HomeMy WebLinkAboutAgenda - 11-16-2004-5gORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: November 16, 2004
Action Agenda
Item No. __~
SUBJECT: Approval of Financing Arrangement for Orange Rural Fire Department No, 1,
Inc. to Purchase a Replacement Fire Truck
DEPARTMENT: Budget PUBLIC HEARING: (YIN) No
ATTACHMENT (S):
Attachment 1. Letter from Orange Rural
Fire Department No, 1, Inc. Board of
Directors President
Attachment 2. October 13, 2004 Public
Hearing Notice
Attachment 3. Notes from 10/19/04
Public Meeting
Attachment 4. Fire Service Agreement
Attachment 5. Certificate of Approval
INFORMATION CONTACT:
Donna Dean 245-2151
TELEPHONE NUMBERS:
Hillsborough 732-8181
Chapel Hill 968-4501
Durham 688-7331
Mebane 336-227-2031
PURPOSE: To approve a request from Orange Rural Fire Department No. 1, Inc, to enter into
a financing arrangement to purchase a fire truck and authorize the Board of Commissioner
Chair to sign the appropriate documents related to the financing arrangement,
BACKGROUND: During last spring's budget planning process, Orange Rural Fire Department
No. 1, Inc, outlined its plans to replace a 1973 tanker sometime during the current fiscal year.
Due to the age of the truck, it required constant, and often times costly, maintenance and
upkeep.
In the attached letter addressed tc the Orange County Board of County Commissioners Chair,
Mr, Edwin Riley, President of the Orange Rural Fire Department No. 1, Inc, confirmed the
department's intent to proceed with the planned purchase (Attachment 1 of this abstract), The
department went through a competitive bid process with U,S, Tanker Fire Apparatus, Inc. from
Burlington, Wisconsin submitting the lowest bid.
According to Attachment 1, purchase price of the truck totals $191,682. The Department's
Board of Directors agreed to barrow $150,000 from Central Carolina Bank and Trust and to pay
the remaining $41,682 from the Department's capital reserve ($21,682) and the Department's
unappropriated fund balance ($20,000), The interest rate far the 5-year note is 4.5 percent,
Annual payments are estimated to be in the neighborhood of $33,500 and are projected to
begin January 2005 following a projected delivery date of December 2004, The total
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repayment, including principle and interest, equals $167,510. It is important to note that these
figures may vary slightly depending upon the actual loan closing date.
Section 147 of the Internal Revenue Code of 1986 outlines specific steps that must occur when
a tax supported fire department enters into a financing arrangement.
• Conduct a public hearing - On October 19, 2004, the department held a public hearing
regarding the purchase. The Department advertised the hearing in the News of Orange
(Attachment 2 of this abstract). Per the Attachment 3 of this abstract, no residents were
present at the hearing and the Department did not receive any written comments from
residents of the district.
Obtain approval of the "applicable elected representatives" - In accordance with
Section 147, the Board of County Commissioners must approve the District's plan to
enter into the debt arrangement. This approval does not create liability on the part of
Orange County nor does it make the County responsible for the repayment of any debt
assumed by the fire district. The approval provides a mechanism for the Commissioners
to acknowledge that, through this financing arrangement, Orange Rural Fire Department
No. 1, Inc. is pledging use of the District's tax dollars to repay the loan. In order to
comply with this IRS requirement, the Chair of the Commissioners must sign the Fire
Service Agreement (Attachment 4) and Certificate of Approval (Attachment 5).
FINANCIAL IMPACT: The department's major revenues consist of County fire district taxes and
fees for service from the Town of Hillsborough. According to June 30, 2004 financial
statements, the district received about $832,000 from those two sources. The department had
about $165,316 in its bank accounts as of June 30, 2004. As indicated earlier, the department
plans to spend $21,682 out of its bank accounts to make the down payment on the truck
leaving about $143,634 in its bank accounts. Funds remaining in the Department's bank
accounts would serve as a reserve that would potentially be used to cover unanticipated major
expenses such as repairs or replacements of other older equipment.
The departments' current year County approved budget totals $310,012. The department's
approved budget for fiscal year 2004-05 includes funds for debt service associated with this
purchase.
RECOMMENDATION(S): The Manager recommends that the Board of County Commissioners:
1. Approve Orange Rural Fire Department No. 1, Inc.'s purchase of a replacement fire
truck;
2. Appropriate $20,000 from the Department's unappropriated fund balance; and
3. Authorize the Chair to sign the appropriate documents related to the financing
arrangement..
®range Rural Fire ®e~t. 3
['.O. Box 151 1 • Hillsborough, NC 27278
November 1, 2004
Domra Dean, Budget Director
Orange County Budget Office
P.O. Box 8181
HiIlsborough,l`?C 27278
Dear Dolma:
The Orange Rural Fire Department Board of Directors would like to request $20,000.00
from our unappropriated fund balance to be used as a portion of the down payment on a
new fire truck, This truck will replace a 1973 tanker.
The total cost of the truck will be $191,682A0. We intend on paying $21,682.00 from our
Capital Reserves Account. This will leave us financing $150,000,00. We have budgeted
for the payments in this fiscal year..
If you have any questions please do not hesitate to give me a call at 919-732-7911
Thank you, ////
is A...:.-, T T: i~~.,..'.1 /
LLLVV tAi 1.1\11ey,15GJllient
Orange Rural Fire Department
CLIPPING OF LEGAL
ADVERTISEMENT
ATTACHED MERE
NORTH CAROLINA
ORANGE COUNTY
AFFIDAVIT OF PUBLICATION
Public Notice
Votice is herby given that the Orange Rural Fire
rt No.1, Inc. will meet on Tuesday, 10/19/2004 at the fire
it located at 206 S. Churton Street Hillsborough, NC
:30pm, in a public hearing pursuant to the requirements
147(f) of the Internal Revenue Oode of 1986, as
on a proposal that the lessee enter into alease-to-
agreement under the "Code' in order to finance the
i of equipment.. The equipment to be financed consists
Tanker (the Equipment) and will be located at the
in Hillsborough, NO. To finance the costs of such
and to pay costs and expenses incidental to the
the Lessee proposes to enter into the Lease-Purchase
t in the maximum aggregate principal amount of
)0 The lessee will be required to pay all expenses of
ing, maintaining, and insuring the Project and to pay all
re Equipment. The rental payments due pursuant to the
chase agreement will be payable and secured by a
terest Lien on the Equipment above here mentioned. All
terested may appear and be at said time and place or
iften comments with the department prior to the hearing
ierein above, 10/13/2004, By the order of the Orange
Department No t, Ina
3, 2004.
Before the undersigned, a Notary Public of said County and State.
duly commissioned, qualified, and authorized by law to administer
oaths, personally appeared Tony Britt, who being first duly sworn.
deposes and says: that he (she) is an authorized employee of The New=.
of Orange County, engaged in the publication of a newspaper known as
The News of Orange County published, issued, and entered as second
class mail in the City of Hillsborough, in said County and State; that he
(she) is authorized to make this affidavit and sworn statement; that the
notice or other legal advertisement, a true copy of which is attached
hereto, was published in The News of Orange County on the following
dates: October 13, 2004 and that the said newspaper in which such
notice, paper, document, or legal advertisement was published was, al
the time of each and every such publication, a newspaper meeting all of
the requirements and qualifications of Section 8-597 of the General
Statutes of North Carolina and was qualified newspaper withing the
meaning of~Se'ction 1-597 of the General Statutes of North C..,aero~lin-a.
This / /da of October, 2004. /~/
lrf''u/I """~~l
(Signature of pers~n making affidavit)
Sworn to and subscribed before me, this ~[/ day of October, 2004.
SLAL
/ ~I~c1~v
(No@o- y Public)
My Commission Expires: November 16, 2008
5
Public Notice Meeting
10/19/2004
Attending: Todd Riley, President, Alois Callemyn, Vice President
Call to order: T, Riley @ 7:.30
Public meeting to discuss the purchase of a new fire truck. There were no other people
present,.
Adjourned @ 8:00
Fire Service Agreement
This agreement, dated this~~ day of oVem~Z,?~( , 20 Opt , by and
between Orange Rural Fire Department No. 1, Inc., a body corporate organized
under the Laws of the State of North Carolina, the ("Fire Department"), and
Orange County, a body politic, the ("Political Subdivision").
WHEREAS, Fire Department is a not for profit organization duly authorized for
the purpose of providing firefighting services in an area within the jurisdiction of
the Political Subdivision; and,
WHEREAS, the parties wish to enter into an agreement setting forth the area and
duties of the Fire Department..
NOW THEREFORE, the Fire Department and Political Subdivision do hereby
agree as follow;
1.. Political Subdivision recognizes that Fire Department provides firefighting
services to the hereafter generally described area or areas;
2. The area in which Fire Department has primary firefighting responsibilities
(area of responsibility) is Orange Rural Fire District.
3. Political Subdivision shall not be liable or responsible for the conduct and
activities of Fire Department.
IN WITNESS WHEREOF, the parties have had this agreement executed by duly
authorized representatives thereof.
Orange.lj}~ral F
Name `~<° ~` i~
Title /`YiiY
Orange Gounty
By
Name
Title
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Certificate of Approval
Approval of Chief Elected Official of
Orange County
I,
chairman of the Board
of County Commissioners of Orange County, pursuant to the
Internal Revenue Code of 1986, as amended (the "Code") hereby
approve, authorize the entering into by Orange Rural Fire
Department No. 1, Inc. a commercial loan by Central Carolina Bank
for the amount of $150,000 to finance a fire tanker truck to be
located at in Hillsborough, NC 27278.
Execution of this document in no way creates liability on the part of
Orange County and Orange County is not responsible for the
repayment of any loan pursuant hereto.
By
Title
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