Agenda - 09-18-2012 - 5f - Laserfiche WebLink

Browse Search

2 Section 147 of the Internal Revenue Code of 1986 outlines specific steps that must occur when a tax supported fire department enters into a financing arrangement. • Conduct a public hearing — On August 16, 2012, the department held a public hearing regarding the purchase. The Department advertised the hearing in the News of Orange (Attachment 2 of this abstract). Per the Attachment 3 of this abstract, no residents were present at the hearing and the Department did not receive any written comments from residents of the district. • Obtain approval of the "applicable elected representatives" — In accordance with Section 147, the Board of County Commissioners must approve the District's plan to enter into the debt arrangement. This approval does not create liability on the part of Orange County nor does it make the County responsible for the repayment of any debt assumed by the fire district. The approval provides a mechanism for the Commissioners to acknowledge that, through this financing arrangement, Efland Volunteer Fire Company, Inc. is pledging use of the District's tax dollars to repay the loan. In order to comply with this IRS requirement, the Chair of the Board of Commissioners must sign the Fire Service Agreement (Attachment 4) and Certificate of Approval (Attachment 5). FINANCIAL IMPACT: The interest rate for the 5-year note with BB&T is 2.33 percent with annual payments of $53,548.65. The total repayment, including principal and interest, equals $267,743.25. These figures may vary slightly depending upon the actual loan closing date. RECOMMENDATION (S): The Manager recommends that the Board: 1. Approve Efland Volunteer Fire Company, Inc.'s purchase of a fire truck; 2. Appropriate $45,000 from the Company's unassigned fund balance; and 3. Approve and authorize the Board of Commissioners' Chair to sign the appropriate documents related to the financing arrangement.