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HomeMy WebLinkAboutAgenda - 09-06-1994 - VII-A 1 ORANGE COUNTY BOARD OF COMMISSIONERS Action Agenda Item No. ViT- ACTION AGENDA ITEM ABSTRACT Meeting Date: September 6, 1994 SUBJECT: PUBLIC HEARING--FARMLAND PRESERVATION BOND REFERENDUM DEPARTMENT: FINANCE PUBLIC HEARING YES: X NO: ATTACHMENT(S) : INFORMATION CONTACT: Ken Chavious Marvin Collins Suggested Proceedings as prepared by TELEPHONE NUMBER- Bond Counsel Hillsborough - 732-8181 Chapel Hill - 968-4501 Information Sheets Mebane - 227-2031 Durham - 688-7331 PURPOSE: To conduct a Public Hearing to receive citizen comment on the $5, 000, 000 Farmland Preservation Bond Order. BACKGROUND: On August 23, 1994 the Bond Order for the scheduled $5 million Bond Referendum was passed on first reading. Pursuant to the Local Government Bond Act, and in accordance with the adopted referendum time-table, a Public Hearing is required in order to provide the opportunity for anyone who wishes to be heard on the questions of the validity of the Bond Order and the advisability of issuing the bonds. Prior to receiving public comment on the Bond Order, staff will provide a presentation and entertain questions on the proposed Farmland Preservation Program. Upon completion of the Public Hearing, final adoption of the Bond Order and the official call for referendum is necessary for the November 8, 1994 election date. The suggested format for these proceedings as prepared by Bond Counsel is attached. RECOMMENDATION(S) : The Manager recommends that the Board conduct the public hearing; adopt the Bond Order; and approve the Bond Referendum Resolution; and authorize the Clerk to meet all publishing requirements as suggested by Bond Counsel. 555"CALIFORNIA STREET WOOD BROWN & BLACKWELL HOUSE 2 GUILDHALL YARD SAN FRANCISCO, CA.04104-1715 LONDON EC2V 548 TELEPHONE: 415.772.1200 TELEPHONE:071-606-1886 FACSIMILE:415-307-4621 ONE WORLD TRADE CENTER FACSIMILE: 071-796-1807 NEW YORK, N.Y. 10048-0557 815 CONNECTICUT AVENUE, N.W. WASHINGTON,TELEPHONE:D.C.20006-4004 TELEPHONE: 212.639-5300 SHIROYAMA JT MORI BUILDING, 15TH FLOOR FACSIMILE:212'839-5500 3-I,TORANOMON 4-CHOME,MINRTO•KU TELEPHONE:202-973-0600 TOKYO 105,JAPAN FACSIMILE:202-223-0485 TELEPHONE: 03.5472.5360 FACSIMILE: 03-5472.5058 10900 WILSHIRE BOULEVARD LOS ANGELES,CA.90024-3959 SUITE 2606,ASIA PACIFIC FINANCE TOWER TELEPHONE: 310-443.0200 CITIBANK PLAZA FACSIMILE:310.208.5740 3 GARDEN ROAD,CENTRAL HONG KONG 172 WEST STATE STREET TELEPHONE:652-500-7668 TRENTON, N.J• 06608-1104 FACSIMILE:B52-509-3110 TELEPHONE:609 393-0303 FACSIMILE:609-393-1990 August 29, 1994 Mr. Kenneth T. Chavious Finance Director County of Orange 208 South Cameron Street Hillsborough, North Carolina 27278 Re: County of Orange, North Carolina $5;000.000 Farmland Preservation Bonds Dear Ken: As we discussed last week, I am enclosing the following items relating to the authorization of the bonds described above: 1. Five copies of a suggested form of proceedings to be taken by the Board of Commissioners for the County at its regular meeting to be held on September 6, evidencing the holding of the public hearing upon the bonds, adoption of the bond order and passage of a resolution calling a special referendum. The information contained in the notice of referendum constituting a part of the referendum resolution was reviewed by Pat, in the Orange County Board of Elections office, in Barbara Strickland' s absence and reflects her comments. Please note that a certified copy of the proceedings should be delivered to the office of the Orange County Board of Elections by not later than Friday, September 9 . 3 2 . Copies of the bond order as adopted with appended statement for handing to The News of Orange County and The Chapel Hill Herald for publication on September 14 . Please note that such statement provides that publication is being made on September 14 . 3 . Copies of the notice of referendum for handing to The News of Orange County and The Chapel Hill Herald for publication on September 14 and September 21. 4. Extra copies of the bond order as adopted with appended statement and the notice of referendum so that the texts of these items can be proofread after the type has been set but prior to publication. After the enclosed proceedings have been taken, please send me two certified copies thereof and, after the bond order and notice of referendum have been published, please send me two publishers ' affidavits, with printed clippings attached, evidencing each such publication thereof. One copy of each item of evidence should also be sent to Ms. Janice Burke of the Local Government Commission. If you have any questions with respect to the enclosed items, please do not hesitate to call me. Sincerely yours, 7E-16kAANcke - Gundars Aperans Enclosures cc: Ms. Janice Burke 2 4 A regular meeting of the Board of Commissioners for the County of Orange, North Carolina, was held at 9: 00 A.M. , on September 6, 1994 , at the Northern Human Services Center, in Cedar Grove, North Carolina, the regular place of meeting. Present: Chairman Moses Carey, Jr. , presiding, and Commissioners Absent: The Chairman announced that this was the date and hour fixed by the Board of Commissioners for the public hearing upon the order , entitled: "ORDER AUTHORIZING $5, 000, 000 FARMLAND PRESERVATION BONDS" and that the Board of Commissioners would immediately hear anyone who might wish to be heard on the questions of the validity of said order or the advisability of issuing said bonds. The following individuals appeared to be heard on the questions of the validity of said order or the advisability of issuing said bonds: 5 NOTE: One or more of the following clauses may be added after the last sentence on the preceding page: , residing at , who appeared in person and stated Esq. , who stated that he represented residing at , who wishes to state , who presented a statement signed by persons, which statement was read and ordered spread upon the minutes, and is as follows: [If any written statement is presented it should be inserted in full in the minutes at this point, including names of signers, if such insertion is practicable] . All of the foregoing statements were duly considered by the Board of Commissioners. [Remove this page from the proceedings prior to their certification. ] la 6 Thereupon, upon motion of Commissioner seconded by Commissioner , the order introduced and passed on first reading on August 23 , 1994 entitled: "ORDER AUTHORIZING $5, 000, 000 FARMLAND PRESERVATION BONDS" was read a second time by title and placed upon its final passage. The vote upon the final passage of said order was: Ayes: Commissioners Noes: The Chairman then announced that the order entitled: "ORDER AUTHORIZING $5, 000, 000 FARMLAND PRESERVATION BONDS" had been adopted. The Clerk to the Board was thereupon directed to publish said order, together with the appended statement as required by The Local Government Bond Act, as amended, once in The News of Orange County and The Chapel Hill Herald. Thereupon Commissioner introduced the following resolution, a copy of which had been provided to each Commissioner and which was read by title: RESOLUTION CALLING A SPECIAL BOND REFERENDUM BE IT RESOLVED by the Board of Commissioners for the County of Orange: Section 1. A special bond referendum is hereby called to be held between 6: 30 A.M. and 7:30 P.M. , on Tuesday, November 8, 1994, at which there shall be submitted to the qualified voters of the 2 7 - — „ - — „ County of Orange the question stated in the notice of special bond referendum set forth in Section 3 of this resolution. - - Section 2 . For said referendum, (i) the regular registraton books for elections in Orange County shall be used and the registration books, process or records shall be open for the registration of qualified persons and for public inspection in the manner, under the conditions and at the times and places as provided in said notice set forth in Section 3 of this resolution, (ii) the registrars, judges and other officers of election appointed by the Orange County Board of Elections for the several precincts and voting places in said County shall be the election officers for such precincts and voting places and (iii) the precincts and voting places shall be those fixed by the Orange County Board of Elections as provided in said notice set forth in Section 3 of this resolution, subject to change as provided by law. The Orange County Board of Elections is hereby requested to conduct said referendum and to take all necessary steps to that end in accordance with the provisions of this section. Section 3 . The Clerk to the Board shall cause a notice to be published in The News of Orange County and The Chapel Hill Herald once at least fourteen days before October 17, 1994 (being the last day on which persons may register for said referendum except as otherwise provided in said notice set forth in Section 3 of this resolution) and once again not less than seven days before said day, such notice to read substantially as follows: 3 8 NOTICE OF SPECIAL BOND REFERENDUM in the COUNTY OF ORANGE, NORTH CAROLINA A special bond referendum will be held throughout the County of Orange, North Carolina, between 6: 30 A.M. and 7: 30 P.M. , on Tuesday, November 8, 1994 at which there will be submitted to the qualified voters of said County the following question: Shall the order adopted on September 6, 1994, authorizing an amount not exceeding $5, 000, 000 Farmland Preservation Bonds of the County of Orange, North Carolina, for the purpose of providing funds, with any other available funds, for implementing a program of farmland preservation in said County, including the acquisition by purchase, lease or otherwise of land or any interests therein (including development rights) to maintain, protect, limit the future use of or otherwise conserve open spaces and open areas constituting farmland, and authorizing the levy of taxes in an amount sufficient to pay the principal of and the interest on said bonds, be approved? The question hereinabove set forth contains a statement of the purpose for which the bonds are authorized by the order referred to in such question. If said bonds are issued, taxes in an amount sufficient to pay the principal and interest thereof will be levied upon all taxable property in the County of Orange. For said referendum the regular registration books for elections in the County of Orange will be used and the registration books, process or records will continue to be open for the acceptance of registration applications and the registration of qualified persons from 8: 00 A.M. until 5: 00 P.M. on Monday through Friday, inclusive, of each week at the office of the Orange County 4 9 Board of Elections located at 110 East King Street in Hillsborough, North Carolina. In addition, registration applications will be accepted yid qualified persons may register at the following places and times: Carrboro Town Hall, 301 West Main Street, Carrboro, North Carolina, Monday to Friday of each week from 8 : 30 A.M. to 5: 00 P.M. Chapel Hill Town Hall, 306 North Columbia Street, Chapel Hill, North Carolina, Monday to Friday of each week from 8 : 30 A.M. to 5: 00 P.M. Chapel Hill Public Library, 100 Library Drive, Chapel Hill, North Carolina, daily during Library hours. Orange County Public Library, 200 West Tryon Street, Hillsborough, North Carolina, Monday to Friday of each week during Library hours. Also, registration applications will be accepted by and qualified persons may register with the registrars or judges of elections for the several precincts in the County by appointment, with special registration commissioners designated by the Orange County Board of Elections at such times and places as may be announced by the Orange County Board of Elections and at any Drivers License Examining Station located in the State of North Carolina during normal business hours when applying for, renewing or correcting their driver licenses. Furthermore, certain persons in the armed forces and their spouses, certain veterans, certain civilians working with the armed forces, and members of the Peace Corps may register by mail at any 5 10 time prior to said referendum in the manner provided in Article 21 of Chapter 163 of the General Statutes of North Carolina and in person at any time, including the day of said referendum. Those residents of the County who have not voted in either of one of the two most recent successive presidential elections or in any other election conducted in the period between said two elections will not be considered to be registered under Orange County's permanent registration system. Those residents of the County who are presently registered under Orange County's permanent registration system and who have not changed residence from one precinct to another within the County since their registration will be permitted to vote in said referendum, provided that removal from one precinct to another shall not deprive any person of the right to vote in the precinct from which he has removed until 30 days after his removal and, further, that any person who has changed residence from one precinct to another more than 30 days prior to the special bond referendum may obtain a certificate of removal and record a change of address on the date of the referendum and vote at such locations as specified by the Orange County Board of Elections. The last day for new registration of those not now registered under Orange County's permanent registration system is Monday, October 17, 1994. Except as provided above, the last day on which registered voters who have changed residence from one precinct to another may transfer registration is Monday, October 17, 1994. 6 11 Any qualified voter of the County who is qualified to vote by absentee ballot in said special bond referendum may apply to the Orange County Board of Elections for an absentee ballot. Any qualified voter who is qualified to vote by military absentee ballot pursuant to Section 163-245 of the General Statutes of North Carolina may also apply for an absentee ballot as provided by Section 163-247 of the General Statutes of North Carolina. Persons who are not certain whether they are registered to vote or qualified to vote by absentee ballot or who desire information concerning the registration process for said referendum should contact the Orange County Board of Elections at the office . of said Board mentioned above. • The registration books for elections in Orange County will be open to inspection by any registered voter of the County during the normal business hours of the Orange County Board of Elections on the days when the office of said Board is open, and such days are challenge days. The registrars, judges and other officers of elections appointed by the Orange County Board of Elections will serve as the election officers for said referendum. The Orange County Board of Elections will conduct said referendum. The precincts and voting places for said referendum, subject to change as provided by law, are as follows: 7 12 PRECINCT LOCATION Battle Park Chapel Hill Community Center 120 S. Estes Drive Chapel Hill, North Carolina., Booker Creek American Legion Building Legion Road Chapel Hill, North Carolina Caldwell Caldwell Community Building Highway 57-N Rougemont, North Carolina Cameron Park Cameron Park School 240 E. King Street Hillsborough, North Carolina Carr Cedar Grove Fire Station #1 Intersection of Penecost Road & Carr Store Road Mebane, North Carolina Cedar Grove Ruritan Building Cedar Grove Road Cedar Grove, North Carolina Cheeks Orange-Alamance Water Corp. Building Highway 70-W Mebane, North Carolina Coker Hills Church of Reconcilliation 110 Elliot Road Chapel Hill, North Carolina Coles Store Union Grove Methodist Church Union Grove Church Road Chapel Hill, North Carolina Colonial Heights YMCA 980 Airport Road Chapel Hill, North Carolina 8 13 PRECINCT LOCATION • Country Club Fetzer Gym UNC Campus, South Road Chapel Hill, North Carolina Dogwood Acres Grey Culbreth School 225 Culbreth Drive Chapel Hill, North Carolina East Franklin The Lutheran Church 300 E. Rosemary Street Chapel Hill, North Carolina Eastside Ephesus Road School Ephesus Church Road Chapel Hill, North Carolina Efland Efland Cheeks Elementary School 4401 Fuller Road Efland, North Carolina Eno Palmers Grove Community Center Palmers Grove Road Hillsborough, North Carolina Estes Hills Guy B. Phillips School Estes Drive Chapel Hill, North Carolina Glenwood Glenwood School Prestwick Road Chapel Hill, North Carolina Grady Brown Grady Brown Elementary School 110 New Grady Brown School Road Hillsborough, North Carolina Greenwood General Administration Building UNC Campus, South Road Chapel Hill, North Carolina 9 14 PRECINCT LOCATION Hillsborough Recreation & Parks Center 300 W. Tryon Street Hillsborough, North Carolinp. King's Mill Aldersgate Methodist Church 632 Laurel Hill Road Chapel Hill, North Carolina Lincoln Lincoln Center Administration Building Merritt Mill Road Chapel Hill, North Carolina Lion's Club Lion's Club Building 131 Fidelity Street Carrboro, North Carolina Mason Farm Community Church Building Purefoy Road Chapel Hill, North Carolina North Carrboro Carrboro Elementary School Shelton Street Carrboro, North Carolina Northside Chapel Hill Town Hall 306 N. Columbia Street Chapel Hill, North Carolina Orange Grove Orange Grove Fire Station Orange Grove Road Chapel Hill, North Carolina OWASA OWASA Administration Building 400 Jones Ferry Road Carrboro, North Carolina Patterson New Hope Community Center Whitfield Road Chapel Hill, North Carolina Ridgefield Binkley Baptist Church 1712 Willow Drive Chapel Hill, North Carolina 10 15 PRECINCT LOCATION St. John St. John Church 607 Pine Acres Road Chapel Hill, North Carolina, St. Mary's New Sharon Methodist Church 1601 New Sharon Church Road Hillsborough, North Carolina Tolars Schley Grange Hall Schley Road Hillsborough, North Carolina Town Hall Carrboro Town Hall West Main Street Carrboro, North Carolina Weaver Dairy Fire Station Weaver Dairy Road & Highway 86-N Chapel Hill, North Carolina West Hillsborough Central Elementary School 154 Hayes Street Hillsborough, North Carolina Westwood Frank Porter Graham School Highway 54 By-Pass Chapel Hill, North Carolina White Cross White Cross Recreation Center White Cross Road Chapel Hill, North Carolina Diane Brown Chairman of Orange County Board of Elections North Carolina Beverly A. Blythe Clerk to the Board of Commissioners of the County of Orange, North Carolina Section 4. The form of the ballots to be used in said referendum and in the instructions to absentee voters shall be substantially as follows: 11 16 OFFICIAL BALLOT SPECIAL BOND REFERENDUM COUNTY OF ORANGE, NORTH CAROLINA November 8, 1994 Instructions 1. To vote in favor of the order make a cross (X) mark in the square to the right of the word "YES" . 2 . To vote against the order make a cross (X) mark in the square to the right of the word "NO" . 3 . If you tear or deface or wrongly mark this ballot, return it and get another. Shall the order adopted on September 6, 1994, authorizing an amount not exceeding $5,000, 000 Farmland Preservation Bonds of the County of YES . Orange, North Carolina, for the purposes of providing funds, with any other available funds, for implementing a program of farmland preservation in said County, including the acquisition by purchase, lease or otherwise of land or any interest therein (including development rights) to maintain, protect, limit NO the future use of or otherwise conserve open spaces and open areas constituting farmland, and authorizing the levy of taxes in an amount sufficient to pay the principal of and the interest on said bonds, be approved? [Facsimile signature] Chairman of Orange County Board of Elections Section 5. The Clerk to the Board of Commissioners is hereby directed to mail or deliver a certified copy of this resolution to the Orange County Board of Elections within three days after the adoption hereof. Section 6. This resolution shall take effect upon its passage. 12 17 Thereupon, upon motion of Commissioner seconded by Commissioner , the foregoing resolution entitled: "RESOLUTION CALLING A SPECIAL BOND REFERENDUM" was passed by the following vote: Ayes: Commissioners Noes: I, Beverly A. Blythe, Clerk to the Board of Commissioners for the County of Orange, North Carolina, DO HEREBY CERTIFY that the foregoing is a true copy of so much of the proceedings of said Board at a regular meeting held on September 6, 1994 , as relates in any way to the holding of a public hearing upon an order authorizing the issuance of bonds of said County as described in such proceedings, the adoption of said order and the calling of a special bond referendum and that said proceedings are recorded in Minute Book No. of the minutes of said Board, beginning at page and ending at page I DO HEREBY FURTHER CERTIFY that I mailed or delivered a certified copy of the resolution passed by said Board on September 6, 1994 entitled: "RESOLUTION CALLING A SPECIAL BOND REFERENDUM" to the Orange County Board of Elections on or before the third day following the passage of said resolution. I DO HEREBY FURTHER CERTIFY that a schedule of regular meetings of said Board, in the form attached hereto, has been on 13 18 file in my office as of a date not less than seven days before said meeting in accordance with G.S. §143-318 . 12 . WITNESS my hand and the corporate seal of said County, this day of August 1994. Clerk to the Board of Commissioners 14 19 (CLOSING DATE] [RATING AGENCIES ADDRESSES] Re : Medium-Term Structured Enhanced Return Trust 1994 Series B- [XXI Gentlemen: We have acted as counsel for Merrill Lynch & Co. , Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S") in connection with the sale by MLPF&S of undivided interests (the "Debt Units" ) to be issued by the Medium-Term Structured Enhanced Return Trust 1994 Series B- (XX] , a trust to be established under the laws of the State of Delaware (the "Trust") , and the sale by MLPF&S to The Bank of New York, as trustee to the Trust (the "Trustee" ) , of certain [TITLE OF SECURITIES] (the "Securities") issued by MIME OF ISSUER] (the "Issuer") . The Securities have been purchased by MLPF&S and will be sold to the Trust, which will enter into a master agreement and related confirmation, each to be dated the date hereof (the "Swap Agreement") , with Merrill Lynch Capital Services, Inc. ("MLCS") , pursuant to which MLCS will agree to pay to the Trust the amounts specified therein and the Trust will agree to pay MLCS [Al certain amounts received by the Trust under the Securities. The Trust will be constituted under a Declaration of Trust and Trust Agreement to be dated as of the date hereof (the "Declaration of Trust") by and between the Trustee and the holders of Debt Units from time to time under the Declaration of Trust. The Debt Units will be sold by MLPF&S to certain institutional accredited investors in accordance with the terms of a Distribution Agreement to be dated as of the date hereof. The Trustee will also enter into an Administrative 20 Agency Agreement to be dated as of the date hereof (the "Administrative Agency Agreement") with MLPF&S, pursuant to which MLPF&S will provide certain administrative services to the Trust. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Declaration of Trust, the Swap Agreement, the Administrative Agency Agreement or the Distribution Agreement, as the case may be. In rendering the following opinion we have examined (i) the Declaration of Trust, (ii) the Swap Agreement; (iii) the Administrative Agency Agreement; (iv) the Distribution Agreement and (v) a certificate of an officer of each of MLPF&S and MLCS regarding the sale of the Securities. We have also examined such other documents and reviewed such questions of law as we have considered necessary and appropriate for the purpose of rendering the opinion expressed herein. For purposes of this opinion, we have relied in particular on the following facts with respect to the transfer of the Securities, which were certified to by MLPF&S and MLCS (in certificates that are attached hereto) and which we assume to be true and as to which we have made no independent investigation: 1. The Securities will be sold by MLPF&S to the Trust . MLPF&S will sell the Debt Units to third parties unrelated to MLPF&S, MLCS, the Trust or any of their affiliates . Following the sale of the Securities to the Trust, neither MLPF&S nor MLCS will have the right to modify or alter the terms of such transfer, and no provision exists whereby the consideration paid for the Securities may be modified following such sale. 2 . It is the intention of each of MLPF&S, MLCS and the Trustee that the transfer of the Securities from MLPF&S to the Trust constitutes a sale to the Trust of all of MLPF&S's right, title and interest to and in the Securities. 3 . In transferring the Securities from MLPF&S to the Trust, MLPF&S did not have the intent to hinder, delay or defraud its present or future creditors. 4 . After giving effect to the transfer of the Securities from MLPF&S to the Trust, the value of MLPF&S' s assets, either taken at their present fair salable value or at fair valuation, exceeded the amount of MLPF&S's debts or obligations, including all of MLPF&S' s contingent and unliquidated debts and obligations. 3 21 5 . After giving effect to the transfer of the Securities from MLPF&S to the Trust, MLPF&S was not left with unreasonably small assets or capital with which to engage in and conduct its business . 6. After giving effect to the transfer of the Securities from MLPF&S to the Trust, MLPF&S did not, and still does not, believe or intend that it will incur debts or obligations beyond MLPF&S' s ability to pay as such debts and obligations mature . 7. The aggregate value of the Securities being transferred to the Trust by MLPF&S and the Swap Agreement being entered into by the Trust with MLCS (including the value of customary fees and expenses of the Trust assumed by MLPF&S, and customary fees and expenses of MLPF&S and/or MLCS for structuring the Trust, distributing the Debt Units and entering into, the Swap Agreement) , valued at their fair market value on the date of such transfer, will equal the aggregate purchase price of the Debt Units . 8 . MLPF&S is accounting for the sale of the Securities to the Trust as a sale under generally accepted accounting principles and for federal income tax purposes . 9 . MLPF&S will have no right to repurchase or otherwise to cause the reconveyance to itself of the Securities (other than the right of the Distributor pursuant to Section 5 . 01 (g) of the Trust Agreement to require the Trustee to terminate a portion of the Swap Agreement and distribute to the Distributor the Securities underlying any Debt Units held by the Distributor for its own account, and assuming such Debt Units were acquired by the Distributor at a price equal to or greater than fair market value) . 10 . MLPF&S has no obligation to repurchase the Securities from the Trustee. 11 . Subsequent to MLPF&S's sale of the Securities to the Trust, MLPF&S and the Trustee will take no action inconsistent with the Trust' s ownership of the Securities. 12 . There are no agreements, arrangements or understandings, written or otherwise, with respect to the transfer of the Securities other than as set forth in the Declaration of Trust and the Distribution Agreement. In determining whether a transfer is properly characterized as a sale or a loan, the courts have expressed diverse reasoning and have not been clear as to the degree of significance to be given various factors. No controlling precedent exists for the • 4 22 instant transaction. One major factor, however, is the level of recourse that the purchaser has against the seller for losses on the obligations being sold. Applicable authority recognizes that some level of recourse against the seller is permissible in a sale transaction. In the instant transaction, there will be no recourse against MLPF&S for losses on the Securities. Based upon the foregoing and the assumptions of fact set forth herein, and applying a reasoned analysis of analogous case law (there being no precedent on point) , we are of the opinion that, under present decisional authority and statutes applicable to cases under Title 11 of the United States Code (the "Bankruptcy Code") , if MLPF&S were to become a debtor in a case under the Bankruptcy Code*, a federal bankruptcy court, exercising reasonable judgment after a full consideration of all relevant facts, including the foregoing facts, would hold that the transfer by MLPF&S to the Trust of the Securities is sufficient to remove the Securities from MLPF&S' s estate for purposes of Section 541 of the Bankruptcy Code and that, in the event that MLPF&S became a debtor under the Bankruptcy Code, the automatic stay arising pursuant to Section 362 (a) of the Bankruptcy Code would not apply to the Securities or the payments thereon to the Trust . Furthermore, we are also of the opinion that, in an adversary proceeding brought by a representative of MLPF&S' s estate in any case under the Bankruptcy Code filed by or against MLPF&S, a federal bankruptcy court, exercising reasonable judgment after a full consideration of all relevant facts, including the foregoing facts, would hold that the transfer by MLPF&S to the Trust of the Securities would not be voidable under Section 548 of the Bankruptcy Code. We express no opinion (i) with respect to how long the Trust could be denied possession of the Securities before the issues discussed herein are finally decided on appeal or other review or (ii) the availability of a preliminary injunction or temporary restraining order pursuant to the broad equitable powers granted to a bankruptcy court. We express no opinion as to the laws of any jurisdiction other than the federal laws of the United States of America and the laws of the State of New York. Very truly yours, We note that MLPF&S would probably be liquidated under the Securities Investor Protection Act of 1970, 15 U.S.C. §78aaa et seq. ("SIPA") , rather than the Bankruptcy Code. However, because SIPA incorporates by reference the relevant provisions of the Bankruptcy Code, for the purposes of this opinion the result if MLPF&S were liquidated under SIPA would be the same as if MLPF&S were liquidated under the Bankruptcy Code. 5 23 CERTIFICATE OF MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED Merrill Lynch, Pierce, Fenner & Smith Incorporated ( "MLPF&S") hereby certifies that the undersigned officer of MLPF&S has reviewed, the facts stated in the opinion of Brown &, Wood dated [CLOSING DATE] addressed to [RATING AGENCIES, UNLESS UNRATED, THEN TO [A] MERRILL LYNCH & CO.] in respect of the Debt Units of the Medium-Term Structured Enhanced Return Trust 1994 Series B- [XX] and hereby certifies that the facts assumed therein, as they relate to MLPF&S, are correct in all material respects . MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: Name : Frank D. Ronan Title: Managing Director Dated: [CLOSING DATE] • 24 CERTIFICATE OF MERRILL LYNCH CAPITAL SERVICES, INC. Merrill Lynch Capital Services, Inc. ("MLCS") hereby certifies that the undersigned officer of MLCS has reviewed the facts stated in the opinion of Brown & Wood dated [CLOSING DAM addressed to [RATING AGENCIES, UNLESS UNRATED, THEN TO [A] MERRILL LYNCH & CO.] in respect of the Debt Units of the Medium- Term Structured Enhanced Return Trust 1994 Series B- [XX] and hereby certifies that the facts assumed therein, as they relate to MLCS, are correct in all material respects. MERRILL LYNCH CAPITAL SERVICES, INC. By: Name : Frank D. Ronan Title: Manaing Dated: [CLOSING DATE] • 25 TO THE PUBLISHER OF THE NEWS OF ORANGE COUNTY: Please publish the following on September 14 . You will note that we have stated in the footnote that publication is being made on September 14. ORDER AUTHORIZING $5, 000, 000 FARMLAND PRESERVATION BONDS BE IT ORDERED by the Board of Commissioners for the County of Orange: 1. That, pursuant to The Local Government Bond Act, as amended, the County of Orange, North Carolina, is hereby authorized to contract a debt, in addition to any and all other debt which said County may now or hereafter have power or authority to contract, and in evidence thereof to issue Farmland Preservation Bonds in an aggregate principal amount not exceeding $5, 000, 000 for the purpose of providing funds, with any other available funds, for implementing a program of farmland preservation in said County, including the acquisition by purchase, lease or otherwise of land or any interests therein (including development rights) to maintain, protect, limit the future use of or otherwise conserve open spaces and open areas constituting farmland. 2 That taxes shall be levied in an amount sufficient to pay the principal of and the interest on said bonds. 3 . That a sworn statement of the debt of said County has been filed with the Clerk to the Board of Commissioners for said County and is open to public inspection. 4. That this order shall take effect when approved by the voters of said County at a referendum as provided in The Local Government Bond Act, as amended. 26 The foregoing order was adopted on the 6th day of September, 1994 and is hereby published this 14th day of September, 1994 . Any action or proceeding questioning the validity of the order must be begun within 30 days after the date of publication of this notice. Beverly A. Blythe Clerk to the Board of Commissioners for the County of Orange, North Carolina 2 27 TO THE PUBLISHER OF THE CHAPEL HILL HERALD: Please publish the following on September 14. You will note that we have stated in the footnote that publication is being made on September 14. ORDER AUTHORIZING $5, 000, 000 FARMLAND PRESERVATION BONDS BE IT ORDERED by the Board of Commissioners for the County of Orange: 1. That, pursuant to The Local Government Bond Act, as amended, the County of Orange, North Carolina, is hereby authorized to contract a debt, in addition to any and all other debt which said County may now or hereafter have power or authority to contract, and in evidence thereof to issue Farmland Preservation Bonds in an aggregate principal amount not exceeding $5, 000, 000 for the purpose of providing funds, with any other available funds, for implementing a program of farmland preservation in said County, including the acquisition by purchase, lease or otherwise of land or any interests therein (including development rights) to maintain, protect, limit the future use of or otherwise conserve open spaces and open areas constituting farmland. 2 . That taxes shall be levied in an amount sufficient to pay the principal of and the interest on said bonds. 3 . That a sworn statement of the debt of said County has been filed with the Clerk to the Board of Commissioners for said County and is open to public inspection. 4. That this order shall take effect when approved by the voters of said County at a referendum as provided in The Local Government Bond Act, as amended. 28 The foregoing order was adopted on the 6th day of September, 1994 and is hereby published this 14th day of September, 1994 . Any action or proceeding questioning the validity of the order must be begun within 30 days after the date of publication of this notice. Beverly A. Blythe Clerk to the Board of Commissioners for the County of Orange, North Carolina 2 29 TO THE PUBLISHER OF THE NEWS OF ORANGE COUNTY: Please publish the following on September 14 and September 21: NOTICE OF SPECIAL BOND REFERENDUM in the COUNTY OF ORANGE, NORTH CAROLINA A special bond referendum will be held throughout the County of Orange, North Carolina, between 6:30 A.M. and 7: 30 P.M. , on Tuesday, November 8, 1994 at which there will be submitted to the qualified voters of said County the following question: Shall the order adopted on September 6, 1994, authorizing an amount not exceeding $5, 000, 000 Farmland Preservation Bonds of the County of Orange, North Carolina, for the purpose of providing funds, with any other available funds, for implementing a program of farmland preservation in said County, including the acquisition by purchase, lease or otherwise of land or any interests therein (including development rights) to maintain, protect, limit the future use of or otherwise conserve open spaces and open areas constituting farmland, and authorizing the levy of taxes in an amount sufficient to pay the principal of and the interest on said bonds, be approved? The question hereinabove set forth contains a statement of the purpose for which the bonds are authorized by the order referred to in such question. If said bonds are issued, taxes in an amount sufficient to pay the principal and interest thereof will be levied upon all taxable property in the County of Orange. For said referendum the regular registration books for elections in the County of Orange will be used and the registration books, process or records will continue to be open for the acceptance of registration applications and the registration of qualified persons from 8: 00 A.M. until 5: 00 P.M. on Monday through 30 Friday, inclusive, of each week at the office of the Orange County Board of Elections located at 110 East King Street in Hillsborough, North Carolina. In addition, registration applications will be accepted and qualified persons may register at the following places and times: Carrboro Town Hall, 301 West Main Street, Carrboro, North Carolina, Monday to Friday of each week from 8 : 30 A.M. to 5: 00 P.M. Chapel Hill Town Hall, 306 North Columbia Street, Chapel Hill, North Carolina, Monday to Friday of each week from 8 : 30 A.M. to 5 : 00 P.M. Chapel Hill Public Library, 100 Library Drive, Chapel Hill,, North Carolina, daily during Library hours. Orange County Public Library, 200 West Tryon Street, Hillsborough, North Carolina, Monday to Friday of each week during Library hours. Also, registration applications will be accepted by and qualified persons may register with the registrars or judges of elections for the several precincts in the County by appointment, with special registration commissioners designated by the Orange County Board of Elections at such times and places as may be announced by the Orange County Board of Elections and at any Drivers License Examining Station located in the State of North Carolina during normal business hours when applying for, renewing or correcting their driver licenses. Furthermore, certain persons in the armed forces and their spouses, certain veterans, certain civilians working with the armed 2 31 forces, and members of the Peace Corps may register by mail at any time prior to said referendum in the manner provided in Article 21 of Chapter 163 of the General Statutes of North Carolina and in person at any time, including the day of said referendum. Those residents of the County who have not voted in either of one of the two most recent successive presidential elections or in any other election conducted in the period between said two elections will not be considered to be registered under Orange County's permanent registration system. Those residents of the County who are presently registered under Orange County' s permanent registration system and who have not changed residence from one precinct to another within the County since their registration will be permitted to vote in said referendum, provided that removal from one precinct to another shall not deprive any person of the right to vote in the precinct from which he has removed until 30 days after his removal and, further, that any person who has changed residence from one precinct to another more than 30 days prior to the special bond referendum may obtain a certificate of removal and record a change of address on the date of the referendum and vote at such locations as specified by the Orange County Board of Elections. The last day for new registration of those not now registered under Orange County's permanent registration system is Monday, October 17, 1994 . 3 32 Except as provided above, the last day on which registered voters who have changed residence from one precinct to another may transfer registration is Monday, October 17, 1994 . Any qualified voter of the County who is qualified to vote by absentee ballot in said special bond referendum may apply to the Orange County Board of Elections for an absentee ballot. Any qualified voter who is qualified to vote by military absentee ballot pursuant to Section 163-245 of the General Statutes of North Carolina may also apply for an absentee ballot as provided by Section 163-247 of the General Statutes of North Carolina. Persons who are not certain whether they are registered to vote or qualified to vote by absentee ballot or who desire information concerning the registration process for said referendum should contact the Orange County Board of Elections at the office of said Board mentioned above. The registration books for elections in Orange County will be open to inspection by any registered voter of the County during the normal business hours of the Orange County Board of Elections on the days when the office of said Board is open, and such days are challenge days. The registrars, judges and other officers of elections appointed by the Orange County Board of Elections will serve as the election officers for said referendum. The Orange County Board of Elections will conduct said referendum. 4 33 The precincts and voting places for said referendum, subject to change as provided by law, are as follows: PRECINCT LOCATION Battle Park Chapel Hill Community Center 120 S. Estes Drive Chapel Hill, North Carolina Booker Creek American Legion Building Legion Road Chapel Hill, North Carolina Caldwell Caldwell Community Building Highway 57-N Rougemont, North Carolina Cameron Park Cameron Park School 240 E. King Street Hillsborough, North Carolina Carr Cedar Grove Fire Station #1 Intersection of Penecost Road & Carr Store Road Mebane, North Carolina Cedar Grove Ruritan Building Cedar Grove Road Cedar Grove, North Carolina Cheeks Orange-Alamance Water Corp. Building Highway 70-W Mebane, North Carolina Coker Hills Church of Reconcilliation 110 Elliot Road Chapel Hill, North Carolina Coles Store Union Grove Methodist Church Union Grove Church Road Chapel Hill, North Carolina Colonial Heights YMCA 980 Airport Road Chapel Hill, North Carolina 5 34 PRECINCT LOCATION Country Club Fetzer Gym UNC Campus, South Road Chapel Hill, North Carolina Dogwood Acres Grey Culbreth School 225 Culbreth Drive Chapel Hill, North Carolina East Franklin The Lutheran Church 300 E. Rosemary Street Chapel Hill, North Carolina Eastside Ephesus Road School Ephesus Church Road Chapel Hill, North Carolina Efland Efland Cheeks Elementary School 4401 Fuller Road Efland, North Carolina Eno Palmers Grove Community Center Palmers Grove Road Hillsborough, North Carolina Estes Hills Guy B. Phillips School Estes Drive Chapel Hill, North Carolina Glenwood Glenwood School Prestwick Road Chapel Hill, North Carolina Grady Brown Grady Brown Elementary School 110 New Grady Brown School Road Hillsborough, North Carolina Greenwood General Administration Building UNC Campus, South Road Chapel Hill, North Carolina 6 35 PRECINCT LOCATION Hillsborough Recreation & Parks Center 300 W. Tryon Street Hillsborough, North Carolina King's Mill Aldersgate Methodist Church 632 Laurel Hill Road Chapel Hill, North Carolina Lincoln Lincoln Center Administration Building Merritt Mill Road Chapel Hill, North Carolina Lion's Club Lion's Club Building 131 Fidelity Street Carrboro, North Carolina Mason Farm Community Church Building Purefoy Road Chapel Hill, North Carolina North Carrboro Carrboro Elementary School Shelton Street Carrboro, North Carolina Northside Chapel Hill Town Hall 306 N. Columbia Street Chapel Hill, North Carolina Orange Grove Orange Grove Fire Station Orange Grove Road Chapel Hill, North Carolina OWASA OWASA Administration Building 400 Jones Ferry Road Carrboro, North Carolina Patterson New Hope Community Center Whitfield Road Chapel Hill, North Carolina Ridgefield Binkley Baptist Church 1712 Willow Drive Chapel Hill, North Carolina 7 36 PRECINCT LOCATION St. John St. John Church 607 Pine Acres Road Chapel Hill, North Carolina St. Mary' s New Sharon Methodist Church 1601 New Sharon Church Road Hillsborough, North Carolina Tolars Schley Grange Hall Schley Road Hillsborough, North Carolina Town Hall Carrboro Town Hall West Main Street Carrboro, North Carolina Weaver Dairy Fire Station Weaver Dairy Road & Highway 86-N Chapel Hill, North Carolina West Hillsborough Central Elementary School 154 Hayes Street Hillsborough, North Carolina Westwood Frank Porter Graham School Highway 54 By-Pass Chapel Hill, North Carolina White Cross White Cross Recreation Center White Cross Road Chapel Hill, North Carolina Diane Brown Chairman of Orange County Board of Elections North Carolina Beverly A. Blythe Clerk to the Board of Commissioners of the County of Orange, North Carolina 8 37 TO THE PUBLISHER OF THE CHAPEL HILL HERALD: Please publish the following on September 14 and September 21: NOTICE OF SPECIAL BOND REFERENDUM in the COUNTY OF ORANGE, NORTH CAROLINA A special bond referendum will be held throughout the County of Orange, North Carolina, between 6: 30 A.M. and 7 : 30 P.M. , on Tuesday, November 8, 1994 at which there will be submitted to the qualified voters of said County the following question: Shall the order adopted on September 6, 1994 , authorizing an amount not exceeding $5, 000, 000 Farmland Preservation Bonds of the County of Orange, North Carolina, for the purpose of providing funds, with any other available funds, for implementing a program of farmland preservation in said County, including the acquisition by purchase, lease or otherwise of land or any interests therein (including development rights) to maintain, protect, limit the future use of or otherwise conserve open spaces and open areas constituting farmland, and authorizing the levy of taxes in an amount sufficient to pay the principal of and the interest on said bonds, be approved? The question hereinabove set forth contains a statement of the purpose for which the bonds are authorized by the order referred to in such question. If said bonds are issued, taxes in an amount sufficient to pay the principal and interest thereof will be levied upon all taxable property in the County of Orange. For said referendum the regular registration books for elections in the County of Orange will be used and the registration books, process or records will continue to be open for the acceptance of registration applications and the registration of qualified persons from 8 : 00 A.M. until 5: 00 P.M. on Monday through 38 Friday, inclusive, of each week at the office of the Orange County Board of Elections located at 110 East King Street in Hillsborough, North Carolina. In addition, registration applications will be accepted and qualified persons may register at the following places and times: Carrboro Town Hall, 301 West Main Street, Carrboro, North Carolina, Monday to Friday of each week from 8 : 30 A.M. to 5: 00 P.M. Chapel Hill Town Hall, 306 North Columbia Street, Chapel Hill, North Carolina, Monday to Friday of each week from 8: 30 A.M. to 5: 00 P.M. Chapel Hill Public Library, 100 Library Drive, Chapel Hill, North Carolina, daily during Library hours. Orange County Public Library, 200 West Tryon Street, Hillsborough, North Carolina, Monday to Friday of each week during Library hours. Also, registration applications will be accepted by and qualified persons may register with the registrars or judges of elections for the several precincts in the County by appointment, with special registration commissioners designated by the Orange County Board of Elections at such times and places as may be announced by the Orange County Board of Elections and at any Drivers License Examining Station located in the State of North Carolina during normal business hours when applying for, renewing or correcting their driver licenses. Furthermore, certain persons in the armed forces and their spouses, certain veterans, certain civilians working with the armed 2 39 forces, and members of the Peace Corps may register by mail at any time prior to said referendum in the manner provided in Article 21 of Chapter 163 of the General Statutes of North Carolina and in person at any time, including the day of said referendum. Those residents of the County who have not voted in either of one of the two most recent successive presidential elections or in any other election conducted in the period between said two elections will not be considered to be registered under Orange County's permanent registration system. Those residents of the County who are presently registered under Orange County's permanent registration system and who have not changed residence from one precinct to another within the County since their registration will be permitted to vote in said referendum, provided that removal from one precinct to another shall not deprive any person of the right to vote in the precinct from which he has removed until 30 days after his removal and, further, that any person who has changed residence from one precinct to another more than 30 days prior to the special bond referendum may obtain a certificate of removal and record a change of address on the date of the referendum and vote at such locations as specified by the Orange County Board of Elections. The last day for new registration of those not now registered under Orange County's permanent registration system is Monday, October 17, 1994 . 3 40 Except as provided above, the last day on which registered voters who have changed residence from one precinct to another may transfer registration is Monday, October 17, 1994 . Any qualified voter of the County who is qualified to vote by absentee ballot in said special bond referendum may apply to the Orange County Board of Elections for an absentee ballot. Any qualified voter who is qualified to vote by military absentee ballot pursuant to Section 163-245 of the General Statutes of North Carolina may also apply for an absentee ballot as provided by Section 163-247 of the General Statutes of North Carolina. Persons who are not certain whether they are registered to vote or qualified to vote by absentee ballot or who desire information concerning the registration process for said referendum should contact the Orange County Board of Elections at the office of said Board mentioned above. The registration books for elections in Orange County will be open to inspection by any registered voter of the County during the normal business hours of the Orange County Board of Elections on the days when the office of said Board is open, and such days are challenge days. The registrars, judges and other officers of elections appointed by the Orange County Board of Elections will serve as the election officers for said referendum. The Orange County Board of Elections will conduct said referendum. 4 41 The precincts and voting places for said referendum, subject to change as provided by law, are as follows: PRECINCT LOCATION Battle Park Chapel Hill Community Center 120 S. Estes Drive Chapel Hill, North Carolina Booker Creek American Legion Building Legion Road Chapel Hill, North Carolina Caldwell Caldwell Community Building Highway 57-N Rougemont, North Carolina Cameron Park Cameron Park School 240 E. King Street Hillsborough, North Carolina Carr Cedar Grove Fire Station #1 Intersection of Penecost Road & Carr Store Road Mebane, North Carolina Cedar Grove Ruritan Building Cedar Grove Road Cedar Grove, North Carolina Cheeks Orange-Alamance Water Corp. Building Highway 70-W Mebane, North Carolina Coker Hills Church of Reconcilliation 110 Elliot Road Chapel Hill, North Carolina Coles Store Union Grove Methodist Church Union Grove Church Road Chapel Hill, North Carolina Colonial Heights YMCA 980 Airport Road Chapel Hill, North Carolina 5 42 PRECINCT LOCATION Country Club Fetzer Gym UNC Campus, South Road Chapel Hill, North Carolina Dogwood Acres Grey Culbreth School 225 Culbreth Drive Chapel Hill, North Carolina East Franklin The Lutheran Church 300 E. Rosemary Street Chapel Hill, North Carolina Eastside Ephesus Road School Ephesus Church Road Chapel Hill, North Carolina Efland Efland Cheeks Elementary School 4401 Fuller Road Efland, North Carolina Eno Palmers Grove Community Center Palmers Grove Road Hillsborough, North Carolina Estes Hills Guy B. Phillips School Estes Drive Chapel Hill, North Carolina Glenwood Glenwood School Prestwick Road Chapel Hill, North Carolina Grady Brown Grady Brown Elementary School 110 New Grady Brown School Road Hillsborough, North Carolina Greenwood General Administration Building UNC Campus, South Road Chapel Hill, North Carolina 6 43 PRECINCT LOCATION Hillsborough Recreation & Parks Center 300 W. Tryon Street Hillsborough, North Carolina King's Mill Aldersgate Methodist Church 632 Laurel Hill Road Chapel Hill, North Carolina Lincoln Lincoln Center Administration Building Merritt Mill Road Chapel Hill, North Carolina Lion' s Club Lion' s Club Building 131 Fidelity Street Carrboro, North Carolina Mason Farm Community Church Building Purefoy Road Chapel Hill, North Carolina North Carrboro Carrboro Elementary School Shelton Street Carrboro, North Carolina Northside Chapel Hill Town Hall 306 N. Columbia Street Chapel Hill, North Carolina Orange Grove Orange Grove Fire Station Orange Grove Road Chapel Hill, North Carolina OWASA OWASA Administration Building 400 Jones Ferry Road Carrboro, North Carolina Patterson New Hope Community Center Whitfield Road Chapel Hill, North Carolina Ridgefield Binkley Baptist Church 1712 Willow Drive Chapel Hill, North Carolina 7 44 PRECINCT LOCATION St. John St. John Church 607 Pine Acres Road Chapel Hill, North Carolina St. Mary' s New Sharon Methodist Church 1601 New Sharon Church Road Hillsborough, North Carolina Tolars Schley Grange Hall Schley Road Hillsborough, North Carolina Town Hall Carrboro Town Hall West Main Street Carrboro, North Carolina Weaver Dairy Fire Station Weaver Dairy Road & Highway 86-N Chapel Hill, North Carolina West Hillsborough Central Elementary School 154 Hayes Street Hillsborough, North Carolina Westwood Frank Porter Graham School Highway 54 By-Pass Chapel Hill, North Carolina White Cross White Cross Recreation Center White Cross Road Chapel Hill, North Carolina Diane Brown Chairman of Orange County Board of Elections North Carolina Beverly A. Blythe Clerk to the Board of Commissioners of the County of Orange, North Carolina 8 45 QUESTIONS FREQUENTLY ASKED ABOUT A PURCHASE OF DEVELOPMENT RIGHTS PROGRAM: Why a Purchase of Development Rights Program? A purchase of development rights program gives farmers a timely, financia y ll competitive alternative to selling their land for development.The compensation paid to landowners for relinquishing their development rights can enable them to expand their farming operations, pay off debts, distribute their assets equitably among children, and/or provide for a comfortable retirement while retaining title and all other rights to their land. What are development rights? The right to build structures on the land constitutes the "development rights" attached to a parcel of land. The extent or amount of such rights is limited by restrictions embodied in health, building, and zoning codes. How is the value of development rights determined? The cost of development rights is usually figured on a per acre basis as follows: Market Value - Agricultural Value = Development Rights Value Both market value and agricultural use value are determined by an appraisal of the property. How would a Purchase of Development Rights (PDR) Program operate? Six basic steps are proposed for the PDR Program and are summarized in the following table. PURCHASE OF DEVELOPMENT RIGHT'S PROGRAM PROCEDURES STEP 1 ��ac�s�o�t.ol�Ar�l✓�c.Am�oly. ;: .. .. . . ( owner ha 64 Clays from pub�c asetce date,to submit applieatiort) .................................................................................................................................................................................................. STEP 2 (R ing by:AgE Districts Advisory Board using LESA system/recommended > p c sent to Hoard of ommtsst etrs):. STEP 3 (Acquisition Approved by Board of Commissioners/appraisals conducted to establisk rkete values STEP 4 (Appraisals sent to land owner/3D clays for owner to submit offer':to sell] STEP 5 ? ACC�FTAI�Cir Oil' O1Nr>.R (Hoard a C nnmFSsionei accepts offer fo sell/authorizes closing) STEP 6 (T tle work cond�rcted/closuig heldldeuelopme t ights:conveyed) 46 What is the LESA System? The method use to evaluate and rank farms is the 'USA or Land Evaluation and Site Assessment system developed by the Soil Conservation Service in the mid-1980's. The system has been used extensively and focuses on the quality or productivity of a given site; e.g., land evaluation, and its continued economic viability; e.g., site assessment. The major advantage of such a system is that the most productive and economically viable farmlands are preserved.A summary of the land evaluation and site assessment factors,and the maximum number of points awarded for each is presented on the following table. LAND EVALUATION& SITE ASSESSMENT (LESA) SYSTEM Evaluation/Assessment Factor Maximum Possible Points AGRICULTURAL SIGNIFICANCE Cropland Productivity 100 Forest Land Productivity 100 Site Assessment Farm Characteristics Size of Farm 15 Percentage of Site Farmed 20 Conservation Plan Implementation 15 Use Compatibility Percentage of Area in Farm Use 20 Land Use Adjacent to Site 10 Distance to Urban Area 20 Total Possible Points 300 PIATURALICULivitai,SIGNIFICANCE Site Assessment Natural Areas/Wildlife Habitats 60 Wildlife Corridors 60 Wetlands 60 Scenic Roads & Viewsheds 60 Historic Sites & Structures 60 Total Points Possible 300 OVERALL SIGNIFICANCE Total Points Possible 600 Would a property owner be required to sell his/her development rights? NO. Participation in the program is completely voluntary. Which land owners would be eligible? Landowners with parcels at least 80 acres in size and in agricultural, forestry or similar open space use would be eligible for participation in the program. Smaller parcels would be considered if they were contiguous to land on which development rights had already been acquired. 47 Could the property owner elect to lease his/her development rights instead of selling them? YES. As part of the application process, a landowner may offer to lease his/her development rights. Such offers would be handled in the same manner as offers to sell. What restrictions would be placed on land in the Purchase of Development Rights Program? Since the purpose of a PDR Program is to preserve agricultural land,restrictions on property use after acquisition of development rights would be implemented through recording of a conservation easement. The easement provisions would restrict the land from being developed for nonfarm purposes without creating hardship for the land owner. Generally, a limit of one building lot per 25 acres would be included in the easement. Building lots of no more than two acres may clustered together on one section of the farm or the farm may be subdivided into 25- acre tracts. Could the County sell the development rights to someone else? NO. The rights would be held in public trust and could not be used by anyone without the owner's consent. Would the public have the right to come unto the land owner's property? NO. The land is still the landowner's private property and subject to the laws of trespass. The general public cannot enter the property without the landowner's permission. What would happen if the landowner sold his/her development rights and then decided to change the type of farming or quit farming altogether? Nothing in a purchase of development rights program requires the landowner to farm his/her property. Selling development rights simply restricts the landowner or anyone else from developing the property for nonfarm purposes. Could the property owner re-purchase his/her development rights? YES. To qualify for re-purchase, the original purchase must have occurred at least 25 years before the date of the re-purchase request. How will the purchase of development rights be funded? The Orange County Board of Commissioners have voted to place a referendum on the November ballot which, if approved, would authorize $5.0 million in bonds to be used for farmland preservation. Additional information is provided on the following financial analysis. Who would pay for a Purchase of Development Rights Program? Based on the current assessed value of property in Orange County, the cost of the program would be distributed as follows: Municipalities 55% Use Value Properties (Farms/Managed Forests) 2% Remainder 43% Given the cost of a Purchase of Development Rights Program, does farmland preservation pay? Studies by the American Farmland Trust have shown that preserving farmland saves money. A smaller scale but similar study of a 125-acre Orange County farm indicated that for every dollar raised from residential development, an extra 34 cents in direct services must be spent. If the farm remained, the ratio was $1 to 61 cents; e.g., for every dollar raised after Orange County provided services, 39 cents remained. 48 FARMLAND PRESERVATION PROGRAM - FINANCIAL ANALYSIS ASSUMPTIONS: 1. Three borrowings: 1995(Year 1) $2.0 million • 1996(Year 2) $2.0 million 1997(Year 3) $1.0 million 2. 20-year General Obligation Bonds at 6.50% 3. County Population(1994): 101,137,with 1.7%per year growth 4. One cent raises$451,893 in 1994; 25%per year growth in assessed value. 5. Average new single-family dwelling cost in 1993 was$170,000; 2.5%per year growth in assessed value. PER CAPITA COST: 1995 (Year 1) per capita cost($2.0 million) $2.24 19%(Year 2) per capita cost($4.0 million) $4.34 1997(Year 3) per capita cost($5.0 million) $5.22 (Year of maximum impact,declines thereafter) - OR - TAX IMPACT,AVERAGE NEW RESIDENTIAL DWELLING: Average cost of a new single-family dwelling was $170,000 in 1993. 1995 (Year 1) debt service ($2.0 million) $9.05 1996(Year 2) debt service ($4.0 million) $17.84 1997(Year 3) debt service ($5.0 million) $21.86 (Year of maximum impact,declines thereafter) - OR - COST PER $1,000 ASSESSED VALUE: 1995(Year 1) cost per$1,000 assessed value $0.05 1996(Year 2) cost per$1,000 assessed value $0.10 1997 (Year 3) cost per$1,000 assessed value $0.13 (Year of maximum impact, declines thereafter) - OR - TAX RATE IMPACT: 1995 (Year 1) - $2.0 million 0.00519 cents 1996(Year 2) - $4.0 million 0.00999 cents 1997(Year 3) - $5.0 million 0.01194 cents (Year of maximum impact, declines thereafter)