Agenda 10-19-2021; 8-c - Approval of Financing Arrangements for Orange Rural Fire Department to Construct a New Fire EMS Station

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2 departments are not mandated to obtain Board of County Commissioner approval when making purchases that do not require debt financing. Section 147(f) of the Internal Revenue Code of 1986 outlines specific steps that must occur when a tax supported fire department enters into a financing arrangement. The department has completed the required steps to comply with Section 147. • Conduct a public hearing — On September 20, 2021, ORFD held a public hearing regarding the financing of the station. ORFD advertised the hearing in the News of Orange (Attachment 1 of this abstract). Per the hearing notes (Attachment 2 ), no individuals signed up for comment or made comment when the floor was opened during the hearing. • Obtain approval of the "applicable elected representatives" — In accordance with Section 147, the Board of County Commissioners must approve the Department'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 department. The approval provides a mechanism for the Commissioners to acknowledge that, through this financing arrangement, the Fire Department is pledging use of the Fire Tax 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 and Certificate of Approval for the district (Attachments 4 and 5). FINANCIAL IMPACT: ORFD plans to finance $2,700,000 for the construction of a portion of a new fire/EMS station in Hillsborough. The department Board of Directors has agreed to a 25-year loan at the fixed rate of 2.73% APR with Roxboro Savings Bank. The department does not anticipate the debt service payments will cause an increase in the current district tax rate. SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goal is applicable to this item: • GOAL: CREATE A SAFE COMMUNITY The reduction of risks from vehicle/traffic accidents, childhood and senior injuries, gang activity, substance abuse, and domestic violence. ENVIRONMENTAL IMPACT: No Orange County Environmental Responsibility Goal impact associated with this item. RECOMMENDATION(S): The Manager recommends the Board: 1. Approve Orange Rural Fire Department enteingr into a financing arrangement to contribute to the construction of a joint fire/EMS station; and 2. Authorize the BOCC Chair to sign the appropriate documents related to the financing arrangement.