Loading...
HomeMy WebLinkAboutAgenda - 05-02-2017 - 5-a - Public Hearing on the Financing of Various Capital Investment Plan Projects 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: May 2, 2017 Action Agenda Item No. 5-a SUBJECT: Public Hearing on the Financing of Various Capital Investment Plan Projects DEPARTMENT: Finance and Administrative Services ATTACHMENT(S): INFORMATION CONTACT: Attachment 1. Public Hearing Notice Gary Donaldson, (919) 245-2453 Attachment 2. Resolution Paul Laughton, (919) 245-2152 Bob Jessup, (919) 933-9891 PURPOSE: To conduct a public hearing on the issuance of approximately $13,600,000 to finance capital investment projects and equipment for the 2016-17 fiscal year; and to approve a related resolution supporting the County's application to the Local Government Commission (LGC) for approval of the financing plan. BACKGROUND: County staff estimates that the total amount to be financed for capital investment projects and equipment will be approximately $13,600,000 including cost of issuance. North Carolina General Statutes require that the County advertise and conduct a public hearing on the proposed financing. A copy of the notice of this hearing as published in The Herald Sun is provided as Attachment 1. After conducting the public hearing and receiving public input, the Board will consider the adoption of the resolution (Attachment 2). This resolution formally requests the required approval from the North Carolina Local Government Commission (LGC) for the County's financing, and makes certain finding of fact as required under the LGC's guidelines. County staff has been in contact with the LGC staff, and staff expects no issues to receiving LGC approval. If the Board adopts the resolution indicating its intent to continue with the financing plan, the Board will be asked to consider a resolution giving final approval to the financing plans at the June 6, 2017 BOCC meeting. FINANCIAL IMPACT: There is no financial impact related to this action. However, there will be a financial impact in proceeding with the financing. A preliminary estimate of maximum debt service applicable to the capital investment projects and equipment financing would require the highest debt service payment of $1.6 million in FY2017-18. The tax rate equivalent for the 2 estimated highest debt service payment is approximately .94 cents. Based on current financial resources, no adjustment to the tax rate is associated with this financing. SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goal is applicable to this agenda item: • GOAL: ENSURE ECONOMIC SELF-SUFFICIENCY The creation and preservation of infrastructure, policies, programs and funding necessary for residents to provide shelter, food, clothing and medical care for themselves and their dependents. RECOMMENDATION(S): The Manager recommends that the Board conduct the public hearing and adopt the resolution supporting the application to the Local Government Commission for approval of the financing. 3 Attachment 1 Orange County, North Carolina -- Notice of Public Hearing Financing for Various Public Improvements and Acquisitions The Board of Commissioners of Orange County, North Carolina, will hold a public hearing on Tuesday, May 2, 2017, at 7:00 p.m. (or as soon thereafter as the matter may be heard). The purpose of the hearing is to take public comment concerning a proposed financing contract, under which the County would borrow an amount estimated as up to approximately $13,600,000 to pay for the public improvement projects described below. Project description Est.Amount Financed ($) Rogers Road sewer improvements 6,280,000 Sportsplex field house construction 2,800,000 Information Technologies projects - hardware and 1,000,000 software acquisition Vehicle replacements 789,722 Solid waste equipment replacements 562,717 Emergency services substation construction 500,000 Generator projects 375,000 Fairview Park access and parking improvements 325,000 Facility accessibility and security improvements 319,000 Roofing projects 194,700 4 Emergency services - radio replacements 166,000 Parking lot improvements 120,000 Cedar Grove Community Center renovations 60,000 Estimated total $ 13,492,139 The County may also use financing proceeds to pay financing costs. The hearing will be held in the Commissioners' usual meeting room in the Whitted Human Services Center, 300 West Tryon Street, Hillsborough, North Carolina. The proposed financing would be secured by a lien on some or all of the property purchased or improved through the financing as well as the County's promise to repay the financing, but there would be no recourse against the County or its property (other than the pledged property) if there were a default on the financing. The County expects that the collateral for the financing will consist primarily of the Orange County Sportsplex and its associated land. All interested persons will be heard. The County's plans are subject to change based on the comments received at the public hearing and the Board's subsequent discussion and consideration. The County's entering into the financing is subject to obtaining approval from the North Carolina Local Government Commission. Persons wishing to make written comments in advance of the hearing or wishing more information concerning the subject of the hearing may contact Gary Donaldson, Orange County Finance Officer, Finance Officer, Post Office Box 8181, Hillsborough, NC 27278 (telephone 919/245-2453, email gdonaldson@orangecountync.gov). 5 RES-2017-023 Attachment 2 Resolution supporting an application to the Local Government Commission for its approval of a County financing agreement WHEREAS-- The Board of Commissioners has previously determined to carry out the acquisition and construction of various public improvements, as identified in the County's capital improvement plan. The Board of Commissioners desires to finance the costs of these projects by the use of an installment financing, as authorized under Section 160A-20 of the North Carolina General Statutes. Under the guidelines of the North Carolina Local Government Commission, this governing body must make certain findings of fact to support the County's application for the LGC's approval of the County's financing arrangements. THEREFORE, BE IT RESOLVED by the Board of Commissioners of Orange County, North Carolina, that the County makes a preliminary determination to finance approximately $13,600,000 to pay capital costs of various public improvements, and in particular the improvements shown on Exhibit A. The Board will determine the final amount to be financed by a later resolution. The final amount financed may be slightly lower or slightly higher than $13,600,000. Some of the financing proceeds may represent reimbursement to the County for prior expenditures on project costs, and some proceeds may be used to pay financing expenses or to provide any required reserves. BE IT FURTHER RESOLVED that the Board of Commissioners makes the following findings of fact: (1) The proposed projects are necessary and appropriate for the County under all the circumstances. 6 (2) The proposed installment financing is preferable to a bond issue for the same purposes. The County is planning to issue both voter-approved and non-voted general obligation bonds for school projects and other purposes, and it is appropriate for the County to continue to balance its capital finance program between bonds and installment financing. These projects will not produce revenues sufficient to support a self-liquidating financing. The County expects that in the current interest rate environment for municipal securities there would be no material difference in the overall financing costs between general obligation bonds and installment financings for this project. (3) The estimated sums to fall due under the proposed financing contract are adequate and not excessive for the proposed purpose. The County will closely review proposed financing rates against market rates with guidance from its financial adviser and the LGC. All amounts financed will reflect either approved contracts, professional estimates or previous actual expenditures. (4) As confirmed by the County's Finance Officer, (a) the County's debt management procedures and policies are sound and in compliance with law, and (b) the County is not in default under any of its debt service obligations. (5) The County expects that there will be no actual increase in taxes necessary to meet debt obligations under the proposed financing arrangements. The County expects that interest rates to be payable by the County on the proposed financing, and the expected term of the financing, will allow the County to repay the financing within current resources. In addition, the County expects that debt service components related to landfill and Sportsplex projects will be paid from the revenues of the related enterprises. Given the County's need for the projects, the Board believes that any tax rate impact is reasonable under all the circumstances. (6) The County Attorney is of the opinion that the proposed projects are authorized by law and are purposes for which public funds of the County may be expended pursuant to the Constitution and laws of North Carolina. BE IT FURTHER RESOLVED as follows: 7 (a) The County intends that the adoption of this resolution will be a declaration of the County's official intent to reimburse project expenditures from financing proceeds. The County intends that funds that have been advanced for project costs, or which may be so advanced, from the County's general fund, or any other County fund, may be reimbursed from the financing proceeds. (b) The Board directs the Finance Officer to take all appropriate steps toward the completion of the financing, including (i) completing an application to the LGC for its approval of the proposed financing, and (ii) soliciting one or more proposals from financial institutions to provide the financing. The Board ratifies all prior actions of County representatives in this regard. (c) This resolution takes effect immediately. * * * * * * * * * * * * * * * * * I certify as follows: that the foregoing resolution was properly adopted at a meeting of the Board of Commissioners of Orange County, North Carolina; that this meeting was properly called and held on May 2, 2017; that a quorum was present and acting throughout this meeting; and that this resolution has not been modified or amended, and remains in full effect as of today. Dated this day of , 2017. [SEAL] Donna S. Baker Clerk, Board of Commissioners Orange County, North Carolina 8 Exhibit A - list of projects to be financed with estimated amounts Project description Est.Amount Financed ($) Rogers Road sewer improvements 6,280,000 Sportsplex field house construction 2,800,000 Information Technologies projects - hardware and 1,000,000 software acquisition Vehicle replacements 789,722 Solid waste equipment replacements 562,717 Emergency services substation construction 500,000 Generator projects 375,000 Fairview Park access and parking improvements 325,000 Facility accessibility and security improvements 319,000 Roofing projects 194,700 Emergency services - radio replacements 166,000 Parking lot improvements 120,000 Cedar Grove Community Center renovations 60,000 Estimated total $ 13,492,139 The County may also use financing proceeds to pay financing costs.