HomeMy WebLinkAboutAgenda - 08-17-2004-5q1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: August 17, 2004
Action Agenda
Item No.
SUBJECT: Refinancing BB&T Installment Purchase Agreement
DEPARTMENT: Finance
PUBLIC HEARING: (Y/N) No
ATTACHMENT(S):
Modification Agreement
Resolution
INFORMATION CONTACT:
Ken Chavious /Bob Jessup, ext 2453
TELEPHONE NUMBERS:
Hillsborough 732-8181
Chapel Hill 968-4501
Durham 688-7331
Mebane 336-227-2031
PURPOSE: To consider approving a modification agreement and resolution for installment
purchase contracts entered into with BB&T to finance school facilities that will result in savings
to the County.
BACKGROUND: During the past 10 years, the County has effectively used installment
purchase contracts as an alternative financing source to fund a number of capital facilities for
both School and County projects. Similar to bonds, staff periodically reviews these agreements
to assess the potential for savings through refinancing these loans in low interest rate
environments. There is an agreement with BB&T Governmental Finance that analysis reveals
could result in savings if the County were to pursue a refinancing.
In order to accomplish the refinancing, the Board is required to adopt a resolution and approve
an agreement that modifies the existing arrangement. The agreement under consideration
includes the installment purchase contract for the construction of Scroggs Elementary School.
This financing was accomplished in two parts beginning in December 1996 with $5,000,000 and
finalized in March 1997 with the addition of another $9,000,000. The remaining balance on this
financing is approximately $8.6 million as of August 1, 2004. The original interest rate on this
financing was 4.92%. The new rate quoted by BB&T in the refinancing would be 3.90% and
would result in savings as outlined in the financial impact section below. A copy of the
modification agreement and required Board Resolution is attached.
FINANCIAL IMPACT: Current estimates are that savings in the 2004-2005 fiscal year will be
approximately $39,000. Annual savings beginning in the 2005-2006 fiscal year are estimated to
average approximately $60,000 resulting in overall savings for the remaining term of nearly
$400,000. These amounts are estimates and are subject to change if there are interest rate
changes prior to closing.
RECOMMENDATION(S): The Manager recommends that the Board adopt the resolution and
approve the modification agreement with BB&T and authorize the Chair and Finance Director to
sign.
3
DRAFT OF AUGUST ii, 2004
Retum After Recording To:
F. Louis Loyd, III
Post Office Box 31273
Charlotte, NC 28231
MODIFICATION AGREEMENT
STATE OF NORTH CAROLINA) COLLATERAL IS OR INCLUDES FIXTURES
ORANGE COUNTY
THIS MODIFICATION AGREEMENT (this "Modification Agreement") is dated as
of August 18, 2004, and is granted by ORANGE COUNTY, NORTH CAROLINA, a political
subdivision of the State of North Carolina (the "County"), to BRANCH BANHING AND
TRUST COMPANY ("BB&T").
The North Carolina Local Government Commission joins in the execution of this
instrument for the purpose of evidencing its approval of the modifications effected by this
instrument.
This Modification Agreement, among other things, modifies and amends a
Financing Agreement and Deed of Trust granted to F. Louis Loyd, III (the "Deed of Trust
Trustee") for the benefit of Branch Banking and Trust Company, successor to and assignee
of BB&T Leasing Corporation ("BB&T") dated as of December 1, 1996, and recorded in
Book 1536, Page 459, Orange County Registry; and those subsequent Modification
Agreements dated as of March 1, 1997, and recorded at Book 1564, Page 163, Orange
County Registry, and dated as of June 1, 1998 and recorded at Book 1797, Page 393,
Orange County Registry, respectively (together, the "Original Agreement").
The parties desire to modify the Original Agreement to amend the average rate of interest
payable by the County on the outstanding balance of the principal amount financed pursuant to
the Original Agreement to an annual interest rate of 3.90%.
Now, therefore, for and in consideration of the premises, and for the purposes
described in the Original Agreement the County covenants and agrees with BB&T (and its
respective heirs, successors and assigns), as follows:
1. The Original Agreement is hereby amended to read as set forth on Exhibits A-1
and A-2 attached to this Modification Agreement and incorporated herein by this reference.
2. Except as modified by this Modification Agreement, the terms and provisions of
the Original Agreement are in all respects ratified and confirmed.
3. This Modification Agreement affects the same real property as the Original
Agreement.
4. Notwithstanding any other provision of this agreement or the Original
Agreement, the County and BB&T intend to comply with North Carolina General Statutes
Section 160A-20. No deficiency judgment may be entered against the County in violation of
such Section 160A-20.
5. This document may be executed in counterparts, including separate counterparts,
all of which shall constitute but a single agreement.
IN WITNESS WHEREOF, the County has caused this instrument to be executed as of
the day and year first above written by duly authorized officers.
ATTEST: (SEAL) ORANGE COUNTY,
NORTH CAROLINA
Clerk, Board of Commissioners Chair, Board of Commissioners
2
5
STATE OF NORTH CAROLINA;
ORANGE COUNTY
I, a Notary Public of such County and State, certify that
and personally came before me this day and
acknowledged that they aze the and the Clerk to the Board of
Commissioners of Orange County, North Carolina, and that by authority duly given and as the
act of Orange County, North Carolina, the foregoing instrument was signed in the County's
name by such ,sealed with its corporate seal and attested by such Clerk to the
Board of Commissioners.
WITNESS my hand and official stamp or seal, this day of August 2004.
[SEAL]
My commission expires:
Notary Public
Approved:
BRANCH BANHING AND
TRUST COMPANY
By:
F. Louis Loyd, III,
Senior Vice President
This instrument has been pre-audited
in the manner required by The Local
Government Budget and Fiscal Control Act.
Finance Director
Orange County, North Carolina
This contract has been approved under the
provisions of Article 8, Chapter 159 of the
General Statutes of North Carolina.
Janice T. Burke
Secretary, North Cazolina
Local Government Commission
By
[Janice T. Burke or
Designated Assistant]
[Signature page to Modification Agreement dated as of August 18, 2004]
3
~0
EXHIBIT A-1
Revised Payment Schedule (Exhibit D) to Financing Agreement and Deed of Trust dated as
of December 1, 1996, and subsequent Modification Agreements dated as of March 1, 1997,
and dated as of June 1, 1998, respectively (together, the "Original Agreement") granted by
Orange County, North Carolina, to BB&T.
Dated as of: August 18, 2004 Account Number: 003-1523500-005
This Payment Schedule is issued pursuant to a Modification Agreement dated as of
August 18, 2004 (the "Modification Agreement"). The Modification Agreement, among other
things, modifies and amends the Original Agreement. All terms used in this Payment Schedule
have the meanings ascribed to them in the Original Agreement.
The payments required to repay the outstanding principal balance of the advance made
pursuant to the Original Agreement (which amount is $3,094,791.90) call for remaining
amortization period of approximately seven (7) years. Payments are semi-annual in arrears in
the amount of $239,564.29. A portion of each payment is paid as and represents payment of
interest at an annual interest rate of 3.90%.
Payments are due beginning on February 1, 2005, and semi-annually thereafter, with a
final payment of all outstanding principal and accrued and unpaid interest due on December 20,
2011, all as set forth in the attached amortization schedule.
4
Orange County, North Carolina
Re-financing of Contract #ool
0o3-15z35oo-005
Compound Period: Semiannual
Nominal Annual Rate: 3.900
AMORTIZATION SCHEDULE -Normal Amortization, 36o Day Year
Balance
Loan o8/18/zoo 3,094,791.90
4
1 02/01/2005 239,564.29 55>989.94 183,574.35 z,9u,217.55
zoos Totals 239,564.29 55,989.94 183,574.35
2 08/01/2005 239,564.29 56,768.74 182,795.55 2,728,4z2.oo
3 02/ol/zoo6 239,564.29 53,204.23 186,360.06 2,542,o6L94
2006 Totals 479,128.58 109972.97 369,155.61
4 08/ol/zoo 239,564.29 49,570.21 189,994.08 2,35z,o67.86
6
5 oz/ol/2007 239,564.29 45,865.32 193698.97 2,158,368.89
2oo7Totals 479,128.58 95,435.53 383>693•05
6 08/01/2007 239,564.29 42,088.19 197>476.10 1,960,892.79
7 02/01/200 239,564.29 38237.41 201,326.88 1,759565.91
8
2008 Totals 479,128.58 80,325.60 398802.98
8 08/01/200 239,564.29 34,311.54 205,252.75 1,554,313.16
8
9 02/01/2009 239,564.29 30,309.11 zo9,255.18 1,345,057.98
2009 Totals 479,128.58 64,620.65 414,507.93
to 08/01/200 239,564.29 26,228.63 213,335.66 1,131,722.32
9
u 02/01/2010 239,564.29 22,068.59 217,495.70 914,226.62
zolo Totals 479,128.58 48,297.22 430,831.36
lz o8/ol/zolo 239>564.29 17,827.42 221,736.87 692>489.75
13 02/01/2011 239,564.29 13,503.55 226,060.74 466,429.01
2ou Totals 479,128.58 31,330.97 447,797.61
14 o8/oi/zou 239>564.29 9,095.37 230,468.92 235,960.09
15 lz/zo/2ou 239,564.29 3,604.20 235,960.09 0.00
2olz Totals 479,128.58 12,699.57 466,429.01
Grand Totals 3,593,464.35 498,672.45 3094,791.90
7
5
8
EXHIBIT A-2
Revised Payment Schedule (Exhibit D) to Financing Agreement and Deed of Trust dated as
of December 1, 1996, and subsequent Modification Agreements dated as of March 1, 1997,
and dated as of June 1, 1998, respectively (together, the "Original Agreement") granted by
Orange County, North Carolina, to BB&T.
Dated as of: August 18, 2004 Account Number: 003-1523500-006
This Payment Schedule is issued pursuant to a Modification Agreement dated as of
August 18, 2004 (the "Modification Agreement"). The Modification Agreement, among other
things, modifies and amends the Original Agreement. All terms used in this Payment Schedule
have the meanings ascribed to them in the Original Agreement.
The payments required to repay the outstanding principal balance of the advance made
pursuant to the Original Agreement (which amount is $5,569,731.62) call for remaining
amortization period of approximately eight (8) years. Payments are semi-annual in arrears in the
amount of $431,250.67. A portion of each payment is paid as and represents payment of interest
at an annual interest rate of 3.90%.
Payments are due beginning on February 1, 2005, and semi-annually thereafter, with a
final payment of all outstanding principal and accrued and unpaid interest due on February 1,
2012, all as set forth in the attached amortization schedule.
6
Orange County, North Carolina
Re-financing of Contract #002
0o3-15z35oo-006
Compound Period: Semiannual
Nominal Annual Rate: 3.900
AMORTIZATION SCHEDULE -Normal Amortization, 36o Day Year
Date Payment Interest Principal Balance
Loan o8/18/zoo 5,569,731.62
4
1 oz/o1/zoo5 431,z5o.67 100,765.73
zoos Totals 431,250.67 100,765.73
2 08/01/2005
3 oz/o1/2006
2006 Totals
4 08/o1/zoo
6
5 oz/o1/zoo7
zoo7 Totals
6 08/o1/zoo7
7 oz/o1/zoo
8
2008 Totals
8 08/o1/zoo
8
9 02/01/2009
2009 Totals
10 08/o1/zoo
9
u oz/o1/zolo
201o Totals
1z o8/o1/zolo
13 oz/o1/zou
2011 Totals
14 08/o1/zou
15 oz/o1/zo12
2012 Totals
Grand Totals
431,z5o.67 1oz,165.31
431,250.67 95,748.15
862,501.34 197,913.46
431,250.67 89,205.85
431,z5o.67 82,535.97
86z,5o1.34 171741.82
431250.67 75,736.04
431,250.67 68,803.50
86z,5o1.34 144539.54
431,z5o.67 61,735.78
431250.67 54,530.24
862,501.34 u6,266.oz
431,250.67 47,184.19
431250.67 39,694.90
862,5oL34 86,879.09
431,250.67 32,059.56
431250.67 24,275.33
86z,5o1.34 56,334.89
431250.67 16,339.31
431,250.67 8,248.57
86z,5o1.34 24,587.88
6,468,760.05 899,028.43
330,484.94 5,239,246.68
330,484.94
329,085.36 4,910,161.32
335,502.52 4,574,658.80
664,587.88
342,044.82 4,232,613.98
348,714.70 3,883899.28
690,75952
355,514.63 3,528,384.65
362>447.17 3,i65,937.48
717,961.80
369,514.89 2,796,422.59
376,720.43 2,419,702.16
746,235.32
384,066.48 z,o35,635.68
391,555.77 1, 644,079.91
775,622.25
399,191.11 1, 244,888.80
406,975.34 837,913.46
806,166.45
414>9u.36 423,002.10
423,002.10 0.00
837913.46
5~569,731.6z
7
fo
Resolution Approving Terms of Re-financing
WHEREAS, Orange County, North Carolina (the "County") has
determined to change the terms of the Payment Schedule to that Financing
Agreement and Deed of Trust granted to F. Louis Loyd, III (the "Deed of Trust
Trustee") for the benefit of Branch Banking and Trust Company, successor to
and assignee of BB&T Leasing Corporation ("BB&T") dated as of December 1,
1996, and recorded in Book 1536, Page 459, Orange County Registry; and those
subsequent Modification Agreements dated as of March 1, 1997, and recorded
at Book 1564, Page 163, Orange County Registry, and dated as of June 1, 1998
and recorded at Book 1797, Page 393, Orange County Registry, respectively
(together, the "Original Agreement"); and
WHEREAS, the changes to the terms of the Payment Schedule include
revising the interest rate from 4.92% to 3.90%;
NOW, THEREFORE BE IT RESOLVED by Orange County, North
Carolina, that the proposed changes to the Payment Schedule of the Original
Agreement are hereby approved and the officers designated to sign financing
documents are hereby authorized and directed to take such action as may be
necessary to effectuate such changes. All other terms and conditions of the
Original Agreement and the Payment Schedule thereof remain in full force and
effect.
Adopted this day of August, 2004.
Attestation:
SEAL
Clerk to the Board
Orange County, North Carolina
Chair
Orange County, North Carolina