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REVISED 1015110 1 <br /> Abstract Only <br /> ORANGE COUNTY <br /> BOARD OF COMMISSIONERS <br /> ACTION AGENDA ITEM ABSTRACT <br /> Meeting Date: October 5, 2010 <br /> Action Agenda <br /> Item No. Lf <br /> SUBJECT: Approval of the Preliminary Steps Necessary to Seek Qualified School <br /> Construction Bond Financing for the Chapel Hill --Carrboro City Schools and <br /> Orange County Schools <br /> DEPARTMENT: Financial Services PUBLIC HEARING: (Y/N) No <br /> ATTACHMENT(S): INFORMATION CONTACT: <br /> 1) Projected Financing Schedule Clarence Grier, 919-245-2453 <br /> 2) Resolution Supporting Financing Bob Jessup, 919-933-9891 <br /> PURPOSE: To approve the preliminary steps necessa ry to seek Qualified School Construction <br /> Bond financing for various school construction projects for Chapel Hill — Carrboro City Schools <br /> and Orange County Schools. <br /> BACKGROUND: Upon the request of Chapel Hill Carrboro City Schools (CHCCS) and Orange <br /> County Schools (OCS), the Board of County Commissioners, during the budget process in <br /> June, committed to the construction of various school projects contingent upon the availability of <br /> federal economic stimulus Qualified School Construction Bonds (QSCB). At that time the <br /> expectation was that the CHCCS and OCS allocations of QSCB funding for 2009 and 2010 <br /> would be approximately $10 million. Chapel Hill Carrboro City Schools applied to the <br /> Department of Public Instruction (DPI) and received approval to use its 2010 QSCB allocations <br /> of $4.0 million for roofing projects at McDougle Middle School and various other projects. <br /> Orange County Schools applied to the Department of Public Instruction (DPI) and received <br /> approval to use its 2009 and 2010 QSCB allocations of $5.4 million for auditorium renovations <br /> at CW Stanford Middle School and various other projects. <br /> Qualified School Construction Bonds are tax credit bonds. The issuer receives a tax credit at an <br /> interest rate established by the Treasury Department at the time of issuance. The issuer then <br /> provides the tax credit to the purchaser of the bonds. The potential purchaser(s) will evaluate <br /> the financing, including the issuer, the project and the tax credit rate. The potential purchaser(s) <br /> will determine whether to purchase the QSCB and further determine whether the tax credit rate <br /> is sufficient or if a higher interest rate is needed to make the financing. <br />