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HomeMy WebLinkAboutAgenda - 12-02-1996 - 14h 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: December 2, 1996 Action Agenda Item No. Ai SUBJECT: Southern Village Elementary School Financing Resolution DEPARTMENT: County Attorney PUBLIC HEARING: (Y/1) BUDGET AMENDMENT: (Y/1) ATTACHMENT(S): INFORMATION CONTACT: Resolution w/Attachments (separate cover) Geof Gledhill, 732-2196 Deed of Trust and Financing Agreement Escrow Agreement Lease-Orange County/CHCCS TELEPHONE NUMBERS: Agency Agreement-Orange County/CHCCS Hillsborough 732-8181 Chapel Hill 968-4501 Durham 688-7331 Mebane 227-2031 PURPOSE: To approve a resolution necessary to complete the financing arrangements for the new Chapel Hill-Carrboro City Schools(CHCCS)elementary school to be constructed in the Southern Village development. BACKGROUND: At the November 19, 1996 meeting,the Board of Commissioners conducted a dual purpose public hearing on a proposed financing agreement for construction of the Southern Village Elementary School,and on the acquisition by the County of the school site from the Chapel Hill-Carrboro Board of Education. There were no speakers at the public hearing,and the Board subsequently adopted a resolution approving the arrangements in principal,and authorizing staff, attorney, and bond counsel to complete documents necessary to carry out the financing. The North Carolina Local Government Commission will consider the County's application for approval of the installment purchase agreement for construction of the school. Bond counsel has prepared the attached resolution, which will accomplish several procedural requirements related to the acquisition, construction, and equipping of the Southern village Elementary school. Documents incorporated by reference(the Deed of Trust and Financing Agreement,the escrow Agreement,the Lease, and the Agency Agreement)in the resolution are transmitted under separate cover. RECOMMENDATION(S): The Manager recommends that the Board adopt the attached resolution. a 2 Document Approval Resolution -- Southern Vigaee Elementary FInancine RESOLUTION PROVIDING FINAL APPROVAL OF TERMS AND DOCUMENT'S FAR SOUTHERN VILLAGE LA&AffLSMY FINANCING PROJECT WHEREAS- The Board of Commissioners of Orange County, North Carolina (the "County"), has previously approved and determined to undertake a plan for the construction, acquisition and financing (the "Project") of a new elementary school in the County (the "New School"). There have been presented the draft agreements listed on Exhibit A (the "Agreements") related to the County's undertaking the Project, copies of which shall be filed with the County's permanent records. Such documents appear to be in forms appropriate for carrying out the Project. BE IT THEREFORE RESOLVED by the Orange County Board of Commissioners: 1. The County hereby confirms its decision to finance the Project through BB&T Leasing Corporation ("BB&TLC") in accordance with the plan of financing described in the Agreements. Z. The Chairman and Vice Chairman of the County's Board of Commissioners, or either of them, are hereby authorized and directed to execute the Agreements and deliver the same to the appropriate counterparties, and the Clerk to this Board (or any assistant clerk) is hereby authorized and directed to affix the County's seal to the Agreements and to attest the same (when the seal and such second signature is required by the final form of any documn O. The Agreements shall be in substantially the forms submitted to this meeting, which are hereby approved, with such changes as may be approved by the Chairman or Vice Chairman, such officer's execution to constitute conclusive evidence of such officer's approval of any such changes. The Agreements m final form, however, must provide for the amount now to be advanced to the County not to exceed $5,400,000, for a nominal amwal hUrest rate (in the absence of defou or change in tax starts) not to exceed 4.92%, and for a term not to exceed fifteen years ftem closing. 3. The County's payment of InstaHment Payments, as defined in the Financing Agreement, shall be subject to annual appropriation of funds by the Board of Commissioners. The County shall not be obligated to make any payments under the Financing Agreement beyond those for which funds have been appropriated in the County's sole discretion during the County's then-current fiscal year. The Financing Agreement shall not constitute a pledge of the County's w«:29e21 .1 3 full faith and credit. Neither the County's full faith and credit nor its taxing power is pledged directly, indirectly or contingently to secure any moneys due under the Financing Agreement. 4. The County Manager and Finance Director are hereby authorized and directed, together or separately, to hold executed copies of the Agreements, 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 Agreements have been completed to such officer's satisfaction, and thereupon to release the executed copies of such documents for delivery to the appropriate persons or organizations. Without limiting the generality of the foregoing, this authorization and direction is hereby specifically extended to authorize such officers to approve changes to any documents (including the Agreements) or closing certifications previously signed by County officers or employees, provided that such changes shall-not substantially alter the intent of such certificates from that expressed in the forms of such certificates as executed by such officers. Such officer's authorization of the release of any such document for delivery shall constitute conclusive evidence of such officer's approval of any such changes. 5. Resolutions as to tax matters — (a) The County's officers are hereby authorized and directed to deliver all certificates and instruments and to take all such firther action as they may consider necessary or desirable in connection with the execution and delivery of the Agreements and the consummation of the transactions contemplated thereby, including delivering a certificate setting forth the expected use and investment of the proceeds to be derived from the execution and delivery of the Agreement (the "Proceeds"), and to make any elections such officers deem desirable regarding any provision requiring rebate of earnings to the United States, for purposes of complying with the provisions of the Internal Revenue Code of 1986, as the same may be amended through the closing date, including applicable 'Treasury regulations (the "Code"). applicable to "arbitrage bonds." (b) The County shall not take or omit to take any action the taking or omission of which will cause its obligations to pay InstaUnxm Payments(the "Obligations")to be "arbitrage bonds," within the meaning of Code Section 148, or otherwise cause interest components of Installment Payments to be includable in the gross income for Federal income tax purposes of the registered owners of the Obligations. Without limiting the generality of the foregoing, the County shall comply with any provision of the Code that may require the County to pay to the United States any part of the earnings derived from the investment of the Proceeds. The County shall pay any such required rebate from its general funds. (c) The County covenants that it shall not permit the Proceeds to be used in any manner that would result in(i) 5% or more of the debt service on the Obligations being directly or indirectly(A) secured by an interest in property, or (B)derived from payments in respect of property or borrowed money, being in either case used in a trade or business carried on by any person other than a governmental unit, as provided in Code Section 141(b), (ii) 5% or more of such Proceeds being used with respect to any "output facility" (other than a facility for the uL;2 i f 4 c furnishing of water), within the meaning of Code Section 141(b)(4), or(iii) 5% or more of such Proceeds being used directly or indirectly to make or finance loans to any persons other than a governmental unit, as provided in Code Section 141(c); provided, however, that if the County receives an opinion of bond counsel acceptable to BB&TLC that compliance with any such covenant is not required to prevent the interest components of Installment Payments from being includable in the gross income for Federal income tax purposes of the registered owners of the Obligations under existing law, the County need not comply with such covenant. (d) The County hereby designates the Obligations as "qualified tax-exempt obligations" for the purpose of Code Section 265(b)(3). The County represents and covenants as follows: (i) The County will in no event designate more than $10,000,000 of obligations as qualified tax-exempt obligations in 1996, including the Obligations, for the purpose of such Section 265(b)(3); (ii) Barring circumstances unforeseen as of the date of delivery of the Agreement, the County will not issue tax-exempt obligations itself or approve the issuance of tax-exempt obligations of any "subordinate entities," within the meaning of Code Section MOM. and all entities which issue tax-exempt obligations on behalf of the County and its subordinate entities, if the issuance of such tax-exempt obligations would, when aggregated with all other tax-exempt obligations theretofore issued in 1996 by the County and such other entities, result in the County and such other,entities having issued a total of more than$10,000,000 of tax-exempt obligations in 1996(not including "private activity bonds," within the means of Code Section 141, other than "qualified 501(eX3) bonds," within the meaning of Code Section 145), including the Obligations; and, (iii) The County has no reason to believe that the County and such other entities will issue tax-exempt obligations in 1996 in an aggregate amoum that will exceed such $10,000,000 limit; provided, however, that if the County receives an opinion of bond counsel acceptable to BB&TLC that compliance with any covenant set forth in(i) or(ii)above is not required for the Obligations to be qualified tax-eateaspt obligations, the County need not comply with such covenant. 6. elJosrsous pmr1skm — All other actions of County officers in conformity with and fuardterance of the purposes of this resolution are hereby ratified, approved and confirmed. All other resolutions or parts thereof in conflict with this resolution are hereby mpcalod, to the extent of the conflict. This resoh"n shall take effect inwaediately. e S r EXHIBIT A Draft DOCZiUletftS (a) A draft dated November 26, 1996, of a Deed of Trust and Financing Agreement to be dated as of December 1, 1996 (the "Financing Agreement"), between the County and BB&TLC, providing for BB&TL.0 to finance the County's undertaking of the Project. (b) A draft dated November 26, 1996, of an Escrow Agreement to be dated as of December 1, 1996, from among the County, BB&TLC and an escrow agent, providing for the custody of financing proceeds pending their use on Project costs. (c) A draft dated November 26, 1996, of a Lease to be dated as of December 1, 1996, providing for the County to lease the New School to the Board of Education for the Chapel Hill - Carrboro School Administrative Unit (the "School Board"); and (d) A draft dated November 26, 1996, of an Agency Agreement to be dated as of December 1, 1996, providing for the School Board to undertake the acquisition and consmwtion of the New School as the County's agent. aa:z9ez� TOTAL P.05