HomeMy WebLinkAboutAgenda - 12-10-2013 - 6g 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: December 10, 2013
Action Agenda
Item No. 6-g
SUBJECT: Adoption of the Final Financing Resolution Authorizing the Issuance of
$10,500,000 of Installment Financing to Finance Various County and School
Capital Investment Plan Projects and County Equipment
DEPARTMENT: Finance and Administrative PUBLIC HEARING: (Y/N) N�
Services
ATTACHMENT(S): INFORMATION CONTACTS:
1. Listing of Projects to be Financed Clarence Grier, 919-245-2453
2. Bid Summary and Debt Service Robert Jessup, 919-933-9891
Schedule
3. Resolution Approving Financing
Terms and Documents for 2014
Installment Financing
PURPOSE: To adopt the final financing resolution authorizing the issue of $10,500,000 of
installment financing to finance various County and School Capital Investment Plan Projects and
County equipment.
BACKGROUND: During its November 5, 2013 meeting, the Board of County Commissioners
approved the financing of various County and School Capital projects and County equipment
(Attachment 1).
Staff requested and received bids for the proposed installment financing from the following
financial institutions-
1. SunTrust Institutional and Government Inc.
2. Bank of America Public Capital Corp
3. PNC Bank
4. First Tennessee Bank
Bank of America was selected as the financially responsive and financially responsible bidder.
The financing agreement will be subdivided into two installment financing agreements: one for
the financing of the capital investment projects and one for the financing of the equipment.
The financing terms of the two installment financing agreements will be follows:
2
1. Installment Financing Agreement 1 — Capital Projects - $8.16 million in total debt service,
Interest Rate — 2.41%, Average debt service over 15 years totals $544,252.
2. Installment Financing Agreement 1 — Equipment - $3.88 million, Interest Rate — 1.24%,
Average debt service over 5 years totals $776,537.
Total debt service will average $803,098 over the term of the installment financing agreements.
FINANCIAL IMPACT: There will be a financial impact in proceeding with the financing. The
maximum annual debt service applicable to the County and School capital investment projects
financing would require $646,920, and $796,415 for the equipment financing in fiscal year 2014-
15. The total combined debt service for the fiscal year 2014 — 2015 for this financing would be
$1,443,335.
RECOMMENDATION(S): The Manager recommends the Board approve the resolution
authorizing the steps to move forward with the financing of the stated capital project and
equipment financing.
3
Attachment I —Proposed Projects
Project Estimated Amount Description
Culbreth Middle School Science Science Wing for Chapel Hill
Wing $ 4,971,676 —Carrboro City Schools
$ 130,000 Community Geothermal
HVAC Projects Projects
Roofing Projects $ 115,000 County
Equipment, BOCC Initiatives,
Firehouse Software and
Information Technology $ 1,436,000 Central Permitting Software
Whitted Building Renovations $ 1,700,000 BOCC Meeting Room
Additional Channels for
Existing Towers increase the
Viper Radio System $ 500,000 Viper System capacity
Communication System
Improvements $ 709,062 Purchase of additional Viper
Radios
Vehicle Replacements $ 899,416 Vehicles Purchases
Attachment 2
orange County, NC
70131PC
FIRST
NTE Amount
3736000
10461,154
10,461,154
3736,000
3736,000
Term
60 Months
180 Months
180 Months
5 years
5 y....
Interest Mode
Fixed through maturity
Fixed through Maturity
Fixed through Maturity
Fimal Maturity
2/1/2019
2/1/2029
2/1/2029
2/1/2019
2/1/2019
interest Rate
1.24%
2.41%
1.24% /2.41 %Blend
1.44%
1.59%
Optional Call Provisions
Prepayment without
Prepayment without
Prepayment without
Prepayment without penalty at anytime
Prepayment im whole with 3 % penalty
om any
penalty at anytime
penalty at anytime
penalty at anytime
Subjet to Make -whole payments
payment date beginning 2nd anniversary
(with 30 days notice)
(with 30 days notice)
(with 30 days notice)
of lease commencement
om any payment date
after half the term has elapsed
after half the term has elapsed
om any payment date
om any payment date
Bank / Legal Fees
None
$7,500 Legal Fee
$7,500 Legal Fee
Not to exceed $3,500 Attorney's fees
$1,500 Legal Costs
Offer Expiration
Offer must be accepted by November 29, 2013
Offer must be accepted by December 11, 2013
Offer must be accepted by January
], 2013
Other
None Specified
Must maintain Borrower's LT GO Debt Rating by
None
Moody's at Al , o better and Borrower's LT Debt
Rating by S &P at A+ or better
Not a commitment to lend. Bank must complete due
diligence
Estimated Debt Service
FY 15
796,414.83
1,491,207.89
1,443,334.61
804,384.96
811,225.64
FY 16
]85,063.60
1,443,817.00
1,407,921.40
791,041.60
795,525.10
FY 17
774,788.40
1,414,463.20
1,387,541.50
779,270.40
782,631.90
FY 18
770,157.00
1,385,109.40
1,367,161.60
768,513.60
770,754.60
FY 19
756,262.80
1,355,755.60
1,346,]81.]0
757,756.80
758,877.30
FY 20
559,401.80
559,401.80
FY 21
548,532.70
548,532.70
FY 22
536,663.60
536,663.60
FY 23
525,818.60
525,818.60
FY 24
514,973.60
514,973.60
FY 25
504,128.60
504,128.60
FY 26
492,283.60
492,283.60
FY 27
481,462.70
481,462.70
FY 28
470,641.80
470,641.80
Fy 29
459,820.90
459,820.90
Total
3,882,686.63
12,184,080.99
12,046,468.]1
3,900,967.36
3,919,014.54
Attachment 2
orange County, NC
20131PC
SLNTRc
CA NIIIH -rF
NTE Amount
6 864,000
6 864,000
10,461,154
3,]36,000
Term
5 Vears
15 Vears
15 Vears
15 Vears
Interest Mode
Fixed through Maturity
Fixed through Maturity
Final Maturity
2/1/2019
15Y ... s from Closing
15 Vears from Closing
Interest Rate
1.51% 1.71%
2.70%
2.87%
3.02%
3.21%
1.51% / 2.70% Blend
Optional Call Provisions
Prepayment m any payment Prepayment m any
payment
Prepayment m any payment Prepayment
m any payment
Prepayment m any payment
Prepayment m any payment
Prepayment m any payment
date at 101 % of par date at par
date (make whole)
date at par
date (make whole)
date at par
date (make whole)
Bank / Legal Fees
$5,000 Document Review Fee +$500 STEEL Fee
$5,000 Document Review Fee
$5,000 Document Review
Fee
$500 STE FL Fee
Offer Expiration
Offer must be accepted by November 26, 2013 and close by January
], 2013
Offer must
be accepted by November 26, 2013 and close
by January ], 2013
Other
An escrow set up fee of $250 will be assessed.
Estimated Debt Service
FY 15
829,]85.1]
837,968.64
645,428.80
65],6]0.61
668,536.64
682,222.72
1,4]5,213.9]
FV 16
813,326.80
819,462.80
621,100.00
631,810.00
641,320.40
653,294.20
1,434,426.80
FV 17
801,]45.10
806,34].10
608,923.00
618,866.30
62],]00.20
638,81].10
1,410,668.10
FV 18
]90,163.40
]93,231.40
596,]46.00
605,922.60
614,080.00
624,340.00
1,386,909.40
FV 19
]]8,581.]0
]80,115.]0
584,569.00
592,9]8.90
600,459.80
609,862.90
1,363,150.]0
FV 20
5]2,392.00
580,035.20
586,839.60
595,385.80
572,392.00
FV 21
559,215.00
566,091.50
5]3,219.40
580,908.]0
559,215.00
FV 22
54],065.00
553,1]6.50
558,599.20
565,431.60
54],065.00
FV 23
534,915.00
540,261.50
5451009.20
550,986.60
534,915.00
FV 24
522,]65.00
52],346.50
531,419.20
536,541.60
522,]65.00
FV 25
509,615.00
513,431.50
51],829.20
522,096.60
509,615.00
FV 26
49],492.00
500,545.20
503,239.20
506,651.60
49],492.00
FV 27
485,369.00
48],658.90
489,6]9.40
492,238.]0
485,369.00
FV 28
4]3,246.00
4]4,]]2.60
4]6,119.60
4]],825.80
4]3,246.00
FY 29
461,123.00
461,886.30
462,559.80
463,412.90
2ff116!
461,123.00
Total
4,013,602.17
4,037,125.64
8,219,963.80
8,312,454.11
8,396,610.84
1250
12,233,565.9]
Attachment 2
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Attachment 3
RES-2013-111
Resolution Approving Financing Terms and Documents
For 2014 Installment Financing
WHEREAS--
Orange County has previously determined to carry out a plan (the "Project") to
acquire, construct and finance various public improvements as identified in the County's
capital improvement plan, including a new science wing for Culbreth Middle School and
the other projects and improvements shown on Exhibit A.
The County has solicited competitive proposals from financial institutions to
provide the financing, and Banc of America Public Capital Corporation (the "Lender")
has submitted the best proposal.
The County's Finance Officer has made available to this Board the draft
agreements listed on Exhibit B (the "Agreements"), which relate to the County's carrying
out the financing plan.
This resolution provides the County Board's final approval of the financing terms
and documents for the financing of the Project.
BE IT THEREFORE RESOLVED by the Board of Commissioners of Orange
County, North Carolina, as follows:
1. Determination To Proceed with Financing — The County confirms its
plans to undertake the Project. The County will carry out the plan with financing from the
Lender, substantially in accordance with the Lender's financing proposal.
Under the financing plan, the Lender will make funds available to the County for
use on Project costs. The County will repay the amount advanced, with interest, over
time. The County will grant to the Lender a mortgage-type interest in Culbreth Middle
School to secure the County's repayment obligation. As part of this financing plan, the
Chapel Hill — Carrboro Board of Education will transfer the school property to the
County.
2. Approval of Agreements; Direction To Execute Agreements -- The Board
approves the forms of the Agreements submitted to this meeting. The Board authorizes
the Board's Chair and the County Manager, or either of them, to execute and deliver the
Agreements in their final forms. The Agreements in their respective final forms must be
1
8
Attachment 3
in substantially the forms presented, with such changes as the Chair or the County
Manager may approve. The execution and delivery of any Agreement by an authorized
County officer will be conclusive evidence of such officer's approval of any such
changes.
The Agreements in final form, however, must be consistent with the financing
plan described in this resolution and must provide (a) for the amount financed by the
County not to exceed $10,600,000, (b) for an annual interest rate not to exceed 2.75% (in
the absence of default, or a change in tax status), and (c) for a financing term not to
extend more than 15.5 years from the funding date.
3. Officers To Complete Closing— The County Manager, the Finance Officer
and all other County officers and employees are authorized to take all proper steps to
complete the financing in cooperation with the Lender and in accordance with this
resolution.
The Board authorizes the Finance Officer to hold executed copies of all financing
documents authorized by this resolution in escrow on the County's behalf until the
conditions for their delivery have been completed to his satisfaction, and thereupon to
release the executed copies of the documents for delivery to the appropriate persons or
organizations.
Without limiting the generality of the foregoing, the Board specifically authorizes
the Finance Officer (a) to approve and enter into additional agreements to carry out the
financing contemplated by this resolution, including agreements for the custody of
financing proceeds and agreements for appropriate professional services, and (b) to
approve changes to any documents previously signed by County officers or employees,
provided that the changes do not contradict this resolution or substantially alter the intent
from that expressed in the form originally signed. The Finance Officer's authorization of
the release of any document for delivery will constitute conclusive evidence of his
approval of the final form.
In addition, the Finance Officer is authorized to take all appropriate steps for the
efficient and convenient carrying out of the County's on-going responsibilities with
respect to the Project. This authorization includes, without limitation, contracting with
third parties for reports and calculations that may be required under this resolution or
otherwise with respect to the financing.
4. Acceptance of Property Transfer — The County agrees to accept title to the
Culbreth School and its associated real property to facilitate the financing arrangements
contemplated by the Agreements.
2
9
Attachment 3
5. Lender May Act through Affiliates -- The Finance Officer may approve
entering into the Agreements with an affiliate of the Lender if the Lender requests a
change.
6. Resolutions as to Tax Matters -- The County will not take or omit to take
any action the taking or omission of which will cause its obligations to pay principal and
interest (the "Obligations") to be "arbitrage bonds," within the meaning of Section 148 of
the "Code" (as defined below), or "private activity bonds" within the meaning of Code
Section 141, or otherwise cause interest components of the installment payments to be
includable in gross income for federal income tax purposes. Without limiting the
generality of the foregoing, the County will comply with any Code provision that may
require the County at any time to pay to the United States any part of the earnings derived
from the investment of the financing proceeds. In this resolution, the Code" means the
United States Internal Revenue Code of 1986, as amended, and includes applicable
Treasury regulations.
7. Miscellaneous Provisions -- All County officers and employees are
authorized to take all such further action as they may consider necessary or desirable in
furtherance of the purposes of this resolution. All such prior actions of County officers
and employees are ratified. Upon the absence, unavailability or refusal to act of the
County Manager, the Chair or the Finance Officer, any other of such officers may assume
any responsibility or carry out any function assigned in this resolution. In addition, the
Vice Chair or any Deputy or Assistant Clerk to the Board may in any event assume any
responsibility or carry out any function assigned to the Chair or the Clerk, respectively, in
this resolution. All other Board proceedings, or parts thereof, in conflict with this
resolution are repealed, to the extent of the conflict. This resolution takes effect
immediately.
3
10
Attachment 3
Exhibit A — proposed proiects
Project Estimated Amount ($)
Culbreth Middle School Science Wing 4,971,676
addition—construction and equipping
HVAC projects 130,000
Roofing projects 115,000
Information technology (including firehouse 1,436,000
software and central permitting software
Whitted Building —renovation costs and 1,700,000
recapture of planning costs
VIPER radio system 500,000
Communication system improvements 709,062
Vehicle replacements 899,416
TOTAL 10,461,154
The County also expects to use additional financing proceeds to pay financing
expenses.
4
11
Attachment 3
Exhibit B -- draft aureements
(a) A draft dated November 26, 2013, of an Installment Financing Contract to
be dated on or about January 1, 2014 (the "Financing Contract"), between the County and
the Lender, providing for the advance of funds to the County for the County's
undertaking of the project, setting out the County's repayment obligation and setting out
the County's obligations regarding care for the collateral and other matters.
(b) A draft dated November 26, 2013, of a Deed of Trust and Security
Agreement to be dated on or about January 1, 2014, from the County to a deed of trust
trustee for the Lender's benefit, providing for a security interest in Culbreth Middle
School, and its associated real property to secure the County's repayment obligations.
(c) A draft dated November 14, 2013, of a Lease to be dated on or about January
1, 2014, from the County to the Board of Education for the Chapel Hill — Carrboro City
Schools (the "School Board"), providing for the School Board's continued use of the
Culbreth Middle School property during the financing term.
(d) A draft dated November 14, 2013, of a Project Completion and Agency
Agreement to be dated on or about January 1, 2014, between the County and the School
Board, setting out their respective responsibilities for carrying out the acquisition and
construction of the new Culbreth science wing.
5