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The accepted offer for both properties is $485,000. Pursuant to the Board's authorization, staff <br />solicited Requests for Proposal (RFP) for financing this amount over a ten-year period. BUT <br />submitted a very competitive "non-bank qualified" interest rate of 6.58%, however, the proposal <br />was proffered prior to the recent action by the Federal Reserve to reduce interest. It is the <br />intention of the Finance Director to seek a downward adjustment to the rate. Nonetheless, the <br />BB&T proposal is recommended to the Board for acceptance at a rate not to exceed 6.58%. <br />Further, the BB&T proposal provides a refinancing option at such time the County's bank <br />qualification status changes. The recommended proposal is attached. <br />This acquisition requires Local Government Commission (LGC) approval. Pursuant to their <br />requirements, a public hearing is being held to receive comments on the financing of the <br />property. Comments, along with the application and other items required for LGC review will be <br />forwarded for their February 6, 2001 meeting. Assuming their approval is forthcoming on that <br />date, closing on this property is anticipated by the end of February 2001. <br />Bond Counsel has prepared a resolution providing for the acceptance of the proposal as well as <br />the other items required for LGC approval. <br />FINANCIAL IMPACT: BB&T submitted a 6.58% interest rate to finance the $485,000 purchase <br />price. The LGC requires that payback be based on a level principal payment. While this will <br />decrease the overall cost of financing from that which as projected for the Board originally, it will <br />increase the annual debt service payments in the front months of the loan. Pursuant to the <br />attached amortization schedule, annual payments will range from a high of $78,000 in the first <br />year to a low of $52,000 in the last year. As a point of comparison, the 10-year lease cost to the <br />County would have been at least $615,000 (not including any inflation escalation), the 10-year <br />debt payback payments will total $648,554, which essentially indicates that the additional cash <br />required over 10 years in order to own the buildings is less than $33,000. The County currently <br />pays approximately $61,500 in rent on the facilities, which will be reallocated to offset the annual <br />debt service payment. Additional funds needed to support the annual debt payment will be <br />provided through the Capital Investment Plan. <br />RECOMMENDATION(S): The Manager recommends that the Board conduct the public <br />hearing and adopt the resolution authorizing staff to proceed.