1. Presentation Capital Projects Funds Note - This presentation and other budget documents are available on the District’s website 1

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6.  In the District’s General Fund (operating budget), losses in tax collections may be offset by Legislative action that increases state (FEFP) funding  In the Capital Funds, there is no “commitment” by the Legislature to offset losses in tax collections  Also, state-funded capital programs have essentially disappeared (only CO&DS continues)  Between 2001-02 and 2008-09, PECO “New Construction” allocations averaged $5.5M. Since 2008-09, we have not received any funding.  During the same period, PECO “Maintenance” allocations averaged $1.5M. Since 2011-12, we have not received any funding.  Note - The Legislature has continued to provide PECO funds, but the funds are distributed exclusively to charter schools Note - This presentation and other budget documents are available on the District’s website 6

7.  In addition to ad valorem (property) taxes, there are two other local revenue sources that may only be used for capital expenditures  Sales Tax Collections – An additional ½ cent sales tax was reauthorized (through 12/31/2026) by voters in 2005.  Impact Fees – The St. Lucie County Board of County Commissioners approves the ordinance that provides the amount of impact fees new development must pay.  These funds have also declined since 2007-08 (see the next chart) Note - This presentation and other budget documents are available on the District’s website 7

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9.  Each year’s funding is established as follows:  State funding – PECO and CO&DS allocations are determined by Legislative action (amounts usually not available until May)  Local funding – Property tax estimates require the value of the underlying tax base, which is provided by the Property Appraiser’s certification of taxable values (not available until July). Note – The Legislature can also affect this revenue source by changing allowable millage rates  Local funding – Sales Tax Collections are based on historical trends  Local funding - Impact Fee Collections are based on historical trends Note - This presentation and other budget documents are available on the District’s website 9

10.  Once funding is established, projects are prioritized via a review of facility needs and requests. However, the “first priority”, which must be fully funded, is debt service.  For 2013-14, the funded projects are provided in the accompanying spreadsheet (the funded projects are also listed in the District’s Long-Range Capital Plan)  As shown in the long-range plan, funding requests exceed available resources. Since the Board must approve a balanced budget each year, prioritization and project deferral are required. This process has already started for 2014-15 (a planning meeting, with staff from Finance, ITS, Facilities, Security, Risk Management, and transportation, was held on 10/15/13). 10