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HomeMy WebLinkAboutAgenda - 05-18-2004-5eORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: May 18, 2004 Action Agenda Item No. SUBJECT: First Step in Authorization of Two-Thirds Net Debt Reduction Bonds DEPARTMENT: Finance PUBLIC HEARING: (Y/N) No ATTACHMENT(S): Findings Resolution to Support Application far Two-Thirds Net Debt Reduction Bonds INFORMATION CONTACT: Ken Chavious, ext 2453 TELEPHONE NUMBERS: Hillsborough Chapel Hill Durham Mebane 732-8181 968-4501 688-7331 336-227-2031 PURPOSE: To consider adoption of a resolution making a preliminary determination to proceed with the County's issuance of two-thirds net debt reduction bonds, BACKGROUND: At its May 5 meeting, the Board authorized staff to pursue the sale of $4,200,000 twc-thirds net debt reduction bonds tc pay capital costs related to public buildings, with the actual amount of bonds to be issued, and the projects to be financed subject to later Board consideration. The North Carolina Local Government Commission (the "LGC") requires that, as a first step, the Board adopt a resolution making certain "findings of fact" in support of the Board's determination to proceed with the bond issue. The attached resolution has been prepared by bond counsel in consultation with County staff and responds to the LGC's requirement. Proposed uses for these bonds will be incorporated into the County portion of the Manager's Recommended 2004-14 Capital Investment Plan (CIP), which is scheduled for presentation to the Board on May 20, 2004. Decisions regarding specific projects and amounts to be addressed through the two-thirds net debt reduction bands can be made during the Board's June 2004 budget and CIP work sessions. Further formal action by the Board toward the issuance of these bonds will take place at subsequent meetings. FINANCIAL IMPACT: Staff will pursue a repayment structure on these bonds that will include interest only for the first fiscal year (2004-2005), These interest payments are currently estimated to be $188,000 and will be included in the Manager's 2004-2005 recommended budget. Annual principal payments of $210,000 will begin in the 2005-2006 fiscal year, Such payments will be in addition to payments on other debt to be issued early in the upcoming fiscal year pursuant to the financing plan endorsed by the Board on May 5, RECOMMENDATION(S): The Manager recommends that the Board adopt the resolution formally making a preliminary determination to proceed with the issuance of the two-thirds net debt reduction bonds. 3 Resolution Stating Intent To Issue Orange County General Obligation Bonds for Public Buildings WHEREAS: The Board of Commissioners of Qrange County, North Carolina, has considered the need for capital improvements for public buildings in the County. The Board has determined it may be desirable for the County to issue general obligations bonds for this purpose in the upcoming County fiscal year, under the provision of law that allows the issuance of such bonds to the extent of two-thirds of the County's net. debt reduction for the previous fiscal year, BE IT THEREFORE RESOLVED by the Board of Commissioners of Orange County, North Carolina, as follows: 1. The Board makes an initial determination to proceed with the issuance of County general obligation bonds in the maximum amount of $4,200,000 to pay capital costs related to public buildings. The Board will make final determinations at a later time as to the actual amount of bonds to be issued and the projects to be funded with the proceeds of such bonds. 2. The County regtaests that the North Carolina Local Government Commission approve the County's application for the issuance of such bonds. The Board makes the following findings of fact in support of its application for approval and its determination to proceed with this bond issue: a) Financing construction, expansion and renovation of public buildings through the issuance of bonds is necessary and expedient for the County, and the amount of bonds proposed is adequate and not excessive for the proposed purpose. Through its capital investment program process, the County has identified a range of such needs for County buildings far in excess of the $4.2 million proposed. The $4.2 million amount is the maximum that the County may issue as "net debt reduction" bonds. 4 b) The County's debt management and budgetary and fiscal management policies have been carried out consistently in accordance with the law. c) The County believes that any increase in the Gounty's property tax rate will be minimal and necessary to provide for principal and interest payments on the bonds. The The Board recognizes that other bond issues previously approved by the County's voters and other contemplated County financings may also require tax increases for repayment. 3. The Finance Officer is authorized and directed to proceed with the proper steps toward the issuance of such bonds, including proceeding with an application to the LGC for its approval of such bonds, The Board appoints the Finance Officer as the County's authorized representative with respect to the LGC application process. 4, All County officers and employees are authorized and directed to take all such further action as they may consider necessary or desirable in connection with the furtherance of the purposes of this resolution. All such prior actions of County officers and employees are ratified, approved and confirmed, All other resolutions, or parts thereof, in conflict with this resolution are repealed, to the extent of the conflict. This resolution takes effect immediately.