Loading...
HomeMy WebLinkAboutAgenda 5-a - Public Hearing on the Financing of Various Capital Investment Plan ProjectsORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: May 1, 2018 Action Agenda Item No. 5 -a 1 SUBJECT: Public Hearing on the Financing of Various Capital Investment Plan Projects DEPARTMENT: Finance and Administrative Services ATTACHMENT(S): INFORMATION CONTACT: Attachment 1. Copy of Public Hearing Gary Donaldson, (919) 245 -2453 Notice Paul Laughton, (919) 245 -2152 Attachment 2. Resolution Robert Jessup, (919) 933 -9891 PURPOSE: To conduct a public hearing on the issuance of approximately $8,150,000 to finance capital investment projects and equipment for the fiscal year; and approve a related resolution supporting the County's application to the Local Government Commission (LGC) for its approval of the financing arrangements. BACKGROUND: County staff estimates that the total amount to be financed for capital investment projects and equipment will be approximately $8,150,000. The financing and transaction costs are included in the loan amount. The North Carolina General Statutes require that the County conduct a public hearing on the proposed financing. The notice of public hearing was advertised in The Herald Sun and the News of Orange. A copy of the published notice is provided at Attachment 1. Since the actual public advertisement, the project name for the Environmental Agricultural Center has been changed to the Northern Campus site acquisition and an additional $60,000 has been added to the 911 Center Improvements, these represent the only changes from the actual public advertisement. After conducting the public hearing and receiving public input, the Board will consider the adoption of a resolution (Attachment 2). This resolution formally requests the required approval from the North Carolina Local Government Commission (LGC) for the County's financing, and makes certain finding of fact as required under the LGC's guidelines. County staff has been in contact with the LGC staff, and staff expects no issues with receiving LGC approval. If the Board adopts the resolution indicating its intent to continue with the financing plan, the Board will be asked to consider a resolution giving final approval to the financing plans at its June 5, 2018 meeting. Under the current schedule, County staff expects to set the final interest rates and close on the financing by the end of June 2018. PIA FINANCIAL IMPACT: There is no financial impact related to conducting the public hearing and approval of the resolution. However, there will be a financial impact in proceeding with the financing. A preliminary estimate of maximum debt service applicable to the capital investment projects and equipment financing would require the highest debt service payment of $1.2 million in FY 2019 -20. The tax rate equivalent for the estimated highest debt service payment is approximately .67 cent. RECOMMENDATION(S): The Manager recommends that the Board open the public hearing, close the public hearing, and adopt the resolution supporting the application to the Local Government Commission for approval of the financing. 3 Attachment 1 s *h draft of April 5 Orange County, North Carolina -- Notice of Public Hearing Financing for Various Public Improvements and Acquisitions The Board of Commissioners of Orange County, North Carolina, will hold a public hearing on Tuesday, May 1, 2018, at 7:00 p.m. (or as soon thereafter as the matter may be heard). The purpose of the hearing is to take public comment concerning a proposed financing contract, under which the County would borrow approximately $8,150,000 to finance a wide variety of acquisitions and improvements, including the following: Project Description Estimated Amount Environmental Agricultural Center Building $ 394,500 Government Services Annex Building 350,000 HVAC Projects 122,000 Roofing Projects 102,444 IT Government Council Initiatives 344,493 IT Infrastructure 700,000 Communications Systems 920,000 Cedar Grove Community Center 75,000 Facility Accessibility and Security Improvements 30,000 Vehicle Replacements 1,106,514 Miscellaneous County equipment 184,000 Chapel Hill HS Architecture and Facility Improvements 601,000 C! Classroom and Building Improvements (OCS) 254,000 Food Services (OCS) 145,000 Passmore Center Renovations 550,000 Information Technologies 500,000 IT Broadband Connectivity 60,000 IT Governance Council Initiatives 346,010 911 Center Improvements 117,832 Conservation Easements 500,000 Cedar Grove Park, Phase II 60,000 Parks and Recreation Facility Renovations 195,000 Affordable Housing Land Banking 293,000 TOTAL ESTIMATED PROJECT COSTS $ 7,950,793 The County also expects to use some financing proceeds to pay financing costs. The hearing will be held in the Commissioners' usual meeting room in the Whitted Human Services Center, 300 West Tryon Street, Hillsborough, North Carolina. The proposed financing would be secured by a lien on some or all of the property to be acquired or improved with the financing proceeds, as well as the County's promise to repay the financing, but there would be no recourse against the County or its property (other than the pledged property) if there were a default on the financing. The County expect the financing will be secured by a lien on the Orange County Sportsplex property or the County's Government Services Annex building (located at 208 South Cameron Street in Hillsborough) and related property. 5 All interested persons will be heard. The County's plans are subject to change based on the comments received at the public hearing and the Board's subsequent discussion and consideration. The County's entering into the financing is subject to obtaining approval from the North Carolina Local Government Commission. Persons wishing to make written comments in advance of the hearing or wishing more information concerning the subject of the hearing may contact Gary Donaldson, Orange County Finance Officer, Finance Officer, Post Office Box 8181, Hillsborough, NC 27278 (telephone 919/245 -2453, email gdonaldson @ orange countync.gov). L RES- 2018 -026 Attachment 2 s *h draft of April 19 Resolution supporting an application to the Local Government Commission for its approval of a financing agreement - 2018 Combined Proiects Installment Financing WHEREAS -- The Board of Commissioners has previously determined to carry out the acquisition and construction of various public improvements, as identified in the County's capital improvement plan. The Board of Commissioners desires to finance these improvements through an installment financing, as authorized under Section 160A -20 of the North Carolina General Statutes. Under the guidelines of the North Carolina Local Government Commission, this governing body must make certain findings of fact to support the County's application for the LGC's approval of the County's financing arrangements. THEREFORE, BE IT RESOLVED by the Board of Commissioners of Orange County, North Carolina, that the County makes a preliminary determination to finance approximately $8,150,000 to pay capital costs of various public acquisitions and improvements, and in particular the projects shown on Exhibit A. The Board will determine the final amount to be financed by a later resolution. The final amount financed may be slightly lower or slightly higher than $8,150,000. Some of the financing proceeds may represent reimbursement to the County for prior expenditures on project costs, and some proceeds may be used to pay financing expenses or to provide any appropriate reserves. BE IT FURTHER RESOLVED that the Board of Commissioners makes the following findings of fact: (1) The proposed projects are necessary and appropriate for the County under all the circumstances. rA (2) The proposed installment financing is preferable to a bond issue for the same purposes. The County is planning to issue both voter - approved general obligation bonds for school projects and other purposes both this year and in future years, and it is appropriate for the County to continue to balance its capital finance program between bonds and installment financing. These projects will not produce revenues sufficient to support a self - liquidating financing. The County has no meaningful ability to issue non -voted general obligation bonds for these projects. The County expects that in the current interest rate environment for municipal securities there would be no material difference in the overall financing costs between general obligation bonds and installment financings for this project. (3) The estimated sums to fall due under the proposed financing contract are adequate and not excessive for the proposed purpose. The County will closely review proposed financing rates against market rates with guidance from the LGC and the County's financial adviser. All amounts financed will reflect either approved contracts or previous actual expenditures. (4) As confirmed by the County's Finance Officer, (i) the County's debt management procedures and policies are sound and in compliance with law, and (ii) the County is not in default under any of its debt service obligations. (5) The County expects that there will be no actual increase in taxes necessary to meet debt obligations under the proposed financing arrangements. The County expects that interest rates to be payable by the County on the proposed financing, and the expected term of the financing, will allow the County to repay the financing within current resources. Given the County's need for the projects, the Board believes that any tax rate impact is reasonable under all the circumstances. (6) The County Attorney is of the opinion that the proposed projects are authorized by law and is a purpose for which public funds of the County may be expended pursuant to the Constitution and laws of North Carolina. BE IT FURTHER RESOLVED as follows: LV (a) The County intends that the adoption of this resolution will be a declaration of the County's official intent to reimburse project expenditures from financing proceeds. The County intends that funds that have been advanced for project costs, or which may be so advanced, from the County's general fund, or any other County fund, may be reimbursed from the financing proceeds. (b) The Board directs the Finance Officer to take all appropriate steps toward the completion of the financing, including (i) completing an application to the LGC for its approval of the proposed financing, and (ii) soliciting one or more proposals from financial institutions to provide the financing. The Board ratifies all prior actions of County representatives in this regard. (c) This resolution takes effect immediately. * * * * * * * * * * * * * * * ** I certify as follows: that the foregoing resolution was properly adopted at a meeting of the Board of Commissioners of Orange County, North Carolina; that this meeting was properly called and held on May 1, 2018; that a quorum was present and acting throughout this meeting; and that this resolution has not been modified or amended, and remains in full effect as of today. Dated this day of May, 2018. [SEAL] Donna S. Baker Clerk, Board of Commissioners Orange County, North Carolina Exhibit A - list of projects to be financed with estimated amounts Project Description Estimated Amount Northern Campus Site Acquisition $ 394,500 Government Services Annex Building 350,000 HVAC Projects 122,000 Roofing Projects 102,444 IT Infrastructure 700,000 Communications Systems 920,000 Cedar Grove Community Center 75,000 Facility Accessibility and Security Improvements 30,000 Vehicle Replacements 1,106,514 Miscellaneous County equipment 184,000 Chapel Hill HS Architecture and Facility Improvements 601,000 Classroom and Building Improvements (OCS) 254,000 Food Services (OCS) 145,000 Passmore Center Renovations 550,000 Information Technologies 500,000 IT Broadband Connectivity 60,000 IT Governance Council Initiatives 690,503 911 Center Improvements 177,832 10 Conservation Easements 500,000 Cedar Grove Park, Phase II 60,000 Parks and Recreation Facility Renovations 195,000 Affordable Housing Land Banking 293,000 TOTAL ESTIMATED PROJECT COSTS $ 8,010,793 The County also expects to use some financing proceeds to pay financing costs.