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ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: June 14, 2005 Action Agenda Item No. a SUBJECT: Refunding of General Obligation Bonds DEPARTMENT: Finance PUBLIC HEARING: (Y /N) No ATTACHMENT(S): Bond Order for Introduction Resolution Sworn Statement of Debt Public Hearing Notice INFORMATION CONTACT: Ken Chavious, ext 245 -2453 TELEPHONE NUMBERS: Hillsborough 732 -8181 Chapel Hill 968 -4501 Durham 688 -7331 Mebane 336- 227 -2031 PURPOSE: To consider refunding general obligation bonds issued by the County on April 4, 2000 in order to take advantage of favorable market conditions, and to take the required actions necessary to execute this task. BACKGROUND: The Finance Director has been monitoring the bond market and assessing the impact on the County's outstanding bonds and other debt instruments over the past year as interest rates have remained low. Finance staff have worked with financial advisors at Ferris, Baker and Watts to generate a number of bond refunding analyses during the past several months. The most recent of these analyses revealed that the County could save approximately $109,000 annually and over $1,500,000 over the remaining terms of the outstanding bonds originally sold in April 2000. Staff have been in contact with both the Local Government Commission (LGC) and Bond Counsel reviewing the recent refunding analysis and the potential benefits to the County. In addition to the refunding, the County will need to sell 2001 voter approved bonds over the summer to provide cash for projects such as the Orange County Schools Middle School #3. A refunding is more attractive when it can be scheduled along with a "new money" sale because of the ability to " piggy back" many of the duties required by County staff, the LGC and Bond Counsel. This eliminates duplication of effort and saves money in issuance costs. The Finance Director has taken the first step in the refunding process by contacting the LGC in a letter of application requesting approval to proceed with the refunding. Since the LGC has reviewed the refunding analysis ahead of time, it is expected that swift approval will be granted. In order to continue the refunding process the Board is required to take the following actions: Introduce the Bond Order For the Bond Refunding. Adopt a Resolution setting establishing June 23, 2005 as the date for the Public Hearing, authorizing the Finance Director to File a Debt Statement and the Clerk to Publish a Notice of Public Hearing.