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ORANGE COUNTY <br />BOARD OF COMMISSIONERS <br />ACTION AGENDA ITEM ABSTRACT <br />Meeting Date: October 3, 2006 <br />Action Agenda <br />Item No. ~~_ <br />SUBJECT• Public Hearing on Carrboro High School Financing <br />DEPARTMENT: Finance PUBLIC HEARING: (YIN) Yes <br />ATTACHMENT (S): INFORMATION CONTACT: <br />None Ken Chavious, Finance Director <br />919-245-2450 <br />Bob Jessup, Bond Counsel <br />PURPOSE: To conduct a public hearing on matters related to alternative financing for the <br />Carrboro High School, as approved by the Board of Commissioners on September 12, 2006. <br />BACKGROUND: .At the September 12, 2006 meeting, the Board of Commissioners took action <br />authorizing staff to pursue private placement financing to acquire the final phase of funding for <br />the Carrboro High School project. In accordance with this action, staff will pursue a request for <br />proposal process to finance $9,000,000 for the project with ashort-term bank loan that will be <br />rolled into a longer term alternative financing using certificates of participation (COPs). This <br />longer term alternative financing was included in the debt issuance schedule reviewed by the <br />Board at both the August 31 and September 14, 2006 work sessions. <br />A preliminary application requesting approval of this proposed financing will be forwarded to the <br />Local Government Commission (LGC) in accordance with statutory provisions. Prior to the LGC <br />granting approval, the Board is required to conduct a public hearing on matters related to the <br />financing proposal. The Board has established October 3, 2006 as the date for the hearing. <br />The LGC was previously scheduled to take action on the County's application on November 7, <br />2006. LGC staff working with the County on the application process recently informed County <br />staff of the need to have a completed 2006 audit report from the County prior to granting <br />approval of the application. The County's audit contract requires completion of the audit report <br />by October 31, 2006, which would provide insufficient time for LGC review of the report prior to <br />approving the County's application for financing. <br />In light of this development, the LGC approval has been rescheduled to December 5, 2006 and <br />if approval is granted, closing is expected to occur shortly thereafter. The resolution approving <br />the final terms of the financing will be presented for Board approval at the November 2, 2006 <br />meeting. <br />FINANCIAL IMPACT: As mentioned above, the amount of the short-term financing is <br />$9,000,000. The principal amount will be rolled into a COPs financing that will be scheduled for <br />late spring of 2007. Interest costs to be paid by the County on this financing are projected to be <br />