Agenda - 09-01-2015 - 6a - Laserfiche WebLink

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18 1 2 Background: 3 At its November 6, 2014 meeting, the Board of County Commissioners was given preliminary 4 information of capital projects and equipment financing for the year. At that meeting, the Board 5 made a preliminary determination to finance costs of these projects and equipment by the use 6 of an installment financing, as authorized under Section 160A-20 of the North Carolina General 7 Statutes. 8 9 Also included is the refinancing of approximately $10,200,000 from a 2006 installment financing 10 secured by Carrboro High School, and a 2006 Certificates of Participation installment financing 11 secured by Gravelly Hill Middle School. 12 13 The statutes require that the County conduct a public hearing on the proposed financing and 14 refinancing contracts. The Board conducted a public hearing at its April 7, 2015 meeting, and 15 adopted the resolution supporting the application to the Local Government Commission (LGC) 16 for approval of the financing and refinancing arrangements (Attachment 1). County staff has 17 been in contact with the LGC staff, and staff expects no obstacles to receiving LGC approval. If 18 the Board adopts the final financial resolution (Attachment 2— beginning on page 15 of this 19 package) giving final approval to the financing and refinancing plans at tonight's meeting, staff 20 expects the LGC to approve the financing and refinancing plans at the LGC's meeting on June 21 2, 2015. 22 23 Under the current schedule, staff expects to set the final interest rates and other terms of the 24 financing around June 15, and to close on the financing and refinancing by June 26th, 2015. It 25 should be noted that the installment financing issuance package has been reduced by 26 $400,000 with the removal of planning funds for the Southern Orange Campus project. Due to 27 the timing of this current financing package, these planning funds can be combined with the 28 financing of the Southern Human Services Center expansion project scheduled in FY 2016-17. 29 30 The Board is requested to approve a financing amount not to exceed $28,000,000, and a 31 maximum interest rate of 3.75%. The final financial resolution (Attachment 2) includes as 32 Exhibit B a list of draft documents. These lengthy documents are available to the Board and the 33 public for review upon request from the Orange County Finance and Administrative Services 34 Department. 35 36 There will be a financial impact associated with approval of the financing. At current rates, 37 preliminary estimates of maximum debt service applicable to the capital investment projects 38 and equipment financing would require the highest debt service payment of$1,732,695 falling 39 in FY 2016-17. The tax rate equivalent for the estimated highest debt service payment is 40 approximately 1.06 cents. However, a portion of this debt financing is related to projects where 41 the debt service payments will be paid for from Sportsplex and Solid Waste Enterprise funds, 42 as well as a Water and Sewer project to be paid from the Article 46 quarter-cent Sales Tax 43 proceeds earmarked for economic development. The General Fund portion of this annual debt 44 service is estimated at $1.1 million, or a tax rate equivalent of approximately 0.67 cents. Based 45 on current resources and the retirement of some existing debt, no adjustment to the tax rate 46 associated with this financing is anticipated to occur during the period noted. Regarding the 47 refinancing, it is estimated that the County will realize savings of approximately $451,788 over 48 the life of the refinancing term.