Agenda - 11-16-2004-5g - Laserfiche WebLink

Browse Search

7 repayment, including principle and interest, equals $167,510. It is important to note that these figures may vary slightly depending upon the actual loan closing date. Section 147 of the Internal Revenue Code of 1986 outlines specific steps that must occur when a tax supported fire department enters into a financing arrangement. • Conduct a public hearing - On October 19, 2004, the department held a public hearing regarding the purchase. The Department advertised the hearing in the News of Orange (Attachment 2 of this abstract). Per the Attachment 3 of this abstract, no residents were present at the hearing and the Department did not receive any written comments from residents of the district. Obtain approval of the "applicable elected representatives" - In accordance with Section 147, the Board of County Commissioners must approve the District's plan to enter into the debt arrangement. This approval does not create liability on the part of Orange County nor does it make the County responsible for the repayment of any debt assumed by the fire district. The approval provides a mechanism for the Commissioners to acknowledge that, through this financing arrangement, Orange Rural Fire Department No. 1, Inc. is pledging use of the District's tax dollars to repay the loan. In order to comply with this IRS requirement, the Chair of the Commissioners must sign the Fire Service Agreement (Attachment 4) and Certificate of Approval (Attachment 5). FINANCIAL IMPACT: The department's major revenues consist of County fire district taxes and fees for service from the Town of Hillsborough. According to June 30, 2004 financial statements, the district received about $832,000 from those two sources. The department had about $165,316 in its bank accounts as of June 30, 2004. As indicated earlier, the department plans to spend $21,682 out of its bank accounts to make the down payment on the truck leaving about $143,634 in its bank accounts. Funds remaining in the Department's bank accounts would serve as a reserve that would potentially be used to cover unanticipated major expenses such as repairs or replacements of other older equipment. The departments' current year County approved budget totals $310,012. The department's approved budget for fiscal year 2004-05 includes funds for debt service associated with this purchase. RECOMMENDATION(S): The Manager recommends that the Board of County Commissioners: 1. Approve Orange Rural Fire Department No. 1, Inc.'s purchase of a replacement fire truck; 2. Appropriate $20,000 from the Department's unappropriated fund balance; and 3. Authorize the Chair to sign the appropriate documents related to the financing arrangement..