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