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HomeMy WebLinkAboutAgenda - 06-08-2004-6cORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: .June 8, 2004 Action Agenda Item No. ~ -C SUBJECT: Next Steps Required for Approved Debt Issuance DEPARTMENT: Finance PUBLIC HEARING: (Y/N) No ATTACHMENT(S): Bond Orders Public Hearing Resolution Reimbursement Resolution Notice of Public Hearing Sworn Statement of Debt Resolution Approving GOPs Financing INFORMATION CONTACT: Ken Chavious /Bob Jessup, ext. 2453 TELEPHONE NUMBERS: Hillsborough 732-8181 Chapel Hill 968-4501 Durham 688-7331 Mebane 336-227-2031 PURPOSE: To consider the required actions necessary to facilitate the issuance of debt in accordance with the debt issuance schedule presented to the Board nn May 5, 2004, BACKGROUND: At the May 5, 2004 meeting, the Board reviewed and endorsed a revised schedule for the issuance of debt related to both School and County projects. The revised schedule included the proposed sale of: • $19,740,000 in 2001 voter approved bonds; • $1,200,000 in 1997 voter approved sewer bonds; • $14,650,000 in alternative financing, and; • $4,200,000 in two-thirds net debt reduction bonds. The combined total debt issuance is $39,790,000, Subsequently, at the May 18, 2004 meeting, the Board adopted resolutions required for the first step in the issuance of the two- thirds bonds in accordance with the step-by-step schedule provided by the County's Bond Counsel. In order to proceed with the debt issuance further actions are required, The next step in the issuance process includes the following actions: • Introduction of the Bond Orders for the two-thirds bonds. This can be accomplished by a Board motion to introduce the bond order for public facilities for up to $3,900,000 and the Bond Order for land acquisition for up to $300,000, • Establish public hearing date, In accordance with the schedule prepared by Counsel, this date is set for the June 23, 2004 regular meeting, This date is necessary in order to meet the notification and advertising requirements of the general statutes, Adoption of Reimbursement Resolution. Since the County has already spent funds on the Whiffed project and there is potential to spend funds on the Blackwood property stabilization prior to closing on the bonds and receiving funds, federal tax regulations require the adoption of a resolution setting forth the County s intent to reimburse itself for these expenditures. Adoption or preliminary resolution approving Certificate of Participation (COPSZ Financing. COPs will be the financial mechanism used by staff to fund the alternative financing share of the approved debt issuance. This resolution is the required first step in the process for issuing COPs. During the June 2004 budget work sessions, the Board will be discussing the list of proposed uses for thetwo-thirds net debt reduction bonds that was previously distributed to the Board by staff. Introduction of the accompanying bond orders will fix the maximum amounts of two-thirds bonds that can be spent far facilities at $3.9 million and for land at $300,000. Within those amounts, the Board will retain substantial flexibility as it relates to the specific projects to be funded by the two bond orders. The only restrictions relate to the purpose as stated in the order. The bond order far public facilities authorizes funds to be used far any public facility acquisition, construction and/or renovations as the Board so chooses. The bond order far land authorizes the funds to be used for any land acquisition. FINANCIAL IMPACT: Funds totaling $795,800 are included in the 2004-2005 Manager's recommended budget to pay the estimated interest payments required for all of the above mentioned debt. The initial principal payments will not come due until the 2005-2006 fiscal year. RECOMMENDATION(S): The Manager recommends that the Chair introduce the Bond Order and that the Board establish a Public Hearing on June 23,2004 as set forth above, adopt the required resolutions and authorize the Finance Director and other staff to proceed as indicated within the resolutions. 3 Bond Order for Introduction - Public Building Bonds BOND ORDER AUTHORIZING THE ISSUANCE OF GENERAL OBLIGATION PUBLIC BUILDING BONDS IN THE MAXIMUM AMOUNT OF $3,900,000 WHEREAS-- By resolution adopted on May 18, 2004, the Board of Conunissioners of Orange County, North Carolina (the "County"), stated its proposal to issue general obligation bonds to pay capital costs of providing public buildings. By law, the County may issue general obligation bonds for this purpose without referendum approval in an amount up to two-thirds of the amount by which the County will have reduced its outstanding indebtedness in the ?00.3-04 fiscal year. The County has applied to the North Carolina Local Government Commission (the "LGC") for its approval of such bonds. The LGC has accepted the County's application. BE IT ORDERED by the Board of Commissioners of Orange County, North Carolina, as follows: 1. There are hereby ordered to be issued general obligation bonds of the County to pay capital costs of providing public. buildings, including costs of acquisition, construction, renovation and other capital costs, including the possible acquisition of land for public buildings, together with related financing and other necessary or incidental costs. 2. The maximum aggregate principal amount of the bonds issued for such purpose will be $3,900,000. 3. Taxes will be levied in an amount sufficient to pay the principal of and interest on the bonds so issued. 4 4. A sworn statement of debt prepared by the County's Finance Officer has been filed with the Clerk to this Board and is available for public inspection. 5. This Bond Order shall take effect 30 days after its publication following adoption, unless it is petitioned to a vote of the people as provided in Section 1.59-60 of the North Carolina General Statutes, and in that event the order will take effect wheir approved by the voters. 5 Bond Order for Introduction - Bonds for "Lands Le~acy" Acquisitions BOND ORDER AUTHORI7,ING THE ISSUANCE OF GENERAL OBLIGATION BONDS FOR LAND ACQUISITION IN THE MAXIMUM AMOUNT OF $300,000 WHEREAS- The Board of Commissioners of Orange County, North Carolina (the "County"), has along-standing conunitment to provide funds and acquire property, and interests in property, for preservation, resource protection and open space purposes under the County's "Lands Legacy" initiative. By law, the County may issue general obligation bonds for this purpose without referendum approval in an amount up to two-thirds of the amount by which the County will have reduced its outstanding indebtedness in the 2003-04 fiscal year. The County has applied to the North Carolina Local Government Commission (the "LGC") for its approval of such bonds for this purpose. The LGC has accepted the County's application, BE IT ORDERED by the Board of Commissioners of Orange County, North Carolina, as follows: 1, There are hereby ordered to be issued general obligation bonds of the County to pay capital costs of the acquisition of land, and interests in land, for preservation, resource protection and open space purposes, together with related financing and other necessary or incidental costs, 2. The maximum aggregate principal amount of the bonds issued for such purpose will be $300,000. 3, Taxes will be levied in an amount sufficient to pay the principal of and interest on the bonds so issued. 6 4. A swonz statement of debt prepared by the County's Finance Officer has been filed with the Clerk to this Board and is available for public inspection. 5. This Bond Order shall take effect 30 days after its publication following adoption, unless it is petitioned to a vote of the people as provided in Section 159-60 of the North Carolina General Statutes, and in that event the order will take effect when approved by the voters, Resolution setting public hearing and authorizing tiling of debt statement WHEREAS, there have been introduced at this meeting bond orders entitled as follows: BOND ORDER AUTHORIZING THE ISSUANCE OF GENERAL OBLIGATION PUBLIC BTJILDING BONDS IN THE MAXIMUM AMOUNT OF $3,900,000, and BOND ORDER AUTHORIZING THE ISSUANCE OF GENERAL OBLIGATION BONDS FOR LAND ACQUISITION IN THE MAXIMUM AMOUNT OF $300,000 AND WHEREAS, Section 159-57 of the General Statutes requires that a public hearing be held on each such bond order prior to its adoption, Section 159-.56 of the C,eneral Statutes requires publication of a notice of such hearing, and Section 159-55 of the General Statutes requires the filing of a statement of the Cow~ty's debt with the Clerlc to the Board prior to the public hearing; BE IT THEREFORE RESOLVED by the Board of Commissioners of Orange County, North Carolina, (1) that a public hearing on each such bond order will be held at 7:30 p.m. (or as soon thereafter as the matter may be heard) on June 2.3, 2004, in the Board's regulai° meeting room in the County's Southern Human Services Center, 2501 Homestead Road, Chapel Hill, North Carolina, and (2) that the Clerk to this Board is authorized and directed to publish a notice of such public hearing, in the form provided for in Section 159-56 of the General Statutes, one time, not less than six days prior to such hearing date, in a newspaper having general circulation in the County; AND BE IT FURTHER RESOLVED that the County's Finance Officer is authorized and directed to prepare and file, prior to the publication of the notice of public hearing, a sworn statement of the County's net debt in the form prescribed by statute. 8 REIMBURSEMENT RESOLUTION -PUBLIC FACILITIES WHF,REAS, Federal tax rules require this Board to adopt an appropriate resolution to facilitate the County's using financing proceeds to restore the County's funds when the unit makes capital expenditures prior to closing on a bond issue or other financing; BE IT RESOLVED by the Board of Cornmissioners of Orange County, North Carolina, as follows: Section 1. The project is providing public buildings, including costs of acquisition, construction, renovation and other capital costs, including the possible acquisition of land for public buildings Section 2. The project is to be financed. The currently expected type of financing (which is subject to change) is general obligation bonds. The currently expected rnaximurn amount of bonds or other obligations to be issued or contracted for the project is $3,900,000. Section 3. Funds that have been advanced, or may be advanced, from the County's General Fund for project costs are intended to be reimbursed from the financing proceeds. Section 4. The adoption of this resolution is intended as a declaration of this unit's official intent to reimburse project expenditures fiom financing proceeds. 9 Notice of Public Hearing -- OranEe County Public Building Bonds The Orange County Board of Conulussioners has called for a public hearing at 7:30 p.m. on June 23, 2004, related to the following bond order. Further information regarding the hearing appears at the end of this notice. x x x x ~: k~ x x e::~ a: ~ x x :e •r.:: BOND ORDER AUTHORIZING THE ISSUANCE OF GENERAL OBLIGATION PUBLIC BUILDING BONDS IN THE MAXIMUM AMOUNT OF $3,900,000 WHEREAS-- By resolution adopted on May 18, 2004, the Board of Commissioners of Orange County, North Carolina (the "County"), stated its proposal to issue general obligation bonds to pay capital costs of providing public buildings. By law, the County may issue such bonds without referendum approval because the amount of the proposed bonds does not exceed two- thirds of the amount by which the County will have reduced its outstanding indebtedness in the 2003-04 fiscal year. The County has applied to the North Carolina Local Government Commission (the "LGC") for its approval of such bonds. The LGC has accepted the County's application. BE IT ORDERED by the Board of Conunissioners of Orange County, North Carolina, as follows: 1. There are hereby ordered to be issued general obligation bonds of the County to pay capital costs of providing public buildings, including costs of acquisition, construction, renovation and other capital costs, including the possible acquisition of land for public buildings, together with related financing and other necessary or incidental costs. 2. The maximum aggregate principal amount of the bonds issued for such purpose will be $3,900,000. 10 3. Taxes will be levied in an amount sufficient to pay the principal of and interest on the bonds so issued. 4. A sworn statement of debt prepared by the County's Finance Officer has been filed with the Clerk to this Boai°d and is available for public inspection. 5. This Bond Order shall take effect 30 days after its publication following adoption, unless it is petitioned to a vote of the people as provided in Section 159-60 of the North Car°olina General Statutes, and in that event the order° will take effect when approved by the voter°s. ~: * * ~ ~ ~: The foregoing order has been introduced and a sworn statement of debt has been filed under the Local Government Bond Act showing the appraised value of Orange County, North Carolina, to be at least $9.828,614.420 and the net debt thereof, including the proposed bonds, to be not more than $213,492,229, A tax will be levied to pay the principal of and interest on the bonds if they are issued. Anyone who wishes to be heard on the questions of the validity of the bond order and the advisability of issuing the bonds may appear at a public hearing or an adjounlnrent thereof to be held at 7:30 p.m. (or as soon thereafter° as the matter may be heard) on June 23, 2004, in the Board's regular meeting room in the County's Southern Human Services Center, 2501 Homestead Road, Chapel Hill, North Carolina. Persons wishing to make wr°itten corrrrnents in advance of the hearing or wishing more information concerning the subject of the hearing may contact Kenneth T. Chavious, Fuiance Officer, Orange County, Post Office Box 8181, Hillsborough, NC 27278 (telephone 919/245-2453). Domla S. Baker Clerk, Board of Comnussioners Orange County, North Carolina 11 SWORN STATEMENT OF DEBT For Orange County, North Carolina I, Kenneth T. Chavious, being first duly sworn, state that I am the Finance Officer for Orange County, North Carolina, that I have been designated by the Board of Commissioners of Orange County to make and file with the Clerk to such Board of Commissioners a sworn statement of debt, and that the following is the statement of debt for Orange County as shown by the books in my office, prepared in accordance with, and made pursuant to the requirements of, Section 159-55 of the North Carolina General Statutes. A. Gross Debt 1. Outstanding debt evidenced by bonds: Purpose Schools Public Facilities Amount ($) 95,262,805 12,322,195 Total$107.585.000 2. Bonds authorized by orders introduced but not yet adopted: Purpose Public Buildings Land Acquisition Amount ($) 3,900,000 300.000 Total$ 4.200.000 12 3. Unissued bonds authorized by adopted orders: Schools 33,250,000 Parks 16,375,000 Senior Center 3,500,000 Affordable Housing 2,700,000 Sewer 1,200,000 Total $ 57.025.000 4. Outstanding debt not evidenced by bonds: Purpose Amount ($) Jail 471,674 Building 1,216,952 Schools 22,970,795 Land 172,397 Equipment 1,615,066 Building/Land 3,235,345 Proposed COPS 15,000,000 Tofa/$ 44.682.229 Total Gross Debt (sum of 1 through 4)$ 213.492 229 B. Deductions from Gross Debt 1. Funding and refunding bonds authorized by orders introduced but not yet -0- adopted. 2. Funding and refunding bonds authorized but not yet isstaed. -0- _ 13 3. Amounts held in sinking funds or otherwise for the payment of any part of the principal of gross debt, other than debt incurred for water, gas, electric light or power purposes or sanitary sewer purposes (to the extent deductible under Section 159- 55(b) of the General Statutes), or two or mare of these purposes. 4. Bonded debt included in gross debt and incurred, or to be incurred, for water, gas or electric light or power purposes, or any two or more of such purposes. 5. Bonded debt included in gross debt and incurred, or to be incurred, for sanitary sewer purposes (to the extent deductible under Section 159-55(b) of the General Statutes). 6. Uncollected special assessments levied for local improvements for which any part of gross debt (that is not otherwise deducted) was or is to be incurred, to the extent that the special assessments will be applied, when collected, to the payment of any part of the gross debt. 7. Estimate of special assessments to be levied for local improvements for which any part of gross debt (that is not otherwise deducted) was or is to be incurred, to the extent that the special assessments will be applied, when collected, to the payment of any part of the gross debt. Total deductions (Sum of 1 through 7) $ -0- 14 C. Net Debt, being the difference between Total Gross Debt (A) and Total Deductions (B). D. Appraised Value of property subject to taxation, being the value from which the assessed value last fixed for taxation was computed, as revealed by the County tax records and certified by fhe County Tax Assessor. E. Percentage that Net Debt bears to the appraised value of property subject to taxation. WITNESS my signature this 2.17°° day of June, 2004. Kenneth T. Chaviaus Finance Officer Orange County, North Carolina STATE OF NORTH CAROLINA ORANGE COUNTY Subscribed and sworn before me this day of June, 2004. Notary, Public [Seal,] $ 213,492,229 $ 9.828.614.420 My commission expires is The undersigned Orange County Tax Assessor certifies that the assessed value last fixed for taxation in Orange County, as revealed by Orange County tax records (before the application of any assessment ratio), is $ 9,828.614,420 . WITNESS my signature this `day of June, 2004, Tax Assessor Orange County, North Carolina The undersigned Clerk to the Board of Commissioners of Orange County, North Carolina, certifies that the foregoing is a true copy of a statement which was filed with me on June 9th 2004, after the introduction of, and before the public hearing on, an order authorizing Public Building Bonds of Orange County, North Carolina, and that said statement is open to public inspection in my office. Donna S. Baker Clerk, Board of Commissioners Orange County, North Carolina 16 Resolution supporting an application to the Local Government Commission for its approval of the County's 2004 installment financing projects WHEREAS- On May S, 2004, the Orange County Board of Commssioners approved, in principle, the use of installment financing to provide funds, to be used with other available funds, to pay costs related to the following projects: School projects, including a new high school for the Chapel Hill - Carrboro district and other school improvements $9,000,000 Acquisition of conservation easements and similar interests in land $500,000 Senior centers $2,150,000 Orange County campus of Durham Tech - building costs $3,000,000 Under the guidelines of the North Carolina Local Government Conulussion (the "LGC"), this governing body must make certain findings of fact to support the County's application for the LGC's approval of the County's proposed financing arrangements for the project. NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of Orange County, North Carolina, as follows: 1, The Board makes an initial determination to finance the projects described above by use of installment financing. The County estimates that the total amount to be financed will be $14,7 million, plus amounts that may be needed to provide required reserves, to pay financing costs and to pay other necessary and related costs. 17 2. The Finance Director is authorized and directed to proceed with the proper steps toward completing the financing, including proceeding with an application to the LGC for its approval of such financing, The Council appoints the Finance Director as the County's authorized representative with respect to the LGC application process. 3, The County requests that the LGC approve the County's application for such financing, The Board makes the following findings of fact in support of its application for approval and its deterizrination to proceed with this financing: (a)The proposed projects are necessary and appropriate for the Com-rty under all the circurnstanaes. The Chapel Hill - Carrboro school board has identified the new high school as a critical need. All of these projects have been in the County's capital investment plan for some period of time, and have received prior confirmation from the Board as to their necessity and appropriateness for the County. The Board believes that the proposed projects represent the best use of the borrowing capaCounty (for installment financings) that the County has elected to use at this time. (b) The proposed installment financing is preferable to a bond issue for the same purpose. Using an installment financing for these projects allows the County to address a series of needs as part of a flexible, long-term plan. Several of the proposed projects will also receive funding from voter-approved general obligation bonds. The County has elected to use its capacity to issue non-voted general obligation bonds in the upcoming fiscal year for other important projects, It is appropriate for the County to balance its capital finance program between bonds and installment financing, (c) The estimated sums to fall due under the proposed financing contract are adequate and not excessive for the proposed purpose. The County has, and will continue, to closely monitor construction budgets against available funds. The County will closely review proposed lending rates against market rates with guidance from the LGC. (d) As confirmed to the Board at this meeting by the County's Finance Officer, (i) the County's debt management procedures and is policies are sound and in compliance with law, and (ii) the County is not in default under any of its debt service obligations. (e) 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 maybe expended pursuant to the Constitution and laws of North Carolina, 4. The Board calls for a public hearing on this installment financing, as requii°ed by Section 160A-20 of the General Statutes, The hearing will be held at 7:30 p.m, (or as soon thereafter as the matter may be heard) on June 23, 2004, in the Boas°d's regular meeting room in the County's Southern Human Services Center, 2501 Homestead Road, Chapel Hill, North Carolina. The Cleric to this Board is authorized and directed to publish a notice of such public hearing, in a form and in a manner compliant with the General Statutes. 5, The Board approves the selection of Banc of America Securities LLP and Siebert Bradford Shank to provide investment banking and underwriting services to the County in connection with this transaction. 6. 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 i°esolution are repealed, to the extent of the conflict. This resolution takes effect immediately. 19 Orange County, North Carolina -- Notice of Public Hearing 2004 Installment Financing Protects The Board of Commissioners of Orange County, North Carolina, will hold a public hearing on Wednesday, June 23, 2004, at 7:30 p.rn. (or as soon thereafter as the mattei° may be heard). The purpose of the hearing is to take public comment concerning a proposed financing contract, under which the County would bon-ow approximately $14,700,000 to pay capital costs related to the following projects: School projects, including a new high school for the Chapel Hill - Carrboro district and other school improvements $9,000,000 Acquisition of conservation easements and similar interests inland $500,000 Senior centers $2,150,000 Orange County campus of Durham Tech - building costs $.3,000,000 The County may also use additional financing proceeds to provide required reserves, to pay financing costs and to pay other necessary and related costs, The hearing will be held in the Board's regular meeting room in the County's Southern Human Services Center, 2501 Hornestead Road, Chapel Hill, North Carolina. The proposed financing would be secured by a lien on the new high school (and its associated land) and the County's promise to repay the financing, but there would be no recourse against the County or its property (other than the pledged high school and the associated land) if there were a default on the financing. As part of this financing plan, The Chapel Hill - Carrboi°o City Board of Education will transfer the intended site of the new high school to the County. 20 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 subseduent discussion and consideration. The County's entering into the financing is subject to obtaining approval from the North Carolina Local Government Comnussion. Persons wishing to make written comments in advance of the hearing or wishing more information concenzing the subject of the hearing may contact Kenneth T. Chavious, Finance Officer, Orange County, Post Office Box 8181, Hillsborough, NC 27278 (telephone 919/245-2453).