Agenda - 10-18-2005-8a - Laserfiche WebLink

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ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: October 18, 2005 Action Agenda Item No. g- q SUBJECT: Public Hearing on SportsPlex Financinq DEPARTMENT: Finance PUBLIC HEARING: (Y/N) Yes ATTACHMENT(S): INFORMATION CONTACT: Resolution Ken Chavious, 245-2450 Financing Proposal Bob Jessup, Band Counsel, 919-755-1800 PURPOSE: To conduct a public hearing on matters related to financing the acquisition of the Triangle SportsPlex, as approved by the Board of Commissioners on September 20, 2005, and to adopt a resolution that authorizes the financing. BACKGROUND: At the September 20, 2005 meeting, the Board of Commissioners took action that authorized staff to pursue private placement financing to acquire the Triangle SportsPlex. In accordance with this action, staff have pursued a request for proposal process to finance $6,000,000 for the acquisition with ashort-term bank loan that will be rolled into a longer term alternative financing using certificates of participation (COPS). Plans for this longer term alternative financing were included in the debt issuance schedule reviewed by the Board at the September 13, 2005 work session. A preliminary application requesting approval of this proposed financing will be forwarded to the North Carolina Local Government Commission (LGC) in accordance with statutory provisions. Prior to the LGC granting approval, the Board is required to conduct a public hearing on matters related to the financing proposal. The Board has established October 18, 2005 as the date for the hearing. Staff solicited and received proposals from five financial institutions, Of the proposals submitted, the Bank of America proposal was the most favorable. This proposal included the lowest variable interest rate of 3,15%, as well as the lowest fixed rate of 3.44%, The County asked for and received information from proposers on both fixed and variable rates, Due to the short-term nature of this financing, staff recommends that the Board accept the variable rate quoted, In accordance with the debt issuance schedule, staff expect to work with the LGC to issue additional debt for various County and school capital projects by means of the aforementioned COPs sometime during the February-March 2006 time frame, Since the $6 million in SportsPlex variable rate debt would be refinanced through this COPs deal, the variable rate would most likely be in effect for only about 2-4 months. Staff believe that the lower interest costs available in the short term through the variable rate instrument should be accepted, as there is little risk that the variable rate would increase significantly in such a short period of time before the refinancing takes place.