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HomeMy WebLinkAboutAgenda - 06-05-2018 6-c - Limited Obligation Series 2018 Bonds ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: June 5, 2018 Action Agenda Item No. 6-c SUBJECT: Limited Obligation Series 2018 Bonds DEPARTMENT: Finance and Administrative Services ATTACHMENT(S): INFORMATION CONTACT: Resolution Gary Donaldson, 919-245-2453 Paul Laughton, 919-245-2152 Bob Jessup, 919-933-9891 PURPOSE: To adopt a resolution for the issuance of Series 2018 Limited Obligation Bonds (LOBS) with a not to exceed amount of $8.8 million to support the County’s FY 2017-18 Capital Investment Plan (CIP). The financing resolution 1) gives final approval to allow the financing to proceed; 2) approves the form of the official statement; 3) states the County's commitment to comply with federal tax and securities laws; and 4) authorizes staff to complete the financing. BACKGROUND: Pursuant to North Carolina General Statute 160A-20, the County seeks to issue approximately $8.1 million in Series 2018 Limited Obligation Bonds. The County conducted a public hearing at its May 15, 2018 Board of County Commissioners (BOCC) meeting and received approval from the BOCC to proceed with the financing. The notice of public hearing was advertised in The Herald Sun and The News of Orange. If the Board adopts the resolution, the County plans to close on this financing on June 19, 2018. Key terms of the financing include: 1) Issuing approximately $8.1 million to finance capital investment projects, equipment and vehicles for the current fiscal year; 2) Estimate of maximum debt service applicable to these CIP projects would require the highest debt service of $1.2 million in FY 2019-20; and 3) The tax rate equivalent for the estimated highest debt service is approximately .67 cents FINANCIAL IMPACT: The Series 2018 Limited Obligation Bonds are included and compliant with County’s CIP and Debt Affordability Plan. SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goal is applicable to this 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 approve the attached resolution. 1 PIA RES- 2018 -035 Resolution providing final approval of terms and documents for 2018 County 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, and in particular the projects shown on Exhibit A. The Board has made a tentative determination to carry out the financing by using an installment financing, as authorized under Section 160A -20 of the North Carolina General Statutes. This financing plan also includes the use of limited obligation bonds, which represent interests in the installment payments to be made by the County that can be sold to investors. The County staff has made available to the Board the draft documents listed on Exhibit B (the "Documents "), and a draft of an official statement designed to provide information about the County and the financing to prospective investors in the bonds. These items relate to the County's carrying out the financing plan. This resolution provides the County Board's final approval of the financing terms and the substantially final financing documents. BE IT THEREFORE RESOLVED by the Board of Commissioners of Orange County, North Carolina, as follows: 1. Determination To Proceed with Financing -- The Board confirms its decision to carry out the proposed installment financing as described above. Under the financing plan, the County will receive funds from the sale of the limited obligation bonds to carry out the projects. The County will repay the funds over time, with interest. The County will secure its repayment obligation by granting a mortgage -like interest in some or all of the following facilities: (a) the County's Government Services Annex at 208 S. Cameron St. in Hillsborough, (b) the County's 3 Emergency Operations Center on Meadowlands Drive in Hillsborough, (c) the County's Visitors Center on Franklin St. in Chapel Hill, and (d) the proposed site of the new Northern County Campus. 2. Approval of Documents; Direction To Execute Documents -- The Board approves the forms of the Documents submitted to this meeting. The Board authorizes the Chair and the County Manager, or either of them, to execute and deliver those Documents to which the County is a party. The Documents in their respective final forms must be in substantially the forms presented, with changes as the Chair or the County Manager may approve. The execution and delivery of any Document by an authorized County officer will be conclusive evidence of that officer's approval of any changes. The Documents in final form, however, must provide for the principal amount of limited obligation bonds to not exceed $8,800,000, an annual true interest cost of the financing not to exceed 4.50% and a financing term not to extend beyond December 31, 2038. The amount financed under the Documents may include amounts to pay financing expenses and other necessary and incidental costs. 3. Sale of Bonds; Approval of Official Statement - The Board appoints Robert W. Baird & Co. to underwrite a public offering of the proposed limited obligation bonds. The Board approves the draft official statement submitted to this meeting as the form of the preliminary official statement pursuant to which the underwriter will offer the bonds 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 directs the Finance Officer, after the sale of the bonds, to complete and otherwise prepare the preliminary official statement as an official statement in final form. The Board authorizes the use of the preliminary official statement and the final official statement (collectively, the "Official Statement ") by the underwriter in connection with the sale of the bonds. The Board acknowledges that it is the County's responsibility, and ultimately the Board's responsibility, to ensure that the Official Statement in its final form C! neither contains an untrue statement of a material fact nor omits to state a material fact required to be included therein for the purpose for which such Official Statement is to be used or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 4. Officers To Complete Closing - The County Manager, the Finance Officer and all other County officers and employees are authorized to take all proper steps to complete the financing in accordance with the terms of this resolution. The Board authorizes the County Manager to hold executed copies of all financing documents authorized by this resolution in escrow on the County's behalf until the conditions for their delivery have been completed to her satisfaction, and then to release the executed documents for delivery to the appropriate persons or organizations. Without limiting the generality of the previous paragraphs, the Board specifically authorizes the County Manager (a) to approve and enter into, on behalf of the County, any additional agreements appropriate to carry out the financing plan contemplated by this resolution, and (b) to approve changes to any documents previously signed by County officers or employees, provided that the changes do not substantially alter the intent from that expressed in the form originally signed. The County Manager's authorization of the release of any document for delivery will constitute conclusive evidence of her approval of any changes. In addition, the County Manager and the Finance Officer are authorized to take all appropriate steps for the efficient and convenient carrying out of the County's on- going responsibilities with respect to the financing. This authorization includes, without limitation, contracting with third parties for reports and calculations that may be required under the Documents, this resolution or otherwise with respect to the bonds. 5. Other Financing Participants - Sanford Holshouser LLP will serve as the County's bond counsel. Davenport & Company LLC will serve as the County's financial adviser. The Bank of New York Mellon Trust Company, N.A., will serve as Trustee under the Trust Agreement. 6. Miscellaneous Provisions - The Board authorizes all County officers 5 and employees to take all further action as they may consider desirable to carry out the purposes of this resolution. In particular, the Board directs the Clerk to this Board to apply the County's seal to the final form Documents, and to attest to the application of the seal. The Board ratifies all prior actions of County officers and employees to this end. Upon the unavailability or refusal to act of the County Manager, the Chair or the Finance Officer, any other of those officers may assume any responsibility or carry out any function assigned in this resolution. In addition, the Vice Chair or any Deputy or Assistant Clerk may carry out or exercise any rights or responsibilities assigned in this resolution to the Chair or the Clerk. The Board repeals all other Board proceedings, or parts of proceedings, in conflict with this resolution, to the extent of the conflict. This resolution takes effect immediately. Exhibit A - list of improvements with estimated amounts Improvement 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 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. LV Exhibit B -- Draft Documents (a) A draft dated May 8, 2018, of a Trust Agreement to be dated on or about June 1, 2018 (the "Trust Agreement "), between the County and The Bank of New York Mellon Trust Company, N.A. (the "Trustee "), providing for the advance of funds to the County, for the issuance of limited obligation bonds, for the County's obligation to repay the amounts advanced, and for the County's responsibilities for the use and care of the collateral. (b) A draft dated May 8, 2018, of a Deed of Trust and Security Agreement to be dated on or about June 1, 2018, from the County to a deed of trust trustee for the Trustee's benefit, providing for a security interest in property to secure the County's obligations under the Trust Agreement. (c) A draft of a Bond Purchase Agreement to be dated on or about June 21, 2018, providing for the underwriter's obligation to purchase the bonds. The final form of this Agreement will set out the final principal amount, principal payment schedule and interest rates for the bonds, and the other terms and conditions for the underwriter's obligation to purchase the bonds.