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ORANGE COUNTY <br />BOARD OF COMMISSIONERS <br />ACTION AGENDA ITEM ABSTRACT <br />Meeting Date: February 7, 2012 <br />Action Agenda <br />Item No. ~ - b <br />SUBJECT: Public Hearing on the Financing for Chapel Hill -Carrboro City Schools <br />Elementary #11 and Other County Capital Projects and Refinancing of Existing <br />Obligations <br />DEPARTMENT: Financial Services PUBLIC HEARING: (Y/N) YO <br />ATTACHMENT(S): <br />A) Copy of Hearing Notice <br />B) Resolution <br />C) Financing Document <br />INFORMATION CONTACTS: <br />Clarence Grier, 919-245-2453 <br />Robert Jessup, 919-933-9891 <br />PURPOSE: To conduct a public hearing on the issuance of approximately $25.5 million in <br />alternative financing for Elementary School #11 for Chapel Hill -Carrboro City Schools, for <br />other County capital projects and to refinance existing obligations, and consideration of a related <br />resolution supporting the County's application to the Local Government Commission for its <br />approval of the financing arrangements. <br />BACKGROUND: The Board of Commissioners has previously approved the construction of a <br />new elementary school for the Chapel Hill -Carrboro public schools, generally referred to as <br />"Elementary #11 ". The Board has made a preliminary determination to finance costs for this <br />projects by the use of an installment contract, as authorized under Section 160A-20 of the North <br />Carolina General Statutes. County staff estimates that the total amount to be financed for <br />school construction will be approximately between $20,500,000 and $21,500,000. <br />In addition, County staff believes that it would be in the County's best interests to include in this <br />financing package approximately $3,500,000 of additional funding for County capital projects. <br />These additions would include approximately $3.0 million for improvements to solid waste <br />convenience centers, and just over $500,000 for the purchase of three ambulances. Combining <br />these projects with the school financing would provide the efficiency of fewer separate <br />transactions, and would be expected similarly to reduce total transaction costs. <br />Also, the County's prospective investment banking underwriters for the debt issuance (Branch <br />Banking and Trust Company Capital Markets (BB&T)) have advised the County that because of <br />continuing low market interest rates, there may be opportunities for the County to refinance <br />some of the County's existing installment financing arrangements. BB&T estimates that adding <br />approximately $50 million to the debt issuance to refinance existing obligations could save the <br />County approximately $1.7 million over the next 15 years (or approximately $1.62 on a present <br />