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2 <br /> The Board will be asked to consider a resolution for the Phase II financing at the July 9, 2026 <br /> Business meeting. The primary use of the Phase II proceeds will be for construction costs of the <br /> crisis diversion center, and so that borrowing amount can be set after the final construction <br /> contract amounts are established. Any changes to the plans for the Phase II financing will not <br /> have any material adverse effect on the Phase I financing. <br /> County staff does not expect to use any of the 2026 financing proceeds to fund capital projects <br /> for public schools. For projects through the current fiscal year, the County has identified other <br /> funds in hand sufficient to fund school projects. Staff expects the County will finance school project <br /> costs in the coming fiscal year through the issuance of some of the voter-approved general <br /> obligation bonds or otherwise. <br /> Notes regarding certain projects: <br /> - The Blackwood Farm Park project pertains to re-graveling and drainage work. There is no <br /> financing associated with this item for the proposed disc golf course. <br /> - The Affordable Housing project pertains to Habitat East Village (funding for site <br /> infrastructure and development for East Village at Meadowlands 76 new units (2, 3, and 4- <br /> bedroom) of which 64 will be affordable Habitat homes for first-time homebuyers earning <br /> between 30% and 80% of area median income (AMI). The remaining 12 units (15%) in <br /> East Village will be market-rate homes. Pee Wee Homes pertains to construction of three <br /> new affordable rental homes ("tiny homes") at 106 Hill Street in Carrboro. <br /> - The 510 Meadowlands Phase 2 project pertains to remediation costs. <br /> COLLATERAL: In this type of County installment financing, the County secures its obligations to <br /> the lender by a mortgage-type interest in some or all the property being acquired or improved <br /> through the financing. The County plans to secure the 2026 financing with a variety of County <br /> facilities previously pledged to secure County financings, with the addition of the crisis diversion <br /> center and the County Justice Center as new collateral. The financing documents provide broad <br /> flexibility to release individual properties from the financing lien if that becomes desirable for the <br /> County. <br /> No school facilities are being used as collateral for the 2026 financings, although schools remain <br /> as collateral for other County financings. <br /> The pledged properties will secure not only the planned 2026 financings, but also existing County <br /> financings. Lenders generally require that the County offer collateral equal to at least 50% of the <br /> total loan amount. The County expects to offer collateral with a value exceeding 100% of the <br /> existing and proposed loan amounts. <br /> FINANCIAL IMPACT: There is no financial impact related to this action. However, there will be <br /> a financial impact in proceeding with the financing. A preliminary estimate of maximum debt <br /> service applicable to the combined financing would require the highest debt service payment of <br /> approximately $6,395,000 in FY 2028. The tax rate equivalent for the estimated highest debt <br /> service payment based on the current (FY 2026) value of a penny of$3,299,538 is approximately <br /> $0.0194 (1.94 cents). These amounts are consistent with those shown previously in County <br /> capital and operating budget plans. <br /> ALIGNMENT WITH STRATEGIC PLAN: This item supports: <br />