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HomeMy WebLinkAboutRES-2002-083 Resolution Providing Final Approval of Financing Terms and Documents - Public Hearing on Alternative Capital Financing Plan~~~" /~ ~.~11~~ ~~ ~'~'..S - ~ao ~- ~ ~,3 Resolution Providing Final Approval Of Financing Terms and Documents - Installment Financin~ Proiects WHEREAS: The Board of Commissioners of Orange County, North Carolina, has previously deternuned to carry out a financing plan for the acquisition and construction of renovations to Orange High School and the County building used by Orange Enterprises, along with acquisition of land and other property interests for public buildings and propertyacquisition purposes (the `Projects'~. BE IT THEREFORE RESOLVED by the Board of Commissioners of Orange County, North Carolina, as follows: 1. Dete~mination To Proceed with Projects -- The Board confirms its decision to carryout the financing plan for the l~ojects. The Countywill finance the Projects through Branch Banking and Trust Company, in accordance with the BB&T proposal dated October 28, 2002. . 2. Determination to Acquire P~operty -- The intended financing plan for the Projects contemplate the County's acquiring the Orange High School property from The Orange County Board of Education (the "School Board"), and imposing a lien on that property to secure the County's repayment obligation for the entire financing package. The Board approves the County's acquisition of the Orange High School property for this purpose. The Board notes that the School Board approved this property transfer on November 18, 2002. 3. Direction To Execute Documents -- The Board authorizes and directs the Board's Chair to execute and deliver, on the County's behalf, financing documents (the "Documents") in such forms as the Chair, on the Finance Officer's advice, may approve. The Documents in final form, however, must provide for the amount financed by the County not to exceed $3,475,000, for an annual interest rate not to exceed 4.22% (in the absence of default or change in tax status), and for a financing term not to extend beyond December 31, 2017. The Board expects that the Documents will include the agreements described in Exhibit A. 4. Authorization to• Finance Officer To Complete Closing - The Board authorizes and directs.the Finance Officer to hold executed copies of the Documents, and any other documents authorized or pennitted by this resolution, in escrow on the County's behalf until the conditions for the delivery of the Documents have been iTxco2! 1 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, tlie Board specifically authorizes the Finance Officer to approve changes to any documents (including the Documents and any closing certifications) previously signed by County officers or employees, provided that such changes shall not substantiallyalter the intent of such docurr~nts from that expressed in the forrr~s of such documents as executedby such officers. The Finance Officer's authorization of the release of any such document for delivery will constitute conclusive evidence of his approval of anysuch changes. S. 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 components of installment payments under the Financing Agreement (as described on Exhibit A) (the "Obligations'~ to be "arbitrage bonds," within the meaning of Section 148 of the "Code" (as defined below), or "private activity bonds" within the meaning of Code Section 141, or otherwise cause interest components of the installment payments to be includable in gross income for federal income tax purposes. Without limiting the generality of the foregoing, the County will comply with any Code provision that may require the County at any time to pay to the United States any part of the earnings derived from the investment of the proceeds made available to it under the Financing Agreement, and the County will pay any such required rebate from its general funds. For the purposes of this resolution, "Code" means the United States Internal Revenue Code of 1986, as amended through the date of the initial delivery of the Financing Agreement, including applicable Treasury regulations. ~ 6. Obligations Are "Bank-Qualified" Obligations -- The County designates the Obligations as "qualifiedtax-exempt obligations" for the purpose of Code Section 265(b)(3). 7. Authorization to School Board Attorney - The Board authorizes and approves actions taken and to be takenby the School Board's attorney in connection with ti~e conveyance of the Orange High School property to the County and in obtaining a title insurance policy on that property for the County's benefit. The Board waives any conflict that may arise between such activities on the County's behalf and the attorney's representative of the School Board. 8. 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 iTxco~! 2 County officers and employees are ratified, approved and confirmed. Upon the absence, unavailabilityor refusal to act of the Chair or the Finance Officer, the County Manager may assume any responsibilityor carry out any function assigned to the Chair or the Finance Officer 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 imnediately. 1TXC02! Resolution supporting an application to the Local Government Commission for its approval of a financing agreement - 2002 Private Placement Installment Financin WHEREAS - Orange County has previously approved in principle the undertaking and financing of the following described proj ects by the use of an installment contract, as authorized under Section 160A-20 of the General S'tatutes: Renovations to Orange High School $950,000 Land acquisition for public buildings $1,000,000 Acquisition of easements and other property $1,000,000 interests for conservation purposes Renovations and improvernents to County $525,000 building used by Orange Enterprises The County's undertaking of the financing was the subject of a public hearing held earlier today on November 19, 2002. Under the guidelines of the North Carolina Local Government Commission (the "LGC"), this governing body must make certain findings of fact to support the County's application for the LGC's approval of the County's proposed financing arrangements for,the projects. NOW, THEREFORE, BEITRESOLVED that the Board of Commissioners of Orange County, North Carolina, makes the following findings of fact: 1. The proposed projects are necessary and appropriate for the County under all the circumstances. The projects as a whole have been approved as part of the County's long-term capital improvements program. The proposed renovations and improvements to Orange High School and the County building used by Orange Enterprises are appropriate to prolong the lives and enhance the levels of service provided by those buildings. The County land acquisition is appropriate as part of the County's long-term plan to bring additional community college services to the County. 1TVN02 11 19 02 The acq~isition of easements or other property interests for conservation purposes will enhance the natural environrr~nt and quality of life of the Count~s residents. 2. The proposed installrr~nt financing is preferable to a bond issue for the same purpose. The County has no meaningful ability to issue non-voted general obligation bonds for these projects, and these projects will produce no revenues that could be used to support a self-liquidating financing. The County has chosen to finance these particular proj ects byinstallment financing in connection with proposing other projects for financing by general obligation bond issues, and it is appropriate for the County to balance its capital finance program between bonds and installment financing. 3. The estima.ted sums to fall due under the proposed financing contract are adequate and not excessive for the proposedpurpose. The County has obtained comperitive lending proposals, and will closely review proposed lending rates against market rates with guidance from 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 Countyis not in default under anyof its debt service obligations. 5. The proposed prQjects described above are part of a larger County capital improvements program. This program includes some $75,000,000 of Countygeneral obligation bonds and a varietyof other financing. Although the Countyexpects that there may be tax increases associated with the overall program, any tax increase attributable to the current proposed financing will be minima.l. The County bases this expectation on its expected interest rates and term for the current proposed financing. 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 that t~ie actions of the County's Finance Officer in filing an application with the LGC for its approval of the project and the proposed financing arrangerr~nts are authorized, ratified and approved, and that this resolution takes effect imnediately. 1TVN02 11 19 02 BARRYJACOBS, CffA/R ORANGE COUN7'Y BOARD OF COMMISSIONERS STEPHENH. HAUC/OT/S, I//CECHA/R POST OFFICE BOX 8'I 8'I MARGARET W. BROWN n~os~sc,v~Er,/tz 20O SOUTH CAMERON STREET AL/CEM. GORDON HILLSBOROUGH, NORTH CAROL[NA 27278 ~~f` ~~% CERTIFICATION I hereby certify that at the regular meeting of the Board of County Commissioners on November 19, 2002 the Board conducted a public hearing on the Alternative Capital Financing Plan that was approved by the Board of Commissioners on September 3, 2002. Kathy Bryan spoke and thanked the BOCC for funding projects for Orange Enterprises. No other person spoke at the public hearing; thus, the hearing was closed. The Board then took action on items to facilitate the acquisition of funds needed for the projects. Finance Director Ken Chavious pointed out to the Board that these were actions required because the Board of Commissioners had adopted a plan that included capital projects to be financed by the initial sale of the 2001 bonds and these projects were to be alternatively financed. Mr. Chavious also pointed out that the Board had adopted a schedule for the alternative financing and therefore the staff had pursued a request for the proposal process to finance $3, 475,000 in projects approved by the Board. The projects included in this phase of the alternative financing include renovations to Orange High School, conservation easements, property acquisition for the community college satellite campus and funding for the Orange Enterprises facility. Mr. Chavious further explained that an application requesting approval of this proposed financing has been forwarded to the Local Government Commission in accordance with statutory provisions. And prior to the LGC granting approval, the Board is required to conduct a public hearing on matters related to the alternative financing proposal. He further stated that the LGC is required to take action on the County's application on December 2, 2002 and if the approval is granted, closing and receipt of funds will occur during mid December, 2002. • Mr. Chavious said that the finance staff had solicited and received proposals from six financial institutions and two of these proposals did not comply with the provisions of the County's request and therefore were deemed non-responsive. Of all of the proposals submitted, the Branch Banking and Trust Company's (BB&T) proposal was the most favorable. This proposal was also the lowest interest rate of 4.22% as well as the lowest overall cost to the County. A motion was made by Commissioner Brown, seconded by Commissioner Halkiotis to accept the proposal from BB&T and to adopt the Resolution supporting an application to the Local Government Commission for its approval of a financing agreement - 2002 Private Placement Installment Financing and to adopt the Resolution providing for final approval of financing terms and documents and authorizing the Finance Director to execute the documents necessary to complete the financing. (Resolutions attached) VOTE: UNANIMOUS This the 20th day of November, 2002 ~,~. _ ~ _ :. ~~ ~G'I/1i1i1 ,,~~~~'f~~~~ - ~~ Donna S. Baker, Clerk to the Board ' i e~' www.co.oranae.nc.us j , % ~' _ Protecting and preserving - People, Resources, Quality of Life ~~} ~: :. ~': ~~ Orange County, North Carolina - You Count! , ~ -~ ~~ `~"u (999) 245-2130 • FAX (919) 644-0246 '~~ ~~:.~ ~T~ '