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HomeMy WebLinkAboutAgenda - 11-20-2012 - 7c ORD-2012-058 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: November 20, 2012 Action Agenda Item No. 7-c SUBJECT: Establishment of a Community Loan Fund for the Water and Sewer Connections for Efland and Rogers Roads Residents, and Approval of Budget Amendment#4-D DEPARTMENT: Financial and Administrative PUBLIC HEARING: (YIN) No Services ATTACHMENT(S): INFORMATION CONTACT: Frank Clifton, 919-245-2300 Sample Loan Agreement Clarence Grier, 919-245-2453 John Roberts, 919-245-2318 PURPOSE: To approve the establishment of a Community Loan Fund for water and sewer connections for residents of the Efland and Rogers Road areas of Orange County, and approve Budget Amendment#4-D. BACKGROUND: In previous meetings, some members of the BOCC have requested staff investigate the establishment of a small loan fund to assist residents of the County in connecting to water and sewer lines within certain geographical areas of the County. Currently the County is investing in water and sewer infrastructure in the Efland area of the County to foster economic development within this area of the County and to address some long-standing agreements with residents of the area. Additionally, as part of the closing of the landfill and part of the related actions taken by the BOCC to mitigate long-standing problems experienced by residents of the Rogers Road area involving the landfill, the BOCC established a mitigation fund to assist residents of the Rogers Road area to hookup to water and sewer. Some residents in both areas have approached the County in regards to wanting to connect to the water and sewer services provided, but do not have the financial resources to do so. Therefore, the establishment of a community loan fund is proposed for such purposes. It is recommended that the Community Loan Fund be established with a $100,000 appropriation from the General Fund available fund balance. All loans would range from $3,500 to a max of $10,000, and carry a low interest rate of 1 to 2 percent over a maximum period of 10 years. A .25% administrative fee would be added on each loan to cover the administration of the loan. 2 All loans will have a legally binding agreement with a lien against the property that would expire once the loan is repaid. The loan would be billed annually with the resident's property tax bill for the property. FINANCIAL IMPACT: Budget Amendment #4-D constitutes a one-time appropriation of the General Fund available fund balance of$100,000 to administer the fund. RECOMMENDATION(S): The Manager recommends that the Board approve the establishment of the Community Loan Fund, and approve Budget Amendment #4-D, an appropriation of General Fund available fund balance of$100,000. • 3 SAMPLE LOAN AGREEMENT (ORANGE COUNTY) (NORTH CAROLINA) PUBLIC IMPROVEMENT LOAN AGREEMENT and PROMISSORY NOTE THIS AGREEMENT, made this 22nd day of November, 2012 by and between the ORANGE COUNTY,a North Carolina Corporation (hereinafter referred to as "County'7, and JOHN DOE . (hereinafter referred to as "Borrower'), for value received, the receipt of which is hereby acknowledged, the Borrower promises to pay to the County the principal sum of Five Thousand and No/100 Dollars($5,000.00) at the rate of Two and 00/100 percent(2.00%)per annum simple interest. WITNESSETH: WHEREAS, the County shall provide funds for the installation of water and sewer connection infrastructure, as determined to be an eligible activity in accordance with 24 CFR 570.201 (c),located at 201 Cameron Street,Hillsborough,North Carolina,by Borrower,and NOW, THEREFORE, in consideration of the premises, the County and Borrower do hereby agree as follows: 4) Statement of Work and Loan Bud et a) The County shall make a Public Improvement(infrastructure) Loan to the Borrower, that will be incrementally disbursed upon receipt,review and approval of evidence of work completed, in the amount not to exceed Five thousand dollars and zero cents ($5,000) for a ten 10 year term at an interest rate of 2% with the initial principal and interest payments to begin January 1,2013. The loan will be secured by this Promissory Note and a Deed of Trust upon the terms and conditions set forth herein. Borrower will also provide title insurance of the amount loaned showing the County as having third lien on the property. b) All expenditures will be subject to review and approval by the Department of Finance and Administrative Services,in accordance with applicable federal, state and local laws. c) Said funds shall be disbursed by check payable to the Borrower. 5) Loan Terms a) County agrees to lend the Borrower the sum of Five Thousand and zero cents ($5,000.00) at an interest rate of two percent(2%). The loan repayment terms shall be a twenty(20) year period to commence on January 1,2013. Borrower shall make consecutive monthly payments including principal and interest at the previously mentioned rate to the County of 4$ 6.01 per month until paid in full. b) The loan shall be evidenced by this Promissory Note and secured by a County Deed of Trust of even date herewith with respect to the real property owned by John Doe,LLC executed and duly recorded in the office of the Register of Deeds of Orange County, North Carolina, and UCC-1 financing statements duly recorded in the office of the Register of Deeds of Orange County, North Carolina and the Office of the Secretary of State of North Carolina on the property of John Doe,LLC. c) Borrower shall make a final payment to County of all principal and interest then due and owing on that date(the"Maturity Date")which is the earlier to occur of the following events: 1 4 i) Upon the sale, ground lease or other transfer of all or any portion of the Project or an interest therein(except for a lease of individual units in the Project with a term of less than three years);or ii) Upon any default (or if a cure period is allowable, upon the expiration of any allowable period of cure) hereunder or under the County Deed of Trust, the terms of which are incorporated herein by reference,as more particularly provided herein below. d) All payments hereunder shall be applied first to amounts advanced by County to protect the security hereof, then to interest on the unpaid principal balance and then to reduction of principal. e) The indebtedness evidenced by this Promissory Note (hereinafter referred to as "Note") may be prepaid,in whole or in part,at any time without penalty. Upon any default hereunder, or under the County Deed of Trust, County shall have the right at its option and election, to accelerate the indebtedness evidenced by this Note and declare the entire principal balance immediately due and payable in full. Upon such acceleration by County, Borrower promises to pay the full principal amount unpaid hereunder in accordance with the terms of the County Loan Documents, together with all costs and expenses incurred in connection with the collection or attempted collection hereof and the protection of the security thereof,including reasonable attorney's fees,whether or not suit is instituted. g) Borrower agrees to pay all principal and interest and in addition to pay all costs of collection, including reasonable attorneys' fees and all costs of suit,when the unpaid principal sum of this Note or any payment of principal or interest is not paid when due, or when it becomes necessary to protect the security for the indebtedness evidenced hereby, or for the foreclosure instituted by County or other holder under the County Deed of Trust or other County Loan Documents or when County or other holder is made party to or affected by any litigation because of the existence of the indebtedness evidenced by this Note, or because of the existence of any of the County Loan Documents, or when the property which is security for this Note becomes subject to the jurisdiction of a bankruptcy court. This obligation shall exist regardless of whether or not suit is actually commenced. h) The parties hereto have intended in good faith to comply with all applicable usury laws. Notwithstanding anything to the contrary contained in this Note or any other of the County Loan Documents,Borrower shall not be obligated or required to pay interest at a rate,which would subject County to either criminal or civil liability. If, by.the terms of this Note, Borrower at any time is required or obligated to pay interest on the principal made available to Borrower in an amount or at a rate in excess of the applicable legal maximum,the interest due to County shall be immediately and automatically reduced to such maximum, the interest payable shall be computed at such maximum rate, and all prior interest payments in excess of such lawful maximum shall be immediately and automatically applied, and shall be deemed to have been treated as having been applied at the time of receipt, in reduction of the principal balance due under this Note. i) No delays on the part of County in exercising any right hereunder or under any of the County Loan Documents shall operate as a waiver thereof or preclude the exercise thereof at any time during the continuance of any default or during the continuance of any subsequent default. j) Notwithstanding anything to the contrary contained herein or in any other County Loan Documents, this County Note is intended to be non-recourse with the liabilities of Borrower under this County Note being limited to the collateral pledged to secure this Note (which includes without limitation the Project),and other than with respect to the collateral pledged to secure this Note, no other assets shall be available to satisfy any liabilities arising out of, or in 2 5 connection with this loan and, further no deficiency or other judgment shall be rendered or entered against Borrower or any of its members by County,it being acknowledged by County that it shall look solely to the collateral pledged to secure this Note with respect to any recoveries for Borrower liabilities under this County Note. It is the intention of the parties that this shall be a non-recourse loan. k) This Note may not be modified or terminated orally. 3. Closin The parties shall execute all documents required under this Agreement at the Orange County law offices 200 S Cameron Street,Hillsborough,NC 27278. 4. Miscellaneous a) Entire Agreement, Supersedin g Effect and Modification. This Agreement supercedes all prior oral or written agreements, if any, between the parties relating to the subject matter of this Agreement and constitutes the entire agreement between the parties. The provisions of this Agreement may not be amended,deleted, or modified in whole or in part without the express written consent of both parties. b) Governing Law. This Agreement will be governed by the laws of the State of North Carolina, without respect to the principles of choice of law or the conflict of laws. c) Headings. The headings in this Agreement are included for convenience only. d) Severabilit i. In the event any provision of this Agreement is determined to be void, invalid, or unenforceable,the remaining provisions of this Agreement will continue in full force and effect e) Waiver of Breach. The Waiver by any party to this Agreement of a breach by any other party of any of the provisions of this Agreement will not operate or be constructed as a waiver of any subsequent breach by the party. f) Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which will be deemed an original,but all of which together will constitute one and the same instrument. g) Parties in Interest. This Agreement will be binding upon and inure to the benefit of the parties, their respective heirs,representatives,successors and assigns. (the remainder of this page is intentionally left blank) 3 6 IN WITNESS WHEREOF,the parties hereto have caused this Agreement to be duly executed in duplicate, the day and year first above written. By: Signature Typed or Printed: Title: Witnessed by: Signature Title: ORANGE COUNTY By. Signature Typed or Printed: Title: County Manager Witnessed by: Signature Title: County Clerk STATE OF NORTH CAROLINA ORANGE COUNTY I, a Notary Public for aforesaid State and Orange County,hereby certify that personally came before me this date and acknowledged that she is the County Clerk of the Orange County, a municipal corporation, and that by authority duly given and as the fact of said corporation, the aforementioned instrument was signed in its name by ,its County Manager, sealed with its corporate seal and attested by herself as its County Clerk. Notary My commission expires: 4 7 CERTIFICATE OF COUNTY'S ATTORNEY I, the undersigned,John T. Carter Tr.,the duly authorized and acting legal representative of THE COUNTY OF JACKSONVILLE,NORTH CAROLINA do hereby certify as follows: I have examined the attached Public Improvement Loan Agreement submitted by EAST CAROLINA COMMUNITY DEVELOPMENT.INC. and the manner of execution thereof,and I am of the opinion that each of the aforesaid agreements has been duly executed by the proper parties thereto acting through their duly authorized representatives; that said representatives have full power and authority to execute said agreements on behalf of the respective parties named thereon; and that the foregoing agreements constitute valid and legal binding obligations upon the parties executing the same in accordance with terms,conditions,and provisions thereof Signature Date APPROVAL BY COUNTY FINANCE OFFICER This instrument has been pre-audited in the manner required by the Local Government Budget and Fiscal Control Act. Signature Date 5