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HomeMy WebLinkAboutAgenda - 04-07-2015 - 5bORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: April 7, 2015 Action Agenda Item No. 5 -b 1 SUBJECT: Public Hearing on the Financing of Various Capital Investment Plan Projects and Equipment, and the Refinancing of Two 2006 Installment Financing DEPARTMENT: Finance and Administrative PUBLIC HEARING: (Y /N) Yes Services ATTACHMENT(S): Attachment 1. November 6, 2014 Agenda Abstract Attachment 2. Copy of Public Hearing Notice Attachment 3. Resolution INFORMATION CONTACT: Paul Laughton, (919) 245 -2152 PURPOSE: To conduct a public hearing on the issuance of approximately $16,270,000 to finance capital investment projects and equipment for the year; carry out refinancing of approximately $10,200,000 from two 2006 installment financing issuances; and approve a related resolution supporting the County's application to the Local Government Commission (LGC) for its approval of the financing arrangements. BACKGROUND: At its November 6, 2014 meeting, the Board of County Commissioners received preliminary information of capital projects and equipment financing for the year (Attachment 1). At that meeting the Board made a preliminary determination to finance costs of these projects and equipment by the use of installment financing, as authorized under Section 160A -20 of the North Carolina General Statutes. County staff estimates that the total amount to be financed for capital investment projects and equipment will be approximately $16,270,000. The financing will also include amounts to pay transaction costs. Also included is the refinancing of approximately $10,200,000 from a 2006 installment financing secured by Carrboro High School, and a 2006 Certificates of Participation installment financing secured by Gravelly Hill Middle School. The statutes require that the County conduct a public hearing on the proposed financing and refinancing contracts. A copy of the published notice of this hearing is provided (Attachment 2). After conducting the public hearing and receiving public input, the Board will consider the adoption of the resolution (Attachment 3). This resolution formally requests the required approval from the North Carolina Local Government Commission for the County's financing arrangements, and makes certain findings of fact as required under the LGC's guidelines. County staff has been in contact with the LGC staff, and staff expects no obstacles to receiving LGC approval. If the Board adopts the resolution (indicating its intent to continue with the financing and refinancing plans), the Board will be asked to consider a resolution giving final approval to the financing and refinancing plans at its April 21, 2015 meeting. Staff expects the LGC to approve the financing and refinancing plans at the LGC's meeting on May 5, 2015. Under the current schedule, staff expects to set the final interest rates and other terms of the financing around May 5, and to close on the financing and refinancing by the end of May 2015. FINANCIAL IMPACT: There is no financial impact related to this action. However, there will be a financial impact in proceeding with the financing. A preliminary estimate of maximum debt service applicable to the capital investment projects and equipment financing would require the highest debt service payment of $1,765,240 falling in FY 2016 -17. The tax rate equivalent for the estimated highest debt service payment is approximately 1.08 cents. However, a portion of this debt financing is related to projects where the debt service payments will be paid for from Sportsplex and Solid Waste Enterprise funds, as well as a Water and Sewer project to be paid from the Article 46 quarter -cent Sales Tax proceeds earmarked for economic development. The General Fund portion of this annual debt service is estimated at $1.1 million or a tax rate equivalent of approximately 0.67 cents. Based on current resources and the retirement of some existing debt, no adjustment to the tax rate associated with this financing is anticipated to occur during the period noted. Regarding the refinancing, it is estimated that the County will realize savings of approximately $451,788 over the life of the refinancing term. RECOMMENDATION(S): The Manager recommends that the Board conduct the public hearing, close the public hearing, and adopt the resolution supporting the application to the Local Government Commission for approval of the financing and refinancing arrangements. ATTACHMENT 1 3 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT COPY Meeting Date:��r Action Agenda Item No. 7 -a SUBJECT: Preliminary Information and Approval to Finance Various Capital Investment Plan Projects and County Equipment DEPARTMENT: Finance and Administrative PUBLIC HEARING: (Y /N) N� Services ATTACHMENT(S): INFORMATION CONTACTS: 1. Description of Projects to be Financed 2. Financing Schedule Clarence Grier, 919 - 245 -2453 Robert Jessup, 919 - 933 -9891 PURPOSE: To provide a preliminary finding and approve financing for capital investment projects and equipment for the year. BACKGROUND: As part of the FY2014 -19 Capital Investment Plan, several projects were approved for equipment financing. Those projects included the following (see Attachment 1 for additional information): Projects Requiring Financing Needed in FY 2014 -15 Project Amount County Projects: Cedar Grove Community Center Southern Orange Campus HVAC HVAC Projects (FY2012 -13) Roofing Information Technologies Emergency Services Radio Systems Communication Systems Improvements Soccer.com Soccer Center Lands Legacy Total County Projects $ 2,822,226 400,000 150,000 205,999 179,010 450,000 500,000 122,000 125,000 2,400,000 7,354,235 Water & Sewer Projects: (Paid w/ Article 46 Sales Tax Proceeds) Efland Sewer to Mebane 4,581,400 Total Water & Sewer Projects 4,581,400 Sportsplex Projects: Phase II - Pool Mezzanine 950,000 Total Sportsplex Projects 950,000 Solid Waste Projects: Eubanks Road Solid Waste Convenience Center Total Solid Waste Projects EquipmentNehicle Purchases: Vehicle Replacement Fund In -Car Cameras Replacements - Sheriff Board of Elections - Voting Equipment Board of Elections - Electronic Poll Books Total EquipmentNehicle Purchases Grand Total FY 2014 -15 Financing 640,483 640,483 775,119 517,798 437,385 242,485 1,972,787 $ 15,498,905 M Additionally, there are some previous year capital projects, although approved budgetary, for which the financing was not issued due to the project schedule and decisions. The preliminary schedule for the financing is attached to the abstract. County staff will be receiving bids from financial institutions to secure the financing. Staff anticipates receiving $15.5 million in financing for an average of 10 years at an interest rate of 2.30 percent, which will result in an average annual debt service cost of $1,752,650. FINANCIAL IMPACT: There is no financial impact related to this action. However, there will be a financial impact in proceeding with the financing. A preliminary estimate of debt service applicable to the financing would be $1,752,650. The tax rate equivalent for the annual debt service payment is approximately 1.07 cents of the current property tax rate. RECOMMENDATION(S): The Manager recommends the Board approve moving forward with the financing of the stated capital project and equipment financing and provide feedback to staff. muuuMio�� Attachment 1 Ol Orange County, North Carolina Description of Projects to be Financed Cedar Grove Community Center: Financing for the Cedar Grove Community Center in the Northern Portion of the County approved in FY2011. Southern Orange Campus: Financing for the beginning phases and planning for the Southern Orange Campus and master plan. HVAC (FY2012 -13 and 2014 -15): Financing of various geothermal projects for County buildings and facilities. Roofing Projects: Financing for various roofing projects of County Owned buildings and facilities such as Asset Management Services Warehouse and the Blackwood Farm House. Information Technologies: Financing for the annual upgrades for server replacements and upgrades, desktop and laptop replacements, PC software upgrades, GIS software and hardware upgrades Emergency Services Improvements: Financing for the projects and initiatives as outlined in the Emergency Services Strategic Plan. FY2014 -15 financing will go to purchase additional towers. Communication Systems Improvements: Financing to fund the purchase additional communication radios and systems for Emergency Services and Sherriff Department. Soccer.com Soccer Center: Financing for the investment in the current facility including restroom improvements, purchase of adjoining land, construction of new artificial turf fields and other improvements. Lands Legacy: Continued financing for the award winning Lands Legacy Program to conserve and protect the County's most critical natural and cultural resources. Sportsplex Projects Pool Mezzanine: Financing and funding for the construction of a swimming pool mezzanine at the Orange County Sportsplex. Solid Waste Projects: Eubanks Road Solid Waste Convenience Center: Financing for the improvements for the Eubanks Road Solid Waste Convenience Center upgrades. Equipment /Vehicle Purchases Vehicle Replacement Fund: Financing for the annual purchases and replacement of County vehicles. In -Car Cameras Replacements — Sheriff: Financing for the upgrading of the in -car cameras for the Sherriff Department. Sanford Holshouser LLP Attachment 2 www.Sanfordholshouserlaw.com Orange County Installment Financing — Schedule County Board provides informal approval of projects BOCC meeting of Nov. 6 and general financing plan County staff makes initial, informal contact with LGC As soon as convenient County sends out bank loan RFP Week of Nov. 10 Publish notice of County public hearing By Nov. 29 (must be at least ten days' prior to hearing date) Bank proposals due back to the County Dec. 1 County Board holds public hearing; adopts BOCC of Dec. 9 preliminary resolution in support of application to LGC County makes filing with legislative joint committee By Dec. 20 for LGC approval in February County's preliminary application due to LGC By Jan. 6 for LGC approval in February County Board adopts resolution formally approving BOCC meeting of Jan. 22 substantially final financing terms and documents LGC approval Feb. 3 Loan closing Feb. 10 or thereafter 7 ATTACHMENT 2 Orange County, North Carolina -- Notice of Public Hearing Financing for Various Public Improvements and Acquisitions The Board of Commissioners of Orange County, North Carolina, will hold a public hearing on Tuesday, April 7, 2015, at 7:00pm (or as soon thereafter as the matter may be heard). The purpose of the hearing is to take public comment concerning a proposed financing contract, under which the County would borrow approximately $26,470,000 to pay for the public improvement projects described below as well as to refinance two of the County's prior installment purchase contracts to achieve savings to the County. Project description Est. Amount Financed Vehicle replacements $ 760,000 In -car camera replacements for Sheriff s office $ 520,000 Board of Elections equipment $ 700,000 Improvements to Cedar Grove Community Center $ 2,800,000 Southern Orange Campus planning and improvements $ 400,000 HVAC projects at various County facilities $ 360,000 Roofing projects at various County facilities $ 180,000 Information technology (including central permitting software) $ 1,250,000 Communications systems improvements, including Sheriff s department and EMS systems $ 125,000 Soccer.com soccer center improvements $ 125,000 Lands Legacy acquisitions $ 2,400,000 Sportsplex pool mezzanine $ 950,000 Improvements for Eubanks Road solid waste convenience center $ 1,100,000 Efland water and sewer improvements $ 4,600,000 Estimated total for new projects $ 16,270,000 Estimated total for refinancings $ 10,200,000 Estimated grand total $ 26,470,000 The two financings that are to be refinanced are a) a 2006 installment financing contract secured by Carrboro High School and b) a 2006 Certificates of Participation installment financing secured by Gravelly Hill Middle School. The County may use additional financing proceeds to pay financing costs or to provide required reserves. The hearing will be held in the Whitted Meeting Room at the Orange County Whitted Human Services Center Complex, 300 West Tryon Street, Hillsborough, NC 27278. The proposed financing would be secured by a lien on some or all of the property purchased or improved through the financing (or subject to the refinancing), as well as the County's promise to repay the financing, but there would be no recourse against the County or its property (other than the pledged property) if there were a default on the financing. The County expects that the collateral for the financing will consist primarily of Gravelly Hill Middle School. All interested persons will be heard. The County's plans are subject to change based on the comments received at the public hearing and the Board's subsequent discussion and consideration. The County's entering into the financing is subject to obtaining approval from the North Carolina Local Government Commission. Persons wishing to make written comments in advance of the hearing or wishing more information concerning the subject of the hearing may contact Paul Laughton, Orange County Interim Finance Officer, Post Office Box 8181, Hillsborough, NC 27278 (telephone 919/245 -2152, email plaughton@orangecountync.gov). 9 RES- 2015 -019 Attachment 3 Resolution supporting an application to the Local Government Commission for its approval of a financing agreement for the County WHEREAS -- The Board of Commissioners has previously determined to carry out the acquisition and construction of various public improvements, as identified in the County's capital improvement plan, and County staff has determined and advised the Board that refinancing all or a portion of two prior installment financings may provide savings to the County. The Board desires to finance the costs of these projects and to carry out the refinancing by the use of an installment financing, as authorized under Section 160A -20 of the North Carolina General Statutes. Under the guidelines of the North Carolina Local Government Commission, the Board 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, that the County makes a preliminary determination to finance approximately $26,470,000 to pay capital costs of various public improvements and to carry out the refinancing. The proposed list of projects and improvements to be financed appears in Exhibit A. The two financings that are to be refinanced are a) a 2006 installment financing contract secured by Carrboro High School and b) a 2006 Certificates of Participation installment financing secured by Gravelly Hill Middle School. The Board will determine the final amount to be financed by a later resolution. The final amount financed may be slightly lower or slightly higher than $26,470,000. Some of the financing proceeds may provide reimbursement to the County for prior expenditures on project costs, some proceeds may be used to pay financing expenses, and some proceeds may be used to provide any appropriate reserves. 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 proposed refinancings are necessary and appropriate for the County under all the circumstances because the refinancings will produce substantial debt service savings. 10 (b) The proposed installment financing is preferable to a bond issue for the same purposes. The County has no meaningful ability to issue non -voted general obligation bonds for these projects. These projects will not produce sufficient revenues to support a self - liquidating financing. The County has in the past issued substantial amounts of voter - approved bonds, and it is appropriate for the County to balance its capital finance program between bonds and installment financings. The County expects that in the current interest rate environment for municipal securities there would be no material difference in interest rates between general obligation bonds and installment financings for these projects. (c) The estimated sums to fall due under the proposed financing contract are adequate and not excessive for the proposed purposes. The County will closely review proposed financing rates against market rates with guidance from the LGC and its financial adviser. All amounts financed will reflect either approved contracts, previous actual expenditures or professional estimates. (d) As confirmed by the County's Interim 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 estimates that the maximum tax rate impact of paying General Fund related debt service on the financing will be the equivalent of up to approximately 0.67 cents per $100 of valuation. Based on current resources and the retirement of some existing debt, no actual tax rate increase related to this financing will be necessary. (f) The County Attorney is of the opinion that the proposed projects are authorized by law and are for 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 Interim Finance Officer is 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. All prior actions of County representatives in this regard are regard are ratified. (b) This resolution takes effect immediately. 11 I certify as follows: that the foregoing resolution was properly adopted at a meeting of the Board of Commissioners of Orange County, North Carolina; that this meeting was properly called and held on April 7, 2015; that a quorum was present and acting throughout this meeting; and that this resolution has not been modified or amended, and remains in full effect as of today. Dated this day of 12015. [SEAL] Donna S. Baker Clerk, Board of Commissioners 12 Exhibit A — proposed projects Project description Est. Amount Financed Vehicle replacements $ 760,000 In -car camera replacements for Sheriff's office $ 520,000 Board of Elections equipment $ 700,000 Improvements to Cedar Grove Community Center $ 2,800,000 Southern Orange Campus planning and improvements $ 400,000 HVAC projects at various County facilities $ 360,000 Roofing projects at various County facilities $ 180,000 Information technology (including central permitting software) $ 1,250,000 Communications systems improvements, including Sheriffs department and EMS systems $ 125,000 Soccer.com soccer center improvements $ 125,000 Lands Legacy acquisitions $ 2,400,000 Sportsplex pool mezzanine $ 950,000 Improvements for Eubanks Road solid waste convenience center $ 1,100,000 Efland water and sewer improvements $ 4,600,000 Estimated total for new projects $ 16,270,000 Estimated total for refinancings $ 10,200,000 Estimated grand total $ 26,470,000