Agenda - 12-12-2006-5e - Laserfiche WebLink

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ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: December 12, 2006 Action Agenda Item No. 5 ~- e,, SUBJECT: Resolutions Authorizing Installment Financing Contract for Equipment Purchases DEPARTMENT: Finance PUBIC HEARING: (Y/N) No ATTACHMENT(S): (Under Separate Cover) Financing Resolution Reimbursement Resolution Financing Proposal INFORMATION CONTACT: Ken Chavious, 919-245-2450 PURPOSE: To consider adopting resolutions required by Bank to facilitate the. financing of equipment approved for purchase by the Board on September 12 end October 3, 2006. BACKGROUND: At meetings on September 12 and October 3, 2006, the Board approved the purchase of equipment for Solid Waste totaling $842,038. Upon authorizing the equipment the Board also directed the Finance Director to seek financing for the purchases. Requests for financing proposals were then sent out to five financial institutions. The most favorable proposal was submitted by Bank of America which included a 3.60% interest rate fora 59 month term. In order to accomplish the financing, the bank requires that the County adopt an official resolution authorizing the execution and delivery of the installment financing contracts and other documents. In addition, the County will need to reimburse itself for expenditures made prior to closing and delivery of the financing proceeds. A resolution stating the County's intent to reimburse itself for these expenditures is required. The resolutions necessary to complete the financing has been reviewed by County staff and the County Attorney and are attached, including copies of the Bank of America proposal. FINANCIAL. IMPACT: As mentioned above, the total amount to be financed is $842,038. The accepted proposal calls for quarterly payments of $46,187 beginning in March 2007. There will be 2 payments in the current fiscal year totaling $92,374. Funding for the debt service is included in the 2006-2007 Solid Waste Enterprise fund Budget. Based on the fact that this fund is aself-supporting enterprise fund, and the debt issuance is not paid from the General Fund, the issuance of this debt does not affect the County's debt capacity. Debt service payments related to equipment purchased for the Solid Waste Department are paid directly from the Enterprise Fund. In accordance with the County's Debt Management Policy, debt. incurred in enterprise funds are not considered a factor in determining the County's debt capacity. Therefore, the issuance of this debt has no impact on the County's 15 percent debt limitation.