Minutes 10-13-2015 - Laserfiche WebLink

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Creating the District is not procedurally complex. The District could be fully established within 60 days of the Board's determination of the geographic boundaries of the District. Attachment B outlines the procedure for creating the District. Carrboro would need to consent to including within the District any property that is within Carrboro town limits. Financing There are a variety of options for financing the construction of the system and for recovering any loans made to the District. This discussion sets aside the possibility of external grant funding and does not address the on-going fee structure that would be used to pay for regular operations and maintenance. These available tools can be used in combination. Initial Financing 1. The governmental partners could lend or grant money to the District to fund construction. a. The terms of loan repayment, if any, could include provisions for the District to pay interest or for portions of the loan to be forgiven upon defined conditions. b. There are ways that a local government partner could borrow money to be loaned or granted to the District if a partner wanted to explore that option. c. Funds could be either paid to the District up front or on an as-needed basis over the project construction period. 2. The District could borrow money from a third-party lender. a. The District could use most of the tools regularly available to North Carolina local governments, including general obligation bonds, (subject to a vote of the residents of the District) non-voted installment financing (which uses the financed assets as collateral for the loan), or revenue bonds (which pledges net operating revenues of the system as security for the loan). b. Because the District will be a new operating entity with a small scope, a private lender might well ask one or more of the governmental partners to provide "moral obligation" backing to a District loan which is a promise to consider funding a loan payment that the District could not otherwise pay. This would be an annual, "subject to appropriation" promise similar to the County's commitment to its installment financings and limited obligation bonds. Cost Recovery The District would have most of the same tools to raise revenue as other general purpose local governments. • Property tax— a rate would be established annually by the Board of Commissioners. There is no obligation to levy a separate property tax within the District. • Water and sewer rates, fees and charges — including usage fees and availability fees, as well as capital charges for new service • Special assessments against benefitted properties — allows the District to collect funds over a ten-year period. Please note that special assessments can be assessed to recover less than all of the costs of a project, and that installments can, but are not required to, include a component of interest over time. • Sales taxes —the District would not share in sales tax distributions. Commissioner Dorosin asked what would happen if the OWASA disagreed with the County's requests or plans. Commissioner Jacobs said there can be differential rates.