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29 <br /> 1 Slide#40 <br /> Options to Smooth the FY2028-29 Increase in Debt Service <br /> 3. Explore Bond Anticipation Notes(BAN's)for School Construction Projects <br /> — Total construction costs are typically financed when bids are received,but on large construction projects,actual <br /> construction costs are incurred over the subsequent next two or three years <br /> — BAN's allow county to borrow for projects as cash flow requirements dictate <br /> — BAN's are paid off using bond proceeds when General Obligation Bonds are issued <br /> — County would incur additional interest at a cost to be quantified as analysis proceeds <br /> — BANs are only allowed for voter approved General Obligation Bonds <br /> ORANGE COUNTY <br /> 40 NORTH CAROLINA <br /> 2 <br /> 3 Travis Myren described bond anticipation notes (BANs) as a financing tool available for general <br /> 4 obligation bonds that would allow the county to borrow short-term for cash flow purposes and then retire <br /> 5 those notes when the full GO bond borrowing occurs, at some additional interest cost. <br /> 6 Commissioner McKee described his experience with commercial draw-down lending. <br /> 7 Kirk Vaughn confirmed that while analogous mechanisms exist in the private sector,governmental <br /> 8 restrictions largely preclude that approach except in the limited case of General Obligation Bond <br /> 9 anticipation notes. <br /> 10 Kirk Vaughn, Budget Director, made the following PowerPoint presentation: <br /> 11 <br /> 12 Slide#1 <br /> ORANGE COUNTY <br /> NORTH +CAROLINA <br /> School Capital Investment Plan <br /> FY 2026-36 <br /> April 16, 2026 <br /> Board of Commissioners Work Session <br /> 13 <br />