HomeMy WebLinkAboutAgenda - 02-21-2012 - 8aORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: February 21, 2012
Action Agenda
Item No. S - Q
SUBJECT: Adoption of the Final Bond Resolution Authorizing the Issuance of Limited
Obligation Bonds to Finance Chapel Hill - Carrboro City Schools Elementary
#11, Other County Capital Projects and Refinancing of Existing Obligations
DEPARTMENT: Financial Services PUBLIC HEARING: (Y/N) NO
ATTACHMENT(S):
1. Resolution
2. Draft Sizing Document
INFORMATION CONTACTS:
Clarence Grier, 919-245-2453
Robert Jessup, 919-933-9891
PURPOSE: To adopt the final bond resolution authorizing the issue of Limited Obligation Bonds
in the maximum amount of $75 million for the financing of Elementary School #11 for Chapel Hifl
- Carrboro City Schools (CHCCS), for other County capital projects and to refinance existing
obligations.
BACKGROUND: At the February 7, 2012 meeting, the Board of Commissioners approved the
financing plan for a new elementary school for the Chapel Hill - Carrboro City Schools,
generally referred to as "Elementary #11 ". The Board made a preliminary determination to
finance costs for this project by the use of an installment contract, as authorized under Section
160A-20 of the North Carolina General Statutes. The total amount to be financed for school
construction will be $21,500,000.
In addition, County staff included in this financing package $3,500,000 of additional funding for
County capital projects. These additions would include $3.0 million for improvements to solid
waste convenience centers, and just over $531,500 for the purchase of three ambulances.
Combining these projects with the school financing would provide the efficiency of fewer
separate transactions, and would be expected similarly to reduce total transaction costs.
Additionally, the County's investment banking underwriters for the debt issuance (Branch
Banking and Trust - BB&T- Company Capital Markets) advised the County that because of
continuing low market interest rates, there was an opportunity for the County to refinance some
of the County's existing installment financing arrangements. BB&T estimated that adding
approximately $50 million to the debt issuance to refinance existing obligations will save the
County $2.9 million over the next 15 years (or approximately $2.59 on a present value basis).
The amount of obligations to be refinanced, and the total savings, are dependent on conditions
at the time the County's obligations are offered by BB&T in the securities market. The financing
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will also include amounts to pay transaction costs. In order to proceed with the refunding, the
Board of County Commissioners must adopt a Resolution for the Sale of Refunding Bonds
(attached).
Currently, the total amount of issuance would be $75 million including the financing for
Elementary #11, County Capital Projects and the refinancing of $50 million of existing debt
obligations.
FINANCIAL IMPACT: There is no financial impact related to this action. However, there will be
a financial impact in proceeding with the financing. A preliminary estimate of maximum debt
service applicable to the school and County projects financing would require $513,050 in fiscal
year 2012-13 with the highest debt service payment of $1.752 million falling in fiscal year 2020-
2021. The tax rate equivalent for the highest debt service payment is approximately 1.14 cents.
The projected savings from the refinancing would reduce future debt service costs. The
estimated annual effect of the contemplated refinancing would be an average of $206,671. The
actual effects of the new debt service and refinancings may be higher or lower. These effects
will be established by the time of the closing.
RECOMMENDATION(S): The Manager recommends that the Board approve the attached
resolution authorizing the sale of the limited obligation bonds to finance CHCCS Elementary#11,
various County Capital Projects and the refinancing of several debt obligations of the County.
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~~s- ~oi~- oa~- 3
SHLF draft of February 21, 2012
Resolution Providing Final Approval of Terms and Documents
for County's 2012 Installment Financing -- for Elementary School #11,
for other County capital proiects and to refinance existin~ obli~ations
WHEREAS --
The Orange County Board of Commissioners 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 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 approximately $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 include the use of limited obligation bonds, which represent interests in the
installment payments to be made by the County.
The County's Finance Officer has made available to this Board the draft documents listed
on E~ibit A(the "Documents"), and a draft of an official statement providing for the disclosure
of information to prospective investors in the County's financing obligations. All of these items
relate to the County's carrying out the 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 Board confirms its decision to
carry out the proposed installment financing as described above. As part of this financing, the
County will refinance such existing County installment financing obligations as the Finance
Officer may determine.
2. Approval of Documents; Direction To Execute Documents -- The Board approves
the forms of the Documents submitted to this meeting. The Board authorizes and directs the
Board's Chair and the County Manager, or either of them, to execute and deliver those
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Documents to which the County is a party. The Documents in their respective final forms must be
in substantially the forms presented, with such changes as the Chair or the County Manager may
approve. The execution and delivery of any Document by an authorized County officer will be
conclusive evidence of such officer's approval of any such changes. The Documents in final
form, however, must provide for the principal amount of limited obligation bonds to not exceed
$75,000,000 and a financing term not to extend beyond December 31, 2032. The collateral
pledged to the repayment of the County's obligations under the Documents must include the
property associated with the new elementary school and may include any portion, or all, of the
collateral pledged to the repayment of obligations that are refinanced, as the Finance Officer may
approve. The amount financed under the Documents may include amounts to pay financing
expenses and other necessary and incidental costs.
3. Sale of Bonds; Approval of Official Statement - The Board approves and appoints
BB&T Capital Markets (a division of Scott & Stringfellow, LLC) as the underwriter of the bonds.
The Board approves the draft official statement submitted to this meeting as the form of
the preliminary official statement pursuant to which the contemplated limited obligation bonds
will be offered for sale.
The preliminary official statement as distributed to prospective investors must be in
substantially the form presented, with such changes as the Finance Officer may approve. The
Board directs the Finance Officer, after the sale of the bonds, to complete and otherwise prepare
the preliminary official statement as an official statement in final form.
The Board acknowledges that it is the County's responsibility, and ultimately the Board's
responsibility, to ensure that the Official Statement in its final form neither contains an untrue
statement of a material fact nor omits to state a material fact required to be included therein for
the purpose for which such Official Statement is to be used or necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading. By the
adoption of this resolution, the Board members approve the Official Statement as materially
correct and complete, and further acknowledge and accept their own responsibility for causing the
County to fulfill these responsibilities for the Official Statement. The Board authorizes and
approves the use of the preliminary official statement and final official statement by the
underwriters in connection with the sale of the bonds.
4. Authorization To Refinance Obligations with Existing Lenders - The Board
understands that for certain of the County's outstanding installment financing obligations, it may
be in the County's best interest to modify the existing agreements with the current lenders,
instead of refinancing those obligations through the issuance of the limited obligation bonds. The
Finance Officer, and all other County officers and representatives, are authorized and directed to
take all appropriate action to carry out such modifications and refinancings with the existing
lenders.
S. Authorization to County Manager and Finance Officer To Complete Closing -
The County Manager, the Finance Officer and all other County officers and employees are
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authorized and directed to take all proper steps to complete the financing in accordance with the
terms of this resolution.
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 (a) to approve any additional agreements appropriate to carry out the plan of
financing contemplated by this resolution, including agreements for the custody or investment of
financing proceeds, appointment of additional underwriters and agreements for appropriate
professional services, and (b) to approve changes to any documents or closing certifications
previously signed by County officers or employees, provided that such changes do not conflict
with this resolution or substantially alter the intent 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 bonds. This authorization includes, without limitation, contracting with third parties for reports
and calculations that may be required under the bonds, this resolution or otherwise with respect to
the bonds.
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 Chair or the Finance Officer, any other of such officers may assume any
responsibility or carry out any function assigned in this resolution. In addition, upon the
unavailability of the Chair or the Clerk, respectively, any of the rights or responsibilities directed
to such officers may be carried out or exercised by the Vice Chair or any Deputy or Assistant
Clerk. 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.
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Feb 3, 2012 9:56 am Prepared by BB&T Capital Markets (Finance 6.022 orange county, nc:COPS_1)
TABLE OF CONTENTS
Orange County, North Carolina
Limited Obligation Bonds, Series 2012
Rates as of February 2, 2012
Preliminary and Subject to Change
Report
Page
Certificates of Participation, Series 2012
Sources and Uses of Funds . . . . . . . . . . . . . . . . . . . . . . . 1
Bond Summary Statistics . . . . . . . . . . . . . . . . . . . . . . . . 3
Summary of Refunding Results . . . . . . . . . . . . . . . . . . . . . 4
Savings ................................ 5
Summary of Bonds Refunded . . . . . . . . . . . . . . . . . . . 6
Bond Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Bond Debt Service . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Sources and Uses of Funds . . . . . . . . . . . . . . . . . . . . . . . 11
Bond Summary Statistics . . . . . . . . . . . . . . . . . . . . . . . . 12
Bond Debt Service . . . . . . . . . . . . . . . . . . . . . . . . . 13
2006 COPS Pub Imp Refunding
Sources and Uses of Funds . . . . . . . . . . . . . . . . . . . . . . . 14
Bond Summary Statistics . . . . . . . . . . . . . . . . . . . . . . . . 15
Summary of Refunding Results . . . . . . . . . . . . . . . . . . . . . 16
Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Bond Debt Service . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Escrow Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Escrow Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2006IP Schools (BB&'I) Refunding
Sources and Uses of Funds . . . . . . . . . . . . . . . . . . . . . . . 22
Bond Summary Statistics . . . . . . . . . . . . . . . . . . . . . . . . 23
Summary of Refunding Results . . . . . . . . . . . . . . . . . . . . . 24
Savings . . . . . . . . • • - • • . . . . . . . . . . . . . . . . . . . 25
Bond Debt Service . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Escrow Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Escrow Cash Flow . . . . . . . . . . . . . . . . • - - . . . . . . . . 29
2008 IP Animal Shelter Refunding (BOA)
Sources and Uses of Funds . . . . . . . . . . . . . . . . . . . . . . . 30
Bond Summary Statistics . . . . . . . . . . . . . . . . . . . . . . . . 31
Summary of Refunding Results . . . . . . . . . . . . . . . . . . . . . 32
Savings . . . . . . . . . . . . . . . . • - • . . . . . . . . . . . . . 33
Bond Debt Service . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Escrow Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2009 II' Land Aquisition & Housing (BB&'1) Refunding
Sources and Uses of Funds . . . . . . . . . . . . . . . . . . . . . . . 38
Bond Sununary Statistics . • • • • • • • • • . . . . . . . . . . . . . . 39
Summary of Refunding Results . . . . . . . . . . . . . . . . . . . . . 40
Savings . . . . . . • • • • • . . . . . . . . • • • • • • • • • - - . . 41
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Feb 3, 2012 9:56 am Prepared by BB&T Capital Markeis (Finance 6.022 orange county, nc:COPS_1)
TABLE OF CONTENTS
Orange County, North Carolina
Limited Obligation Bonds, Series 2012
Rates as of February 2, 2012
Preliminary and Subject to Change
Report Page
2009 IP Land Aquisition & Housing (BB&'I) Refunding
Bond Debt Service . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Escrow Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Escrow Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
2009 IP Muni Buildings (BB&'I) Refunding
Sources and Uses of Funds . . . . . . . . . . . . . . . . . . . . . . . 47
Bond Summary Statistics . . . . . . . . . . . . . . . . . . . . . . . . 48
Sumulary of Refunding Results . . . . . . . . . . . . . . . . . . . . . 49
Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Bond Debt Service . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Escrow Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Escrow Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
2009 IP County Buildings and Library (BB&'1) Refunding
Sources and Uses of Funds . . . . . . . . . . . . . . . . . . . . . . . 56
Bond Summary Statistics . . . . . . . . . . . . . . . . . . . . . . . . 57
Summary of Refunding Results . . . . . . . . . . . . . . . . . . . . . 58
Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Bond Debt Service . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Escrow Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Escrow Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Feb 3, 2012 9:56 am Prepared by BB&T Capital Markets
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(Finance 6.022 orange counfy, nc:COPS_1) Page 1
SOURCES AND USES OF FUNDS
Orange County, North Carolina
Limited Obligation Bonds, Series 2012
Rates as of February 2, 2012
Preliminary and Subject to Change
Dated Date 03/29/2012
Delivery Date 03/29/2012
Certificates ~ 7A08 II' Animal 7A09IP Iand 2009IP Muni
of 2006IP Schools Shelter Aquisition & Buildings
Partidpation, 2006 COPS Pub (BB&'1) Refunding Housing (BB&27 (BB&T)
Sources: Series 2012 Imp Refunding Refanding (BpA) Refunding Refunding
Bond Proceeds:
Paz Amount 21,630,000.00 9,755,000.00 5,495,000.00 5,820,OW.W 2,560,000.00 4,315,000.00
Premium 3,579,596.65 1,996,679.50 719,653.00 837,083.50 415,347.50 700,813.00
25,209596.65 11,751,679.50 6,214,653.00 6,657,063.50 2,975,347.50 5,015,813.00
Other Sources of Funds:
Accrued Interest Contnbution 240,052.78
u,209S%.65 11,991,73228 6,214,653.00 6,657,083.50 Y,975,347.50 5,015,813.00
Certificates 7A08 TP Animal 7.009IP Land 2A09II' Muni
of 2006IP Schools Shelt~ Aquisition & Buildings
Partidpation 2006 COPS Pub (BB&'n Refunding Housing (BB&'[) (BB&'n
Uses: Series 2012 Imp Refunding RefundinS ,: (BOA) Refunding Refunding
Project Fund Deposits:
IIementary School 21,500,000.00
Emergency Service Vehicles 531,500.00
Solid Waste Convenience Center Upgrades 3,000,000.00
25,031,500.00
Refunding Escrow Deposits:
Cash Deposit 242,750.65 0.44 6,609,646.59 0.35 0.51
SI.GS Purchases 11,668,532.00 6,175,334.00 2,955,286.00 4,978,290.00
11,911,28265 6,175,334.44 6,609,646.59 2,955,286.35 4,978,290.51
Delivery Date Expenses:
Cost of Issuance 66,441.41 29,964.68 16,879.13 17,877.44 7,863.62 13,254.49
Underwriter's Discount 108,150.00 48,775.00 27,475.00 29,100.00 12,800.00 21,575.00
174,591.41 75,739.68 44,354.13 46,977.44 20,663.62 34,829.49
Other Uses of Funds:
Additional Proceeds 3505.24 1,709.95 -5,035.57 459.47 -602.47 2,693.00
25,209,596.65 11,941,73228 6,214,653.00 6,657,083.50 2,975,347.50 5,015,813.00
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Feb 3, 2012 9:56 am Prepazed by BB&T Capital Markets (Finance 6.022 orange county, nc:COPS 1) Page 2
SOURCES AND USES OF FUNDS
Orange County, North Carolina
Limited Obligation Bonds, Series 2012
Rates as of February 2, 2012
Preliminary and Subject to Change
wo9 rn co~ry
suitdings and
Library (BBds'n
Sovrces: Retunding Total
Bond Proceeds:
Paz Amount 15,535,000.00 65,110,000.00
Premium 2,453,233.05 10,702,406.20
17,988,733.05 75,612,406.20
Other Sources of Funds:
Accrued Interest Contribution 240,052.78
17,988,Z33.05 76,052,458.~
Uses:
2009IP County
Buildings and
Library (BB&1)
Refunding Total
Project Fund Deposits:
IIementary School
Emergency Service Vehicles
Solid Waste Convenience Center Upgrades
Refunding Escrow Deposits:
Cash Deposit
SLGS Purchases
Delivery Dare Expenses:
Cost of Issuance
Underwriter's Discount
Other Uses of Funds:
Additional Proceeds
21Sa1,000.00
531,500.00
3,000,000.00
25,031,500.00
0.49 6,852,399.03
17,863,935.00 43,641,377.00
17,863,935.49 50,493,776.03
47,719.23 200,000.00
77,675.00 325,550.00
125,394.23 525S5o.00
-1,096.67 1,63295
17,988,233.05 76,052,456.98
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Feb 3, 2012 9:56 am Prepared by BB&T Capital Markets (Finance 6.022 orange county, nc:COPS_1) Page 3
BOND SUMMARY STATISTICS
Orange County, North CaroIina
Limited Obligation Bonds, Series 2012
Rates as of Februa ry 2, 2012
Preliminary and Subject to Change
Dated Date 03/29/2012
Delivery Date 03/29/2012
Last Maturity 10/Ol/2032
Arbitrage Yield 2091315%
True Interest Cost ('TIC) 2.431697°~
Net Interest Cost (NIC~ 2737569°~
All-In TIC 2.469842%
Average Coupon 4.685957°~
Average Life (years) 8.180
Duration of Issue (years) 7.044
Par Amount 65,110,000.00
Bond Proceeds 75,812,406.20
Totalinterest 24,956,785.83
Net Interest 14,579,929.63
Total DebtService 90,066,785.83
Maximum Annual Debt Service 7,098,050.00
Average Annual Debt Service 4,392,311.42
Underwriter's Fees (per $1000)
Average Takedown
Other Fee 5.000000
Total Underwriter's Discount 5.000000
Bid Price 115.937423
Paz Average Average
Bond Component Value Price Coupon Life
Serials 59,710,000.00 116.620 4.613°~ 7246
2032 Term 5,400,000.00 114.415 5.000°k 18.506
65,110,~0.00 8.180
All-In Arbitrage
TIC TIC Yield
Par Value 65,110,000.00 65,110,000.00 65,110,000.00
+ Accrued Interest
+ Premium (Discount) 10,702,406.20 10,702,40620 10,702,406.20
- Undenvriter's Discount -325,550.00 -325,550.00
- Cost of Issuance Expense -200,000.00
- Other Amounts
Target Value 75,486,85620 75,286,856.20 75,812,40620
Target Date 03/29/2012 03/29/2012 03/29/2012
Yield 2431697°k 2.469842% 2.091315°~
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Feb 3, 2012 9:56 am Prepared by BB&T Capital Markets (Finance 6A22 orange county, nc:COPS_1) Page 4
SUMMARY OF REFUNDING RESUL'I5
Orange County, North Carolina
Limited Obligation Bonds, Series 2012
Rates as of February 2, 2012
Preliminary and Subject to Change
Dated Date 03/29/2012
Delivery Date 03/29/2012
Arbitrage yield 2.091315%
Escrow yield 0.374559%
Bond Par Amount 43,480,000.00
True Interest Cost 1.992562%
Net Interest Cost 2 22gq~49%
Average Coupon 4.571279 %
Average Life 6.779
Par amount of refunded bonds 47,415,827.58
Average coupon of refunded bonds 3.794330 %
Average life of refunded bonds 6.791
PV of prior debt to 03/29/2012 Q 2.091315% 52,848,077.12
Net PV Savings 2,517,920.54
Percentage savings of refunded bonds 5.310295%
Percentage savings of refunding bonds 5.790986%
Feb 3, 2012 9:56 am Prepared by BB&T Capital Markets (Finance 6.022 orange county, nc:COPS_1) Page 5 2
SAVINGS
Orange County, North Carolina
Limited Obligation Bonds, Series 2012
Rates as of February 2, 2012
Preliminary and Subject to Change
Date
Prior Prior
Debt ServiceAccrued Interest
Prior
Net Cash Flow
Refunding
Debt Service
Savings Present Value
to 03/29/2012
@ 2.0913150%
06/30/2012 242,750.00 240,052.78 2,697.22 2,69722 2,669.16
06/30/2013 4,684,959.93 4,684,959.93 4,463,943.13 221,016.81 224,282.96
06/30/2014 4,584,972.48 4,584,972.48 4,360,012.50 224,959.98 223,456.03
06/30/2015 4,484,985.04 4,484,985.04 4,264,925.00 220,060.04 214,112.34
06/30/2016 4,384,997.59 4,384,997.59 4,162,362.50 222,635.09 211,948.41
06/30/2017 5,390,010.14 5,390,010.14 5,152,618.75 237,391.39 210,264.53
06/30/2018 5,234,772.69 5,234,772.69 4,998,350.00 236,422.69 204,864.43
06/30/2019 5,295,303.74 5,295,303.74 5,056,350.00 238,953.74 203,381.31
06/30/2020 5,132,603.29 5,132,603.29 4,895,250.00 237,353.29 197,421.21
06/30/2021 4,969,902.85 4,969,902.85 4,733,375.00 236,527.85 192,262.05
06/30/2022 4,807,202.40 4,807,202.40 4,569,750.00 237,452.40 188,660.21
06/30/2023 4,039,501.95 4,039,501.95 3,834,000.00 205,501.95 161,084.59
06/30/2024 3,619,129.40 3,619,129.40 3,413,375.00 205,754.40 159,689.83
06/30/2025 3,216,044.00. 3,216,044.00 3,049,375.00 166,669.00 125,695.76
60,087,135.50 240,052.78 59,847,082.72 56,953,686.88 2,893,395.85 2,519,792.83
Savings SummarX
PV of savings from cash flow 2,519,792.83
Plus: Refunding funds on hand -1,872.29
Net PV Savings 2,517,920.54