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5 <br />Commissioner Halkiotis suggested that Commissioner Jacobs and Commissioner Brown work <br />together to develop a proposal for the Board to discuss. <br />The consensus of the Board was to have Commissioner Jacobs and Commissioner Brown work <br />on this and bring back a recommendation to the Board for discussion. <br />b. Resolution and Modification Agreement to Refinance installment Purchase - <br />McDougle Elementary School <br />The Board considered adopting a resolution and modification agreement authorizing the <br />refinancing of an installment loan with NationsBank to reduce the interest rate by 1.12 percent. <br />Finance Director Ken Chavious reported that an installment purchase had been entered into with <br />NationsBank to finance the McDougle Elementary School. This was the first undertaking of this kind that the <br />County had pursued as it relates to a school project. The County borrowed $9.6 million dollars for a 15-year <br />period at 5.71 % interest. This 5.71 % loan was the only debt the County had that was above 5%. He asked <br />NationsBank to consider refinancing at a more favorable rate which they agreed to do. The new rate is <br />4.59%. This does not extend the term of the loan but it does save the County approximately $60,000 per <br />year in interest costs and $600,000 for the term of the loan. This is a very simply procedure and does not <br />need to be approved by the full Local Government Commission. Staff will review it and the Local <br />Government Commission will sign off on the modification agreement. <br />Commissioner Halkiotis thanked Ken Chavious for his initiative in saving money for the citizens of <br />Orange County. He mentioned that if this was done in the private sector, Chavious would be eligible for a <br />financial reward. Commissioner Halkiotis stated that the County does not do enough to reward this type of <br />behavior. He challenged the Manager to look again at the possibility of creating a Countywide program that <br />would reward staff who made these types of contributions. <br />A motion was made by Commissioner Jacobs, seconded by Commissioner Halkiotis to approve <br />the resolution as stated below: <br />Resolution Regarding Modification Agreement for McDougle Elementary Financing <br />WHEREAS: In January, 1995, Orange County entered into a financing arrangement with <br />NationsBank for the construction of McDougle Elementary School. The Finance Director has secured a <br />proposal from NationsBank to reduce the interest rate on the financing from 5.71% to 4.59%. The <br />Finance Director distributed at this meeting a draft dated April 23, 1999, of a Modification Agreement <br />(the "Agreement") to carry out this reduction. <br />BE IT RESOLVED by the Board of Commissioners of Orange County, North Carolina, as follows: <br />1. The Board determines that the County shall enter into the Agreement. The Chair and <br />Vice Chair of the County's Board of Commissioners, or either of them, are hereby authorized and <br />directed to execute and deliver the Agreement, and the Clerk to this Board (or any assistant clerk) is <br />hereby authorized and directed to affix the County's seal to the Agreement and to attest the same. <br />2. The Agreement shall be in substantially the form submitted to this meeting, which is <br />hereby approved, with such changes as may be approved by the Chair or Vice Chair, such officer's <br />execution to constitute conclusive evidence of such officer's approval of any such changes. The <br />Agreement in final form, however, must provide for a nominal annual interest rate (in the absence of <br />default or change in tax status) not to exceed 4.59%, and for no extension of the financing term or <br />increase in the outstanding principal balance of the financing. <br />QA19990504.doc