HomeMy WebLinkAboutAgenda - 12-14-2004-5jORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: December 14, 2004
Action Age a~
Item No. ~_
SUBJECT: Approval of Financing Arrangement for Efland Volunteer Fire Company, Inc. to
Purchase a Realacement Fire Tanker
DEPARTMENT: Budget
PUBLIC HEARING: (Y/N) No
ATTACHMENT (S):
Attachment 1. Letter from Efland
Volunteer Fire Company, Inc. Board of
Directors President
Attachment 2. November 22, 2004 Public
Hearing Notice
Attachment 3. Notes from 11/22/04
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 Efland Volunteer Fire Company, Inc. to enter into a
financing arrangement to purchase a tanker 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, Efland Volunteer Fire Company,
Inc, outlined its plans to replace its 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 to the Orange County Board of County Commissioners Chair,
Mr. Ronnie L, McAdams, President of the Efland Volunteer Fire Company, 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 and awarded the bid to 4 Guys Firetrucks
from Meyersdale, Pennsylvania,
According to Attachment 1, purchase price of the tn~ck totals $188,164. The Department's
Board of Directors agreed to borrow $160,000 from CCB-Hillsborough and to pay the remaining
$28,164 from the Department's capital reserve. The interest rate for the 5-year note is 4,5
percent, Annual payments are estimated to be in the neighborhood of $36,000 and are
projected to begin January 2005 fallowing a projected delivery date of December 28 2004. The
total repayment, including principle and interest, equals $180,000. It is important to note that
these figures may vary slightly depending upon the actual loan closing date.
z
Section 147 of the Internal Revenue Gode of 1986 outlines specific steps that must occur when
a tax supported fire department enters into a financing arrangement.
• Conduct a public hearing - On November 22, 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, Efland Volunteer Fire
Company, 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 City of Mebane. According to June 30, 2004 financial statements, the
district received about $190,097 from those two sources. The department had about $195,082
in its bank accounts as of June 30, 2004. As indicated earlier, the department plans to spend
$28,164 out of its bank accounts to make the down payment on the truck leaving about
$166,918 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 $180,647. 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
approve Efland Volunteer Fire Company, Inc.'s purchase of a replacement fire truck and
authorize the Board of Commissioner Chair to sign the appropriate documents related to the
financing arrangement.
November 29, 2004
Efland Volunteer F/re Co., Inc.
PO Box 89, Efland NC 27243
Donna Dean, Budget Director
Orange County Budget Office
P.O. Box 8181
Hillsborough, NC 27278
Dear Donna:
The Efland Volunteer Fire Department Board of Directors would like to
request the balance of our available fund balance fo be used as a portion of the
down payment on a new fire tanker. This Uuck will replace a 1973 tanker.
The total cost of the tanker will be $188,164.00. We intend on financing
$160,000. We are budgeted for the payments in this fiscal year.
Three banks have given us quotes for the financing. The tanker want out
to bid to five companies, three of whom we have visited.
If you have any questions contact myself or Assistant Chief Peter
Hallenbeck..
Thank you,
Ronnie L. McAdams, President
Efland Volunteer Fine Co, Inc.
CLIPPING OF LEGAL
ADVERTISEMENT
ATTACHED HERE
NORTH CAROLINA a
ORANGE COUNTY
AFFIDAVI'T OF PUBLICATION
PUBLiC NOTICE
PUBLIC NOTICE IS HEREBY
GIVEN that the Efland Volunteer
Fire Company, Inc.. will meet on
Monday, November 22, 2004 at
the Volunteer Fire Department
located at 3900 U. S. 70 West,
Efland, N.C„ 27243 at 7:30 p.m ,
in a public hearing pursuant to
the requirements of section
147(f) of the lntemal Revenue
Code of 1986, as amended, on a
proposal that the Lessee enter
into a Lease-Purchase
agreement under the "Code" in
order to finance the acquisition
of equipment.. The equipment to
be financed consists of a Four
Guys Tanker Truck (the
"Equipment") and'will be located
at the firehouse in Efland, N. C.
To fnence the costs of such
equipment and to pay costs and
expenses incidental to the
financing, the Lessee proposes
to enter into the Lease-Purchase
agreement in the maximum
aggregate principal amount of
$160,000,00. The Lessee will be
required to pay all expenses of
the operating, maintaining, and
insuring the Project and to pay
all taxes on the Equipment. The
rental payments due pursuant to
the lease-purchase agreement
will be payable and secured by a
security interest lien on the
Equipment above her
mentioned.. All persons
interested may appear and be at
said lime and place or may'file
written comments with the
department prior to the hearing
set forth herein above, 10/22/04..
by order of the Efland Volunteer
Fire Company, Inc., November
5, 2004.
November 10, 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 News
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 o1 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: November 10, 2004 and that the said newspaper in which
such notice, paper, documenC, or ]egal advertisement was published
was, at the time of each and every such publication, a newspaper meet-
ing all of the requirements and qualifications of Section 5-~97 of the
General Statutes of Nort9r Carolina and was qualified newspaper with-
ing the meaning of Section 1-597 of the General Statutes of North
Carolina.
This ~~7~day of November, 2004. /~ %i' _ _'
/~~
(Signature of person malting affidavit)
Sworn to and subscribed before me, this ~ clay of November; 2004.
SEAL
1
(Notkrj~ Public)
My Commission Expires: November 16, 2005
November 22, 2004
Efland Volunteer Fire Co., inc.
PO Box 39, Efland NC 27243
Public Notice Meeting
11!22!04
Attending: Peter D, Hallenbeck, Assistant Chief
Call to Arder. P. Hallenbeck, 7:30 PM
Public meeting to discuss the purchase of a new Tanker. There were no other
people present.
Adjourned at 8:00 PM
i
Peter D. Hallenbeck
Assistant Chief, Secretary
Efland Volunteer Fire Co, Inc,
Fire Service Agreement
This agreement, dated November 29, 2004, by and between Efland Volunteer
Fire Co., 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 the Efland tax district comprised of the
West Orange and East Alamance fire districts.
3) Political Subdivision shall not be liable or responsible for the
conduct and activities of Fire DepaRment.
IN WITNESS WHEREOF, the parties have had this agreement executed by duly
authorized representatives thereof.
Efland Volunteer Fire Co. Inc.
Ronnie L.. McAdams
President, Board of Directors
Orange County
By
Name
Title
7
Certificate of A royal
pp
Approval of Chief Elected Official of
Orange County
I, , Chair of the Board of
County Commissioners of Orange County, pursuant to the Internal
Revenue Code of 1936, as amended (the "Code") hereby approve,
authorize the entering into by Efland Volunteer Fire Company, Inc. a
commercial loan by Central Carolina Bank for the amount of
$16Q,000 to finance a fire tanker truck to be located in Efland, NC
2724:1.
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.
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