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HomeMy WebLinkAboutAgenda - 01-24-2012 - 5j 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: January 24, 2012 Action Agenda . Item No. � SUBJECT: Adoption of a Reimbursement Resolution for Chapel Hill Carrboro City Schools Elementary#11 DEPARTMENT: Financial and Administrative PUBLIC HEARING: (Y/N) No Services ATTACHMENT(S): INFORMATION CONTACT: Reimbursement Resolution for CHCCS Clarence Grier, 919-245-2453 Elementary #11 Bob Jessup, 919-933-9391 Frank Clifton, 919-245-2301 Reimbursement Resolution for Chapel Hill — Carrboro City Schools Timeline for Debt Issuance for Elementary# 11 PURPOSE: To adopt a reimbursement resolution authorizing the County to reimburse itself and Chapel Hill - Carrboro City Schools (CHCCS) for non-general obligation bond project expenditures incurred for the construction of CHCCS Elementary #11 prior to the actual issuance of debt; and to schedule a public hearing to receive public input and consider approval of the financing timetable as set forth in the attached timeline for the issuance for the debt. BACKGROUND: The Board of County Commissioners has committed to constructing Elementary #11 for the Chapel Hill — Carrboro City Schools. Current plans include issuing non- general obligation debt, also known as alternative financing, not later than May 2012 to fund the project. In accordance with Local Government Commission (LGC) policy, local governments must have construction bids "in hand" prior to actually incurring debt. However, local governments must expend monies in order to get the bids and in turn, reimburse themselves once they issue the debt. As specified by the Internal Revenue Service, the tool that allows local governments to proceed with planned projects and expend funds prior to issuing debt is a reimbursement resolution. Reimbursement resolutions allow governing boards to state their intent to reimburse themselves for capital project expenses with funds received from the debt financing. The adoption of this resolution is consistent with past practices — for example, with the 2008 Animal Services Facility, when the project incurred expenditures prior to the actual sale of the authorized financing. In these instances, the Board adopted reimbursement resolutions that authorized the County to expend monies up front and reimburse itself once the borrowed 2 monies were in hand. At its December 15, 2011 meeting, the Chapel Hill — Carrboro Board of Education adopted a reimbursement resolution for the construction of Elementary#11. Additionally in order to maintain the proposed March 2012 and April closing dates, staff requests that the Board of County Commissioners schedule a public hearing to receive public input and consider approval of the financing timetable as set forth in the attached timeline for �, the issuance for the debt. Staff proposes that this hearing be held at the Board of County Commissioners' February 7, 2012 meeting. FINANCIAL IMPACT: As outlined in the attached resolution, the County expects that the Board of Education for Chapel Hill — Carrboro City Schools will spend funds on project expenditures prior to the closing on the financing. The County intends to use financing proceeds to reimburse the School Board for these project expenditures. The approximate amount that the County expects the School Board to expend before the closing, and for which the School Board will be reimbursed, is $2,100,000. The approximate amount for which the County expects to seek reimbursement is $2,100,000. RECOMMENDATION(S): The Manager recommends that the Board adopt the reimbursement resolution for CHCCS Elementary#11 and schedule a public hearing to receive public input and consider approval of the financing timetable at the Board of County Commissioners' February 7, 2012 meeting. R �� - ao �a- o�� 3 REIMBURSEMENT RESOLUTION -- Chauel Hill—Carrboro Elementarv School#11 Proiect WHEREAS-- The County has made a preliminary determination to proceed with the acquisition, construction and financing of a new elementary school (referred to as "Elementary #11") for the Chapel Hill — Carrboro city school district. The County intends to advance its own funds to pay some of the project costs, and then reimburse itself from financing proceeds for these early expenditures. The Finance Officer has advised the Board that it is desirable for the Board to adopt a resolution to document the County's plans, in order to comply with certain federal tax rules related to this type of reimbursement. BE IT RESOLVED by the Board of Commissioners of Orange County, North Carolina, as follows: Section 1. The County intends to pay some of the costs of the acquisition and construction of Elementary #11 from the County's own funds prior to obtaining financing for the proj ect. Section 2. The County intends to finance the project. The expected type of financing (which is subject to change) is installment financing under Section 160A-20 of the General Statutes, including the use of limited obligation bonds or certificates of participation. The estimated maximum amount of bonds or other obligations to be issued or contracted for the project (including allowances for reserves and financing costs) is approximately $21,400,000. The approximate amount for which the County expects to seek reimbursement is $2,100,000. In addition, the County expects that The Board of Education for The Chapel Hill — Carrboro City Schools will spend funds on project costs prior to the closing on the financing. The County intends to use financing proceeds to reimburse the School Board for these project expenditures. The approximate amount that the County expects the School Board to expend before the closing, and for which the School Board will be reimbursed, is $2,100,000. Section 3. The County intends that funds that have been advanced, or may be advanced, from the general fund, the school capital fund or any other fund for project costs will be reimbursed from the financing proceeds. Section 4. The County intends that the adoption of this resolution will be a declaration of this County's official intent to reimburse project expenditures, whether made by the County or the School Board, from financing proceeds. �4 REIlVIBURSEMENT RESOLUTION-- AcQUisition and Construction of Elementarv School#21 WHEREAS-- I This Board has come to an agreexnent with the Orange County Board of Co�nmissioners on a plan for the acquisition, construction and financing of a new elementary school for the District,currentiy referred to as"Elementary#1l." This plaa calls for both the District and the Couniy to spend funds on hand for tlae project, vvith those funds to be reirnbursed from the proceeds of the County's financing for the project. The Board has been advised that pursuant to federaI tax rules for Iocal government fmancing, this Board shou[d adopt a resolution to state formally its plan to use financing proceeds to reimburse the District for expenditures on project costs made prior to�e County's closing on the fmancing. BE IT RESOLVED by The Board of Education for The Chapel Hill —Carrboro City Schools,as follows: Section 1. The Boatd of Educa.tion intends to pay some costs of the acquisition and canstruction of Elementary #i 1 from its own fiznds prior to the County's obtaining financing for fihe projec� Section 2. The Board understands that the County intends to finanae the project using instalIment fmancing under Section 160A-20 of the General Statutes, including the use of l�iz�nited obligation bonds or certificates of participation. The estimated m�imum amount of bonds or other obliga�ions to be issued or contracted by the County for the project{inclnding allowances for reserves and financing costs)is approximately$21,400,000. Sectian 3. The Board intends that project funds that have been advanced, or may be advanced, from its general funds,its capital reserves,or any other fund or reserves,for project costs will be reimbursed ftom the financing proceeds. The approximate aznount that the School Board expects to e�cpend before the closing,and for which the School Board expects to seek reimbursement,is$2,100,00Q. Sec�ion 4. The Board intends for this resolution to be a declaration of the Board's official intent to be reimbursed for project expenditures from financing proceeds. . ( ___ .���� December�5,2011 ___ Marianna Day Bn�hs,Board air CHCCS Date: 5 Orange Countv Short Form Financin�Calendar for Elementary#11 —Draft of 1/19/2012 For March LGC/ For April LGC/ For May LGC/ March closing April closing May closing School Boazd to consider Dec.15 meeting Dec. 15 meeting Dec. 15 meeting reimbursement resolution County Board to consider Jan. 24 meeting Jan. 24 meeting Jan. 24 meeting reimbursement resolution County Board- schedule public Jan. 24 meeting Jan. 24 meeting Jan. 24 meeting hearing; approve financing timetable(as Board action or information report) Advertise for notice of hearing By early February By early February By early March Submit 45-day filing to General By January 20 By February 17 By March 16 Assembly Committee Construction bids come in At least by end of At least by end of At least by end of January February March County Board conducts hearing; BOCC Feb 7 BOCC Feb 7 BOCC March 22 adopts findings resolution Fina1 application material due to By Feb 10 By March 9 By Apri16 LGC School Board—meeting to approve February 2 March 15 April 19 forms of lease and construction agreement County adopts final resolution BOCC Feb 21 BOCC Apri13 BOCC May 1 (approves financing details and forms of documents, including official statement) LGC approval March 6 Apri13 May 1 Mail POS to prospective investors March 7 April 4 May 2 Pricing Mazch 14 April 11 May 9 Closing March 22 April 19 May 17