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ORANGE COUNTY <br />BOARD OF COMMISSIONERS <br />ACTION AGENDA ITEM ABSTRACT <br />Meeting Date: June 2, 2004 <br />Action Agenda <br />Item No. 5 - e, <br />SUBJECT: Approval of Financing Arrangement for Orange Grove Rural Fire Department to <br />Purchase a Replacement Fire Truck <br />DEPARTMENT: Budget PUBLIC HEARING: (Y/N) No <br />ATTACHMENT (S): <br />Attachment 1. Letter from Orange Grove <br />Rural Fire Department Board of Directors <br />Chairperson <br />Attachment 2. May 20, 2004 Public <br />Hearing Notice <br />Attachment 3. Fire Service Agreement <br />Attachment 4. Certificate of Approval <br />INFORMATION CONTACT: <br />Donna Dean 245-2151 <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 approve a request from Orange Grove Fire Department to enter into a financing <br />arrangement to purchase a fire truck and authorize the Board of Commissioner Chair to sign the <br />appropriate documents related to the financing arrangement, <br />BACKGROUND: During last spring's budget planning process, Orange Grave Fire Department <br />outlined its plans to replace a 1983 fire truck sometime during the next two fiscal years. Due to <br />the age of the truck, it required constant, and often times costly, maintenance and upkeep. <br />In the attached letter addressed to the Orange County Board of County Commissioners Chair, <br />Mr, Linwood Futrelle, President of the Orange Grove Fire Department confirmed the <br />department's intent to proceed with the planned purchase (Attachment 1 of this abstract). <br />According to the letter, the purchase price of the truck totals $290,704. The Department's <br />Board of Directors agreed to borrow $250,000 from Central Carolina Bank and Trust and to pay <br />the remaining $40,704 from the Department's capital reserve. The interest rate for the seven- <br />year note is 3,9 percent. Annual payments total $40,869 and are scheduled to begin in late FY <br />2003-04, The total repayment, including principle and interest, equals $286,080, <br />Section 147 of the Internal Revenue Cade of 1986 outlines specific steps that must occur when <br />a tax supported fire department enters into a financing arrangement, <br />Conduct a public hearing - On May 10, 2004, the department held a public hearing <br />regarding the purchase, The Department advertised the hearing in the Chapel Hill <br />Herald (Attachment 2 of this abstract). No residents were present at the hearing and the <br />Department did not receive any written comments from residents of the district, <br />