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ORANGE COUNTY <br /> BOARD OF COMMISSIONERS <br /> ACTION AGENDA ITEM ABSTRACT <br /> Meeting Date: March 17, 2009 <br /> Action Agenda <br /> Item No. 4 - m <br /> SUBJECT: Adoption of Resolution Approving Alternative Financing for Capital Projects and <br /> Equipment <br /> DEPARTMENT: Financial Services PUBLIC HEARING: (YIN) No <br /> ATTACHMENT(S): INFORMATION CONTACT: <br /> Resolution Gary Humphreys 919-245-2453 <br /> Robert Jessup 919-933-9891 <br /> PURPOSE: To adopt a resolution approving the Financing for Capital Projects in the amount of <br /> $30,917,000. <br /> BACKGROUND: The Orange County Board of Commissioners has previously approved the <br /> capital projects and the issuance of alternative financing by the use of an installment contract as <br /> authorized under section 160A — 20 of the North Carolina Statutes to finance capital projects <br /> and equipment in an amount not to exceed $33,617,000 as shown below: <br /> • Acquisition and equipping of the county portion of the Gateway Center, county office <br /> building, and library known as the County Campus Project $25,000,000 <br /> • Parks and Open Space projects $5,500,000 <br /> • Affordable Housing projects $1,400,000 <br /> • Property Management and Information System (PIMS) $1,500,000 <br /> • Solid Waste Equipment $217,000 <br /> In addition the Board has made the necessary findings of fact and conducted a Public Hearing <br /> concerning the projects and proposed financing as prescribed under the guidelines of the Local <br /> Government Commission. The next step is for the Board to make a determination to proceed <br /> with financing and direct staff to execute documents and complete the closing of the financing <br /> through the adoption of the attached resolution. Pending Board approval, the Local Government <br /> Commission would subsequently consider approval of the financing arrangements at its April 7, <br /> 2009 meeting. <br /> Normally banks are not allowed to deduct the interest expense of carrying tax-exempt municipal <br /> obligations. There is a small issuer exception under the tax code (known as bank qualified) <br /> which allows a bank to deduct 80% percent of interest expense of carrying a qualified tax- <br /> exempt municipal obligation. The American Recovery and Reinvestment Act of 2009 (ARRA) <br /> raised the small issuer exemption for tax exempt financing to $30 million. This enables the <br /> banks to offer a better rate. <br />