HomeMy WebLinkAboutAgenda - 12-03-2001-8kORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Dale: December 3, 2001
Action Agentl
' Item No. ~_
SUBJECT: Approval of Financing Arrengemenf for Orange Rural Fire Department tc
P h Repl t F're Truck
DEPARTMENT: Budget PUBLIC HEARING: (YIN) No
ATTACHMENT(St: INFORMATION CONTACT:
Attachment 1. Letter from Orange Rural Donna Dean, 245-2751
Fire Oepartment Boats of Dlroctars
Chairperson
Attachment 2. October 24, 2001 Public TELEPHONE NUMBERS:
Hearing Notice Hillsborough ]32.8181
Attachment 3. Fire Service Agreement Chapel Hill 868-0501
Attachment 4. Certificate of Approval Durham 688-]331
Mebane 33632]-2031
PURPOSE: Td approve a request from Orange Rural Fire Department to enter into a hnancing
anengement to purchase a fire track and authorize the BoaN of Commieaionar Chair to sign the
appropriate tlocumems relatetl to the financing anengement.
BACKGROUND: During last spring's butlget planning process, Alois Cellemyn, Chair of the
Orenge Rurel Fire Department's BoaN of Dimctors, antl JeH Cabe, the tleparlmenfa Fire Chief,
outlined the tleparVnenfa plans tc replace one of Rs fire tracks sometime [luring the current
65ca1 year. The Depadmen[ purchased [he torten[ track in 19]], antl due to Rs age, it requires
constant, end often times wshy, maintenance and upkeep.
In a recent letter addressed [o the Orange County Boats of County Commissipnere Chair, Mr.
Cellemyn confirmed the department's intent [o proceetl with the planned purchase (Attachment
1). AcrnMing ip the letter, [he total cost of the Wck is $182,288. The Oepattmenfa BoaN of
Oirec[grs has agreed to pay one-half of the purchase price ($81,133) from its savings account.
First Bankers Comore[ion would finance [he remaining $81,133 through a leaselpurchase
pro0ram oRered by the track manufacturer, KME. The terms of [he fnancing arrangement
provitle far start-year repayment plan antl an interest rate of 4.84 percent Annual payments
total $10.425 and are scheduletl to begin August 1, 2002. The total repaymenp inclutling
principle and interest, equals $104,250.
Section 14] of the Internal Revenue Code of 1986 outlines specrfic e<epa that must occur
before the department can enter'mto [he fnancing armngemenl.
z
• Contluet a public hearing- On October 24, 2001, the department held a public hearing
regaMing the purchase. The Department advertised the hearing In the News of Orange
County (Atachment 2). No residents were preaent at the hearing.
Following the public hearing, the Board of pirectorc voted to use funds totaling $81,133
fmm its savings account to make a down payment on IDs truck and to finance the
remaining funds ($81,133) with First Bankers Corporation
• Obtain approval of the "applicable elected representatives" - In eccoNance with
Section 147, the Board of County Commissioners must approve the District's plan to
enter into the debt arrangement. This approval does not crealeliability on the part of
Orange County nor does it make [he County responsible for [he repayment of any debt
assumed by the fre district The approval provides a mechanism for the Commissioners
to acknowledge that, through this fnancing arrengement, Orange Rural Fire Department
is pledging use of the OistricPS tax dollars to repay the loan. In oNer to comply with this
IR$ requirement, Mc Callemyn's letter requests the Chair ctthe Commissionsrs sign the
Fire Service Agreement (Attachment 3j and Certificate of Approval (Attachment 4).
FINANCIAL IMPACT: The department's malor revenues consist of County fre district taxes
and fees for services fmm the Town of Hillsborough. AccoMinq to June 30, 2001 financial
statemeMS completed by the Department, the fire district received about $298,000 from those
Iwe aeumes. The department had about $224,600 in ita bank accounts as of June 30,2001. As
indicated eatlieq the department plena to spend $81,133 out of Rs bank accounts to make the
down payment on the track leaving about $140,000 in Rs bank acmuMS. Funds remaining in
the Department's bank accounts would serve as a reserve that would potentially be used to
cover unantiGpatsd major expenses such as repairs or replacements of other older equipment.
The tleparhnent's current year County approved budget totals $310,012, and the Town of
Hillsborough's contract with [he department totals $300,000. The departments cunen[ year
budget dose not inGUde funds for debt service associated with this purchase since payments
will not begin until eAsr delivery of the track. The deparment's 2002-W fiscal year budget will
reflect the amount of the new payments. The Deparment dose no[ entlclpata requesting an
additional tax rate increase to cover the payments.
RECOMMENDATION(S): The Manager recommends that the 608N of County
Commisalonere approve the Orange Rural Fire Departments purchase of a replacement fire
truck and authorize the BoaN of Commissioner Chair to sign the appropriate documents related
to the financing arrangement
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Ocbhe 24, 2001
Dr. SYcphcn H HaOCptis, Chav
Omnge Coumy Cu~ismvms
P.O. BOx 8181 '
Hdkbomugh, N.G 2tt]8
FJ?: Ormga Rmal F've Depmtmevt.
~ Dc H.,
lwwuvoB YOU Nis l~lembelulfofNe OUnge Rmal F"ve Divbia BreMofD'ustwa. Weise in lM pracs
ofrepYUngooe ofaur aldtnmki wiNa row KOff Pmnpa Tuck Tbetmlaslb$IW.,266 eM He ORFD
Bmrd has vMd to paY fu halfoFHus mnauaa mrt ofawssving ammm[ Wewens to take adremage ofe (save
and opdon program Hut KME is oRm'ng for Weremaming $81,133. ties wHl Imax u in my savings ar<oum, 3
vwmhs opualivg cauaz~cave in ease wen lil wshe fiuma
As peetaf IAis egreemma l4NE has requasmdNaz wags Ne -Chief&tecrmi O~icbf a/pmrge Cowry"m sign
Hw enclosetl loam im. lTm documents wti(y Ne(we are axhori M esenapproved"Frze Disuirt^ ro make
Hiss agreumem. Thc<dccumems do rot awte soy IiabiHry on Ne put of 0.age Cwoty nor will Orange
County be respoauible far Ne paymam in a^Y way.
I woultl apprm rayar euwion to stiffs amtla,azweere bopmgto final:--tNa agmnmt wNtiv Ne nes[two
weeks.
Pkaze feel frm m ull me ifym love any quatiom shout Naedoammm.
Siramely,
Alois Callemyq Clmu
CraogoRwel Fvx D'uo-ict Paud ofDireamn
~o~-.~_e. e9.,, a., ...a. Aa~keaa
NORTH CAROLINA
ORANQH COUN'CY
APT90AVIT OF PYiLIGATroN
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' FIRE BERVICE ACREEMENI' l~)h]fl't1TtVal3
TtII6 AGREEh1ENT dated Utia 20Ilt day of . 20L by aad baweev Ousge t4ua1
Fve oenanwat No. 1, Ivc., a body nwporem o~®d wde Poe Im of the Sme of North Gmlma,
aeCF UapvmteoC'A,oata~Cu~mr.anadrwtmc.mel°wu6w Bobdrviam"}
WI®tF1$ Fre UgWvmmt i. a not foc Pofa utgmimiai duly eW~mimi tir me P~aPOw of
ptm~idisefitdi~gavrcua marmwiPoin NeP~^sdei®ofdtePdi6cd 9t6d'n+s®; m4
WIIDtEA6, >be Patties av'vl~ m mmr inm m epammt utlm6 fmdt Ste am and dimu of the F
pgiami®t
i`RriV TFIEREPORF dw Fve D,ysmomt aidl'dhirsl9ihdrv®'os dshadry apeeae EcOOiw:
1. PdiEUI SSdnu®m aemgeias Post F d lnavdm fvefighhng servvcs m the
hmeaM gmuallY deaudied ama or asses
2. 'Itwareamxhitli Frelsryummthas Pa~yfiidiehungse~mu (ua ofsrsPma3~ry)
is oRAn/4/ L[/.PJH- F/fa'r Ga'6~1-f~
3. Pdcd Sibdivam dub na be liable a supmnble f¢ Poe maaa and activities of Fiu
DyBmR®L
IN WRNESB WiRiRPAF,Poepaniaharehddds a®emmlexaaeilnduy
amh® ilaytee®h4vesthae~:
Oravg Rml Fee RaParOmm[ No. 1, Lv.
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Attachmwt 0
CERTIFTCATEOFAPPROVAL
Approval of ChieY Elec[ed Official of
Orange Couu[y
1, ,the Chavmw ofthe BueN oC
Cowry Commisai ers of Orange COwty, pmsnwtto the lntemal Revenue Cadc of
1986, ae amended (Ne'Code ~, hrreby approve and auWmizc the wring into by
Orange Rurel Fire Department No. I, inc. ofa Volwlea Fve Deparlmwt Irsac wd
Optiov Agiamnaur M1etweea it ae lessee ®d P.h43 FVe Apparatus mm Lwm in w
aggegate privapal smowrno[ w eneced $81,133 [0 6vance aKME Pumper Truck
I«az~azHillabmough, NC 2]2]8-2540.
Executionof dru d«nment in ne way creates liability ov the pen ofOrevge Coumya do
Orznge Cowry is not responsible fortbe repayment of wybonds issued puxauant hereto.
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