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HomeMy WebLinkAboutRES-2007-031 Resolution for Approval of Alternative Financing~ ~, 2007 Orange County installment financing for various projects -- Resolution supporting an application to the Local Government Commission for its approval of a financing agreement, and taking other appropriate action WHEREAS-- The Orange County Board of Commissioners has approved, in principle, the use of installment financing to provide funds, to be used with other available funds, to pay costs related to the various capital projects described on Exhibit A. The County has solicited competitive proposals to provide the desired financing, and SunTrust Bank ("SunTrust") has submitted the best proposal. Under the guidelines of the North Carolina Local Government Commission (the "LGC"), this governing body must make certain findings of fact to support the County's application for the LGC's approval of the County's proposed financing arrangements for the projects. NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of Orange County, North Carolina, as follows: 1. The Board makes an initial determination to finance the projects described above by use of installment. financing. The County estimates that the total amount to be financed will be approximately $50,057,000, plus amounts that maybe needed to provide required reserves, to pay financing costs and to pay other necessary and related costs. 2. The County makes a tentative determination to accept the SunTrust proposal dated March 13, 2007, to provide the contemplated financing. This determination is subject to final approval by the Board after the required public hearing, approval by the LGC, completion of documentation acceptable to the Board and negotiation of final financing terms between the County and SunTrust. 3. The County's Finance Officer is authorized and directed to file an application with the LGC for its approval of the project and the proposed financing arrangements and to take all necessary and appropriate action related to the LGC approval process. The Board appoints the Finance Director as the County's authorized representative with respect to the LGC application process. 4. The County requests that the LGC approve the County's application for such financing. The Board makes the following findings of fact in support of its application for approval and its determination to proceed with this financing: (a) The proposed projects are appropriate for the County under all the circumstances. These projects have been considered by the Board on multiple occasions as pant of the Board's capital investment planning process. (b) The proposed installment financing is preferable to a bond issue for the same purpose. It is appropriate for the County to balance its capital finance program between bonds and instalhent financing, and the County has already applied some general obligation bond funds and other resources to these projects, especially including the school projects. (c) The estimated sums to fall due under the proposed financing contract are adequate and not excessive for the proposed purpose. The SunTrust proposal provides not only competitive interest rate and prepayment terms but also lower than expected transaction costs. (d) As confirmed to the Board at this meeting by the County's Finance Officer, (i) the County's debt management procedures and policies are sound and in compliance with law, and (ii) the County is not in default under any of its debt service obligations. (e) The County expects that the amounts required to repay the amounts financed for the projects will require the equivalent of a real property tax increase of approximately cents. Such an increase is appropriate under all the circumstances, given the need for the projects. (f) The County Attorney is of the opinion that the proposed projects are authorized by law and are purposes for which public funds of the County may be expended pursuant to the Constitution and laws of North Carolina. 5. The County intends that the adoption of this resolution will be a declaration of the County's official intent to reimburse project expenditures from financing proceeds. The County intends that funds that have been advanced, or that may be advanced, from the County's general fund, or any other County fund, for project costs will be reimbursed from the financing proceeds. 6. A public hearing on this matter will be held at the Board's meeting of May 3, 2007. The Manager is authorized and directed to set the time of the hearing, and the Clerk to this- Board is authorized and directed to publish a notice of such public hearing in the manner provided for by law and in substantially the form of Exhibit B. 7. This resolution takes effect immediately.