HomeMy WebLinkAboutAgenda - 10-03-2006-8bORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: October 3, 2006
Action Agenda
Item No. ~~_
SUBJECT• Public Hearing on Carrboro High School Financing
DEPARTMENT: Finance PUBLIC HEARING: (YIN) Yes
ATTACHMENT (S): INFORMATION CONTACT:
None Ken Chavious, Finance Director
919-245-2450
Bob Jessup, Bond Counsel
PURPOSE: To conduct a public hearing on matters related to alternative financing for the
Carrboro High School, as approved by the Board of Commissioners on September 12, 2006.
BACKGROUND: .At the September 12, 2006 meeting, the Board of Commissioners took action
authorizing staff to pursue private placement financing to acquire the final phase of funding for
the Carrboro High School project. In accordance with this action, staff will pursue a request for
proposal process to finance $9,000,000 for the project with ashort-term bank loan that will be
rolled into a longer term alternative financing using certificates of participation (COPs). This
longer term alternative financing was included in the debt issuance schedule reviewed by the
Board at both the August 31 and September 14, 2006 work sessions.
A preliminary application requesting approval of this proposed financing will be forwarded to the
Local Government Commission (LGC) in accordance with statutory provisions. Prior to the LGC
granting approval, the Board is required to conduct a public hearing on matters related to the
financing proposal. The Board has established October 3, 2006 as the date for the hearing.
The LGC was previously scheduled to take action on the County's application on November 7,
2006. LGC staff working with the County on the application process recently informed County
staff of the need to have a completed 2006 audit report from the County prior to granting
approval of the application. The County's audit contract requires completion of the audit report
by October 31, 2006, which would provide insufficient time for LGC review of the report prior to
approving the County's application for financing.
In light of this development, the LGC approval has been rescheduled to December 5, 2006 and
if approval is granted, closing is expected to occur shortly thereafter. The resolution approving
the final terms of the financing will be presented for Board approval at the November 2, 2006
meeting.
FINANCIAL IMPACT: As mentioned above, the amount of the short-term financing is
$9,000,000. The principal amount will be rolled into a COPs financing that will be scheduled for
late spring of 2007. Interest costs to be paid by the County on this financing are projected to be
in the range of $175,000 to $200,000, depending on the timing of the Closing of the COPs.
Funds have been included in the 2006-2007 debt service budget to cover this cost.
Funding for the expected future expansion of Carrboro High School will be addressed in future
Capital Investment Plans.
RECOMMENDATION(S): The Manager recommends that the Board conduct the public _
hearing.