Orange County NC Website
ORANGE COUNTY <br />BOARD OF -COMMISSIONERS <br />ACTION AGENDA ITEM ABSTRACT <br />Meeting Date: September 8, 2011 <br />Action Agenda <br />Item No. ~~ <br />SUBJECT: Resolution Authorizing Application to the Local Government Commission to <br />Issue Up to $42 5 Million in Limited Obligation Refunding Bonds <br />DEPARTMENT: Financial Services PUBLIC HEARING:- (Y/N) No <br />ATTACHMENT(S): <br />1. Resolution <br />2. Bond Refunding Analysis <br />INFORMATION_ CONTACT: <br />Clarence Grier, 919-245-2453 <br />Bob Jessup, 919-933-9891 <br />PURPOSE: To consider approving a resolution authorizing application to the Locai <br />Government Commission (LGC) to issue up to $42.5 million in Limited Obligation Refunding <br />Bonds to refund the 2007 Certificates of Participation (COPS). <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 -Branch <br />Banking- and Trust (BB&T) and Wells Fargo, has identified an opportunity for debt service <br />savings and provided an analysis of the potential savings under current market conditions. The <br />current proposal is to refund $42.5 million of various debt obligations of the County. The <br />analysis shows a potential savings of $1.76 million over the remaining life of the debt, with a net <br />present value of $1.3 million. The analysis shows the reduction in debt service would average <br />slightly over $'Fa7,000 a-year for fiscal years 2012 through 2027. <br />The Local Government Commission requires the percentage savings of debt service to be <br />approximately 3.0%, or more, of the amount of the refunded bonds. The proposal realizes a <br />3.067% savings. Market conditions could change between now and the time of issuance, <br />potentially increasing or decreasing savings. <br />Staff is proposing the Board approve a resolution 1) authorizing staff to proceed with an <br />application requesting the Local Government Commission's approval to issue up to $42.5 <br />million of Limited Obligation Refunding Bonds for the purpose of refunding various debt <br />obligations of the County; and 2) authorizing Davenport and Company, LLC, to serve as <br />Financial Advisor and the firm of Sanford Holshouser, LLP, represented by Bob Jessup, to <br />serve as Bond Counsel. <br />