Orange County NC Website
2 <br />remaining $42,000 from the Department's capital reserve, The interest rate for the 5-year note <br />is 4,27 percent. Estimated annual payments are in the neighborhood of $17,352 per year and <br />with a projected beginning date of November 2005, The total repayment, including principle <br />and interest, equals $86,800. It is important to note that these figures may vary slightly <br />depending upon the actual loan closing date.. <br />The District also has an outstanding tax-exempt loan that the Board of County Commissioners <br />approved in December 2004, The annual payments associated with that particular loan are <br />about $36,000 with an estimated pay-off date of January 2010, <br />Section 147 of the Internal Revenue Code 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 November 22, 2004, the department held a public <br />hearing regarding the purchase, The Department advertised the hearing in the News of <br />Orange (Attachment 3 of this abstract). Per the Attachment 4 of this abstract, one district <br />resident was present at the hearing and a brief description of the land, intended future <br />use, cost and financing details were presented, The Department did not receive any <br />written comments from residents of the district. <br />• Obtain approval of the "applicable elected representatives" - In accordance with <br />Section 147, the Board of County Commissioners must approve the District's plan to <br />enter into the debt arrangement. This approval does not create liability on the part of <br />Orange County nor does it make the County responsible for the repayment of any debt <br />assumed by the fire district, The approval provides a mechanism for the Commissioners <br />to acknowledge that, through this financing arrangement, Efland Volunteer Fire <br />Company, Inc, is pledging use of the District's tax dollars to repay the loan, In order to <br />comply with this IRS requirement, the Chair of the Commissioners must sign the Fire <br />Service Agreement (Attachment 5) and Certificate of Approval (Attachment 6), <br />FINANCIAL IMPACT: The department's major revenues consist of County fire district taxes and <br />fees for service from the City of Mebane, According to .tune 30, 2004 financial statements (the <br />mast recent information available to the Budget Office), the district received about $190,097 <br />from those two sources, The department had about $195,082 in its bank accounts as of June <br />30, 2004. As indicated earlier, the Department financed a fire truck in December 2004 and <br />used $28,164 from its bank accounts as a dawn payment on a fire truck, This left about <br />$166,918 in the department's bank accounts, <br />With the property purchase, the department plans to spend $42,000 to make the down payment <br />on the property leaving about $124,918 in its bank accounts, Funds remaining in the <br />Department's bank accounts would serve as a reserve that would potentially be used to cover <br />unanticipated major expenses such as repairs or replacements of other older equipment, <br />The departments' current year County approved budget totals $181,628. The department's <br />approved budget for fiscal year 2005-06 includes funds for debt service associated with this <br />purchase along with previously approved debt. According to the letter from the Board of <br />Directors President (Attachment 1 of this abstract), the district may require a tax rate increase in <br />fiscal year 2006-07 to cover approximately $8,000 in debt service payments for the land. <br />