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13 <br /> • A Lease between the County and the Orange County Board of Education which <br /> provides for the School Board's continued use of the Grady Brown School property <br /> during the financing term. <br /> • A Project Completion and Agency Agreement between the County and the School <br /> Board, which sets out their respective responsibilities for carrying out the acquisition <br /> and construction of the planned improvements to Grady Brown School. <br /> If the Board adopts the final financial resolution authorizing final approval for the financing, <br /> staff expects the LGC to approve the financing plan at the May 3, 2016 LGC meeting. Under <br /> the current schedule, staff expects to set the final interest rates and other terms of the <br /> financing in April 2016, and to close on the financing the week of May 9th. The Board is <br /> requested to approve a financing amount not to exceed $8,150,000 and a maximum interest <br /> rate of 2.55%. <br /> FINANCIAL IMPACT: <br /> There will be a financial impact in proceeding with the financing. At current rates, preliminary <br /> estimates of maximum debt service applicable to the capital investment projects and <br /> equipment financing would require the highest debt service payment of$894,084 in FY 2016- <br /> 17. The tax rate equivalent for the estimated highest debt service payment is approximately 1/2 <br /> cent. A portion of this debt financing is related to projects where the debt service payments <br /> will be paid from Solid Waste Enterprise funds. <br /> Based on current resources and the retirement of existing debt, no adjustment to the tax rate is <br /> anticipated with this financing during the period noted. <br /> Commissioner Price asked if using Grady Brown as collateral is a normal process; and <br /> if the County has a surplus, why is it not being used for these projects, instead of increasing <br /> debt. <br /> Gary Donaldson said there is a Capital Investment Plan (CIP), and there is a mix of <br /> sources of income. He said these projects were deemed for financing, and the useful life of a <br /> project is also considered. <br /> Gary Donaldson said under state statue for installment financing, there must be <br /> collateral that is comparable in value to that which is being financed. <br /> Commissioner Jacobs asked if special authorization is given for the University of North <br /> Carolina to borrow multi millions over 100 years. <br /> Bob Jessup said UNC Board of Governors has asked for some legislation for 100 year <br /> borrowing, which is currently capped at 30 years. He said there is currently no statutory limit <br /> for installment financing, but the Local Government Commission wants the payment schedule <br /> to be about the length of the useful life of the asset. He said it would take additional state <br /> legislation to authorize that type of long-term financing. <br /> Commissioner Jacobs asked if there is any place in the United States where this type <br /> of borrowing is used. <br /> Bob Jessup said the District of Columbia or Washington Metro transit borrowed 100- <br /> year money to finance a wide range of long lasting improvements. He said others, such as for <br /> profit organizations and some public universities, have used it. <br /> A motion was made by Commissioner Burroughs, seconded by Commissioner Pelissier <br /> for the Board to approve the final financing resolution authorizing the issuance of <br /> 13 <br />