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ORANGE COUNTY <br />BOARD OF COMMISSIONERS <br />ACTION AGENDA ITEM ABSTRACT <br />Meeting Date: May 18, 2004 <br />Action Agenda <br />Item No. <br />SUBJECT: First Step in Authorization of Two-Thirds Net Debt Reduction Bonds <br />DEPARTMENT: Finance <br />PUBLIC HEARING: (Y/N) No <br />ATTACHMENT(S): <br />Findings Resolution to Support <br />Application far Two-Thirds Net Debt <br />Reduction Bonds <br />INFORMATION CONTACT: <br />Ken Chavious, ext 2453 <br />TELEPHONE NUMBERS: <br />Hillsborough <br />Chapel Hill <br />Durham <br />Mebane <br />732-8181 <br />968-4501 <br />688-7331 <br />336-227-2031 <br />PURPOSE: To consider adoption of a resolution making a preliminary determination to <br />proceed with the County's issuance of two-thirds net debt reduction bonds, <br />BACKGROUND: At its May 5 meeting, the Board authorized staff to pursue the sale of <br />$4,200,000 twc-thirds net debt reduction bonds tc pay capital costs related to public buildings, <br />with the actual amount of bonds to be issued, and the projects to be financed subject to later <br />Board consideration. The North Carolina Local Government Commission (the "LGC") requires <br />that, as a first step, the Board adopt a resolution making certain "findings of fact" in support of <br />the Board's determination to proceed with the bond issue. The attached resolution has been <br />prepared by bond counsel in consultation with County staff and responds to the LGC's <br />requirement. <br />Proposed uses for these bonds will be incorporated into the County portion of the Manager's <br />Recommended 2004-14 Capital Investment Plan (CIP), which is scheduled for presentation to <br />the Board on May 20, 2004. Decisions regarding specific projects and amounts to be <br />addressed through the two-thirds net debt reduction bands can be made during the Board's <br />June 2004 budget and CIP work sessions. Further formal action by the Board toward the <br />issuance of these bonds will take place at subsequent meetings. <br />FINANCIAL IMPACT: Staff will pursue a repayment structure on these bonds that will include <br />interest only for the first fiscal year (2004-2005), These interest payments are currently <br />estimated to be $188,000 and will be included in the Manager's 2004-2005 recommended <br />budget. Annual principal payments of $210,000 will begin in the 2005-2006 fiscal year, Such <br />payments will be in addition to payments on other debt to be issued early in the upcoming fiscal <br />year pursuant to the financing plan endorsed by the Board on May 5, <br />