HomeMy WebLinkAboutAgenda - 12-12-2006-5eORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: December 12, 2006
Action Agenda
Item No. 5 ~- e,,
SUBJECT: Resolutions Authorizing Installment Financing Contract for Equipment
Purchases
DEPARTMENT: Finance PUBIC HEARING: (Y/N) No
ATTACHMENT(S): (Under Separate
Cover)
Financing Resolution
Reimbursement Resolution
Financing Proposal
INFORMATION CONTACT:
Ken Chavious, 919-245-2450
PURPOSE: To consider adopting resolutions required by Bank to facilitate the. financing of
equipment approved for purchase by the Board on September 12 end October 3, 2006.
BACKGROUND: At meetings on September 12 and October 3, 2006, the Board approved the
purchase of equipment for Solid Waste totaling $842,038. Upon authorizing the equipment the
Board also directed the Finance Director to seek financing for the purchases. Requests for
financing proposals were then sent out to five financial institutions. The most favorable proposal
was submitted by Bank of America which included a 3.60% interest rate fora 59 month term.
In order to accomplish the financing, the bank requires that the County adopt an official
resolution authorizing the execution and delivery of the installment financing contracts and other
documents. In addition, the County will need to reimburse itself for expenditures made prior to
closing and delivery of the financing proceeds. A resolution stating the County's intent to
reimburse itself for these expenditures is required. The resolutions necessary to complete the
financing has been reviewed by County staff and the County Attorney and are attached,
including copies of the Bank of America proposal.
FINANCIAL. IMPACT: As mentioned above, the total amount to be financed is $842,038. The
accepted proposal calls for quarterly payments of $46,187 beginning in March 2007. There will
be 2 payments in the current fiscal year totaling $92,374. Funding for the debt service is
included in the 2006-2007 Solid Waste Enterprise fund Budget. Based on the fact that this fund
is aself-supporting enterprise fund, and the debt issuance is not paid from the General Fund,
the issuance of this debt does not affect the County's debt capacity. Debt service payments
related to equipment purchased for the Solid Waste Department are paid directly from the
Enterprise Fund. In accordance with the County's Debt Management Policy, debt. incurred in
enterprise funds are not considered a factor in determining the County's debt
capacity. Therefore, the issuance of this debt has no impact on the County's 15 percent debt
limitation.
RECOMMENDATION(S): The Manager recommends that the Board adopt the resolutions and
authorize the Finance Director and County Attorney to execute documents as required to
accomplish the financing with Bank of America.