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ORANGE COUNTY <br />BOARD OF COMMISSIONERS <br />ACTION AGENDA ITEM ABSTRACT <br />Meeting Date: February 20, 2007 <br />Action Agenda <br />Item No. <br />SUBJECT: Authorization to Proceed With Alternative Financing <br />DEPARTMENT: Finance and Budget PUBLIC HEARING: (YIN) No <br />ATTACHMENT (S): <br />Tentative Projects Proposed for Alternative <br />Financing <br />Tentative Schedule For Alternative <br />Financing <br />INFORMATION CONTACT: <br />Ken Chavious/Bob Jessup, 919-245- 2453 <br />Donna Coffey, 919-245-2151 <br />PURPOSE: To approve the County's plans to issue $96.2 million in alternative financing <br />between fiscal years 2006-07 and 2009-10 and to authorize staff to proceed with the required <br />steps necessary to obtain the financing planned for fiscal year 2006-07 including request for <br />proposal (RFP) for underwriting services and minority participation in bond counsel services. <br />BACKGROUND: The County has several County and school-related capital projects that are <br />currently in various stages of planning, development and construction. Current estimates <br />anticipate that over the next three years the projects will cost the County $96.2 million ($92.2 <br />million in General Fund debt plus $4 million in Solid Waste and SportsPlex Enterprise funds <br />debt) to construct. The County plans to debt finance the projects. <br />Over the last six months, staff has analyzed the affordability of the construction projects. The <br />Board's established debt management policy provides that no more than fifteen percent of the <br />annual General Fund expenditures shall be allocated for debt service payments. Using a 7 <br />percent annual General Fund growth assumption and structuring debt service payments in a <br />manner reviewed with North Carolina Local Government Commission (LGC) staff, staff <br />concluded that the County could issue debt to fund all of the planned projects between fiscal <br />years 2006-07 and 2009-10 while the County remains below its self-imposed debt ceiling. <br />On September 14, 2006, the Board approved individual debt issuance amounts for a number of <br />school and County projects. The Board then held a public hearing on December 12, 2006 <br />regarding its plans to issue $96.2 million in debt over the next three years. No one spoke <br />against the County's plans to issue the debt, and staff has not received any written comments <br />from citizens regarding the plan. Commissioners approved the minutes for the December 12, <br />2006 meeting on February 6, 2007.