Agenda - 05-19-1998 - 9a - Laserfiche WebLink

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'1 R County arranges a loan payment schedule with decreasing payments each year; if the Board G redirects funding from certain capital projects in the recommended CIP to the school /park reserve; or some combination of these three measures. It is staff s opinion that if the Board approves the CIP with all three private placement projects as recommended, that the County apply to the Local Government Commission for the approximately $4.8 million needed to accomplish the outlined project scope as one package. LGC approval would be needed no later than December, 1998 in order to secure the most favorable interest rates. In early 1999, the County will begin selling bonds approved by voters in the November 1997 referenda. For the next few years, the County will almost certainly not be "bank qualified" under IRS regulations as a small issuer (less than $10 million in debt incurred in any calendar year) because we will be selling $56 million worth of bonds over a multi -year period. We will remain bank qualified for 1998, which would allow us to incur private placement debt at a much lower interest rate (at least 1- 2% lower) than we would obtain if the lender were required to pay federal income tax on the interest paid to it by the County. Pursuing the $4.8 million as one private placement package will also be administratively easier and reduce staff time and legal and issuance costs, compared to a multi- phase approach or the issuance of Certificates of Participation (COPs). Any private placement funds that the County draws down but does not spend immediately would be placed in interest earning accounts. The rate that the County earns on its investments at this time is very close to the interest rate that the County would likely have to pay on any money borrowed. May 6, 1998 Meeting Followup The Board discussed a proposal to include $200,000 annually for the PACE program (see attached staff memos from Don Belk on the recent history of farmland preservation efforts in Orange County: Cost of Community Services Studies (COCS); and the Forsyth County farmland preservation program). The Manager recommends that if the Board decides that it wants to implement PACE, or some similar program, that funding in the first year of $100,000 be provided through an appropriation of $50,000 from the County capital project fund balance, and a $50,000 transfer from the General Fund from unanticipated property tax revenues that will likely be received in 1998 -99 from taxes on acreage removed from the land use program. In the second year, these appropriations could increase to $150,000 ($75,000 from both the County Capital Project and General Funds) in the second year, and to $200,000 by the third year. 1998 -2008 CIP Adoption Following further discussions and deliberations tonight, the Manager recommends that the Board adopt the 1998 -08 Capital Investment Plan, withholding decisions on any specific projects that may need further deliberation during the Board's budget work sessions in June. Approval of most, if not all, of the CIP at this time will afford staff sufficient time to prepare the numerous capital project ordinances that will need to take effect on July 1, 1998 in order to carry out the CIP. Ordinances for each capital project will be presented for formal adoption by the Board no later than the Board's final regular meeting for the 1997 -98 fiscal year on June 22. RECOMMENDATION(S): The Manager recommends that the Board of Commissioners formally adopt the 1998 -2008 CIP, less any specific projects that the Board may identify as needing further deliberation during June 1998 budget work sessions.