Agenda - 02-20-2007-9e - Laserfiche WebLink

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a In accordance with the Board's debt issuance plans, the first issuance would need to occur before June 30, 2007 in order to meet cash flow needs of the most imminent projects. It is important to note that there is a several month planning and Local Government Commission approval process before the County actually has the cash in hand to pay for the projects. In order to ensure that cash is available when needed, it is essential that the Board authorize staff to proceed with the required steps necessary to obtain the financing before the end. of the current fiscal year. The LGC meets and reviews local governments borrowing requests on the first Tuesday of each month. Considering the steps that must be taken between now and the final approval step, staff plans to have the LGC review the County's alternative financing proposal on June 5, 2007. In order to meet that target date, staff requests that on February 20, 2007, the Board approve the next steps in the process - preliminary approval to proceed with financing including approval of a tentative project list and approximate financing amounts and approval to distribute the Request for Proposal for underwriters. At this time, while there are unanswered questions related to certain projects, namely Chapel Hill Carrboro City Schools Elementary #10 and the Justice Facility, it is important for Commissioners to know that the project list they approve tonight is tentative and can be amended. In accordance with the attached approval schedule, the Board does not need to approve the final list of projects until May 3, 2007. Bond Counsel Services The Sanford Holshouser law firm has served as the County's bond counsel for a number of years. Commissioner Carey, at the February 6, 2007 Board meeting, proposed that the County request the Sanford Holshouser law firm to explore opportunities for minority participation in bond counsel services. The Board, by consensus, supported this proposal, and requested that staff bring a proposal back to the Board for minority participation. In previous financing arrangements, the County has included minority participation as it relates to underwriting services. County staff intends to pursue a Request for Proposal (RFP) process for underwriting services to include minority participation. Similarly, County staff recommends that the Sanford Holshouser law firm be asked to identify and select one or more law firms in the region that are minority- and/or women-owned and that evidence an interest and ability to partner with Sanford Holshouser in Orange County transactions requiring bond counsel. The long-term goal would be that minority- and/or women-owned law firms develop independent expertise to carry out a stand-alone bond counsel practice. Sanford Holshouser plans to present a proposal to the County staff and Board for appropriate consideration. Staff has met with Bob Jessup, the partner with Sanford Holshouser responsible for ably handling the County's bond counsel work, to discuss this process. The Sanford Holshouser law, firm is open to the idea and expressed willingness to work with the County to accomplish this initiative. FINANCIAL IMPACT: The amount of the tentative projects planned for financing this fiscal year total $50,057,000. Based on a 20-year loan at a 6 percent interest rate, staff anticipates that the debt service payment for fiscal year 2007-08 would be approximately $1.5 million (about 1.2 cents on the anticipated 2007-08 tax rate) for interest only followed by debt and interest payments in fiscal year 2008-09 of approximately $5.5 million (about 4.3 cents on the anticipated 2008-09 tax rate).