Agenda - 04-10-2007-6a - Laserfiche WebLink

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ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: April 10, 2007 Action Agenda Item No. (~ c.~t _ SUBJECT• Resolution for Approval of Alternative Financing DEPARTMENT: Finance PUBLIC HEARING: (Y/N) No ATTACHMENT(S): Resolution Public Hearing Notice Financing Proposal Projects to be Financed INFORMATION CONTACT: Ken Chavious, 245-2453 PURPOSE: To consider adoption of a resolution required for the County to pursue alternative financing for various capital projects. BACKGROUND: On February 20, 2007, the Board authorized staff to proceed with the process of obtaining alternative financing in the amount of $50,057,000 to fund the various capital projects included on the attached tentative project listing. The Board is scheduled to finalize the projects for the proposed financing at the meeting scheduled for April 24, 2007. In addition, the Board approved a tentative schedule of actions required by the Local Government Commission (UGC) in order to approve the County's financing application in June 2007. In accordance with the schedule, staff issued requests for financing proposals (RFP). Since staff was expecting to issue certificates of participation (GOP's), RFPs were sent to investment banking firms with this type of expertise. In addition, a proposal was sent to SunTrust Bank because it had expressed interest in proposing a financing structure. Staff was pleasantly surprised by the SunTrust Proposal. SunTrust proposed an installment purchase agreement fora 20 year term at 4.14% or 4.10%, depending on the repayment option chosen. The 4.14% is the proposal to be recommended by staff, due to the more flexible prepayment options. In addition to the very competitive interest rates, the costs associated with the SunTrust loan are far less that- the issuance costs that accompany a COPs issue. There is significantly more staff time involved in a COPs transaction, and the issuance costs could be in the $300,000 to $400,000 range. A copy of the SunTrust proposal is attached including the amortization schedule. Staff has continued to negotiate certain terms of the proposal, especially terms related to the collateral for the loan. In order to proceed, the Board is required to adopt a resolution authorizing staff to file an application with the LGC for approval of the financing for the tentative projects in an amount not to exceed $50,057,000 and to take other action. The resolution accomplishes the following;