HomeMy WebLinkAboutAgenda 04-05-22; 5-a - Public Hearing on the Financing of Various Capital Investment Plan Projects 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: April 5, 2022
Action Agenda
Item No. 5-a
SUBJECT: Public Hearing on the Financing of Various Capital Investment Plan Projects
DEPARTMENT: Finance and Administrative
Services
ATTACHMENT(S): INFORMATION CONTACT:
Attachment 1. Resolution Gary Donaldson, (919) 245-2453
Attachment 2. Copy of Public Hearing Rebecca Crawford, (919) 245-2152
Notice Robert Jessup, (919) 933-9891
Attachment 3. PowerPoint Presentation
PURPOSE: To conduct a public hearing on the issuance of approximately $46 Million to finance
capital investment projects and equipment for the fiscal year; and approve a related resolution
supporting the County's application to the Local Government Commission (LGC) for its approval
of the financing arrangements. The financing and transaction costs are included in the loan
amount.
BACKGROUND: County staff estimates that the total amount to be financed for capital
investment projects and equipment will be approximately $46 Million. The statutes require that
the County conduct a public hearing on the proposed financing. A copy of the published notice
for this public hearing is provided (Attachment 2).
The notice of public hearing was advertised in The Herald Sun and the News of Orange.
After conducting the public hearing and receiving public input, the Board will consider the adoption
of the resolution (Attachment 1). This resolution formally requests the required approval from the
North Carolina Local Government Commission (LGC) for the County's financing, and makes
certain findings of fact as required under the LGC's guidelines. County staff has been in contact
with the LGC staff, and staff expects no issues in receiving LGC approval.
The total of the estimated project costs is $43 million, while the requested approval is for a loan
amount not to exceed $46 million. The difference between the two figures covers financing costs.
The $46 million figure was derived while staff was considering financing that would be a public
sale bond offering, instead of the private bank placement now being pursuing. The public sale
offering has higher financing costs, and the means in which bonds are sold to investors can lead
to a higher loan amount even with no higher total cost to the County. The final loan amount will
not exceed the amount the County needs to pay project costs and financing costs.
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If the Board adopts the resolution indicating its intent to continue with the financing plan, the Board
will be asked to consider a resolution giving final approval to the financing plans at its Business
meeting on May 3, 2022. Under the current schedule, County staff expects to set the final interest
rates and close by the end of May.
FINANCIAL IMPACT: There is no financial impact related to this action. However, there will be
a financial impact in proceeding with the financing. A preliminary estimate of maximum debt
service applicable to the capital investment projects and equipment financing would require the
highest debt service payment of$4.14 million in FY 2024 (based on current market interest rates).
The tax rate equivalent for the estimated highest debt service payment is approximately $0.0193
(1.93 cents).
SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goals are applicable
to this item:
• GOAL: FOSTER A COMMUNITY CULTURE THAT REJECTS OPPRESSION AND
INEQUITY
The fair treatment and meaningful involvement of all people regardless of race or color;
religious or philosophical beliefs; sex, gender or sexual orientation; national origin or ethnic
background; age; military service; disability; and familial, residential or economic status.
• GOAL: CREATE A SAFE COMMUNITY
The reduction of risks from vehicle/traffic accidents, childhood and senior injuries, gang
activity, substance abuse and domestic violence.
• GOAL: ENABLE FULL CIVIC PARTICIPATION
Ensure that Orange County residents are able to engage government through voting and
volunteering by eliminating disparities in participation and barriers to participation.
ENVIRONMENTAL IMPACT: The following Orange County Environmental Responsibility Goal
impacts are applicable to this item:
• ENERGY EFFICIENCY AND WASTE REDUCTION
Initiate policies and programs that: 1) conserve energy; 2) reduce resource consumption;
3) increase the use of recycled and renewable resources; and 4) minimize waste stream
impacts on the environment.
• RESULTANT IMPACT ON NATURAL RESOURCES AND AIR QUALITY
Assess and where possible mitigate adverse impacts created to the natural resources of
the site and adjoining area. Minimize production of greenhouse gases.
RECOMMENDATION(S): The Manager recommends that the Board:
1) Conduct the public hearing;
2) Close the public hearing; and
3) Adopt the resolution supporting the application to the Local Government Commission
for approval of the financing.
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RES-2022-013 Attachment 1
s*h draft of 3/14/2022
Resolution supporting an application to the Local Government
Commission for its approval of a County Financing Agreement
- 2022 Multiple Project Installment Financing
Introduction --
The Orange County Board of Commissioners has previously determined to
carry out various public improvements and acquisitions, as identified in the County's
capital improvement plan and as described in Exhibit A.
The Board has also determined to finance the costs of these projects through
an installment financing, as authorized under Section 160A-20 of the North Carolina
General Statutes. In an installment financing, the County's repayment obligation is
secured by a mortgage-type interest in all or part of the property being financed, but
not by any pledge of the County's taxing power or any specific revenue stream.
North Carolina law requires that the County's financing be approved by the
North Carolina Local Government Commission (the "LGC"), a division of the North
Carolina State Treasurer's office. Under the LGC's guidelines, this governing body
must make certain findings of fact to support the County's application for the LGC's
approval of the County's financing arrangements.
1. THEREFORE, BE IT RESOLVED by the Orange County Board of
Commissioners, as follows:
(a) The County makes a preliminary determination to finance
approximately $46,000,000 to pay capital costs of public improvements and
acquisitions,and in particular those described in Exhibit A, and to pay financing costs.
(b) The Board will determine the final amount to be financed by a later
resolution. The final amount financed may be slightly lower or slightly higher than
$49,000,000, but the total amount financed will not exceed the amounts estimated
for the project costs and financing costs. Some of the financing proceeds may
represent reimbursement to the County for prior expenditures on project costs.
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2. The Board makes the following findings of fact in support of the
County's application to the LGC:
(a) The proposed projects are necessary and appropriate for the County
under all the circumstances.
(b) The proposed installment financing is preferable to a bond issue for the
same purposes.
The County has no meaningful ability to issue non-voted general obligation
bonds for these projects. It is appropriate for the County to balance its capital
program between various types of financings, and the County is using general
obligation bonds for additional school capital projects. The County expects that in the
current interest rate environment for municipal securities there would be no material
difference in the overall financing costs between general obligation bonds and
installment financings for these projects. These projects will produce no revenues
that could be used to support a self-liquidating financing.
(c) The estimated sums to fall due under the proposed financing contract
are adequate and not excessive for the proposed purpose. The County will closely
review proposed financing rates against market rates with guidance from the LGC and
the County's financial adviser. All amounts financed will reflect either approved
contracts, previous actual expenditures, or professional estimates.
(d) As confirmed by the County's Finance Officer, (i) the County's debt
management procedures and policies are sound and in compliance with law, and (ii)
the County is not in default under any of its debt service obligations.
(e) Although the County expects there will be tax increases associated with
the County's overall capital improvement program, any tax increase directly
attributable to the current proposed financing will be minimal. The County will
manage the projects and its borrowing plans so as to minimize the tax impact while
still allowing the projects to proceed. The County believes that the tax rate impact of
this financing is reasonable under all the circumstances.
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(f) The County Attorney is of the opinion that the proposed projects are
authorized by law and are purposes for which public funds of the County may be
expended pursuant to the Constitution and laws of North Carolina.
3. Additionally, the Board resolves as follows:
(a) The County intends that the adoption of this resolution will be a
declaration of the County's official intent to reimburse project expenditures from
financing proceeds. The County intends that funds that have been advanced for
project costs, or which may be so advanced, from the County's general fund, or any
other County fund, may be reimbursed from the financing proceeds.
(b) The Board directs the County Manager and the Finance Officer to take
all appropriate steps toward the completion of the financing, including (i) completing
an application to the LGC for its approval of the proposed financing, and (ii) soliciting
one or more proposals from financial institutions to provide the financing. The Board
ratifies all prior actions of County representatives in this regard.
(c) This resolution takes effect immediately.
* * * * * * * * * * * * * * * * *
I certify as follows: that the foregoing resolution (which includes the attached
Exhibit A) was properly adopted at a meeting of the Board of Commissioners of
Orange County, North Carolina; that this meeting was properly called and held on
April 5, 2022; that a quorum was present and acting throughout this meeting; and
that this resolution has not been modified or amended, and remains in full effect as of
today.
Dated this day of , 2022.
[SEAL]
Laura Jensen
Clerk, Board of Commissioners
Orange County, North Carolina
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Exhibit A - list of projects to be financed with estimated amounts
Project Est.Amount ($)
Lake Orange Dam Remediation 873,399
Parks and Recreation (Repairs and Renovations)
R&R 163,522
Lands Legacy 250,000
Conservation Easement 262,000
Neuse River Rules Nutrient Management 27,000
Solid Waste Vehicle Replacements 516,739
Solid Waste Equipment Replacement- Grinder 833,500
Commercial and Demolition (C&D) Construction
Phase II 230,643
High Rock Improvements 470,000
Facility Accessibility, Safety and Security
Improvements 195,584
Heating, Ventilation, and Air Condition (HVAC)
Projects 1,354,546
Major Plumbing Repairs 61,410
Orange County Southern Branch Library (County
portion) 18,965,438
Parking Lot Improvements 241,648
Phillip Nick Waters Building Remediation 545,242
Roof& Building Facade Projects 1,212,106
Criminal Justice Resource Department 17,598
Southern Campus Expansion 299,422
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Communication System Improvements 157,755
Emergency Services Substations
Efland Emergency Medical Services (EMS) &
Medical Examiners Station 4,713,298
Waterstone Emergency Medical Services (EMS)
Station & Location Study 3,506,702
Sportsplex - Facility Maintenance/Replacement 104,332
Information Technology Governance Council
(ITGC) 500,000
Information Technology Infrastructure 1,376,519
Sheriff Vehicles 255,473
Emergency Medical Services Vehicles 439,091
Department of Environmental, Agriculture and 68,650
Recreation (DEAPR) Vehicles
Animal Services Vehicles 47,666
Orange Public Transit (OPT) Vehicle Replacement 110,627
Chapel Hill - Carrboro Schools
Technology 908,047
Roofing 484,607
Recurring Capital 1,810,800
Fire Safety 164,172
Supplemental Deferred 217,568
Stormwater Management 105,295
Orange County Schools
Recurring Capital 1,189,200
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Supplemental Deferred 320,400
TOTAL $43,000,000
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Attachment 2
s*h draft of 3/11/22
Orange County, North Carolina -- Notice of Public Hearing
2022 Installment Financing for Various Projects
The Board of Commissioners (the "Board") of Orange County (the "County"),
North Carolina, will hold a public hearing on April 5, 2022, at 7:00 p.m. (or as soon
thereafter as the matter may be heard). The purpose of the hearing is to take public
comment concerning a proposed financing contract, under which the County would
borrow an amount expected not to exceed $46,000,000 to pay for the various public
improvements and acquisitions shown below, and to pay financing costs:
Project Est.Amount ($)
Lake Orange Dam Remediation 873,399
Parks and Rec R&R 163,522
Lands Legacy 250,000
Conservation Easement 262,000
Neuse River Rules Nutrient Management 27,000
Solid Waste Vehicle Replacements 516,739
Solid Waste Equipment Replacement- Grinder 833,500
C&D Construction Phase II 230,643
High Rock Improvements 470,000
Facility Accessibility, Safety and Security
Improvements 195,584
HVAC Projects 1,354,546
Major Plumbing Repairs 61,410
10
Orange County Southern Branch Library (County
portion) 18,965,438
Parking Lot Improvements 241,648
Phillip Nick Waters Building Remediation 545,242
Roof& Building Facade Projects 1,212,106
Criminal Justice Resource Department 17,598
Southern Campus Expansion 299,422
Communication System Improvements 157,755
Emergency Services Substations
Efland EMS & Medical Examiners Station 4,713,298
Waterstone EMS Station & Location Study 3,506,702
Sportsplex - Facility Maintenance/Replacement 104,332
ITGC 500,000
IT Infrastructure 1,376,519
Sheriff Vehicles 255,473
EMS Vehicles 439,091
DEAPR Vehicles 68,650
Animal Services Vehicles 47,666
OPT Vehicle Replacement 110,627
Chapel Hill - Carrboro Schools
Technology 908,047
Roofing 484,607
Recurring Capital 1,810,800
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Fire Safety 164,172
Supplemental Deferred 217,568
Stormwater Management 105,295
Orange County Schools
Recurring Capital 1,189,200
Supplemental Deferred 320,400
TOTAL $43,000,000
The total amount financed will not exceed the amounts estimated for the
project costs and financing costs.
The hearing will be held in the Board's usual meeting room in the County's
Whitted Building, 300 West Tryon Street, Hillsborough, North Carolina.
The proposed financing would be secured by a lien on some or all of the
property purchased or improved through the financing as well as the County's
promise to repay the financing, but there would be no recourse against the County or
its property(other than the pledged property) if there were a default on the financing.
All interested persons will be heard. The County's plans are subject to change
based on the comments received at the public hearing and the Board's subsequent
discussion and consideration. The County's entering into the financing is subject to
obtaining approval from the North Carolina Local Government Commission.
Persons wishing to make written comments in advance of the hearing or
wishing more information concerning the subject of the hearing may contact Gary
Donaldson, Orange County Chief Financial Officer, Post Office Box 8181, Hillsborough,
NC 27278 (telephone 919/245-2453, email gdonaldson@orangecountync.gov).
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OR- -A-NGE COUNTY
NORTH CAROLINA
Series 2022 Limited Obligation Bonds
Spring Financing Resolution
Gary Donaldson, Chief Financial Officer
April5, 2022
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Purpose
➢ Conduct Public Hearing for Limited Obligation Bonds pursuant to NC Statute Section 160A-20
➢ Close Public Hearing
➢ Obtain Board Approval of Resolution to Proceed with Filing Local Government Commission Application for
Series 2022 Limited Obligation Bonds
➢ Funds our FY 2021-22 Capital Investment Plan through this Series 2022 Limited Obligation Bonds are
secured by a Deed of Trust, with a security interest in various County and School facilities.
➢ The Series 2022 Limited Obligation Bonds will fund various County projects including:
- Vehicles and Equipment (5-8 Years useful life): $3.6 Million
- County Projects (up to 20 years useful life): $34.2 Million
- School Prolects (up to 20 years useful life): $5.2 Million
TOTAL: $43 Million
ORANGE COUNTY
NORTH CAROLINA
Pro ect Est.Amount($)
rLakeran a Dam Remediation
and Recreation Re airs and Renovations R&RLe acrvation Easement for Moorefields Foundation
Neuse River Rules Nutrient Management M
Solid Waste Vehicle Replacements
Solid Waste E ui ment Re lacement—Grinder
Construction and Demolition (C&D) Construction Phase II .-
Hi h Rock Improvements - I oil
Facilit Accessibility, Safety and Security Improvements •
Heatin , Ventilation and Air Conditioning HVAC Projects - -.
Ma'or Plumbing Repairs -
Oran a County Southern Branch Library (County portion) : •.
Parkin Lot Improvements
Philli Nick Waters Building Remediation -
Roof& Buildin Fa ade Projects
Criminal Justice Resource Department •:
Southern Cam us Ex ansion D arking Improvements) ••
Communication S stem Im rovements
Emer ency Services Substations
Efland Emer enc Medical Service EMS & Medical Examiners Station - •:
Waterstone Emergency Medical Service EMS Station & Locati
S orts lex- Facility Maintenance/Replacement
Information Technology Governance Council ITGC Initiatives of
Information Technology IT Infrastructure •
Sheriff Vehicles
Emer ency Medical Services EMS Vehicles •
De artment of Environment, Agriculture, Parks and Recreation DEAPR Vehicles •:
Animal Services Vehicles •••
Oran a Public Transit OPT Vehicle Replacement •
Cha el Hill —Carrboro Schools
Technninriv •�:
Roofin
Reclirrinni Ca ital _
Fire Safet
Su plernental Deferred •:
Stormwater Management
Oran a County Schools
Recurring Capital
Supplemental Deferred
Future Debt Service 15
Debt Model Metrics 60.0
50.0
40.0 ■
N —
30.0 —
20.0
10.0 - '
202320242025202620272028202920302031203220332034
■ Existing Debt Service ■CIP Debt Service Future Additional School Debt
Cash Flow Statistics Debt Ratios
Revenue
Tax Rate Gross Annual from Tax Capital Adjusted Capital Debt to DS to GF
Year Equivalent Surplus/Deficit Rate Reserve Surplus/ Reserve AV Revenues
Equivalent Utilized (Deficit) Balance
2023 0.254 (663,404) 550,150 113,254 1.59% 15.20%
2024 1.004 (1,616,405) 2,805,765 - 1,189,360 1,076,106 1.73% 15.17%
2025 - (2,617,022) 2,861,880 - 244,858 1,320,965 1.63% 15.29%
2026 - (3,940,807) 3,082,749 858,058 - 462,907 1.46% 15.51%
2027 1.124 (4,809,708) 5,786,078 - 976,370 1,439,277 1.58% 15.37%
2028 - (2,146,257) 5,905,757 - 3,759,499 5,198,776 1.47% 14.17%
2029 - (5,056,527) 6,027,956 - 971,429 6,170,205 1.56% 14.93%
2030 - (5,109,337) 6,493,335 - 1,383,998 7,554,203 1.42% 14.69%
2031 - (7,245,290) 6,279,604 965,686 - 6,588,517 1.47% 15.15%
2032 - (7,892,953) 6,409,449 1,483,504 - 5,105,013 1.40% 15.11%
2033 - (9,669,743) 6,542,027 3,127,716 - 1,977,297 1.27% 15.39%
Total 2.374
ORANGE COUNTY
NORTH CAROLINA
Key Financing Terms 16
➢ Security Pledge- County Assets serve as Collateral and subject to Annual County
Appropriations
➢ Maturity Term- 5- 20 Year maturities matches the useful life of the assets
➢ February 1 and August 1 Repayment Dates to Bank Trustee
➢ Estimated Interest Rates- 2-3% subject to market conditions
➢ Series 2022 Limited Obligation Bonds Maximum Annual Debt Service not exceeding $4.1
million in FY 2024 (based on current market interest rates)
➢ Source of Repayment- Property Tax, Solid Waste Fees and Sportsplex Fees
➢ Limited Obligation Bonds are Subordinate Lien to AAA General Obligation Bonds
➢ Current Limited Obligation Bonds- AA1/AA+/AA+ from Moody s, Standard & Poor's and
Fitch Ratings
ORANGE COUNTY
NORTH CAROLINA
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Questions/Comments
ORANGE COUNTY
NORTH CAROLINA