HomeMy WebLinkAboutAgenda - 05-16-2017 - 8-d - Approval of Lender for Upcoming Installment Financing 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: May 16, 2017
Action Agenda
Item No. 8-d
SUBJECT: Approval of Lender for Upcoming Installment Financing
DEPARTMENT: Finance and Administrative
Services
ATTACHMENT(S): INFORMATION CONTACT:
Attachment 1. Installment Financing Gary Donaldson, (919) 245-2453
Project List Robert Jessup, (919) 933-9891
Attachment 2. Financing Proposal from Paul Laughton, (919) 245-2152
Sterling National Bank
Attachment 3. Memo from Financial
Advisers
PURPOSE: To approve Sterling National Bank as the lender for the County's upcoming
installment financing in response to Sterling's request for notification by May 30, 2017.
BACKGROUND: The County has planned to undertake an installment financing for a variety of
County capital projects. At its May 2 meeting, the Board held a public hearing and adopted a
resolution giving preliminary approval to the financing plan, including approving a list of projects,
and asking the Local Government Commission to approve the financing. Attachment 1 is the
approved project list.
County staff, in consultation with Davenport & Company LLC, the County's financial adviser,
circulated a request for proposals to a wide variety of institutions to provide this financing to the
County. The County received seven proposals. After review of these proposals in consultation
with bond counsel and Davenport, County staff has determined that the proposal from Sterling
National Bank is the proposal that best suits the County's needs. The Sterling proposal is
Attachment 2. A memo from Davenport regarding the proposals is Attachment 3.
Sterling has requested that it be formally notified by May 30 of the County's acceptance of
Sterling's proposals. Tonight's action encompasses the Board approving Sterling as the
financing provider so that staff can provide notice to Sterling. The Board's approval is subject to
completion of financing documents and the LGC's approval of the financing.
At the June 6 meeting, the Board will be asked to consider a resolution approving substantially
final financing terms and documents. June 6 is also the scheduled date for consideration of the
County's financing application by the North Carolina Local Government Commission. County
staff has been in contact with LGC staff and anticipates no issues in obtaining LGC approval.
County staff expects that the loan will close on or about June 15.
2
FINANCIAL IMPACT: The projected debt service conforms to the County's debt policies, debt
affordability analysis, and CIP Prioritization.
RECOMMENDATION(S): The Manager recommends that the Board approve Sterling National
Bank to provide financing for the County's upcoming installment financing, substantially as
provided in the Bank's proposal of May 3, 2017, and subject to the Board's later approval of
substantially final financing documents and the LGC's approval.
3
Attachment 1 -- Approved List of Projects for Installment Financing
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.
Attachment 2 4
Mark A. airgo
ki STERLING 4eragil 11)ilrctor Bank
9667 f avenscroft I NW
,NATIONAL BANK Concord, INC 28027
704 287 4493
f::ii!i roaiV:mcarao(a�snb.com
Website www.snb.com
May 3, 2017
Orange County, NC
Mr. Gary Donaldson
200 South Cameron Street
Hillsborough, NC 27278
Project: Financing of vehicles/equipment and improvements at various facilities
Sterling National Bank ("SNB") is pleased to present this financing proposal (the "Term Sheet")
to Orange County, NC in connection with the above-referenced project. Working with SNB has
several major advantages, including:
• Experience and Expertise: Each member of the SNB Public Finance team has significant
experience regarding the financing of essential governmental equipment and projects, and can
help you document your financing in a manner that complies with applicable local laws.
• Financial Capability: The SNB Public Finance team is part of Sterling National Bank, a publicly
traded commercial bank, which has the capability of funding tax-exempt financings on a
nationwide basis.
• Reliability: The SNB Public Finance team prides itself on excellent customer service and the
prompt closing of awarded transactions.
• Simplified Financing Structure: SNB is proposing to finance 100% of the equipment and
improvements via a tax-exempt Installment Financing Contract which is the North Carolina Local
Government Commission's preferred methodology for financing energy performance contracts.
We look forward to working with you and your team on this assignment, and please do not hesitate to
contact us with any questions, comments or concerns. We are positive that you'll enjoy working with
SN B.
Very truly yours,
Mark A. Cargo
Managing Director
mcargo @snb.com
www.snb.com
5
Mark A Cargo
Managing II::Diirector
ki STERLING SterlIng Natiionall Bank
9667 I avenscrott I....N NW
NATIONAL A N Concord„
704-2874493 704-2874493 493�93
f::i:.rr 01 mcargo @snb.com
Website: www.snb.com
TERM SHEET
TYPE OF FINANCING: A tax-exempt Installment Financing Contract (the "IFC"), with
repayment subject to annual appropriations, which will enable
the Borrower to finance the purchase of essential governmental
equipment (the "Equipment") as well as funding improvements
as various facilities. Lender will fund the IFC on a private-
placement basis.
BORROWER: Orange County, NC
LENDER: Sterling National Bank, or its designee or assignee
ESCROW: IFC proceeds shall be funded into an escrow account (the
"Escrow Fund"), with disbursements made to the Contractor as
the Equipment is delivered and accepted. The Escrow is expected
to be set up with Sterling National Bank at no cost so long as the
proceeds do not require collateralization other than the use of a
surety bond. Escrow Fund earnings shall accrue to the benefit of
the Borrower.
AMOUNT FINANCED: A. $11,142,000.00 (Option B, Draw 2) or B. $13,700,000.00
(Option B Total)
EQUIPMENT/USE: Vehicles/Equipment&Capital Improvements
TERM: Approximately Twenty (20)years (see Exhibit A& B).
PAYMENT STRUCTURE: Borrower shall make principal and interest IFC payments as set
forth in the RFP. Payments will be made from any legally available
funds.
INTEREST RATE: A. 2.86%and B. 2.83%(20 year)
INTEREST RATE LOCK: The Interest Rate quoted above is valid for a closing within Forty
four(44) days from the date of this Term Sheet (through June 15
2017). Should closing occur after such date,the Interest Rate will
be subject to adjustment five (5) days prior to closing date
utilizing the following index formula:
Interest Rate= (Index * 0.65): A. + 138 bps
B. + 135 bps
SNB Confidential Term Sheet 2 1 P a g e
6
Where Index=Ten (10) year Libor Swap Rate, which was 2.28 at
close of business on May 2, 2017.
BANK QUALIFICATION: The IFC will be designated as a Non-Bank Qualified Tax-Exempt
Obligation under section 265(b) of the Internal Revenue Code of
1986, as amended.
SECURITY: As for security, the County will offer a Deed of Trust on the
County's Sportsplex Facility which has an insured building value
of $14,709,240 (excluding construction resulting from this
borrowing).
MAINTENANCE& INSURANCE: All maintenance and insurance are the responsibility of
Borrower. Borrower shall bear all risk of loss or damage to the
Equipment and shall be responsible for keeping the Equipment
insured with companies satisfactory to and for such amounts as
required by Lender. Lender and its affiliates, successors and
assigns must be named as loss payee and additional insured as
applicable on all insurance policies. Evidence of such insurance
must be satisfactory to Lender.
PREPAYMENT: Borrower shall have the right to pre-pay the IFC on any payment
date by paying the Financing Price, provided that Borrower gives
Lender at least thirty (30) days prior written notice of its intent
to do so. The Financing Price, as a percentage of the then-
outstanding IFC balance, shall be equal to:
Exhibits A& B (20 Yr):
Year Percentage:
1-5 No Call
6-10 101%
Thereafter 100%
FEES OF LENDER: None. The costs of issuance incurred by Borrower, such as loan
counsel fees, are payable by Borrower and may be capitalized
into the IFC upon request.
DOCUMENTATION: Borrower shall provide standard North Carolina documentation
for the IFC, subject to review & approval by Lender. Borrower
shall provide an opinion of legal counsel attesting to the legal,
valid, binding and enforceable nature of the IFC.The Lender will
use Gilmore& Bell as counsel to review the documents.
RATING: Lender reserves the right(at the sole expense of Lender), prior to
or after the closing of the IFC, to obtain a confidential or public
rating on the IFC. Borrower agrees to cooperate with Lender and
the selected rating agency in connection with the rating process.
SNB Confidential Form Sheet 5 1 p a g e
7
ASSIGNMENT: Lender reserves the right — without the consent of (but with
notice to) the Borrower — to assign, sell or otherwise transfer
the IFC (or interests therein) to a trust, partnership, custodial
arrangement or similar entity, interests in which are offered and
sold to an Eligible Assignee; provided, however, any such
assignment, sale or other transfer shall not cause the Borrower
to be required to provide any disclosure information relating to
the sale of such bond or interests therein or to agree to provide
information required by SEC Rule 15c2-12. "Eligible Assignee"
means any of(a) a commercial bank organized under the laws of
the United States or any state thereof and having (x) total assets
in excess of $2,000,000,000 and (y) a combined capital and
surplus of at least$200,000,000; (b) a branch or agency licensed
under the laws of the United States or any state thereof of a
commercial bank organized under the laws of any country that is
a member of the Organization for Economic Cooperation and
Development, or a political subdivision of any such country, and
having (x) total assets in excess of $2,000,000,000 and (y) a
combined capital and surplus of at least $200,000,000; (c) a life
insurance company organized under the Laws of any state of the
United States and having admitted assets of at least
$2,000,000,000; (d) a nationally recognized investment banking
company or other financial institution in the business of making
loans, or an Affiliate thereof organized under the Laws of any
state of the United States, and licensed or qualified to conduct
such business under the Laws of any such state and having (1)
total assets of at least$2,000,0000,000 and (2) a net worth of at
least $200,000,000; (e) any Lender, or (f) an Affiliate of any
Lender; provided, however, that none of the foregoing entities
shall be or be deemed to be an Eligible Assignee if such entity's
primary business is the investment in distressed debt or
securities; and provided, further, however, that (x) no Lender
that is or at any time was a Defaulting Lender, nor any Affiliate of
such Defaulting Lender, nor a Person who, upon becoming a
Lender hereunder would constitute a Defaulting Lender, shall be
an Eligible Assignee, unless consented to in writing by the
Borrower and the Administrative Agent, and (y) no Loan Party,
and no Affiliate of a Loan Party, shall qualify as an Eligible
Assignee.
IRS CIRCULAR 230 DISCLOSURE: Lender and its affiliates do not provide tax advice. Accordingly,
any discussion of U.S.tax matters contained herein(including any
attachments) is not written or intended to be used, and cannot
be used, in connection with the promotion, marketing or
recommendation by anyone unaffiliated with Lender of any of
the matters addressed herein or for the purpose of avoiding U.S.
tax-related penalties.
SNB Confidential Fenn Sheet 4 1 p a g e
8
ADVISORY DISCLOSURE: SNB is not a registered municipal advisor as defined under the
Dodd-Frank Wall Street Reform and Consumer Protection Act
and its related rules and regulations. In providing this Term
Sheet, SNB is not providing any advice, advisory services, or
recommendations with respect to the structure, timing, terms,
or similar matters concerning an issuance of municipal securities.
This Term Sheet is a commercial, arms-length proposal that does
not create a fiduciary duty by SNB to the Borrower. The Borrower
may engage, separately and at its own cost, an advisor to review
this Term Sheet and the proposed transaction on the Borrower's
behalf.
CREDIT APPROVAL: The IFC is subject to formal credit approval by SNB and the
negotiation of mutually acceptable documentation. For due
diligence, Lender will require Borrower's three (3) most recent
audited financial statements, its most recently adopted budget,
a complete Equipment listing, a copy of any contract in
connection with the Equipment, and any other information that
Lender may reasonably require.
LOCAL GOVERNMENT COMMISSION: This Term Sheet is subject to Local Government Commission
Review and Approval.
PROPOSAL EXPIRATION: Unless accepted by the Borrower or extended in writing by SNB
at its sole discretion, this Term Sheet shall expire on May 30,
2017.
Upon receipt of the signed Term Sheet, we will endeavor to provide you with a timely commitment and
we will use good faith efforts to negotiate and finance the IFC based on the terms herein. It is a pleasure
to offer this financing proposal and we look forward to your favorable review.
Very truly yours,
Mark A. Cargo
Managing Director
mcargo @snb.com
www.snb.com
Agreed to and Accepted by:
Orange County, NC
(Name)
(Title)
(Date)
SNB Confidential Fenn Sheet S 1 p a g e
9
Exhibit A--Sample Amortization Schedule
Funding Amount: $11,142,000.00 Interest Rate: 2.86%
Down Payment: $0.00 Closing Date: 6/15/2017
Capitalized Interest: $0.00 Term (years): 20
Cost of Issuance: $0.00
Amount Financed: $11,142,000.00
Payment Payment Payment Interest Principal Outstanding Redemption
Number Date Amount Component Component Balance Price
Principal: 6/15/2017 $11,142,000.00 No Call
1 12/1/2017 $147,544.50 $147,544.50 $0.00 $11,142,000.00 No Call
2 6/1/2018 $716,330.60 $159,330.60 $557,000.00 $10,585,000.00 No Call
3 12/1/2018 $151,365.50 $151,365.50 $0.00 $10,585,000.00 No Call
4 6/1/2019 $709,365.50 $151,365.50 $558,000.00 $10,027,000.00 No Call
5 12/1/2019 $143,386.10 $143,386.10 $0.00 $10,027,000.00 No Call
6 6/1/2020 $701,386.10 $143,386.10 $558,000.00 $9,469,000.00 No Call
7 12/1/2020 $135,406.70 $135,406.70 $0.00 $9,469,000.00 No Call
8 6/1/2021 $692,406.70 $135,406.70 $557,000.00 $8,912,000.00 No Call
9 12/1/2021 $127,441.60 $127,441.60 $0.00 $8,912,000.00 No Call
10 6/1/2022 $684,441.60 $127,441.60 $557,000.00 $8,355,000.00 No Call
11 12/1/2022 $119,476.50 $119,476.50 $0.00 $8,355,000.00 $8,438,550.00
12 6/1/2023 $676,476.50 $119,476.50 $557,000.00 $7,798,000.00 $7,875,980.00
13 12/1/2023 $111,511.40 $111,511.40 $0.00 $7,798,000.00 $7,875,980.00
14 6/1/2024 $668,511.40 $111,511.40 $557,000.00 $7,241,000.00 $7,313,410.00
15 12/1/2024 $103,546.30 $103,546.30 $0.00 $7,241,000.00 $7,313,410.00
16 6/1/2025 $660,546.30 $103,546.30 $557,000.00 $6,684,000.00 $6,750,840.00
17 12/1/2025 $95,581.20 $95,581.20 $0.00 $6,684,000.00 $6,750,840.00
18 6/1/2026 $652,581.20 $95,581.20 $557,000.00 $6,127,000.00 $6,188,270.00
19 12/1/2026 $87,616.10 $87,616.10 $0.00 $6,127,000.00 $6,188,270.00
20 6/1/2027 $644,616.10 $87,616.10 $557,000.00 $5,570,000.00 $5,625,700.00
21 12/1/2027 $79,651.00 $79,651.00 $0.00 $5,570,000.00 $5,625,700.00
22 6/1/2028 $636,651.00 $79,651.00 $557,000.00 $5,013,000.00 $5,013,000.00
23 12/1/2028 $71,685.90 $71,685.90 $0.00 $5,013,000.00 $5,013,000.00
24 6/1/2029 $628,685.90 $71,685.90 $557,000.00 $4,456,000.00 $4,456,000.00
25 12/1/2029 $63,720.80 $63,720.80 $0.00 $4,456,000.00 $4,456,000.00
26 6/1/2030 $620,720.80 $63,720.80 $557,000.00 $3,899,000.00 $3,899,000.00
27 12/1/2030 $55,755.70 $55,755.70 $0.00 $3,899,000.00 $3,899,000.00
28 6/1/2031 $612,755.70 $55,755.70 $557,000.00 $3,342,000.00 $3,342,000.00
29 12/1/2031 $47,790.60 $47,790.60 $0.00 $3,342,000.00 $3,342,000.00
30 6/1/2032 $604,790.60 $47,790.60 $557,000.00 $2,785,000.00 $2,785,000.00
31 12/1/2032 $39,825.50 $39,825.50 $0.00 $2,785,000.00 $2,785,000.00
32 6/1/2033 $596,825.50 $39,825.50 $557,000.00 $2,228,000.00 $2,228,000.00
33 12/1/2033 $31,860.40 $31,860.40 $0.00 $2,228,000.00 $2,228,000.00
34 6/1/2034 $588,860.40 $31,860.40 $557,000.00 $1,671,000.00 $1,671,000.00
35 12/1/2034 $23,895.30 $23,895.30 $0.00 $1,671,000.00 $1,671,000.00
36 6/1/2035 $580,895.30 $23,895.30 $557,000.00 $1,114,000.00 $1,114,000.00
37 12/1/2035 $15,930.20 $15,930.20 $0.00 $1,114,000.00 $1,114,000.00
38 6/1/2036 $572,930.20 $15,930.20 $557,000.00 $557,000.00 $557,000.00
39 12/1/2036 $7,965.10 $7,965.10 $0.00 $557,000.00 $557,000.00
40 6/1/2037 $564,965.10 $7,965.10 $557,000.00 $0.00 $212,000.00
Totals: $14,475,698.90 $3,333,698.90 $11,142,000.00
SNB Confidential Form Sheet Wage
10
Exhibit B--Sample Amortization Schedule
Funding Amount: $13,700,000.00 Interest Rate: 2.83%
Down Payment: $0.00 Closing Date: 6/15/2017
Capitalized Interest: $0.00 Term(years): 20
Cost of Issuance: $0.00
Amount Financed: $13,700,000.00
Payment Payment Payment Interest Principal Outstanding Redemption
Number Date Amount Component Component Balance Price
Principal: 6/15/2017 $13,700,000.00 No Call
1 12/1/2017 $179,515.04 $179,515.04 $0.00 $13,700,000.00 No Call
2 6/1/2018 $1,091,855.00 $193,855.00 $898,000.00 $12,802,000.00 No Call
3 12/1/2018 $181,148.30 $181,148.30 $0.00 $12,802,000.00 No Call
4 6/1/2019 $1,087,148.30 $181,148.30 $906,000.00 $11,896,000.00 No Call
5 12/1/2019 $168,328.40 $168,328.40 $0.00 $11,896,000.00 No Call
6 6/1/2020 $1,082,328.40 $168,328.40 $914,000.00 $10,982,000.00 No Call
7 12/1/2020 $155,395.30 $155,395.30 $0.00 $10,982,000.00 No Call
8 6/1/2021 $1,076,395.30 $155,395.30 $921,000.00 $10,061,000.00 No Call
9 12/1/2021 $142,363.15 $142,363.15 $0.00 $10,061,000.00 No Call
10 6/1/2022 $1,072,363.15 $142,363.15 $930,000.00 $9,131,000.00 No Call
11 12/1/2022 $129,203.65 $129,203.65 $0.00 $9,131,000.00 $9,222,310.00
12 6/1/2023 $1,069,203.65 $129,203.65 $940,000.00 $8,191,000.00 $8,272,910.00
13 12/1/2023 $115,902.65 $115,902.65 $0.00 $8,191,000.00 $8,272,910.00
14 6/1/2024 $1,065,902.65 $115,902.65 $950,000.00 $7,241,000.00 $7,313,410.00
15 12/1/2024 $102,460.15 $102,460.15 $0.00 $7,241,000.00 $7,313,410.00
16 6/1/2025 $659,460.15 $102,460.15 $557,000.00 $6,684,000.00 $6,750,840.00
17 12/1/2025 $94,578.60 $94,578.60 $0.00 $6,684,000.00 $6,750,840.00
18 6/1/2026 $651,578.60 $94,578.60 $557,000.00 $6,127,000.00 $6,188,270.00
19 12/1/2026 $86,697.05 $86,697.05 $0.00 $6,127,000.00 $6,188,270.00
20 6/1/2027 $643,697.05 $86,697.05 $557,000.00 $5,570,000.00 $5,625,700.00
21 12/1/2027 $78,815.50 $78,815.50 $0.00 $5,570,000.00 $5,625,700.00
22 6/1/2028 $635,815.50 $78,815.50 $557,000.00 $5,013,000.00 $5,013,000.00
23 12/1/2028 $70,933.95 $70,933.95 $0.00 $5,013,000.00 $5,013,000.00
24 6/1/2029 $627,933.95 $70,933.95 $557,000.00 $4,456,000.00 $4,456,000.00
25 12/1/2029 $63,052.40 $63,052.40 $0.00 $4,456,000.00 $4,456,000.00
26 6/1/2030 $620,052.40 $63,052.40 $557,000.00 $3,899,000.00 $3,899,000.00
27 12/1/2030 $55,170.85 $55,170.85 $0.00 $3,899,000.00 $3,899,000.00
28 6/1/2031 $612,170.85 $55,170.85 $557,000.00 $3,342,000.00 $3,342,000.00
29 12/1/2031 $47,289.30 $47,289.30 $0.00 $3,342,000.00 $3,342,000.00
30 6/1/2032 $604,289.30 $47,289.30 $557,000.00 $2,785,000.00 $2,785,000.00
31 12/1/2032 $39,407.75 $39,407.75 $0.00 $2,785,000.00 $2,785,000.00
32 6/1/2033 $596,407.75 $39,407.75 $557,000.00 $2,228,000.00 $2,228,000.00
33 12/1/2033 $31,526.20 $31,526.20 $0.00 $2,228,000.00 $2,228,000.00
34 6/1/2034 $588,526.20 $31,526.20 $557,000.00 $1,671,000.00 $1,671,000.00
35 12/1/2034 $23,644.65 $23,644.65 $0.00 $1,671,000.00 $1,671,000.00
36 6/1/2035 $580,644.65 $23,644.65 $557,000.00 $1,114,000.00 $1,114,000.00
37 12/1/2035 $15,763.10 $15,763.10 $0.00 $1,114,000.00 $1,114,000.00
38 6/1/2036 $572,763.10 $15,763.10 $557,000.00 $557,000.00 $557,000.00
39 12/1/2036 $7,881.55 $7,881.55 $0.00 $557,000.00 $557,000.00
40 6/1/2037 $564,881.55 $7,881.55 $557,000.00 $0.00 $212,000.00
Totals: $17,292,495.04 $3,592,495.04 $13,700,000.00
SNB Confidential Form Sheet 7 1 p a g e
11
ki STERLING
NATIONAL'I„ L BANK
ABOUT—STERLING NATIONAL BANK
Sterling Bancorp, of which the principal subsidiary is Sterling National Bank, specializes in the delivery of
service and solutions to business owners,their families, and consumers within the communities we serve
through teams of dedicated and experienced relationship managers. Sterling National Bank offers a
complete line of commercial, business, and consumer banking products and services. In a 2012 annual
survey commissioned by Forbes and prepared by Governance Metrics International, a global leader in
corporate governance, we were named one of America's 100 Most Trustworthy Companies. Sterling
National Bank has origins dating to 1888, and Sterling Bancorp is traded on the New York Stock Exchange
under the symbol "STL". For more information about Sterling Bancorp and Sterling National Bank, please
visit www.snb.com.
The public finance group of Sterling National Bank provides tax-exempt and taxable financing solutions on
a nationwide basis for state & local governments, non-profit corporations, and the federal government.
Projects financed include virtually all types of essential capital items, including equipment, vehicles,
energy efficiency & renewable energy equipment, and real property. Financing terms are tied to the
useful life of the capital improvements, and range from 3 to 20 years. Each member of the public finance
team has 25 or more years of lending experience, and is committed to the timely closing of awarded
transactions.
CONTACT INFORMATION
For more information about this financing opportunity, please contact:
Mark Cargo
Managing Director
Sterling National Bank
Phone: (704) 287-4493
Email: mcargo @snb.com
SNB Confidential Fenn Sheet Wage
DAVENPORT& COMPANY Attachment 3 Davenport Public Finan12
Independence Center
101 N.Tryon Street Ste. 1220
Charlotte,NC 28246
To Orange County, North Carolina
From Davenport & Company lL1C
Date May 16, 2017
Subject 2017 installment Financing Contract REP Summary
Background
Davenport& Company ILLC ("Davenport"), on behalf of Orange County, NC (the "County"), distributed a Request
for Proposals ("REP") to secure a commitment for an installment Financing Contract to finance the County's
Vehicles/Equipment and Addition/improvement projects and fund the associated Costs of issuance.
The REP was distributed to over 50 National, Regional, and Local lending institutions. After the initial
distribution, Davenport reached out to each of the potential bidders to assess their interest in the financing and
address any questions they had.
As part of the REP process, responding institutions were asked to provide interest rates for two separate draws
and two separate terms:
• Draw 1: 5 or 7 year term
• Draw 2: 15 or 20 year term
RFP Responses
Through this process, the County was able to secure seven responses to the RIF?, including:
1. Capital One Public Funding ("Capital One");
2. JP Morgan Chase Bank ("JP Morgan");
3. PING Equipment Finance ("IPINC");
4. Signature Public Funding ("Signature");
5. Sterling National Bank ("Sterling");
6. SunTrust Equipment Finance & Leasing ("SunTrust"); and
7. US Bank Government Leasing and Finance ("US Bank").
The following pages contain a summary of the key terms and conditions for each of the responses received.
Member NYSE I FINRA I SIPC Page 1
DAVENPORT& COMPANY 13
May .1..6, 2017
Discussion Points
1. interest Rate
A summary of the interest rate proposals provided by the seven bidders is shown in Table 1 below. Bidders were
requested to provide interest rates that would be locked in through a closing date of June 15th. If bidders were
unable to provide a fixed rate at the time of the RH', they were asked to indicate the earliest date on which
interest rates could be locked in for a June 15th closing,.
Table 1: Summary of Interest Rates
Vnterest Rate
5/ 15 Year Option 7/ 20 Year Option
Draw 1 Draw 2 Total Draw 1 Draw 1 Total
Lender 5 Years 15 Years 5/15 Years 7 Years 20 Years 7/20 Years
Capital One 2.39% 2.98% 2.99% 2.55% 3.45% 3.38%
Signature 181% 7.77% 7.11%
Sterling 2.86% 2.83%
uP..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„.,..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„.
Morgan1 2.05% 2.65% 2.65%
US Bank 1.84% 2.015%
SunTrust2
PNC3 180%
Interest rates are subject to a downgrade pricing grid.JP Morgan will require margin rate factor provisions and full protection
against increased costs and changes in capital adequacy requirements. Interest rates will be determined on the closing date.
Documentation will include JP Morgans standard LIBOR fixed rate breakage provisions.
2 The interest rates will be subject to upward adjustment if the federal corporate tax rate is reduced or if the benefit of interest
income exclusion is capped. If the proposal is not accepted by May 10th,the interest rate will be subject to change based on the
three year swap rate until the financing is awarded.
3
Interest rate will be subject to change based on an index after May 1.7th.The change will be the equivalent of 65%of the change in
the 3 year interest rate swap+/-the base interest rate. Interest rate will be finalized three days prior to closing.
• Signature provided the lowest combined interest rate proposals for the 5 / 15 year options that are fixed
through the life of the loan and not subject to change prior to closing:
— 5 Year rate: 1.81%
— 15 Year rate: 2.72%
• Sterling provided the lowest combined interest rate proposal for the 7/ 20 year options that is fixed through
the life of the loan and not subject to change prior to closing:
— Blended 7 / 20 year rate: 2.83%
Member NYSE I FINRA I SIPC Page 2
DAVENPORT& COMPANY 14
May 1...6, 20.1..7
2. Prepayment Provisions
Prepayment provisions offered by all seven lending institutions are shown in Table 2 below.
Table 2: Summary of Prepayment Provisions
Lender Prepayment IProVisions
Capital One Draw 1, 5 Years: in whole at par after 6/1/19; Draw 2, 15 Years: in whole at par after
6/1/24; Total, 5/15 Years: in whole at par after 6/1/24;
Draw 1, 7 Years: in whole at par after 6/1/20; Draw 2, 20 Years: in whole at par after
6/1/27; Total, 7/20 Years: in whole at par after 6/1/27
..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„.
Signature in whole on any payment date at 101%
Sterling in whole or in part on any payment date at 101% (Years 640); Par (Thereafter)
..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„.
.J11:) Morgan INon-callable
US Bank After 13 months, lesser of make•whole provision or 103%
..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„..„.
SU nTrust in whole at 103% (Year 1); 102% (Year 2); 101% (Year 3); Par (Thereafter)
IPNC in whole after the second anniversary at 103%
Member NYSE I FINRA I SIPC Page 3
DAVENPORT&COMPANY 15
May.1..6, 201 /
3. II::::Sti rrnated II::)ebt Service
A sum nary comparison of the estimated debt service structure for the Signature 5/15 year, US Bank .ir year/
Sterling 20 year, Sterling II3Iended .x/20 year proposals is shown in .fable 3. .fhe prelirninary estimated debt
Service shown accounts for estimated costs of issuance.
A I3 C D E
Lender SOgnlatuure Puublllc FuunldOnlg Ster unng
Draw Draw 1 Draw 2 total) RIIenlded
1.
2. Sources
3 Par Amount* `; 2,548,()()() .1; 11,099,000 .1; 13,647,()()() $ 13,643,()()()
4 rOta ll 2,548,000 811,099,000 813,647,000 813,643,000
5
6 Uses
7 Project Fund* $ 2,518,439__ $ 10,973,700 .1; 13,492,139 $ 13,492,139
8 Cost of O S suaam(;e/ Bank Fees* 29,561 125,300 154,861 150,861
9 TotaO $ 2,548,000 $11,099,000 $13,647,000 $13,643,000..
10
i.1 IOC/ Ilnferesf Rate* 1.8100% 2.7200% 2.6420% 2.8300%
12 AVV On 7OC* 2.2056% 2.8853% 2.8266% 2.9734%
13
14 Debt Service
15 FuscaO Year
16 201..E $ 5 37,325... $ 1,030,153 $ 1,567,478 $ 1,2 3,032 .
17 2019 537,196 1,022,765 1,553,960 1,260,853_.
18 2020 538,146_.. 1,001,61..0 1,539,755 1,244,383
19 2021 536,915 981,482 1,518,396 1,228,659..
2.0 2022 536,539 961,354 1,497,892 1,212,651
1 202E 941,226 941,226 1,195,360_
32 2024 921,098 921.,098 1,180,815
4 2025 9t)t),97() 9t)t),97() 758,930_
2.4 2026 880,842 880,842 743,223
15 2027 860,714 860,714 727,517..
36 2028 840,586 840,586 71..1,810
1 2029 8204 58 820,458 695,104_
18 2030 800,330 800,330 679,426
19 2031 779,202 779,202 663,747..
30 2032 759,101 759,1..01 648,069._
31. 2033 632,391..
32 2034 616,713
33 2035 601,035_.
34 2036 585,356
35 2037 569,678..
36 rOtall 2,686,119 $13,501,885 $16,188,005 $17,218,802
* Prehhmaumaary and subject to change
Member NYSE I FINRA I SIPC Page 4
DAVENPORT& COMPANY 16
May .1..6, 2017
Recommendation
Based upon our review of the proposals, related analyses, and discussions with County Staff and II3ond Counsel,
Davenport recommends that the County select the Sterling Blended 7/20 year proposal.The Sterling blended 7
/ 20 year proposal allows the County to lock-in a 20 year interest rate of 2.83% while maintaining flexibility to
prepay or refinance the loan in the future. While the 20 year final maturity results in higher overall debt service
than the 15 year final maturity, the longer term amortization provides lower annual debt service payments.
Given the County's upcoming CH") and Referendum projects, the 20 year amortization will provide greater
budgetary flexibility and minimize the impact on the County's debt service to general fund revenue policy through
the lower annual debt service payments.
Next Steps
May 16th County Board Meeting
• County Board considers selecting a winning bidder
June 6th ILGC approval
County Board Meeting
• County Board adopts Resolution formally approving lending proposal and
substantially final financing documents
On or about June 15th Close on Financing
Member NYSE I FINRA I SIPC Page 5
17
DAVENPORT& COMPANY
May 1S' 2O17
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an issuer eia.es Davenport ID provide.financial advisory or consultant services with respect ID the issuance of municipal securities, Davenport.is
obligated u`evidence such a.financial advisory relationship with a written agreement.
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person,or when acting as an underwriter,though it is required ID deal fairly with such persons.
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Version 01.13.14. V CH MB IC
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