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HomeMy WebLinkAboutAgenda - 04-12-2005-5fORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: April 12, 2005 Action Agenda Item No. ~~ SUBJECT: Resolutions Authorizing Contracts for Financing Vehicles and Equipment DEPARTMENT: Finance PUBLIC HEARING: (Y/N) No ATTACHMENT(S): Resolutions Amortization Schedules March 15, 2005 Agenda Abstract INFORMATION CONTACT: Ken Chavious, ext 2450 TELEPHONE NUMBERS: Hillsborough 732-8181 Chapel Hill 968-4501 Durham 688-7331 Mebane 336-227-2031 PURPOSE: To consider adopting resolutions required by RBC Centura Bank to facilitate the financing of equipment to be purchased by the County, BACKGROUND: At the March 15, 2005 meeting, the Board authorized staff to purchase vehicles and other equipment totaling $1,520,331. A description of the approved equipment is contained on the attached abstract from the March 15 meeting. In addition, the Board authorized staff to pursue financing for the equipment with RBC Centura, consisting of two separate installment financing contracts -one with a three year term for passenger vehicles and a second with a 59 month term for heavy vehicles and equipment. The Finance Director has worked with RBC Centura to accomplish the vehicle and equipment financing as authorized.. Closing has been scheduled for April 20, 2005.. In order to accomplish the financing, the bank requires the County to adopt official resolutions authorizing the execution and delivery of the installment financing contracts, The resolutions necessary to close on the financings have been reviewed by County staff and the County Attorney and are attached, including copies of the proposed amortization schedules, FINANCIAL IMPACT: The County will be entering into two separate financing contracts.. The three-year contract will provide $1,100,691 in funds far the purchases authorized.. Principal and interest payments will total $389,166 annually, The 59-month contract will provide $419,640 to fund the purchases authorized. Principal and interest payments on this contract will total $92,532 annually. Semi-annual payments on both contracts will begin in October of 2005. Funds will be included in the Manager's recommended budget for 2005-06 and future years to cover the annual costs for both contracts. RECOMMENDATION(S): The Manager recommends that the Board adapt the resolutions and authorize the Finance Director and County Attorney to execute documents as required to accomplish the financing with RBC Centura. [Equipment] a RESOLUTION The governing body for the County of Orange, North Carolina, held a regular meeting at the the regular place of meeting, on at a~m./pan. Present: Absent: Also Present: * * # -k W introduced the following resolution which was read: RESOLUTION AUTHORIZING THE EXECUTION AND DELIVERY OF AN INSTALLMENT FINANCING CONTRACT IN THE AMOUNT OF $1,100,691.00 WITH RBC CENTURA BANK TO FINANCE THE ACQUISITION OF CERTAIN EQUIPMENT & VEHICLES FOR USE BY THE COUNTY OF ORANGE, NORTH CAROLINA, AUTHORIZING THE EXECUTION AND DELIVERY OF RELATED INSTRUMENTS, AND DETERMINING OTHER MATTERS IN CONNECTION THEREWITH BE IT RESOLVED by the governing body for the County of Orange, North Carolina (the Section 1. The governing body of the Unit does hereby find and determine: a) The County of Orange proposes the acquisition of certain equipment, which may include fixtures as more fully described in the hereinafter mentioned Contract (collectively, the "Equipment"); b) After consideration, the governing body of the Unit has determined that the most advantageous marmer of financing thereof is by an installment contract pursuant to Section 160A-20 of the General Statutes of North Carolina, as amended; c) Pursuant to Section 160A-2Q the Unit is authorized to finance the acquisition of personal property, including fixtures, by installment contracts that create a security interest in the property financed to secure repayment of the financing; and d) RBC Centura Bank ("RBC Centura") has proposed that RBC Centura enter into an Installment Financing Contract with the Unit to finance the Equipment pursuant to which RBC Centura will lend the Unit then amount of $1,100,691,00 3 (the "Contract") and a related Escrow Agreement between the Unit and RBC Centura (the "Escrow Agreement"). Section 2. The governing body of the Unit hereby authorizes and directs the Authorized Officer, to execute, acknowledge and deliver the Contract and Escrow Agreement on behalf of the Unit in such form and substance as the person executing and delivering such instruments on behalf of the Unit shall find acceptable. The Clerk is hereby authorized to affix the official seal of the County of Orange to the Contract and the Escrow Agreement and attest the same. Section .3. The proper officers of the Unit are authorized and directed to execute and deliver any and all papers, instruments, opinions, certificates, affidavits and other documents and to do or cause to be done any and all other acts and things necessazy or proper for carrying out this Resolution and the Contract and the Escrow Agreement, Section 4. Notwithstanding any provision of the Contract or the Escrow Agreement, no deficiency judgment may be rendered against the Unit in any action for breach of a contractual obligation under the Contract or the Escrow Agreement and the taxing power of the Unit is not and may not be pledged directly or indirectly to secure any moneys due under the Contract, the security provided under the Contract being the sole security for RBC Centura in such instance. Section 5. The Unit covenants that, to the extent perrnitted by the Constitution and laws of the State of North Carolina, it will comply with the requirements of the Internal Revenue Code of 1986, as amended (the "Code") as required so that interest on the Unit's obligations under the Contract will not be included in the gross income of RBC Centura. Section G. This Resolution shall take effect immediately upon its passage. Upon rnotion of ,seconded by ,members of the governing body, the foregoing resolution entitled "RESOLUTION AUTHORIZING THE EXECUTION AND DELIVERY OF AN INSTALLMENT FINANCING CONTRACT IN THE AMOUNT OF $1,100,691.00 WITH RBC CENTURA BANK TO FINANCE THE ACQUISITION OF CERTAIN EQUIPMENT & VEHICLES, AUTHORIZING THE EXECUTION AND DELIVERY OF RELATED INSTRUMENTS, AND DETERMINING OTHER MATTERS IN CONNECTION THEREWITH" was passed by the following vote: Ayes: Nays: PASSED AND ADOPTED this day of , I, Clerk for the County of Orange, North Cazolina DO HEREBY CERTIFY that the foregoing has been carefully copied from the actually recorded 2 y minutes of the governing body of said County of Orange at a regular meeting held on ,the record having been made in the minutes of said governing body, and is a true copy of so much of said minutes as relates in any way to the passage of a resolution providing for the authorization of the Installment Financing Contract referred to therein.. I DO HEREBY FURTHER CERTIFY that a schedule, stating that the regular meetings of the Council are held on of each month at a.m./p.m., respectively, at ,North Carolina, was on file with me for at least seven calendar days prior to said meeting, all in accordance with G.S, 143-.318.12. WITNESS my hand and corporate seal of said County of Orange, this day of [SEAL] Original Loazr Amount: $1,100,691.00 Loan Date: April _, 2005 Clerk, County of Orange 3 57651 000052 RALEIGH 2582')2v1 [Equipment] 5 RESOLUTION The governing body for the County of Orange, North Carolina, held a regular meeting at the the regular place of meeting, on at a.m,/p.m. Present: Absent: Also Present: * ~ ~ * ~ inhoduced the following resolution which was read: RESOLUTION AUTHORIZING THE EXECUTION AND DELIVERY OF AN INSTALLMENT FINANCING CONTRACT IN THE AMOUNT OF $419,640.00 WITH RBC CENTURA BANK TO FINANCE THE ACQUISITION OF CERTAIN VEHICLES FOR USE BY THE COUNTY OF ORANGE, NORTH CAROLINA, AUTHORIZING THE EXECUTION AND DELIVERY OF RELATED INSTRUMENTS, AND DETERMINING OTHER MATTERS IN CONNECTION THEREWITH BE IT RESOLVED by the governing body for the County of Orange, North Carolina (the ..Unit"): Section 1. The governing body of the Unit does hereby find and determine: a) The County of Orange proposes the acquisition of certain equipment, which may include fixtures as more fully described in the hereinafter mentioned Contract (collectively, the "Equipment"); b) After consideration, the governing body of the Unit has determined that the most advantageous manner of financing thereof is by an installment contract pursuant to Section 160A-20 of the General Statutes of North Carolina, as amended; c) Pursuant to Section 160A-20, the Unit is authorized to finance the acquisition of personal properly, including fixtures, by installment contracts that create a security interest in the properly financed to secure repayment of the financing; and d) RBC Centura Batilc ("RBC Centura") has proposed that RBC Centura enter into an Installment Financing Contract with the Unit to finance the Equipment pursuant to which RBC Centura will lend the Unit then amount of $419,640.00 (the "Contract") and a related Escrow Agreement between the Unit and RBC Centura (the "Escrow Agreement"). Section 2. The governing body of the Unit hereby authorizes and directs the Authorized Officer, to execute, acknowledge and deliver the Contract and Escrow Agreement on behalf of the Unit in such form and substance as the person executing and delivering such instruments on behalf of the Unit shall find acceptable. The Clerk is hereby authorized to affix the official seal of the County of Orange to the Contract and the Escrow Agreement and attest the same. Section 3. The proper officers of the Unit are authorized and directed to execute and deliver any and all papers, instruments, opinions, certificates, affidavits and other documents and to do or cause to be done any and all other acts and things necessary or proper for carrying out this Resolution and the Contract and the Escrow Agreement. Section 4. Notwithstanding any provision of the Contract or the Escrow Agreement, no deficiency,judgment may be rendered against the Unit in any action for breach of a contractual obligation under the Contract or the Escrow Agreement and the taxing power of the Unit is not and may not be pledged directly or indirectly to secure any moneys due under the Contract, the security provided under the Contract being the sole security for RBC Centura in such instance. Section 5, The Unit covenants that, to the extent permitted by the Constitution and laws of the State of North Carolina, it will comply with the requirements of the Internal Revenue Code of 1986, as amended (the "Code") as required so that interest on the Unit's obligations under the Contract will not be included in the gross income of RBC Centura, Section 6. This Resolution shall take effect immediately upon its passage. Upon motion of ,seconded by ,members of the governing body, the foregoing resolution entitled "RESOLUTION AUTHORIZING THE EXECUTION AND DELIVERY OF AN INSTALLMENT FINANCING CONTRACT IN THE AMOUNT OF $419,640.00 WITH RBC CENTURA BANK TO FINANCE THE ACQUISITION OF CERTAIN VEHICLES, AUTHORIZING THE EXECUTION AND DELIVERY OF RELATED INSTRUMENTS, AND DETERMINING OTHER MATTERS IN CONNECTION THEREWITH" was passed by the following vote: Ayes: Nays: PASSED AND ADOPTED this day of , ~: + + :r I, Clerk for the County of Orange, North Carolina DO HEREBY CERTIFY that the foregoing has been carefully copied from the actually recorded 2 minutes of the governing body of said County of Orange at a regular meeting held on ,the record having been made in the minutes of said governing body, and is a true copy of so much of said minutes as relates in any way to the passage of a resolution providing for the authorization of the Installment Financing Contract referred to therein. I DO HERESY FURTHER CERTIFY that a schedule, stating that the regular meetings of the Council are held on of each month at a,m./p.m., respectively, at ,North Cazolina, was on file with me for at least seven calendaz days prior to said meeting, all in accordance with G.S. 143-.318..12. WITNESS my hand and corporate seal of said County of Orange, this day of Clerk, County of Orange [SEAL] Original Loan Amount: $419,640.00 Loan Date: April , 2006 s~~s ~ oooosz aAts~cti zsszm_~ i S Exhibit B-1 Countv of Oranoe Compound Period Semiannual Nominal Annual Rate 3.64% Event Start Date Amount Number Period End Date 1 Loan 20-Apr-05 419,640.00 1 2 Payment 20-Oct-05 46,265..88 9 Semiannual 3 Payment 20-Mar-10 46,265.88 1 10/20/2010 AMORTIZATION SCHED ULE -Normal Amortization, 360 Day Year # Date Payment Interest Principal Balance Loan 20-Apr-05 419,640.00 1 20-Oct-05 46,265.88 7,637.45 38,628.43 381,011.57 2005 Totals 46,265.88 7,637 45 38,628.43 2 20-Apr-06 46,265.88 6,934.41 39,331.47 341,680.10 3 20-Oct-06 46,265.88 6,218.58 40,047.30 301,632.80 2006 Totals 92,531.76 13,15299 79,378.77 4 20-Apr-07 46,265.88 5,489.72 40,776,16 260,856.64 5 20-Oct-07 46,265,88 4,747.59 41,518.29 219,338.35 2007 Totals 92,53176 10,237.31 82,294.45 6 20-Apr-08 46,265.88 3,991.96 42,273.92 177,064.43 7 20-Oct-08 46,265 88 3,222.57 43,043.31 134,021.12 2008 Totals 92,531.76 7,214.53 85,317.23 8 20-Apr-09 46,265.88 2,439.18 43,826.70 90,194.42 9 20-Oct-09 46,265.88 1,64154 44,624.34 45,570.08 2009 Totals 92,531.76 4,080.72 88,451 04 10 20-Mar-10 46,265.88 69580 45,570,08 0.00 2010 Totals 46,265.88 695.80 45,570.08 Grand Totals 462,658.80 43,018.80 419,640 00 Exhibit B-1 County of Orange Compound Period Semiannual Nominal Annual Rate 3.42% Event Start Date Amount Number Period End Date 1 Loan 20-Apr-05 1,100,691.00 1 2 Payment 20-Oct-05 194,583.00 6 Semiannual 04/20/2008 AMORTIZATION SOHEDULE -Normal Amortization, 360 Day Year # Date Payment Interest Principal Balance Loan 20-Apr-05 1,100,691 .00 1 20-Oct-05 194,583. 00 18,821 .82 175,761 .18 924,929 .82 2005 Totals 194,583, 00 18,821 .82 175,761. 18 2 20-Apr-O6 194,583. 00 15,816. 30 178,766 .70 746,163 .12 3 20-Oct-06 194,583. 00 12,759. 39 181,823 .61 564,339 .51 2006 Totals 389,166. 00 28,575. 69 360,590 .31 4 20-Apr-07 194,583. 00 9,650, 21 184,932 .79 379,406 .72 5 20-Oct-07 194,583. 00 6,487. 85 188,095. 15 191,311 57 2007 Totals 389,166. 00 16,138. 06 373,027. 94 6 20-Apr-OS 194,583.00 3,271.43 191,311.57 0 00 2008 Totals 194,583.00 3,27143 191,311,57 Grand Totals 1,167,498.00 66,807.00 1,100,691.00 ORANGE COUNTY ~Q BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: March 15, 2005 Action Age a Item No. - G SUBJECT• Approval of Equipment and Vehicle Purchases for Fiscal Year 2004-05 DEPARTMENT: Budget PUBLIC HEARING: (Y/N) No ATTACHMENT (S): Attachment 1. Equipment and Vehicles Recommended for Purchase in Fiscal Year 2004-05 Attachment 2. Equipment and Vehicles Capital Project Ordinance INFORMATION CONTACT: Donna Dean 245-2151 Dave Stancil 245-2598 TELEPHONE NUMBERS: Hillsborough 732-8181 Chapel Hill 968-4501 Durham 688-7331 Mebane 336-227-2031 PURPOSE: To consider approval of equipment and vehicle purchases for County departments, excluding Information Systems and Solid Waste, for fiscal year 2004-05 and authorization for the Finance Director to finance the purchase the vehicles and major equipment through private placement loan proposals from RBG. BACKGROUND: Historically, the County has funded replacement of County-owned equipment and vehicles through its ten year Capital Investment Plan (CIP). Examples of the types of purchases made with annually appropriated monies include replacement of some portion of the Sheriff's vehicle fleet and Emergency Services vehicles, including ambulances, as well as replacement of other County department vehicles and major equipment (not including Information Technology-related equipment). However, since the State's fiscal crisis began in 2001, the County has redirected a large portion of CIP pay-as-you-go funding that would normally have been available far routine equipment and vehicle replacements to the General Fund to offset unfunded mandates and state and federal funding cuts. Postponement of replacing aged equipment and vehicles over the last few years has caused the County to experience higher than normal maintenance costs for the older vehicles and equipment because of high mileage and hours of usage. For the current fiscal year, the Board approved CIP included a plan to purchase County equipment and vehicles through financing arrangements in the current fiscal year. Over the last few months, the Manager and Budget Staff have worked with individual departments to explore various options for meeting departmental equipment and vehicle needs. Staff recommends that the County pursue two funding arrangements, one for athirty-six month period and the other for a period of fifty-nine months. The life expectancy and cost of the equipment or vehicle would determine whether it was financed for the shorter or longer-term period. Attachment 1 of this abstract outlines the recommended purchases. Examples of recommended vehicles and r- equipment planned for purchase with the assistance of a three-year financing arrangement include replacement of Sheriff patrol vehicles (in accordance with the Sheriffs BOCC approved vehicle replacement plan), Emergency Medical Services Initial Response Vehicles (IRV) and ambulances, and Animal Control trucks. A detailed list of recommended vehicles is included on Attachment 1 of this abstract. Emergency Medical Vehicles The County currently has eight ambulances and twelve IRV's responding to emergency medical calls. The Board approved the replacement of four ambulances on May 18, 2004. At that time, staff stressed the need to replace all of the ambulances due to extremely high mileage and maintenance costs. EMS recently took delivery of those ambulances and staff anticipates that they will be on the road and in operation within the next two months. There is still an opportunity to purchase ambulances using the same bid as last May. The cost to purchase and equip two ambulances totals $216,408 or $108,204 each, Current mileage for the old ambulances ranges from a low of more than 226,000 to a high of more than 430,000. The average annual mileage for an ambulance is in the neighborhood of 26,000 miles per vehicle. With regard to the IRV's, the county replaced nine of the twelve vehicles during 2002. The current mileage of these vehicles ranges from a low of 57,000 to a high of 85,000. Mileage on the three oldest vehicles exceeds 120,000. Alternative Fuel Vehicles The Board has expressed interest in actively pursuing the use of alternative fiael vehicles (AFV's) for County owned vehicles. On February 1, 2005, the Board approved siting recommendations for aCounty-owned and operated CNG fueling station at the County s Public Works facility located on Highway 86 North. At that time the Board directed staff to add CNG vehicles to the County s vehicle inventory. For this current year, staff has been able to locate only one CNG vehicle, the Honda Civic, that is available on State contract at a cost of $22,575. As a point of reference, the price of a comparable gasoline fueled vehicle on State contract is about $12,500. Staff has also researched CNG truck options and found that the cast of a CNG four-wheel drive Chevrolet Silverado is about $26,000 compared to about $16,000 for a gasoline fueled Silverado on State contract, The County currently has twenty-four E85 (ethanol) compatible vehicles in the fleet including the Taurus, Ranger pick-up trucks and Explorer all manufactured by Ford Motor Company and the S-10 pick-up and Silverado pick-ups manufactured by Chevrolet. These particular vehicles are being fueled with gasoline at this time because there is no E85 fuel available locally. Should the Board wish to pursue installation of an ethanol tank, staff would explore the alternatives and report them to the Board at a later date, The Town of Chapel Hill is considering installation of a large E85 fueling station at the new Town Operations Center under construction on Millhouse Road. Other alternative fuel vehicles currently available on the market include: • Hybrids -There are two options for hybrid vehicles on State contract for the current year - the two-door Insight sedan or hatchback at a cost of about $21,000 and the four door Civic sedan at a cost of about $20,000 -both manufactured by Honda Motors. As a point of comparison, a gasoline fueled four-door sedan, the Dodge Neon, has a price tag ~a of just over $11,100, It should be noted that hybrid vehicles are usually considere to be "borderline" alternative fuel vehicles, and most grant agencies will not fund their purchase as an AFV. While hybrids do show emissions improvement when compared to conventional gasoline vehicles, the emissions reductions are marginal compared to other AFV's Biodiesel -There are no options for biodiesel vehicles on State contract and there are no fuel supplies available locally, • Electric - As with the biodiesels, there are no options available on State contract, In addition, research indicates that electric powered vehicles experience higher than normal maintenance issues. As stated in the February 1, 2005 Report of CNG Siting Staff Work Group, some municipalities and counties in North Carolina (including Buncombe County) have pursued retrofitting gasoline powered vehicles to CNG fueled vehicles. Should the Commissioners wish to pursue this option, staff would gather information from those counties and report back to the Board at a later date. Based on initial staff surveys, the estimated cost to retrofit a vehicle would probably range from $9,000 to $15,000 in addition to the original cost to purchase the vehicle. Staff plans to pursue grant opportunities that would cover some or all of the cost of retrofitting. It is important to note that staff does not anticipate that the new CNG fueling station would be operational until Fall 2005. The proposed station would be available for use only during normal business hours, Due to the criticality of public safety vehicles having to respond to emergency situations twenty-four hours a day, seven days per week, staff recommends that the vehicles proposed for the Sheriff's Department and for EMS be gasoline fueled in order to avoid potential downtime related to fuel not being available, As identified on Attachment 1 of this abstract, alternative fuel vehicles would be located in ERCD, Motor Pool, Health Department, with a possible retrofit planned for the Department of Social Services van. Staff will conduct further assessment of opportunities to retrofit vehicles purchased as gasoline-powered to alternative fueled, Elements that will affect the feasibility of additional retrofits will include cast per vehicle far retrofitting, availability/location of companies that can perform retrofitting on gasoline-powered vehicles, and the availability/location of companies that can provide services to alternative fuel retrofitted vehicles. Staff will report back to the Board with this information at a later date, Should the Board wish staff to pursue opportunities for purchase of alternative fuel vehicles instead of gasoline fuel vehicles, staff will do so. Sanitation Vehicles It is also important to note that the County's Sanitation division of Public Works has significant vehicle needs in order to properly operate and maintain our solid waste convenience centers located throughout the county, The most pressing needs include: Replacement of a 1990 front-end loader with more than 260,000 miles, Replacement of a 1988 dump truck with more than 324,000 miles. The price outlined on Attachment 1 of this abstract includes the cost to purchase snowplow blades for the dump truck for staff to use in clearing driveways and parking lots during inclement weather. • Purchase of a roll-off tn~ck and waste containers. For the last two years the County has contracted with a private hauler for this service at a cost of about $35,000 per year. 13 At this time, staff does not have solid cost estimates for two of the items listed above, the front- end loader and the dump truck with snowplow blades. Further analysis and research needs to be done before these items can be purchased, Staff anticipates bringing these items back to the Board within the next two-to-three months for consideration, FINANCIAL IMPACT: The estimated cost to purchase the equipment and vehicles (exclusive of the two items for Sanitation) totals $1,442,331. As outlined in the Background section above, staff proposes to enter into two private placement arrangements with RBC in order to fund the purchases outlined on Attachment 1 of this abstract, Thirty-Six Month Arrangement -The estimated cost of proposed items for the thirty-six month arrangement totals $1,100,691, The projected annual debt service payments (over a 36 month period) related to this arrangement would consist of approximately $366,900 in principal payments and $23,600 in interest payments for a total annual projected payment of $390,500, The interest rate quoted by RBC for this arrangement is 3.42% annually, The projected annual debt service payments were included in the most recent (October 25, 2004) debt capacity calculations presented to the Board, Fifty-Nine Month Arrangement -The estimated cost of proposed items for the fifty-nine month arrangement totals $419,640, exclusive of the two outstanding items for the Sanitation Division. The projected annual debt service payments (aver a 59 month period) related to this arrangement would consist of approximately $85,350 in principal payments and $11,650 in interest payments for a total annual projected payment of $97,000, The interest rate quoted by RBC for this arrangement is 3.6% annually, The projected annual debt service payments were included in the most recent debt capacity calculations presented to the Board. Projected annual debt service requirements for both financing arrangements total $487,500 and were included in the most recent debt capacity calculations presented to the Board on October 25, 2004, Funds to repay both loans would be addressed through the County's annual General Fund debt service appropriations in accordance with the Board's adopted County Capital Funding Policy. Should the Board decide to postpone the recommended action until a later date, it is very likely that defibrillator trade-in and discount opportunities ($60,000) and State vehicle contract prices would be lost thereby increasing the overall cost of purchasing the recommended vehicles and equipment. In addition, interest rates have increased slightly over the last thirty days (one-to- two tenths of a percent in last 30 days). It is important to note that the interest rates quoted by RBC are good until April 1, 2005. RECOMMENDATION (S): The Manager recommends that the Board of County Commissioners: (1) Approve the equipment and vehicle purchases (outlined on Attachment 1 of this abstract); (2) approve the Equipment and Vehicle Capital Project Ordinance at Attachment 2; and 1`~ (3) Authorize the Finance Director and County Attorney to execute the documents necessary to complete funding not to exceed $1,100,700 for the thirty-six month financing arrangement and not to exceed $419,640 for the fifty-nine month financing arrangement through RBC.