HomeMy WebLinkAboutAgenda - 03-06-2014 - 6j 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: March 6, 2014
Action Agenda
Item No. 6-j
SUBJECT: Approval of Financing Arrangement for New Hope Volunteer Fire Department
of Orange County, Inc. to Purchase a Replacement Tanker Truck
DEPARTMENT: Finance and Administrative PUBLIC HEARING: (Y/N) No
Services
ATTACHMENT (S): INFORMATION CONTACT:
Attachment 1. Letter from New Hope Clarence Grier, (919) 245-2151
Volunteer Fire Department
of Orange County, Inc.
Board of Directors
President
Attachment 2. October 7, 2013 Public
Hearing Notice
Attachment 3. October 7, 2013 Public
Meeting Notes
Attachment 4. Fire Service Agreement
Attachment 5. Certificate of Approval
PURPOSE: To approve a request from New Hope Volunteer Fire Department of Orange
County, Inc. to enter into a financing arrangement to purchase a Tanker truck, and authorize the
Board of Commissioners' Chair to sign the appropriate documents related to the financing
arrangement.
BACKGROUND: In the attached letter (Attachment 1) addressed to Orange County Financial
Services, Howard Pratt, Board President of New Hope Volunteer Fire Department of Orange
County, Inc., indicated the department's intent to purchase a replacement Tanker truck. The
department will replace its current aging Tanker truck. The Fire Chief confirmed that the
department went through a competitive bid process and awarded the bid to 4 Guys Fire Trucks.
According to Attachment 1, the purchase price of the truck totals $261,996. The Department's
Board of Directors agreed to borrow $160,000 from the Local Government Federal Credit Union
and to pay approximately $100,000 as a down payment for the truck from the Department's
Capital Reserves. The interest rate for the 10-year loan is 2.75% percent with monthly
payments of approximately $1,526.58. The total repayment, including principal and interest,
equals $183,189.60. It is important to note that these figures may vary slightly depending upon
the actual loan closing date.
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Section 147 of the Internal Revenue Code of 1986 outlines specific steps that must occur when
a tax supported fire department enters into a financing arrangement.
• Conduct a public hearing — On October 7, 2013, the department held a public hearing
regarding the purchase. The Department advertised the hearing in the News of Orange
(Attachment 2 of this abstract). Per Attachment 3 of this abstract, no residents were
present at the hearing and the Department did not receive any written comments from
residents of the district.
• Obtain approval of the "applicable elected representatives" — In accordance with
Section 147, the Board of County Commissioners must approve the District's plan to
enter into the debt arrangement. This approval does not create liability on the part of
Orange County nor does it make the County responsible for the repayment of any debt
assumed by the fire district. The approval provides a mechanism for the Commissioners
to acknowledge that, through this financing arrangement, New Hope Volunteer Fire
Department of Orange County, Inc. is pledging use of the District's tax dollars to repay
the loan. In order to comply with this IRS requirement, the Chair of the Commissioners
must sign the Fire Service Agreement (Attachment 4) and Certificate of Approval
(Attachment 5).
FINANCIAL IMPACT: The department's major revenues consist of County fire district taxes.
According to the district's June 30, 2013 financial statements, the district received about
$644,023 during fiscal year 2012-13 from fire district tax revenues and other miscellaneous
revenue.
RECOMMENDATION(S): The Manager recommends that the Board:
1. Approve a request from New Hope Volunteer Fire Department of Orange County, Inc. to
enter into a financing arrangement with the Local Government Federal Credit Union to
purchase a Tanker truck; and
2. Authorize the Board of Commissioners' Chair to sign the appropriate documents related
to the financing arrangement.
Attachment 1
Street Address(Station 1) Mailing Address:
AN 4012Whitfield Road P.O.Box 16484
Chapel Hill,NC 27514 Chapel Hill,NC 27516
€4: Phone:(919)493 1409 www.newhopefire corn
Fax (919)419-0241
New Hope Volunteer Fire department of Orange County, Inc.
February 2,2014
Mr. Paul Laughton
Orange County Financial Services
P.O. Box 8181
Hillsborough, NC 27278
Dear Paul,
The New Hope Volunteer Fire Department of Orange County, Inc., is in the process of purchasing a
new elliptical tanker to replace an aging tanker that has been sold due to reoccurring mechanical
problems. Specifications for a new tanker were written and sent to five vendors for bids. Four
vendors submitted bids and 4 Guys Fire Trucks was the low bid and selected as the vendor for the
purchase.
The bid cost of the new tanker was$261,996.00. The New Hope Fire Department Board of Directors
approved the 4 Guys bid and has authorized the president to sign the contract with 4 Guys. The
department will make a down payment of up to $100,000 and will finance approximately $160,000
from the Local Government Federal Credit Union. The terms of the loan is for 10 years with semi-
annual payments with a 2.75% interest rate. These figures may vary slightly depending on the actual
closing costs date.
A public hearing was advertised in the New of Orange and the public hearing was held on October 7,
2013. No residents were present and no written comments were received. The fire Department is
requesting that the County Commissioners approve the financing arrangements to purchase the new
tanker in order to meet the IRS Codes when a tax supported fire department enters into a financing
arrangement. The public hearing notice, minutes of the public hearing and the board of directors loan
authorization resolution are attached.
If you have questions or need additional information, please contact me at 919- 351-2423 or by email:
howard.prattCcD-newhopefire.com.
Thank you,
Howard Pratt,President
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�► t_GFcu
BE IT RESOLVED,that the Board of N—Hope Volunteer Fire Department at orange County as approved
the motion to seek financing in the amount of$ 160,000.00 through LGFCU
Commercial Lending' for the purchase or refinancing of 2014 4 Gays Tanker for a
term of 10 years to be repaid at a rate of 2.75 % percent.
BE IT FURTHER RESOLVED, that the following representative(s) are hereby authorized to
sign all documents necessary to execute this transaction:
Howard Pratt President
Name and Title Name and Title
Mike Tapp Chief
Name andTitle Name and Title
Board Members Present:. Cliff Carroll Vice President Gorue Goldbeck Board Member
Brian Blalock Treasure Rik Tyndall Board Member
Justin Tillett Secretary
David Hunt Board Member
Date an attested this 7 day of October 2013 2 ��"
Secret
LGFCU Commercial Lending is a division of LGFCU Financial Partners,LLC
Q LGFCU Member Share Account(organizational) For the latest rate'information
Q Financial Statements(most recent 2 years and interim statements) please speak to one of our
Board Resolution Authorizing Loan Commercial Loan Officers at
Copy of Bylaws and Articles of Incorporation 800.844.4846.
Proof of Insurance
Copy of Contract(purchase, real estate, construction)
Copy of Funding Agreement with town or counter if applicable
❑ Construction Financing
a Performance Bond
Licensed Contractor(license based on project size)
ism.
5
Attachment 2
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CORREcnoN5:itisthepnikyattlieNewsc Orange
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Public Notice CHOOSE_
Public notice is hereby given that the New Hope Volunteer Fire
,�
an Mond t of orange County,Inc. wit!hnid a public hewing ay,October 7, 2(113 at the fire department located at
E F
= 4012 Whitfield Road,Chapel lilt,NC at 7:3gpm pursuant to the
- requirements of Section 147M of the internal Revenue Code,on
a.prvposal that the fire enter into a term barn in order •WORKERS'COI
to finance the purchase of new equipment The equipment lO •BUSINESS LAV
s be financed is a new 4 Guys Elliptical Tanker,to be used for
fire protection services. Td finance the casts and expenses • PERSONAL{N}l
z'
incidental to financing, file buyer proposes to enter into a
�: term loan agreement in the principal amount o€approximately
•11Vius&ESTA
si6o,000.00. The buyer shall be required to pay all expenses
of the operating,maintaining the equipment,pay al!taxes on
the equipment and maintain insurance on the equipment All
persons interested may appear at the public hearing or file
written comments with the department prior to the hearing.
Howard Pratt,President NC3 C
Mike Tapp,Fire Chief
0 MOM,
Attachment 3 1 6
New Hor{ Street Address{Station 1): Mailing Address:
4012 Whitfield Road P.O.Box 16484
Chapel Hit NC 27514 Chapel till,NC 27516
Phone:(919)493-1041 www.newhopefire.com
Fax (919)419-0241
New Hope Volunteer Fire Department of Orange County, Inc.
Public hearing for the new NHFD Tanker was opened up at 7:36 PM at NHFD Station 1.
The following people were present.
• Mike Tapp
• Howard Pratt
• David Hunt
• Justin Tillett
• Rik Tyndall
• George Goldbeck
• Cliff Carroll
• Brian Blalock
• Shane Cannada
• Jason Hackler
• Eddie Walker
The meeting was closed at 7:45 PM having no other community members attending.
Respectfully submitted,
Justin Tillett, Board Secretary
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Attachment 4
Fire Service Agreement
This agreement, dated this day of 20 , by and
between New Hope Volunteer Fire Department of Orange County, Inc., a body
corporate organized under the Laws of the State of North Carolina, the ("Fire
Department"), and Orange County, a body politic, the ("Political Subdivision").
WHEREAS, Fire Department is a not for profit organization duly authorized for
the purpose of providing firefighting services in an area within the jurisdiction of
the Political Subdivision; and,
WHEREAS, the parties wish to enter into an agreement setting forth the area and
duties of the Fire Department.
NOW THEREFORE, the Fire Department and Political Subdivision do hereby
agree as follow:
1. Political Subdivision recognizes that Fire Department provides firefighting
services to the hereafter generally described area or areas:
2. The area in which Fire Department has primary firefighting responsibilities
(area of responsibility) is New Hope Fire District.
3. Political Subdivision shall not be liable or responsible for the conduct and
activities of Fire Department.
IN WITNESS WHEREOF, the parties have had this agreement executed by duly
authorized representatives thereof.
Eno Fire & Emergency Services, Inc.
By
Name
Title
Orange County
By
Name
Title
8
Attachment 5
C 00%
■
ertificate of rova
Approval of Chief Elected Official of
Orange County
I, chair of the Board of
County Commissioners of Orange County, pursuant to the Internal
Revenue Code of 1986, as amended (the "Code") hereby approve,
authorize the entering into by New Hope Volunteer Fire Department
of Orange County, Inc., a commercial loan by the Local Government
Federal Credit Union for the amount of $160,000 to finance a Tanker
truck to be located in Chapel Hill, NC 27514.
Execution of this document in no way creates liability on the part of
Orange County and Orange County is not responsible for the
repayment of any loan pursuant hereto.
By:
Title
Date