HomeMy WebLinkAboutAgenda - 05-07-2013 - 6c1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: May 7, 2013
Action Agenda
Item No. 6 -c
SUBJECT: Public Hearing on the Financing for Various Capital Investment Plan Projects
and County Equipment
DEPARTMENT: Finance and Administrative PUBLIC HEARING: (Y /N) Y�
Services
ATTACHMENT(S): INFORMATION CONTACTS:
1. Notice of Public Hearing
2. Resolution Clarence Grier, 919 - 245 -2453
3. Comparison of Options Robert Jessup, 919 - 933 -9891
4. Listing of Projects to be Financed
PURPOSE: To conduct a public hearing on the issuance of approximately $10,000,000 to
finance capital investment projects and equipment for the year, and consideration of a related
resolution supporting the County's application to the Local Government Commission for its
approval of the financing arrangements.
BACKGROUND: The Board of Commissioners has previously approved the construction and
purchase of capital investment projects and equipment for the year. The Board has made a
preliminary determination to finance costs for this projects by the use of an installment contract,
as authorized under Section 160A -20 of the North Carolina General Statutes. County staff
estimates that the total amount to be financed for various County capital projects and
equipement will be approximately $10,000,000. The financing will also include amounts to pay
financing transaction costs.
The statutes require that the County conduct a public hearing on the proposed financing
contract. A copy of the published notice of this hearing is provided as Attachment 1.
After conducting the hearing and receiving public input, the Board will consider the adoption of
the resolution at Attachment 2. This resolution formally requests the required approval from the
North Carolina Local Government Commission (LGC) for the County's financing arrangements,
and makes certain findings of fact as required under the LGC's guidelines. County staff has
been in contact with LGC staff, and staff expects no obstacles to receiving LGC approval.
If the Board adopts the resolution (indicating its intent to continue with the financing plan), the
Board will be asked to consider a resolution giving final approval to the financing plan at the
June 4, 2013 meeting. Staff expects the LGC to approve the financing plan at the LGC's
meeting on June 4, 2013. Under the current schedule, staff expects to set the final interest
rates and other terms of the financing around May 15, and to close on the financing by the end
of June.
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 County projects financing would require the highest debt service
payment of $743,000 falling in fiscal years 2015 -2018. The tax rate equivalent for the highest
debt service payment is approximately .4054 cents. Based on current valuations, no adjustment
to the tax rate associated with this financing is contemplated to occur during the period noted.
RECOMMENDATION(S): The Manager recommends that the Board conduct the public
hearing and adopt the resolution supporting the application to the Local Government
Commission for approval of the financing arrangements.
Attachment 1
Orange County, North Carolina -- Notice of Public Hearing
2013 Installment Financing for Various County Projects
K
The Board of Commissioners of Orange County, North Carolina, will hold a public hearing
on Tuesday, May 7, 2013, at 7:00 p.m. (or as soon thereafter as the matter may be heard). The
purpose of the hearing is to take public comment concerning a proposed financing contract, under
which the County would borrow approximately $10,000,000 to finance costs of various County
proj ects.
The hearing will be held in the Commissioners' usual meeting room in Hillsborough
Commons, DSS Building (Old Wal- Mart), 113 Mayo St., Hillsborough, North Carolina.
The projects to be financed may include vehicle replacements, information technology
upgrades and replacements, water and sewer projects in the Buckhorn- Mebane Economic
Development District, HVAC improvement and roof replacements for various County buildings,
various communication systems upgrades and replacements, Twin Creeks park improvements,
improvements to the Southern Human Services Center and planning for future improvements to
the Southern Human Services Center and the Whitted Building in Hillsborough. The County may
also use financing proceeds to provide required reserves and to pay financing costs.
The proposed financing would be secured by a lien on some or all of the property to be
improved or acquired through the financing. The County expects this may include the Whitted
Building and the Southern Human Services Center (and the related real property). There would be
no recourse against the County or its property (other than the pledged facilities and associated
land) in the case of a default.
All interested persons will be heard. The County's plans are subject to change based on
the comments received at the public hearing and the Board's subsequent discussion and
consideration. The County's entering into the financing is subject to obtaining approval from the
North Carolina Local Government Commission.
Persons wishing to make written comments in advance of the hearing or wishing more
information concerning the subject of the hearing may contact Clarence Grier, Orange County
Finance Officer, Post Office Box 8181, Hillsborough, NC 27278 (telephone 919/245 -2453, email
cgrier @orangecountync.gov).
M
RES- 2013 -040 Attachment 2
Resolution Supporting an Application to the Local Government Commission for
its Approval of a Financing Agreement for the County
WHEREAS --
The Board of Commissioners has previously determined to carry out the
acquisition and construction of various public improvements, as identified in the
County's capital improvement plan.
The Board desires to finance the costs of these projects by the use of an
installment financing, as authorized under Section 160A -20 of the North Carolina
General Statutes.
Under the guidelines of the North Carolina Local Government Commission, the
Board must make certain findings of fact to support the County's application for the
LGC's approval of the County's proposed financing arrangements.
THEREFORE, BE IT RESOLVED by the Board of Commissioners of Orange
County, North Carolina, that the County makes a preliminary determination to finance
approximately $10,000,000 to pay capital costs of various public improvements. The
proposed list of projects and improvements to be financed appears on Exhibit A.
The Board will determine the final amount to be financed by a later resolution.
The final amount financed may be slightly lower or slightly higher than $10,000,000.
Some of the financing proceeds may provide reimbursement to the County for prior
expenditures on project costs, and some proceeds may be used to pay financing costs.
BE IT FURTHER RESOLVED that the Board of Commissioners makes the
following findings of fact:
(a) The proposed projects are necessary and appropriate for the County under
all the circumstances.
(b) The proposed installment financing is preferable to a bond issue for the
same purposes.
The County has no meaningful ability to issue non -voted general obligation bonds
for this project. These projects will not produce sufficient revenues to support a self -
liquidating financing. The County has in the past issued substantial amounts of voter -
approved bonds, and it is appropriate for the County to balance its capital finance
program between bonds and installment financing.
The County expects that in the current interest rate environment for municipal
securities there would be no material difference in interest rates between general
obligation bonds and installment financings for these projects.
(c) The estimated sums to fall due under the proposed financing contract are
adequate and not excessive for the proposed purpose. The County will closely review
proposed financing rates against market rates with guidance from the LGC and its
financial adviser. All amounts financed will reflect either approved contracts, previous
actual expenditures or professional estimates.
(d) As confirmed by the County's Finance Officer, (i) the County's debt
management procedures and policies are sound and in compliance with law, and (ii) the
County is not in default under any of its debt service obligations.
(e) The County estimates that the maximum tax rate impact of paying debt
service on the financing will be the equivalent of up to approximately 0.04 cents per $100
of valuation. Given this low amount and based on the estimated interest rates to be
payable and the proposed financing term, the County expects to be able to repay the
financing within current resources, and no actual tax rate increase related to this financing
will be necessary.
(f) The County Attorney is of the opinion that the proposed project is
authorized by law and is a purpose for which public funds of the County may be
expended pursuant to the Constitution and laws of North Carolina.
BE IT FURTHER RESOLVED as follows:
(a) The County intends that the adoption of this resolution will be a declaration
of the County's official intent to reimburse project expenditures from financing proceeds.
The County intends that funds that have been advanced for project costs, or which may
be so advanced, from the County's general fund, or any other County fund, may be
reimbursed from the financing proceeds.
(b) This resolution takes effect immediately.
Exhibit A — proposed projects
Project
Estimated Amount
Description
Southern HSC Future Planning)
$300,000
Expansion Master Plan and
Preliminary Design Work and Planning
HVAC Projects
$1,553,201
Community Geothermal Projects
Roofing Projects
$165,000
Jail, Justice Facility, Asset Management
Services, North Administrative Building
Information Technology
$702,500
Library Management System Software
(ILS), Equipment, BOCC initiatives
Whitted Building
$295,000
Preliminary Design Work
VIPER Radio System
$543,750
Additional Channels for Existing Towers to
increase the Viper System capacity
Communications System
Improvements
$164,000
Purchase of additional Viper Radios
Twin Creeks Park - Phase II
$600,000
Construction of a main entry road
Buckhorn EDD Phase 2
$4,256,046
To place Water and Sewer infrastructure in
the Buckhorn - Mebane Economic
Development District
Southern Human Services
Center
$280,000
Health Clinic and DSS Renovations
Information Technology
$500,000
Desktop, Laptop and Server Replacements
Vehicle Replacements
$640,503
Vehicle Purchases
Attachment 3
Orange County, NC
Limited Obligation Bonds, Series 2013
Preliminary, Rate Indications as of March 20, 2013
7
Term
15 Years
Term
15 Years
Term
20 Years
Par Amount
$ 11,075,000
Par Amount
$ 9,925,000
Par Amount
$ 9,900,000
Total Debt Service
13,101,365
Total Debt Service
13,259,517
Total Debt Service
14,606,418
Project Fund Deposit
11,000,000
Project Fund Deposit
11,000,000
Project Fund Deposit
11,000,000
Issuance Costs
75,000
Issuance Costs
175,000
Issuance Costs
175,000
Underwriter's Discount
743,000
Underwriter's Discount
49,625
Underwriter's Discount
49,500
Total Cost of Issuance
75,000
Total Cost of Issuance
224,625
Total Cost of Issuance
224,500
TIC
2.30%
TIC
2.39%
TIC
2.99%
AIC
2.40%
AIC
2.62%
AIC
3.18%
2014
$ 683,000
2.300% $
234,205 $
917,205
2014
615,000
2.00%
335,367.36
950,367.36
2014
455,000
2.00%
364,467.78
819,467.78
2015
743,000
2.300%
239,016
982,016
2015
665,000
2.00%
352,450.00
1,017,450.00
2015
500,000
2.00%
387,300.00
887,300.00
2016
743,000
2.300%
221,927
964,927
2016
665,000
3.00%
339,150.00
1,004,150.00
2016
500,000
3.00%
377,300.00
877,300.00
2017
743,000
2.300%
204,838
947,838
2017
665,000
3.00%
319,200.00
984,200.00
2017
500,000
3.00%
362,300.00
862,300.00
2018
743,000
2.300%
187,749
930,749
2018
665,000
3.00%
299,250.00
964,250.00
2018
500,000
3.00%
347,300.00
847,300.00
2019
742,000
2.300%
170,660
912,660
2019
665,000
3.00%
279,300.00
944,300.00
2019
500,000
3.00%
332,300.00
832,300.00
2020
742,000
2.300%
153,594
895,594
2020
665,000
3.00%
259,350.00
924,350.00
2020
500,000
3.00%
317,300.00
817,300.00
2021
742,000
2.300%
136,528
878,528
2021
665,000
3.00%
239,400.00
904,400.00
2021
500,000
3.00%
302,300.00
802,300.00
2022
742,000
2.300%
119,462
861,462
2022
665,000
4.00%
219,450.00
884,450.00
2022
500,000
4.00%
287,300.00
787,300.00
2023
742,000
2.300%
102,396
844,396
2023
665,000
4.00%
192,850.00
857,850.00
2023
495,000
4.00%
267,300.00
762,300.00
2024
742,000
2.300%
85,330
827,330
2024
665,000
5.00%
166,250.00
831,250.00
2024
495,000
5.00%
247,500.00
742,500.00
2025
742,000
2.300%
68,264
810,264
2025
665,000
5.00%
133,000.00
798,000.00
2025
495,000
5.00%
222,750.00
717,750.00
2026
742,000
2.300%
51,198
793,198
2026
665,000
5.00%
99,750.00
764,750.00
2026
495,000
5.00%
198,000.00
693,000.00
2027
742,000
2.300%
34,132
776,132
2027
665,000
5.00%
66,500.00
731,500.00
2027
495,000
5.00%
173,250.00
668,250.00
2028
742,000
2.300%
17,066
759,066
2028
665,000
5.00%
33,250.00
698,250.00
2028
495,000
5.00%
148,500.00
643,500.00
2029
2029
2029
495,000
5.00%
123,750.00
618,750.00
2030
2030
2030
495,000
5.00%
99,000.00
594,000.00
2031
2031
2031
495,000
5.00%
74,250.00
569,250.00
2032
2032
2032
495,000
5.00%
49,500.00
544,500.00
2033
2033
2033
495,000
5.00%
24,750.00
519,750.00
Preliminary: Subject to Change
Davenport & Company LLC 3/20/2013
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Version 06/01/12 MB TC
Orange County 9
Listing of Projects To Be Financed for FY 2012 -2013 Attachment 4
Debt Financing in FY 2012 -13
County Projects
Amount
Description
Expansion Master Plan and
Southern HSC (Future Planning)
$
300,000
Preliminary Design Work and Planning
HVAC Projects
$
1,553,201
Community Geothermal Projects
Jail, Justiice Facility, Asset Management Services
Roofing Projects
$
165,000
North Administrative Building
Library Management System Software (ILS), Equipment,
Information Technology
$
702,500
BOCC initiatives
Whitted Building
$
295,000
Preliminary Design Work
Additional Channels for Existing Towers to increase the
VIPER Radio System
$
543,750
Viper System capacity
Communications System Improvements
$
164,000
Purchase of additional Viper Radios
Twin Creeks Park - Phase II
$
600,000
Construction of a main entry road
Total
$
4,323,451
Debt Financing in FY 2012 -13
Water and Sewer Projects Amount
To place Water and Sewer infrastructure in the Buckhorn
Buckhorn EDD Phase 2 (Article 46 Proceeds) $ 4,256,046 - Mebane Economic Development District
$ 4,256,046
Additional Debt Financing Needed in FY 2012 -13
Project Amount
Southern Human Services Center (10027) $ 280,000 Health Clinic and DSS Rennovations
Information Technology (30007) $ 500,000 Desktop, Laptop and Server Replacements
$ 780,000
Vehicle Replacement Fund
Project Amount
Vehicle Replacements $ 640,503 Vehicle Purcahses approved in the FY2013 Budget
$ 640,503
Grand Total $ 10,000,000