Agenda - 11-17-2015 - 6a - Minutes

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10 1 grant funding and does not address the on-going fee structure that would be used to pay for 2 regular operations and maintenance. These available tools can be used in combination. 3 Initial Financing 4 1. The governmental partners could lend or grant money to the District to fund construction. 5 a. The terms of loan repayment, if any, could include provisions for the 6 District to pay interest or for portions of the loan to be forgiven upon defined conditions. 7 b. There are ways that a local government partner could borrow money to be loaned or 8 granted to the District if a partner wanted to explore that option. 9 c. Funds could be either paid to the District up front or on an as-needed basis over the 10 project construction period. 11 2. The District could borrow money from a third-party lender. 12 a. The District could use most of the tools regularly available to North Carolina local 13 governments, including general obligation bonds, (subject to a vote of the residents of 14 the District) non-voted installment financing (which uses the financed assets as collateral 15 for the loan), or revenue bonds (which pledges net operating revenues of the system as 16 security for the loan). 17 b. Because the District will be a new operating entity with a small scope, a private lender 18 might well ask one or more of the governmental partners to provide "moral obligation" 19 backing to a District loan which is a promise to consider funding a loan payment that the 20 District could not otherwise pay. This would be an annual, "subject to appropriation" 21 promise similar to the County's commitment to its installment financings and limited 22 obligation bonds. 23 24 Cost Recovery 25 The District would have most of the same tools to raise revenue as other general 26 purpose local governments. 27 • Property tax—a rate would be established annually by the Board of Commissioners. There is 28 no obligation to levy a separate property tax within the District. 29 • Water and sewer rates, fees and charges — including usage fees and availability fees, as well 30 as capital charges for new service 31 • Special assessments against benefitted properties — allows the District to collect funds over a 32 ten-year period. Please note that special assessments can be assessed to recover less than all 33 of the costs of a project, and that installments can, but are not required to, include a component 34 of interest over time. 35 • Sales taxes —the District would not share in sales tax distributions. 36 37 Commissioner Dorosin asked what would happen if the OWASA disagreed with the 38 County's requests or plans. 39 Commissioner Jacobs said there can be differential rates. 40 Commissioner Dorosin said his concern is that the project is not being put out to bid, 41 and OWASA may not want to do what the County requests. He said having differential rates is 42 a clear advantage. 43 Bob Jessup said OWASA can speak for themselves on this question. He said the 44 second reason to focus on the district was that the defined area may assist the three 45 jurisdictions in doing joint planning. He said the district itself does not have any land use 46 authority. He said the third reason to focus on the district is the idea that the district might be 47 eligible for loan and grant programs that the County is not otherwise eligible for on its own. He 48 said the Department of Agriculture programs are the best example of that. 49 Commissioner Price asked who would write and manage such grants. 50 Bob Jessup said the district would contract that responsibility or assign it to staff.