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HomeMy WebLinkAboutAgenda - 02-16-2006-7ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: February 16, 2006 Action Agenda Item No. ~_ SUBJECT: Confirmation of Public Hearing Notice for Debt Financing DEPARTMENT: Finance PUBLIC HEARING: (Y/N) No ATTACHMENT(S): Draft Public Hearing Notice INFORMATION CONTACT: Ken Chavious, 919-245-2453 Bob Jessup, 919-755-1800 PURPOSE: To review and confirm the content of the notice for the March 2, 2008 public hearing required by the North Carolina Local Government Commission (LGC) for the issuance of Orange County debt. BACKGROUND: At the Febnaary 9 regular meeting, the BOCC established a required public hearing date of March 2 for the planned issuance of $22 million in non-bond debt for a variety of school and County projects. The County will use Certificates of Participation (COPS) as the alternative financing mechanism, and will be pursuing an issuance date in late April 2006. Projects to be included in the COPs deal are listed on the public hearing notice, with specific amounts associated with each to be determined or confirmed at this February 16, 2006 work session. The face value of the planned debt far school and County projects is $22,000,000, However, based on advice received this week from staff of the Local Government Commission (LGC), the Board is asked to authorize publication of a notice that cites an amount not to exceed $24,000,000, The difference between project costs and issuance amount relate to conservative estimates of issuance costs and discounts associated with marketing the COPs, Original issue discounts require the Issuance of additional certificates above the project costs that serve to lower the overall interest rate resulting in savings to the County. Annual debt service requirements associated with this issuance will remain within the County's debt policy parameters and are in line with previous projections. As is the case with other financings undertaken recently by the County, this debt issuance will require the approval of the Local Government Commission (LGC), County staff have arranged with LGC staff to have the County's financing application considered for approval at the LGC's April 4, 2006 meeting, The establishment of the public hearing date and the advertisement of the public hearing notice to receive public comment on the advisability of the proposed debt issuance are two of the initial steps in the LGC process.. The County's Band Counsel and staff have prepared the accompanying public hearing notice far publication, which reflects input received from the BOCC at the February 9 meeting. z FINANCIAL IMPACT: Other than the cast of advertising, there is no direct financial impact associated with this agenda item. However, staff estimate that once the COPs are issued, annual debt service payments will be in the range of $2..0 to $2.2 million, based on current market conditions. These payments fall within the County's estimated debt capacity, which strives to maintain total debt service payments at an amount not to exceed15% of annual General Fund expenditures. This planned debt issuance was incorporated in the projections that were provided to the Board at the retreat on Friday, January 20, 2006. RECOMMENDATION(S): The Manager recommends that the Board: finalize the individual project amounts for the Spring 2006 COPs issuance, based on discussions for an earlier agenda item at this work session; approve the final text of the notice for the March 2, 2006 public hearing; and authorize the Clerk to publish the public hearing notice. 3 Orange County, North Carolina --Notice of Public Hearing 2006 Installment Financing Proiects The Board of Cm1~r7rissioners of Orange County, North Carolina, will hold a public hearing on Thursday, March 2, 2006, at 7:30 p.m. (or° as soon thereafter as the matter may be heard). The propose of the hearing is to take public comment concerning a proposed financing contract, render which the County would bon-ow an amourrt not to exceed $24,000,000 to pay capital costs related to the following projects: Costs of the Gravelly Hi11 Middle School $ 3,500,000 Efland /Buckhorn Community Water and Sewer Const-uction $x,x00,000 Renovation and improvement projects $5,150,000 for the Chapel Hill - Canboro school district Acquisition of conservation $x,x00,000 easements and similar° interests in land Southern Orange Senior Center costs $4,150,000 Planning funds for proposed $ 700,000 Animal Services facility Permanent financing for the $6,000,000 SportsPlex acquisition The County may also use additional financing proceeds to provide required reserves, to pay financing costs and to pay other necessary and related costs. Estimated debt servic~ayrnerrts fall within the County's projected debt capacity which st-ives to maintain annual debt service payments.. at___or below 15% of annual general fund expenditures The hearing will be held in the F. Gordon Battle Courtoom, Orange County Courthouse, 106 E, Margaret bane, Hillsborough, North Carolina, North Carolina, a The proposed financing would be secured by a lien on the new Gravelly Hill middle school (and its associated land) and the County's pronuse to repay the financing, biit there would be no recourse against the County or its property (other than the pledged school and the associated land) if there were a default on the financing. As part of this financing plan, The Orange County Board of Education will transfer the site of the middle school to the County. All interested persons will be heard. The County's plans are subject to change based on the comments received at the public hearing and the Board's subsequent discussion and consideration. The County's enter°ing into the fnanoing contact is sul?ject to obtaining approval from the North Carolina Local Govenmlent Conuiussion. Persons wishing to make written comments in advance of the hearing or wishing more information concerning the subject of the hearing may contact Kenneth T. Chavious, Finance Officer, Orange County, Post Office Box 8181, Hillsborough, NC 27278 (telephone 919/245-24.5.3).