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Honorable J Yoshimoto <br /> May 5, 2010 <br /> Page 2 <br /> The lower the interest rate and the greater the revenues, the more can be borrowed while <br /> staying within the prudent debt service limits. The proposed operating budget for this coming <br /> fiscal year includes debt service for short term bond anticipation notes, which are used to <br /> reduce carrying cost and insure that cash will be available for projects as needed. As budgeted, <br /> the resulting total debt service is estimated at 10.3% of the general expenditures. If all debt <br /> that has been authorized by the County Council was issued, the debt service percentage would <br /> be 12.5% of the general expenditures. <br /> What is a Capital Improvement Project? <br /> A project is eligible for funding from the capital budget if it is a major nonrecurring expenditure, <br /> such as: <br /> 1. Land acquisition; <br /> 2. Infrastructure improvement other than buildings that add value to the land or <br /> improves utility (roads, drainage, sewer lines, parking, landscape or similar <br /> construction); <br /> 3. New buildings or structures or additions to buildings; including related equipment <br /> and appurtenances which are integral to the new structure; <br /> 4. Nonrecurring rehabilitation, remodeling or expansion of infrastructure and <br /> buildings; <br /> 5. Planning, feasibility, engineering, or design studies related to capital improvement <br /> projects; <br /> 6. Information and communications technology infrastructure. <br /> Pending vs. New Projects <br /> Approximately 46 of the 80 proposed projects are reappropriations of existing projects totaling <br /> $89,711,000 because appropriations are lapsing and funds will not be encumbered by June 30, <br /> 2010. Generally, appropriations are active for 3 years from the effective date of the ordinance <br /> appropriating the project. <br /> 4 <br />