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HomeMy WebLinkAboutAgenda - 12-10-2013 - 5a 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: December 10, 2013 Action Agenda Item No. 5-a (Proposed) i SUBJECT: Public Hearing and 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: (YIN) Services ATTACHMENT(S): INFORMATION CONTACTS: 1.. Listing of Projects to be Financed Clarence Grier, 91.9-245-2453 2. Bid Summary and Debt Service Robert Jessup, 919-933-9891 Schedule 3. Resolution Approving Financing Terms and Documents for 2014 Installment Financing 3 PURPOSE: To: 1) Conduct a public hearing to receive public .comment on 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, including the proposed transfer of Culbreth Middle School, including the buildings and the related real estate, from the Chapel Hill - Carrboro City School Board to Orange County to facilitate the financing of a new science wing at the school; and 2) 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. i 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 2 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: 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. Additionally, under the installment financing method selected by the County, the financing will be secured by a mortgage on the school land and buildings. For the County to grant a mortgage and collateral, the County must.own the Culbreth Middle School and the proposed constructed Science Wing. The Chapel Hill — Carrboro City (CHCCS) School Boa-rd will-have to transfer the I property to the County for the financing. The Cou-nty will lease the property back to CHCCS for its use during the financing term, and the financing documents will provide for the school property to be returned to CHCCS when the financing is retired. The annual lease to CHCCS will be $1 per year. The CHCCS Board, at its meeting last week, approved the overall financing plan, including the transfer of the school property. State law provides that such a transfer can occur only after a public hearing. The resolution provides the County`s approval of the transfer, and provides approval of other financing terms and documents for the installment financing previously approved by the Board in principle. I FINANCIAL IMPACT": There is no financial impact related to this action. However, 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 conduct the public hearing, receive public comments, close the public hearing and approve the resolution authorizing the steps to move forward with the financing of the stated capital project and equipment financing. II 3 Attachment I —Proposed Projects Project Estimated Amount Description E 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 i i Attachment 2 0-91 County, NO 2sl 3 Ipc Nn Amount Bank UfArlaeica� so IT E, IaN F 5 S E 0 - Ot K S'D n 1:'NCBANK w wTom m,da Months 190 Months 160 Months 5 you. 3,736,0, 0Interest Final M.tuflty 211/2019 Flood through M,turMy 2/1 2029 211,12029 Flood tb'ough sy... Lh—Sh llta—LM. Opu ... i Call P—W.r' Prepayment without I.N%/ Z41% la,nd 211AD19 1,14% penalty -t """' Fro Pa VreenLyAthout P ... Ine at uqtl.a FrQaaVm.r t Oh.0 L Pne"Y—r wl th,ut p—ttv at RpVgm, P'ap�.r t In �ha IM 3% �4tyz (with 3C divy� ,otIcul ;lh3O days r.tl.,j P-11"t Y11— Wth Sod ..J[�aj S*J� to Wke-Whalt tuayments bola PWMe,L date oJnning 2nd rulc an any pyrrolnz data oiler huff the t,M hu &Lt,,jd after half the t— ht, Ilutuld or to.e ectrean",,n,ant on any payment data on any payment date Bank/ Lae.1 Fee. N... $7,500 Lopi Fee $7,500 Legal Fee Not to egeed 63,SOO AUtunty's rm SI'Son Loopt Cask orrw upinaVap Offer must be laorptad by NO zq, Zpja Offur MMt be accepted by D—mh�r 11, 2013 Other Biter —L be —pkd by junu.,, 7, wig None spa6fl.d Must malntain 3—oweea LT GO subt R,ti,g by None M-dy's at Al te batte-nd 90—ar's LT Debt Ruling by S&P pt,ot or betIcl- Not I warmIZ-1 to land. Bank mart Complete due Estimated Debt Service dillearoo FY is ry is 79' 414m 783,063.60 5"' 1,491AD7.99 1,443 334.61 ID1,1".11 PY 17 774'78SAO 11,443,817.00 4 '144 6' 3':"'D 1,407:SUAO N L 811,12$,64 7311525.I0 FY 18 " 11 770,15700 1'385'IltR.40 1,387,54150 77792, 9,270A 78LOLlto of 11 756,UIM ZASS,75S,60 1,346,731.70 768,513.60 A:7 7701754.60 FY 21 1:::IILII SS9,4021. a 757 56M 758,877.30 N22 1 '1471 548.53 0 Nza 536,6fi3.60 536'663.6p H24 525,81a 60 525413.60 F.2 514,973.60 514,973.60 1 y25 '04,12a." a ry 27 :0411u, 92,233.60 FY 2B 48IA62,70 AOIAV 70 ,y Z9 470,641.60 470.64160 Total 3,882686.63 939,8 ;0.90 12,184 060.99 459 820.40 12,046 4d &71 3 900987.36 3,914014.54 Orange C40nLY, NC Attachment 2 yl ?� .ritiv"I it1.4Sk" ]5 Ypry 15 Years Flied 111—sh Maturity 15 yeas from Clcsing 15 Years I— t3esln6 2,70°,4 x.67u 3.OZx 3.S1Y4 "Payment on any Payment Pr6Paymon1 on any paYm4nt PrepalYme0t on arty payment Pmpoymenl on any Peymcat d to (make whole) date at par date(mak4 whole) date at par 55,000 Ocaument 6ewlow Fee Oiler must ba aaepted by M—ber 16, 2013 and claw byl­ary 7,20U 13 16 u'SL85i�'74[1bT 857,568.54 '45'W Ai11d3,ti.. ", LFt rd0'k.lkwil)Sil1`t7,4.' I.l�di%16'aC�hilii�i Rmount 3,736,00 1 5 Years ut Mode Flknd utrough Maturity Maturlty za /2019 r,t law L51% L71% anal fall P—Ldl PrePaymenl en ary Pay—t PmPaymenl on any Payment 606,347,10 dale at 1079E of par dateatptr .1146al Fees $5,00004tumenl Review Fu 4 SSW 576FL Fec r Upiratlon Offer must lfea aceple d by ll—ber 16,2013 and dose byJanVary7, 2013 'r Rn eearawset up fee of $250 wpl be m—ad. Attachment 2 yl ?� .ritiv"I it1.4Sk" ]5 Ypry 15 Years Flied 111—sh Maturity 15 yeas from Clcsing 15 Years I— t3esln6 2,70°,4 x.67u 3.OZx 3.S1Y4 "Payment on any Payment Pr6Paymon1 on any paYm4nt PrepalYme0t on arty payment Pmpoymenl on any Peymcat d to (make whole) date at par date(mak4 whole) date at par 55,000 Ocaument 6ewlow Fee Oiler must ba aaepted by M—ber 16, 2013 and claw byl­ary 7,20U 13 16 BM 765.I7 857,568.54 645,476.80 691,670.61 17 813,326.80 819,962.80 631.108.00 631,111930 668 ,936.69 687.227.72 18 800,745.10 606,347,10 665,7x340 616,666.30 641,320.60 693,194,29 20 790,163,40 793,131.40 596,]4630 605,911.60 617,700.20 638,817.29 20 77a ,96170 780,7]5,70 564,569.00 591 614,090,Op 6x4,340.00 21 571,39100 ,9711.90 500,035.x0 600,459.80 566,639.:0 609,66190 59585.00 22 55921930 96639139 5]3,309.40 5H0.906.T9 23 547A5600 ari,176 0 556,s9s.x0 565,43179 24 534,915.00 540,261„50 545,909.70 550,9:6.50 25 :x7,7G&M 5x7,34650 531319.20 536.541.69 26 909,67,5,00 5]3,43150 517,62920 52x,096.60 27 497,492.110 50054520 603,739.79 SOkG5160 xR 485,36940 4`3,246.00 457,69890 463,679.40 49x,738.70 2q a7a,772,60 476,229.56 477,025.BP 13Yean 1,M/ 2.7079 81end pr {payrnent en any payment date {nuke whole} $5,900 C—ra na 11c -lcw Fae MDSTEFLFea 1,434,42680 2,410,fi66I0 7,585504.40 3,363,150.70 57x,39100 559,215.00 547,065.90 534.9]5.90 522,765.00 509,615.00 497,49190 4:3,304.90 473,24630 5 At t achrnent 2 Disclaimer The U.S. Securities and Exchange Commission (the "SEC ") has clarified that a broker, dealer or municipal securities dealer engaging in municipal advisory activities outside slid scope of underwriting a particular issuance of municipal securities should be subject to municipal advisor registration. 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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. I 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.. 1 E This resolution provides the County Board's final approval of the financing terms and documents for the financing-of the Project. I BE IT THEREFORE RESOLVED by the Board of Commissioners of Orange County, North Carolina, as follows: L 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. 3 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 time 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 II 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 belovv), 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. E Z 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 E resolution are repealed, to the extent of the conflict. This resolution takes effect immediately. I I j i 3 10 Attachment 3 Exhibit A— proposed projects i Project Estimated Amount(S) Culbreth Middle School Science Wing 4,971,676 addition—construction and equipping RVAC projects 130,000 Roofing projects 115,000 Information technology{including firehouse 1,436,000 software and central permitting software Whitted Build-ing—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 I The County also expects to use additional financing proceeds to pay financing expenses. 11 Attachment 3 Exhibit B draft agreements (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 undert,a ing 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 fmancing 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. 1 1 5