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HomeMy WebLinkAboutAgenda - 06-20-2017 - 5-a - Public Hearing and Adoption of Bond Order and Resolution Related to $5.9 Million Two-Thirds School Bonds 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: June 20, 2017 Action Agenda Item No. 5-a SUBJECT: Public Hearing and Adoption of Bond Order and Resolution Related to $5.9 Million Two-Thirds School Bonds DEPARTMENT: Finance and Administrative Services ATTACHMENT(S): INFORMATION CONTACT: Attachment 1. Bond Order for $5.9 Gary Donaldson, (919) 245-2453 Million in Two-Thirds Robert Jessup, (919) 933-9891 General Obligation Bonds Paul Laughton, (919) 245-2152 for Schools Attachment 2. Resolution to Publish the Bond Order PURPOSE: To conduct a public hearing as outlined in the two-thirds bond authorization schedule and adopt the bond order and resolution to publish the bond order. The bond order authorizes the issuance of two-thirds General Obligation Bonds in an amount not to exceed $5.9 million to support school facilities, and the bonds replace the General Fund pay-as-you-go funding in FY 2017-18 and a portion in FY 2018-19, as reflected in the Capital Investment Plan (CI P). (Note: The two-thirds bonds are separate and unrelated to the bonds for schools that were approved by voters in November 2016.) BACKGROUND: Pursuant to North Carolina General Statute 159-48, local governments can issue General Obligation bonds each year in an amount equal to two-thirds of the principal amount of debt retired in the previous year. Two-thirds General Obligation bonds may be issued without referendum but are subject to approval by the Local Government Commission in the same manner as other debt financings. The County will retire $8.8 million in principal on outstanding General Obligation bonds in FY 2016-17. The Statutes allow the County to issue up to two-thirds of the $8.8 million in principal retired or an additional General Obligation bond capacity of $5.9 million in FY 2017-18. This bond capacity cannot be accumulated or carried forward to future years. The Board adopted a resolution at its May 2, 2017 meeting providing preliminary approval of this bond issue. The bond order was introduced at the May 16, 2017 BOCC meeting and a resolution authorizing tonight's public hearing was adopted as well. 2 Two-thirds bonds can be used for substantially all the purposes for which voter-approved bonds may be issued except to fund auditoriums, coliseums, stadiums, convention centers, art galleries, museums, historic properties, urban redevelopment, public transportation or cable television systems. After review of the County's CIP and in consultation with the County's financial advisor, County staff recommends that the County proceed to authorize and issue the two-thirds bonds for school renovations and facility improvements for both school systems, as well as the costs of issuance for the bonds. The bond proceeds would be allocated on the average daily membership for both school systems, with Chapel Hill-Carrboro City Schools (CHCCS) receiving approximately $3.5 million and Orange County Schools (OCS) receiving $2.4 million. Examples of school renovation and improvement projects include: Athletic Facilities, Classroom/Building improvements, Mechanical Systems, Roofing projects, and School Safety/Security improvements. Both school systems maintain flexibility in the process at this point, but some of the currently planned projects include: CHCCS Athletic Field Improvements at Chapel Hill High School Athletic Field Improvements at Carrboro High School Classroom Improvements in Science classrooms at Phillips Middle School Cooling Tower Replacement at Scroggs Elementary Cooling Tower Replacement at East Chapel Hill High School OCS Upgrade Science classrooms at Cedar Ridge High School Roofing Project at Central Elementary Roofing Project at New Hope Elementary School Safety Initiatives district-wide Food Service Facility Improvements at Grady A. Brown Elementary and Orange High School As noted above, the two-thirds bonds for schools are separate from the November 2016 bonds for schools. However, for time and cost efficiency, the financing plan will combine the issuance of the two-thirds bonds with the issuance of the first bonds authorized by the November 2016 referendum. That bond sale is planned for September 2017. FINANCIAL IMPACT: The projected debt service conforms to the County's debt policies, debt affordability analysis, and CIP prioritization. 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 open the public hearing, receive any comments from the public, close the public hearing, and adopt the bond order and resolution. 3 Attachment 1 Proposed Bond Order for Adoption BOND ORDER AUTHORIZING THE ISSUANCE OF GENERAL OBLIGATION SCHOOL BONDS IN THE MAXIMUM AMOUNT OF $5,900,000 WHEREAS-- The Orange County Board of Commissioners has stated its proposal to issue to issue general obligation bonds to pay capital costs of providing school facilities. The County has applied to the North Carolina Local Government Commission for its approval of such bonds, and the Commission has accepted the County's application. BE IT ORDERED by the Board of Commissioners of Orange County, North Carolina, as follows: 1. There are hereby ordered to be issued general obligation school bonds of the County to pay capital costs of providing school facilities, together with related financing and other necessary or incidental costs. 2. The maximum aggregate principal amount of the bonds issued for such purpose will be $5,900,000. 3. Taxes will be levied in an amount sufficient to pay the principal of and interest on the bonds so issued. 4. A sworn statement of debt prepared by the County's Finance Officer has been filed with the Clerk to this Board and is open to public inspection. 5. This Bond Order shall take effect 30 days after its publication following adoption, unless it is petitioned to a vote of the people as provided in Section 159-60 of the North Carolina General Statutes, and in that event the order will take effect when approved by the voters. 4 RES-2017-044 Attachment 2 Resolution regarding publication of Bond Order WHEREAS, there has been adopted at this meeting a bond order entitled as follows: BOND ORDER AUTHORIZING THE ISSUANCE OF GENERAL OBLIGATION SCHOOL BONDS IN THE MAXIMUM AMOUNT OF $5,900,000 AND WHEREAS, this bond order is to take effect when authorized; AND WHEREAS, the General Statutes require certain additional actions to complete the process of authorizing the bonds; BE IT THEREFORE RESOLVED by the Board of Commissioners of Orange County, North Carolina, that the Clerk to this Board is authorized and directed to publish a notice of the adoption of such Bond Order, in the form provided for in Section 159-58 of the General Statutes, one time in a newspaper having general circulation in the County.