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12 <br /> 1 <br /> 2 7. Regular Agenda <br /> 3 <br /> 4 a. Adoption of the FY 2015-16 Final Financing Resolution Authorizing the Issuance <br /> 5 of$8,150,000 in Installment Purchase Financing for Various Capital Investment <br /> 6 Plan Projects <br /> 7 The Board considered approving the final financing resolution authorizing the issuance <br /> 8 of approximately $8,150,000 in installment financing to finance capital investment projects and <br /> 9 equipment for fiscal year 2015-16, including amounts to pay transaction costs. <br /> 10 Gary Donaldson, Orange County Chief Financial Officer, reviewed the following <br /> 11 information: <br /> 12 <br /> 13 BACKGROUND: <br /> 14 At the March 22, 2016 meeting, the Board of County Commissioners received preliminary <br /> 15 information on capital projects and equipment financing for the year. At that meeting, the Board <br /> 16 made a preliminary determination to finance costs of these projects and equipment by the use <br /> 17 of an installment financing, as authorized under Section 160A-20 of the North Carolina General <br /> 18 Statutes. The financing will also include amounts to pay transaction costs. <br /> 19 <br /> 20 The statutes require that the County conduct a public hearing on the proposed financing and <br /> 21 refinancing contracts. The Board conducted the public hearing at its March 22, 2016 meeting, <br /> 22 and adopted the resolution supporting the application to the Local Government Commission <br /> 23 (LGC) for approval of the financing. County staff has been in contact with the LGC staff, and <br /> 24 staff expects no issues to receiving LGC approval. <br /> 25 <br /> 26 The four documents that the resolution approves are the following: <br /> 27 • The Installment Financing Contract, between the County and First Bank, which provides <br /> 28 for the Bank's advance of funds to the County for the County's undertaking of the <br /> 29 project, sets out the County's repayment obligation, and sets out the County's other <br /> 30 obligations, such as its obligations to care for the collateral. <br /> 31 • The Deed of Trust and Security Agreement, which provides for a security interest in the <br /> 32 Grady Brown School and its associated real property to secure the County's repayment <br /> 33 obligation. This is the document that provides that if the County defaults on its <br /> 34 obligations, the Bank can foreclose on the school property. <br /> 35 • A Lease between the County and the Orange County Board of Education which <br /> 36 provides for the School Board's continued use of the Grady Brown School property <br /> 37 during the financing term. <br /> 38 • A Project Completion and Agency Agreement between the County and the School <br /> 39 Board, which sets out their respective responsibilities for carrying out the acquisition and <br /> 40 construction of the planned improvements to Grady Brown School. <br /> 41 <br /> 42 If the Board adopts the final financial resolution authorizing final approval for the financing, staff <br /> 43 expects the LGC to approve the financing plan at the May 3, 2016 LGC meeting. Under the <br /> 44 current schedule, staff expects to set the final interest rates and other terms of the financing in <br /> 45 April 2016, and to close on the financing the week of May 9th. The Board is requested to <br /> 46 approve a financing amount not to exceed $8,150,000 and a maximum interest rate of 2.55%. <br /> 47 <br /> 48 FINANCIAL IMPACT: <br /> 49 There will be a financial impact in proceeding with the financing. At current rates, preliminary <br /> 50 estimates of maximum debt service applicable to the capital investment projects and equipment <br /> 12 <br />