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2 <br /> 4. First Tennessee Bank <br /> Bank of America was selected as the financially responsive and financially responsible bidder. <br /> The financing agreement will be subdivided into two installment financing agreements: one for <br /> the financing of the capital investment projects and one for the financing of the equipment. <br /> The financing terms of the two installment financing agreements will be follows: <br /> 1. Installment Financing Agreement 1 — Capital Projects - $8.16 million in total debt service, <br /> Interest Rate— 2.41%, Average debt service over 15 years totals $544,252. <br /> 2. Installment Financing Agreement 1 — Equipment - $3.88 million, Interest Rate — 1.24%, <br /> Average debt service.over 5 years totals $776,537. <br /> Total debt service will average $803,098 over the term of the installment financing agreements. <br /> Additionally, under the installment financing method selected by the County, the financing will be <br /> secured by a mortgage on the school land and buildings. For the County to grant a mortgage <br /> and collateral, the County must.own the Culbreth Middle School and the proposed constructed <br /> Science Wing. The Chapel Hill — Carrboro City (CHCCS) School Boa-rd will-have to transfer the I <br /> property to the County for the financing. The Cou-nty will lease the property back to CHCCS for <br /> its use during the financing term, and the financing documents will provide for the school <br /> property to be returned to CHCCS when the financing is retired. The annual lease to CHCCS <br /> will be $1 per year. <br /> The CHCCS Board, at its meeting last week, approved the overall financing plan, including the <br /> transfer of the school property. State law provides that such a transfer can occur only after a <br /> public hearing. The resolution provides the County`s approval of the transfer, and provides <br /> approval of other financing terms and documents for the installment financing previously <br /> approved by the Board in principle. <br /> I <br /> FINANCIAL IMPACT": There is no financial impact related to this action. However, there will be � <br /> a financial impact in proceeding with the financing. The maximum annual debt service <br /> applicable to the County and School capital investment projects financing would require <br /> $646,920, and $796,415 for the equipment financing in fiscal year 2014-15. The total combined <br /> debt service for the fiscal year 2014 --2015 for this financing would be $1,443,335. <br /> RECOMMENDATION(S): The Manager recommends the Board conduct the public hearing, <br /> receive public comments, close the public hearing and approve the resolution authorizing the <br /> steps to move forward with the financing of the stated capital project and equipment financing. <br /> II <br />