HomeMy WebLinkAboutRES-2009-088 Resolution for the Sale of Refunding Bonds lb
Y S - aooq-- 068 k
2
• RESOLUTION FOR THE SALE OF REFUNDING BONDS
WHEREAS.
The Board of Commissioners has previously authorized the issuance of up to
$27,000,000 in County general obligation refunding bonds (the"Bonds")to refund public
improvement bonds issued in 2001 and 2003.
This resolution provides for the issuance of a portion of these Bonds and takes
related action, such as approving the form of the disclosure document that will be used in
connection with the offering and sale of the Bonds.
BE IT THEREFORE RESOLVED by the Board of Commissioners of Orange
County,North Carolina, as follows:
1. Determination To Sell Refunding Bonds - The County will issue and sell
the Bonds for their authorized purpose.
2 Payment Provisions. The Bonds will bear interest at the rates determined at
the time of their sale by the Local Government Commission (currently scheduled for
• January 12, 2010). The principal of the Bonds will be payable in annual installments as
the Finance Officer may determine after consultation with the LGC, except that the final
maturity for the Bonds must not extend beyond December 31,2021.
3. Pledge of Faith, Credit and Taxing Power -- The County's full faith and
credit are hereby irrevocably pledged for the payment of the principal of and interest on
the Bonds. Unless other funds are lawfully available and appropriated for timely payment
of the Bonds, the County will levy and collect an annual ad valorem tax, without
restriction as to rate or amount, on all locally taxable property in the County sufficient to
pay the principal of and interest on the Bonds as the same become due.
4. Approval of Official Statement for Offering - There has been made
available to each member of the Board the form of an official statement (the "Official
Statement") relating to the Bonds, pursuant to which the Bonds will be offered for sale.
The Official Statement remains subject to completion and amendment.
The Official Statement is approved as the form of official statement pursuant to
which the Bonds will be offered for sale. The actions of the Finance Officer, in
collaboration with the LGC, in preparing the text of the Official Statement are ratified,
approved and confirmed. The Board ratifies and approves the LGC's distribution of the
Official Statement, in substantially the form presented, to prospective purchasers of the
Bonds.
•
t
3
The Board acknowledges that it is the County's responsibility, and ultimately the
Board's responsibility, to ensure that the Official Statement in its final form neither
contains an untrue statement of a material fact nor omits to state a material fact required
to be included therein for the purpose for which such Official Statement is to be used or
necessary to make the statements therein, in light of the circumstances under which they
were made, not misleading. By the adoption of this resolution, the Board members
approve the Official Statement as materially correct and complete, and further
acknowledge and accept their own responsibility for causing the County to fulfill these
responsibilities for the Official Statement.
S. Prepayment Provisions'— The Bonds will be subject to prepayment and
redemption prior to maturity, or not, upon such terms and conditions as the Finance
Officer, upon advice from the LGC, may determine. The Finance Officer shall execute a
certificate prior to the initial delivery of the Bonds designating redemption terms and
conditions, and this certificate will be conclusive evidence of the Finance Officer's
approval and determination of such terms and conditions.
6. Form of Bonds; Payment Details -- The Bonds will be designated
"General Obligation Refunding Bonds, Series 2010," and will be in substantially the form
set out in Exhibit A. The Bonds will be dated the date of their initial issuance, will be in
• fully registered form, in denominations of$5,000 and integral multiples thereof, and will
be numbered R-1 upward.
The Bonds must be signed by the manual or facsimile signature of the Chair of
this Board or the County Manager, must be countersigned by the manual or facsimile
signature of the Clerk to this Board or any Assistant Clerk, and the County's seal must be
affixed thereto or a facsimile thereof printed thereon. No Bond will be valid unless at
least one of the signatures appearing on such Bond (which may be the signature of the
LGC's representative required by law) is manually applied or until such Bond has been
authenticated by the manual signature of an authorized officer or employee of a bond
registrar selected by the County.
Interest on each Bond will be payable semiannually (a) from its date, if it is
authenticated prior to the first interest payment date, or (b) otherwise from the interest
payment date that is, or immediately precedes, the date on which it is authenticated
(unless payment of interest thereon is in default, in which case such Bonds will bear
interest from the date to which interest has been paid). Principal and interest will be
payable in lawful money of the United States of America.
The Finance Officer will execute a certificate prior to the initial delivery of the
Bonds designating the final aggregate principal amount of the Bonds (up to the maximum
authorized amount of$27,000,000) and the principal and interest payment schedule for
2
4
the Bonds. This certificate will be conclusive evidence of the Finance Officer's approval
and determination of such matters.
7. Finance Officer as Registrar; Payments to Registered Owners -- The
Finance Officer is appointed Registrar for the Bonds. As Registrar, the Finance Officer
will maintain appropriate books and records of the ownership of the Bonds. The County
will treat the registered owner of each Bond as the person exclusively entitled to payment
of principal and 'interest and the exercise of all rights and powers of the owner, except
that interest payments will be made to the person shown as owner on the registration
books at the end of the day on the 15th day of the month preceding each interest payment
date (whether or not such 15`h day is a business day).
8. Advertising Bonds for Sale -- The Finance Officer, in collaboration with
the LGC, is authorized and directed to take all proper steps to advertise the Bonds for sale
in accordance with customary LGC procedures, including through the use of one or more
"Notice of Sale" documents in the LGC's customary form. All prior steps toward this end
are hereby ratified and approved.
9. LGC To Sell Bonds; Provisions for Delayed Sale — (a) The County asks
the LGC to sell the Bonds, to receive and evaluate bids and to award the Bonds on the
• basis of the best bid received.
(b) If market conditions at the time of the proposed sale of the Bonds do not
allow the Bonds to be sold at interest rates and prices that make the refunding of all or
any portion of the prior bonds economical, as determined by the Finance Officer and in
accordance with LGC guidelines, the Finance Officer is authorized to decline the sale of
the Bonds, in whole or in part. The Finance Officer is further authorized to provide for
additional attempts to sell the Bonds, or any portion of the Bonds, if such officer
determines that market conditions have changed such that a successful sale of the Bonds
(or any portion) may be possible. The Finance Officer may provide for one or more
additional sales until March 1, 2010, without further advance approval from the Board.
These additional sales may make use of the previously-approved official statement, with
the Finance Officer's approval, and pursuant to such advertisement for sale as the
Finance Officer may approve.
.10. Completing Official Statement after Sale --After bids have been received
and the LGC has awarded the Bonds to the successful purchaser, the Finance Officer is
authorized and directed to prepare, in collaboration with the LGC, a final Official
Statement containing, among such other matters as may be appropriate, information
required pursuant to Rule 15c2-12 ("Rule 15c2-12") promulgated by the United States
Securities and Exchange Commission under the United States Securities Act of 1934, as
amended. The County, together with the LGC, will arrange for the delivery within seven
business days of the date the Bonds are sold of a reasonable number of copies of the final
3
5
• Official Statement o the successful bidder on h Bond r o to
t the s for delivery t each potential
investor requesting a copy of the final Official Statement and to each person to which
such bidder and members of the bidding group initially sell the Bonds.
II. Finance Officer To Complete Bond Closing -After the sale of the Bonds,
the Finance Officer and all other County officers and employees are authorized and
directed to take all proper steps to have the Bonds prepared and executed in accordance
with their terms and to deliver the Bonds to the purchaser upon payment for the Bonds.
The Finance Officer is authorized and directed to hold the executed Bonds, and
any other documents authorized or permitted by this resolution, in escrow on the
County's behalf until the conditions for the delivery of the Bonds and other documents
have been completed to the Finance Officer's satisfaction, and thereupon to release the
executed Bonds and other documents for delivery to the appropriate persons or
organizations.
Without limiting the generality of the foregoing, this authorization and direction is
specifically extended to authorize the Finance Officer(a)to enter into such agreements or
take such other actions as such officer may deem appropriate in connection with
obtaining bond insurance for the Bonds, (b) to approve agreements appropriate to carry
• out the refunding contemplated by this resolution, including agreements for the custody
of Bond proceeds and agreements for appropriate professional services, and (c) to
approve changes to any documents or closing certifications previously signed by County
officers or employees, provided that the Bonds must be in substantially the form
approved by this resolution and that any such changes must not substantially alter the
intent of such certificates from that expressed in the forms of such certificates as executed
by such officers or employees. The Finance Officer's authorization of the release of any
such document for delivery will constitute conclusive evidence of such officer's approval
of any such changes.
In addition, the Finance Officer is authorized and directed to take all appropriate
steps for the efficient and convenient carrying out of the County's on-going
responsibilities with respect to the Bonds. This authorization includes, without limitation,
contracting with third parties for reports and calculations that may be required under the
Bonds,this resolution or otherwise with respect to the Bonds.
I2. Undertaking for Continuing Disclosure -- The County undertakes, for the
benefit of the beneficial owners of the Bonds, to provide continuing disclosure with
respect to the Bonds as described in Exhibit B.
The Board designates the Finance Officer as the County officer to be primarily
responsible for the County's compliance with its undertakings for continuing disclosure
• provided for in this resolution. The Finance Officer will provide for the filings and
4
t
6
• reports (including the reports of material events) constituting the continuing disclosure
provided for in this resolution.
13. Resolutions As To Tax Matters --The County will not take or omit to take
any action the taking or omission of which will cause the Bonds to be "arbitrage bonds,"
within the meaning of Section 148 of the "Code" (as defined below), or "private activity
bonds"within the meaning of Code Section 141, or otherwise cause interest on the Bonds
to be includable in gross income for federal income tax purposes. Without limiting the
generality of the foregoing, the County will comply with any Code provision that may
require the County at any time to pay to the United States any part of the earnings derived
from the investment of the proceeds of the Bonds, and the County will pay any such
required rebate from its general funds. For this resolution, "Code" means the United
States Internal Revenue Code of 1986, as amended, including applicable Treasury
regulations.
14. Bonds Are, `Bank-Qualified" Obligations -- The County designates the
Bonds as "qualified tax-exempt obligations" for the purpose of Code Section 265(b)(3),
which provides certain tax advantages for financial institutions that own the Bonds.
15. Book-Entry System for Bond Registration-- The Bonds will be issued
• by means of a book-entry system, with one bond certificate for each maturity
immobilized at The Depository Trust Company, New York,New York("DTC"), and not
available for distribution to the public. The book-entry system for registration will
operate as described in the Official Statement. Therefore, (a) the County will pay
principal and interest on the Bonds to DTC or its nominee as registered owner of the
Bonds, (b) the County will not be responsible or liable for any transfer of payments to
parties other than DTC or for maintaining, supervising or reviewing the records
maintained by DTC or any other person related to the Bonds, and (c) the County will not
mail redemption notices (or any other notices related to the Bonds) to anyone other than
DTC or its nominee so long as the book-entry system of registration with DTC is in
effect. The County may elect to discontinue the book-entry system with DTC by
resolution of the Board. The Finance Officer is authorized and directed to enter into any
agreements such officer deems appropriate to put into place and maintain the book-entry
system with DTC.
16. Call of Prior Bonds for Redemption -The Board authorizes and directs the
Finance Officer to make, on the County's behalf, an irrevocable call for redemption of
such of the County's General Obligation Public Improvement Bonds, Series 2001 and
Series 2003, as the Finance Officer (after consultation with the LGC) deems beneficial to
the County. The Finance Officer will make this call for redemption by the execution and
delivery of an appropriate certificate in connection with the original delivery of the
Bonds.
•
s
t
7
17. Miscellaneous Provisions -- All County officers and employees are
authorized and directed to take all such further action as they may consider necessary or
desirable in connection with the furtherance of the purposes of this resolution. All such
prior actions of County officers and employees are ratified, approved and confirmed.
Upon the absence, unavailability or refusal to act of the Chair, the County Manager or the
Finance Officer, any of such officers may assume any responsibility or carry out any
function assigned to another officer in this resolution. All other resolutions, or parts
thereof, in conflict with this resolution are repealed, to the extent of the conflict. This
resolution takes effect immediately.
I certify that the foregoing resolution (including the attached Exhibits A and B)
was duly adopted at a meeting of the Board of Commissioners of Orange County, North
Carolina, duly called and held on December 7, 2009, and that a quorum was present and
acting throughout such meeting. Such resolution remains in full effect as of today.
Dated this day of December,2009.
[SEAL]
Donna S. Baker
Clerk, Board of Commissioners
Orange County,North Carolina
•
6
8
EXHIBIT A-Form of Bonds
REGISTERED REGISTERED
Number R-X
UNITED STATES OF AMERICA
STATE OF NORTH CAROLINA
ORANGE COUNTY
General Obligation Refunding Bond, Series 2010
INTEREST RATE MATURITY DATE DATED DATE CUSIP
% February 1, 20XX , 2010 684 609 XXX
REGISTERED OWNER:*****CEDE & CO.*****
PRINCIPAL AMOUNT: **** THOUSAND DOLLARS
($ ,000)***
ORANGE COUNTY, NORTH CAROLINA (the "County'), for value received,
promises to pay to the registered owner hereof, or registered assigns or legal
representative, the principal amount stated above on the maturity date stated above,
subject to prior. redemption as described herein, and to pay interest on this Bond
semiannually on each February 1 and August 1, beginning August 1, 2010, at the annual
rate stated above. Interest is payable (a) from the dated date stated above, if this Bond is
authenticated prior to August 1, 2010, or (b) otherwise from the February 1 or August 1
that is, or immediately precedes, the.date on which this Bond is authenticated (unless
payment of interest hereon is in default, in which case this Bond will bear interest from
the date to which interest has been paid). Principal and interest are payable in lawful
money of the United States of America.
This Bond is one of an issue of the County's $ General Obligation
Refunding Bonds, Series 2010 (the 'Bonds"), of like date and tenor, except as to number,
denomination, rate of interest, privilege of redemption and maturity. The Bonds are
issued pursuant to a resolution adopted by the County's governing Board of
i
9
• Commissioners n
o December 7, 2009, and the Constitution and laws of the State of North
Carolina,including the Local Government Bond Act.
The County's full faith and credit are pledged for the payment of principal of and
interest on this Bond.
The Bonds are issued by means of a book-entry system, with one bond certificate
for each maturity immobilized at The Depository Trust Company, New York, New York
CUM"), and not available for distribution to the public. Transfer of beneficial ownership
interests in the Bonds in the principal amount of$5,000 or any integral multiple thereof
will be effected on the records of DTC and its participants pursuant to rules and
procedures established by DTC and its participants. Principal and interest on the Bonds
are payable by the County to DTC or its nominee as registered owner of the Bonds. The
County is not responsible or liable for such transfer of ownership or payments or for
maintaining, supervising or reviewing the records maintained by DTC, its participants or
persons acting through such participants.
Bonds maturing prior to February 1, 2020, are not subject to redemption prior to
maturity. Bonds maturing on February 1, 2020, and thereafter are redeemable, at the
County's option, from any moneys that may be made available for such purpose, in whole
or in part on any date not earlier than February 1, 2019, at a redemption price of 100% of
the principal amount to be Yedeemed, plus interest accrued to the redemption date,
without premium.
If less than all of the Bonds stated to mature on different dates are called for
redemption, the Bonds to be redeemed will be selected in such manner as the County may
determine. If less than all of the Bonds of any one maturity are called for redemption,the
particular Bonds or portions of Bonds of such maturity to be redeemed will be selected
by lot in such manner as the County in its discretion may determine; provided, however,
that the portion of each Bond to be redeemed will be in the principal amount of$5,000 or
some integral multiple thereof, and that, in selecting Bonds for redemption, each Bond
will be considered as representing that number of Bonds which is obtained by dividing
the principal amount of such Bond by $5,000. Notwithstanding the foregoing, so long as
a book-entry system with DTC is used for determining beneficial ownership of Bonds, if
less than all of the Bonds within a maturity are to be redeemed, DTC and its participants
will determine which of the Bonds within any such maturity are to be redeemed. If a
portion of a Bond is called for redemption, a new Bond in principal amount equal to the
unredeemed portion thereof will be issued to the registered owner upon the surrender
thereof.
The County will give notice of redemption by certified or registered mail to DTC
or its nominee as the registered owner of the Bonds. The County will mail such notice not
• more than 60 days and not less than 30 days prior to the date fixed for redemption. The
s
• Coun ty is not responsible for sending notices of redemption to anyone other than DTC or
its nominee.
If(a)DTC determines not to continue to act as securities depository for the Bonds
or(b)the County so elects,the County will discontinue the book-entry system with DTC.
If the County fails to identify another qualified securities depository to replace DTC, the
County will deliver replacement Bonds in the form of fully-registered certificates.
The County's Finance Officer has been appointed Registrar for the Bonds. As
Registrar, the Finance Officer will maintain appropriate books and records indicating
ownership of the Bonds. The County will treat the registered owner of this Bond as the
person exclusively entitled to payment of principal and interest and the exercise of all
other rights and powers of the owner, except that interest payments will be made to the
person shown as owner on the County's registration books at the end of the day on the
15th day of the month preceding each interest payment date (whether or not such 15th day
is a business day).
The County has designated the Bonds as "qualified tax-exempt obligations" for
the purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended.
• The Bonds are issued with the intent that North Carolina law will govern their
terms.
All acts, conditions and things required by the Constitution and laws of the State
of North Carolina to happen, exist or be performed precedent to and in the issuance of
this Bond have happened, exist and have been performed, and the issue of Bonds of
which this Bond is one, together with all other indebtedness of the County, is within
every debt and other limit prescribed by the Constitution and laws of the State of North
Carolina.
IN WITNESS WHEREOF, Orange County, North Carolina,has caused this Bond
to signed by the Chair of its Board of Commissioners,to be countersigned by the Clerk to
such Board, the County's seal to be affixed hereto and this Bond to be dated ,
2010.
COUNTERSIGNED: (SEAL)
[Sample only-do not signl Sample only-do not signl
Clerk, Board of Commissioners Chair,Board of Commissioners
• Orange County,North Carolina Orange County,North Carolina
9
11
•
The Bonds have been approved by
the North Carolina Local Government
Commission in accordance with the
Local Government Bond Act.
jSa�mpte only-do not sib
T. Vance Holloman
Secretary,Local Government Commission
•
10
12
• ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and
transfer(s)unto
(Please print or type transferee's name and address, including zip code)
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OR TRANSFEREE:
the within bond and all rights thereunder, hereby irrevocably constituting and appointing
, Attorney, to transfer said bond on the books kept for
the registration thereof,with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s)must be (Signature of Registered Owner)
guaranteed by a participant in the NOTICE: The signature above
Securities Transfer Agent Medallion must correspond with the name of the
Program("STAMP") or similar program registered owner as it appears on the front
of this bond in every particular without
alteration or enlargement or any change
whatsoever.
•
13
Exhibit B --Undertaking for Continuing Disclosure
The County undertakes, for the benefit of the beneficial owners of the Bonds, to
provide the following:
(a) by not later than seven months from the end of each of the County's fiscal
years, to the Municipal Securities Rulemaking Board ("MSRB"), audited County
financial statements for such fiscal year, if available, prepared in accordance with Section
159-34 of the General Statutes of North Carolina, as it may be amended from time to
time, or any successor statute, or, if such audited financial statements are not available by
seven months from the end of any fiscal year, unaudited County financial statements for
such fiscal year, to be replaced subsequently by audited County financial statements to be
delivered within 15 days after such audited financial statements become available for
distribution;
(b) by not later than seven months from the end of each of the County's fiscal
years, to the MSRB, (i) the financial and statistical data as of a date not earlier than the
end of the preceding fiscal year (which data will be prepared at least annually, will
specify the date as to which such information was prepared and will be delivered with
any subsequent material events notices specified in subparagraph (c) below) for the type
of information included under heading "The County - Debt Information" and "- Tax
Information" in the final Official Statement(excluding any information on overlapping or
underlying units), and (ii) the combined budget of the County for the current fiscal year,
to the extent such items are not included in the audited financial statements referred to in
(a) above;
(c) in a timely manner, to the MSRB, notice of any of the following events
with respect to the Bonds, if material:
(1) principal and interest payment delinquencies;
(2) non-payment related defaults;
(3) unscheduled draws on debt service reserves reflecting financial difficulties;
(4) unscheduled draws on any credit enhancements reflecting financial
difficulties;
(5) substitution of credit or liquidity providers, or their failure to perform;
(6) adverse tax opinions or events affecting the tax-exempt status of the Bonds;
• (7) modifications to rights of the beneficial owners of the Bonds;
12
14
•
(8) Bond calls;
(9) defeasances;
(10) release, substitution or sale of any property securing repayment of the
Bonds; and
(11) rating changes; and
(d) in a timely manner, to the MSRB, notice of a failure of the County to
provide required annual financial information described in (a) or (b) above on or before
the date specified.
If the County fails to comply with the undertaking described above, any beneficial
owner of the Bonds may take action to protect and enforce the rights of all beneficial
owners with respect to such undertaking, including an action for specific performance;
provided, however, that failure to comply with such undertaking will not be an event of
default and will not result in any acceleration of payment of the Bonds. All actions will
be instituted, had and maintained in the manner provided in this paragraph for the benefit
of all beneficial owners of the Bonds.
The County shall provide the documents referred to above to the MSRB in an
electronic format as prescribed by the MSRB and accompanied by identifying
information as prescribed by the MSRB.
The County may discharge its undertaking as set forth in this resolution by
providing such information in any manner that the United States Securities and Exchange
Commission subsequently authorizes in lieu of the manner described above.
The County reserves the right to modify from time to time the information to be
provided to the extent necessary or appropriate in the County's judgment,provided that:
(a) any such modification may only be made in connection with a change in
circumstances that arises from a change in legal requirements, change in law, or change
in the identity,nature, or status of the County;
(b) the information to be provided, as modified, would have complied with the
requirements of Rule 15c2-12 as of the date of the final Official Statement, after taking
into account any amendments or interpretations of Rule 15c2-12, as well as any changes
in circumstances; and
•
13
t
15
• (c) any such modification does not materially impair the interests of the
beneficial owners, as determined either by parties unaffiliated with the County or by the
approving vote of the registered owners of a majority in principal amount of the Bonds
pursuant to the terms of the bond resolution, as it may be amended from time to time, at
the time of the amendment.
Any annual financial information containing modified operating data or financial
information will explain, in narrative form, the reasons for the modification and the
impact of the change in the type of operating data or financial information being
provided.
•
14
16
• m Ratings:
Moody's:
S&P:
Fitch:
2��° (See"Ratings"herein)
N °
'4 3 PRELIMINARY OFFICIAL STATEMENT DATED NOVEMBER 80,2009
a NEW ISSVFr—Book-Entry Only
8,-,
u
A This Official Statement has been prepared by the Local Government Commission of North Carolina and the County of Orange,
North Carolina to provide information in connection with the sale and issuance of the Bonds described herein. Selected infor-
motion is presented on this cover page for the convenience of the user. To make an informed decision regarding the Bonds,a
prospective investor should read this Official Statement in its entirety. Unless indicated,capitalized terms used on this cover
$ page have the meanings given in this OflwW Statement.
o �
�A
$9,7609000*
M 9 ,j County of Orange, North Carolina
2 o
s
o` General Obligation Refunding Bonds, Series 2009
b a�
cDated: Date of Delivery Due:As shown on inside cover page
Tax Exemption In the opinion of Bond Counsel and subject to the qualifications de-
scribed herein,interest on the Bonds is not includable in gross income
s for federal income tax purposes and is exempt from existing State of
1�o North Carolina income taxation. See "Tax Exemption" herein for
., a ° additional information regarding tax consequences arising from own-
sership or receipt of interest on the Bonds. The Bonds will not be
"qualified tax-exempt obligations" within the meaning of Internal
Revenue Code Section 26W)(3).
A p
Redemption The Bonds are subject to optional redemption at the times and prices
p as set forth herein.
Security The Bonds constitute general obligations of the County,secured by a
s
pledge of the faith and credit and taxing power of the County.
o Interest Payment Dates February 1 and August 1,commencing February 1,2010
" Denominations $5,000 or any integral multiple thereof
w Expected Closing/Settlement December 21,2009
° a
g� Bond Counsel Sanford Holshouser LLP
Financial Advisor BB&T Capital Markets
8
W Sate Date December 8,2009
Sale of Bonds Pursuant to sealed bids in accordance with the Notice of Sale
° Qo
The date of this Official Statement is December_,2009
as
l3 Preliminary,subject to change.
u
ba
'n'a
�2
17
. MATURITY SCHEDULE
$9,760,000*General Obligation Refunding Bonds,Series 2009
Due February 1 of the Year Indicated
Year of Principal Interest Price Year of Principal Interest Price
Maturitx Amounts Rok or Yields Maturity unt• Bate or Yield'_
2010 $ 160,000 2016 $950,000
2011 95,000 2017 935,000
2012 1,020,000 2018 930,000
2013 995,000 2019 925,000
2014 980,000 2020 910,000
2015 960,000 2021 900,000
*Preliminary;subject to change.
]Information obtained from underwriters of the Bonds.
•
1 '
18
COUNTY OF ORANGE, NORTH CAROLINA
BOARD OF COMMISSIONERS
ValerieFoushee....................................................................................................................................Chair
BernadettePelissier....................................................................................................................Vice-Chair
Alice M. Gordon
Pam Hemminger
Barry Jacobs
Mike Nelson
Steve Yuhasz
•
COUNTY STAFF
FrankClifton.................................................................................................................... County Manager
Gary Humphreys.............................................................................................Financial Services Director
JohnRoberts.....................................................................................................................:County Attorney
FINANCIAL ADVISOR
BB&T Capital Markets
Winston-Salem,North Carolina
BOND COUNSEL
Sanford Holshouser LLP
Carrboro,North Carolina
• i
i9
• TABLE OF CONTENTS
Page
Introduction..........................................................................................................................................
TheLocal Government Commission of North Carolina.....................................................................
TheBonds.. ...................................................... ...............................................................................
Description. .. .........................................................................................................................
..... .......
RedemptionProvisions....................................................................................................................
Authorizationsand Purposes..........................................................................................................
Security............................................................................................................................................
TheRefunding Plan..............................................................................................................................
TheCounty............................................................................................................................................
GeneralDescription ........................................................................................................................
DemographicCharacteristics..........................................................................................................
Commercial,Industrial and Institutional Profile..........................................................................
Employment......................................................................................................................................
Governmentand Major Services.....................................................................................................
GovernmentStructure.................................................................................................................
Education.......................................................................................................................................
Transportation.............................................................................................................................
HumanServices...........................................................................................................................
Parks,Recreation and Open Space.............................................................................................
PublicService Enterprises..........................................................................................................
OtherPublic Service Enterprises...............................................................................................
OtherServices..............................................................................................................................
DebtInformation. ..........................................................................................................................
LegalDebt Limit..........................................................................................................................
Outstanding General Obligation Debt.......................................................................................
GeneralObligation Debt Ratios..................................................................................................
General Obligation Debt Service Requirements and Maturity Schedule................................
General Obligation Bonds Authorized and Unissued...............................................................
General Obligation Debt In€ormation for Underlying Units.......................... ..........................
OtherLong-Term Commitments................................................................................................
DebtOutlook................................................................................................................................
TaxInformation...............................................................................................................................
GeneralInformation....................................................................................................................
TaxCollections.............................................................................................................................
TenLargest Taxpayers................................................................................................................
2009-10 Budget Commentary..........................................................................................................
PensionPlans...................................................................................................................................
ContingentLiabilities......................................................................................................................
ContinuingDisclosure..........................................................................................................................
Approvalof Legal Proceedings.............................................................................................................
Ratings..................................................................................................................................................
TaxTreatment......................................................................................................................................
FinancialAdvisor..................................................................................................................................
Verificationof Mathematical Computations......................................................................................
Underwriting........................................................................................................................................
Miscellaneous........................................................................................................................................
A—The North Carolina Local Government Commission............................................................ A-1
B—Certain Constitutional,Statutory,and Administrative
Provisions Governing or Relevant to the Insurrence of
General Obligation Bonded Indebtedness by Units of Local
Government of the State of North Carolina...................................................................... B-1
C—Management Discussion and Analysis................................................................................ C-1
D—Financial Information............................................................................................................. D-1
E—Proposed Form of Legal Opinion............................................................................................ E-1
F— Description of Book-Entry Only System................. .......................................................... F-1
ii
20
d�a$M7Fo�
State of North Carolina
Department of State Treasurer
JANET COWELL State and Local Government Finance Division T.VANCE HOLLOMAN
TREASURER and the Local Government Commission DEPUTY TREASURER
INTRODUCTION
This Official Statement,including the cover page and the appendices hereto,is intended to fur-
nish information in connection with the public invitation for bids for the purchase of$9,760,000*
General Obligation Refunding Bonds, Series 2009 (the "Bonds"), of the County of Orange, North
Carolina(the"County").
The information furnished herein includes a brief description of the County and its economic
conditions, government, debt management, tax structure, financial operations, budget, pension
plans and contingent liabilities. The County has assisted the Local Government Commission of
North Carolina(the"Commission")in gathering and assembling the information contained herein.
This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy
any securities other than the Bonds offered hereby, nor shall there be any offer or solicitation of such
offer or sale of the Bonds in any jurisdiction in which it is unlawful for such person to make such
offer, solicitation or sale. Neither the delivery of this Official Statement nor the sale of any of the
Bonds implies that the information herein is correct as of any date subsequent to the date hereof.
The information contained herein is subject to change after the date of this Official Statement, and
this Official Statement speaks only as of-its date.
This Official Statement is deemed to be a final official statement with respect to the Bonds
within the meaning of Rule 15c2-12 promulgated by the Securities and Exchange Commission under
the Securities Exchange Act of 1934,as amended(the"Rule"),except,when it is in preliminary form,
for the omission of certain pricing and other information to be made available by the successful bid-
der or bidders for the Bonds to the Commission. In accordance with the requirements of such Rule,
the County will agree in a resolution to be adopted by the Board of Commissioners of the County
prior to the sale of the Bonds to certain continuing disclosure obligations. See the caption"Continu-
ing Disclosure"herein.
THE LOCAL GOVERNMENT COMMISSION OF NORTH CAROLINA
The Commission, a division of the Department of State Treasurer, State of North Carolina(the
"State"), is a State agency that supervises the issuance of the bonded indebtedness of all units of lo-
cal government and assists these units in the area of fiscal management.Appendix A to this Official
Statement contains additional information concerning the Commission and its functions.
*Preliminary,subject to change.
1
21
• THE BONDS
Description
The Bonds will be dated as of their date of delivery and will bear interest from their date. In-
terest on the Bonds will be payable semiannually on each February 1 and August 1, commencing
February 1, 2010. The Bonds will mature, subject to the optional redemption provisions set forth
below,on the dates set forth on the inside cover page of this Official Statement.
The Bonds will be issuable as fully registered bonds in a book-entry system under which The
Depository Trust Company ("DTC") will act as securities depository nominee for the Bonds. Pur-
chases and transfers of the Bonds may be made only in authorized denominations of$5,000 and in
accordance with the practices and procedures of DTC. See Appendix E hereto for a description of
DTC and its book-entry system.
Redemption Provisions
The Bonds maturing prior to February 1,2020 will not be subject to redemption prior to matur-
ity.The Bonds maturing on February 1, 2020 and thereafter will be redeemable, at the option of the
County, from any moneys that may be made available for such purpose,either in whole or in part on
any date not earlier than February 1, 2015, at a redemption price equal to 100% of the principal
amount of the Bonds to be redeemed,plus interest accrued to the date fixed for redemption.
If less than all of the Bonds of any one maturity shall be called for redemption, the particular
Bonds or portions of Bonds of such maturity to be redeemed shall be selected by lot in such manner
as the County in its discretion may determine;provided,however,that the portion of any Bond to be
redeemed shall be in the principal amount of$5,000 or any integral multiple thereof and that, in
selecting Bonds for redemption, each Bond shall be considered as representing that number of Bonds
which is obtained by dividing the principal amount of such bond by$5,000 and, further, that so long
as a book-entry system with DTC is used for determining beneficial ownership of bonds, if less than
all of the Bonds within a maturity are to be redeemed, DTC shall determine by lot the amount of
interest of each Direct Participant in the Bonds to be redeemed. If less than all of the Bonds then
subject to redemption shall be called for redemption, the particular maturities and amounts of the
Bonds or portions of Bonds to be redeemed shall be determined by the County.
Notice of redemption shall be given by certified or registered mail to Cede & Co., DTC's nomi-
nee, as the registered owner of the Bonds. Such notice shall be mailed not more than 60 days nor
less than the 30 days prior to the date-fixed for redemption. The County-will not be responsible for
mailing notices of redemption to anyone other than Cede'&Co.
On the date fixed for redemption, notice having been given as hereinabove provided,the Bonds
or portions thereof called for redemption shall be due and payable at the redemption price provided
therefor, plus accrued interest to such date. If moneys sufficient to pay the redemption price of the
Bonds or portions thereof to be redeemed plus accrued interest thereon to the date fixed for redemp-
tion have been deposited by the County to be held in trust for the registered owners of the Bonds or
portions thereof to be redeemed,interest on the Bonds or portions thereof called for redemption shall
cease to accrue, and the registered owner of such Bonds or portions thereof shall have no rights in
respect thereof except to receive payment of the redemption price thereof,including accrued interest
to the date of redemption, and, if a portion of a Bond shall have been selected for redemption, a new
Bond or Bonds of the same maturity,of any authorized denomination or denominations and bearing
interest at the same rate for the unredeemed portion of the principal amount of such Bonds.
• 2
s 22
•
Authorization and Purpose
The Bonds are being issued pursuant to the provisions of The Local Government Bond Act, as
amended, Article 7, as amended, of Chapter 159 of the General Statutes of North Carolina, a bond
order duly adopted by the Board of Commissioners of the County, and a resolution duly passed by
said Board of Commissioners.
Security
The Bonds are general obligations of the County.The County is authorized and required by law
to levy on all property taxable by the County such ad valorem taxes,without limitation as to rate or
amount,as may be necessary to pay the Bonds and the interest thereon.
THE REFUNDING PLAN
The Bonds are being issued for the purpose of redeeming on February 1, 2011 (1) the
$9,190,000 principal amount of the County's Public Improvement Bonds, Series 2001, dated August
1, 2001, maturing on February 1, 2012 to 2021, inclusive (the "2001 Bonds"), and redeeming on
March 1, 2013 (2) $6,525,000 principal amount of the County's Public Improvement Bonds, Series
2003, dated April 1, 2003, maturing on March 1, 2015 to 2019,inclusive(the"2003 Bonds", and col-
lectively, the "Bonds to be Refunded"). The following tables set forth the years, maturity amounts
and interest rates for the Bonds to be Refunded.
2001 Bonds
Year A=unt ate Yrar Amount Rate
2012 $920,000 4.50% 2017 $920,000 4.50%
2013 920,000 4.50 2018 920,000 4.50
2014 920,000 4.60 2019 920,000 4.50
2015 920,000 4.50 2020 915,000 4.60
2016 920,000 4.50 2021 915,000 4.70
2008 Bonds
Year Amount Rats Year Amount Rate
2015 $1,075,000 4.00% 2018 $1,100,000 4.00%
2016 1,075,000 4.00 2019 2,200,000 4.00
2017 1,075,000 4.00
The proceeds to be received from the sale of the Bonds, together with any contribution from
the County,are sufficient to pay when due all principal of and premium and interest on the Bonds to
be Refunded to and including their date of redemption and to pay certain expenses of the County
related to the issuance of the Bonds. The proceeds will be held in trust by Wells Fargo Bank,Jack-
sonville,Florida,(the"Escrow Agent")pursuant to an escrow deposit agreement between the County
and the Escrow Agent. The Escrow Agent will purchase certain obligations of the United States of
America ("Government Obligations")with the proceeds. The Government Obligations will mature
at such times and in such amounts, and will bear interest payable at such times and in such
amounts, so that sufficient moneys will be available to pay when due all principal of and premium
and interest on the Bonds to be Refunded to and including their respective dates of redemption. The
Escrow Agent will apply the maturing principal of and the interest on the Government Obligations,
together with other moneys held uninvested by the Escrow Agent, for such purpose, and will trans-
fer any surplus to the County for payment of interest on the Bonds. The Escrow Agent has been ir-
3
a
•
revocably instructed to redeem the 2001 Bonds on February 1, 2011 and the 2003 Bonds on March 1, 23
2013.
THE COUNTY
General Description
The County, founded in 1752, is located in the north-central portion of the State on the Pied-
mont Plateau. Bisected from east to west by Interstate Highway 85, the County lies approximately
midway between the cities of Atlanta, Georgia and Washington,D.C.
The County is part of the Raleigh-Durham Metropolitan Statistical Area, which also includes
the Research Triangle Park,a major complex of research and research-oriented manufacturing facil-
ities.
There are four municipalities in the County: the towns of Chapel Hill and Carrboro in the sou-
theastern part of the County and the Town of Hillsborough and the City of Mebane in the central
corridor of the County along Interstate Highway 85 and Interstate Highway 40. Population esti-
mates by the North Carolina Office of State Budget and Management for the year 2008 are: Chapel
Hill—55,616, Carrboro—19,479,Hillsborough—6,660 and Mebane—9,848.
r
4
24
The Town of Chapel Hill, home of the University of North Carolina at Chapel Hill, is the larg-
est municipality in the County, and its population plus that of the adjacent Town of Carrboro com-
prises 66% of the total estimated County population of 129,296. The Town of Hillsborough, the
County seat, and surrounding area are expected to experience accelerated growth, because of their
location adjacent to Interstate Highways 85 and 40.
Interstate Highway 40 connects the County directly with the Research Triangle Park and Ra-
leigh-Durham International Airport.The City of Mebane,home of most of the County's major manu-
facturing employers, is on the westernmost boundary of the County. A major portion of the City of
Mebane lies in neighboring Alamance County.North of Interstate Highway 85, the County is mostly
rural,with a mixture of farming,residential and light industrial and commercial uses.
The County is approximately 401 square miles in area, of which approximately 177 square
miles are unincorporated, 39 square miles are farmland, 132 square miles are forested, and 53
square miles are urbanized.
New York,New York 438 Miles
60 MILE RADIUS
Washington,D.C.251 Miles
cnn
U e-we..'. ''a%g.'"'r,..,_.-`'�:�I��" c r,F�- ..6r r�iv"4"-'�-- �;� : r - •e:�� c f°'�rT+`•.�.. .."'.�, �- ,-�
�7l�iw��" �.�.- .x .a' 9B�: r�"", is-e `�=",�pc- � .;�� 4 501'�".��. s��.��{,•�-- � mss.`_
.� 'r=>^�� '' �+, � �.5 � 'CCU•^!� �'��,_,� '� :u ,.�� ■•� ,
C 1IY I.' ea_ ) Oak"' vn l-Wh
C N �'R A V.I L t; a
1 locuil •i i R■■ni{■
0 Him 9A■b4■!■ 1�
l7 ) 5
)
dniit9rp a:wwu: Ka.h*W i. raw 53` eM` i •
,,may nme.rhk■' Z �.
�'' , •q1■h ) ■
■-3 p+rte■■ )i Pte+ s■naonr■a' 501
lae'!1 a • o tin
rye Naitlee7! 4 >� wfAi■s� � do 9Eu�
)jGAN ■ ScANIIS i } ), Brta H■}>,r 4AN■■
�.p Bu rlii gton o ` A .N
r _ i .
i ° . d ■na 5
i Lr lUl A C E:
421 )- j• a18 8� (�� '- axe i a e
• uW� 1 ' p i.. del
� st�isv�.' ti 0' F r •'
P
rrwdi i s = i .b i a s!
Atlanta, Georgia 351 Miles
5
25
Demographic Characteristics
The United States Department of Commerce, Bureau of the Census, has recorded the County's
population to be as follows:
1980 199Q 2000
77,056 93,662 115,537
More recent population estimates are as follows:
JUE "M1 20071 20081.
121,991 123,766 127,344 129,296
-'Estimate of North Carolina Office of State Budget and Management.
Per capita income figures for the County and the State are presented in the following table:
YAM c°
2003 $33,282 $27,942
2004 37,225 29,440
2006 39,363 31,002
2006 41,162 32,271
2007 43,844 33,735
•
Source: United States Department of Commerce, Bureau of Economic Analysis (most recent data
available).
Commercial,Industrial and Institutional Profile
The County's economy is characterized by a high degree of institutional and public-sector activ.
ity,plus office, commercial and service-oriented business.Manufacturing and agriculture are small-
er portions of the County's economy.
The University of North Carolina at Chapel Hill and University Hospitals in the Town of Cha-
pel Hill and their associated service, teaching and research programs.have a reputation for excel-
lence in the educational and medical fields. The County is also the place of residence for many
technical, professional and executive people who work in the Research Triangle Park and neighbor-
ing cities of Durham,Raleigh,and Burlington.
The Research Triangle refers to an area located among three municipalities: Chapel Hill,Dur-
ham and Raleigh. In addition to the University of North Carolina at Chapel Hill,universities located
in these municipalities include Duke University and North Carolina Central University in the City
of Durham and North Carolina State University in the City of Raleigh.The proximity of these uni-
versities makes the Research Triangle area well-suited to many types of research activities.
The Research Triangle Park (the 'Park"), Iocated 10 miles east of the County, contains 7,000
acres of land which has been reserved for research and research-oriented manufacturing. Since its
inception in the 1950'x, over 170 private and governmental organizations have located facilities in
the Park. According to the Research Triangle Foundation, the Park represents a capital investment
exceeding $2.8 billion.Approximately 42,000 people (52,000 including contract employees)were em-
ployed at the Park with an annual payroll of approximately$2.7 billion with an average salary of
$56,000. Approximately 80°x6 of the employees in the Park work for multinational corporations. Be-
6
26
cause of its close proximity to the County and the fact that many of the Parks' employees reside in
the County,the impact of the Park on the County's economy is significant.
An industrial strip along Interstate Highway 85 in the western portion of the County is the lo-
cation of several manufacturing firms.This area is the projected location for future growth of indus-
trial and commercial concerns. In addition to this area, the County designated over 2,450 acres in
three strategically placed areas along Interstates 85 and 40 as Economic Development Districts.The
County's location, midway between the Piedmont Triad and Research Triangle metropolitan areas,
makes these sites extremely attractive.The districts offer development potential for light industrial,
warehouse/flex space,office, retail and business service. Numerous tracts, ranging in size from 20 to
100 acres or more,are available.
Utility extension development is another economic development initiative undertaken by the
County. This project encourages economic development in the County by providing funds to finance
utility extension development for commercial entities. Using the monies in this fund, the County
provides a portion of the upfront waterlsewer infrastructure costs for businesses. As the various
projects are completed, some portion of the resultant increased property tax revenue is used to repay
the fund.These funds then"revolve"to address waterlsewer needs of other commercial development
projects.
7
27
The following able lists the 25 largest g g major commercial, industrial, and institutional employ-
ers in the County:
Approximate
Number of
Company or institution Service or Product Emulovees
University of North Carolina at
Chapel Hill Public University 15,000-20,000
UNC Hospitals Medical Center 6,000-10,000
Blue Cross/Blue Shield of North
Carolina Insurance Company 3,000-6,000
Chapel Hill/Carrboro City Schools Public School System 1,000-3,000
Orange County Board of Education Public School System 1,000-3,000
Orange County Government County Government 600-999
Town of Chapel Hill Municipal Government 500-999
Harris Teeter,Inc. Food Store 600-999
General Electric Co., Inc. Electrical Equipment Manufacturer 260-499
Sports Endeavors Mail Order Retail 250-499
Wal-Mart Stores,Inc.#1191 Retail Store 250-499
Aramark Services Food Service 250-499
PHE,Inc. Mail Order Retail 250-499
Orange-Person-Chatham Mental
Health Mental Health Agency 250-499
A Southern Season Retail Specialty Foods 250-499
Magnolia Gardens Retirement Community 260-499
Mebane Packaging Group Corrugated Carton Manufacturer 250-499
Whole Foods Market Food Store 250-499
U.S.Post Office Postal Service 250-499
Kenan Transport Trucking 100-249
Carol Woods Retirement Center Retirement Community 100-249
Lowe's Food Food Store 100-249
Weaver Street Market,Inc. Retail Natural Foods 100-249
Performance Chevrolet Retail Auto Sales/Service 100-249
UPS Parcel Distribution Center 100-249
Source: Orange County Economic Development Commission as of October 2009.
Construction activity in the County is indicated by the number and construction value of build-
ing permits as set forth in the following table:
Fiscal Year Residential Commercial
Ended Number of Value Value Total Value
June 80 Building Permits an Thousands) (In Thousands) (In Thousands)
2005 2,163 $201,810 $ 54,899 $256,709
2006 2,643 204,086 66,864 270,950
2007 2,841 177,072 81,109 258,182
2008 3,072 165,285 156,180 321,465
2009 2,247 126,962 77,875 204,837
Source: Inspection divisions of the Town of Chapel Hill and Carrboro and of the County.
. 8
28
Total taxable retail sales in the County for the past four fiscal years are shown in the following
table:
Fiscal
Year Ended Total Taxable Increase(Decrease)
June 90 Retail Sales Over Previous Year
2006 $907,564,371 . %
2007 948,302,963 4.5
2008 971,591,672 2.5
2009 926,654,246 (4.6)
Source: North Carolina Department of Revenue,Sales and Use Tax Division.
Note: Information for years ended prior to June 30, 205, are not comparable due to a change in the
State's method of reporting local sales information.
Employment
The County enjoys a consistently low unemployment rate. The unemployment rate estimated
by the North Carolina Employment Security Commission for August 2009 was 6.8%, one of the low-
est in the State. (State average was 10.8%in August 2009.)
The North Carolina Employment Security Commission has estimated the percentage of unem-
ployment in the County to be as follows:
2M 2493 AM Zoos 849.& 2M 2008 ?:448
January 3.2% 3.2% 3.4% 5.8% July 3.9% 3.7% 4.8% 7.1%
February 3.6 3.4 3.6 6.5 August 3.6 3.3 4.3 6.8
March 3.1 3.0 3.3 6.1 September 3.0 3.0 4.0 6.3
April 3.0 3.0 3.2 5.8 October 3.0 3.1 4.0 NIA
May 3.3 3.1 4.0 6.7 November 3.2 3.2 4.4 N/A
June 3.8 3.8 4.5 7.0 December 2.9 3.1 4.7
Government and Major Services
GOVERNMENT STRUCTURE
The County has a commission-manager form of government with a seven-member Board of
Commissioners comprising the governing body. The commissioners are elected on a partisan basis
for staggered four-year terms.The County manager is appointed by and serves at the pleasure of the
Board of Commissioners.The Board of Commissioners annually adopts a balanced budget and estab-
lishes a tax rate for the support of the County's programs.The County Manager has the responsibili-
ty of administering these programs in accordance with the policies and the annual budget adopted
by the Board of Commissioners.
EDUCATION
Two separate school administrative units, Chapel Hill-Carrboro City Schools ("CHCCS") and
Orange County Schools ("OCS'), provide public education in the County. CHCCS serves the Towns
of Chapel Hill and Carrboro and a small area outside the Towns, and OCS serves the remainder of
the County.Non-partisan elected boards of education administer both units.
• 9
29
The State provides the basic minimum education program for each school administrative unit.
Funding for this basic program is provided by appropriations from the State Public School Fund.
Additional funding is provided by special State and Federal Grants. The County also appropriates
funds to each school system, which provides for program expansions beyond the state basic mini-
mum.The County ranked number one in the State in per pupil funding in 2009.A special school dis-
trict tax is levied in a special school district that comprises the CHCCS system. This tax is a
significant revenue source for the CHCCS system. (See the section "Tax Information" below.) The
major sources of school funding in each school administrative unit budgeted for the fiscal year ended
June 30, 2009 are outlined in the chart below.
Qra %of Total CHM %of Totat
State $37,262,986 56% $ 63,848,216 .50%
Federal 2,582,182 4 5,200,000 6
Local 28.147.013 41 59.538.474 45
Total $67,992,181 100% $128,586,690 100%
The building of public school facilities has been a joint State/County effort with the County
playing the major role. Local financial support is provided by the County primarily through the use
of one-half cent local option sales and use taxes, bond proceeds, installment financing and impact
fees.
Large portions of the one-half cent local option sales and use taxes authorized by the General
Assembly in 1983 and 1986 are a major funding source for public school facilities. These taxes are
used in accordance with County Capital Policies and the County's ten-year Capital Investment Plan
to fund construction as well as debt service for both school and County facilities. The County re-
ceived $10.05 million from one-half cent sales taxes in the fiscal year ended June 30, 2009. Of this
amount,approximately$6.1 million has been allocated to school construction and debt retirement.
In 1987 the General Assembly adopted special legislation on behalf of the County which autho-
rized the County to establish a system of impact fees on new residential development. Revenues
generated by these fees are to be used toward additional school facilities necessitated by the new
development. The Board of County Commissioners in December of 2008 adopted the most recent
amendment.This amendment established impact fees effective January 1,2009*as follows:
Orange County Schools
Single Family Detached—$3,000 per unit
Single Family Attached—$930
Manufactured Homes—$1,428
Chapel Hill Carrboro City Schools
Single Family Detached—$6,092 per unit
Single Family Attached—$3,525
Multifamily—$686
Manufactured Homes—$2,634
*The amendment increases the above impact fees each year effective January 1, 2010-2012.
Impact fees have generated over$30.6 million since implementation in 1993. Impact Fees gen-
erated$1.23 million in the fiscal year ended June 30,2009.
Revenues received by the County from the sources mentioned above are expected by the County
to be sufficient to fund a significant portion of school capital improvements over the next 10 years.
10
30
The following table reflects average daily membership and the number of schools for both the
OCS and CHCCS for a five-year period.
Chapel Hill-Carrboro City Schools
Elementary Intermediate Secondary
Grades(H-5) Grades(6 8) Grades(9-12)
No.of No,of No.of Total
School Year Schools ADZ Schools Alai Schools Alai ADM
2004-05 9 4,693 4 2,566 2 3,462 10,721
2005-06 9 4,851 4 2,563 2 3,527 10,938
2006-07 9 4,959 4 2,592 2 3,528 11,079
2007-08 9 5,141 4 2,617 3 3,669 11,427
2008-09 10 5,268 4 2,688 3 3,674 11,630
Orange County Schools
Elementary Intermediate Secondary
Grades(K-b) Grades(5-81 Grades(9-12)
No.of No.of No.of Total
School Yeft Schools AIM Schools AIZM Schools ADZ APES
2004-05 7 3,081 2 1,612 2 2,118 6,811
2005-06 7 3,005 2 1,590 2 2,121 6,716
2006-07 7 3,081 3 1,576 2 2,194 6,851
2007-08 7 3,147 3 1,631 2 2,195 6,973
2008-09 7 3,175 3 1,613 2 2,243 7,031
'ADM or average daily membership,determined by actual records at the schools,is computed by the
North Carolina Department of Public Education on a uniform basis for all public school units in the
State.The ADM computations are used as a basis for teacher allotments.
Source: Orange County Board of Education, and the Chapel Hill Carrboro City Schools Board of
Education,Finance Offices.
The University of North Carolina at Chapel Hill provides post-secondary educational opportun-
ities to the residents of the County. Durham Technical Community College, Piedmont Technical In-
stitute and Alamance Community College are post-secondary institutions located within a 20-mile
radius of the County and are members of the State system of community colleges and technical insti-
tutes.Durham Technical Community College opened an Orange County Campus in 2008.The Coun-
ty is contributing$545,000 toward operating expenses in the fiscal year ending June 30, 2010.
TRANSPORTATION
Major expansion and maintenance of primary and secondary highways within the County are
primarily the responsibility of the State.Municipalities within the County bear the responsibility for
local street systems.The County has no responsibility for the construction or maintenance of streets
or highways.
The County is served by two interstate highways, which merge in the center of the County. In-
terstate Highway 85 connects the County to the cities of Greensboro, Charlotte and Atlanta to the
south and west and the cities of Durham, Richmond and Washington, D.C. to the north and east.
11
31
Interstate Highway 40 connects the County to the cities of Winston-Salem and Asheville to the north
and west and the Research Triangle Park and the City of Raleigh to the south and east.Other major
highways include U.S.highways 16-501 and 70 and N.C.highways 64, 57 and 86.
Inter-city bus service is provided by Carolina Trailways and the Town of Chapel Hill operates a
local bus system which serves a substantial portion of the population in the Towns of Chapel Hill
and Carrboro. The County operates specialized transport services for human services delivery. One
coordinated system,run by the County, serves a variety of human service departments and agencies
throughout the County.In addition, Triangle Transit Authority operates a bus system that provides
commuter services to County residents.
Air transportation is provided by various major, commuter and commercial airlines at the
Raleigh-Durham International Airport("RDU), approximately 10 miles from the County. Commer-
cial air service is provided by Air Canada, Air Trans American Airlines, Continental, Del-
ta/Northwest, Jet Blue, Southwest, United, and US Airways. In addition, 6 carriers provide
commuter service.The total economic impact of RDU to the Triangle economy is more than$2 billion
per year according to North Carolina Department of Transportation figures. In 2008, RDU had 187
daily departures and served approximately 9.7 million passengers.
In addition to the services provided by Raleigh-Durham International Airport,the University of
North Carolina at Chapel Hill operates a general aviation airfield located in the Town of Chapel
Hill.
Railway freight service is provided by Norfolk Southern Railway. Railway passenger service is
provided by Amtrak through its terminals located in the cities of Durham and Raleigh.
HEJMAIV SERVICES
Social Services Programs—Social Services programs are provided for by a combination of fed-
eral,state and local funds.Among the programs provided are: Work First,Temporary Aid to Needy
Families Child Protective Services, Daycare, Foster Care, Energy Assistance, Medicaid, Child Sup-
port Enforcement and programs for the elderly.
Health Programs--The County provides environmental, sanitation,family planning, dental and
nursing services throughout the County. Clinics are offered in the towns of Hillsborough and Chapel
Hill and in the public schools. The County has access to the services of the schools of medicine, den-
tistry, nursing and public health at University of North Carolina at Chapel Hill and the University
Hospitals, as well as Duke University Medical Center and a U.S.Veterans Administration Hospital
within five miles of the County. No County investment in hospital or major medical facilities is an-
ticipated.
Mental Health Programs—The County currently contributes annually to a tri-county Mental
Health Agency that provides extensive services within the County.A sheltered workshop and clinics
in the towns of Chapel Hill and Hillsborough are provided. Services to the public schools are also
provided.Under a new State proposal to reform mental health statewide, a local management entity
has been created that will serve to transition the current method of service provision.
Other Human Services In addition to social service, health and mental health programs, the
County provides agricultural services, housing and community development services, library servic-
es and support to various private non-profit agencies located within the County.
• 12
32
PARKS,RECREATION AND OPEN SPACE
Recreational programs throughout the County are provided by the County's Parks and
Recreation Department along with the parks and recreation departments of the towns of Chapel Hill
and Carrboro.Organized leisure programs ranging from athletics to fine arts are regularly offered to
citizens of all ages at several park sites and community centers. Numerous programs and special
events for senior citizens and the mentally and physically impaired are also offered.During the past
several years the County developed aggressive plans for park development and open space acquisi-
tion.
PUBLIC SERVICE ENTERPRISES
Water and Sewer Services--Water and sewer services are provided to the majority of the popu-
lation of the County by the Orange Water and Sewer Authority(the"Authority").The Authority was
created in 1976 by the Board of Commissioners for the County and the boards of aldermen of the
towns of Chapel Hill and Carrboro for the purpose of acquiring, consolidating, improving, and oper-
ating the existing water and sewer systems in the southern portion of the County. Prior to the for-
mation of the Authority, water service was provided by the University of North Carolina at Chapel
Hill and the Town of Carrboro and sewer service was provided by the towns of Chapel Hill and
Carrboro in conjunction with the University.
The Authority began utilities operations in 1977 when the towns of Chapel Hill and Carrboro
and the University of North Carolina at Chapel Hill conveyed their water and sewer facilities to the
Authority.Under the terms of the transfer, the Authority provides and maintains sewage collection
and treatment facilities and water supply,treatment and distribution facilities.
The Town of Hillsborough and the City of Mebane,which is partly located within the corporate
limits of the County, also own and operate water and sanitary sewer systems. The County issued
water and sanitary sewer bonds in the Iate 1960s to finance the construction of the Lake Orange re-
servoir, which serves the water system of the Town of Hillsborough, and the construction of im-
provements which serve the water and sanitary sewer systems of the City of Mebane. In addition,
the Orange Alamance Water System, a private corporation,utilizes Lake Orange and provides water
service to a part of the west central portion of the County.
The County's water supply has been supplemented by the addition of the Cane Creek Reser-
voir, which was built by the Authority in 1989. Increased water supply has also resulted from the
renovations to the dam at Lake Orange,which is owned by the County.
Sanitary Landfill —The County owns and operates a sanitary landfill serving County resi-
dents. The landfill was owned jointly by the County and the Towns of Carrboro and Chapel Hill.
Ownership and operation of the landfill became the County's sole responsibility in May 2000. The
operation of the landfill is self-supporting from landfill charges and is expected to be usable through
the year 2010.The County has been able to extend the expected life of its existing landfill by several
years through aggressive recycling efforts in the County. In fact, the County lead the State in 2003
in its waste reduction efforts.These efforts have led to an actual decline over the past several years
in the annual amount of solid waste being delivered to the landfill.In the 2004-2006 fiscal year the
County implemented a waste reduction recycling fee to offset the costs of the recycling program
which has been subsidized over the years by the tipping fees.The new fee will generate$3.66 million
to offset the cost of recycling operations in 2008-2009. The County has begun to consider its options
for further solid waste disposal.
OTHER PUBLIC SERVICE ENTERPRISES
Telephone service in the County is provided by Sprint,BellSouth,Mebtel and Verizon Commu-
nication. Electric service is provided by Duke Power Company, Piedmont Electric Membership Cor-
poration and Progress Energy. Gas service is provided by Public Service Gas Company.
• OTHER SERVICES
13
33
Fire and police protection are provided by the towns of Chapel Hill, Carrboro and Hillsborough
within their respective jurisdictions. In the unincorporated areas of the County fire protection is
provided in 12 fire districts pursuant to contracts between the County, the municipalities and vari-
ous fire departments. Police protection in the unincorporated areas of the County is provided by the
County Sheriffs Department.
The County's Emergency Services Department provides four general areas of countywide emer-
gency assistance: emergency communications (911), emergency medical services, fire marshall and
emergency management.Volunteer rescue squads work jointly with the County to provide a signifi-
cant amount of such services.
Debt Information
LEGAL DEBT LIMIT
In accordance with the provisions of the State Constitution and The Local Government Bond
Act, as amended, the County had the statutory capacity to incur additional net debt in an approx-
imate amount of$1,070,000,000 as of October 31,2009.For a summary of certain constitutional, sta-
tutory and administrative provisions governing or relating to the incurrence of debt by units of local
government of the State,see Appendix B.
• 14
OUTSTANDING GENERAL OBLIGATION DEBT 34
Principal Outstanding as of
June 30, June 30, June 30, October 31,
General Obligation Bonds 2007 2008 2009 2009
School Bonds $ 53,388,345 $ 61,112,944 $ 48,837,544 $ 48,837,5441
Refunding Bonds 53,695,000 49,540,000 45,435,000 45,435,000
Sanitary Sewer Bonds 1,114,048 1,071,068 1,028,088 1,028,088
Other Bonds 31.017,607 28.665.988 26.114.368 26.114.3681
Total General Obligation
Debt Outstanding $139,216,0002 $130,290,000 2 $121,415,000 2 $121,415,000 2
Latest Bonds Issued:
•2005-06 $29,186,000 General Obligation Public Improvement Bonds, Series 2005A, 12.56
years average maturity, 4.1459%true interest cost.
$29,365,000 General Obligation Refunding Bonds, Series 2005B, 9.76 years average
maturity, 3.8806%true interest cost.
lA portion of these bonds will be paid and refunded with the proceeds of the Bonds now being of-
fered.See"the Refunding Plan"herein.
2This amount does not include refunded bonds with respect to which an escrow agent holds in trust
certain obligations of, or obligations the principal of and interest on which are unconditionally guar-
anteed by, the United States of America,which mature at such times and in such amounts and bear
interest payable at such times and in such amounts so that sufficient moneys will be available, to-
gether with cash deposited with such escrow agent,to pay when due all principal of and interest and
any premium on the refunded bonds to and including their respective maturities or dates of redemp-
tion.
GENERAL OBLIGATION DEBT RATIOS
Total
GO Debt Total
GTotal Assessed to Assessed GO Debt
At July l O Debt! Valuation Valuation Population= Per Capita
2005 $125,810,000 $10,075,972,003 1.25% 121,991 $1,031.31
2006 148,176,000 12,330,315,189 1.20 123,766 1,197.22
2007 139,215,000 .12,581,220,079 1.11 127,344 1,093.22
2008 130,290,000 12,833,591,710 1.02 129,296 1,007.69
2009 121,415,000 15,369,119,201 .79 129,296 939.05
After Bonds now
offered are issued $ 3.4 $16,369,119,201 % 129,296 $
'Does not include refunded bonds as described under"Outstanding General Obligation Debt"above.
2Estimate of North Carolina Office of State Budget and Management.
sDoes not include the Bonds to be Refunded as described under"The Refunding Plan"herein.
4The principal amount of the Refunding Bonds now being offered is subject to change as described in
the Notice of Sale.
• 16
35
N k
Cd
r�
a
tw
NtiP1Nl *Icic1NC7NNt' N �
mm CD CDMriI* r-Ito -4 w 0 w w w M
00 00 Q to to g t U9 " tO l 00 tO w ►t� N
N nQ tp M N M t-- O M t- N r1 0 00 l dr
C3300r--�M'OOCANU> M co-00-05 ri
T dr00t0 `4MMr4M r40 44 00000 t-
PC , fL C* mcor-1NN00 'drr-CNNN Ll. M
Fla �thMNN'cl+-�+-�OOOC»�Cpl O
ri r-C rt 1-11-4 ri ri ri •-C r-i .-t CO
H ,y
O
O O O O O O O O O o O d O d 0 0 v
O O O O O O O O O O O O O O O
0 0 0 0 o d o d o 0 0 0 o d o o a'i o 4
trioUoUo00U,iU>"0La0UioC>tO10 > z
MODNWQV t- t- V L r4 -110dr ri O be
00 oc cc N C t ca c cp � tc O I I dr .a 0 y
Cd
OO a0 OO 00 00 OO OD to 00 00 tl0 GD tX}tf�
° FA
CD
60, A O N
1 O ,g
M MMto r-40? 05C* m Q40CDNMd' O � $3 v
r, u� C� O> �f! O l O) .-t M M r 2i 0 C" N PI �o
Cam' r-i t- t0 M Lo r-i tf) O .3�t r-4 co dr N d'� cC M
N t- 'dr d 0 rc to to dr 0 CJ9 M t- Co to N
F� c�tort +-CO) NOOOOaONCDr+ NcONOO O 0 Om
�r .-�to N O ts;N I",V"M 4�rr Do d-U;Oi u1i t» ;
0 M comwco00UOmNto drM00MdOM N
a O to N 00 in O w N t- N to tO rC t-- (- to
d't6 C6 N N N 14 +o c 0i tai 0S uo N to at
W 14 rt r-i .q rA r--1 r-C r 4 r4 r--r � T�
a
W
vtOiOtOtOUMtOUjtOMo00otioN °
ti � NNNNatiC- NU� tOtOtr� 000 V 4>
Oim0im0imQi0imNNNN "rON 41 iy
r-i r4 rC rc rc rC rC .-( N M CO CO M O O r-C 03 aS m
000000000 [ t- N t 000 M
c]tz CV Ntz tz cl N t�.-S ri ri CD,l tO tD
M ao 00 N tO M co cm (m M t- N o t- 00 00 0
00 O t0 CC It dIt M O M FC H
�j00 00 00 00 w m 00 w 00 00 00 M M U) N N �d
Qi t4 69- :3 OA
'a
ML rimMMr-ir-iM C11 r-4 N V +"
NL MogNtoM rC00ol +-Cc7 M +-C 10 "1 � b
W N10C) N Go 010 r-4 r4mC7r-1Mdr O m
,Pr wOvMiOMNO00erept0wt0 O ,�
V OOOtONMOM " tto -40t-- N to O G7
(� 00 Ui M ri Q>>:tC>d'N ri tC�C�N t` m v p
0000 * 00 Nt- Nt- t` N ri 0LOIC M ,) N tq Pa
r-'1 r--1 4
ri O
U is 6c> .fl ZS
xi 42
E� in tf1 t0 t[j t0 10 +0 to to O O O O co 00 � P�
NNNNNNNN NUOLRV) UJM Iq N m
W 0000 t> 00040t- t- t- t- utl t- :+ .0 O
A o0000000 Mo0Mt0000O wCD OM o0
OMMMMMOfCACANNNNrC O N
!44gNNNNNN MMM00 00 m R
0 dr dr � dt dr " 'dr 'C44 ri " r"-1 rq-i O O O
�y0 0 �.
k; O m .�
O r-IN McNtOCCI OOMOrCNM 'dr d
rC ri ,� ri ri ri ri ri ri ri N N N cl Ly
(D 0
O4 �4G-4Md4t4 -4 4r-I NrCNM
W Gs 00000 00 0000000 FHi �s
. C0 NNNNNNNNNN NNNNN
17
36
GENERAL OBLIGATION BONDS AUTHORIZED AND UNISSUED
Date Authorized Bonds
Purpose Approved and Unissued Now Offered Balance
Parks and
Open Space 11106/2001 $ 6,500,000 $ — $ 5,600,000
Housing 11/06/2001 1,400,000 — 1,400,000
Refunding 06/23/2005 4,000,000 — 4,000,000
Refunding 10/20/2009 27.000.000 9,760,0001 17.240.00Q 2
$37,900,000 $ 9,760,000 $ 28,140,000
'Subject to change as described in the Notice of Sale.
2The County does not intend to issue the remaining authorized and unissued bonds.
GENERAL OBLIGATION DEBT INFORMATION FOR UNDERLYING UNITS AS OF OCTOBER 31,2009
Bonds Authorized Total Total
2008 Assessed Tax hate and Unissued GO Debts GO Debt
Unit PopulationI Valuation Per 51002 Utility Other Utility Other Per Capita
Carrboro 19,479 $1,430,312,905 $.0537 $ — $4,600,000 $ — $2,616,107 $134.30
Chapel Hill 55,616 6,640,522,787 .522 — 20,410,000 — 17,415,000 313.13
Hillsborough
(County Seat) 6,660 626,401,231 .691 - - 122,000 - 18.32
Mebane 9,848 4 1,149,864,403 .50 980,000 99.51
(Estimates of North Carolina Office of State Budget and Management.
2Rates are for the fiscal year ended June 30,2008.
$Does not include installment financing agreements,revolving loans and revenue bonds as these ob-
ligations are not general obligations.
49%reside in Orange County and 91%reside in Alamance County
18
i
37
OTHER LONG-TERM COMMITMENTS
The County currently has a variety of short-term financing agreements for vehicles and other
equipment. In addition, the County has financed school and public buildings through installment
financing agreements and the current debt service requirements of these other financing agreements
are as follows:
Fiscal Principal
Year Principal and Interest
2009-10 $ 9,228,814.01 $ 13,387,697.60
2010-11 10,654,872.50 16,041,767.66
2011-12 9,639,468.81 13,819,059.64
2012-13 7,776,042.90 11,700,414.74
2013-14 7,750,642.90 11,370,581.61
2014-15 7,512,216.30 10,828,698.02
2015-16 7,168,816.30 10,193,922.72
2016-17 7,000,315.30 9,743,353.26
2017-18 6,880,487.90 9,334,684.32
2018-19 6,980,160.14 9,149,959.48
2019-20 6,980,160.14 8,863,607.48
2020-21 6,980,160.14 8,577,055.47
2021-22 6,980,160.14 8,290,603.48
2022-23 6,375,160.14 7,399,151.49
2023-24 6,099,298.04 6,863,427.87
2024-25 5,819,936.00 6,344,993.93
2025-26 3,787,936.00 4,115,637.39
2026-27 2,773,022.00 2,943,667.68
2027-28 2.602.850.00 2.663.220.00
$128,689,417.66 $171,621,303.73
DEBT 0UTLQ0K
The County has an extensive ten-year capital improvement program underway to provide go-
vernmental offices,judicial facilities, school facilities,parks and open space and affordable housing.
Some of these facilities will require the incurrence of debt by the County. The County currently has
$6,900,000 in voter approved bonds authorized and unissued.
In addition to the use of bond proceeds, the ten-year capital plan calls for the combined use of
pay-as-you-go funds and installment purchases to fund capital.During the next two years the Coun-
ty plans to issue Alternative Financing(direct bank placement or Certificates of Participation)under
the Qualified School Construction Bond(QSCB)Program as well as other Alternative Financing and
loans. The total amount is estimated to be between$64-56.6 million.The issuance of$4.1 million of
QSCB financing is scheduled for December to construct a High School Arts Wing for the Chapel Hill
Carrboro City School System. Additional financings include up to $1.5 million for technology and
communications projects, $2.7 million for Parks and Open Space, $8-10 million for a land fill trans-
fer station, $3.3 million for a Middle School Auditorium for the Orange County School System and
$31 million for a new elementary school for the Chapel Hill Carrboro City School System. Debt ser-
vice on the landfill transfer station financing would be paid from enterprise fund revenue. In addi-
tion the County plans to seek a State loan of$3.5 million for sewer system construction which would
be repaid from general revenue of the County.
• 19
38
Tag Information
GENERAL INFORMATION
Fiscal Year Ended or Endinc June 30
&Q42 $ 2 20106
Assessed Valuation:
Assessment Ratio' 100% 100% 100% 100%
Real Property $10,936,261,416 $11,183,241,007 $11,385,947,548 $14,021,668,763
Personal Property 1,214,967,577 1,219,216,812 1,221,364,482 1,144,855,450
Public Service Companiesa 218,479.438 218,549,070 226.279,680 202,594.988
Total Assessed Valuations $12,369,708,431 $12,621,006,889 $12,833,591,710 $15,369,119,201
Tax Rate per$1004 .9030 .96 .998 .858
Levy $ 111,171,556 $ 119,467,330 $ 128,079,245 $ 131,867,043
'Percentage of appraised value has been established by statute.
2Valuation of railroads, telephone companies and other utilities as determined by the North Caroli-
na Property Tax Commission.
sRevaluation of real property became effective with the 2010 tax levy.The County revalues property
every 4 years.
4In addition to the County-wide rate shown, all taxable property within the Chapel Hill-Carrboro
City School Administrative Unit is subject to a special school district tax and parts of the rural area
of the County are subject to special fire district taxes. Such special districts and their respective tax
rates per$100 assessed valuation are as follows:
5Estimated.
2M 244$ 2M 2M
Special School District
Chapel Hill-Carrboro City Schools $.19 $.20 $.23 $.1884
Special Fire Districts
Cedar Grove Fire District .073 .073 .073 .066
Chapel Hill Fire District .020 .020 .049 .022
Damascus Fire District .040 .050 .060 .050
Efland Fire District .042 .042 .062 .047
Eno Fire District .057 .057 .057 .060
Little River Fire District .046 .046 .046 .041
New Hope Fire District .068 .068 .068 .057
Orange Rural Fire District .056 .056 .063 .064
Orange Grove Fire District .039 .039 .042 .036
South Orange Fire District .092 .095 .096 .079
Southern Triangle Fire District .040 .050 .060 .050
White Cross Fire District .042 .050 .060 .060
20
39
i
The following table shows the County-wide levy and the levies by the County on behalf of the
special school districts and the special fire districts for the fiscal years ended or ending June 30:
AM 2008 Im 20101
County-wide $109,874,607 $119,509,712 $128,249,751 $131,867,043
Special School District 14,871,669 16,325,707 18,600,932 18,721,785
Special Fire Districts 2.559.638 2.771.387 3.010335 3.139.248
Total Levy $127,305,914 $138,606,806 $149,861,018 $153,728,076
'Estimated.
TAX COLLECTIONS
Percentage of
Fiscal Year Ended Prior Years' Current Year's Current Year's
Qr Eud:Lna June 30 Levies Collected Total Lew Collected Total Levy Collected
2006 $ 954,076 $ 99,271,419 98.90°x6
2007 1,053,864 110,014,826 98.96
2008 984,746 117,907,855 98.69
2009' 1,061,492 126,660,331 98.75
'Unaudited.
TEN LARGEST TAXPAYERS FOR FISCAL YEAR 2008.09
Assessed Percentage of
lam,@ Type of Enterprise Valuation Assessed Value
Duke Energy Company Public Utility $ 89,524,645 .70%
VAC Limited Partnership Apartment Rental 62,702,256 .49
US CT LLC Property Owners Trust 50,120,115 .39
Piedmont Electric
Membership Corporation Public Utility 46,539,477 .36
Blue Cross and Blue Shield
of North Carolina Health Insurance 36,432,449 - .28
Corium LLC Health Insurance 32,584,496 .25
Madison University Mall LLC Retail Outlet 32,336,426 .25
Bell South Telephone and
Telegraph Company Public Utility 31,052,192 .24
Europa Center Hotel and Office Rental 27,031,431 .21
DDRM Meadowmont Rental/Residental 22,577.932 .18
$430,901,419 3.36%
2009-14 Budget Commentary
Ad valorem tax collections through June 2009 for real property were approximately 98% of the
levy which is on target with budget expectations.Motor Vehicle tax collections were coming in under
budget estimates. Other revenues came in under budget due to the downturn in the economy. Ex-
penditures were slightly lower than normal at approximately 96°x6 of budget. There was million ap-
propriated from fund balance in the original budget as well as a significant appropriation of fund
balance during the year. The FYE 2009 Unreserved Fund Balance dropped by$4.8 million from the
FYE 2008 amount to$21 million which is 11.6% of FYE 2009 expenditures. Since there was no ap-
21
40
in the adopted budget for Fiscal Year 2010 the Undesi nated Fund Bal-
ance for FYE is the same amount as the Unreserved Fund Balance. The adopted 2009-2010 budget
included General Fund appropriation of $177.6 million which is a reduction of $5.4 million from
prior years original budget. Property was revalued in 2009. The Board adopted a tax revenue neu-
tral tax rate of.858 cents per hundred for fiscal 2009-10 which reduced the tax rate to generate the
same total tax revenue as the previous fiscal year. The adopted budget for FYE 2010 contains ap-
propriations to meet debt service payments on all County debt including projected debt service pay-
ments related to these bonds.
Pension Plans
The County participates in the North Carolina Local Governmental Employees' Retirement
System.
North Carolina Local Governmental Employees'Retirement System—The North Carolina Lo-
cal Governmental Employees'Retirement System is a service agency administered through a board
of trustees by the State for public employees of counties, cities,boards, commissions and other simi-
lar governmental entities. While the State Treasurer is the custodian of system funds, administra-
tive costs are borne by the participating employer governmental entities. The State makes no
contributions to the system.
The system provides, on a uniform system-wide basis, retirement and, at each employer's op-
tion, death benefits from contributions made by employers and employees. Employee members con-
tribute six percent of their individual compensation. Each new employer makes a normal
contribution plus, where applicable, a contribution to fund any accrued liability over a 24-year pe-
riod. The normal contribution rate, uniform for all employers, is currently 4.80 percent of eligible
payroll for general employees and 5.27 percent of eligible payroll for law enforcement officers. The
accrued liability contribution rate is determined separately for each employer and covers the liabili-
ty of the employer for benefits based on employees'service rendered prior to the date the employer
joins the system.
Members qualify for a vested deferred benefit at age 50 with at least 20 years of creditable ser-
vice;at age 60 after at least five years of creditable service to the unit of local government. Unre-
duced benefits are available: at age 65,with at least five years of service; at age 60,with at least 25
years of creditable service;or after 30 years of creditable service,regardless of age.Benefit payments
are computed by taking an average of the annual compensation for the four consecutive years of
membership service yielding the highest average. This average is then adjusted by a percentage
formula, by a total years of service factor, and by an age service factor if the individual is not eligible
for unreduced benefits.
Contributions to the system are determined on an actuarial basis.
For information concerning the County's participation in the North Carolina Local Governmen-
tal Employees'Retirement System and the Supplemental Retirement Income Plan of North Carolina
see the Notes to the County's Audited Financial Statements in Appendix D.
Financial statements and required supplementary information for the North Carolina Local
Governmental Employees'Retirement System are included in the Comprehensive Annual Financial
Report("CAFR")for the State.Please refer to the State's CAFR for additional information.
Other Post-Employment Benefits
Under the County Personnel Ordinance the County administers a single employer defined ben-
efit Retiree Healthcare Benefits Plan. This plan provides post employment health care benefits to
retirees of the County provided they participate in the North Carolina Local Government Employees
Retirement System and have at least ten years of creditable service with the County or either age 65
22
41
• with the County. The
or retiring on a disability retirement with five years of creditable service w t y
County provides 100% of the cost under it employee healthcare plan for employees with ten years of
creditable service and 62% of the dependent coverage up to age 65.The County provides 50% of the
cost of coverage for employees with five years of service and 26% of the cost of dependent coverage
up to age 66. The County does not subsidize the dependent coverage for employees hired after July
1, 2008.The County has chosen to fund the healthcare benefits on a pay as you go basis.The County
contributed$846,177 for fiscal year 2008 and$1,005,019 for fiscal year 2009.
As of December 31, 2007, the most recent actuarial valuation date, the accrued liability for
benefits was $54,382,277. The plan was not funded, therefore, the Unfunded Actuarial Accrued Lia-
bility(UAAL)was$54,382,277.The UAAL is 145.6%of covered payroll.
The ARC represents the estimated amount needed in a fiscal year to amortize the then-current
UAAL over a 30-year period. The following table presents certain information concerning the Coun-
ty's ARCs and its actual annual pay-as-you-go funding.
The current Annual Required Contribution("ARC')rate is 13.69%of annual covered payroll.
Percentage of
Fiscal Annual OPEB Annual OPEB Net OPEB
Year ended Cost("ARC") Cost Contributed Obligation
June 30,2008 $8,829,704 9.57% $7,984,527
June 30,2009 6,109,662 19.67 4,104,463
Contingent Liabilities
. The County is not aware of any contingent liabilities which it expects would materially ad-
versely affect its ability to meet its financial obligations.
CONTINUING DISCLOSURE
In a resolution to be adopted by the County prior to the sale of the Bonds, the County will
undertake,for the benefit of the beneficial owners of the Bonds,to provide:
(a) by not later than seven months fi-om the end of each fiscal year of the County, to the
Municipal Securities Rulemaking Board('MSRB')audited financial statements of the County
for such fiscal year, if available;preppivd in accordance with Section 169-34 of the General
Statutes of North Carolina,as it may be amended from time to time,or any successor statute,
or,if such audited financial statements of the County are not available by seven months from
the end of such fiscal year, unaudited financial statements of the County for such fiscal year
to be replaced subsequently by audited financial statements of the County to be delivered
within 16 days after such audited financial statements become available for distribution;
(b) by not later than seven months from the end of each fiscal year of the County,to the MSRB(i)
the financial and statistical data as of a date not earlier than the end of the preceding fiscal
year for the type of information included under heading`The County-Debt Information and-
Tax Information" in the Official Statement relating to the Bonds(excluding any information
on overlapping or underlying units)and(ii)the combined budget of the County for the current
fiscal year, to the extent such items are not included in the audited financial statements
referred to in(a)above;
(c) in a timely manner, to the MSRB, notice of any of the following events with respect to the
Bonds,if material:
• 23
'
(1) principal and interest payment delinquencies; 42
(2) non-payment related defaults;
(3) unscheduled draws on debt service reserves reflecting financial difficulties;
(4) unscheduled draws on credit enhancements reflecting financial difficulties;
(5) substitution of credit or liquidity providers,or their failure to perform;
(6) adverse tax opinions or events affecting the tax-exempt status of the Bonds;
(7) modification to rights of the beneficial owners of the Bonds;
(8) Bond calls;
(9) defeasances;
(10) release,substitution or sale of any property securing repayment of the Bonds and
(11) rating changes;and
(d) in a timely manner,to the MSRB,notice of a failure of the County to provide required annual
financial information described in(a)or(b)above on or before the date specified.
The County shall provide the documents referred to above to the MSRB in an electronic format as
• prescribed by the MSRB and accompanied by identifying information as prescribed by the MSRB.
The County may discharge its undertaking described above by providing such information in a
wanner that the United States Securities and Exchange Commission subsequently authorizes in lieu of
the manner described above.
At present, Section 169-34 of the General Statutes of North Carolina requires the County's
financial statements to be prepared in accordance with generally accepted accounting principles and to
be audited in accordance with generally accepted auditing standards.
The resolution to be adopted by the County will also provide that if the County fails to comply with
the undertaking described above, any beineficial owner of the Bonds then outstanding may take action to
protect and enforce the rights of all beneficial owners with respect to such undertaking, including an
action for specific performance;provided, however, that failure to comply with such undertaking shall
not be an event of default and shall not result in any acceleration of payment of the Bonds. All actions
shall be instituted, had and maintained in the manner provided in this paragraph for the benefit of all
beneficial owners of the Bonds.
Pursuant to such resolution, the County will reserve the right to modify from time to time the
information to be provided to the extent necessary or appropriate in the judgment of the County,
provided that:
(a) any such modification may only be made in connection with a change in circumstances that
arises from a change in legal requirements,change in law, or change in the identity, nature,
or status of the County;
(b) the information to be provided, as modified, would have complied with the requirements of
Rule 15e2-12 issued under the Securities Exchange Act of 1934("Rule 15c2-12')as of the date
• 24
43
•
of this Official Statement, after taking into account any amendments or interpretations of
Rule 15c2-12,as well as any changes in circumstances;and
(c) any such modification does not materially impair the interests of the beneficial owners, as
determined either by parties unaffiliated with the County (such as bond counsel), or by the
approving vote of the registered owners of a majority in principal amount of the Bonds then
outstanding pursuant to the terms of such resolution, as it may be amended from time to
time,at the time of the amendment.
Any annual financial information containing modified operating data or financial information is
required to explain,in narrative form, the reasons for the modification and the impact of the change in
the type of operating data or financial information being provided.
The undertaking described above will terminate upon payment,or provision having been made for
payment in a manner consistent with Rule 15c2-12, in full of the principal of and interest on all of the
Bonds.
The County has not failed to provide any information required to be provided by any undertaking
previously made by the County pursuant to the requirements of Rule 15c2-12.
APPROVAL OF LEGAL PROCEEDINGS
Certain legal matters incident to the authorization and issuance of the Bonds are subject to the
approving legal opinion of Sanford Holshouser LLP, Carrboro,North Carolina, Bond Counsel for the
County (Bond Counsel"). Bond Counsel's approving legal opinions will be provided at the County's
expense and will be available at the time of the delivery of the Bonds. The proposed forms of Bond
• Counsel's opinions are attached as Appendix D.
Bond Counsel's approving legal opinions express Bond Counsel's professional judgment as to
the legal issues explicitly addressed in the opinion. By rendering a legal opinion, an opinion giver
does not become an insurer or guarantor of that expression of professional judgment, of the transac-
tion opined upon,or of the future performance of parties to the transaction.Additionally,the render-
ing of an opinion does not guarantee the outcome of any legal dispute that may arise out of the
transaction and a bond opinion is not a statement(either expressly or by implication)concerning the
marketability,value or likelihood of payment of the Bonds.
Bond Counsel has not been engaged to investigate the County's operations or condition or the
County's ability to provide for payments on the Bonds.Bond Counsel will express no opinion(1)-as to
the County's ability to provide for payments on the Bonds, or(2)as to the accuracy, completeness or
fairness of any information that may have been relied on by anyone in making a decision to purchase
Bonds, including this Official Statement. In this transaction, Bond Counsel will serve only as bond
counsel to the County, and will not represent any bidder or the purchaser of the Bonds.
RATINGS
Moody's Investors Service, Standard & Poor's Ratings Services, Fitch Ratings, and the North
Carolina Municipal Council have given the Bonds ratings of and
, respectively. Those ratings reflect only the respective views of such organizations, and an
explanation of the significance of each such rating may be obtained only from the respective organi-
zation providing such rating. Certain information and materials not included in the Official State-
ment were furnished to such organizations. There is no assurance that such ratings will remain in
effect for any given period of time or that any or all will not be revised downward or withdrawn en-
tirely. Any downward revision or withdrawal of a rating may have an adverse effect on the market
prices of the Bonds.
• 26
44
TAX TREATMENT
Opinion of Bond Counsel. In the opinion of Sanford Holshouser LLP, Carrboro, North Caro-
lina, Bond Counsel for the County ("Bond Counsel"), under existing law, interest on the Bonds (1)
will not be included in gross income for federal income tax purposes, (2)will not be a specific item of
tax preference for purposes of the federal alternative minimum income tax imposed on individuals
and corporations;however,with respect to corporations(as defined for federal income tax purposes),
such interest will be taken into account in determining adjusted current earnings for purposes of
computing the alternative minimum income tax on corporations, and(3)will be exempt from exist-
ing State of North Carolina income taxation. Bond Counsel will express no other opinion regarding
the federal or North Carolina tax consequences of the ownership of or the receipt or accrual of inter-
est on the Bonds.
Bond Counsel will give its opinion in reliance upon certifications by County representatives
and others as to certain facts relevant to the opinion.The County has covenanted to comply with the
provisions of the Internal Revenue Code of 1986, as amended (the"Code"), regarding, among other
matters, the use,expenditure and investment of the proceeds derived from the sale of the Bonds and
the timely payment to the United States of any arbitrage profit with respect to the Bonds. The
County's failure to comply with such covenants could cause interest on the Bonds to be included in
gross income for federal income tax purposes retroactively to date of issuance of the Bonds.
The Bonds will not be designated as"qualified tag-exempt obligation."
Other Tax Consequences. In addition to the matters addressed above, prospective purchas-
ers of the Bonds should be aware that the ownership of tax-exempt obligations may result in colla-
teral federal income tax consequences to certain taxpayers, including without limitation, financial
institutions, property and casualty insurance companies, certain S corporations, certain foreign cor-
porations subject to the branch profits tax, corporations subject to the environmental tax, recipients
of Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have in-
curred or continued indebtedness to purchase or carry tax-exempt obligations. Prospective purchas-
ers of the Bonds should consult their tax advisors as to the applicability and impact of such
consequences.
Interest on the Bonds may or may not be subject to state or local taxation in jurisdictions other
than North Carolina. Prospective purchasers of the Bonds should consult their own tax advisors as
to the status of interest on the Bonds under the tax laws of any such jurisdiction other than North
Carolina.
Discount Bonds and Premium Bonds
. as lead underwriter, has advised the Local Government
Commission of North Carolina that the initial public offering prices of the Bonds maturing on Feb-
ruary 1, to inclusive, (the "Discount Bonds"), are less than the respective
amounts payable at maturity.An amount not less than the difference between the initial public of-
fering prices of the Discount Bonds and the amounts payable at maturity constitutes original issue
discount("OID"). Owners of Discount Bonds should consult their own tax advisors as to the determi-
nation for federal tax purposes of the amount of OID properly accruing each year with respect to the
Discount Bonds and as to federal tax consequences and the treatment of OID for State of North Car-
olina and local tax purposes. '
as lead underwriter, has also advised the Local Govern-
ment Commission of North Carolina that the initial public offering prices of the Bonds maturing on
February 1, to inclusive, (the"Premium Bonds'),are greater than the amounts payable
26
.The difference between the amount
at maturit Y payable at maturity of the Premium Bonds and the 45
tax basis of the Premium Bonds to a purchaser (other than a purchaser who holds Premium Bonds
as inventory,stock in trade or for sale to customers in the ordinary course of business)who purchas-
es the Premium Bonds at the initial offering price is 'Bond Premium."Bond Premium is amortized
over the term of the Premium Bonds for federal income tax purposes. Owners of the Premium Bonds
are required to decrease their adjusted basis in the Premium Bonds by the amount of amortizable
Bond Premium attributable to each taxable year the Premium Bonds are held. Owners of the Pre-
mium Bonds should consult their tax advisors with respect to the precise determination for federal
income tax purposes of the treatment of Bond Premium upon the sale or other disposition of the
Premium Bonds and with respect to State of North Carolina and local tax consequences of owning
and disposing of the Premium Bonds.
Bond Counsel's approving opinion will not specifically address the characterization of any
amounts as OID or Bond Premium, and will not specifically address the tax treatment of any
amounts that may constitute OID or Bond Premium.
FINANCIAL ADVISOR
has acted as financial advisor to the County in
connection with the issuance of the Bonds.The firm has provided technical assistance in structuring
the Bonds and related escrow account and has performed the mathematical computations to
determine the amount necessary to be deposited in the escrow account to pay and retire the Bonds to
be Refunded. will also assist in the purchase and subscription of
securities for the escrow account.
Rule G-23 of the Municipal Securities Rulemaking Board allows any broker, dealer or
municipal securities dealer, who has a finacial advisor relationship, to purchase new issues on a
competitively bid basis with prior written consent of the issuer.
has received written permission from the County to submit a competitive bid at the public sale for
the Bonds. . through the competitive bidding process, may
acquire as principal or as a participant in a syndicate of underwriters, all or a portion of the
County's Bonds,including those upon which has rendered advice.
VERIFICATION OF MATHEMATICAL COMPUTATIONS
The accuracy of(a) the mathematical computations of the adequacy of the maturing principal
amounts of the respective Government Obligations and interest (i£any) earned thereon, together
with any cash in the related escrow account, to pay all of the principal of and premium, if any, and
interest on the Bonds to be Refunded as such interest payments become due and the Bonds,to be Re-
funded are redeemed and(b)the mathematical computations supporting the conclusion that the Re-
funding Bonds are not"arbitrage bonds"under Section 148 of the Code are being verified by Barthe
&Wahrman, PA,Bloomington, Minnesota.Bond Counsel will rely on said verification in rendering
its opinion as to the exclusion of interest on the Refunding Bonds from gross income of the owners
thereof for purposes of federal income taxation.
• 27
46
UNDERWRITING
The underwriters for the Bonds are
*
The underwriters have jointly and severally agreed, subject to certain conditions, to purchase
all but not less than all of the Bonds. If all of the Bonds are sold at the public offering yields berei-
nabove set forth,the underwriters anticipate total selling compensation of$ *.The pub-
lic offering prices or yields of the Bonds may be changed from time to time by the underwriters.
*Information provided by underwriters.
MISCELLANEOUS
Any statements in this Official Statement involving matters of opinion or estimates,whether or
not expressly so stated,are intended as such and not as representations of fact.
References herein to the State Constitution and legislative enactments are only brief outlines
of certain provisions thereof and do not purport to summarize or describe all provisions thereof.
The execution of this Official Statement has been duly authorized by the Local Government
Commission of North Carolina and the Board of Commissioners for the County.
LOCAL GOVERNMENT COMMISSION
OF NORTH CAROLINA
By
T.Vance Holloman
Secretary of the Commission
COUNTY OF ORANGE,NORTH CAROLINA
By
Valerie Foushee
Chair of the Board of Commissioners
By
Frank Clifton
County Manager
By
Gary Humphreys
Financial Services Director
• 28
47
• .APPENDIX E
[Proposed form of Sanford Holshouser's
opinion on the Bonds]
2009
Orange County,North Carolina
Orange County,North Carolina
General Obligation Refunding Bonds,Series 2009
We have acted as bond counsel to Orange County, North Carolina(the"County"),in connection
with the County's issuance today of the above-captioned bonds(the"Bonds").The County is and has
been our only client in this transaction.
We have examined the applicable law and certified copies of proceedings and documents relat-
ing to such issuance.Without undertaking to verify the same by independent investigation,we have
relied on (1)computations provided to Barthe &Wahrman, P.A., Cloomington, Minnesota, the ma-
thematical accuracy of which has been verified by them, relating to the yield of investments in an
escrow fund established in connection with the issuance of the Bonds, the sufficiency of such in-
vestments to pay the Prior Bonds (as defined below)when due and the yield on the Bonds, and (2)
representations and certifications by representatives of the Town, the North Carolina Local Gov-
ernment Commission(the"LGC") and others as to certain facts relevant to both our opinion and re-
quirements of the Internal Revenue Code of 1986,as amended(the"Code").
The Bonds are being issued to pay principal, applicable redemption premium and interest on
the outstanding balance of the Town's General Obligation Public Improvement Bonds, Series
(the "Prior Bonds"), as more filly described in the proceedings and documents relating to
the issuance of the Bonds.
The County has made certain covenants (the "Covenants") in the proceedings and documents
providing for the issuance of the Bonds to comply with the provisions of the Code regarding, among
other matters, the use, expenditure and investment of the proceeds of the Bonds and the timely
payment of any arbitrage rebate required under the Code.
We have assumed the capacity of all natural persons, the genuineness of all signatures, the
authenticity of all documents submitted to us as originals and the conformity to authentic original
documents of all documents submitted to us as copies or specimens.
E-2
4$
• Based on the foregoing,as of today and under existing law,we are of the following opinions:
1. The Bonds have been duly authorized and issued. The Bonds are legal, valid and binding
obligations of the County, enforceable in accordance with their terms.The County's faith and credit
are pledged for the payment of principal of and interest on the Bonds, and the County is authorized
to levy and collect ad valorem taxes, without restriction as to rate or amount, on all locally taxable
property to pay the principal of and interest on the Bonds.
2. Our opinion as set forth in paragraph 1 is subject to the effect(a)of bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting creditors' rights, and (b) of general
principles of equity,regardless of whether applied in a proceeding in equity or at law.
3. Interest on the Bonds paid by the County(a) is not included in gross income for federal in-
come tax purposes and (b) is not an item of tax preference for purposes of the federal alternative
minimum income tax imposed on individuals and corporations. The County's failure to comply with
the Covenants could cause interest on the Bonds to be included in gross income for federal income
tax purposes retroactively to the date of issuance of the Bonds.
4. Interest on the Bonds is exempt from existing State of North Carolina income taxation.
We express no opinion regarding other federal or North Carolina tax consequences of the own-
ership of or receipt or accrual of interest on the Bonds.
Our services as bond counsel have been limited to rendering the foregoing opinion based on our
review of such proceedings and documents as we have deemed necessary to evaluate the legality,
validity and enforceability of the Bonds and to evaluate the status of the Bonds and the interest
thereon under the federal and North Carolina tax laws referenced above.
We have not made any investigation concerning the County's operations or condition. We ex-
press no opinion(a)as to the County's ability to provide for payments on the Bonds, (b)as to the ac-
curacy, completeness or fairness of any information that may have been relied on by anyone in
making a decision to purchase Bonds, including the LGCs Official Statement with respect to the
Bonds, or(c)as to any party's compliance with any terms or conditions precedent to any purchase of
Bonds.
This opinion is based on constitutional and statutory provisions and judicial decisions existing
today. We assume no responsibility to update this opinion or take any other action with regard to
changes in facts,circumstances or the applicable law.
Very truly yours,
(To Be Signed,"Sanford Holshouser LLF')
• E-2
49
• APPENDIX F
DTC's Book-Entry System
The Depository Trust Company ("DTC"), New York, New York,will act as securities depository
for the Bonds.The Bonds will be issued as fully-registered bonds registered in the name of Cede &
Co., DTC's partnership nominee, or such other name as may be requested by an authorized repre-
sentative of DTC. One fully-registered bond certificate for each maturity of the Bonds will be regis-
tered in the name of Cede & Co., as nominee for DTC, each in the aggregate principal amount of
such maturity and will be deposited with DTC. SO LONG AS CEDE & CO. IS THE REGISTERED
OWNER OS THE BONDS, AS DTC'S PARTNERSHIP NOMINEE, REFERENCES HEREIN TO
THE OWNERS OF REGISTERED OWNERS OF THE BONDS SHALL MEAN CEDE & CO.AND
SHALL NOT MEAN THE BENEFICIAL OWNERS OF THE BONDS.
DTC is a limited-purpose trust company organized under the New York Banking Law, a"bank-
ing.organization" within the meaning of the New York Banking Law, a member of the Federal Re-
serve System, a "clearing corporation" within the meaning of the New York Uniform Commercial
Code, and a"clearing agency" registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934. DTC holds and provides asset servicing for over 2 million issues of U.S. and
non-U.S. equity issues, corporate and municipal debt issues and money market instruments from
over 85 countries that DTC's direct participants("Direct Participants")deposit with DTC. DTC also
facilitates the post-trade settlement among Direct Participants of sales and other securities transac-
tions in deposited securities trough electronic computerized book-entry transfers and pledges be-
tween Direct Participants' accounts. This eliminates the need for physical movement of securities
certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers,
banks, trust companies, clearing corporations and certain other organizations. DTC is a wholly-
owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC'). DTCC, in turn, is
owned by a number of its Direct Participants and members of the National Securities Clearing Cor-
poration, Government Securities Clearing Corporation, MBS Clearing Corporation and Emerging
Markets Clearing Corporation, as well as by the New York Stock Exchange,Inc.,the American Stock
Exchange,Inc. and the National Association of Securities Dealers, Inc.Access to the DTC system is
also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, and
trust companies that clear through or maintain a custodial relationship with a Direct Participant,
either directly or indirectly ("Indirect Participants"). DTC is rated AAA by Standard & Poor's Rat-
ings Services ("S&P"). The DTC Rules applicable to its Direct and Indirect Participants are on file
with the Securities and Exchange Commission. More information about DTC can be found at
www.dtcc.com.
Purchases of Bonds under the DTC system must be made by or through Direct Participants,
which will receive a credit for the Bonds on DTC's records. The ownership interest of actual pur-
chasers of the Bonds.(`Beneficial Owners') is in turn recorded on the Direct and Indirect Partici-
pants'records. Beneficial Owners will not'receive written confirmation from DTC of their purchases,
but Beneficial Owners are expected to receive written confirmations providing details of the transac-
tion, as well as periodic statements of their holdings, from the Direct or Indirect Participants
through which the Beneficial Owners entered into the transaction. Transfers of ownership interests
in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants
acting on behalf of the Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interests in the Bonds, except in the event that use of the book-entry
system for the Bonds is discontinued.
To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are
registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be
requested by an authorized representative of DTC. The deposit of Bonds with DTC and their regis-
tration in the name of Cede&Co.or such other nominee do not affect any change in beneficial own-
ership. DTC has no knowledge of the actual Beneficial Owners of the Bonds;DTC's records reflect
only the identity of the Direct Participants to whose accounts the Bonds are credited,which may or
may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for
keeping account of their holdings on behalf of their customers.
•
F-1
50
Conveyance of notices and other communications by DTC to Direct Participants,by Direct Par-
ticipants to Indirect Participants and by Direct and Indirect Participants to Beneficial Owners will
be governed by arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.Beneficial Owners of the Bonds may wish to take certain steps to
augment transmission to them of notices of significant events with respect to the Bonds, such as
prepayments,tenders,defaults and proposed amendments to the security documents.
Neither DTC nor Cede & Co. will consent or vote with respect to the Bonds. Under its usual
procedures, DTC mails an Omnibus Proxy to the County as soon as possible after the record date.
The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to
whose accounts the Bonds are credited on the record date(identified in a listing attached to the Om-
nibus Proxy).
Principal and interest payments on the Bonds will be made to Cede &Co. or such other nomi-
nee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct
Participants' accounts upon DTC's receipt of funds and corresponding detail information from the
County on each payable date in accordance with their respective holdings shown on DTC's records.
Payments by Direct and Indirect Participants to Beneficial Owners will be governed by standing in-
structions and customary practices, as is the case with securities held for the accounts of customers
in bearer form or registered in"street name,"and will be the responsibility of such Direct and Indi-
rect Participants and not of DTC or the County, subject to any statutory or regulatory requirements
as may be in effect from time to time.Payment of principal and interest to DTC is the responsibility
of the County, disbursement of such payments to Direct Participants will be the responsibility of
DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of the
Direct and Indirect Participants.
DTC may discontinue providing its service as securities depository with respect to the Bonds at
any time by giving reasonable notice to the County. Under such circumstances, or in the event the
County desires to use a similar book.-entry system with another securities depository, there may be a
successor securities depository (all references to DTC include any such successor). The County may
also decide to discontinue participation in the system of book-entry transfer through DTC(or a suc-
cessor securities depository) at any time by giving reasonable notice to DTC. If the book-entry sys-
tem is discontinued and there is no successor securities depository, Bond certificates will be printed
and delivered to the Beneficial Owners.
The information in this section concerning DTC and DTC's book-entry has been obtained from
DTC, and the County takes no responsibility for the accuracy thereof.
The County cannot and does not give any assurances that DTC,Direct Participants or Indirect
Participants will distribute to the Beneficial Owners of the Bonds (a) payments of principal, pre-
mium, if any,or interest on the Bonds, (b)confirmations of their ownership interests in the Bonds or
(c) prepayment or other notices sent to DTC or Cede & Co., its partnership nominee, as the regis-
tered owner of the Bonds, or that they will do so on a timely basis or that DTC, Direct Participants
or Indirect Participants will serve and act in the manner described in this Official Statement.
THE COUNTY WILL NOT HAVE ANY RESPONSIBILITY OR OBLIGATIONS TO THE
DIRECT PARTICIPANTS, INDIRECT PARTICIPANTS OR THE BENEFICIAL OWNERS WITH
RESPECT TO (1)THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DIRECT
PARTICIPANT OR INDIRECT PARTICIPANT, (2) THE PAYMENT BY DTC OR ANY DIRECT
PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL
OWNER IN RESPECT OF THE PRINCIPAL AMOUNT OF OR PREPAYMENT PRICE OR
INTEREST ON THE BONDS; (3) THE DELIVERY BY DTC OR ANY DIRECT PARTICIPANT OR
INDIRECT PARTICIPANT OF ANY NOTICE TO ANY BENEFICIAL OWNER THAT IS
REQUIRED OR PERMITTED TO BE GIVEN TO OWNERS UNDER THE TERMS OF THE BOND
ORDER AND RESOLUTION; (4) THE SELECTION OF THE BENEFICIAL OWNERS TO
RECEIVE PAYMENT IN THE EVENT OF ANY REDEMPTION OF THE BONDS; OR (6) ANY
CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS OWNER.
F-2
51
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and
transfer(s)unto
(Please print or type transferee's name and address, including zip code)
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OR TRANSFEREE:
the within bond and all rights thereunder, hereby irrevocably constituting and appointing
, Attorney, to transfer said bond on the books kept for
the registration thereof,with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be (Signature of Registered Owner)
guaranteed by a participant in the NOTICE: The signature above
Securities Transfer Agent Medallion must correspond with the name of the
Program ("STAMP") or similar program registered owner as it appears on the front
of this bond in every particular without
alteration or enlargement or any change
whatsoever.
•
z
52
Exhibit B --Undertaking for Continuing Disclosure
The County undertakes, for the benefit of the beneficial owners of the Bonds, to
provide the following:
(a) by not later than seven months from the end of each of the County's fiscal
years, to the Municipal Securities Rulemaking Board ("MSRB"), audited County
financial statements for such fiscal year, if available,prepared in accordance with Section
159-34 of the General Statutes of North Carolina, as it may be amended from time to
time, or any successor statute, or, if such audited financial statements are not available by
seven months from the end of any fiscal year, unaudited County financial statements for
such fiscal year, to be replaced subsequently by audited County financial statements to be
delivered within 15 days after such audited financial statements become available for
distribution;
(b) by not later than seven months from the end of each of the County's fiscal
years, to the MSRB, (i) the financial and statistical data as of a date not earlier than the
end of the preceding fiscal year (which data will be prepared at least annually, will
specify the date as to which such information was prepared and will be delivered with
any subsequent material events notices specified in subparagraph (c) below) for the type
of information included under heading "The County - Debt Information" and "- Tax
Information"in the final Official Statement(excluding any information on overlapping or
underlying units), and (ii) the combined budget of the County for the current fiscal year,
to the extent such items are not included in the audited financial statements referred to in
(a) above;
(c) in a timely manner, to the MSRB, notice of any of the following events
with respect to the Bonds, if material:
(1) principal and interest payment delinquencies;
(2) non-payment related defaults;
(3) unscheduled draws on debt service reserves reflecting financial difficulties;
(4) unscheduled draws on any credit enhancements reflecting financial
difficulties;
(5) substitution of credit or liquidity providers, or their failure to perform;
(6) adverse tax opinions or events affecting the tax-exempt status of the Bonds;
• (7) modifications to rights of the beneficial owners of the Bonds;
12
r
53
(8) Bond calls;
(9) defeasances;
(10) release, substitution or sale of any property securing repayment of the
Bonds; and
(11) rating changes; and
(d) in a timely manner, to the MSRB, notice of a failure of the County to
provide required annual financial information described in (a) or (b) above on or before
the date specified.
If the County fails to comply with the undertaking described above, any beneficial
owner of the Bonds may take action to protect and enforce the rights of all beneficial
owners with respect to such undertaking, including an action for specific performance;
provided, however, that failure to comply with such undertaking will not be an event of
default and will not result in any acceleration of payment of the Bonds. All actions will
be instituted, had and maintained in the manner provided in this paragraph for the benefit
of all beneficial owners of the Bonds.
The County shall provide the documents referred to above to the MSRB in an
electronic format as prescribed by the MSRB and accompanied by identifying
information as prescribed by the MSRB.
The County may discharge its undertaking as set forth in this resolution by
providing such information in any manner that the United States Securities and Exchange
Commission subsequently authorizes in lieu of the manner described above.
The County reserves the right to modify from time to time the information to be
provided to the extent necessary or appropriate in the County's judgment,provided that:
(a) any such modification may only be made in connection with a change in
circumstances that arises from a change in legal requirements, change in law, or change
in the identity,nature, or status of the County;
(b) the information to be provided, as modified, would have complied with the
requirements of Rule 15c2-12 as of the date of the final Official Statement, after taking
into account any amendments or interpretations of Rule 15c2-12, as well as any changes
in circumstances; and
•
13
M
a
54
(c) any such modification does not materially impair the interests of the
beneficial owners, as determined either by parties unaffiliated with the County or by the
approving vote of the registered owners of a majority in principal amount of the Bonds
pursuant to the terms of the bond resolution, as it may be amended from time to time, at
the time of the amendment.
Any annual financial information containing modified operating data or financial
information will explain, in narrative form, the reasons for the modification and the
impact of the change in the type of operating data or financial information being
provided.
•
14