Orange County NC Website
Browse       Search
11 <br /> b. Revision to General Obligation Bond Sale Amount <br /> The Board considered approving a Resolution to Adjust the Bond Sale Amounts. <br /> Gary Donaldson, Chief Financial Officer, reviewed the information below: <br /> BACKGROUND: <br /> On October 3, 2017, the Board of Commissioners approved the sale of general obligation <br /> bonds for various purposes in the amount of$40 million. Based on the overbid results of Chapel <br /> Hill-Carrboro City Schools (CHCCS) Lincoln Center project and upon the direction of the Local <br /> Government Commission, the County must reduce the amount of voter-approved school bonds <br /> to be sold from $40 million to $21 million on this first issuance of bonds. <br /> This change does not impact the Orange County Schools first bond issuance amount of$15.9 <br /> million. The CHCCS bond amount is changed from $24 million to $5 million pending the <br /> CHCCS final decision on project amounts for its projects. The initial $5 million is to reimburse <br /> for CHCCS design expenditures to date on the Lincoln Center and Chapel Hill High School and <br /> cash flow the remainder of design expenditures through the Chapel Hill High School bid <br /> openings in April/May 2018. This additional time will allow CHCCS to determine a definitive <br /> funding plan for its bond projects. The County would then present a revised funding application <br /> and recommendation of issuing remaining first bonds for CHCCS in April/May 2018 to the Local <br /> Government Commission. <br /> In accordance with the County Capital Investment Plan and in advisement with the County's <br /> bond counsel and financial advisor, County staff recommends that the County proceed with a <br /> General Obligation Bond Sale. 1 The actual interest rates on these bonds will be set when the <br /> Local Government Commission takes competitive bids on October 24, 2017, and the bond <br /> closings are scheduled for November 14 and 15. <br /> FINANCIAL IMPACT: <br /> The General Obligation bonds are included in the County's FY 2017- 2022 CIP and debt <br /> affordability report on June 13, 2017 work session, which indicated a tax equivalent impact <br /> ranging from 4.56 cents (upfront) to 5.76 cents (incremental). <br /> Todd LoFrese, CHCCS Assistant Superintendent, said open bids were received on the <br /> Lincoln Center Project, which came in $10 million over budget with construction costs. He said <br /> there were indicators that this was happening in other smaller projects in the Capital Investment <br /> Plan (CIP). He referred to the Lincoln Center project, and said the Department of Public <br /> Instruction (DPI) monitors this, and showed a 59% increase in construction costs in the Triangle <br /> area. He said due to these increases, the Chapel Hill High School project was also reviewed <br /> and showed an increase. He said there is a shortfall of$25-30 million to carry out these two <br /> projects. <br /> Todd LoFrese said the district met with the School Board, who has asked the district to <br /> return with options at the November 2nd meeting. He said the district knows that there is not <br /> enough money and it is looking at other areas within its own means, but also anticipates having <br /> a conversation with the Commissioners. <br /> Commissioner McKee asked if, during internal discussions, the district has considered <br /> terminating one project in order build the other. <br /> Todd LoFrese said the CHCCS Board asked for as many options as possible. He said <br /> the administration does not see many good options. He said if the Lincoln Center project is <br /> greatly scaled back, it will decrease the ability to increase capacity, which was one of the goals <br /> of the project; especially when considering the class size legislation. He said Chapel Hill High <br />