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1 <br /> ORANGE COUNTY <br /> BOARD OF COMMISSIONERS <br /> ACTION AGENDA ITEM ABSTRACT <br /> Meeting Date: October 19, 2010 <br /> Action Age V-0 <br /> a <br /> Item No. <br /> SUBJECT: Public Hearing and Consideration of Resolution Authorizing Application to the <br /> Local Government Commission to Issue Up to $103.6 Million in General <br /> Obligation Refunding Bonds and Financing of$2 Million for Computer <br /> Hardware/Software and Communications Equipment <br /> DEPARTMENT: Financial Services PUBLIC HEARING: (Y/N) Yes <br /> ATTACHMENT(S): INFORMATION CONTACT: <br /> 1. Resolution Clarence Grier, 919-245-2453 <br /> 2. Bond Refunding Analysis Bob Jessup, 919-933-9891 <br /> PURPOSE: To hold a public hearing and consider approving a resolution authorizing <br /> application to the Local Government Commission (LGC) to issue up to $103.6 million in General <br /> Obligation Refunding Bonds and to finance $2 Million in computer hardware/software and <br /> communications equipment. <br /> BACKGROUND: Staff maintains contact with several financial advisors who track the County's <br /> bonds against market conditions to identify opportunities to achieve debt service savings <br /> through refunding outstanding debt of the County. Municipal bond interest rates have continued <br /> to fall over the past fiscal year. Davenport & Company LLC, in conjunction with BB&T and Wells <br /> Fargo, has identified an opportunity for debt service savings and provided an analysis of the <br /> potential savings under current market conditions. The current proposal is to refund $84.3 <br /> million of various debt obligations of the County. The analysis shows a potential savings of $4.6 <br /> million over the remaining life of the debt, with a net present value of $3.9 million. The analysis <br /> shows the reduction in debt service would be approximately $1.7 million in the current fiscal <br /> year, and would average slightly over$165,000 a year for fiscal years 2012 through 2028. <br /> A new option for refunding savings has also presented itself with this refunding. If approved by <br /> the LGC, a majority of the savings from the refunding would be achieved over the first three <br /> fiscal years of the refunding issue. If this method of refunding is pursued, the savings in the first <br /> three years would be approximately $704,000 a year, with an average savings of $130,000 <br /> in the remaining 15 years. <br /> Additionally, the County would, as part of this refunding, include the issuance of $2 million to <br /> fund the remaining portions of the Property Information Management System (PIMS) hardware <br /> and software, telephones, financial and payroll software, and Sheriff's Department 911 radios. <br />