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HomeMy WebLinkAboutAgenda - 06-23-2004-8cORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: June 23, 2004 Action Agenda Item No. __~G _ SUBJECT: Public Hearing and Final Steps for Planned Debt Issuance DEPARTMENT: Finance PUBLIC HEARING: (Y/N) Yes ATTACHMENT(S): Bond Orders for Adoption Resolution on Publication Bond Orders and Notice of Adoption Resolution far a Bond Sale Resolution Regarding Installment INFORMATION CONTACT: Ken Chaviaus, ext. 2453 TELEPHONE NUMBERS: Hillsborough 732-8181 Chapel Hill 968-4501 Financing Durham 688-7331 Mebane 336-227-2031 PURPOSE: To receive public comment on the bond orders far the proposed issuance of $4,2 million in two-thirds net debt reduction bonds and $15 million in installment financing and to consider taking further actions that would allow staff to proceed with the issuance of the proposed debt. BACKGROUND: On .lune 8, 2004, the Board introduced the Bond Orders for the issuance of $4,2 million in two-thirds net debt reduction bonds and established a public hearing date to receive public comment on the proposed debt issue. June 23, 2004 was the date set for the hearing. In addition to these actions, the Baard adapted a preliminary resolution granting approval for the staff to pursue the issuance of approximately $15 million in installment financing, as well as adopted reimbursement resolutions that will allow the County to reimburse itself far projects the may begin prior to receipt of the borrowed funds. All of these actions were in accordance with the proposed timetable prepared by the County's bond counsel and all projects funded are included in the debt issuance schedule endorsed by the Board an May 5, 2004, Debt issuance related to the Bonds is scheduled far discussion and approval by the Local Government Commission (LGC) an July 6, 2004, The bond sale is currently scheduled for July 20, 2004, and closing and delivery is set far August 3 and 4, 2004. LGC action on the installment financing, which could be in the form of certificates of participation (COPs) and/or private placement has not yet been scheduled, The mast recent project cash flow information received from Chapel Hill-Carrbara School system staff indicates that the funds included in the alternative financing proposal for high school number 3 at $4,7 million and various other school projects totaling $4.3 million will not be needed until early 2005, The LGC has advised that approval for the of the installment purchase should be scheduled to coincide mare closely with the cash flaw needs of these major projects, There will be no further Board actions required for the alternative financing as long as the projects remain unchanged. The Board is asked to complete the final steps required in order to gain approval of the debt issuance from the Local Government Commission for the bonds and to authorize staff to take the steps necessary to accomplish the installment financing, Board actions required include: • Conduct a public hearing on the two bond orders and the resolution regarding the installment purchase financing. The public hearing can be conducted on all items at once, After the public hearing, the Board is asked to consider adoption of the bond orders and the resolution regarding the installment financing.. The installment financing resolution provides final Board approval for the alternative financing portion of the plan approved by the Board on May 5. It confirms the financing plan, approves the forms of financing documents and authorizes staff to complete the financing process. At the suggestion of staff of the Local Government Commission, this resolution also approves the possibility of a short-term bank-placement financing that could be used to provide financing in advance of completing the COPs financing, if that turns out to be in the County's best interest, Finally, the Board will be asked to adopt another resolution related to the sale of the two- thirds bonds and the $197 million 2001 referendum bonds. The resolutions, among other matters, approve the forms of financing documents, All documents have been reviewed by staff and bond counsel, and are in forms substantially similar to documents used for prior County financings. Copies of the documents referenced in the resolutions are available from Finance Director and Bond Counsel, If the Board takes the actions mentioned above, the Clerk should be instructed to publish a "Notice of Adoption" far the bond orders mentioned above. FINANCIAL IMPACT: As mentioned during the June 8, 2004 Board Meeting, Rands totaling $795,800 are included in the 2004-2005 Manager's recommended budget to pay the estimated interest payments required for all of the above mentioned debt, The initial principal payments will not come due until the 2005-2006 fiscal year, RECOMMENDATION(S): The Manager recommends that the Board conduct the public hearing on the two Band Orders and on the Installment Financing, After the public hearing, the Manager recommends that the Board (a) adapt the Bond Order for $3.9 million public building bonds, (b) adopt the Bond Order for $300,000 bonds far land acquisition, (c) adapt the resolution directing the Clerk to publish notice of the adoption of the bond orders, (d) adopt the resolution providing for the sale of general obligation bonds, and (e) adopt the resolution providing final approval for the County's installment financings, 3 Kenneth T. Chavious June 11, 2004 Page 4 Bond Order for Adoption - Public Building Bonds BOND ORDER AUTHORIZING THE ISSUANCE OF GENERAL OBLIGATION PUBLIC BUILDING BONDS IN THE MAXIMUM AMOUNT OF $3,900,000 WHEREAS -- By resolution adopted on May 18, 2004, the Board of Commissioners of Orange County, North Carolina (the "County"), stated its proposal to issue general obligation bonds to pay capital costs of providing public buildings. By law, the County may issue general obligation bonds for this purpose without referendum approval in an amount up to two-thirds of the amount by which the County will have reduced its outstanding indebtedness in the 2003-04 fiscal year. The County has applied to the North Carolina Local Government Commission (the "LGC") for its approval of such bonds. The LGC has accepted the County's application. BE IT ORDERED by the Board of Commissioners of Orange County, North Carolina, as follows: 1. There are hereby ordered to be issued general obligation bonds of the County to pay capital costs of providing public buildings, including costs of acquisition, construction, renovation and other capital costs, including the possible acquisition of land for public buildings, together with related financing and other necessary or incidental costs. 2. The maximum aggregate principal amount of the bonds issued for such purpose will be $3,900,000. Orange 04 23 2d meeting does Kenneth T. Chavious .Tune 11, 2004 Page 5 3, Taxes will be levied in an amount sufficient to pay the principal of and interest on the bonds so issued. 4, A sworn statement of debt prepared by the County's Finance Officer has been filed with the Clerk to this Board and is available for public inspection. S. This Bond Order shall take effect 30 days after its publication following adoption, unless it is petitioned to a vote of the people as provided in Section 159-60 of the North Carolina General Statutes, and in that event the order will take effect when approved by the voters. Orange 04 23 2d meeting flocs 5 Kenneth T. Chavious June 11, 2004 Page 6 Bond Order for Adoption - Bonds for "Lands Legacy" Acquisitions BOND ORDER AUTHORIZING THE ISSUANCE OF GENERAL OBLIGATION BONDS FOR LAND ACQUISITION IN THE MAXIMUM AMOUNT OF $300,000 WHEREAS- The Board of Commissioners of Orange County, North Carolina (the "County"), has along-standing conrrrritment to provide funds and acquire property, and interests in property, for preservation, resource protection and open space purposes under the County's "Lands Legacy" initiative. By law, the County may issue general obligation bonds for this purpose without referendum approval in an amount up to two-thirds of the amount by which the County will have reduced its outstanding indebtedness in the 2003-04 fiscal year. The County has applied to the North Carolina Local Government Cornmission (the "LGC") for its approval of such bonds for this purpose. The LGC has accepted the County's application. BE IT ORDERED by the Board of Commissioners of Orange County, North Carolina, as follows: 1. There are hereby ordered to be issued general obligation bonds of the County to pay capital costs of the acquisition of land, and interests in land, for preservation, resource protection and open space purposes, together with related financing and other necessary or incidental costs. 2. The maximum aggregate principal amount of the bonds issued for such purpose will be $300,000. Orange 04 23 2d meeting does Kenneth T. Chavious June 11, 2004 Page 7 3. Taxes will be levied in an amount sufficient to pay the principal of and interest on the bonds so issued. 4. A sworn statement of debt prepared by the County's Finance Officer has been filed with the Clerk to this Board and is available for public inspection. S. This Bond Order shall take effect 30 days after its publication following adoption, unless it is petitioned to a vote of the people as provided in Section 159-60 of the North Carolina General Statutes, and in that event the order will take effect when approved by the voters. Orange 04 23 2d meeting docs ICemieth T. Chavious June 11, 2004 Page 8 Resolution re~ardin~ publication of Bond Orders WHEREAS, there have been adopted at this meeting bond orders entitled as follows: BOND ORDER AUTHORIZING THE ISSUANCE OF GENERAL OBLIGATION PUBLIC BUILDING BONDS IN THE MAXIMUM AMOUNT OF $3,900,000; and BOND ORDER AUTHORIZING THE ISSUANCE OF GENERAL OBLIGATION BONDS FOR LAND ACQUISITION IN THE MAXIMUM AMOUNT OF $300,000 AND WHEREAS, the General Statutes require the publication of a notice to complete the process of authorizing the bonds; BE IT THEREFORE RESOLVED by the Board of Commissioners of Orange County, North Carolina, that the Clerk to this Board is authorized and directed to publish a notice of the adoption of each such Bond Order, in the form provided for in Section 159-58 of the General Statutes, one time in a newspaper having general circulation in the County. Orange 04 2.3 2d meeting docs Kenneth T, Chavious June 11, 2004 Page 9 Orange County Public Buildinu Bonds --Notice of Adoption of Bond Order The Orange County Board of Commissioners has adopted the following bond order, providing for the issuance of public building bonds. Further information regarding the bonds and the bond order appears at the end of this notice, ~ ~ * * :~ BOND ORDER AUTHORIZING TIIE ISSUANCE OF GENERAL OBLIGATION PUBLIC BUILDING BONDS IN THE MAXIMUM AMOUNT OF $4,200,000 WHEREAS -- By resolution adopted on May 18, 2004, the Board of Commissioners of Orange County, North Carolina (the "County"), stated its proposal to issue general obligation bonds to pay capital costs of providing public buildings. By law, the County may issue such bonds without referendum approval because the amount of the proposed bonds does not exceed two-thirds of the arnount by which the County will have reduced its outstanding indebtedness in the 2003-04 fiscal year. The County has applied to the North Carolina Local Govei°nment Commission (the "LGC") for its approval of such bonds. The LGC has accepted the County's application. BE IT ORDERED by the Board of Commissioners of Orange County, North Carolina, as follows: 1. There are hereby ordered to be issued general obligation public building bonds of the County to pay capital costs of providing public buildings, including costs of acquisition, construction, renovation and other capital costs, Orange 04 2.3 2d meeting docs q Kenneth T. Chavious June 11, 2004 Page 10 including the possible acquisition of land for public buildings, together with related financing and other necessary or incidental costs, 2. The maximum aggregate principal amount of the bonds issued for such purpose will be $4,200,000, 3. Taxes will be levied in an amount sufficient to pay the principal of and interest on the bonds so issued. 4. A sworn statement of debt prepared by the County's Finance Officer has been filed with the Clerk to this Board and is available for public inspection. 5. This Bond Order shall take effect 30 days after its publication following adoption, unless it is petitioned to a vote of the people as provided in Section 159-60 of the North Carolina General Statutes, and in that event the order will take effect when approved by the voters. :~ ~ ~: The foregoing order was adopted by the Orange County Board of Commissioners on June 23, 2004, and is hereby published this day of 2004. Any action or proceeding questioning the validity of the order must be begun within 30 days after the date of publication of this notice. By order of the Board of Commissioners. Donna S. Baker Cleric, Board of Commissioners Orange County, North Carolina Orange 04 23 2d meeting docs Ib Kenneth T. Chavious June 11, 2004 Page 11 Orange County Bonds for Land Acquisition --Notice of Adoption of Bond Order The Orange County Board of Cornrnissioners has adopted the following bond order, providing for the issuance of bonds for land acquisition. Further information regarding the bonds and the bond order appears at the end of this notice. * ~ k x ~ ~ BOND ORDER AUTHORIZING THE ISSUANCE OF GENERAL OBLIGATION BONDS FOR LAND ACQUISITION IN THE MAXIMUM AMOUNT OF $300,000 WHEREAS- The Board of Commissioners of Orange County, North Carolina (the "County"), has along-standing commitment to provide funds and acquire property, and interests in property, for preservation, resource protection and open space purposes under the County's "Lands Legacy" initiative. By law, the County may issue general obligation bonds for this purpose without referendum approval in an amount up to two-thirds of the amount by which the County will have reduced its outstanding indebtedness in the 2003-04 fiscal year. The County has applied to the North Carolina Local Government Commission (the "LGC") for its approval of such bonds for this purpose. The LGC has accepted the County's application, BE IT ORDERED by the Board of Commissioners of Orange County, North Carolina, as follows: Orange 04 23 2d meeting docs Kenneth T. Chavious June 11, 2004 Page 12 1. There are hereby ordered to be issued general obligation bonds of the County to pay capital costs of the acquisition of land, and interests in land, for preservation, resource protection and open space purposes, together with related financing and other necessary or incidental costs. 2. The maximum aggregate principal amount of the bonds issued for such purpose will be $300,000. 3. Taxes will be levied in an amount sufficient to pay the principal of and interest on the bonds so issued. 4. A sworn statement of debt prepared by the County's Finance Officer has been filed with the Clerk to this Board and is available for public inspection, 5. This Bond Order shall take effect 30 days after its publication following adoption, unless it is petitioned to a vote of the people as provided in Section 159-60 of the North Carolina General Statutes, and in that event the order will take effect when approved by the voters. * x x :r• x ~ The foregoing order was adopted by the Orange County Board of Commissioners on June 23, 2004, and is hereby published this day of 2004. Any action or proceeding questioning the validity of the order must be begun within .30 days after the date of publication of this notice. By order of the Board of Commissioners. Donna S. Baker Clerk, Board of Conunissioners Orange County, North Carolina Orange 04 2.3 2d meeting dots is RESOLUTION FOR A BOND SALE WHEREAS: The voters of Orange County, North Carolina (the "County"), at bond referenda in 1997 and 2001, approved the issuance of County general obligation bonds for several purposes, including schools, sewer system improvements, low and moderate income housing and parks, recreation and open space. In addition, on June 23, 2004, the County's Board of Contnussioners (the "Board") authorized the issuance of County general obligation bonds in the maximum amounts of $3,900,000 for public buildings and $300,000 for land acquisition. The County will issue these bonds under the provisions of law which the allow issuance of such bonds without referendum approval, in an amount up to two-thirds of the amount by which the County will have reduced its outstanding indebtedness in the 2003-04 fiscal year, The Board has now determined that the County should issue a portion of such bonds. BE IT THEREFORE RESOLVED by the Board of Commissioners of Orange County, North Carolina, as follows: 1. Detervtiization To Sell Referendiun Bo~zds -The County will issue and sell a portion of the bonds previously approved at bond referenda for their authorized purposes, as follows: $7,565,000 of the $33,250,000 authorized and unissued school bonds; $1,300,000 of the $2,700,000 authorized and unissued bonds for certain housing purposes; $10,&75,000 of the $16,375,000 authorized and unissued bonds for parks, recreation and open space purposes; and All of the $1,200,000 authorized and unissued sewer expansion bonds. These bonds will be sold as a single issue of bonds to be designated "Public hnpl°ovement Bonds, 2004B." Orange 04 GO bond resolution BR 13 Z. Determination To Sell Two-T/eirds Boads -- The County will also issue and sell for their authorized purposes the bonds for which referendum approval was not required. The $3,900,000 public building bonds and $300,000 land acquisition bonds will be sold together as a single issue, separately from but simultaneously with the bonds issued pursuant to the previous paragraph. These bonds will be designated "Public Improvement Bonds, Series 2004A." The Series 2004A Bonds and the Series 2004E Bonds are referred to collectively in the resolution as the "Bonds." .3. Principal Payment Se/eedule -- The principal of the Bonds will be payable on such dates and in such years and amounts as the Finance Officer determines after consultation with the LGC, except that the final maturity for the Bonds must not extend beyond December 31, 2025. The Finance Officer will execute a certificate prior to the initial delivery of the Bonds designating the final principal payment schedule for each Series of the Bonds. Such certificate will be conclusive evidence of the Finance Officer's approval and deterntinarion of such matters. 4. Interest Rate ar:d Payrr:er:t Provisions -- Each Bond will bear interest at such rate as is determined at the time of its sale. Interest on each Bond will be payable semiannually on each February 1 and August 1, beginning February 1, 2005, (a) from August 1, 2004, if it is authenticated prior to February 1, 2005, or (b) otherwise from the February 1 or August 1, that is, or immediately precedes, the date on which it is authenticated (unless payment of interest thereon is in default, in which case such Bonds will bear interest from the date to which interest has been paid). Principal, prenuum, if any, and interest will be payable in lawful money of the United States of America. S. Pledge of Faitl:, Credit and Taxing Power -- The County's full faith and credit are hereby irrevocably pledged for the payment of the principal of and interest on the Bonds. unless other funds are lawfully available and appropriated for timely payment of the Bonds, the Board will levy and collect an annual ad valorem tax, without restriction as to rate or amount, on all locally taxable property in the County sufficient to pay the principal of and interest on the Bonds as the same become due. Orange 04 GO bond resolution BR 2 i~- 6. Approval of Official Statement for Offeriizg -There has been made available to each member of the Board the form of an official statement (the "Official Statement") relating to the Bonds, pursuant to which the Bonds will be offered for sale. The Official Statement remains subject to completion and amendment. The Official Statement is approved as the form of official statement pursuant to which the Bonds will be offered for sale. The actions of the Finance Officer, in collaboration with the LGC, to prepare the text of the Official Statement are ratified, approved and confirmed. The Board approves the LGC's distribution of the Official Statement to prospective purchasers of the Bonds. The Official Statement as so distributed must in substantially the fornr presented to this meeting, with such changes as the Finance Officer may approve. The Board acknowledges that it is the County's responsibility to ensure that the Official Statement, in its final form, neither contains an untrue statement of a material fact nor orrrits 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. By the adoption of this resolution, the Board members approve the Official Statement as materially correct and complete, and further acknowledge and accept their own responsibility for causing the County to fulfill these responsibilities for the Official Statement. 7. Redemption Provisio~as -- The Bonds of each Series will be subject to redemption prior to maturity upon such terms and conditions as the Finance Officer, upon advice from the LGC, may determine. The Finance Officer must execute a certificate prior to the initial delivery of the Bonds designating redemption teens and conditions, and such certificate will be conclusive evidence of the Finance Officer's approval and determination of such terms and conditions. 8. Form of Bonds -- The Bonds will be in substantially the form set out in Exhibit A. The Bonds will be dated August 1, 2004, will be in fully registered form, in denominations of $.5,000 and integral multiples thereof, and will be numbered R-1 upward separately within each series or consecutively across the series, as the Finance Officer may determine. Orange 04 GO bond resolution BR i~ The Bonds must be signed by the manual or facsimile signature of the Board's Chair, must be countersigned by the manual or facsimile signature of the Board's Clerk or any Assistant Clerk, and the County's seal must be affixed thereto or a facsimile thereof printed thereon. No Bond will be valid unless at least one of the signatures appearing on such Bond (which may be the signature of the LGC's representative required by law) is manually applied or until such Bond has been authenticated by the manual signature of an authorized officer or employee of a bond registrar selected by the County. 9. Fir:ance Officer as Registrar; Payments to Registered Owners -- The Finance Officer is appointed Registrar for the Bonds, As Registrar, the Finance Officer will maintain appropriate books and records of the ownership of the Bonds. The County will treat the registered owner of each Bond as the person exclusively entitled to payment of principal, premium, if any, and interest and the exercise of all rights and powers of the owner, except that interest payments will be made to the person shown as owner on the registration books on the 15th day of the month preceding each interest payment date. I0. Advertisi~:g Bonds for Sale -- The Finance Officer, in collaboration with the LGC, is authorized and directed to take all proper steps to advertise the Bonds in accordance with customary LGC procedures, including through the use of a "Notice of Sale" document in the LGC's customary form. The Finance Officer is authorized and directed to review and approve a form of Notice of Sale as he may determine to be in the County's best interest. ll. LGC To Sell Bonds -The County asks the LGC to sell the Bonds, to receive and evaluate bids and to award the Bonds to the successful purchaser. I2. Conepleting Official Statement after Sale -- After bids have been received and the LGC has awarded the Bonds to the successful purchaser, the Finance Officer is authorized and directed to prepare, in collaboration with the LGC, a final Official Statement containing, among such other matters as may be appropriate, information required pursuant to Rule 15c2-12 ("Rule 15c2-12") promulgated by the United States Securities and Exchange Commission under the United States Securities Act of 1934, as amended. The County, together with the LGC, will arrange for the delivery within seven business days of the date the Bonds are sold of a reasonable number of copies of the final Official Statement to Orange 04 GO bond resolution BR i~ the successful bidder on the Bonds for delivery to each potential investor requesting a copy of the final Official Statement and to each person to whom such bidder and members of the bidding group initially sell the Bonds. 13. Fi~aance Officer To Complete Bond Closing -After the sale of the Bonds, the Finarrce Officer and all other County officers and employees are authorized and directed to take all proper steps to have the Bonds prepared and executed in accordance with their terms and to deliver the Bonds to the purchaser upon payment for the Bonds. The Finance Officer is authorized and directed to hold the executed Bonds, 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 Bonds and other documents have been completed to the Finance Officer's satisfaction, and thereupon to release the executed Bonds and other documents for delivery to the appropriate persons or organizations. Without limiting the generality of the foregoing, this authorization and direction is specifically extended to authorize the Finance Officer (a) to enter into such agreements or take such other actions as such officer may deem appropriate in connection with obtaining bond insurance for the Bonds and (b) to approve changes to any documents or closing certifications previously signed by County officers or employees, provided that the Bonds will be in substantially the form approved by this resolution and that any such cYranges will not substantially alter the intent of such certificates from that expressed in the forms of such certificates as executed by such officers or employees, The Finance Officer's authorization of the release of any such document for delivery will carrstitute conclusive evidence of such officer's approval of any such changes. 14. Undertaking for Continuing Disclosure -- The County undertakes, for the benefit of the beneficial owners of the Bonds, to provide continuing disclosure with respect to the Bonds as described in Exhibit B. The Board designates the Finance Officer as the County officer to be primarily responsible for the County's compliance with its undertakings for continuing disclosure provided for in this resolution. The Finance Officer will Orange 04 GO bond resolution BR i~ provide for the filings and reports (including the reports of material events) constituting the continuing disclosure provided for in this resolution. 1 S. Resolutions As To Tax Matters -- The County will not take or omit to take any action the taking or omission of which will cause the Bonds to be "arbitrage bonds," within the meaning of Section 148 of the "Code" (as defined below), or "private activity bonds" within the meaning of Code Section 141, or otherwise cause interest on the Bonds to be includable in gross income for federal income tax purposes. Without limiting the generality of the foregoing, the County will comply with any Code provision that may require the County at any time to pay to the United States any part of the earnings derived from the investment of the proceeds of the Bonds, and the County will pay any such required rebate from its general funds. For this paragraph, "Code" means the United States Internal Revenue Code of 1986, as amended, including applicable Treasury regulations. 16. Book-Entry System for Bond Registration -- The Bonds will be issued by means of a book-entry system, with one bond certificate for each maturity immobilized at The Depository Trust Company, New Yorlc, New York ("DTC"), and not available for distribution to the public. The book-entry system for registration will operate as described in the Official Statement, Therefore, (a) the County will pay principal, premium, if any, and interest on the Bonds to DTC or its nominee as registered owner of the Bonds, (b) the County will not be responsible or liable for such transfer of payments to parties other than DTC or for maintaining, supervising or reviewing the records maintained by DTC or any other person related to the Bonds, and (c) the County will not mailing redemption notices (or any other notices related to the Bonds) to anyone other than DTC or its nominee so long as the book-entry system of registration with DTC is in effect. The County may elect to discontinue the book-entry system with DTC. The Finance Officer is authorized and directed to enter into any agreements he deems appropriate to put into place the book-entry system with DTC. 17. 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 connection with the furtherance of the purposes of this resolution, All such prior actions of County officers and employees are ratified, approved and confirmed, tTpon the absence, unavailability or refusal to act of the Chair or the Finance Officer, the County Manager may assume any responsibility or carry out any function assigned to the Chair or the Finance Officer in this Orange 04 GO bond resolution BR ~~ resolution All other resolutions, or parts thereof, in conflict with this resolution are repealed, to the extent of the conflict. This resolution takes effect immediately. Orange 04 GO bond resolution BR 1~ EXHIBIT A -Form of Bonds REGISTERED Number R-X UNITED STATES OF AMERICA STATE OF NORTH CAROLINA ORANGE COUNTY REGISTERED Public Improvement Bond, Series 20041A/Bl INTEREST RATE MATURITY DATE DATED DATE CUSIP February 1, August 1, 2004 684 609 XXX REGISTERED OWNER: *****CEDE & CO.***** PRINCIPAL AMOUNT: **** THOUSAND DOLLARS ($ ,000)*** ORANGE COUNTY, NORTH CAROLINA (t/ie "Coiu:ry"), for value received, promises to pay to the registered owner hereof; or registered assigns or legal representative, the principal amount stated above on tYie maturity date stated above, subject to prior redemption as described herein, and to pay interest on this Bond semiannually on each February 1 and August 1, beginning February 1, 2005, at the aruiual rate stated above. Interest is payable (a) from August 1, 2004, if this Bond is authenticated prior to February 1, 2005, or (b) otherwise from the February 1 or August 1 that is, or inunediately precedes, the date on which this Bond is authenticated (unless payment of interest hereon is in default, in which case this Bond will bear interest from the date to which interest has been paid). Principal, premium, if any, and interest are payable in lawful money of the United States of America. This Bond is one of an issue of the County's $ Public Improvement Bonds, Series [2004A/B] (the "Bonds"), of like date and tenor, Orange 04 GO bond resolution BR ao except as to number, denomination, rate of interest, privilege of redemption and maturity, The Bonds are issued pursuant to a resolution adopted by such Board on June 23, 2004, and the Constitution and laws of the State of North Carolina, including the Local Government Bond Act. The County's full faith and credit are pledged for the payment of principal of and interest on this Bond. The Bonds are issued by means of a book-entry system, with one bond certificate for each maturity immobilized at The Depository Trust Company, New York, New York ("DTC"), and not available for distribution to the public, Transfer of beneficial ownership interests in the Bonds in the principal amount of $5,000 or any integral multiple thereof will be effected on the records of DTC and its participants pursuant to rules and procedures established by DTC and its participants, Principal, premium, if any, and interest on the Bonds are payable by the County to DTC or its nominee as registered owner of the Bonds, The County is not responsible or liable for such transfer of ownership or payments or for maintaining, supervising or reviewing the records maintained by DTC, its participants or persons acting through such participants. Bonds maturing prior to February 1, 2015, are not subject to redemption, prior to maturity. Bonds maturing on February 1, 2015, and thereafter are redeemable, at the County's option, from any moneys that may be made available for such purpose, in whole on any date not earlier than February 1, 2014, at a redemption price equal to 100% of the principal amount to be redeemed, plus interest accrued to the redemption date, without premium. If less than all of the Bonds stated to mature on different dates are called for redemption, the Bonds will be redeemed in the inverse order of their maturities. If less than all of the Bonds of any one maturity are called for redemption, the particular Bonds or portions of Bonds of such maturity to be redeemed will be selected by lot in such manner as the County in its discretion may determine; provided, however, that the portion of each Bond to be redeemed will be in the principal amount of $5,000 or some integral multiple thereof, and that, in selecting Bonds for redemption, each Bond will be considered as representing that number of Bonds which is obtained by dividing the principal amount of such Bond by $5,000. Notwithstanding the foregoing, so long as a book-entry system with DTC Orange 04 GO bond resolution BR a~ is used for determining beneficial ownership of Bonds, if less than all of the Bonds within a maturity are to be redeemed, DTC and its participants will determine which of the Bonds within any such maturity are to be redeemed, If a portion of a Bond is called for redemption, a new Bond in principal amount equal to the unredeemed portion thereof will be issued to the registered owner upon the surrender thereof: The County will give notice of redemption by certified or registered mail to DTC or its nominee as the registered owner of the Bonds. The County will mail such notice not more than 60 days and not less than 30 days prior to the date fixed for redemption. The County is not responsible for sending notices of redemption to anyone other than DTC or its nominee. If (a) DTC determines not to continue to act as securities depository for the Bonds or (b) the County so elects, the County will discontinue the book-entry system with DTC. If the County fails to identify another qualified securities depository to replace DTC, the County will deliver replacement Bonds in the form of fully-registered certificates, The County Finance Officer has been appointed Registrar for the Bonds. As Registrar, the Finance Officer will maintain appropriate books and records indicating ownership of the Bonds, The County will treat the registered owner of this Bond as the person exclusively entitled to payment of principal, prenuum, if any, and interest and the exercise of all other rights and powers of the owner, except that interest payments will be made to the person shown as owner on the County's registration books on the 15th day of the month preceding each interest payment date. All acts, conditions and things required by the Constitution and laws of the State of North Carolina to happen, exist or be performed precedent to and in the issuance of this Bond have happened, exist and have been performed, and the issue of Bonds of which this Bond is one, together will all other indebtedness of tYie County, is within every debt and other limit prescribed by the Constitution and laws of the State of North Carolina. IN WITNESS WHEREOF, Orange County, North Carolina, has caused this Bond to signed by the Chair of its Board of Commissioners, to be countersigned by Orange 04 GO bond resolution BR as the Clerlc to such Board, its seal to be affixed hereto and this Bond to be dated August 1, 2004. Orange 04 GO bond resolution BR a3 COUNTERSIGNED: (SEAL) [Saa~le orals - do not si~n7 [Saan~le only - rlo not sign? Clerk, Board of Corr~nussioners Orange County, North Carolina Chair, Board of Commissioners Orange County, North Carolina The Bonds have been approved by the North Carolina Local Government Commission in accordance with the Local Government Bond Act. [Sarnple only - do not si~a1 Janice T. Burke Secretary, Local Government Conunission Orange 04 GO bond resolution BR a~+ ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and transfer(s) unto (Please print or type transferee's name and address, including zip code) PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NI.IMBER OR TRANSFEREE: the within bond and all rights thereunder, hereby irrevocably constituting and appointing ,Attorney, to transfer said bond on the books kept for the registration thereof, with full power of substitution in the premrses. Dated: Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by a participant in the Securities Transfer Agent Medallion Program ("STAMP") or similar program (Signature of Registered Owner) NOTICE; The signature above must correspond with the name of the registered owner as it appears on the front of this bored in every particular without alteration or enlargement or any change whatsoever. Orange 04 GO bond resolution BR a~ Exhibit S -- Undertalcin~ for Continuing Disclosure The County undertakes, for the benefit of the beneficial owners of the Bonds, to provide the following: (a) by riot later than seven months from the end of each of the County's fiscal years, to each nationally recognized municipal securities information repository ("NRMSIR"), and the state information depository for the State of North Carolina ("SID"), if any, audited County financial statements for such fiscal year, if available, prepared in accordance with Section 159-34 of the General Statutes of North Carolina, as it may be amended from time to time, or any successor statute, or, if such audited financial statements are not available by seven months from the end of any fiscal year, unaudited County financial statements for such fiscal year, to be replaced subsequently by audited County financial statements to be delivered within 15 days after such audited financial statements become available for distribution; (b) by not later than seven months from the end of each of the County's fiscal years, to each NRMSIR, and to the SID, if any, (I) the financial and statistical data as of a date not earlier than the end of the preceding fiscal year (which data will be prepared at least annually, will specify the date as to which such information was prepared acid will be delivered with any subsequent material events notices specified in subparagraph (c) below) for the type of infornation included under heading "The County -Debt Information" and "- Tax Information" in the final Official Statement (excluding any information on overlapping or underlying units), and (ii) the combined budget of the County for the current fiscal year, to the extent such items are not included in the audited financial statements referred to in (a) above; (c) in a timely manner, to each NRMSIR or to the Municipal Securities Rulemalcing Board ("MSRB"), and to the SID, if any, notice of any of the following events with respect to the Bonds, if material: (1) principal and interest payment delinquencies; (2) non-payment related defaults; Orange 04 GO bond resolution BR a~ (3) unscheduled draws on debt service reserves reflecting financial difficulties; Orange 04 GO bond resolution BR a~ (4) unscheduled draws on any credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions or events affecting the tax-exempt status of the Bonds; (7) modifications to rights of the beneficial owners of the Bonds; (8) Bond calls; (9) defeasances; (10) release, substitution or sale of any property securing repayment of the Bonds; and (11) rating changes; and (d) in a timely manner, to each NRMSIR or to the MSRB, and to the SID, if any, notice of a failure of the County to provide required annual financial information described in (a) or (b) above on or before the date specified. If the County fails to comply with the undertaking described above, any beneficial owner of the Bonds may take action to protect and enforce the rights of all beneficial owners with respect to such undertaking, including an action for specific perforrnance; provided, however, that failure to comply with such undertaking will not be an event of default and will not result in any acceleration of payment of the Bonds. All artions will be instituted, had and maintained in the manner provided in this paragraph for the benefit of all beneficial owners of the Bonds. The County reserves the right to modify from time to time the information to be provided to the extent necessary or appropriate in the County's ,judgment, provided that: Orange 04 GO bond resolution BR ~ i3 (a) any such modification may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nattiire, or status of the County; (b) the information to be provided, as modified, would have complied with the requirements of Rule 15c2-12 as of the date of the final Official Statement, after taking into account any amendments or interpretations of Rule 1Sc2-12, as well as any changes in circumstances; and (c) any such modification does not materially irripair the interests of the beneficial owners, as determined either by parties unaffiliated with the County or by the approving vote of the registered owners of a majority in principal amount of the Bonds pursuant to the terms of the bond resolution, as it may be amended from time to time, at the time of the amendment, Any annual financial information containing modified operating data or financial information will explain, in narrative form, the reasons for the modification and the impact of the change in the type of operating data or financial information being provided. Orange 04 GO bond resolution BR a~ Resolution P~°oviding Final Approval of Terms and Documents For County's 2004 Installment Financing WHEREAS: The Board of Comnrissioners of Orange County, North Carolina, has previously deternlined to carry out a plan to finance certain public projects, as described on Exhibit A (the "Projects"), through the use of an installment financing including certificates of participation. The County's Finance Officer has presented to this meeting the draft documents listed on Exhibit B (the "Documents") and a draft dated June 7, 2004, of an official statement providing for the disclosure of information to prospective investors in the County's financing obligations. All of these items relate to the County's carrying out the financing plan. BE IT THEREFORE RESOLVED by the Board of Commissioners of Orange County, North Carolina, as follows: 1. abDeteraii~aatior: To Proceed with Projects -- The Board confirms its decision to carry out the financing plan for the Projects. This plan includes the County's acquiring the site of the proposed new high school from the Chapel Hill - Carrboro school board to facilitate the financing plan; the Board approves the County's acquisition of such property, and hereby directs the County Manager and the County Attorney to take all appropriate action toward that end. 2. abApproval of Docunaeizts; Directiox To Execute Docunze~ats -- The Board approves the forms of the Documents submitted to this meeting. The Board authorizes and directs the Board's 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 such 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 his approval of any such changes. The Documents in final form, however, must provide for the amount financed by the County not to exceed ?so $15,000,000 and for a financing term not to extend beyond December 31, 2025. .3. abApproval of Offccial Staten:e~:t -The Board approves the draft official statement subnutted to this meeting as the form of the preliminary official statement pursuant to which the Certificates (as defined in Exhibit B) 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 also aclrnowledges that the form of the official statement distributed to prospective investors will include additional financial and other information concerning the County, in a form substantially similar to that to be included in the official statement in connection with the County's planned general obligation bonds, with such supplements and updates as the Finance Officer may approve and as may be appropriate under the circumstances at the time of sale. The Board directs the Finance Officer, after the sale of the Certificates, to complete and otherwise prepare the prelimnary official statement as an official statement in final form. The Board authorizes and directs the Board's Chair to execute and deliver the final official statement in such form as he may approve upon the Finance Officer's recommendation. The Board authorizes and approves the use of the preliminary official statement and final official statement by Banc of America Securities LLP and Siebert Bradford Shank & Co., LLC, in connection with the sale of the Certificates. The Board acknowledges that it is the County's responsibility to ensure that the Official Statement, in its final form, is correct and complete in all material respects. By the adoption of this resolution, the Board members aclrnowledge their r°esponsibility for causing the County to fulfill its responsibilities for the Official Statement. 4. Alternative Baak-Placement Finaxcing - The Board determines that it may be in the County's best interest to undertake abank- placement installment financing to provide funds for a portion of the costs of the Project, in anticipation of; or in substitution for, the public offering of 31 certificates of participation otherwise contemplated by this resolution. The Board authorizes and approves such a bank-placement installment financing. The Board authorizes and directs the Finance Officer (a) to solicit and accept a financing proposal as he may determine to be in the County's best interest, (b) to apply to the North Carolina Local Government Commission for its approval of such a financing, and to take all appropriate action in connection therewith, (c) to approve the forms of financing documents for such a financing, (d) to approve the final financing terms, including the interest rate or rates for the financing (which may include variable rates), (e) to approve the collateral offered to secure the financing, and (f) otherwise to carry out such a financing under the terms and conditions of this resolution. The bank-placement financing, however, must provide (i) for an amount financed not to exceed $6.0 million, (ii) for a financing term not to exceed 15 years from closing, and (iii) for the use of financing documents substantially in forms previously used irr some other North Carolina local government installment financings. The Board expects that any such bank- placement installment financing would be in addition to, and not a complete alternative to, the public offering of certificates of participation otherwise contemplated by this resolution. 5. Firaa~zce Officer To Complete Closing -The Finance Officer and all other County officers and employees are authorized and directed to take all proper steps to complete the closings of the financings contemplated by this resolution. The Finance Officer is authorized and directed to hold any documents authorized or permitted by this resolution, once executed, in escrow on the County's behalf until the conditions for their delivery have been completed to the Finance Officer's satisfaction, and thereupon to release the executed documents for delivery to the appropriate persons or organizations. Without limiting the generality of the foregoing, this authorization and direction is specifically extended to authorize the Finance Officer (a) to enter into such agreements or take such other actions as such officer may deem appropriate in connection with obtaining financial guaranty insurance related to the County's payment obligations, and (b) to approve changes to ~a any documents or closing certifications previously signed by County officers or employees, provided that the Documents will be in substantially the form approved by this resolution and that any such changes will not substantially alter the intent of such certificates from that expressed in the forms of such certificates as executed by such officers or employees. The Finance Officer's authorization of the release of any such document for delivery will constitute conclusive evidence of such officer's approval of any such changes. 6. Reiutburseu:eut Declaration -The adoption of this resolution is intended as a declaration of the County's official intent to reimburse itself from financing proceeds for Prgject expenditures made prior to the closing date on the financing. Funds that have been advanced, or maybe advanced, from the County's General Fund, or any other fund, for costs of the Projects are intended to be reimbursed from the financing proceeds. 7. Miscellaneous Provisions - A11 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 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 or the County Manager may assume any responsibility or carry out any function assigned to the Chair in this resolution. All other Board proceedings, or parts thereof, in conflict with this resolution are repealed, to the extent of the conflict. This resolution takes effect immediately. 3~ Exhibit A -The Protects Acquisition and construction of a third high school for the Chapel Hill - Carrboro school system -- approximate amount $4,700,000 Additional school renovations, capital repairs and other improvements for the Chapel Hill - Canboro school system -approximate amount $4,300,000 Construction of planned Senior Centers -approximate amount $2,150,000 Construction of one or more buildings for the planned Orange County campus of Durham Tech -approximate amount $3,000,000 Acquisition of conservation easements and similar interests in land - approximate amount $500,000 3 ~- Exhibit B --Draft Documents (a) abA draft dated June 3, 2004, of an Installment Financing Contract (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 Projects. (b) abA draft dated June 3, 2004, of a Deed of Trust and Security Agreement from the County to a deed of trust trustee for the Company's benefit, providing for a security interest in the proposed new high school (and the associated land) to secure the County's obligations under the Financing Contract. (c) abA draft dated June 3, 2004, of a Trust Agreement between the Company and a Trustee, providing for the issuance of certificates of participation (the "Certificates") in the County's financing obligations to generate funds for the advance to the County under the Financing Contract (d) abA draft dated June 7, 2004, of a Contract of Purchase, 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) abA draft dated June 3, 2004, of a Lease, providing for the County to lease the new high school and its associated property back to the Chapel Hill - Carrboro school board (the "School Board"). (f) abA draft dated June 3, 2004, of an Agency Agreement, providing for the School Board to undertake the acquisition and construction of the new high school as the County's agent,