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HomeMy WebLinkAboutAgenda - 10-15-1996 - 5a 4 L ORANGE COUNTY BOARD OF COMMISSIONERS Action Agenda Item No. 5-A ACTION AGENDA ITEM ABSTRACT Meeting Date: October 15, 1996 SUBJECT: Resolution Authorizing Local Government Commission(LGC)Application for Elementary School Installment Financing and Establishment of Public Hearing Date DEPARTMENT: Finance PUBLIC HEARING: YES: NO: x ATTACHMENT(S): INFORMATION CONTACT: Resolution Ken Chavious, Ext. 2453 Public Hearing Notice TELEPHONE NUMBER: Hillsborough -732-8181 Chapel Hill -968-4501 Mebane -227-2031 Durham -688-7331 PURPOSE: To Consider the adoption of a resolution authorizing staff to file an application with the Local Government Commission(LGC)seeking approval for installment purchase financing for a new elementary school in the Chapel Hill-Carrboro School District,and to set a date for a Public Hearing on financing proposals. BACKGROUND: During the past several months the Board of County Commissioners,County Staff and both School Boards have been working together to develop long range plans to address school capital needs. These plans include a new elementary school in the Chapel Hill-Carrboro School District as an immediate need. In order to address this need,County and School District staff have identified resources to fund an installment purchase for this new school. The funding required for this project is approximately$14 million. Staff is proposing that the County split the financing in order to remain bank qualified(issuing less than$10 million in debt in a calendar year)for both 1996 and 1997. By doing this,the County can accomplish the financing in less time and save significant dollars in issuance costs, as well as obtain very favorable interest rates. It is proposed that the County borrow$5 million before the end of this calendar year and the other$9 million in calendar year 1997. Staff recommends that the County pursue a"split forward commitment"option. This option is one in which there is only one contract but the bank provides separate interest quotes on each year's financing amount. General Statutes require that the Local Government Commission(LGC)approve all financing arrangements of this nature. As a part of their review,the LGC requires a procedural step involving the adoption of a resolution by the County Commissioners. The attached resolution addresses the issues required by the LGC. In addition,the Statutes require that the Governmental unit entering into an installment purchase of this nature conduct a public hearing on the financing proposal selected for LGC 2 review. Staff recommends that the Board establish the public hearing date for November 19, in anticipation that the County and Chapel Hill-Carrboro Schools can complete all procedural requirements by that date. Attached is a public hearing notice substantially in the form in which the Clerk to the Board of Commissioners will need to advertise at least 10 days before the hearing . RECOMMENDATION(S): The Manager Recommends that the Board: 1)Approve the Resolution and authorize the Finance Director to execute all documents and procedural steps required in the LGC application process, and 2)Establish the Public Hearing date for 7:30pm on Tuesday,November 19 at the OWASA Operations Center, and authorize the Clerk to advertise. ORANGE COUNTY BOARD OF COMMISSIONERS A RESOLUTION AUTHORIZING THE FILING OF AN APPLICATION FOR APPROVAL OF A FINANCING AGREEMENT AUTHORIZED BY NORTH CAROLINA GENERAL STATUTE 160A-20 WHEREAS, the County of Orange,North Carolina desires to construct a new elementary school in the Chapel Hill-Carrboro City Schools district to address overcrowding at the elementary school level within the district; and WHEREAS,the County of Orange desires to finance the Project largely by the use of an installment contract authorized under North Carolina General Statute 160A,Article 3, Section 20; and WHEREAS, findings of fact by this governing body must be presented to enable the North Carolina Local Government Commission to make its findings of fact set forth in North Carolina General Statute 159, Article 8, Section 151 prior to approval of the proposed contract; NOW THEREFORE, BE IT RESOLVED that the Board of Commissioners of Orange County,North Carolina, meeting in regular session on the 15th day of October, 1996, make the following findings of fact: 1. The proposed contract is necessary or expedient because the elementary student population in the Chapel Hill-Carrboro City Schools is currently over the capacity of the district's existing elementary school buildings and no practical or timely alternative to the construction of permanent additional elementary school space is available. The student population in the district has increased rapidly in recent years and is projected by the North Carolina Department of Public Instruction to continue growing substantially for the foreseeable future. 2. The proposed contract is preferable to a bond issue for the same purpose because: a. availability of the new elementary school is urgently needed in time for the 1999-2000 school year and the contracting method is the most expeditious method of raising cash quickly to meet the planning,design,and construction timetable for a 1999-2000 school opening; b. the cost of the elementary school,estimated at$14 million,cannot be prudently raised from currently available appropriations,unappropriated fund balances,or non-voted bonds; c. the North Carolina General Assembly adopted legislation during the 1994 Session intended specifically to permit Orange County to pursue installment financing for an elementary school project that has since been successfully constructed and opened, and any future projects that mighi become necessary. 3. The cost of financing under the proposed contract could be greater than the cost of issuing general obligation bonds. However,this method of financing will increase the alternatives available to Orange County to obtain the most cost effective,timely,and flexible means possible of funding this necessary project. Given Orange County's excellent credit standing,and its past success in obtaining installment financing for the previous elementary school project that compared favorably with rates on other available financing mechanisms,any difference in the comparable costs between bond financing and installment purchase financing will be reasonable. 4. The sums to fall due under the contract are adequate and not excessive for the proposed purpose because funding of the debt service thus created is already planned in Orange County's long-term Capital Improvement Plan. 5. The County of Orange's debt management procedures and policies are good because the County's existing and planned debt falls well within North Carolina's legal debt limitations for local governments; furthermore,Orange County's excellent creditworthiness is well recognized by investors and well established by the principal municipal bond rating agencies with bond ratings of Aal(Moody's) and AA+(Standard&Poor's). 6. There will be no increase in ad valorem property taxes necessary to meet the sums to fall due under the proposed contract. Payments due under the proposed contract will be financed by school impact fees accrued and pay-as-you-go sales tax revenues. 7. The County of Orange is not in default in any of its debt service obligations. 8. The Attorney for the County of Orange has rendered an opinion that the proposed Project is authorized by law and is a purpose for which public funds may be expended pursuant to the Constitution and laws of North Carolina. NOW, THEREFORE, BE IT FURTHER RESOLVED that the Finance Officer is hereby authorized to act on behalf of the County of Orange in filing an application with the North Carolina Local Government Commission for approval of this Project and the proposed financing contract and other actions not inconsistent with this resolution. This resolution is effective upon its adoption this 15th day of October, 1996. The motion to adopt this resolution was made by CommissionerGordor;seconded by Commissioner Willhoit , and passed by a vote of 4 to 0 . ATTEST: Beverly A. Blythe,Clerk to the Board This is to certify that this is a true and accurate copy of this resolution adopted by the Orange County Board of Commissioners on the 15th day of October, 1996. Beverly a Blythe,Clerk to the Board Date i 5 NOTICE OF PUBLIC HEARING CONCERNING A PROPOSED INSTALLMENT PAYMENT AGREEMENT OF THE COUNTY OF ORANGE, NORTH CAROLINA TO FINANCE THE CONSTRUCTION AND EQUIPPING OF AN ELEMENTARY SCHOOL LOCATED IN THE CHAPEL HILL- CARRBORO SCHOOL DISTRICT. NOTICE IS HEREBY GIVEN of a public hearing to be held at 7:30 P.M. on November 19, 1996, at the OWASA Operations Center, 400 Jones Ferry Road, Carrboro, North Carolina, for the purpose of considering whether the Board of Commissioners for the County of Orange, North Carolina should approve a proposed installment payment agreement and certain related documents under which the County would obtain financing for the acquisition, construction and equipping of a new elementary school located in the Chapel Hill-Carrboro City School District, including parking areas, sidewalks, and other appurtenant facilities, landscaping and other related site work . Under the proposed installment payment agreement and related documents the County would secure the repayment by it of moneys advanced pursuant to such installment payment agreement by granting a security interest in the property purchased. At such public hearing the Board of Commissioners will also consider whether the County should acquire the site of such project from the Chapel Hill-Carrboro City Schools to facilitate such financing. -------------------------- Beverly A. Blythe . Clerk to the Board of Commissioners for the County of Orange, North Carolina