Agenda - 09-03-2002 - 9a - Laserfiche WebLink

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2 School (OCS) and County staff discussion, as well as BOCC direction provided during June 2002 budget work sessions, regarding the following project considerations: • Funding for a possible addition to the OCS Board of Education building may be postponed while OCS explores the possibility of relocating central office staff currently housed at the Hillsborough Elementary campus to other existing space within the district. That postponement affords the opportunity to accelerate funding for siting and planning OCS Middle School #3. Park project funding reflects Board direction in June 2002 to undertake park projects generally on an `equal footing", with Town park project and timelines maintained as presented last winter. Accelerated funding for conservation easements provides for greater flexibility to act as opportunities present themselves during the coming year. Senior Center funding allocations provide for initial funding to begin planning and design for a replacement when the Galleria lease for the Chapel Hill Senior Center expires. Over the life of the funding plan, both senior center projects will receive equal amounts of funding from bonds and alternative financing. At this time, staff proposes to pursue the first piece ($3.475 million) of the nearly $38 million alternative financing plan with closing by the end of December 2002. That will allow the County to obtain lower interest rates for that capital financing because of the County s position as "bank qualified" (having issued less than $10 million in debt in any calendar year). Staff also proposes to hold off on the first bond sale until March 2003, rather than the December 2002 - January 2003 timeline first proposed. The later sale date will allow the County to piggyback the 2001 bond sale with the refinancing of previously refinanced bonds. Some of the Countys 1988 bonds were refunded in 1993 at interest rates ranging from 4.75% to 5.1%. Staff proposes to again refund about $26 million of those outstanding bonds, this time at an all-inclusive cost annual interest rate of about 3.29%. This will result in annual debt service savings in excess of $120,000, and a total savings over the next eleven years of $1.35 million. The approach of combining the bond sale and refunding will reduce administrative costs (e.g. allowing the County to compile, issue, and produce only one Official Statement). Because of "call" dates established for the 1993 refunded bonds, March 2003 is the earliest date at which they can be refunded again, to take advantage of the prevailing lower interest rates. The Finance Director will briefly review the steps to be taken leading up to these capital financings, per the calendar prepared by the County's Bond Counsel. FINANCIAL IMPACT: As was explained during the public information campaign leading up to the November 2001 bond referenda, the cumulative debt service impacts from the plan for bond sales and alternative financing could range from 7 to 10 cents on the property tax rate, depending on size, timing, and prevailing interest rates. Depending on how debt service payments are structured through the LGC, the debt service impact for the next fiscal year (FY 2003-04) resulting from the first bond sale and alternative financing could be in the range of 1 to 2 cents per$100 of assessed valuation. RECOMMENDATION(S): The Manager recommends that the Board review and amend, as needed, the list of projects and amounts to be included in the first bond sale and alternative financing installment, and direct staff to proceed with all necessary steps to effect the financings, in accordance with the schedule prepared by Bond Counsel.