HomeMy WebLinkAboutRES-2010-075 Resolution supporting an Application to the Local Government Commission for its approval of financing arrangements for public school improvement projects/0-o5-~dl~
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.Resolution supporting an application to the Local Government Commission
for its approval of financing arrangements for public school improvement projects
WHEREAS
Orange County has been asked by the Boards of Education for both Orange
County Schools and the Chapel Hill - Carrboro City. Schools to cooperate in the
construction and financing of various public school improvements, including construction
of a new auditorium wing at Stanback Middle School, various roof replacements and
renovations -for Orange County Schools, and various roof replacements for the Chapel
Hill - Carrboro City Schools.
The total amount to be financed would be approximately $9,899,440. The County
will undertake this ,financing pursuant to the installment financing provisions of Section
160A-20 of the North Carolina General Statutes. The North Carolina Local Government
Commission would have to approve any such financing arrangements. The County would
expect this financing to qualify as a "Qualified School Construction Bond" (a "QSCB")
under federal tax law and thereby allow the County to borrow the money at a very low
effective interest rate, and possibly an effective interest rate of zero.
Under the LGC's guidelines, this governing body must make certain findings of
fact to support the County's application for the LGC's approval of the financing
arrangements.
BE IT RESOLVED by the Board of Commissioners of Orange County, North
Carolina, that the County makes a preliminary determination to proceed with the
construction and financing of the various public .school improvements described above.
The Board will make a final determination to approve financing terms and conditions by
a subsequent resolution.
BE IT FURTHER RESOLVED that the Board of Commissioners makes .the
following findings of fact:
(1) The proposed projects are necessary and appropriate for the County under
all the circumstances.
(2) The proposed installment financing is preferable to a bond -issue for the
same purpose under all the circumstances.
The County has no existing capacity to issue general obligation bonds for this
project. Financing this project as an installment financing is consistent with the County's
policy of using both general obligation bonds and installment financing for school capital
needs. The small amount of financing needed makes it impractical to proceed as a
separate bond issue. The availability of QSCB financing means that there would be no
interest rate advantage to proceeding with a general obligation bond issue. In addition,
using installment financing for this project will allow the County to better-match the
timing of the financing to the timing of the project, and to take advantage of current
favorable conditions in the construction market.
(3) The estimated sums to fall due under the proposed financing contract will
be adequate and not excessive for the proposed purpose. All amounts to be financed will
reflect contract prices or well-developed estimates acceptable to the County and the LGC.
The County will closely review debt service levels with the LGC. .
(4) As confirmed to the Board at this meeting by the County's Finance Officer,
(a) the County's debt management procedures and policies are sound and in compliance
with law, and (b) the County is not in default under any of its debt service obligations.
(5) The County estimates that this financing will have a maximum tax rate
impact of less than 1 cent per $100 of assessed valuation, although this does not
necessarily mean that County taxes will be increased as a result of this financing. The
County will continue to work to minimise the tax impact of the contemplated financing,
in a manner consistent with other County needs. The County believes that given the need
for the projects and the availability of QSCB financing, such a tax rate impact is
reasonable under all the cvrcumstances.
(6) The County Attorney is of the opinion that the proposed project is
authorized by law and is a purpose for which public funds of the County may be
expended pursuant to the Constitution and laws of North Carolina.
(7) The Board currently estimates that the maximum amount to be financed for
this project will be $9,899,440. This amount is an estimate; the final amount to be
financed may be somewhat higher or lower than the estimate to match the final amounts
allocated to the County by the State Department of Public Instruction for the issuance of
QSCBs.
BE IT FURTHER RESOLVED, as follows:
(a) The Finance Officer is authorized and directed to take all appropriate steps
toward the completion of the financing, including completing an application to the LGC
for its approval of the proposed financing. All actions of the County's Finance Officer
and other County representatives in furtherance of the completion of the contemplated
financing are ratified, approved and confirmed.
(b) 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 fiznds that have been advanced for project costs, or which may
be so advanced, from the County's general fund, or any other County fund, may be
reimbursed from the financing proceeds.
(c) The Board will hold a public hearing on this matter. The County Manager
is authorized and directed to schedule the public hearing in his discretion. The Clerk to
this Board is authorized and directed to publish a notice of such public hearing in the
manner provided for by law, in consultation with the County Manager.
(d) This resolution takes effect immediately.
I certify that the foregoing resolution was duly adopted at a meeting of the Board
of Commissioners of Orange County, North Carolina, duly called and held on October 5,
201.0, and that a quorum was present and acting throughout such meeting. Such
resolution remains in full effect as of today.
Dated this .7 day of October, 2010.
Clerk, Board of Commissioners
Orange County, North Carolina