HomeMy WebLinkAboutAgenda - 09-18-2012 - 5f ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: September 18, 2012
Action Agenda
Item No. 5-f
SUBJECT: Approval of Financing Arrangement for Efland Volunteer Fire Company, Inc. to
Purchase a Fire Engine Truck
DEPARTMENT: Finance and Administrative PUBLIC HEARING: (Y/N) No
Services
ATTACHMENT(S): INFORMATION CONTACT:
Attachment 1. Letter from Efland Clarence Grier, (919) 245-2453
Volunteers Fire Company,
Inc. Board of Directors
Chair
Attachment 2. August 16, 2012 Public
Hearing Notice
Attachment 3. Notes from the August 16,
2012 Public Meeting
Attachment 4. Fire Service Agreement
Attachment 5. Certificate of Approval
PURPOSE: To approve a request from Efland Volunteer Fire Company, Inc. to enter into a
financing arrangement to purchase a fire truck and authorize the Board of County
Commissioners' Chair to sign the appropriate documents related to the financing arrangement.
BACKGROUND: In the attached letter (Attachment 1) addressed to the Orange County Budget
Office, Ronnie McAdams, Chairman of the Efland Volunteer Fire Company, Inc. indicated the
Company's intent to purchase a new fire truck. Mr. McAdams confirmed that the Company
went through a competitive bid process and awarded the bid to Ferrara Fire Apparatus, Inc. in
Holden, Louisiana. Projected delivery date of the truck is November 2012.
According to Attachment 1, the purchase price of the truck totals $408,941. The Company's
Board of Directors agreed to borrow $250,000 from Branch Banking and Trust Company
(BB&T), and to pay the remaining $158,941 from the Company's capital reserves as well as
$45,000 from its County-held fund balance. With this appropriation, approximately $5,000
remains in its County-held fund balance.
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Section 147 of the Internal Revenue Code of 1986 outlines specific steps that must occur when
a tax supported fire department enters into a financing arrangement.
• Conduct a public hearing — On August 16, 2012, the department held a public hearing
regarding the purchase. The Department advertised the hearing in the News of Orange
(Attachment 2 of this abstract). Per the Attachment 3 of this abstract, no residents were
present at the hearing and the Department did not receive any written comments from
residents of the district.
• Obtain approval of the "applicable elected representatives" — In accordance with
Section 147, the Board of County Commissioners must approve the District's plan to
enter into the debt arrangement. This approval does not create liability on the part of
Orange County nor does it make the County responsible for the repayment of any debt
assumed by the fire district. The approval provides a mechanism for the Commissioners
to acknowledge that, through this financing arrangement, Efland Volunteer Fire
Company, Inc. is pledging use of the District's tax dollars to repay the loan. In order to
comply with this IRS requirement, the Chair of the Board of Commissioners must sign
the Fire Service Agreement (Attachment 4) and Certificate of Approval (Attachment 5).
FINANCIAL IMPACT: The interest rate for the 5-year note with BB&T is 2.33 percent with
annual payments of $53,548.65. The total repayment, including principal and interest, equals
$267,743.25. These figures may vary slightly depending upon the actual loan closing date.
RECOMMENDATION (S): The Manager recommends that the Board:
1. Approve Efland Volunteer Fire Company, Inc.'s purchase of a fire truck;
2. Appropriate $45,000 from the Company's unassigned fund balance; and
3. Approve and authorize the Board of Commissioners' Chair to sign the appropriate
documents related to the financing arrangement.
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/4 +i
July 19, 2012.
Efiand Volunteer Fire Co., Inc
PO Box 39
Efland, NC 27243
Orange County Budget Office
PO Box 8181
Hillsborough, NC 27278
Re:Accumulated Fund Balance
As Chairman of the Board of Directors of the Efland Volunteer Fire co, Inc. I am
requesting that all of the June 30, 2012 fund balance be released to our fire department
as soon as possible. This money will be used to offset the cost of a new rescue/pumper.
which we are in the process of ordering. We expect to take delivery sometime,in
October of 2012. This truck has a contract price of$408,941.00 which we plan to pay
for with the fund balance, accumulated reserves and a loan for the balance of$250,000.
This truck will supplement our truck inventory keeping it up to date and enhance our
ability to perform vehicle rescue operations.
Because the well being of the citizens of Efland fire district and the safety of the
fire fighters are of the utmost importance to the Board of Directors, we respectfully
request the fund balance for the purchase of the rescue/pumper. Be receiving the fund
balance, the amount of the loan necessary to pay for the balance of the truck will be
reduced. This will enable the department to continue to run on a solid financial base
with their regular operating budget.
Thank you in advance for your time in this matter.
Sincerely, 7 (2
Ronnie L. McAdams, Sr
Chairman, Board of Directors
Efland volunteer Fire Co, Inc.
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Attachment 2
PUELIIC IIVC)TIICE
PUBLIC Nc TICE- IS 1-i�R Ir3Y
IN/E_---N that the Efland 'Volunteer Fire
Company, Inc. will meet on Thursday.
August 16 2012 at the 'V'olunteer Fire
r Department located at 3900 U.S. 70
West,- Efland, NC., 27243 at 7:00
p.m., in a public hearing" pursuant to
the requirements of section 147(f) of
the Internal !Revenue Code of 1986,.
as amended, on a proposal that the
Lessee enter into a Lease-Purchase
agreement under the "Code" in order
tco`finaricc the acquisition of equip-
merit_ 1 he egLii er-1t to be financed
consists of : Fare Fr-igine°,(the "Equip-
ment") and will be located at" the
firehouse in Efland, NC_ To finance
costs of such equipment and to
pay costs and expenses incidental to
the financing, the Lessee proposes to
enter into the Lease-Purchase agree-
ment in the maximum aggregate
principal amount of $250,000 00_
The Lessee will be required to pay all
expenses of the operating, maintain-
ing, and insuring the Project and to
pay all taxes an the Equipment. The
rental payments due pursuant to the
Lease-purchase agreement will be
payable and secured by a secu-
rity interest lien on the Equipment
above here mentioned. AU persons
interested may appear and be at said
time and place or may file written
comments with the department prior
to the hearing set forth herein above,
8/16/12.
By order of the Efland 'Volunteer Fire
Company, Inc
July 19, 2012:
5
A4raCLAj-
Aug 17, 2012
Efland Volunteer Fire Co., Inc.
PO Box 39, Efland NC 27243
Public Notice Meeting
August 16, 2012
Attending: Peter D. Hallenbeck,Assistant Chief
Call to Order: P. Hallenbeck, 7:00 PM
Public meeting to discuss the purchase of a new Engine. There were no other
people present.
Adjourned at 7:30 PM
/e;<7777,4/;4-9-e----
Peter D. Hallenbeck
Deputy Chief
Efland Volunteer Fire Co, Inc.
STATE OF NORTH CAROLINA
COUNTY OF ORANGE (�I
I, (AV s\,a. , Notary Public of the aforesaid
County and Sate, do hereby certify that ')P-s- T). f ct � �n bc-k ,
personally appeared before me this day and acknowledge the due execution of
the foregoing instrument.
�Dla.
Witness my hand and seal, this )'1 day of U�� ,
ffe
%.% 1) -RYQ\Ox-
NO RY PUBLIC
PuB\-\o a�
c° %, PRINT OR TYPE NAME OF NOTARY
My commission expires: /b - - 7613
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Attachment 4
Fire Service Agreement
This agreement, dated this day of , 20 , by and
between Efland Volunteer Fire Company, Inc., a body corporate organized under
the Laws of the State of North Carolina, the ("Fire Department"), and Orange
County, a body politic, the ("Political Subdivision").
WHEREAS, Fire Department is a not for profit organization duly authorized for
the purpose of providing firefighting services in an area within the jurisdiction of
the Political Subdivision; and,
WHEREAS, the parties wish to enter into an agreement setting forth the area and
duties of the Fire Department.
NOW THEREFORE, the Fire Department and Political Subdivision do hereby
agree as follow:
1. Political Subdivision recognizes that Fire Department provides firefighting
services to the hereafter generally described area or areas:
2. The area in which Fire Department has primary firefighting responsibilities
(area of responsibility) is Efland Fire District.
3. Political Subdivision shall not be liable or responsible for the conduct and
activities of Fire Department.
IN WITNESS WHEREOF, the parties have had this agreement executed by duly
authorized representatives thereof.
Efland Volunteer Fire Company, Inc.
By
Name
Title
Orange County
By
Name
Title
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Attachment 5
Certificate of rova
Approval of Chief Elected Official of
Orange County
I, chair of the Board of
County Commissioners of Orange County, pursuant to the Internal
Revenue Code of 1986, as amended (the "Code") hereby approve,
authorize the entering into by Efland Volunteer Fire Company, Inc. a
commercial loan by Branch Banking and Trust Company (BB&T) for
the amount of $250,000 to finance a fire engine truck to be located
in Efland, NC 27243.
Execution of this document in no way creates liability on the part of
Orange County and Orange County is not responsible for the
repayment of any loan pursuant hereto.
By:
Title
Date