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HomeMy WebLinkAboutAgenda - 09-26-2013 - 5ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: September 26, 2013 Action Agenda Item No. 5 SUBJECT: Possible Bond Issuance for November 2014 DEPARTMENT: Finance and Administrative PUBLIC HEARING: (Y /N) No Services ATTACHMENT(S): INFORMATION CONTACT: A. Proposed Bond Schedule for a November 2014 Bond Clarence Grier, 919 - 245 -2450 Referendum Bob Jessup, 919 - 933 -9891 PURPOSE: To receive a report on a possible November 2014 bond referendum schedule. BACKGROUND: In recent meetings over the past few months, the Board of County Commissioners has discussed the need for a future bond referendum to fund some County and School long -range capital needs. This item was also discussed at the September 3, 2013 County /School Collaboration Meeting. There were two possible dates for voters to consider a bond referendum — May 2014 and November 2014. Bob Jessup, Orange County Bond Counsel, and Orange County staff provided the Board with a brief timeline comparison related to both dates. During the County /School Collaboration Meeting, the May 2014 date was removed due to time considerations. Currently, the proposed County Jail and Middle School #5 for the Chapel Hill — Carrboro City School District are two projects that have been discussed as projects that would be included as part of the bond referendum. The Boards will have to decide any additional projects to be included in the bond referendum. The decision to include any additional projects in previous bond referendums has been led by a Commissioner appointed Capital Needs Advisory Task Force, and the use of an educational campaign to educate the public about the needs and purpose of the bond referendum. FINANCIAL IMPACT: There is no direct financial impact associated with the attached report and calendar. RECOMMENDATION(S): The Manager recommends that the Boards receive the report and calendar. The Board of County Commissioner may choose to discuss the possible bond referendum at a future meeting. Sanford Holshouser LLP Attachment A Memorandum To: Orange County Officials Date: July 5, 2013 Regarding Required Procedures and Possible Schedule for General Obligation Bond Referendum From: Sanford Holshouser LLP -- Robert M. Jessup Jr. This memorandum describes the steps required for Orange County to conduct a general obligation bond referendum on May 6, 2014, and sets out a proposed schedule. Here are the required steps and suggested dates for action: 1. Determine tentative elan for bond nurnoses and amounts. Although Step 5 provides for the first formal Board action to determine what will be presented to the voters, the bond program needs to be substantially worked out before we begin the formal process. In addition, the plan for what projects are to be included in the bond package is something that LGC representatives will want to discuss in detail with County representatives as part of the meeting described in the next step. Each separate general purpose for bonds has to be the subject of a separate ballot question. The statutes assume that each question put to voters will propose a dollar amount for a separate generic purpose, such as paying "capital costs of school facilities. " Although the statutes allow the purpose to be stated with more specificity, it is highly recommended that the purpose in the ballot question be left as general as possible. The more specific plans underlying the planning for the bond issue do not legally bind the County to a particular future plan of action in the issuance of the bonds or construction of specified facilities. 2. Meet with LGC staff. The County should arrange a meeting with LGC staff about the proposed referendum as soon as possible. At the meeting, the County should obtain a copy of the required application for the LGC's approval of the proposed bonds. 3. Give informal notice to the County Board of Elections. Because 1 the Board of Elections will need to coordinate its own procedures for the bond referendum, it would help the Board of Elections to receive a phone call to inform the Board of the County's plans, even if the plans are still subject to change. In addition, State law generally requires that absentee ballots be available at least 50 days prior to the election date (in this case, by March 17), and we want to be sure that our schedule is generally acceptable to the Board of Elections. 4. Obtain School Board Resolution. If any of the bonds will be proposed for school purposes, the statutes contemplate that the affected school boards should provide a formal referendum request to the Commissioners. This request usually proposes a maximum amount of bonds to be considered at the referendum. This schedule assumes that each school board could provide this resolution to the Commissioners prior to a County Board meeting in early January. 5. Adopt "Findings" Resolution. As part of the application process, the LGC wants to see a statement describing why the proposed projects and bonds are necessary and desirable. This resolution will also state an estimated tax rate impact of the borrowing. This resolution could be adopted at a County Board meeting in early January. This resolution will also authorize the publication of the "Notice of Intent" described in Step 6. 6. Publish Notice of Intent To File Application. The County must publish a notice of its intent to file an application for the LGC's approval of the proposed bonds. The notice must be published at least 10 days before filing the application. The notice needs to be published as soon as possible after the Board adopts the findings resolution described in Step 5. The own words resolution and the Notice of Intent establish the maximum amount of bonds that can be proposed at the referendum for each of the specified purposes. From this point, we can decrease the amount of bonds or eliminate purposes, but we can increase an amount or add a purpose only by re- starting the authorization process. 7. Make Legislative Committee 45 -day filing. The guidelines call for this filing to go in 45 days before the LGC considers your application. Because the LGC only needs to "accept" your application in advance of the referendum — it doesn't technically have to "approve" the application prior to the referendum -- I'd suggest we send in the legislative filing when we're ready to file the LGC application, and just ask the LCG to defer formal action until our 45 -day period has expired. So that would mean making the filing some time after the mid - January County Board meeting. n 8. File LGC Application. As stated above, this cannot happen until at least 10 days have elapsed since the publication of the notice of intent. The application needs to be filed and formally accepted by the LGC before we have the County Board take its next steps as described in Step 9. Although we have to submit the LGC application as part of the referendum process, it is not necessary to receive LGC approval until we are ready to proceed with the actual sale of bonds, which of course will be after the referendum. The LGC may or may not act on the application prior to the referendum, although the current LGC practice is in fact to consider applications as they are received (instead of waiting for the time of a bond issuance). 9. Introduce Bond Orders; Set public hearing. After the County files its application, the Board needs to introduce the "Bond Orders" and set a date for the required public hearing. We can take these actions at any time after the LGC accepts the application (even the same day). Our schedule shows these steps occurring at a Board meeting in early February. The "Bond Order" is the basic authorization for bonds approved by the County Board. The statutes provide for the format and most of the text of a bond order; the bond order is a short, general statement of the Board's determination to proceed. Each of the separate generic purposes for which bonds are to be proposed will be the subject of a separate bond order: The details of an actual bond issue are further approved by the Board at the time of a bond issue. 10. File sworn statement of debt. This is a statement, required by statute, that details outstanding County debt. This document will be similar, but not quite identical, to a debt statement that appears in the LGC application. This statement needs to be filed after the bond orders are introduced but before the publication of the notice of public hearing (as described in the next step). 11. Publish Notice of Public Hearing. We need to publish notice of the required public hearing at least six days prior to the hearing. 12. Hold Public Hearing; Adopt Bond Order; Set Ballot Question and Referendum Date. After holding a public hearing, the Board needs to adopt the Bond Orders and adopt a resolution that formally sets the ballot questions and the date for the referendum. Our schedule shows these steps occurring at a County Board meeting in early March. The Board Clerk must then send a copy of the resolution setting the date and the ballot question to the County Board of Elections 5 within three days after the Board meeting. We can arrange the schedule to have the public hearing at a meeting before the Board takes final action on the Bond Orders and ballot questions. For absentee ballots to be available by March 17, an early March Board meeting is just about as late as we can go for the final Board action. The adoption of the bond order establishes the final amount of bonds that will go before the voters. There is never any obligation in fact to issue any or all of the bonds approved at a referendum. 13. Publish Bond Order as Adopted. This should be done as soon as possible after the Bond Order is adopted. There is no particular deadline for publishing this notice, but the notice starts a 30 -day period for court challenges to the authorization process that must lapse before any bonds can be issued. 14. Publish Notice of Bond Referendum. This notice must be published twice, once not less than 14 days and once not less than 7 days before the close of voter registration. State law permits registration until the 25th day prior to the election date. That puts the date registration closes at April 11 for a referendum on May 6. The first publication, then, needs to be at least 14 days earlier, or on or before March 28, and the second publication no more than one week later (by April 4). I would certainly encourage you, however, to plan to publish at least a week before the final legal date, in order to leave time to re- publish in case of any problems with publication. I have attached schedules in table form for elections in both May 2014 and November 2014. These tables summarize the steps that have been described in more detail above. Once the voters have approved the bonds, you are looking at a minimum of 90 to 120 days to get through the process to actually issue bonds. The County Board must adopt a resolution to formally approve the election results, and the County must publish a notice of the results that triggers a 30 -day period during which people can bring legal challenges to the bond election process. Then, to approve the issuance of bonds takes only one more Board resolution, with no other required public hearings or published notices. The real timing issue in proceeding with a bond issue centers around the progress of the projects that are going to be financed. In general, the LGC wants you to have firm construction numbers for most of the projects to be financed before you close on the financing — the LGC wants to be sure you don't borrow too much money, or too little money, or borrow it earlier than you need it. This is only LGC policy — not the law — so the LGC has flexibility in how it administers this policy. In general, the LGC will give you some more leeway in the timing of issuing voter - approved bonds than for other types of financing, but it still wants to see that you are close to construction with well - developed estimates (at least) before allowing you to borrow money. Please let me know if you have any questions about this information, or if I can be of any other assistance. -- RMJ 5 7 Orange County -- Proposed Timetable for May '14 Bond Referendum Event 1. Determine tentative referendum plan 2. Meet with LGC staff 3. Give informal notice to County Board of Elections 4. Obtain school board resolution Date As soon as possible As soon as possible after informal decision to proceed with May referendum As soon as possible after informal decision to proceed with May referendum Prior to Event 5 5. Board adopts preliminary resolution County Board meeting by early January explaining purpose for referendum and authorizing publication of notice of intent to file LGC application 6. Publish notice of intent to file application 7. Legislative committee 45 -day filing 8. File LGC application 9. Board introduces bond orders and schedules public hearing 10. Clerk files sworn statement of debt 11. Publish notice of public hearing 12. Hold public hearing 13. Adopt bond orders; formally set ballot questions and referendum date As soon as possible after Event 5 As soon as possible after Event 5 Early February; must be at least 10 days after Event 6 and prior to Event 9 At early February Board meeting Any time between Event 9 and Event 11 By late February (after Event 10 and at least six days prior to Event 12) At early March Board meeting At early March Board meeting 14. 15. Publish bond order as adopted Publish notice of referendum (twice) As soon as possible after Event 13 By 3/28; then by 4/4 16. Referendum occurs 5/6 9 Orange County -- Proposed Timetable for November '14 Bond Referendum Event 1. Determine tentative referendum plan 2. Meet with LGC staff Date As soon as possible As soon as possible after informal decision to proceed with November referendum 3. Give informal notice to County Board As soon as possible after informal of Elections decision to proceed with November referendum 4. Obtain school board resolution Prior to Event 5 5. Board adopts preliminary resolution At a County Board meeting by early June explaining purpose for referendum and authorizing publication of notice of intent to file LGC application 6. Publish notice of intent to file application 7. Legislative committee 45 -day filing 8. File LGC application 9. Board introduces bond order and schedules public hearing 10. Clerk files sworn statement of debt 11. Publish notice of public hearing 12. Hold public hearing As soon as possible after Event 5 As soon as possible after Event 5 Must be at least 10 days after Event 6 and prior to Event 9 At a County Board meeting prior to summer break Any time between Event 9 and Event 11 After Event 10 and at least six days prior to Event 12 At a Board meeting in late August or early September 13. 14. 15. 16. 10 Adopt bond orders; formally set ballot At a Board meeting in late August or early questions and referendum date Publish bond order as adopted Publish notice of referendum (twice) Referendum occurs September As soon as possible after Event 13 By 9/26; then by 10/3 11/4