Agenda - 03-03-2009 - 5a - Laserfiche WebLink

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2 It is worth noting the American Recovery and Reinvestment Act of 2009 (ARRA) has increased the small issuer exemption for tax exempt bonds from $10 million to $30 million for calendar years 2009 and 2010. The proposed County financing package detailed above could qualify under this exemption if 1) the amount of the financing was reduced to an amount less than $30 million and 2) no other tax exempt financings were pursued by the County during calendar year 2009. In addition, financial institutions will generally offer lower interest rates when the issuer qualifies for this exemption (known as a bank qualified financing). In anticipation of the final ARRA retaining the exemption increase, the request for proposals (RFP) the County sent to banks requested responses for both bank qualified and non-bank qualified financing. In order for the financing to meet the bank qualified limit, the County would need to defer at least $3,617,000 of the project financing until next calendar year. A staff recommendation on this deferral based on the potential interest savings will be made at the Board's March 17, 2009 meeting. FINANCIAL IMPACT: There is no financial impact related to holding the public hearing and adoption of the resolution. However, there will be a financial impact in proceeding with the financing. A preliminary conservative estimate of maximum debt service would require $2.14 million in FY 2009-10. A conservative estimate of the tax rate equivalent for FY 2009-10 is 1.39 cents. The highest debt service payment of $3.73 million would occur in FY 2010-11 with a tax rate equivalent conservatively estimated to be 2.33 cents. RECOMMENDATION(S): The Manager recommends the Board: 1) open the public hearing and receive any comments from the public; 2) close the public hearing; 3) make the findings of fact as set forth in the attached resolution for the projects and the proposed financing as prescribed under the guidelines of the North Carolina Local Government Commission; and 4) adopt the resolution supporting the application to the Local Government Commission for approval of the financing arrangements.