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HomeMy WebLinkAboutAgenda - 09-30-2014 - 6ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: September 30, 2014 11 Action Agenda Item No. 6 SUBJECT: Possible Bond Issuance for Mav 2016 or November 2016 Referendum DEPARTMENT: Finance and Administrative Services ATTACHMENT(S): a. Proposed Bond Schedules for a May 2016 or November 2016 Bond Referendum b. Chronological Summary of the Capital Needs Task Force c. Information on the Strategic Bond Education Committee PUBLIC HEARING: (Y /N) No INFORMATION CONTACT: Clarence Grier, 919 - 245 -2453 Bob Jessup, 919 - 933 -9891 PURPOSE: To receive a report on a possible May 2016 or November 2016 bond referendum and related schedules. BACKGROUND: In recent meetings over the past fiscal year, the Board of County Commissioners has discussed the need for a future bond referendum to fund some County and School long -range capital needs. This item was also discussed at the September 16 2014 County /School Collaboration Meeting. Due to recent changes enacted by the North Carolina General Assembly related to the dates in which a general obligation bond referendum can be held, a general obligation bond referendum can only be held on even numbered years. Therefore, there are only two possible dates for the Board of County Commissioners to conduct a voter approved general obligation bond referendum — May 2016 and November 2016. If not held at one of these dates, a potential general obligation bond referendum can only be held in May 2018 or November 2018. Bob Jessup, Orange County Bond Counsel, and Orange County staff have provided a schedule with a brief timeline comparison related to both dates (Attachment a). The previous time that Orange County held a general obligation bond referendum was in November of 2001. The bond referendum totaled $75 million and the items included on the referendum were as follows: • School related projects totaling $47 million. • Parks and Recreation projects totaling $20 million • Senior Center projects totaling $ 4 million • Low and moderate income projects (Affordable Housing) totaling $4 million 12 All of the individual items on the bond referendum passed in the November 2001 bond referendum. The total bond referendum passed with an average approval rate of approximately 55 percent. Additionally, some of the steps included in the process to prepare for the general obligation bonds referendum were as follows: 1. The Board of County Commissioners decided to proceed with a general obligation bond referendum. 2. The Board of County Commissioners formed and appointed members to a Capital Needs Task Force to make a recommendation as to the needs and components of the bond referendum (See Attachment b). 3. Once the components of the general obligation bond referendum were decided, the Board of County Commissioners appointed a Bond Education Committee to inform the public of the purpose of and the components of the general obligation bond referendum (Attachment c). Currently, the County and both School Districts (Chapel — Carrboro City Schools and Orange County Schools) have capital projects that would be included as part of the general obligation bond referendum. Moreover, both school districts have older facility needs totaling approximately $330 million that could potentially be addressed in part with a general obligation bond referendum. At the September 11, 2014 Board of County Commissioners Work Session, the recommended sizing of the potential general obligation bond referendum was discussed at a range between $100 and $125 million over a period of 20 years. At current AAA municipal bond interest rates, the total combined debt service for $100 million is estimated to be $6.1.million annually. This would represent 4.00 cents on the current property tax rate. At current AAA municipal bond interest rates, the total combined debt service for $125 million is estimated to be $7.6 million annually. This would represent 4.67 cents on the current property tax rate. Future debt capacity for a potential general obligation bond referendum can increase or decrease due to the following circumstances: • Future increases or decreases in interest rates • Future changes or modifications to the capital investment plans of the County and or both School Districts (individually or collectively) • Future changes of a legislative or regulatory nature FINANCIAL IMPACT: There is no direct financial impact associated with the attached report and calendar. RECOMMENDATION(S): The Manager recommends that the Board receive the report and calendar. The Board may choose to discuss the possible bond referendum at a future meeting. Attachment a 13 Sanford Holshouser LLP Memorandum To: Orange County Officials Date: September 15, 2014 Regarding Required Procedures and Possible Schedule for General Obligation Bond Referendum in May, 2016 or November, 2016 From: Sanford Holshouser LLP -- Robert M. Jessup Jr. This memorandum describes the steps required for Orange County to conduct a general obligation bond referendum on May 3, 2016, and sets out a proposed schedule. I have attached a schedule in table form that summarizes these steps. Please note that in general the dates indicated are the last available dates for the indicated action; steps can certainly be accomplished prior to the indicated deadlines. As we do not have an official Board meeting schedule for this time period, I have assumed Board meeting dates of the first and third Mondays of each month. Further, changes to State law may change some of the dates related to the May primary, and when the formal process begins we will make sure our calendar is consistent with the needs of the County's Board of Elections on items such as printing the ballots. Here are the required steps and suggested dates for action: 1. Determine tentative plan for bond purposes and amounts. Although Step 5 provides for the first formal Board action to determine what will be presented to the voters, the bond program needs to be substantially worked out before we begin the formal process. In addition, the plan for what projects are to be included in the bond package is something that LGC representatives will want to discuss in detail with County representatives as part of the meeting described in the next step. Each separate general purpose for bonds has to be the subject of a separate ballot question. The statutes assume that each question put to voters will propose a dollar amount for a separate generic purpose, such as paying "capital costs of school facilities. " Although the statutes allow the purpose to be stated with more 14 Sanford Holshouser LLP specificity, it is highly recommended that the purpose in the ballot question be left as general as possible. The more specific plans underlying the planning for the bond issue do not legally bind the County to a particular future plan of action in the issuance of the bonds or construction of specified facilities. 2. Give informal notice to the County Board of Elections. Because the Board of Elections will need to coordinate its own procedures for the bond referendum, it would help the Board of Elections to receive a phone call to inform the Board of the County's plans, even if the plans are still subject to change. In addition, State law generally requires that absentee ballots be available at least 50 days prior to the election date (in this case, by March 14), and we want to be sure that our schedule is generally acceptable to the Board of Elections. 3. Meet with LGC staff. The County should arrange a meeting with LGC staff about the proposed referendum. Although LGC staff would be happy to meet with County staff at any time, it would probably be most efficient to schedule this meeting close to the completion of the process described in Step 1. We can have a preliminary meeting with LGC staff at any time to discuss the general outlines and possible size of a bond issue; the meeting described in this step would come after the County has more or less worked out the final bond program. 4. Obtain School Board Resolutions. If any of the bonds will be proposed for school purposes, the statutes contemplate that the affected school boards should provide a formal referendum request to the Commissioners. This request usually proposes a maximum amount of bonds to be considered at the referendum. This schedule assumes that each school board could provide this resolution to the Commissioners by mid - December of 2015. 5. Adopt "Findings" Resolution. As part of the application process, the LGC wants to see a statement describing why the proposed projects and bonds are necessary and desirable. This resolution will also state an estimated tax rate impact of the borrowing. This resolution could be adopted at a mid - December or early January County Board meeting. 6. Publish Notice of Intent To File Application. The County must publish a notice of its intent to file an application for the LGC's approval of the proposed bonds. The notice must be published at least 10 days before filing the application. The notice needs to be published as soon as possible after the Board adopts the findings resolution described in Step 5. The own words resolution and the Notice of Intent establish the maximum ON 15 Sanford Holshouser LLP amount of bonds that can be proposed at the referendum for each of the specified purposes. From this point, we can decrease the amount of bonds or eliminate purposes, but we can increase an amount or add a purpose only by re- starting the authorization process. 7. Make Legislative Committee 45 -day filing. The guidelines call for this filing to go in 45 days before the LGC considers your application. Because the LGC only needs to "accept" your application in advance of the referendum — it doesn't technically have to "approve" the application prior to the referendum -- I'd suggest we send in the legislative filing when we're ready to file the LGC application, and just ask the LCG to defer formal action until our 45 -day period has expired. So that would mean making the filing promptly after the completion of Step 5. 8. File LGC Application. As stated above, this cannot happen until at least 10 days have elapsed since the publication of the notice of intent. The application needs to be filed and formally accepted by the LGC before we have the County Board take its next steps as described in Step 9. Although we have to submit the LGC application as part of the referendum process, it is not necessary to receive LGC approval until we are ready to proceed with the actual sale of bonds, which of course will be after the referendum. The LGC may or may not act on the application prior to the referendum, although the current LGC practice is in fact to consider applications as they are received (instead of waiting for the time of a bond issuance). 9. Prepare statement of debt and statement of estimated interest. The debt statement sets out details of the County's outstanding debt. The statement of estimated interest states the County's calculation of the total amount of interest to be paid on the bonds, if issued, over the term of the bonds. These statements will be prepared as we are preparing the LGC application and the bond order documents. Information from these statements will be included in some of the public notices related to the bond election. 10. Introduce Bond Orders; Set public hearing. After the County files its application, the Board needs to introduce the "Bond Orders" and set a date for the required public hearing. We can take these actions at any time after the LGC accepts the application (even the same day). Our schedule shows these steps occurring at a mid - January County Board meeting. The "Bond Order" is the basic authorization for bonds approved by the 3 16 Sanford Holshouser LLP County Board. The statutes provide for the format and most of the text of a bond order; the bond order is a short, general statement of the Board's determination to proceed. Each of the separate generic purposes for which bonds are to be proposed will be the subject of a separate bond order: The details of an actual bond issue are further approved by the Board at the time of a bond issue. 11. Publish Notice of Public Hearing. We need to publish notice of the required public hearing at least six days prior to the hearing. The notice will include information from the debt statement and the statement of estimated interest. 12. Hold Public Hearing; Adopt Bond Order; Set Ballot Question and Referendum Date. After holding a public hearing, the Board needs to adopt the Bond Orders and adopt a resolution that formally sets the ballot questions and the date for the referendum. Our schedule shows these steps occurring at a mid - February County Board meeting. The Board Clerk must then send a copy of the resolution setting the date and the ballot question to the County Board of Elections within three days after the Board meeting. We can arrange the schedule to have the public hearing at a meeting before the Board takes final action on the Bond Orders and ballot questions. For absentee ballots to be available by March 14, the mid - February Board meeting is just about as late as we can go for the final Board action and still allow for convenient printing of the ballots. The adoption of the bond order establishes the final amount of bonds that will go before the voters. 13. Publish Bond Order as Adopted. This should be done as soon as possible after the Bond Order is adopted. There is no particular deadline for publishing this notice, but the notice starts a 30 -day period for court challenges to the authorization process that must lapse before any bonds can be issued. 14. Publish Notice of Bond Referendum. This notice must be published twice, once not less than 14 days and once not less than 7 days before the close of voter registration. State law permits registration until the 25th day prior to the election date. That puts the date registration closes at April 8 for a referendum on May 3. The first publication, then, needs to be at least 14 days earlier, or on or before March 25, and the second publication no more than one week later (by April 1). I would certainly encourage you, however, to plan to publish at least a week before the final legal date, in order to leave time to re- publish in case of any problems with publication. 4 Sanford Holshouser LLP 17 Once the voters have approved the bonds, you are looking at a minimum of 90 to 120 days to get through the process to actually issue bonds. The County Board must adopt a resolution to formally approve the election results, and the County must publish a notice of the results that triggers a 30 -day period during which people can bring legal challenges to the bond election process. Then, to approve the issuance of bonds takes only one more Board resolution, with no other required public hearings or published notices. The real timing issue in proceeding with a bond issue centers around the progress of the projects that are going to be financed. In general, the LGC wants you to have firm construction numbers for most of the projects to be financed before you close on the financing — the LGC wants to be sure you don't borrow too much money, or too little money, or borrow it earlier than you need it. This is only LGC policy — not the law — so the LGC has flexibility in how it administers this policy. In general, the LGC will give you some more leeway in the timing of issuing voter - approved bonds than for other types of financing, but it still wants to see that you are close to construction — usually with construction bids in hand for projects representing the majority of the amount to be borrowed. Approval at a bond referendum gives the County seven years from the referendum date to issue the bonds. The law allows the LGC to extend that time for an additional three years, and in my experience the LGC routinely grants these extensions. The bonds can be issued in as many different installments as the County chooses, and there is never any obligation actually to issue bonds approved at a referendum. Please let me know if you have any questions about this information, or if I can be of any other assistance. -- RMJ 5 Sanford Holshouser LLP Orange County -- Proposed Timetable for May '16 Bond Referendum Event Date 1. Determine referendum plan — As soon as possible tentative amounts and purposes, and target election date 2. Give informal notice to County Board As soon as possible after informal of Elections decision to proceed with a May referendum 3. Meet with LGC staff As soon as possible after informal decision on referendum plan— prior to Event 5 4. Obtain school board resolutions Prior to Event 5 — school boards to act by mid - December 2015 5. Board adopts preliminary resolution 12/21/15 or 1/4/2016 BOCC meeting explaining purpose for referendum and authorizing publication of notice of intent to file LGC application 6. Publish notice of intent to file application 7. Make legislative committee 45 -day filing 8. File LGC application 9. Prepare statement of debt and statement of estimated interest 10. Board introduces bond orders and schedules public hearing rr. As soon as possible after Event 5 As soon as possible after Event 5 Must be at least 10 days after Event 6 and prior to Event 9 In connection with preparing LGC application 1/18 BOCC meeting Sanford Holshouser LLP 11. Publish notice of public hearing 12 13 14 15 16 Hold public hearing; adopt bond orders; formally set ballot questions and referendum date Absentee ballots to be available Publish bond order as adopted Publish notice of referendum (twice) Referendum occurs 19 After Event 10 and at least six days prior to Event 12 2/15 BOCC meeting By March 14 As soon as possible after Event 13 By 3/25; then by 4/1 5/3/2016 P Sanford Holshouser LLP Orange County -- Proposed Timetable for November '16 Bond Referendum Event 1. Determine referendum plan — tentative amounts and purposes, and target election date 2. Give informal notice to County Board of Elections 3. Meet with LGC staff 4. Obtain school board resolutions 5. Board adopts preliminary resolution explaining purpose for referendum and authorizing publication of notice of intent to file LGC application 6. Publish notice of intent to file application 7. Make legislative committee 45 -day filing 8. File LGC application 9. Prepare statement of debt and statement of estimated interest 10. Board introduces bond orders and schedules public hearing 11. Publish notice of public hearing Date As soon as possible As soon as possible after informal decision to proceed with a November referendum As soon as possible after informal decision on referendum plan— prior to Event 5 Prior to Event 5 — school boards to act by end of April 2016 BOCC meeting sometime in May or early June As soon as possible after Event 5 As soon as possible after Event 5 Must be at least 10 days after Event 6 and prior to Event 9 In connection with preparing LGC application BOCC meeting prior to summer break After Event 10 and at least six days prior to Event 12 Sanford Holshouser LLP 12. 13. 14. 15. 16. Hold public hearing; adopt bond orders; formally set ballot questions and referendum date Publish bond order as adopted Absentee ballots to be available Publish notice of referendum (twice) Referendum occurs 2 21 First BOCC meeting after summer break As soon as possible after Event 12 By September 19 By 9/30; then by 10/7 11/8/2016 Attachment b 22 Chronological Summary for the 2001 Orange County Capital Needs Advisory Task Force and 2001 Bond Education Committee The 2001 Orange County Capital Needs Advisory Task Force was established in late 2000 and the early months of 2001. Members of the Task Force were appointed by the Board of Commissioners over three meetings in January and February 2001. The Task Force consisted of 24 members and 4 alternates, and the Task Force meetings generally included assistance from ten (10) County staff members as well as the Superintendents and other staff from both school systems. The Task Force's work was also aided by the work of two facilitators to help the group discussion and ensure the group met the goals established by the Board of Commissioners. The Task Force first met on March 14, 2001 in the Media Center at A.L Stanback Middle School. This was followed by meetings on March 28 and April 4 at the Southern Human Services Center. The group met again on April 18 at the Homestead Community Center. This was followed by additional meetings on April 25, May 2, May 9, May 16, and May 30 at the Southern Human Services Center. The Task Force met a total of nine (9) times. Staff developed a final report, which was initially reviewed by the Task Force Co- Chairs (Leo Allison and Lisa Stuckey), and then provided to all members for comments. The Task Force's recommendations were subsequently provided to the Board of Commissioners, and on June 25, 2001, the Board approved a Notice of Intent to Pursue a Bond Referendum on November 6, 2001. At the same June 25th meeting, the Board approved a resolution of intent to create a Bond Education Steering Committee and a proposed charge and structure for the Committee. At its August 14, 2001 work session, the Board introduced the bond orders and scheduled a public hearing on the proposed bond referendum for August 27, 2001. At its August 21, 2001 meeting, the Board approved appointments to the Bond Education Steering Committee. 23 On August 27, 2001, the Board conducted a public hearing on the proposed Bond Orders. No action was taken other than to open the hearing, receive comments from approximately 40 speakers and close the public hearing. This was followed up by the Board discussing and approving the specific elements of the proposed bond package at an August 30, 2001 work session. At the September 4, 2001 meeting, the Board approved the bond orders, the November 6, 2001 referendum date and the language to appear on the ballot. The Board also approved the agenda for the first Bond Education Steering Committee meeting scheduled for September 5, 2001. The first Bond Education Steering Committee met on September 5, 2001, with all five members of the Board of Commissioners present. In a joint meeting on September 24, 2001, the Board of Commissioners discussed the Bond Education Campaign with the two Boards of Education. The Bond Education Steering Committee met on September 26, 2001 to review draft educational materials. The Bond Education Steering Committee had 5 sub - committees, one responsible for Information & Outreach and the other four focused on each of the subject areas of the referendum. At its October 2, 2001 meeting, the Board of Commissioners approved a resolution expressing appreciation to the Capital Needs Advisory Task Force members for their service and work. As part of the October 16, 2001 Board meeting, staff presented educational materials, including a Powerpoint presentation, that had been developed by the Bond Education Steering Committee. The education materials included an overall bond referendum brochure, an individual brochure for each of the four bond issues on the ballot, flyers sharing information about the referendum items, public service announcements, and a speakers group. The bond referendum occurred on November 6, 2001, with all four ballot questions receiving majority approval from Orange County voters. Attachment c 24 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: June 25, 2001 Action Agenda Item No. SUBJECT: Resolution of Intent to Create a Bond Education Committee and Proposed Charge and Structure of the Committee DEPARTMENT: County Commissioners County Manager ATTACHMENT(S): Draft Resolution Draft Committee Charge and Structure PUBLIC HEARING: (Y /N) No INFORMATION CONTACT: John Link, ext 2300 TELEPHONE NUMBERS: Hillsborough 732 -8181 Chapel Hill 968 -4501 Durham 688 -7331 Mebane 336- 227 -2031 PURPOSE: To consider a resolution indicating the intent of the Board of Commissioners to create a Bond Education Committee that will develop and disseminate information to voters concerning the November 6, 2001 bond referendum and to consider a proposed charge to, and structure of, that Bond Education Committee. BACKGROUND: The Board of County Commissioners appointed a citizens' Bond Education Committee to help develop and disseminate factual information about the capital needs that led to bond referenda in November 1988, November 1992, and November 1997. The attached resolution indicates the Board's intention to appoint a Bond Education Committee comprised of interested citizens who will communicate to community groups, civic organizations, and voters in general about the needs that have led to the scheduling of a November 6, 2001 bond referendum for Orange County. The resolution includes plans for the Board to appoint Committee members and a chair, or co- chairs, at its August 14 regular meeting. Also attached to this abstract is a proposed charge to the committee and a suggested sub- committee structure for the overall Bond Education Committee. The proposed charge and structure mirror the framework used during the 1997 bond education process. Public funds may be spent to present relevant factual information to voters about the proposed bonds, the projects expected to be financed by the bonds, and the circumstances and needs that have given rise to the bond referendum. Public funds may not be spent on campaigns either to promote or defeat passage of any bond order put before the voters. The Manager's proposed 2001 -2002 Budget includes a $15,000 appropriation for Bond Education Committee activities and informational materials. As the subcommittees undertake their work and develop cost estimates for the production and distribution of informational materials, the Board could consider an additional appropriation, if needed, from the Contingency account. 25 FINANCIAL IMPACT: There is no financial impact associated with approval of the resolution. There would be some costs, if the Board so directs, associated with advertising for citizens interested in serving on the Committee. The Manager's proposed 2001 -2002 Budget includes a $15,000 appropriation for actual Bond Education Committee activities and informational materials. RECOMMENDATION(S): The Manager recommends that the Board adopt the attached resolution, approve the proposed Committee charge and structure, and request that the Clerk to the Board begin advertisement for citizens interested in serving on the Committee. P ORANGE COUNTY BOARD OF COMMISSIONERS A RESOLUTION OF INTENT TO CREATE A BOND EDUCATION COMMITTEE WHEREAS, the Orange County Board of Commissioners has appointed a Bond Education Committee in connection with the November 1988, November 1992 and November 1997 bond referenda; and, WHEREAS, these committees proved extremely useful in providing voters with relevant, factual information about the capital needs that led to each bond referendum; and, WHEREAS, the Board of Commissioners has scheduled a bond referendum in conjunction with the November 6, 2001 elections; NOW, THEREFORE BE IT RESOLVED THAT the Orange County Board of Commissioners does hereby indicate its intent to create a Bond Education Committee to assist in public information efforts related to the November 2001 bond referendum, with the Board planning to appoint Committee members and a chair, or co- chairs, at its August 14 regular meeting. This the 25th day of June, 2001. 27 DRAFT CHARGE TO ORANGE COUNTY BOND EDUCATION COMMITTEE NOVEMBER 2001 BOND REFERENDUM • become familiar with the purposes of each of the bond orders • become familiar with the projects expected to be addressed with bond funds • understand the community needs that led the Board of Commissioners to adopt each of the bond orders • develop appropriate informational materials that will address the bond orders • design and implement a campaign to distribute relevant factual information about the bonds to Orange County citizens in the most effective and efficient manner possible • design and implement a process for informational meetings with civic groups, non - profit agencies, neighborhood associations, and other interested parties in the community • ensure that equal access to factual information is provided to all individuals and groups, regardless of their position for or against any bond order • encourage all eligible voters to participate in the November 6 election SUGGESTED BOND EDUCATION COMMITTEE STRUCTURE Subcommi Senior Centers Subcommittee Bond Education Committee Steering Conur ttm & Outreach Subcommittee Recreation & Parks Subcommittee Affordable Housing Subcommittee