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HomeMy WebLinkAboutAgenda - 01-20-2011 - 6aORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: January 20, 2011 Action Agenda Item No. 6 -q SUBJECT: Public Hearing on the Issuance of Up to $9.9 Million of Qualified School Construction Bonds for the Chapel Hill — Carrboro City Schools and Orange County Schools DEPARTMENT: Financial Services PUBLIC HEARING: (Y /N) Yes ATTACHMENT(S): Listing of QSCB Projects October 17, 2010 Public Hearing Notice January 2, 2011 Public Hearing Notice Resolution Providing Final Approval of Terms and Documents for QSCB School Improvements Financing INFORMATION CONTACT: Clarence Grier, 919 - 245 -2453 Bob Jessup, 919 - 933 -9891 PURPOSE: To conduct an additional public hearing on the proposed issuance of up to $9.9 million of Qualified School Construction Bonds for the Chapel Hill — Carrboro City Schools and Orange County Schools due the revised public hearing notice dated Sunday, January 2, 2011; and to approve the Resolution Providing Final Approval of Terms and Documents for QSCB School Improvements Financing. BACKGROUND: At the October 5, 2010 meeting the Board of County Commissioners approved proceeding with the preliminary steps necessary to seek Qualified School Construction Bond (QSCB) financing for the Chapel Hill — Carrboro City Schools and Orange County Schools systems in an amount not to exceed $9.9 million. The Board authorized setting a public hearing on the proposed financing for the November 4, 2010 Board Meeting. The public hearing was advertised in the Chapel Hill Herald on October 17, 2010. As a point of correction, the notice of public hearing stated AL Stanback Middle School for the QSCB renovations for Orange County Schools and not CW Stanford as mentioned below. Chapel Hill Carrboro City Schools has applied to the North Carolina Department of Public Instruction (DPI) and received approval to use its 2010 QSCB allocations of $4.6 million for roofing projects at McDougle Middle School and various other projects. Orange County Schools has applied to the North Carolina Department of Public Instruction (DPI) and received approval to use its 2009 and 2010 QSCB allocations of $5.3 million for auditorium renovations at CW Stanford Middle School and various other projects. Qualified School Construction Bonds are tax credit bonds. The issuer receives a tax credit at an interest rate established by the Treasury Department at the time of issuance. The issuer then provides the tax credit to the purchaser of the bonds. The potential purchaser will evaluate PA the financing including the issuer of the project and the tax credit rate. The potential purchaser will determine whether to purchase the QSCB and further determine whether the tax credit rate is sufficient, or if a higher interest rate, is needed to make the financing. Branch Banking Trust (BB &T) will be the purchaser of this issuance and was also the issuer of the previous QSCB issuance for the Carrboro High School Arts Wing. The current approach for this type of financing is to negotiate terms directly with the purchaser. BB &T requires a 5.27% or higher tax credit in order to sustain a QSCB financing at 0% interest. Due to recent changes in the interest rates, Orange County will not have a supplemental interest coupon of 1.00% as mentioned in the previous public hearing abstract. The interest rate on the financing would be 0 %. The approximate annual payment for a $9.899 million /15 year financing loan with a coupon rate of 0% would be $659,963 per year, with a no interest cost over the life of the loan. This represents a savings of $54,037 in debt service from the previous public hearing. FINANCIAL IMPACT: There is no financial impact until the issuance of the bonds. RECOMMENDATION(S): The Manager recommends that the Board: 1) Open the public hearing and receive comments from the public; 2) Close the public hearing; and 3) Approve the Resolution Providing Final Approval of Terms and Documents for QSCB School Improvements Financing. LEA CHCCS Chapel Hill Carrboro City Schools Chapel Hill Carrboro City Schools Chapel Hill Carrboro City Schools Chapel Hill Carrboro City Schools Chapel Hill Carrboro City Schools Chapel Hill Carrboro City Schools Total CHCCS QSCB Projects OCS Orange County Schools Orange County Schools Orange County Schools Orange County Schools Orange County Schools Orange County Schools Orange County Schools Total OCS QSCB Projects Proiect Year Allocation Amount McDougle Elementary and Middle School Roof Replacement 2010 McDougle Elementary and Middle School Roof Replacement 2010 Glenwood Elementary School Roof Replacement 2010 Ephesus Elementary School Roof Replacement 2010 Phillips Middle School Roof Replacement 2010 Ephesus Elementary School Roof Project 2010 CW Stanford Middle School Auditorium CW Stanford Middle School Auditorium C.W. Stanford Middle School Roof Replacement Orange High School Roof Replacement Central Elementary School Roof Replacement Central Elementary School Breezeway Enclosure Efland Cheeks Elementary School Renovation Total all QSCB Projects 2009 2010 2010 2010 2010 2010 2010 1 $ 2,371,489 2 828,511 2 400,000 2 400,000 2 405,000 2 225,000 4,630,000 1 1,555,077 1 1,448,363 2 1,000,000 2 500,000 2 100,000 2 250,000 2 416,000 5,269,440 $ 9,899,440 5 SUNDAY,. JANUARY 2; 2Cj11 THE CHAPEL HILL HERALD /CHAPEL HiLL, NORTH CAROLINA. '�•- ••-•- ••••-- -• - - =' +sani•Otao 7CRanwol•Y.ya1 VV50 rr:" '.•oaaae6i iwrcsOTS6u. cover- �•- :: �wan� seasoned,mirdwobd. near.Hillside & NCCL "man`s $30p= 350 919- 47.7 - 2183•'. :: .. •.. `. 9.19 -7.95 -2261 8. $750 1mo. 9.19 -49C D . FREE TO -GOOD NOME p p . o o - 2_ and 3Bl3- Homes , Orange:Coanty;'...: ,' ';. 63 & -old Lab m]R pups: _ Ce ?H /AC,.. update Noith'Carolina =. . '.1male;.3'females, -.variety -of;:. `n'brliood 91'9 9744 Notice of Public Hearin ( ) 9:.` colors9.19- 244 -1732 `` ": ,:. ..;_CashPaidFor.Di *befic.::''.3BR;',:1,5BA, :all ; 2010 I)panaing-fbr- School " :Improvements * indoor:Netherland >Dwari bun -.. Test.Strips:;Up X0'$10 Fier, °5 .h'wood::)Irs,: 1308 :H :• . >;: �•= :: ;Box. Tom = An Ime:... '" `.:''.St The Boar 'of :Commis loners i ;. Hies ?:i ,fern 1 male $20; a piece`:: r Yt' $750/rrio. 91441,-, d,. a :...: also,: Diamond • D'oves, for $1;0 : ; ](919):283 -991:1 . i .of Qrange!Courity,. North Caro-. ' ,;,: For cent. :.'3BR: :hou or:1.. rl5reedI _doves j:`• Ion ,4willilioid-a"putiTchearing •'. The Herald- Suri;ls `lookirigj'fo� .: Indoor Hutch and<Cages3nego._ ' 'W d. diabetic .strips. . •d use c 9P95 93 8 Thursday:: January '2Q,: Independent:: Contractors • to:.; -ba)I'33Cr364 8892 and 'leave Any type, /knybi -4 d. Will beat ';,;g '2.6460. AvaiLJan 1 201 1. a# a 00• D:m: (or'�as 'soon d 1 : tr r, r . . 7 0 :. ... be ment- corigeming A proposed•< financ]ng`.;, contract, .under: which thir66uiity;*ouid boy`' - row appiozirnaiety $9;900,000 • to pay for] arlous public school Improvements, including. con-. struction of :a new auditorium wing at C.W. Stanford Middle School, various roof replace- ments and .renovations for Or- ange County Schools, and various roof replacements for the Chapel Hill - Carrboro City Schools. The County.may,also use financing proceeds to pro- vide:r®quired reserves and pay financing Costs. . The-hearing will be held in the Co'm`missioners' usual meeting room - in •Hillsborough Com- mooa,_ DSS Building (Old Wal- Mart), 1.13 Mayo St, Hillsbor- ough, North Carolina. The proposed financing would be secured by.a Ilen. on Stan: ford Middle. School, along with the County's promise to repay 'the financing; but there would be no: recourse against the - County or its property (other than :the. pledged facilities and . associated land) in the case of a.befidlt..As part of this fi- nancing plan, the • Orange County Board of Education will transfer the Stanford Middle School property (on Orange High- Schodl Road in .Hillsbor- . ough) to the County. All interested persor s will be heard: The County's plans are subject to change based on the comments received at the public, hearing and the Board's subsequent discussion and consideration. The County's entering into the financing is subject td obtaining approval from the North Carolina Local Government Commission. Persons wishing to make writ- ten comments in advance of the hearing or wishing more in- formation concerning the:sub Ject of the hearing may contact Clarence Grier, Orange, County Finance Officer, Post Office Box 8181, Hillsborough,• NC- . 27278, (telephone 919/245- 2453). - H -S: January 2, 2011 ,N1PLfOY:IVIE T �- t l e the must', .a „'• ;,: _ . �- -Route 12ll ' •Approximately $210.0p.wkiy Cysts Rd, US 15 -501, Morris Rd Feanington Village Community Approximately $281 Weekly Route 1238 Approximately $281 wily Jones Ferry Rd, NC 87, US Hwy 64 Sanford Rd; Old Graham Rd Rural area Chapel Hili/Ptttsboro: Route 1129 Approximately $185.00 - Weekly .Prankiin St, UNC Campus Area; Sbuthem Village; and US 15-501 Area. Route 525 Approximately $350 Oxford, Bullock and Grassy -Creek areas ' For more info. call .419-6551 ID a e ua. $75.2.5 yr old female, spayed, friendly, black lab mix with ID chip. 919- 383 -2474 Westie Maltese M &F, 1 Mal- tease M; Papillons M &P; -Taking deposits $350 & up. 1 st Shots. (919)526 -1952 ' Wesue Puppies AKC, lov- Ingly raised with lots of TLC, Very cutel.Champton sired/ grand sired, superior quality- and temprement 1 yr, health ' gauranteed. $800. . (434)374 -2969 AKC Registered Shiztu Pup- pies, 1 st shots and wormed, $400,(336)599-7045 American Pit Bull Terrier pups. ADBA registered: •9mo old, shots, wormed, $250 OBO. 9.19- 260 -6772. BICHON PUPPIES AKC, ab- solutely gorgeous, champion sire/ grand sired. top quality, chntc haaith nttarantaari "MALT]- P00'PUPs. Shots, small, non - shedding, tiny. $500. (336) - 215 -5232. Papillons; CKC • registered.' $300ea. " Please call 919 - 529 -0373• YORKIES / MALTESE. Small, non- shedding, Shots $500. 336 -215 -5232 round bales 19)603 -7211 DONKEYS FOR SALE, 2 Males, 1 Female. $200 - $400. (919)732 -7552 or 323 -2148 ooa Dryers $75 & up. Washers, Stoves, Fridges. $125 -up. 919 - 225 -1348. . . ' Nice Washers, Dryers, Fridges, Electric Stoves, $125 &• up ea. Repair available Also. 919 =596 -1547 D A+ Namc Brand MATTRESS SETS Twin $69. Full $79. Queen $B9. King $129. CAN DELIVER 919 -889 75228 AAAA Brand New Mattress sets F$75 Q$85 K$125 Layaway avail. 919 - 406-4616. BEDROOM MAHOGANY. Beautiful 6 piece, 1 yr old: In- cludes 2 -Trio old box spring & Donations Accepted. 33 Guess Rd 620 -8741 - Mobile DJ System Greaf Condition, hardly used. Stored in climate con- trolled environment $1800. (919)9294130 •• ELLIPTICAL CYCLE, Nor- dicTrack Cross Trainer. . CX17-990, Model NTEL12910, like new. $350 Flea Mateket. .. uyers & sellers paradisel Produce, jewelry, clothing, music, etc. Open Fri. Sat. &Sun. em- 4am.'1600•E. Pelluarew 'Front load washer & dryer, Washer & Dryer top. load. 'Electric Stove, 1 double door refrigerators, 52 inch TV set, a VCS stereo system: Liquid laundry. detergent, Tide' and Gain.. Please call 919 - 528 - 1.939 or 919 -880- 0111.. Samsung 24,000 btu window AC, used 1 month, $300. Rem 1100 12ga barrel $50. 12ga deer barrel for Browning pump shotgun.- smooth bare; .new; $100. Savage 7. mm-08 w/ scope & ammo. $350. 919 -482 -1827 Shih Tzu puppies ready now. 3 males, black/brown/white com- b1nations, $400. 338 -260 -8314. Free Rent Speclail '21311, 1 BA, Ct AC /HT, W/D, $500 /mo. 204 W. Geer St 395- 6393. Section 8 Welcome '..I y:appt,-(919)419 .]Nice '34Br :Niime.::w 'near NCCU. bsmt, mr today Sac. 8 ok. 6864 e. D o " - 2 Br, 1.5 Ba, near, NI 147.' H /AC, $520/mo. req. Ref. req 919 -676• Nice 2 'BR,, central $525 mo. 508 Gud 210 S. Plum. 919 -36 ea 't" " Fum. RM, Priv. bath, util. $435 & up (919)4 www.vooreman.c Disability Recipl, 3 Fumished Rooms E including telephone: and refrigerator; use o and kitchen: Males or / mo no dep. 475 -822f Nice room for world son or student For it (919)880 -2709 Lv. MI ROOMS R Us. Nice Rooms. By. MCC paint/carpJappl, t Included., good nbr $115wk 919 -306 -E Homes, Duplexes, TH www.RentalsofDurha , Call919- 286 -93: D" C,no. Roomate Wante Rougemorit location. interested:.918-667- e" D • 1 or 2 Newly. Renovated Office Si 12'X14'8" and.1'0'x•11K Included. 3200 Croasd Suite 105.'Nq Stairsl l (919)961 -1871 3 Office Suite in Chaf AVAILABLE NOWI 9 port Rd, Sublease w/ I\ ble terms. TPS Real I 919 -423 -7107 RES-a011-00+ Resolution Providing Final Approval of Terms and Documents for QSCB School Improvements Financing 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 Stanford Middle School, various roof replacements and renovations for Orange County Schools, and various roof replacements for the Chapel Hill — Carrboro City Schools. The County has also stated an intent to finance project costs by the use of an installment contract, as authorized under Section 160A -20 of the North Carolina General Statutes, that qualifies as a "qualified school construction bond" (a "QSCB "). The Finance Officer has obtained for the County a proposal from Branch Banking and Trust Company (`BB &T) to provide the QSCB installment financing to the County. The Finance Officer has made available to this Board the draft agreements listed on Exhibit A (the "Agreements "), which relate to the County's carrying out the QSCB financing plan. BE IT THEREFORE RESOLVED by the Board of Commissioners of Orange County, North Carolina, as follows: 1. Determination To Proceed with Financing — The County confirms its plans to undertake and finance the Project. The County accepts a proposal from BB &T dated November 29, 2010, to provide Project financing. Under the financing plan, BB &T will make funds available to the County for use on Project costs. The County will repay the amount advanced over time. As part of the financing plan, the Orange County School Board will convey C.W. Stanford Middle School (and its associated real property) to the County, so that the transferred property can provide collateral for the financing. The County will grant to BB &T a mortgage -type interest in the property to secure the County's repayment obligation. 2. Approval of Agreements; Direction To Execute Documents -- The Board approves the forms of the Agreements submitted to this meeting. The Board authorizes and directs the Board's Chairman and the County Manager, or either of 1 V] them, to execute and deliver the Agreements in their final forms. The Agreements in their respective final forms must be in substantially the forms presented, with such changes as the Chairman or the County Manager may approve. The Agreements in final form, however, must be consistent with the financing plan described in this resolution and must provide (a) for the amount financed by the County not to exceed $9,899,439.78, (b) for an annual interest rate to the County not to exceed 5.41 % (in the absence of a default or a change in tax status), and (c) for a financing term not to extend beyond December 31, 2026. In addition, the Board's Chairman and the County Manager, or either of them, are authorized and directed to approve, execute and deliver any further documents and agreements they deem desirable for carrying out the purposes and intents of this resolution. It is the Board's understanding that the financing documents may include (a) a lease agreement, providing for the School Board to continue to use the transferred school property during the term of the financing, and (b) an agreement under which the School Board will carry out the planned school improvements on the County's behalf. The execution and delivery of any document by an authorized officer will be conclusive evidence of his approval of the final form of such document. 3. Authorization to County Manager and Finance Officer To Complete Closing — The County Manager, the Finance Officer and all other County officers and employees are authorized and directed to take all proper steps to complete the financing in cooperation with BB &T and in accordance with the terms of this resolution. The Board authorizes and directs the Finance Officer to enter into an agreement with BB &T to formalize the County's commitment to complete the financing with BB &T and thereby establish a "sale date" for the transaction for the purpose of determining the tax credit rate to be applicable to the transaction for BB &T. The Board authorizes and directs the Finance Officer to hold executed copies of all financing documents authorized or permitted by this resolution in escrow on the County's behalf until the conditions for their delivery have been completed to such officer's satisfaction, and thereupon to release the executed copies of such documents for delivery to the appropriate persons or organizations. Without limiting the generality of the foregoing, the Board specifically authorizes the Finance Officer to approve changes to any documents, agreements or certifications previously signed by County officers or employees, provided that such changes do not conflict with this resolution or substantially alter the intent 2 N from that expressed in the form originally signed. The Finance Officer's authorization of the release of any such document for delivery will constitute conclusive evidence of such officer's approval of any such changes. In addition, the Finance Officer is authorized and directed to take all appropriate steps for the efficient and convenient carrying out of the County's on- going responsibilities with respect to the financing of the Project. This authorization includes, without limitation, contracting with third parties for reports and calculations that may be required under this resolution or otherwise with respect to the Agreements. 4. Resolutions As To Tax Matters -- The County will not take or omit to take any action the taking or omission of which will cause its obligations to pay principal and interest (the "Obligations ") to be "arbitrage bonds," within the meaning of Section 148 of the United States Internal Revenue Code of 1986, as amended, including the applicable Treasury regulations (the "Code "), or "private activity bonds" within the meaning of Code Section 141. S. Designation as a QSCB — The County designates the Obligations as a "qualified school construction bond" for the purposes of, and within the meaning of, Code Section 54F and related Code provisions. The County and BB &T intend that the financing will qualify as a QSCB. 6. Miscellaneous Provisions -- All County officers and employees are authorized and directed to take all such further action as they may consider necessary or desirable in furtherance of the purposes of this resolution. All such prior actions of County officers and employees are ratified, approved and confirmed. Upon the absence, unavailability or refusal to act of the County Manager, the Board's Chairman or the Finance Officer, any other of such officers may assume any responsibility or carry out any function assigned in this resolution. In addition, the Vice Chairman or any Deputy or Assistant Clerk to the Board may in any event assume any responsibility or carry out any function assigned to the Chairman or the Clerk, respectively, in this resolution. All other Board proceedings, or parts thereof, in conflict with this resolution are repealed, to the extent of the conflict. This resolution takes effect immediately. Exhibit A -- Draft Agreements (a) A draft dated December 20, 2010, of a Financing Agreement and Deed of Trust to be dated on or about January 20, 2011 (the "Financing 3 E Contract "), from the County for the benefit of BB &T, providing for the advance of funds to the County for the County's undertaking of the Project, setting out the terms of the County's promise and obligation to repay the amount financed and to care for the collateral, and providing for a security interest in C.W. Stanford Middle School (and its associated real property) to secure the County's obligations. (b) A draft dated December 20, 2010, of a Project Fund Agreement to be dated on or about January 20, 2011, between the County and BB &T, providing for the custody and investment of financing proceeds pending their application to Project costs. 4