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HomeMy WebLinkAboutAgenda - 11-21-2000-5a ORANGE COUNTY _ BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: November 21, 2000 Action Agenda Item No. SUBJECT: Resolution on Oran e County High School Financing DEPARTMENT: Finance PUBLIC HEARING: (Y/N) No ATTACHMENT(S):Financing Calendar Resolution Preliminary Official Statement . Installment Financing Contract Deed of Trust and Security Agreement Trust Agreement Contract of Purchase Lease Agreement Agency Agreement (all sent under separate cover) INFORMATION CONTACT: Ken Chavious, Finance Director, ext 2453 Bob Jessup, Bond Counsel, 960-4277 TELEPHONE NUMBERS: Hillsborough 732-8181 Chapel Hill 968-4501 Durham 688-7331 Mebane 336-227-2031 PURPOSE: To consider adapting a resolution providing for financing of the new high school in the Orange County School District. BACKGROUND: On June 6, 2000, the Board adopted a resolution that authorized staff to proceed with obtaining financing for a new high school in the Orange County Schaal District. Staff proposed to the Board that a public offering in the form of certificates of participation (COPS) be pursued as the financing mechanism, as recommended by the Local Government Commission. The resolution established June 29, 2000 as the date for the required public hearing on the high school financing. At the public hearing, the Board authorized staff to retain BB&T Capital Markets as underwriters and authorized the creation of anon-profit corporation, Orange County Public Facilities Company, for the issuance of the COPS. As approved by the County Commissioners and included in the 1997 bond referendum package, original funding for construction of the New Orange County High School totaled $25 million ($12.5 million in bonds plus $12.5 million in installment purchase proceeds). On June 6, 2000, at the request of the Orange County Board of Education and School Superintendent, the Commissioners increased the COPS amount by $1 million, from $12.5 million to $13.5 million. The School Board's reasons to increase the project budget included: • The original project budget was based on 1996 prices; • The core student capacity of the original plan allowed for 1,200 students; the .new high school plans were developed in accordance with Commissioner approved High School Construction Standards of 1,500; The original budget did not anticipate widening of Orange Grove Road and Grady Brown Road, lighting the athletic fields, installing a thermal ice storage system, and putting water and sewer lines in place. The school system received construction bids for the project on October 26, 2000. In early November, the Orange County Board of Education awarded construction bids totaling $19,208,190 and contracts for site work and required road widening work totaling just aver $1.5 million. This amount is approximately $1.3 million less than the project's original construction budget. These savings may be able to provide additional flexibility to OCS to address other pressing pay-as-you-go capital project needs, as most of their annual pay-as-you-go funds are committed to paying debt service on the COPs. An updated financing calendar is attached. All actions listed on the calendar to this point have been completed. The date set for final' action by the Board of Commissioners is November 21, 2000. Action required on this date includes adoption of the attached resolution that provides for approval of the following draft documents: • Preliminary Official Statement -Similar to the Official Statement for General Obligation (G.O.) Bonds, this document provides the required disclosure of information to prospective investors. • Installment Financing Contract- This agreement between the County and the non-profit corporation, Orange County Public Facilities Company, provides for the advance of funds to the County for project expenditures. • Deed of Trust and Security Agreement -- Provides for the security interest in the property (the collateral) to secure the County's payment obligation. • Trust Agreement- This agreement between the non-profit corporation and the Trustee provides for the issuance of the COPS in the County's financing obligations to generate funds to provide to the County under the financing agreement. • Contract of Purchase- provides far the underwriter's obligation to purchase the COPs. • Lease - An agreement that provides for the County to lease the new school to the School Board. • Agency Agreement- Provides for the School Board to undertake the acquisition and construction of the new school as the County's agent. The resolution provides that the Board make a determination to proceed with the project -and, as mentioned above, approve the draft documents with the understanding that the final documents must be in substantially the forms presented. The resolution also directs the Chair and the Vice Chair and the Finance Director to execute the final documents. FINANCIAL IMPACT: Assuming the amount borrowed at the Commissioner approved level of $13.5 million, estimated underwriting and other issuance costs total $165,000. The combined total of the financing package is approximately $13,665,000. Annual debt service, estimated at $1.98 million in the peak year (fiscal year 2009-02), will be paid from Orange County Schools pay-as-you-go revenues in accordance with the County's CIP and approved Capital Funding Policy. RECOMMENDATION(S): The Manager recommends that the Board adopt the resolution providing final approval of the terms and documents far the new high school financing project. A t faaaer Ocbkr Tieue~ar S M T W T F S S M T W T F S 5 M T W T F 5 S M T W T F S S M T W T F 5 1 1 2 S A 5 I S 1 2 S~ 5 6 7 1 2 3 0 2 3 1 i, 6 7 6 6 7 B 9 !0 11 12 3 4 5 6 7 6 9 8 9 10 11 12 13 1~ i 6 7 8 9 10 11 9 IO I1 l2 13 l4 l5 13 11 15 16 17 16 19 ]0 11 12 13 l~ 15 16 IB 16 1T 18 19 SO 21 1S 1S 14 15 16 17 18 16 17 16 19 20 21 2S SD S1 2S 23 24 23 26 17 16 19 ZD SI 32 23 22 S3 SI S5 26 27 2B 19 20 21 22 S3 S~ 2i 23 24 75 26 27 28 29 S7 28 29 30 31 S4 S5 S6 27 28 29 30 S9 30 9l 26 27 28 29 SO 30 3l Orange County Installment Financing Series 2000 Financing Calendar As of 11/14/00 ~. "- ~• • d/29/2000 County Board holds public hearing to adopt preliminary resolution County 7/7/200p Conference call to discuss the proposed financing 7/I8/2000 Circulate trustee RFP, if desired 7/2S/2000 Receive trustee RFP's 7/,27/2000 County selects trustee $/4/2000 Distribute 1st draft of financing documents (Trust Agreement, Installment Financing Agreement) 8/9/2000 Distribute the Preliminary Ofizciad Statement ("POS') $/1$/2000 Review 1st draft of legal documents & POS at the LGC- 10: 00 am 9/1/2000 Receive Z"d draft of financing documents-including the POS All Parties County, UW County, UW County SC, UC County, SC All Parties SC, UC 9/11/2000 Conference call to discuss the 2"d draft of the financing documents & All Parties the POS 9/X 5/2000 Submit packages to rating agencies & bond insurers UW 9/20/2000 Non Profit Corporation meeting SC, County 10/11/2000 Receive/review bond insurance commitments & Ratin s indicators Coun , UW 10/20/2000 Make revisions to financing documents based on rating agency SC, UC comments 10/26/2000 Receive school construction bids issuer Orange County Regulatory Local Government Commission Underwriter BB&T Capital Markets. Special Counsel Robert M. Jessup/Nexson Pruet Jacobs and Pollard Underwriter's Counsel Robinson Bradshaw 8 Hinson County LGC UW SC 1 Ir. w .se s ~~u~ o~>~ rimer 4 S M T W T F S S M T W T B 8 S M T W T F 5 S ![ T W T F 5 S DI T W T F S 1 1 2 3 4 5 ~ 1 2 1 2 3 4 5 6 7 l 2 3 4 2 3 .4 5 6 7 8 6 7 6 9 10 11 l2 3 4 5 6 7 B 9 6 9 ]0 11 12 13 H 5 6 7 B 9 10 11 9 18 11 l2 13 l4 15 19 14 l5 16 1T 18 l9 10 it 12 1S 11 15 16 15 l6 17 16 19 20 21 12 1S 11 15 16 17 18 16 l7 16 19 ZD 21 22 28 S1 22 23 24 25 26 17 IB 19 28 21 22 23 2S 23 24 25 26 27 28 19 28 S1 22 23 24 25 23 24 2S 26 27 26 19 27 26 29 30 3l 24 25 26 27 26 29 3D 29 30 31 26 27 ZB ?9 38 90 31 - Orange County Installment Financing Series 2000 11/21/2000 County Board gives final approval County, SC 11/22/2000 Submit application to LGC County, UW 11/28/2000 Printer receives POS UC, UW 11/29/2000 Mail POS UW 12/5/2000 LGC approves application and financing LGC 12/11/2000 Pricing of Certificates UW 12/12/2000 Execute CPA County,. UW, LGC 12/19 8~ 12/20 Pre-closing 8 Closing All Parties Issuer Orange County soul Regulatory Local Government Commission LOG Underwriter BB&T Capital Markets. UW Special Counsel Robert M. Jessup/Nexson Pruet Jacobs and Pollard SC l Indarwritar'.a Cnunsel Re6inson Bradshaw & Henson UC 5 Resolution Providing Final Approval of Terms and Documents For New Oran a Count Hi h School Finan~in Pro'ect WHEREAS: The Board of Commissioners of Orange County, North Carolina, has previously approved and determined to carry out a plan for the construction and financing (the "Project") of a new Orange County high school (the "New School"). The County's Finance Officer has presented to .this meeting the draft documents listed on Exhibit A (the "Documents") and a draft dated November 9, 2000, of an official statement providing for the disclosure of information to prospective investors. All of these items relate to the County's carrying out the Project and appear to be in forms appropriate for carrying out the Project. BE IT TFIEREFORE RESOLVED by the Board of Commissioners of Orange County, North Carolina, as follows: 1. Determination To Proceed with Project -- The Board confirms its decision to carry out the Project in accordance with the plan described in the Documents. 2. Approval of Documents; Direction To Execute Documents -- The Board approves the forms of the Documents submitted to this meeting and directs the Board's Chair to execute and deliver those Documents to which the County is a party. The Documents in their final form must be in substantially the forms presented, with such changes as the Chair may approve; the execution and delivery of any Document by the Chair shall be conclusive evidence of such officer's approval of any such changes. .The Documents in final form, however, must provide for the amount to be financed by the County not to exceed $14,000,000 and for a financing term not to extend beyond December 31, 2010. 3. Approval of Official Statement -The Board approves the draft official statement submitted to this meeting as the form of the preliminary official statement pursuant to which the Certificates (as defined in Exhibit A) will be offered 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 Certificates, to 6 complete and otherwise prepare the preliminary official statement as an official statement in final form. The Board directs the Board's Chair. to execute and deliver the final official statement in such form as such officer may approve upon recommendation from the Finance Officer. 4. Authorization to Finance Offacer To Complete Closing -The Board authorizes and directs the Finance Officer to hold executed copies of the Documents, and any other documents authorized or permitted by this resolution, in escrow on the County's behalf until the conditions for the delivery of the Documents have been completed to such officer's satisfaction, and thereupon to release the executed copies of such documents for delivery to the appropriate persons or organizations. Without limiting the generality of the foregoing, the Board specifically authorizes the Finance Officer to approve changes to any documents (including the Documents and any closing certifications) previously signed by County officers or employees, provided that such changes shall not substantially alter the intent of such documents from that expressed in the forms of such documents as executed by such officers. Such officer's authorization of the release of any such document for delivery shall constitute conclusive evidence of such officer's approval .of any such changes. 5. Authoriza~'ion to School Board Attorney -The Board authorizes and approves actions taken and to be taken by the attorney for the Orange County School Board in connection with the conveyance of the site of the New School to the County and in obtaining a title insurance policy on that site for the County's benefit, and waives any conflict that may arise between such activities on the County's behalf and the attorney's representation of the School Board. 6. Miscellaneous Provisions -- All County officers and employees are authorized and directed to take all such further action as they may consider necessary or desirable in furtherance of the execution and delivery of the Documents in final form and the other purposes of this resolution. All such prior actions of County officers ~ and- employees are ratified, approved and confirmed. In the Chair's absence, the Vice Chair may assume any responsibility or carry out any function assigned to the Chair in this resolution. All other resolutions, or parts thereof, in conflict with this resolution are repealed, to the extent of the conflict. This resolution shall take effect immediately. This the 21st day of November, 2Q00 7 Exhibit A -- Draft Documents (a) A draft dated November 10, 2000, of an Installment Financing Contract to be dated as of December 1, 2000 (the "Financing Contract"), between the County and Orange County Public Facilities Company (the "Company), providing for the advance of funds to the County for the County's undertaking of the Project. (b) A draft dated November 10, 2000, of a Deed of Trust and Security Agreement to be dated as of December 1, 2000, from the County to a deed of trust trustee for the Company's benefit, providing for a security interest in the New School to secure the County's obligations under the Financing Contract. (c) A draft dated November 10, 2000, of a Trust Agreement to be dated as of December 1, 2000, between the Company and the Trustee, providing for the issuance of certificates of participation (the "Certificates") in the County's fmancing obligations to generate funds for the advance to the County under the Financing Agreement. (d) A draft dated November 9, 2000, of a Contract of Purchase to be dated on or about December 16, 2000, providing for an underwriter's obligation to purchase the Certificates. The Contract for Purchase includes a Letter of Representation to be delivered by the County. (e) A draft dated November 10, 2000, of a Lease to be dated as of December 1, 2000, providing for the County to lease the New School to The Orange County School Board (the "School Board"). (~ A draft dated November 10, 2000, of an Agency Agreement to be dated as of December 1, 2000, providing for the School Board to undertake the acquisition and construction of the New School as the County's agent.