HomeMy WebLinkAboutAgenda - 11-20-2012 - 5i '
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ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: November 20, 2012
Action Agenda
Item No. 5-i
SUBJECT: Authorization and Issuance of Up to $20,000,000 in General Obligation
Refunding Bonds
DEPARTMENT: Finance and Administrative PUBLIC HEARING: (Y/N)
Services
ATTACHMENT(S): INFORMATION CONTACT:
Attachment 1. Resolution for the Sale of Frank Clifton, (919) 245-2300
Up to $20,000,000 Clarence G. Grier, (919) 245-2453
General Obligation Bob Jessup, Bond Counsel, (919) 933-
Refunding Bonds 9891
Attachment 2: Preliminary Refunding
Bond Information
PURPOSE: To adopt a resolution authorizing the issuance of general obligation
refunding bonds in the maximum amount of $20,000,000 to refinance existing County
BACKGROUND: This item represents a new round of bond refinancing designed to
save the County money on debt service expenditures by taking advantage of low
borrowing rates currently available to the County.
In 2011, the Board of County Commissioners authorized the issuance of up to
$47,000,000 of the County's general obligation bonds to refund public improvement
bonds previously issued in 2004 and 2005. Market conditions at the time enabled the
County to refund a substantial amount, but not all, of those prior bonds. As interest
rates have remained very low, it appears it is now possible for the County to refund
more of the old bonds.
Current estimates show potential savings to the County through this refunding of over
$850,000. The savings estimates will change as market conditions vary between now
and when the refunding bonds are sold.
The attached resolution provides authorization from the Board for the County to proceed
with the refunding bond sale. The attached resolution, as prepared by bond counsel,
provides the following authorizations and approvals:
1. Formally authorizes the sale of up to $20,000,000 in refunding bonds;
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2. Formally pledges the County's taxing power to provide for payment on the
bonds;
3. Approves the proposed form of the bonds themselves;
4. Authorizes staff to prepare a formal disclosure document providing information
on the County to prospective bond purchasers, in a form consistent with
previous County disclosure documents of a similar nature;
5. States the County's agreement to comply with the relevant provisions of
federal tax law and the rules for continuing disclosure to the securities
markets; and
6. Authorizes County staff to complete the process of issuing the bonds.
FINANCIAL IMPACT: The financial impact of proceeding with the refunding is that the
County will achieve savings of future debt service costs. The total amount of savings
will be determined as the County moves closer to the issuance of the bonds.
RECOMMENDATION(S): The Manager recommends that the Board adopt the
attached resolution for the sale of up to $20,000,000 of general obligation refunding
bonds.
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RES-2012-101 Attachment I
Resolution for the Sale of Up to $20,000,000
of County General Obligation Refunding Bonds
WHEREAS--
In 2011 the Board of Commissioners authorized the issuance of up to $47,000,000
in County general obligation refunding bonds to refinance public improvement bonds that
the County originally issued back in 2004 and 2005.
The County then issued $24,400,000 of those refunding bonds. The Board has
now determined that the County should issue up to $20,000,000 of the remaining
authorized but unissued refunding bonds to refinance more outstanding County bonds
from 2004 and 2005.
This resolution provides for the issuance of these refunding bonds and takes
related action, such as approving the form of the disclosure document that will be used in
connection with the offering and sale of the bonds.
BE IT THEREFORE RESOLVED by the Board of Commissioners of Orange
County,North Carolina,as follows:
L Determination To Sell Refunding Bonds - The County will issue and sell
up to $20,000,000 of the unissued refunding bonds (referred to as the "Bonds" or the
"Refunding Bonds" in this resolution) for their authorized purpose.
2. Payment Provisions. The Bonds will bear interest at the rates determined
by the Local Government Commission (the "LGC") at the time of its sale of the Bonds
(currently scheduled for December 5). The principal of the Bonds will be payable in
installments as the Finance Officer may determine after consultation with the LGC,
provided that the Refunding Bonds must mature not later than April 1, 2024 (which is the
current final maturity of the bonds being refunded).
3. Pledge of Faith, Credit and Taxing Power -- The County's full faith and
credit are hereby irrevocably pledged for the payment of the principal of and interest on
the Bonds. Unless other funds are lawfully available and appropriated for timely payment
of the Bonds, the County will levy and collect an annual ad valorem tax, without
restriction as to rate or amount, on all locally taxable property in the County sufficient to
pay the principal of and interest on the Bonds as the same become due.
4. Approval of Official Statement for Offering - The Board directs the
Finance Officer to prepare, in collaboration with the LGC staff and other County
representatives, an official statement (the "Official Statement") relating to the Bonds
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designed to provide appropriate information about the County and the financing to
prospective investors in the Bonds.
The Official Statement must be in substantially the same form as that used on
other recent County financings (such as the County's 2011 refunding bonds and its 2012
limited obligation bonds), with appropriate supplemental and updated information as
approved by the Finance Officer. The Board ratifies the prior actions of the Finance
Officer and other County representatives in preparing the Official Statement.
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 the 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
acknowledge and accept their own responsibility for causing the County to fulfill these
responsibilities for the Official Statement.
The Board approves the LGC's distribution of the Official Statement to
prospective purchasers of the Bonds. The County deems the Official Statement as
distributed by the LGC to be a "final official statement" within the meaning of Rule
15c2-12 of the Securities Exchange Act of 1934, as amended ("Rule 15c-12"), except for
the omission of certain final bond pricing and other information that Rule 15c2-12 allows
to be omitted.
5. Redemption Provisions--The Finance Officer, upon advice from the LGC,
is directed to determine the terms and conditions under which the Bonds will be subject
to redemption prior to maturity, if at all. The Finance Officer must execute a certificate
prior to the initial delivery of the Bonds designating redemption terms and conditions.
This certificate will be conclusive evidence of the Finance Officer's approval and
determination of these terms and conditions.
6. Form of Bonds; Payment Details — The Refunding Bonds will be
designated "General Obligation Refunding Bonds, Series 2012." The Bonds will be in
substantially the form set out in Exhibit A. The Bonds will be dated the date of their
initial issuance, will be in fully registered form, will be in denominations of$5,000 and
integral multiples thereof, and will be numbered for identification from R-I upward.
The Bonds must be signed by the manual or facsimile signature of the Board's
Chairman or the County Manager, and the County's seal must be affixed to the Bonds (or
a facsimile thereof printed thereon) and attested by the manual or facsimile signature of
the Clerk to this Board or any Deputy or Assistant Clerk. No Bond will be valid unless at
least one of the signatures appearing on the Bond (which may be the signature of the
LGC's representative required by law) is manually applied or until the Bond has been
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authenticated by the manual signature of an authorized officer or employee of a bond
registrar selected by the Finance Officer.
Interest on each Bond will be payable semiannually (a) from its date, if it is
authenticated prior to the first interest payment date, or (b) otherwise from the interest
payment date that is, or immediately precedes, the date on which it is authenticated
(unless payment of interest is in default, in which case such Bond will bear interest from
the date to which interest has been paid). Principal and interest will be payable in lawful
money of the United States of America.
The Finance Officer must execute a certificate prior to the initial delivery of the
Bonds designating the final aggregate principal amount of the Bonds (up to the maximum
authorized amount of$20,000,000), the final principal payment schedule and the interest
payment dates for the Bonds. This certificate will be conclusive evidence of the Finance
Officer's approval and determination of such matters.
Z Finance Officer as Registrar, Payments to Registered Owners — The
Finance Officer is appointed Registrar for the Bonds. As Registrar, the Finance Officer
will maintain appropriate books and records of the ownership of the Bonds. The County
will treat the registered owner of each Bond as the person exclusively entitled to payment
of principal and interest and the exercise of all rights and powers of the owner, except
that the County will make payments to the person shown as owner on the registration
books at the end of the calendar day on the 15th day of the month (whether or not a
business day)preceding each payment date. C-
8 Advertising Bonds for Sale — The Finance Officer, in collaboration with
the LGC, is directed to take all proper steps to advertise the Bonds for sale in accordance
with standard LGC procedures, including through the use of a"Notice of Sale" document
in the LGC's customary form and in substantially the same form as used for prior County
bond sales. The Finance Officer is directed to review and approve a form of Notice of
Sale as such officer may determine to be in the County's best interest.
9. LGC To Sell Bonds;Provision for Delayed Sale—(a) The County asks the
LGC to sell the Bonds, to receive and evaluate bids and to award the Bonds on the basis
of the best bid received.
(b) If market conditions at the time of the proposed sale of the Bonds do not
allow the Bonds to be sold at interest rates and prices that make the refunding of all or
any portion of the prior bonds economical, as determined by the Finance Officer, the
Finance Officer is authorized to decline the sale of the Bonds, in whole or in part. The
Finance Officer is further authorized to provide for additional attempts to sell the Bonds,
or any portion of the Bonds, if such officer determines that market conditions have
changed such that a successful sale of the Bonds (or any portion) may be possible. The
Finance Officer may provide for one or more additional sales until March 31, 2013,
without further advance approval from the Board. These additional sales may make use
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of the previously-approved Official Statement, with the Finance Officer's approval, and
may proceed pursuant to such advertisement for sale as the Finance Officer may approve.
10. Completing Official Statement after Sale — After bids have been received
and the LGC has awarded the Bonds to the successful bidder, the Finance Officer is
directed to prepare, in collaboration with the LGC, a final Official Statement within the
meaning of Rule 15c2-12. The Finance Officer is authorized to approve the final form of
the document as such a final official statement. The County, together with the LGC, will
arrange for the delivery within seven business days of the date the Bonds are sold of a
reasonable number of copies of the final Official Statement to the successful bidder on
the Bonds for delivery to each potential investor requesting a copy of the final Official
Statement and to each entity to which such bidder and members of the bidding group
initially sell the Bonds.
IL County Officers To Complete Closing - After the sale of the Bonds, the
Finance Officer and all other County officers and employees are authorized to take all
proper steps to have the Bonds prepared and executed in accordance with their terms and
to deliver the Bonds to the purchaser upon payment for the Bonds, and to take all other
proper steps to complete the issuance of the Bonds.
The Finance Officer is authorized to hold the executed Bonds, and any other
documents authorized or permitted by this resolution, in escrow on the County's behalf
until the conditions for the delivery of the Bonds and other documents have been
completed to the Finance Officer's satisfaction, and then to release the executed Bonds
and other documents for delivery to the appropriate persons or organizations.
Without limiting the generality of the foregoing, this authorization is specifically
extended to authorize the Finance Officer (a) to approve and enter into agreements to
carry out the refunding contemplated by this resolution, including agreements for the
custody of Bond proceeds and agreements for appropriate professional services, and (b)
to approve changes to any documents previously signed by County officers or employees,
provided that the Bonds must be in substantially the form approved by this resolution and
that any such changes must not substantially alter the intent of such documents from that
expressed in the forms originally executed. The Finance Officer's authorization of the
release of any document for delivery will constitute conclusive evidence of such officer's
approval of any such changes.
In addition, the Finance Officer is authorized 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.
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12. Undertaking for Continuing Disclosure — The County undertakes, for the
benefit of the beneficial owners of the Bonds, to provide continuing disclosure with
respect to the Bonds as described in Exhibit B.
The Board designates the Finance Officer as the County officer to be primarily
responsible for the County's compliance with its undertakings for continuing disclosure
provided for in this resolution. The Finance Officer will provide for the filings and
reports (including the reports of material events) constituting the continuing disclosure
provided for in this resolution.
13. Resolutions As To Tax Matters— The County will not take or omit to take
any action the taking or omission of which will cause the Bonds 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 on the Bonds
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 of the Bonds, and the County will pay any such
required rebate from its general funds. For this paragraph, "Code" means the United
States Internal Revenue Code of 1986, as amended, including applicable Treasury
regulations.
14. Book Entry System for Bond Registration -- The Bonds will be issued
by means of a book-entry system, with one bond certificate for each maturity
immobilized at The Depository Trust Company, New York, New York ("DTC"), and not
available for distribution to the public. The book-entry system for registration will
operate as described in the Official Statement. Therefore, so long as the book-entry
system of registration with DTC is in effect, (a)the County will pay principal and interest
on the Bonds only to DTC or its nominee as registered owner of the Bonds, (b) the
County will not be responsible or liable for any transfer of payments to parties other than
DTC or for maintaining, supervising or reviewing the records maintained by DTC or any
other person related to the Bonds, and (c) the County will not send redemption notices (or
any other notices related to the Bonds) to anyone other than DTC or its nominee. The
Board, by resolution, may elect to discontinue the County's book-entry system with
DTC. The Finance Officer is authorized to enter into any agreements such officer deems
appropriate to put into place and carry out the book-entry system with DTC.
_15. Ratification of Professionals - The Board confirms the selection (a) of
Robert M. Jessup Jr. of Sanford Holshouser LLP to serve as the County's bond counsel
with respect to the Bonds, and (b) of Davenport & Co. LLC to serve as the County's
financial advisor with respect to the refunding.
16. Call of Prior Bonds for Redemption - The Board directs the Finance
Officer to make, on the County's behalf, an irrevocable call for redemption of such of the
County's Public Improvement Bonds with Series designations 2004A, 2004E and 2005A
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as the Finance Officer (after consultation with the LG-C) deems beneficial to the County.
The Finance Officer will make this call for redemption by the execution and delivery of
an appropriate certificate in connection with the original delivery of the Bonds.
17 Finding as to Term of the Bonds—In accordance with Section 159-122 of
the General Statutes, the Board finds and determines that the term of the Refunding
Bonds will be the shortest period in which the debt to be refunded can be finally paid
without making it unduly burdensome on the County's taxpayers, and will be within the
remaining period of usefulness of the projects financed with the proceeds of the prior
bonds.
18. Miscellaneous Provisions -- All County officers and employees are
authorized to take all such further action as they may consider necessary or desirable in
connection with the furtherance of the purposes of this resolution. All such prior actions
of County officers and employees are ratified. Upon the absence, unavailability or refusal
to act of the Chairman, the County Manager or the Finance Officer, any of such officers
may assume any responsibility or carry out any function assigned to another officer in
this resolution. In addition, upon the unavailability of the Chairman or the Clerk,
respectively, any of the rights or responsibilities directed to such officers may be carried
out or exercised by the Vice Chairman or any Deputy or Assistant Clerk. All other
resolutions, 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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EXHIBIT A-Form of Bonds
REGISTERED REGISTERED
Number R X
UNITED STATES OF AMERICA
STATE OF NORTH CAROLINA
ORANGE COUNTY
General Obligation Refunding Bond, Series 2012
INTEREST RATE MATURITY DATE DATED DATE CUSIP
% April 1, December 20, 2012 684 609 XXX
REGISTERED OWNER:*****CEDE & CO.*****
PRINCIPAL AMOUNT: **** THOUSAND DOLLARS
($ ,000)***
ORANGE COUNTY, NORTH CAROLINA (the "County"), for value received,
promises to pay to the registered owner of this Bond, or registered assigns or legal
representative, the principal amount stated above on the maturity date stated above,
subject to prior redemption as described herein, and to pay interest on this Bond
semiannually on each April 1 and October 1, beginning April 1, 2013, at the annual rate
stated above. Interest is payable (a) from the dated date stated above, if this Bond is
authenticated prior to April 1, 2013, or (b) otherwise from the April 1 or October 1 that
is, or immediately precedes, the date on which this Bond is authenticated(unless payment
of interest on this Bond is in default, in which case this Bond will bear interest from the
date to which interest has been paid). Principal and interest are payable in lawful money
of the United States of America.
This Bond is one of an issue of the County's $20,000,000 General Obligation
Refunding Bonds, Series 2012 (the "Bonds"), of like date and tenor, except as to number,
denomination, rate of interest, privilege of redemption and maturity. The Bonds are
issued pursuant to a resolution adopted by the County's governing Board of
Commissioners on November 20, 2012, and the Constitution and laws of the State of
North Carolina, including the Local Government Bond Act.
The County's full faith and credit are pledged for the payment of principal of and
interest on this Bond.
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The Bonds are issued by means of a book-entry system, with one bond certificate
for each maturity immobilized at The Depository Trust Company, New York, New York
("DTC"), and not available for distribution to the public. Transfer of beneficial ownership
interests in the Bonds in the principal amount of$5,000 or any integral multiple thereof
will be effected on the records of DTC and its participants pursuant to rules and
procedures established by DTC and its participants. Principal and interest on the Bonds
are payable by the County to DTC or its nominee as registered owner of the Bonds. The
County is not responsible or liable for such transfer of ownership or payments or for
maintaining, supervising or reviewing the records maintained by DTC, its participants or
persons acting through such participants.
Bonds maturing prior to April 1, 2022, are not subject to redemption prior to
maturity. Bonds maturing on April 1, 2023, and thereafter are redeemable, at the
County's option, from any moneys that may be made available for such purpose, in whole
or in part on any date not earlier than April 1, 2022, at a redemption price of 100% of the
principal amount to be redeemed, plus interest accrued to the redemption date, without
premium.
If less than all of the Bonds stated to mature on different dates are called for
redemption, the Bonds to be redeemed will be selected in such manner as the County may
determine. If less than all of the Bonds of any one maturity are called for redemption, the
particular Bonds or portions of Bonds of such maturity to be redeemed will be selected
by lot in such manner as the County in its discretion may determine; provided, however,
that the portion of each Bond to be redeemed will be in the principal amount of$5,000 or
some integral multiple thereof, and that, in selecting Bonds for redemption, each Bond
will be considered as representing that number of Bonds which is obtained by dividing
the principal amount.of such Bond by $5,000. Notwithstanding the foregoing, so long as
a book-entry system with DTC is used for determining beneficial ownership of Bonds, if
less than all of the Bonds within a maturity are to be redeemed, DTC and its participants
will determine which of the Bonds within any such maturity are to be redeemed. If a
portion of a Bond is called for redemption, a new Bond in principal amount equal to the
unredeemed portion thereof will be issued to the registered owner upon the surrender
thereof.
The County will send notice of redemption to DTC or its nominee as the registered
owner of the Bonds in such manner as may be provided for under DTC's then-current
operating procedures. The County will send this notice not more than 60 days and not
less than 30 days prior to the date fixed for redemption. The County is not responsible for
sending redemption notices to anyone other than DTC or its nominee.
If(a) DTC determines not to continue to act as securities depository for the Bonds
or(b) the County so elects, the County will discontinue the book-entry system with DTC.
If the County does not identify another qualified securities depository to replace DTC, the
County will deliver replacement Bonds in the form of fully-registered certificates.
The County Finance Officer has been appointed Registrar for the Bonds. As
Registrar, the Finance Officer will maintain appropriate books and records indicating
ownership of the Bonds. The County will treat the registered owner of this Bond as the
person exclusively entitled to payment of principal and interest and the exercise of all
other rights and powers of the owner, except that payments will be made to the person
shown as owner on the County's registration books at the end of the calendar day on the
15th day of the month(whether or not a business day)preceding each payment date.
The County intends that North Carolina law will govern the interpretation of the
terms of the Bonds.
All acts, conditions and things required by the Constitution and laws of the State
of North Carolina to happen, exist or be performed precedent to and in the issuance of
this Bond have happened, exist and have been performed, and the issue of Bonds of
which this Bond is one, together will all other indebtedness of the County, is within every
debt and other limit prescribed by the Constitution and laws of the State of North
Carolina.
IN WITNESS RWEREOF, Orange County, North Carolina, has caused this Bond
to signed by its County Manager, its seal to be affixed hereto and attested by the Clerk to
its Board of Commissioners, and this Bond to be dated December 20, 2012.
(SEAL)
ATTEST:
Mample only-do not sio [Sam ple onl_y-do not sjo
Clerk,Board of Commissioners County Manager
Orange County,North Carolina Orange County,North Carolina
The Bonds have been approved by the North Carolina
Local Government Commission in accordance with the
Local Government Bond Act.
[Sam ple onl y-do not sioj
T. Vance Holloman
Secretary,Local Government Commission
[Orange County,North Carolina
$20,000,000 General Obligation Refunding Bonds, Series 2012]
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ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and
transfer(s)unto
(Please print or type transferee's name and address, including zip code)
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OR TRANSFEREE:
the within bond and all rights thereunder, hereby irrevocably constituting and appointing
, Attorney, to transfer said bond on the books kept for
the registration thereof, with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be (Signature of Registered Owner)
guaranteed by a participant in the NOTICE: The signature above
Securities Transfer Agent Medallion must correspond with the name of the
Program("STAMP") or similar program registered owner as it appears on the front
of this bond in every particular without
alteration or enlargement or any change
whatsoever.
[Orange County,North Carolina
$20,000,000 General Obligation Refunding Bonds, Series 2012]
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Exhibit B --Undertakine for Continuing Disclosure
The County undertakes, for the benefit of the beneficial owners of the Bonds, to
provide the following items and information to the Municipal Securities Rulemaking
Board(the "MSRB"):
(a) by not later than seven months-from the end of each of the County's fiscal
years, audited County financial statements for such fiscal year, if available, prepared in
accordance with Section 159-34 of the General Statutes of North Carolina, as it may be
amended from time to time, or any successor statute, or, if such audited financial
statements are not available by seven months from the end of any fiscal year, unaudited
County financial statements for such fiscal year, to be replaced subsequently by audited
County financial statements to be delivered within 15 days after such audited financial
statements become available for distribution;
(b) by not later than seven months from the end of each of the County's fiscal
years, (i) the financial and statistical data as of a date not earlier than the end of the
preceding fiscal year (which data will be prepared at least annually, will specify the date
as to which such information was prepared and will be delivered with any subsequent
material events notices specified in subparagraph (c) below) for the type of information
included under heading "The County - Debt Information" and"- Tax Information" in the
final Official Statement (excluding any information on overlapping or underlying units),
and (ii) the combined budget of the County for the current fiscal year, to the extent such
items are not included in the audited financial statements referred to in(a)above;
(c) in a timely manner, not in excess of ten business days after the occurrence
of the event notice of any of the following events with respect to the Bonds:
(1) principal and interest payment delinquencies;
(2) non-payment related defaults;
(3) unscheduled draws on debt service reserves reflecting financial difficulties;
(4) unscheduled draws on any credit enhancements reflecting financial
difficulties;
(5) substitution of credit or liquidity providers, or their failure to perform;
(6) adverse tax opinions, the issuance by the Internal Revenue Service of
proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form
5701-TEB) or other material notices or determinations with respect to the tax status of the
2010 Bonds, or other material events affecting the tax status of the Bonds;
(7) modifications to rights of the beneficial owners of the Bonds, if material;
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(8) calls for redemption of the Bonds (other than calls pursuant to sinking fund
redemption), if material, and tender offers;
(9) defeasances;
(10) release, substitution or sale of any property securing repayment of the
Bonds; and
(11) rating changes;
(12) bankruptcy, insolvency, receivership or similar proceedings related to the
County or any other person or entity that may at any time become legally obligated to
make payments on the Bonds (collectively,the "Obligated Persons");
(13) the consummation of a merger, consolidation, or acquisition involving an
Obligated Person or the sale of all or substantially all of the assets of the Obligated
Person, other than in the ordinary course of business,the entry into a definitive agreement
to undertake such an action or the termination of a definitive agreement relating to any
such actions, other than pursuant to its terms, if material; and
(14) Appointment of a successor or additional trustee or the change of name of a
trustee, if material; and
(d) in a timely manner, notice of a failure of the County to provide required
annual financial information described in(a) or(b)above on or before the date specified.
For the purposes of the event identified in subparagraph (12) above, the event is
considered to occur when any of the following occurs: the appointment of a receiver,
fiscal agent or similar officer for an Obligated Person in a proceeding under the U.S.
Bankruptcy Code or in any other proceeding under state or federal law in which a court
or governmental authority has assumed jurisdiction over substantially all of the assets or
business of the Obligated Person, or if such jurisdiction has been assumed by leaving the
existing governing body and officials or officers in possession but subject to the
supervision and orders of a court or governmental authority, or the entry of an order
confirming a plan of reorganization, arrangement or liquidation by a court or
governmental authority having supervision or jurisdiction over substantially all of the
assets or business of the Obligated Person.
If the County fails to comply with the undertaking described above, any beneficial
owner of the Bonds may take action to protect and enforce the rights of all beneficial
owners with respect to such undertaking, including an action for specific performance;
provided, however, that failure to comply with such undertaking will not be an event of
default and will not result in any acceleration of payment of the Bonds. All actions will
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be instituted, had and maintained in the manner provided in this paragraph for the benefit
of all beneficial owners of the Bonds.
The County shall provide the documents and other information referred to above
to the MSRB in an electronic format as prescribed by the MSRB and accompanied by
identifying information as prescribed by the MSRB.
The County may discharge its undertaking as set forth in this resolution by
providing such information in any manner that the United States Securities and Exchange
Commission subsequently authorizes in lieu of the manner described above.
The County reserves the right to modify from time to time the information to be
provided to the extent necessary or appropriate in the County's judgment, provided that:
(a) any such modification may only be made in connection with a change in
circumstances that arises from a change in legal requirements, change in law, or change
in the identity, nature, or status of the County;
(b) the information to be provided, as modified, would have complied with the
requirements of Rule 15c2-12 as of the date of the final Official Statement, after taking
into account any amendments or interpretations of Rule 15c2-12, as well as any changes
in circumstances; and
(c) any such modification does not materially impair the interests of the
beneficial owners, as determined either by parties unaffiliated with the County or by the
approving vote of the registered owners of a majority in principal amount of the Bonds
pursuant to the terms of the bond resolution, as it may be amended from time to time, at
the time of the amendment.
Any annual financial information containing modified operating data or financial
information will explain, in narrative form, the reasons for the modification and the effect
of the change in the type of operating data or financial information being provided.
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Attachment 2
Oct 25,2012 10:48 am Prepared by Davenport&Company LLC(PQS) 16 Page 1
SOURCES AND USES OF FUNDS
Orange County,North Carolina
Refunding of General Obligation Bonds
Market Rates as of October 24,2012—Subject to Change
Dated Date 01/16/2013
Delivery Date 01/16/2013
Refunding of Refunding of Refunding of
the 2004A the 2004E the 2005A
Sources: Bonds Bonds Bonds Total
Bond Proceeds:
Par Amount 155,000.00 771,000.00 12,395,000.00 13,321,000.00
Premium 4,727.06 23,525.28 1,622,516.35 1,650,768.69
159,727.06 794,525.28 14,017,516.35 14,971,768.69
Other Sources of Funds:
Budgeted Interest 3,187.50 15,000.00 264,878.13 283,065.63
162,914.56 809,525.28 14,282,394.48 15,254,834.32
Refunding of Refunding of Refunding of
the 2004A the 2004B the 2005A
Uses: Bonds Bonds Bonds Total
Refunding Escrow Deposits:
Cash Deposit 0.79 0.02 0.35 1.16
SLGS Purchases 159,256.00 793,474.00 14,021,255.00 14,973,985.00
159,256.79 793,474.02 14,021,255.35 14,973,986.16
Delivery Date Expenses:
Cost of Issuance 2,327.15 11,575.71 186,097.14 200,000.00
Underwriter's Discount 930.00 4,626.00 74,370.00 79,926.00
3,257.15 16,201.71 260,467.14 279,926.00
Other Uses of Funds:
Additional Proceeds 400.62 -150.45 671.99 922.16
162,914.56 809,525.28 14,282,394.48 15,254,834.32
Notes:
This analysis makes general assumptions which will need to be confirmed with the County:
--Assumes the County elects to make a contribution,at closing,in the amount of the budgeted interest.
—Assumes the escrow is invested in SLG securities.
Oct 25 2012 10:48 am Prepared by Davenport&Company LLC(PQS) 17 Page 2
BOND SUMMARY STATISTICS
Orange County,North Carolina
Refunding of General Obligation Bonds
Market Rates as of October 24,2012—Subject to Change
Dated Date 01/16/2013
Delivery Date 01/16/2013
Last Maturity 04/01/2024
Arbitrage Yield 1.792262%
True Interest Cost(TIC) 1.913478%
Net Interest Cost(NIC) 2.068114%
All-In TIC 2.107656%
Average Coupon 3.565078%
Average Life(years) 7.877
Duration of Issue(years) 7.043
Par Amount 13,321,000.00
Bond Proceeds 14,971,768.69
Total Interest 3,741,022.50
Net Interest 2,170,179.81
Total Debt Service 17,062,022.50
Maximum Annual Debt Service 4,154,720.00
Average Annual Debt Service 1,522,262.23
Underwriter's Fees(per$1000)
Average Takedown
Other Fee 6.000000
Total Underwriter's Discount 6.000000
Bid Price 111.792228
Par Average Average PV of 1 by
Bond Component Value Price Coupon Life change
Serial Bond 13,321,000.00 112.392 3565% 7.877 10,095.26
13,321,000.00 7.877 10,095.26
All-In Arbitrage
TIC TIC Yield
Par Value 13,321,000.00 13,321,000.00 13,321,000.00
•Accrued Interest
•Premium(Discount) 1,650,768.69 1,650,768.69 1,650,768.69
-Underwriter's Discount -79,926.00 -79,926.00
-Cost of Issuance Expense -200,000.00
-Other Amounts
Target Value 14,891,842.69 14,691,842.69 14,971,768.69
Target Date 01/16/2013 01/16/2013 01/16/2013
Yield 1.913478% 2.107656% 1.792262%
Oct 25,2012 10:48 am Prepared by Davenport&Company LLC(PQS) page 3
BOND DEBT SERVICE
Orange County,North Carolina
Refunding of General Obligation Bonds
Market Rates as of October 24,2012—Subject to Change
Dated Date 01/16/2013
Delivery Date 01/16/2013
Period Annual
Ending Principal Coupon Interest Debt Service Debt Service
10/01/2013 308,42250 308,422.50
04/01/2014 11,000 2.000% 217,710.00 228,710.00
06/30/2014 537,132.50
10/01/2014 217,600.00 217,600.00
04/01/2015 915,000 2.000% 217,600.00 1,132,600.00
06/30/2015 1,350,200.00
10/01/2015 208,450.00 208,450.00
04/01/2016 992,000 2.000% 208,450.00 1,200,450.00
06/30/2016 1,408,900.00
10/01/2016 198,530.00 198,530.00
04/01/2017 971,000 2.000% 198,530.00 1,169,530.00
06/30/2017 1,368,060.00
10/01/2017 188,820.00 188,820.00
04/01/2018 188,820.00 188,820.00
06/30/2018 377,640.00
10/01/2018 188,820.00 188,820.00
04/01/2019 1,541,000 3.000% 188,820.00 1,729,820.00
06/30/2019 1,918,640.00
10/01/2019 165,705.00 165,705.00
04/01/2020 2,423,000 3.000% 165,705.00 2,588,705.00
06/30/2020 2,754,410.00
10/01/2020 129,360.00 129,360.00
04/01/2021 129,360.00 129,360.00
06/30/2021 258,720.00
10/01/2021 129,360.00 129,360.00
04/01/2022 129,360.00 129,360.00
06/30/2022 258,720.00
10/01/2022 129,360.00 129,360.00
04/01/2023 3,896,000 4.000% 129,360.00 4,025,360.00
06/30/2023 4,154,720.00
10/01/2023 51,440.00 51,440.00
04/01/2024 2,572,000 4.000% 51,440.00 2,623,440.00
06/30/2024 2,674,880.00
13,321,000 3,741,022.50 17,062,022.50 17,062,022.50
A
Oct 25,2012 10.48 am Prepared by Davenport&Company LLC(PQS) 19 Page 4
SUMMARY OF REFUNDING RESULTS
Orange County,North Carolina
Refunding of General Obligation Bonds
Market Rates as of October 24,2012—Subject to Change
Dated Date 01/16/2013
Delivery Date 01/16/2013
Arbitrage yield 1.792262%
Escrow yield 0.293224%
Bond Par Amount 13,321,000.00
True Interest Cost 1.913478%
Net Interest Cost 2.068114%
Average Coupon 3.565078%
Average Life 7.877
Par amount of refunded bonds 13,685,000.00
Average coupon of refunded bonds 4.121614%
Average life of refunded bonds 7.902
PV of prior debt to 01/16/2013 Q 1.792262% 16,173,026.27
Net PV Savings 872,415.23
Percentage savings of refunded bonds 6.374974%
Oct 25,2012 10:48 am Prepared by Davenport&Company LLC(PQS) '
Page 5
SAVINGS
Orange County,North Carolina
Refunding of General Obligation Bonds
Market Rates as of October 24,2012—Subject to Change
Present Value
Prior Prior Prior Refunding to 01/16/2013
Date Debt Service Receipts Net Cash Flow Debt Service Savings @ 1.7922616%
06/30/2013 283,065.63 283,065.63 -996.31
06/30/2014 566,131.26 566,131.26 537,132.50 28,998.76 28,264.35
06/30/2015 1,466,131.26 1,466,131.26 1,350,200.00 115,931.26 114,697.51
06/30/2016 1,529,756.26 1,529,756.26 1,408,900.00 120,856.26 114,609.61
06/30/2017 1,489,756.26 1,489,756.26 1,368,060.00 121,696.26 113,278.23
06/30/2018 439,756.26 439,756.26 377,640.00 62,116.26 56,857.45
06/30/2019 2,039,756.26 2,039,756.26 1,918,640.00 121,116.26 108,665.27
06/30/2020 2,875,756.26 2,875,756.26 2,754,410.00 121,346.26 106,875.81
06/30/2021 275,756.26 275,756.26 258,720.00 17,036.26 14,781.19
06/30/2022 275,756.26 275,756.26 258,720.00 17,036.26 14,519.79
06/30/2023 4,275,756.26 4,275,756.26 4,154,720.00 121,036.26 100,944.97
06/30/2024 2,795,756.26 2,795,756.26 2,674,880.00 120,876.26 98,995.20
18,313,134.49 283,065.63 18,030,068.86 17,062,022.50 968,046.36 871,493.06
Savings Summary
PV of savings from cash now 871,493.06
Plus:Refunding funds on hand 922.16
Net PV Savings 872 415.22