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HomeMy WebLinkAboutAgenda - 06-24-2008-4gORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: June 24, 2008 Action Agenda Item No. __~' ` J SUBJECT: Proposed Financing for Animal Shelter and Solid Waste Equipment DEPARTMENT: Finance PUBLIC HEARING: (Y/N) No ATTACHMENT(S): INFORMATION CONTACT: Resolution Supporting Application to the LGC for Approval of Installment Gary Humphreys, 919-245-2453 Financing Robert Jessup, 919-755-1800 PURPOSE: To consider adopting a resolution required by the Local Government Commission (LGC) for approval of the acquisition of financing needed for construction of the Animal Services Facilities and to reimburse the County for Solid Waste equipment that has been recently purchased, BACKGROUND: The proposed financing is a part of the planned financings to be issued ~in Fiscal Year 2008-09 that have been previously been discussed by the Board of County Commissioners. On February 19, 2008, the Board approved a contract for site preparation for the Animal Services Facility and a reimbursement resolution authorizing the issuance of a maximum of $8 million of non-general obligation debt (alternative financing) to pay for the costs of this project. At its June 3, 2008 meeting, the Board approved the contract for construction of the Animal Services Facility. On February 19, 2008, the Board authorized the purchase of two front loading garbage trucks at a total cost of $401,592. On April 1, 2008, the Board approved the purchase of a landfill compactor at a cost of $645,222 along with a reimbursement resolution authorizing financing. This proposed financing of $9.3 million will require approval of the LGC. The requested Board action is the initial step in the LGC approval process and involves the adoption of the attached resolution. The resolution accomplishes several purposes that include: • Authorizing County Staff to pursue the LGC application process; • Authorizing County Staff to solicit financing proposals; and • Directing staff to arrange for a public hearing on the proposed financing (proposed public hearing date is August 19, 2008). If the Board approves the resolution, staff will proceed to solicit proposals from institutions interested in providing the County with financing for the project. The financing related to the Animal Shelter will be for a period not to exceed 20 years. The Solid Waste equipment financing will be for a period not to exceed 59 months. The recommended financing proposals will be 2 presented for approval on August 19, 2008. The County will present the proposed financing to the LGC for approval at its September 2, 2008 meeting. Closing of the financing should occur within the following ten days. FINANCIAL IMPACT: The financing will increase the debt of the County by an amount not to exceed $9.3 million. Interest on the financing is estimated to be $4.033 million for a total of $13.332 million in debt service. There will be no debt service payments in Fiscal Year 2008-09 and therefore no impact on the Fiscal Year 2008-09 tax rate. It is estimated that the debt service payments will require a tax increase of not more than .69 of one cent in Fiscal Year 2009-10. RECOMMENDATION(S): The Manager recommends that the Board adopt the accompanying findings resolution related to the financing. Resolution supporting an application to the Local Government Commission for its approval of a financing agreement for Orange County WHEREAS, The Board of Commissioners of Orange County has previously determined to undertake (a) the acquisition and construction of a new animal services building, and (b) the acquisition of new landfill equipment. The Board has previously determined to finance costs for these projects by the use of an installment contract, as authorized under Section 160A-20 of the North Carolina General Statutes. Under the guidelines of the North Carolina Local Government Commission, this governing body must make certain findings of fact to support the County's application for the LGC's approval of the County's proposed financing arrangements. THEREFORE, BE IT .RESOLVED by the Board of Commissioners of Orange County, North Carolina, as follows: (a) The County makes a preliminary determination to finance project costs, as follows: Component Estimated Maximum Amount Animal services building Landfill equipment Total $8,000,000 1,300,000 $9,300,000 The Board will determine the final amount to be financed by a later resolution. The total amount financed may reflect adjustments to the amounts listed above and may include amounts for financing costs. (b) The Finance Officer is authorized and directed to take all appropriate steps toward the completion of the financing, including (i) completing an application to the LGC for its approval of the proposed financing, and (ii) soliciting one or more proposals from financial institutions to provide the financing. BE IT FURTHER .RESOLVED that the Board of Commissioners makes the following findings of fact: (a) The proposed projects are necessary and appropriate for the County under all the circumstances. The new animal services building is necessary to replace a facility that will no longer be available to the County. The landfill equipment will enhance service levels and the efficiency of landfill operations. 9sa6z~1 (b) The proposed installment financing is preferable to a bond issue for the same purposes. These projects are for discrete facilities and are for relatively small amounts. These projects therefore lend themselves to installment financing and are not particularly suitable for voter-approval bond financing. (c) The estimated sums to fall due under the proposed financing contract are adequate and not excessive for the proposed purpose. The County will obtain competitive lending proposals, and will closely review proposed lending rates against market rates with guidance from the LGC. All project costs to be financed will be based on approved bids for the construction and acquisition. (d) As confirmed to the Board at this meeting by the County's Finance Officer, (i) the County's debt management procedures and policies are sound and in compliance with law, and (ii) the County is not in default under any of its debt service obligations. (e) The County expects that the amounts required to repay the amounts financed for the projects will require the equivalent of a real property tax increase of approximately .69 cents. Such an increase is appropriate under all the circumstances, given the need for the projects. In addition, the County expects that debt service related to the landfill equipment will be paid from the County's solid waste enterprise fund. (f) The County Attorney is of the opinion that the proposed projects are authorized by law and are purposes for which public funds of the County may be expended pursuant to the Constitution and laws of North Carolina. BE IT FURTHER RESOLVED as follows: (a) The County intends that the adoption of this resolution will be a declaration of the County's official intent to reimburse project expenditures from financing proceeds. The County intends that funds that have been advanced for project costs, or which may be so advanced, from the County's general fund, or any other County fund, may be reimbursed from the financing proceeds. (b) The Board will hold a public hearing on this matter. The County Manager is authorized and directed to set the date and time of the hearing, and the Clerk to this Board is authorized and directed to publish a notice of such public hearing in the manner provided for by law. (c) This resolution takes effect immediately. ~ ~ ~ ~ ~ ~ ~ I certify that the foregoing resolution was duly adopted at a meeting of the Board of Commissioners of Orange County, North Carolina, duly called and held on June 24, 98262v1 5 2008, and that a quorum was present and acting throughout such meeting. Such resolution remains in full effect as of today. Dated this day of , 2008. [SEAL] Donna Baker Clerk, Board of Commissioners Orange County, North Carolina 98262v1