but I do not see enough information to understand the total schools spend and breakdown. These projections are noise without underlying assumptions. A lot of money is being spent to expand Carrboro high and a new elementary and middle school. If (as it seems) these new schools are in CCHSS that implies a school population increase and a corresponding amount of new homes. Where is the county getting these projections?
I think the EDD spend is understandable and justified.
I tend to think the Solid Waste and Emergency Services spend is at least understandable, especially if there are all of these new homes.
My opinion is that the SportsPlex should be operated (or have a plan to be operated) as a self-supporting entity and should borrow its own CapEx funds supported by dues.
many
/ January 2, 2015Terry,
Yes. Thank you. You seem to have resources; whom did you ask these questions of?
Do you get a feeling the elected officials in the towns and county have the answers, and if not why not?
Given the absolute train wreck in Wake county over schools, I am kind of surprised the media has not picked up this story and asked where these new schools are going to to be built, how many students they will house and what data is driving this shift.
Terri
/ January 2, 2015What media? In case you haven’t noticed, there is only a skeletal crew left at CHN and Chapelboro doesn’t do any kind of investigative work.
There are multiple citizen groups besides this blog that are trying to bring the issues to the public. Here’s another one: http://ourtownchapelhill.org/
I’m trying to find the presentation made to the OWASA board on the growth planning process and will share it when/if I can find it.
Bonnie
/ January 2, 2015Many – not sure where you got the idea that I don’t like debt. Debt is fine. The county has a policy of limiting debt service (principal plus interest) to 15% of revenue. They issue bonds all the time and last year refinanced all the county’s debt to save a couple of million dollars. If they raise the debt limit, they need to find revenue to pay the loans. That’s a tax increase unless ED kicks in. So the bond referendum is essentially a voter- sanctioned tax increase that takes politicians off the hook for capital planning.
I’m repeating myself so I apologize. The commissioners only approve the current years cap ex so years 2-10 are essentially placeholders. It’s an issue now because the unvetted placeholder projects are tying up the county’s debt capacity, and forcing a discussion of bond referendum,
Schools are particularly problematic because $200 million of placeholders over the next 10 years which have not been reconciled with the school’s latest wish lists. BTW The wish lists of school projects did not include any info about enrollment growth, priority or timing,
I simply believe that a better next step is a real capital plan that clarifies projects and priorities, and delays non essential projects until new revenue sources come forward. If we need to increase our debt limit, so be it. but I for one, would like to see the plan. And if the projects are truly essential, the commissioners, not voters, should take responsibility for raising taxes to pay for them.
Terri
/ January 2, 2015“the placeholder projects are tying up the county’s debt capacity, and forcing a discussion of bond referendum,”
I disagree with this analysis. Paying for placeholder projects could be done with current taxes via reserve funds–which would increase taxes. So the choices are to either reduce the list of projects, raise taxes, or issue a bond referendum. The new school projects aren’t going to go away unless someone decides the growth projections are wrong. Funding for adequately maintaining the existing facilities, schools and all others too, has never been budgeted. The county doesn’t plan for capital maintenance (like furnace replacements), neither do the towns, neither does the university. It’s not a county weakness–it’s a public government weakness.
many
/ January 2, 2015What bothers me is that CCHSS just completed the new Northside Elementary (discussed a bit on the other thread), Add to that the newly completed Science Wing at Culbreth. Now the CapEx budget seems to be saying CCHSS needs another elementary and a middle school (don’t know where or why) in the next five – ten years, as well as a new elementary school in the county and an expansion in Cedar Ridge.
I don’t know, maybe that is right. Without the supporting demographic data it is impossible to tell.
That supporting data should be at least referenced in the budget document rather than just accepted don’t you think?
Mark Marcoplos
/ January 2, 2015“Bruce” – Why don’t you write a song called the “Red Herring Blues”?
Honestly, if you told somebody who drives from Alamance County to work in Chapel Hill that you don’t care about the unnecessary long-distance trucking of trash because they drive a lot too, I think they would look at you quizzically for a second, wonder if you spent your youth sniffing glue, and go on about their business.
bonnie hauser
/ January 2, 2015Terri – I don’t understand your point. First let me agree that a huge problem is that buildings are planned without maintenance – which is causing the big oops in the school cap ex.
Now on taxes and bonds and placeholders- the choices are not as you suggest. Maybe you missed my point.
Placeholder projects are simply projects and $$ earmarked for projects that may or may not be needed. They have not been scrutinized and become important in the county needs to project its dept capacity.
If a project moves forward, the county will pay for them using loans, and the loan payment (debt service) comes out of taxes. By policy, commissioners will only commit to projects if the total debt service is 15% of revenues (about $30 million a year). Reserves don’t count.
The school projects are a mix of new schools, expansions (like Culbreth or Cedar Ridge), and maintenance to old schools. The latest school requests are not in the capital budgets. I’ve not seen OCS – but CHCCS ranges from $50-$150 million depending on whether or not they add capacity to the schools. In other words, “we don’t have enrollment numbers but if we want to build our existing facilities to full capacity, it will cost $150 million”.
The projections are a mess – and I think both school systems are looking at that. Unlike Wake, our schools are not growing. that’s a reflection of sluggish real estate markets and students leaving for private, charter and homeschools. Here’s the latest SAPFO projections (page 88 preceded by estimates from the school districts0
http://orangecountync.gov/occlerks/141201.pdf
Terri Buckner
/ January 2, 2015Bonnie,
I think you are mostly wrong and don’t understand how capital budgets work in NC local governments.
Many–see page for for Chapel Hill growth projections. Hillsborough is also predicting a sizable population growth but Chapel Hill is the one that will most effect county budget. http://www.townofchapelhill.org/Home/ShowDocument?id=12177
Bonnie
/ January 3, 2015What was that Terri? Humpf? Is that a technical term.
Sorry you dislike being informed on the fiscal policies behind how Orange County handles it’s capital and operating funds. Actually the policies are sound – the real issue is the projects themselves.
I realize that you don’t understand how the pieces fit, But you shouldn’t have to – it’s not a voters job to understand capital planning. That’s why the bond referendum is a joke. You won’t be asked about how the county is using their current debt capacity ( $400 million). You will only be asked to approve the increase by $125 million. It’s the quintessential shell game.
Try this. What happens to the essential school repairs if the voters say “no”.
Terri Buckner
/ January 3, 2015Nice try Bonnie, but I’ve been on the OWASA board for 5 years and a member of the finance committee for 3 years so I really do have a pretty good understanding of how the budgeting works. I haven’t spent much time with the Orange Co budgets but I did review the capital budget Many linked too and don’t see the problems you are going on about. Other than the fact that it doesn’t include regular facility maintenance, I’m satisfied with the detail. But to really understand it, you would also need to review the reserves policies.
The new schools are in the budget although they are not funded at 100%, nor should they be. To do so would mean taxpayers are paying higher rates now than they need to. That’s where the balancing of reserves and borrowing comes into play.
Budgets are extremely complex and trying to criticize them from the outside is a losing position. I think you are overreacting, maybe because you expect these budgets to follow the rules and practices of a corporate environment. They don’t and never will.
Bonnie
/ January 3, 2015Nice try Terri. I have an MBA in finance and am retired from the partership at PricewaterhouseCoopers. .ever hear of them?
I know nothing about OWASAs policies except that they don’t generalize to the county. A novice might not be able to tell the difference, I have paid close attentions to the county’s finances and could tell from your comments that you haven’t,
Over the year I’ve learned that if you read the county’s budgets carefully, including the appendices, you may understand some of the polices but you won’t understand the assumptions or how it all forms the basis for a bond referendum. Much of that is found in notes from other meetings and in presentations which rarely make it online, it’s part of the county’s transparency problem.
Projections are tougher and you have been conflating poplularion projections with student enrollment. Again not the same and the schools are trying to fix it,
My apologies to Nancy and the readers of the blog, I believe we have all been trying to advance an informed conversation about important issues. I dont think anyone is interested in a passing contest.
Hopefully we’ll be able to have more conversations about capital projects and bonds over the next year,
Happy new year everyone.
many
/ January 3, 2015Terri, I am sure budgets are based on more than that link, but thanks anyway.
I agree that business is there purely for efficient profit while government exists for service. I agree it is often a mistake to rely on business experience as a primary credential for public service,
I do understand the difference in the budgeting between corporations and government, but including the data used to make the decision is not one of those differences. I’ll say it again, publishing the clarity of thought behind important decisions should not be a casualty of the difference between government and business.
The point I am trying to make is that the tools used for projecting and trending are not apparent. The more I dig, the less convinced I am that there is justification. Given the data so far a 2.2% rise in a 10 year population does not seem to me to justify budgeting two new multimillion dollar school buildings in town unless there is a pretty major population shift. What I see is an attempt by government to avoid the thorny issue of redistricting, if that is the case they should come out and say so.
Bonnie
/ January 3, 2015Many what you are seeing is governments running on auto drive using dated “methodologies”. Things have changed and will require more analytical savvy and precision (or much higher taxes). Planning tools proven in the business world have good applicability here.
Personally I like that the county’s CFO is a CPA and has added professional policies and analytical rigor to the county’s finances, I was less happy to see a 2 point tax increase when a $7.5 million (4 point) surplus showed up in the county’s year end bookkeeping,
Hillsborough is expecting to grow by 30% (about 2000 people) over the next couple of years, but OCS just had to correct an over projection of students by 174 students because they didn’t factor in the new charter school, private schools or growth in homeschooling, CHCCS is trying to understand how new urban style development is going to impact school enrollment but don’t have a projection methodology.
Yet the school districts have proposed a combined $330 million for fixes to older schools and new schools – superseding what’s in the county’s capital budgets. There was no enrollment basis for the request – which I believe was simply a ploy to get the bond on the books.
Yet there is a need for funds to fix or enhance the older schools but no one knows how much. Last year, Estes Hills closed for 3 days because there was no heat. Efland Cheeks flooded in heavy rain, Chapel Hill High may need to be replaced.
I’d like to see the county work with the schools to develop a legitimate facilities plan and manage that with it’s other capital projects.
Terri Buckner
/ January 4, 2015“Yet the school districts have proposed a combined $330 million for fixes to older schools and new schools – superseding what’s in the county’s capital budgets. There was no enrollment basis for the request – which I believe was simply a ploy to get the bond on the books.”
Enrollment is irrelevant to maintenance.
There isn’t any conspiracy despite Bonnie’s continual implications of one. It serves no politician’s best interest to support an unnecessary bond referendum. Jeez……
Bonnie
/ January 4, 2015Terri if you read the plans, you’ll see that CHCCS ranges from $50 to $150 million with the larger number adding capacity to the existing schools. No info about current or needed capacity, the timing of need, or how it impacts planned new schools (it delays them).
Of course the conversation has morphed beyond long overdue school repairs to now include affordable housing, parks and other populist topics. Again – there’s no plan – just an intention to raise debt capacity and taxes.
No conspiracy – just business as usual. Haven’t you heard commissioners, with a straight face, represent the bond as a “democratic process allowing the public to select spending priorities”. OMG
Bruce Springsteen
/ January 5, 2015Mark,
If someone that lives in CH tells someone that lives in Alamance but works in CH that they DON’T CARE about long distance trucking of trash then the response is a nod of agreement. OTOH if someone that lives in CH tells someones that lives in Alamance but works in CH that they DO CARE about long distance trucking of trash then the response is either laughter or a punch in the face.
The reason people live in Alamance but work in CH isn’t because they a enjoy long commute. The reason they do it is because they have no other choice.
In the next few hours thousands of people in Alamance and Raleigh and Chatham, etc, will wake up, get into their cars and spew a bunch of pollution into the atmosphere as they drive to work at UNC and then do the same in the afternoon when they drive home. And they will do so as a direct result of the development policies of Chapel Hill (and Carrboro too, who too often gets a pass because they are legally a separate town).
So when people in Chapel Hill / Carrboro say things like, we want the garbage trucks to have shorter drives because we want less vehicle emissions or that we should eat local food because we want less vehicle emissions, etc, other people just roll their eyes. There are less emissions in the overall picture when you ship one human in one car over and over than there is when you ship a bunch of food in one big truck all at once? Really? Does that make any sense?