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ORANGE COUNTY <br />BOARD OF COMMISSIONERS <br />ACTION AGENDA ITEM ABSTRACT <br />Meeting Date: November 4, 2010 <br />Action Agenda <br />Item No. o - a <br />SUBJECT: Public Hearing on the Issuance of Up to $9.9 Million of Qualified School <br />Construction Bonds for the Chapel Hill -Carrboro City Schools and Orange <br />County Schools <br />DEPARTMENT: Financial Services <br />PUBLIC HEARING: (Y/N) Yes <br />ATTACHMENT(S): <br />Listing of QSCB Projects <br />Financing Schedule <br />INFORMATION CONTACT: <br />Clarence Grier, 919-245-2453 <br />Bob Jessup, 919-933-9891 <br />PURPOSE: To conduct a public hearing on the proposed issuance of up to $9.9 million of <br />Qualified School Construction Bonds for the Chapel Hill -Carrboro City Schools and Orange <br />County Schools. <br />BACKGROUND: At the October 5, 2010 meeting the Board of County Commissioners <br />approved proceeding with the preliminary steps necessary to seek Qualified School <br />Construction Bond (QSCB) financing for the Chapel Hill -Carrboro City Schools and Orange <br />County Schools systems in an amount not to exceed $9.9 million. The Board authorized setting <br />a public hearing on the proposed financing for the November 4, 2010 Board Meeting. The <br />public hearing was advertised in the Chapel Hill Herald on October 16, 2010. <br />Chapel Hill Carrboro City Schools applied to the North Carolina Department of Public Instruction <br />(DPI) and received approval to use its 2010 QSCB allocations of $4.6 million for roofing projects <br />at McDougle Middle School and various other projects. Orange County Schools applied to the <br />North Carolina Department of Public Instruction (DPI) and received approval to use its 2009 and <br />2010 QSCB allocations of $5.3 million for auditorium renovations at CW Stanford Middle School <br />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 will evaluate the <br />financing including the issuer of the project and the tax credit rate. The potential purchaser will <br />determine whether to purchase the QSCB and further determine whether the tax credit rate is <br />sufficient, or if a higher interest rate, is needed to make the financing. <br />