HomeMy WebLinkAboutAgenda - 11-21-2013 - Information Item 6-BINFORMATION ITEM - Attachment 6 - B
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NORTH CAROLINA
FINANCE AND ADMINISTRATIVE SERVICES
200 South Cameron Street Clarence G. Grier, CPA, CITP, CGMA Phone (919) 245 -2553
Post Office Box 8181 Assistant County Manager — CFO Fax (919) 644 -3324
Hillsborough, North Carolina 27278
MEMORANDUM
To: Assembly of Governments
From: Clarence Grier, Assistant County Manager — Chief Finance Officer
Date: November 21, 2013
Re: Potential Bond Issue
Over the past few months, the Orange County Board of County Commissioners has discussed
the need for a future bond referendum to fund some county and school long -range capital needs.
The anticipated issuance of general obligation bonds will be for two of the County's largest projects:
New County Jail Facility and Middle School #5 for the Chapel Hill - Carrboro City School District total a
combined $73.2 million dollars and both projects are included in the current County Capital Investment
Plan for the fiscal years 2015 - 2020.
An additional project that has been discussed is Elementary #8 for Orange County Schools, but this
project is not scheduled until FY 2021 -2022. Affordable housing, lands legacy, and park projects could
potentially be included on a potential bond referendum.
Based on the County's current financial position, to afford the additional debt, the County would
potentially have to increase the property tax rate 2.82 cents for the new debt service. This projected
tax increase would not include any future other operating expenditure increases and or any future
operating expenditure increases related directly to the new facilities and schools being built.
The Orange County's current bond ratings are as follows
• S &P - AAA
• Fitch - AAA
• Moody's - Aa1 positive outlook
It is currently expected that projects totaling $100 -125 million could be financed with the issuance of
general obligation or limited obligation bonds over a period not to exceed 20 years. At current
municipal bond interest rates, the total combined debt service for $100 million is estimated to be $6.7
million annually. This would represent 4.18 cents on the current property tax rate.