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HomeMy WebLinkAboutAgenda - 03-02-2006-8bORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: March 2, 2006 Action Agenda Item No. ~'j SUBJECT: Public Hearing and Resolutions for Alternative Financing for School and County Capital Projects DEPARTMENT: Finance PUBLIC HEARING: (Y/N) Yes ATTACHMENT(S): INFORMATION CONTACT: Resolutions Ken Chavious, (919)-245-2453 Draft Financing Documents Bob Jessup, (919)-755-1800 (under separate cover) PURPOSE: To conduct a public hearing on the County's planned debt issuance using alternative financing, and to adopt the related "Findings Resolution" and the resolution approving the financing documents. BACKGROUND: At the September 13, 2005 work session, the Board reviewed and approved a revised schedule for the issuance of debt related to both School and County projects that involved the pursuit of alternative financing. Bonds approved for 2005-06 issuance were sold in August 2005.. The projects listed below and in the amounts cited on the attached resolution will be included in the alternative financing in accordance with the BOCC~~endorsed debt issuance schedule. The resolutions contain several blanks, which are to be filled in once the BOCC has made final determinations at this March 2 meeting on the face amount of COPs to be issued for each project,. School Projects Chapel Hill-Carrboro City Schools Renovations/Repair to Existing Facilities Orange County Schools -Gravelly Hill Middle School County Projects Animal Services Planning SportsPlex Conservation Easements Efland/Buckhorn Water and Sewer Improvements Seymour Senior Center Staff proposes to use Certificates of Participation (COPs) as the alternative financing mechanism and will be pursuing an issuance date currently scheduled for April 26, 2006. 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).. The County's application will be considered by the LGC on April, 4, 2006. BOCC action at this March 2 meeting is the initial step in the LGC process and involves conducting a public hearing, the adoption of a resolution authorizing the financing, and the adoption of a resolution approving draft financing documents, The resolutions serve the following purposes: • Make a preliminary determination of the projects and funding amounts to be included in the Spring COPs financing. Many of these projects are scheduled to receive (or have already received) additional funding from other sources, • Direct the Finance Officer to apply for LGC approval for the financing.. • Make the findings of fact required by LGC regulations on such matters as the desirability of pursuing installment financing for these particular projects. • Make the final determination to proceed with the proposed financing, • Approve the financing documents and the official offering statement, Disclose the intent for the County to reimburse itself far projects already undertaken, Band Counsel has prepared the attached resolutions, as well as the draft financing documents, The Offering Statement has been prepared and reviewed in detail by the financing team, which consists of LGC staff, underwriters, bond counsel and the Finance Director.. Financing documents, which are quite voluminous, have been posted for public review on the County's website along with this abstract and other March 2, 2006 BOCC agenda materials, FINANCIAL IMPACT: Staff will work with the LGC to issue COPs in an amount not to exceed $24,000,000, That amount includes project costs, issuance costs, and bond discounts that serve to lower the overall interest rates, Once the COPs have been issued, annual debt service payments are expected to be in the range of $2.0 to 2.2 million, based on current market conditions. These payments fall within the debt capacity parameters established in the Board's Debt management Policy, which strives to maintain total annual debt service payments at no more than 15% of General Fund expenditures. Costs of this debt issuance were included in the projections provided to the Board at the annual planning retreat on Friday January 20, 2006. RECOMMENDATION(S): The Manager recommends that the Board conduct the public hearing and adopt the resolutions that authorize the Finance Director to proceed with the financing and that approve the draft financing documents, 3 Resolution supporting an application to the Local Government Commission for its approval of the County's 2006 installment financing projects WHEREAS The Orange County Board of Commissioners has approved, in principle, the use of installment financing to provide funds, to be used with other available fluids, to pay costs related to the following projects: Gravelly Hill Middle School construction costs $ I/flandBucldiom Community Water and $ Sewer consri~uction Renovation and improvement projects for the Chapel Hill - Can°boro $5,150,000 school district Acquisition of conservation easements and similar interests $ in land Seymoui° Senior Center costs $4,150,000 Planning fiords for proposed $700,000 aiumal services facility Pei°manent financing for the $6,000,000 SportsPlex acquisition Under the guidelines of the North Cai°olina Local Goven~ment Conmrission (the "LGC"), this governing body must make certain findings of fact to support the County's application for the LGC's approval of the County's proposed financing arrangements for the projects. ~ans~,i y NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of Orange County, North Carolina, as follows: 1. The Board makes an initial determination to finance the projects described above by use of installment financing including certificates of participation. The County estimates that the total amount to be financed will not exceed $24,000,000, including amoLmts that may be needed to provide required reserves, to pay financing costs and to pay other neaessai°y and related costs, 2. The Finance Director is authorized and directed to proceed with the proper steps toward completing the financing, including proceeding with an application to the LGC for its approval of such financing. The Board appoints the Finance Director as the County's authorized representative with respect to the LGC application process. 3, The County requests that the LGC approve the County's application for such financing, The Board rnalces the following findings of fact in support of its application for approval and its deternunation to proceed with this financing: (a) The proposed projects are necessary and appropriate for° the County under all the circumstances, All of these projects have been in the County's capital investment plan for some period of time, and have received prior confirmation from the Board as to their necessity and appropriateness for the County. Construction of the Gravelly Hill middle school is underway. The Board believes that the proposed projects represent the best use of the borrowing capacity (for installment financhgs) that the Com1ty has elected to use at this time, (b) The proposed installment financing is preferable to a bond issue for the same purpose. Using an installment financing for these projects allows the County to address a series of needs as part of a flexible, long-term plan. Several of the proposed pi°o,jects will also receive funding from voter-approved general obligation loads, The County has no meaningful capacity to issue non-voted general obligation bonds in the cLU~~ent fiscal year. It is appropriate for the County to balance its capital finance program between bonds and installment financing. (c) The estimated sums to fall due under the proposed financing conri•act are adequate and not excessive for the proposed purposes. The County has, and. will continue, to closely monitor const-uction budgets against available fiu7ds. The County will closely review proposed financing rates against market rates with guidance fiom the LGC. 94775v1 5 (d) As confirmed to the Board at this meeting by the County's Finance Officer, (i) the County's dept management procedures and policies are sound and in compliance with law, and (ii) the County is not in default tinder any of its debt service obligations. (e) The County Attorney is of the opinion that the proposed projects are authorized by law and are purposes for which public ftimds of the County maybe expended pursuant to the Constitution and laws of North Carolina, 4. The Board approves the selection of Banc of America Securities LLP and Siebert Bradford Shank to provide inveshnent banking and under°wr°iting services to the County in cormection with this transaction. S. All County officers and employees are authorized and directed to take all such ftu•thei° action as they nay consider necessary or desirable in connection with the furtherance of the purposes of this resolution. All such prior actions of County officers and employees are ratified, appr°oved and confiniied. All other resolutions, or• parts ther°eof, irr conflict with this resolution are repealed, to the extent of the conflict. This resolution takes effect inuizediately. ~.~~~s~i Resolution Providing Final Approval of Terms and Documents For County's 2006 Installment Financing WHEREAS: The Boai°d of Commissioners of Orange County, North Carolina, has previously determined to carry out a plan to finance certain public projects, as described on Exhibit A (the "Projects"), tlu-ough the use of an installment financing inchiding certificates ofparticipation. The County's Finance Officer has made available to this Board the draft documents listed on Exhibit B (the "Documents"), and a draft of an official statement providing for the disclosure of infoi°mation to prospective investors in the County's financing obligations, All of these items relate to the County's carrying out the financing plan. BE IT THEREFORE RESOLVED by the Board of Commissioners of Orange County, North Carolina, as follows: 1. Determir:atiorc To Proceed with Projects -- The Board confines its decision to cant' out the financing plan for the Projects. This plan includes the County's acgluring the site of the new Gravelly Hill Middle School fi-om the Orange Comity school board to facilitate the financing plan; the Board approves the County's acquisition of such property, and hereby directs the County Manager and the Cormty Attonley to take all appropi°iate action toward that end. Z. AI7~1'07~C1i Oj° DOCllnrerZtS~ Direction To Execute Documents -- The Board approves the forms of the Documents submitted to this meeting. The Board author°izes and directs the Board's Chair and the Cormty Manager, or either of them, to execute and deliver those Documents to which t11e County is a party. The Documents in their respective final foinis mist be in substantially the forms presented, with such changes as the Chair or the County Manager may approve, The execution and delivery of any Document by an author°ized Cormty off cei° will be conclusive evidence of his approval of any such changes. The Documents in final form, however, must provide for the amount financed by the County not to exceed $24,000,000 and for a financing teen not to extend beyond December 31, '2026. 93869v3 3. Approval of Official Staten:ezzt -The Board approves the draft official statement submitted to this meeting as the fon7~r of the pr•elinunary official statement pursuant to which the Certificates (as defined in Exhibit B) will be offered for sale, The preliminary official statement as distributed to prospective investors must be in substantially the form presented, with such changes as the Finance Officer may approve, The Board dir°ects the Finance Officer, after the sale of the Certificates, to complete and otherwise prepare the preliminary official statement as an official statement in final form. The Board. authorizes and approves the use of the preliminary official statement and final official statement by Banc of America Securities LLP and Siebert Bradford Shank & Co., LLC, (together, the "Underwriters") in corurection with the sale of the Cer°tificates. The Board acknowledges that it is the County's responsibility to ensure that the Official Statement, in its final form, is correct and complete in all material respects. By the adoption of this resolution, the Board members aclarowledge their responsibility for causing the County to fulfill its responsibilities for the Official Statement. r{. Reinzburseznent Declaration -The adoption of this resolution is intended as a declaration of the County's official intent to reimburse itself fi•om financing proceeds for Project expenditures made prior to the closing date on the financing. Funds that have been advanced, or° may be advanced, fi•om the Cormty's Gener°al Fund, or any other fiord, for costs of the Pr°o,jects are intended to be reimbursed from the financing proceeds. 5. Miscellazzeozzs Provisiozzs -- All County officer°s and employees are author°ized and directed to take all such fin°ther action as they may consider necessary or desirable in furtherance of the purposes of this resolution. All such prior actions of County officers and employees are ratified, approved and confirmed. In the Chair's absence, the Vice Chair or the County Manager may assume any responsibility or cany out any function assigned to the Chair in this resolution. All other Board proceedings, or parts thereof, in conflict with this resolution are repealed, to the extent of the conflict, This resolution takes effect invnediately. Exhibit A -The Proiects Gravelly Hill Middle School consh•uction costs $ 1/fland/Buckhorn Community Water and $ Sewer consh•uction Renovation and improvement projects for the Chapel Hill - Carrboro $5,150,000 school district Acquisition of conservation easements and similar interests $ u3 land Seymour Senior Center costs $4,150,000 Plarniing funds for proposed $700,000 animal services facility Permanent financing for the $6,000,000 SportsPlex acquisition 93869v3 3 I Exhibit S -- Di•aft Documents (a) A draft dated Febr°uary 21, 2006, of an Installment Financing Conriact to be dated on or about April 1, 2006 (the "Financing Conri•act"), between the County and Orange County Public Facilities Company (the "Company), providing for° the advance of funds to the County for° the County's undertaking of the Pi°ojects. (b) A draft dated February 21, 2006, of a Deed of Trust and Security Agreement to be dated on or about April 1, 2006, from the County to a deed of riust h°ustee for the Cornparry's benefit, providing for a security interest in the proposed new Huddle school (and the associated land) to secure the County's obligations under the Financing Contract. (c) A draft dated Febr°uary 21, 2006, of a Tr°ust Agreement to be dated on or about April 1, 2006, between the Company and a Trustee, providing for the issuance of certificates of participation (the "Certificates") in the County's financing obligations to generate funds for the advance to the County under the Financing Contract. (d) A draft dated February 21, 2006, of a Contract of Purchase to be dated on or about Apr°il 13, 2006, providing for° the Underwriters' obligations to purchase the Certificates. The Corrhact for Pur°chase includes a Letter of Representation to be delivered by the County, (e) A draft dated Febr°uary 21, 2006, of a Lease to be dated on or about April 1, 2006, providing for the County to lease the new Huddle school and its associated property back to the Orange County school board (the "School Board"). (f) A draft dated February 21, 2006, of an Agency Agreement to be dated on or about April 1, 2006, providing for the School Board to undertake and complete the acquisition and consriuction of the new middle school as the County's agent. a