Orange County NC Website
Browse       Search
<br />• In order to receive Local Government Commission (LGC) approval for a project, <br />commitments from the business partners will need to be firm, In other words, "you can't <br />build it and hope they come", <br />• The debt obligation resulting from these bonds is a direct obligation of the issuing unit and <br />therefore counts against the unit's debt ratios and in Orange's case, the County's own debt <br />management policy parameters. <br />• In most cases, the property taxes generated from these projects would be insufficient to <br />cover the entire amount of debt service, This would mean that the issuer could be required <br />to pledge other revenues, toward the project (property taxes could not be pledged.) The <br />issuer may also be required to obtain bond insurance, <br />The authorization to use self-financing bonds, if approved by North Carolina voters, may be <br />beneficial to certain local governments who view it as an appropriate and useful tcol to promote <br />certain economic development initiatives, Staff would recommend that Orange County be <br />extremely cautious in the possible use of this debt instrument, should it become available, <br />because of the risk that promised economic development benefits to cover the cost of debt <br />service may not fully materialize, <br />FINANCIAL- IMPACT: There is no direct financial impact associated with this report, If the <br />constitutional amendment passes, it would provide an additional tool to North Carolina local <br />governments far debt issuance. Any financial impact would depend, then, on whether Orange <br />County should decide to use this financing mechanism at some point in the future. <br />RECOMMENDATION(S): The Manager recommends that the Board receive the report for <br />information only, <br />