1. VSBA Conference November 17, 2011

2. Roanoke County Public Schools Roanoke, Virginia Mr. Drew Barrineau, CPA, School Board Member dbarrineau@rcs.k12.va.us Mrs. Penny Hodge, CPA, SFO, Assistant Superintendent of Finance phodge@rcs.k12.va.us 2

3.  14,400 students with growing enrollment  30 school buildings  Average age of buildings -- 48 yrs old  17 elementary, 5 middle, 5 high, 3 specialty  Completed $71M in school projects since 1997-2005 based on community study (8 schools) 3

4.  22 schools remaining with capital needs  Aging infrastructure with no financial plan  County government capital needs growing  Competing county capital needs - new public safety facility, county garage, recreation center, and library in the works  Debt capacity was exhausted 4

5.  Find a way to address future capital needs of both School System and County Government  Identify funding stream to sustain CIP  No tax increase 5

6.  New policies to protect plan from yearly fluctuations and ensure sustainability  Win-win solution to address school and county capital needs  Collaboration of both boards and finance staffs  Buy-in from boards and employees to commit to long-term investment in capital 6

7.  Methodical means of funding CIP  Allocating smaller dollar amounts every year is small compared to the size of the capital needs and the results of ignoring those needs  Easier to give community dependable projections on when projects will begin  Design work can be scheduled just prior to building and not sit on shelf 7

8.  Compatible and complimentary school and county financial policies  Permanent revenue stream  Annual commitment of set amount of new money  Cooperative relationship between School and County governing boards  Use pay-as-you-go for smaller capital expenditures including A&E and land 8

9.  In budgeting …….revenue sharing formula  In year end ………year end surplus rollover agreement 9

10. 1. Establish School Capital Reserve 2. Use of School YE Balances 3. Establish County Capital Reserve 4. Use of County Unspent YE Expenditures 5. Use of County Revenues in Excess of Budget 10

12.  Began with $2M annual contribution in 1996 (to build new high school)  Add new $600,000 from county & schools each year (beginning in 2005-06)  Plus debt drop-off over time  Plus economic development incentive drop- off over time  Results in incrementally growing reserve  Limit bonding to 20 years 12

13. FY05$2,000,000 FY06$2,600,000 FY07$3,200,000 FY08$4,200,000* FY09$4,800,000 FY10$5,400,000 FY11$6,000,000 FY12$6,600,000 FY13 projected $7,200,000 FY25 projected $14,400,000 * Boards increased contribution this year during budget negotiations. 13

14.  Use for projects on adopted CIP  Land as it becomes available  Fund with 2/3 of YE balance  Pay cash for smaller projects  Supplement borrowing for larger projects 14

15.  Use for smaller capital projects (<$500,000) and one-time needs  Fund with 1/3 of YE balance  Plus sale of land and buildings  Can be used for A&E to get CIP projects planned  Can also be used for CIP projects 15

16.  Set up like reserves for the County government 16

17. 2011-12$10M Schools 2012-13$10M Schools 2013-14$10M County 2014-15$10M Schools 2015-16$10M Schools 2016-17$10M County Future funding pattern of 2 years schools and 1 year county projects. 17

18.  Properly timed bond issues  Available cash accumulated in Major/Minor reserves (from year end surpluses)  No tax increases needed  Funds $40M for schools and $20M for county over next 6 years (at a minimum)  Ensures funding for future School Boards  Assists County Board in addressing needs of entire county with constituents 18

19. Schools - $122 million $41M paid in cash County - $107 million $20M paid in cash Plus $10M added to Unappropriated Balance 19

20. 2005$5.3 million 2006$6.2 million 2007$6.8 million 2008$5.0 million 2009$4.5 million 2010$6.7 million 2011$9.9 million Total to Date$44.4 million 20

21. 21

22.  Replace Cave Spring Middle  Construction RFP released in Spring 2011 (still attractive bidding market)  $28 million cost including all soft costs  Paying $18 million in cash! 22

23. RCPS lost $17M (21%) in state funding from FY09-FY11  Committed to not reducing annual contribution even in bad years (treated like a debt payment)  Allowed for 20-25% cost savings over past 3 years when construction costs were reduced due to the economy (bid out 5 school building projects)  Benefits of policy reinforced by ongoing capital projects able to be funded  Bond rating agencies give high marks (AA+) 23

24.  Plan for future capital needs in realistic timeframes  Communicate with citizens  Eliminate annual competition for same funds  Relatively simple to manage  Immediate payback for county and schools in CIP projects underway 24

25. Roanoke County Public Schools www.rcs.k12.va.us 25