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2 <br />time Guggenheim appears to be the only significant purchaser of QSCB. BB &T is expected to <br />make a decision regarding entering this market in September. The current approach for this <br />type of financing is to negotiate terms directly with the purchaser. At the current time most of <br />the QSCB projects are being purchased so the County should be able to finance the project <br />whether or not BB &T enters the market. <br />All QSCB financing for the funds allotted for 2009 must occur by December 31, 2009 in order to <br />retain the allotment. This issuance of QSCB financing must follow the normal steps through the <br />Local Government Commission. There will be a number of entities seeking to issue this type of <br />financing prior to the end of the year. There are at most only two potential financing sources <br />and it is anticipated there will be many discussion items at the December LGC meeting. <br />Therefore staff and bond counsel believe it would be prudent to put the County in the position to <br />complete the financing as early as possible. Staff and bond counsel are proposing a schedule <br />(see attached) which would enable this financing to be presented to the LGC for approval at its <br />November meeting which occurs November 3, 2009. Because issuance will take place prior to <br />December 31 there may be an interest payment due in the current fiscal year. This payment <br />should be under $50,000. <br />Bond Counsel has prepared the attached resolution which: <br />1) Makes a preliminary determination to proceed with financing for the Carrboro High <br />Arts wing project; <br />2) Makes certain findings of fact to support the financing; <br />3) Authorizes the Finance Officer to proceed with an application to the LGC and seek <br />financing proposals and other steps necessary to move forward with the financing; <br />4) Sets a public hearing for October 6, 2009; and <br />5) Provides for reimbursement of project expenditures from financing proceeds. <br />The Board will need to consider an additional resolution approving the financing which is <br />scheduled for consideration on October 6, 2009. The School Board will also need to hold a <br />public hearing and approve the financing plan. The School Board may also need to approve a <br />transfer of the property. <br />FINANCIAL IMPACT: There is no financial impact until the Board gives final approval to the <br />financing. It is possible that the financing will require payment of a low rate of interest. The <br />Board will need to consider this in giving final approval to the financing. Given the fact that the <br />upcoming budget and ensuing budgets are expected to be difficult the Board may wish to <br />consider taking the required debt service for this financing from the CHCSS portion of pay as <br />you go revenue. This would eliminate any potential tax impact of the financing. <br />RECOMMENDATION(S): The Manager recommends that the Board adopt the attached <br />resolution which: <br />1) Makes a preliminary determination to proceed with financing for the Carrboro High Arts <br />wing project; <br />2) Makes certain findings of fact to support the financing; <br />3) Authorizes the Finance Officer to proceed with an application to the LGC and seek <br />financing proposals and other steps necessary to move forward with the financing; <br />4) Sets a public hearing for October 6, 2009; and <br />5) Provides for reimbursement of project expenditures from financing proceeds. <br />