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HomeMy WebLinkAboutAgenda 01-18-22; 8-h - Approval of Financing Arrangements for New Hope Volunteer Fire Department to Purchase Fire Truck 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: January 18, 2022 Action Agenda Item No. 8-h SUBJECT: Approval of Financing Arrangements for New Hope Volunteer Fire Department to Purchase Fire Truck DEPARTMENT: Finance and Administrative Services ATTACHMENT(S): INFORMATION CONTACT: Attachment 1. November 10, 2021 Public Gary Donaldson, 919-245-2453 Hearing Notice Rebecca Crawford, 919-245-2152 Attachment 2. Board of Directors Letter and November 22, 2021 Public Hearing Notes Attachment 3. Fire Service Agreement Attachment 4. Certificate of Approval PURPOSE: To approve New Hope Volunteer Fire Department (NHFD) entering into a financing arrangement to purchase a fire engine truck, and authorize the Board of Commissioners' Chair to sign the appropriate documents related to the financing arrangements. BACKGROUND: NHFD intends to purchase a fire engine to replace an aging engine originally purchased in 1990. The department went through a competitive bid process and awarded the bid to Atlantic Coast Fire Trucks. The purchase price of the truck is $621,715. The department will make a down payment of$221,715 (not from tax supported dollars) and will borrow the remaining $400,000 in an interest free loan from Piedmont Electric Membership Corporation. The department's unassigned fund balance of$37,682 will not be impacted by this request. Volunteer fire departments are required to obtain Board of County Commissioners approval of such purchases only when they use tax-exempt debt financing to pay for a purchase. Volunteer fire departments are not mandated to obtain Board of County Commissioners approval when making purchases that do not require debt financing. Section 147(f) of the Internal Revenue Code of 1986 outlines specific steps that must occur when a tax supported fire department enters into a financing arrangement. The department has completed the required steps to comply with Section 147. • Conduct a public hearing — On November 22, 2021, NHFD held a public hearing regarding the purchase. NHFD advertised the hearing in The News of Orange (Attachment 1). Per the hearing notes in the Board of Directors Letter (Attachment 2), no individuals signed up for comment or made comment when the floor was open during the hearing. 2 • Obtain approval of the "applicable elected representatives" — In accordance with Section 147, the Board of County Commissioners must approve the Department'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 department. The approval provides a mechanism for the Board of Commissioners to acknowledge that, through this financing arrangement, the Fire Department is pledging use of the Fire Tax District's tax dollars to repay the loan. In order to comply with this IRS requirement, the Chair of the Board of Commissioners must sign the Fire Service Agreement and Certificate of Approval for the district (Attachment 3 and 4). FINANCIAL IMPACT: NHFD plans to finance a portion of the cost of the truck in the amount of $400,000. The Department Board of Directors have agreed to an interest free, 10-year loan with the Piedmont Electric Membership Corporation. The department does not anticipate the purchase will cause an increase in its current district tax rate. SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goal is applicable to this item: • GOAL: CREATE A SAFE COMMUNITY The reduction of risks from vehicle/traffic accidents, childhood and senior injuries, gang activity, substance abuse, and domestic violence. ENVIRONMENTAL IMPACT: There is no Orange County Environmental Responsibility Goal impact associated with this item. RECOMMENDATION(S): The Manager recommends that the Board: 1. Approve New Hope Volunteer Fire Department entering into a financing arrangement to purchase a replacement fire truck; and 2. Authorize the Board of County Commissioners' Chair to sign the appropriate documents related to the financing arrangement. 3 NORTH CAROLINA ORANGE COUNTY AFFIDAVrr OF PUBLICATION Before the undersigned,a Notary Public of Orange County,North Carolina,duly commissioned,qualified, and authorized by law to administer oaths and affirmations, personally appeared Muct- L\wis who, being duly sworn or affirmed, according to law,doth depose and say that they are an authorized employee of The News of Orange County Newspaper, engaged in the publication of a newspaper known as The News of Orange County Newspaper, issued and entered'as second class mail in the Town of Msborough in said County and State; that they are authorized to make this affidavit and sworn statement; that the notice or other legal advertisement, a true copy of which ached hereto was published in The News of Orange County on the following dates: 0 0 UQ that the said newspapers in which such notice, paper, document, or legal advertisement was published at the time of each and every such publication, a newspaper meeting all of the requirements and qualifications of Section 1597 of the General Statutes of North Carolina and was a qualified newspaper within the meaning of Section 1-597 of the General Statutes of North Carolina. This, day of 2021 DONNA S ROSE the Notary Public Pers Co., r Person CNorth Carolina a M My Commission pr" Y commission Expires April 6,2025 Sworn to and subscribed before me,this day of PjDeL,\J 2021 rotary Public My Commission Expires: The New Hope Volunteer Fire Department of Orange County, Inc. will hold its annual meeting on November 22,2021,at 7:00pm at 4012 Whitfield Road, Chapel Hill, NC 27514. During this meeting, elections for officers and board members for the year 2022 will be held. The fire department is purchasing a new Spartan fire truck and a public hearing will be held for residents of the fire district to provide comments. The public hearing is intended to comply with section 147(0 of the Internal Revenue Code of 1986. s - n NEW HOPE 4 Street Address(Station 1): Mailing Address: 4012 Whitfield Road P.O.Box 16484 °4 Chapel Hill,NC 27514 Chapel Hill,NC 27516 FlEo Phone:(919)493-1001 www.newhopefiire.com Fax: (919)419-0241 New Hope Volunteer Fire Department of Orange County, Inc. December 9, 2021 Mr. Gary Donaldson Orange County Finance and Administrative Services PO Box 8181 Hillsborough, NC 27278 Dear Gary, The New Hope Volunteer Fire Department is in the process of purchasing a new fire engine to replace and aging 1990 fire engine. Specifications for the new truck were sent to fire truck dealers to met the requirement for a competitive bid process to purchase the truck. Low bid was awarded to Atlantic Coast Fire Trucks in the amount of$621,715.00. The fire department will make a down payment of$221,715.00. The fire department applied for and received an interest free loan in the amount of$400,000. from Piedmont Electric Membership Corporation to finance the remaining balance on the track. The fire department had a public notice published in the New of Orange on November 10, 2021 and documentation is included with this letter. The fire department held a public hearing on November 22, 2021 at 7:00pm. No one from the public attended and there were no comments offered during the public hearing which closed at 7:20pm. The fire department board of directors ask that the Board of County Commissioners approve and sign the necessary documents to meet the requirements of section 147(0 of the Internal Revenue Service. If you need additional information, please contact me at cliff.carroll(a)-newhooefire.com. Thank you for your assistance with this matter. Regards, n/} � ,, l;, uk Cliff Carroll, President Board of Director; New Hope Fire Department Attachment 3 5 Fire Service Agreement This agreement, dated this day of January, 20 by and between New Hope Volunteer Fire Department, 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 New Hope Volunteer Fire District is a designated fire district with prescribed boundaries pursuant to NCGS § 153A-233; 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: primary firefighting responsibilities (area of responsibility) is New Hope Volunteer Fire District. 2. 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. New Hope Volunteer Fire Department By Name Title Orange County By Name Title 6 Attachment 4 Adomp- ORANGE COUNTY NORTH CAROLINA FINANCE AND ADMINISTRATIVE SERVICES 405 Meadowlands Drive Post Office Box 8181 Phone(919)245-2151 Hillsborough,North Carolina 27278 Fax(919)644-3324 Certificate of Approval Section 147(f) Approval and Written Agreement The undersigned Official of Orange County, NC (hereinafter referred to as "County") pursuant to section 147(f) of the Internal Revenue Code of 1986, as amended (the "code"), hereby approves the entering into by New Hope Volunteer Fire Department of an Agreement in an aggregate principal amount not to exceed $400,000.00 to finance equipment consisting of One (1) New Atlantic Coast Fire Engine Truck, which will be located atthe fire house of the New Hope Volunteer Fire Department. This approval does not in any way constitute any financial involvement or obligation of the County. Furthermore, this document acknowledges that for consideration, the receipt and sufficiency of which are hereby acknowledged, the New Hope Volunteer Fire Department has provided firefighting and other services for the County for many years and New Hope Volunteer Fire Department hereby agrees to meet the requirement to continue to provide firefighting and other services for the County. Dated as of - New Hope Volunteer Fire Department Orange County, NC Cliff Carroll,President Signature of authorized representative Name and Title An Equal Opportunity/Affirmative Action Employer www.orangecountync.gov