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HomeMy WebLinkAboutRES-2012-016 Resolution Supporting An Application to the LGC for its approval of a financing agreement for Elementary School #11 and Other County Capital Projects and Refinancing of Existing ObligationsRes. 2012-016 a- 7 ~~ ~~ Resolution supporting an application to the Local Government Commission for its approval of a financing agreement for the County -for Elementary School #11, for other County capital proiects and to refinance existing obligations WHEREAS -- Orange County has previously determined to carry out the acquisition and construction of a new elementary school for the Chapel Hill - Carrboro school system, often referred to as "Elementary # 11," and to finance the costs of this project by the use of an installment financing, as authorized under Section 160A-20 of the North Carolina General Statutes. The Board of Commissioners has also determined to fund approximately $3,500,000 for additional County capital projects, including approximately $3.0 million for improvements to solid waste convenience centers and just over $500,000 for the purchase of three ambulances. County staff has further advised the Board that because of generally low borrowing rates, the County may be able to save money by refinancing a variety of the County's existing installment financings. The Board believes a single installment financing for the new school, the additional County projects and to carry out refinancings would be in the County's best interest. This financing will require approval from the North Carolina Local Government Commission. Under the LGC's guidelines, this governing body must make certain findings of fact to support the County's application to the LGC for its approval of the proposed financing arrangements. THEREFORE, BE IT RESOLVED by the Board of Commissioners of Orange County, North Carolina, that the County makes a preliminary determination to finance approximately $21,500,000 to pay capital costs of the proposed new elementary school and $3,500,000 to pay costs of the other County projects described above. BE IT FURTHER RESOLVED that the Board approves additional financing as appropriate to carry out beneficial refinancings of existing County obligations, with the amount of this financing currently estimated as not to exceed $50,000,000. The Board will make a final determination to proceed with the financing, and to approve financing terms and conditions, by one or more subsequent resolutions. Likewise, the Board will establish a maximum amount to be financed by a later resolution. Some financing proceeds may be use to reimburse the County for prior expenditures on project costs, and some proceeds will be used to pay financing costs. 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. The County has worked with Chapel Hill - Carrboro School Board to develop a plan for financing school facilities, of which the currently-proposed elementary school is apart. The ambulances and convenience center improvements will improve services to County residents. (2) The proposed installment financing is preferable to a bond issue for the same purposes. As the elementary school will be a discrete facility, it is particularly suitable for installment financing. The amounts to be financed for other County projects are relatively small, and it will be cost-effective for the County to combine that financing with the larger school financing. As the financings that are proposed to be refinanced are all installment financings, it is most appropriate to carry out the refinancing as an installment financing. The County has no meaningful ability to issue non-voted general obligation bonds for this project, and the County has no previously-authorized bonds for these projects. The projects will produce no revenues that could support aself-liquidating financing. The County expects that in the current interest rate environment for municipal securities that there will be no substantial difference in interest rates between general obligation bonds and installment financings for this project. The County maintains a balance in school construction financing between voter- approved bonds, pay-as-you-go funding and installment financing, and the Board believes that under the circumstances installment financing is the preferable vehicle for Elementary # 11. (3) The estimated sums to fall due under the proposed financing contract are adequate and not excessive for the proposed purpose. The County will closely review proposed financing rates against market rates with guidance from the LGC. All amounts financed will reflect either approved contracts or previous actual expenditures. (4) As confirmed 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. (5) The County estimates that the maximum tax rate impact of paying debt service on the financing for the new elementary school will be the equivalent of approximately 1.14 cents per $100 of valuation. Given the County's need for the new school, the Board believes that such a tax rate impact is reasonable under all the circumstances. The County estimates that the tax-rate impact of the additional financing for County projects will be negligible, especially since solid waste enterprise revenues will help pay debt service on the financing for the convenience center improvements. Any refinancings will reduce the County's debt service obligations. (6) 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. 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 prior actions of County representatives in this regard are regard are approved, ratified and confirmed. (b) This resolution takes effect immediately. I certify as follows: that the foregoing resolution was properly adopted at a meeting of the Board of Commissioners of Orange County, North Carolina; that such meeting was properly called and held on February 7, 2012; that a quorum was present and acting throughout such meeting; and that such resolution has not been modified or amended, and remains in full effect as of today. ~a-~ Dated this ~ day of February, 2012. ~? ~ ~ ~° ; ~ Do a S. Ba er ~~ Clerk, Board of Commissioners ~, ' ~ Orange County, North Carolina '~ ~~`~~ 'S ~~°