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2 <br /> OGFD Annual Tax Levy <br /> The OGFD will be responsible for reimbursing the County annually for the full amount of debt service through final <br /> maturity. The district adjusted their tax rate in FY 2025-26 from 5.81 cents to 7.00 cents per $100 of assessed <br /> valuation to account for this capital replacement request and other expenditure requirements. The OGFD FY 2025- <br /> 26 annual tax levy is projected to generate $1,133,337 for operating and maintenance expenses and the proposed <br /> debt service requirement. OGFD debt service payments to the County will be structured to coincide with the <br /> County's debt service schedule and repayment to the bank trustee. <br /> County Recourse for Annual OGFD Repayment <br /> The County provides annual property tax revenues to OGFD in four equal quarterly payments each fiscal year based <br /> on their district tax levy. The OGFD debt service repayment date will be set for January 15 every fiscal year which <br /> coincides with peak tax collections for OGFD. If debt service payment is not received by January 15, then the County <br /> will deduct and apply, through a right of set-off, an amount from the fourth quarter (March) property tax <br /> distribution to OGFD sufficient to satisfy the annual debt service requirement. The OGFD repayment will be <br /> recorded in our Debt Service Fund. <br /> Bond counsel is currently preparing an Inter-Local Agreement (ILA) pursuant to North Carolina statutory <br /> requirements. The ILA will: <br /> • Formalize the Fire District's obligation to make annual debt service payments to the County; <br /> • Specify the term of repayment through final maturity; <br /> • Address any required security provisions consistent with LOB financing. <br /> Because the OGFD will provide annual payments equal to debt service, the borrowing will not result in a net County <br /> General Fund tax burden. As with all LOB financings, the County's credit will secure the bonds; therefore, careful <br /> documentation and financial review are being undertaken to mitigate risk and ensure statutory compliance. <br /> Next Steps <br /> 1. Finalize financing documents, Inter-Local Agreement and CIP Budget Amendment. <br /> 2. Include the project in the Series 2026 A LOB financing package. <br /> 3. Return to the Board for formal approval actions prior to issuance. <br /> Staff will continue to coordinate with the Fire District and bond counsel and will return with formal ILA and Budget <br /> Amendments at the April Board meetings. <br /> Please let me know if you have any additional questions. <br /> cc: Travis Myren, County Manager <br /> Cait Fenhagen, Deputy Manager <br /> Kirk Vaughn, Budget Director <br /> Enclosures <br />