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1 <br /> ORANGE COUNTY <br /> BOARD OF COMMISSIONERS <br /> ACTION AGENDA ITEM ABSTRACT <br /> Meeting Date: January 24, 2012 <br /> Action Agenda . <br /> Item No. � <br /> SUBJECT: Adoption of a Reimbursement Resolution for Chapel Hill Carrboro City Schools <br /> Elementary#11 <br /> DEPARTMENT: Financial and Administrative PUBLIC HEARING: (Y/N) No <br /> Services <br /> ATTACHMENT(S): INFORMATION CONTACT: <br /> Reimbursement Resolution for CHCCS Clarence Grier, 919-245-2453 <br /> Elementary #11 Bob Jessup, 919-933-9391 <br /> Frank Clifton, 919-245-2301 <br /> Reimbursement Resolution for Chapel <br /> Hill — Carrboro City Schools <br /> Timeline for Debt Issuance for <br /> Elementary# 11 <br /> PURPOSE: To adopt a reimbursement resolution authorizing the County to reimburse itself <br /> and Chapel Hill - Carrboro City Schools (CHCCS) for non-general obligation bond project <br /> expenditures incurred for the construction of CHCCS Elementary #11 prior to the actual <br /> issuance of debt; and to schedule a public hearing to receive public input and consider approval <br /> of the financing timetable as set forth in the attached timeline for the issuance for the debt. <br /> BACKGROUND: The Board of County Commissioners has committed to constructing <br /> Elementary #11 for the Chapel Hill — Carrboro City Schools. Current plans include issuing non- <br /> general obligation debt, also known as alternative financing, not later than May 2012 to fund the <br /> project. <br /> In accordance with Local Government Commission (LGC) policy, local governments must have <br /> construction bids "in hand" prior to actually incurring debt. However, local governments must <br /> expend monies in order to get the bids and in turn, reimburse themselves once they issue the <br /> debt. As specified by the Internal Revenue Service, the tool that allows local governments to <br /> proceed with planned projects and expend funds prior to issuing debt is a reimbursement <br /> resolution. Reimbursement resolutions allow governing boards to state their intent to reimburse <br /> themselves for capital project expenses with funds received from the debt financing. <br /> The adoption of this resolution is consistent with past practices — for example, with the 2008 <br /> Animal Services Facility, when the project incurred expenditures prior to the actual sale of the <br /> authorized financing. In these instances, the Board adopted reimbursement resolutions that <br /> authorized the County to expend monies up front and reimburse itself once the borrowed <br />