HomeMy WebLinkAboutAgenda - 03-06-2014 - 6k 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: March 6, 2014
Action Agenda
Item No. 6-k
SUBJECT: Approval of Financing Arrangement for Eno Fire & Emergency Services, 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 Eno Fire & Clarence Grier, (919) 245-2151
Emergency Services, Inc.
Fire Chief
Attachment 2. January 14, 2014 Public
Hearing Notice
Attachment 3. January 14, 2014 Public
Meeting Notes
Attachment 4. Fire Service Agreement
Attachment 5. Certificate of Approval
PURPOSE: To approve a request from Eno Fire & Emergency Services, 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 Budget
Office, Bryan Baker, Fire Chief of Eno Fire & Emergency Services, Inc., indicated the
department's intent to purchase a replacement Tanker truck. The department will replace its
current 1983 Ford Tanker truck. The Fire Chief confirmed that the department went through a
competitive bid process and awarded the bid to Houston Galveston Area Contract (HGAC).
The purchase price of the truck, including equipment, totals $279,886. As per Attachment 1,
the Department's Board of Directors has applied for a loan of $210,000 through the Local
Government Federal Credit Union Commercial Loan program, and plans to use $70,000 as a
down payment for the truck from the Department's Truck Fund reserves. The interest rate for
the 10-year loan is 2.75% with monthly payments of $2,003.63. The total repayment, including
principal and interest, equals $240,435.60. It is important to note that these figures may vary
slightly depending upon the actual loan closing date.
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.
2
• Conduct a public hearing — On January 14, 2014, 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, Eno Fire & Emergency
Services, 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
$450,712 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 Eno Fire & Emergency Services, 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.
lAttachment 11 3
99M ENO FIRE & EMERGENCY SERVICES INC.
5019 U.S. HIGHWAY 70 W
T7 DuRHAm, NC 27705-9029
(919)383-5967
Bryan Baker-Fire Chief Keith Hayes-Oeputy Chief' Scutt Bell-Assistant Chief
2/20/2014
Paul Laughton
Orange County Budget Office
P.O. Box 8 181
I-lillsborough, NC 27278
Dear Paul,
It is the intent of Eno Fire and Emergency Services, Inc. to purchase a replace tanker.
This tanker will replace a 1983 Ford Tanker currently housed at our Station 2. Eno
Fire and Emergency Services, Inc. has money set aside in a truck fund and has
budgeted $125,000 this year to apply to the loan once the truck has been received.
Currently,we are in a USDA grant process through.Piedmont Electric for an interest
free loan. If awarded,we would be funded through the grant process with a zero
percent interest. We have been approved for this grant through Piedmont Electric
but are awaiting approval from the USDA. We will know by the time of delivery if we
have been awarded the loan or not.
Our contingency plan is to apply for a loan through the Local Government Federal
Credit Union Commercial Loan Program. If this avenue is chosen, Eno will use
$70,000 from our Truck Fund as a down payment to make the loan amount
$210,000 over a ten year period with a fixed interest rate of 2,75%.Thank you for
your support and attention to this matter.
Sincerely,
13 an aker
Fire Chief
Eno Fire&Emergency Services
5019 US Highway 70 W
Durham, NC 27705
Cc:Wayne Paschall, President Eno Fire and Emergency Services, Inc.
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Attachment 2
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Attachment 3
ENO FIRE DE1'ARTMEN'r
Elliptical Tanker Purebase Public Rearing
Minutes for.lanuaq 14,2014
Board Treasurer Tammy Darker opened the tineeting for business B:QQpm.
Attendee's: Bryan Baker, Tanury Parker, Keith Hayes.Daylon Haves,Chad Parker, Daniel Bass
No e.i.tizens attended the meeting.
Meeting closed at 7:00prn.
6 ;
Attachment 4
Fire Service Agreement
This agreement, dated this day of , 20 , by and
between Eno Fire & Emergency Services, 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 Eno 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
7
Attachment 5
Certificate o 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 Eno Fire & Emergency Services, Inc.,
a commercial loan by the Local Government Federal Credit Union
for the amount of $210,000 to finance a Tanker truck to be located in
Durham, NC 27705.
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