Agenda - 11-21-2013 - Information Item 6-B

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INFORMATION ITEM - Attachment 6 - B O NORTH CAROLINA FINANCE AND ADMINISTRATIVE SERVICES 200 South Cameron Street Clarence G. Grier, CPA, CITP, CGMA Phone (919) 245 -2553 Post Office Box 8181 Assistant County Manager — CFO Fax (919) 644 -3324 Hillsborough, North Carolina 27278 MEMORANDUM To: Assembly of Governments From: Clarence Grier, Assistant County Manager — Chief Finance Officer Date: November 21, 2013 Re: Potential Bond Issue Over the past few months, the Orange County Board of County Commissioners has discussed the need for a future bond referendum to fund some county and school long -range capital needs. The anticipated issuance of general obligation bonds will be for two of the County's largest projects: New County Jail Facility and Middle School #5 for the Chapel Hill - Carrboro City School District total a combined $73.2 million dollars and both projects are included in the current County Capital Investment Plan for the fiscal years 2015 - 2020. An additional project that has been discussed is Elementary #8 for Orange County Schools, but this project is not scheduled until FY 2021 -2022. Affordable housing, lands legacy, and park projects could potentially be included on a potential bond referendum. Based on the County's current financial position, to afford the additional debt, the County would potentially have to increase the property tax rate 2.82 cents for the new debt service. This projected tax increase would not include any future other operating expenditure increases and or any future operating expenditure increases related directly to the new facilities and schools being built. The Orange County's current bond ratings are as follows • S &P - AAA • Fitch - AAA • Moody's - Aa1 positive outlook It is currently expected that projects totaling $100 -125 million could be financed with the issuance of general obligation or limited obligation bonds over a period not to exceed 20 years. At current municipal bond interest rates, the total combined debt service for $100 million is estimated to be $6.7 million annually. This would represent 4.18 cents on the current property tax rate.