Agenda - 04-19-2016 - 7-a - Adoption of the Final Financing Resolution Authorizing the Issuance of $8,150,000 in Installment Purchase Financing for Various Capital Investment Plan Projects

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2 The attached resolution formally approves the lending proposal from First Bank, authorizes staff to complete the financing process, and approves other financing documents as substantially final drafts. The resolution approves the draft document; the only formal action is on the resolution. There is no separate action required on the documents. The four documents that the resolution approves are the following: • The Installment Financing Contract, between the County and First Bank, which provides for the Bank's advance of funds to the County for the County's undertaking of the project, sets out the County's repayment obligation, and sets out the County's other obligations, such as its obligations to care for the collateral. • The Deed of Trust and Security Agreement, which provides for a security interest in the Grady Brown School and its associated real property to secure the County's repayment obligation. This is the document that provides that if the County defaults on its obligations, the Bank can foreclose on the school property. • A Lease between the County and the Orange County Board of Education which provides for the School Board's continued use of the Grady Brown School property during the financing term. • A Project Completion and Agency Agreement between the County and the School Board, which sets out their respective responsibilities for carrying out the acquisition and construction of the planned improvements to Grady Brown School. If the Board adopts the final financial resolution authorizing final approval for the financing, staff expects the LGC to approve the financing plan at the May 3, 2016 LGC meeting. Under the current schedule, staff expects to set the final interest rates and other terms of the financing in April 2016, and to close on the financing the week of May 9th. The Board is requested to approve a financing amount not to exceed $8,150,000 and a maximum interest rate of 2.55%. FINANCIAL IMPACT: There will be a financial impact in proceeding with the financing. At current rates, preliminary estimates of maximum debt service applicable to the capital investment projects and equipment financing would require the highest debt service payment of $894,084 in FY 2016-17. The tax rate equivalent for the estimated highest debt service payment is approximately 1/2 cent. A portion of this debt financing is related to projects where the debt service payments will be paid from Solid Waste Enterprise funds. Based on current resources and the retirement of existing debt, no adjustment to the tax rate is anticipated with this financing during the period noted. SOCIAL JUSTICE IMPACT: There are no Social Justice Goal impacts associated with this item. RECOMMENDATION(S): The Manager recommends that the Board approve the resolution authorizing the steps to proceed with the financing of the stated capital projects and equipment.