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ORANGE COUNTY <br />BOARD OF COMMISSIONERS <br />ACTION AGENDA ITEM ABSTRACT <br />Meeting Date: November 17, 2009 <br />Action Agenda <br />Item No. ~{- ' K <br />SUBJECT: Adoption of Resolution Approving Qualified School Construction Bond Financing <br />for $4,136,434 for the Carrboro High School Arts Winq <br />DEPARTMENT: Financial Services <br />PUBLIC HEARING: (Y/N) No <br />ATTACHMENT(S): <br />Resolution <br />INFORMATION CONTACT: <br />Gary Humphreys 919-245-2453 <br />Robert Jessup 919-933-9891 <br />PURPOSE: To adopt a resolution approving Qualified School Construction Bond Installment <br />financing in the amount $4,136,434 under section 160A - 20 of the North Carolina Statutes to <br />finance the Carrboro High School Arts Wing project. <br />BACKGROUND: The Orange County Board of Commissioners has previously approved <br />proceeding with the issuance of alternative financing by the use of an installment contract as <br />authorized under section 160A - 20 of the North Carolina General Statutes. The issuance will <br />finance the Carrboro High School Arts Wing project under the Qualified School Construction <br />Bond (QSCB) program in an amount not to exceed the $4,136,434 QSCB allocation. The <br />project cost estimate is $4,577,300. Chapel Hill Carrboro City Schools' has agreed to ask the <br />Chapel Hill Carrboro Board of Education to make available $441,000 from the pay as you go <br />funding from the County for the project, if necessary, to complete the project. <br />In addition, the Board has made the necessary findings of fact and conducted a public hearing <br />concerning the project 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 <br />December 1, 2009 meeting and the closing would occur shortly thereafter. This will enable the <br />County to meet the December 31, 2009 deadline for issuance of financing for the 2009 QSCB <br />allocation. <br />As noted during previous Board discussions, the QSCB is taxable financing with a tax credit <br />designed to result in a zero percent (0%) rate to the County. There are very limited financing <br />sources currently available for this type of financing. Under the current tax credit rates being <br />issued by the US Treasury, financing sources are requiring supplemental interest coupons for <br />this financing program. Branch Banking & Trust (BB&T) has reconsidered its earlier decision not <br />to participate in this type of financing, and staff has negotiated with BB&T a 1.81 % supplemental <br />