Joint BOCC/BOEs Meeting
April 26th, 2005

Agenda: http://www.co.orange.nc.us/OCCLERKS/050426.htm (51 page PDF linked on that page has all the materials)

(Notes follow)

(these were amended in a number of areas from the email version sent out)

We need a volunteer for the May 3rd meeting, please.

These notes constitute my best effort to document what was discussed. Only text enclosed in quotation marks are actually quotations.

This was the most civil meeting of this kind I have attended.

-Mark Peters

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Joint BOCC/BOEs Meeting
April 26th, 2005

Agenda: http://www.co.orange.nc.us/OCCLERKS/050426.htm (51 page PDF linked on that page has all the materials)

Donna Dean: (went through a spreadsheet on Capital funding items)

Went through the scenarios for the implementation of the 60/40 proposal. There are different places in the process where you can pull the 60/40 from and they are considering all options.

(Variations in the spreadsheet (my understanding): Peak or not peak debt service. Where Cedar Ridge debt payments are coming out of the process. Whether revenue that was dedicated for schools vs. county are no longer dedicated and are thus mingled before the 60/40 split.)

Current average daily membership percentages: 61.5 chccs, 38.5 ocs

Visser: Explained how the debt peak works. Apparently the bond payments go down over time and the non-peak debt times are available for pay-as-you-go, which is what Cedar Ridge was set up to be paid via so that it could be built earlier.

Copeland: No matter how you do it, we are a net loser. CHCCS has never had to pay for a school.

Dean: In fact, CHCCS was in a similar situation for McDougle. CHCCS started out like Cedar Ridge;s funding and Orange County took over the later part of the debt payments.

Copeland: If the county later assumed the debt for McDougle, then why not Cedar Ridge?

Link: Because that was the agreement that we made up front.

Carey: This is why are trying to get rid of this. You can read the old minutes as to why those decisions were made at that time. The current way we do it breeds misunderstanding, which is why we are trying to change it.

Gordon: (asked about the impact fees)

Dean: Impact fees collected in a district are spent for new construction in that district.

Visser: Impact fees are put into an impact fee trust fund and can be applied to debt service for new seats.

Dean: Currently all of these impact fees collected in OCS are applied to Cedar Ridge.

Gordon: Asked about past impact fees and pay as you go related to chccs HS3.

(There was more conversation about the 10 year projections. There are big differences between the different plans)

Hough: OCS may not need a new school for 10 years, so chccs will have greater needs for the next 10 years, and then it may swing again.

Link: When we do chccs ES10, it will be 2007-8 and our debt capacity will be able to be expanded again (due to debt being retired). One of the things the board is grappling with is how to address the 60/40 split.

Hough: No matter how we do this, all citizens of the county are paying for new schools. chccs paid for ours and now we will pay for the new chccs schools.

Brown: Can you compare Cedar Ridge to McDougle from a debt service perspective?

Chavis: $9.6M was the original, but we have refinanced and we have saved millions of dollars.

Visser: CHCCS probably paid $3 or 4M.

??: Cedar Ridge has been paid for 5 years. We are half way through payments.

Carey: Commissioners are going to decide at May 3rd meeting [WHO CAN TAKE NOTES? I HAVE A COMMITMENT] which of the 60/40 plans to select. Let us know if you have comments before then.

[Note that there is a HUGE difference between some of them. OCS varies by $15M over 10 years between the min/max plans, and CHCCS varies by $13M over 10 years]

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(Equity discussion - a presentation was handed out on paper)

Link: (read parts of presentation) We are getting parts of the Bob Segal report in (we need to request these drafts). Should have complete Bob Segal report in shortly. Talked about history of chccs district tax that the chccs voters imposed upon themselves. Talked about the need for a definition of equity.

Hartkopf: Asked about the BOCC's ability to direct funds for a particular purpose.

Link: There was discussion on how the commissioners can direct funding to certain spending.

Whitling: Asked if the per pupil must be the same between the districts.

Link: The per pupil must be the same between the districts, even if the BOCC were to direct funding.

Stuckey: Asked about Tier III in presentation. (the scenario where ad valorem would go up and chccs district tax would go down)

Link: There are other options for Tier III.

Stuckey: Why would the county want to direct funds for OCS?

Link: This depends on the definition of equity. Programmatic or $$?

Visser: For arguments sake, countywide ad valorem goes up $25 (Rod made it clear that this is merely an example to illustrate one scenario). Both school systems get the $25. The BOCC could reduce the CHCCS district tax so that CHCCS revenue goes down $25. This would give OCS more money and CHCCS would stay the same. Or CHCCS could be reduced $15 instead of reducing by $25, which would give OCS $25 increase and CHCCS a $10 increase (ie - to account for inflation, etc).

Halkiotis: This is why I asked the county staff to work with the county attorney to see which of the options are legal. We need to start thinking about needs, not the pie splitting (ie- allocating funds that aren't needed). OCS does not need new schools. CHCCS needs new buildings. Orange county (not schools) buildings are falling apart.

Jacobs: I have the notebook for the upcoming county capital needs.

Carey: We should provide you with your own copy so that you understand that the county's own buildings have needs. We have finite resources that need to be shared We shouldn't be focusing on the pie.

[which is why I, Mark, have been advocating that let's write the needs down for everyone in a priority order and draw a line every year].

Brown: Regarding merger, chccs was against busing and northern folks are for local control. The school board should be allowed to control where allocated money is spent. I want equal funding, but I will wait a year.

[editorial note: Local control refers to the ability for a smaller group make their own decisions. In the context of these discussions, local control refers to the OCS BOE and citizens ability to make OCS decisions and the CHCCS BOE and citizens to make CHCCS decisions. I think Brown was referring to "local control" as the ability of the OCS BOE to determine where to spend funding allocated by the BOCC. When Copeland and Hartkopf discussed it in this meeting, I think they refer to "local control" as the ability of OCS to be able to both direct funding and determine their own taxes.]

Foushee: I wonder if it would be appropriate for the collaboration group to define equity. When we talk equity, we are talking about equal access. We need to talk about what funding is necessary for equity. We don't know what is feasible right now, but we are working on it.

Stuckey: If OCS is taxed more and has more funding, then the OCS board should be empowered to spend that money how they think is best for their students.

Bedford: My concern is that chccs not stagnate. As long as chccs is willing to pay more, we have certain needs. The tier 3 is tricky and could lead to chccs stagnation, though I am for the OCS district being funded.

Stuckey: I think Jamezetta speaks for the whole board.

Copeland: I disagree with my colleague that we are adequately funded. We are well funded compared to many counties. CHCCS does choose to pay a district tax and OCS has not. Personally I don't think they would. I think the BOCC should put that to a vote.

Link: The commissioners could zero the district tax, but I am sure they won't do that.

Copeland: You could only get equality if OCS has its own matching district tax. You have two different social classes.

Carey: You sound like you support merger.

Copeland: I definitely do not support merger. But I do support BOCC District Representation.

Hartkopf: I am grateful for money that OCS gets. We have equity right now. We also have democracy. CHCCS has elected to exercise their democratic rights to impose their own tax. This is democratic as the founders have intended.

Hough: (joking) which school board are you with?

Hartkopf: But there is a $13M difference. I don't like the way that equity is being defined. I don't want you to talk to me about equity. Look at the $13M and figure out what you want to do, but keep equity and it's accompanying guilt motivations out of it.

Halkiotis: We need to schedule another meeting with these two boards before we make a decision on the budget so that we can address the likely state cuts.

Carey: The collaboration group should make recommendations on the issues such as school construction.

Gordon: Building capacity is something that needs to be considered.

Carey: Make suggestions to the members of the group.

Carter: I want each district to be funded appropriately. I don't want chccs to be held stagnant while you address the ocs funding equity. If there is anything that we can do to help you with the funding locally, then we would like to help. We need to prepare the kids to help us. We can either get it right or get it wrong.

Brown: (Talked about how the district tax gives CHCCS more funding.) Our board has not discussed having the OCS district tax of our own.

Bedford: Regarding Dr. Grumet's report, I have a special needs child and Dr. Grumet had difficulty with the underlying reasoning. The conclusion is right, but the reasoning is wrong.

Hough: Dr. Grumet presented to our board, but we have not had a chance to discuss. There was no new news as the report affirms what we know.

Gordon: OCS, how do you think the BOCC should proceed with this? No matter how you cut it, this difference is due to taxes in OCS. You have to raise OCS taxes. The commissioners could raise the taxes now in this budget cycle. But what method should we use? Please have that discussion in your board and give us some feedback. I would like to work on funding equity, I have for a long time, but how should we proceed?

Carey: But you don't have to do that tonight. The Segal report tabled the discussion of merger. When we get the final report back, we will get back to that discussion. And you can give us your advice on merger. We won't do that before the budget cycle is done.

(talked about high school 3)

Carey: What has the architect said about overrun?

Stuckey: Same as OCS, the materials have gone up and the fact that there is a lot of construction and we only got 2 bids. Wake and UNC are building like crazy.

(talked about Smith Level road and that Carrboro has not made a decision)

Halkiotis: Would like to see what things were dropped out? We need to know what was tossed out because you could not afford. We would like to know what the towns mandate so we can understand those extra costs (ie - so we are comparing apples to apples)