HomeMy WebLinkAboutAgenda - 09-20-2005-9aORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: September 20, 2005
Action Agenda
Item No. -q
SUBJECT• Update on Planned Acquisition of Triangle SportsPlex Property
DEPARTMENT: Manager/Attorney/Finance/ PUBLIC HEARING: (Y/N) No
Purchasing
ATTACHMENT(S): INFORMATION CONTACT:
Public Hearing Notice Rod Visser, 245-2300
Financing Resolution Geof Gledhill, 732-2196
Major Elements of Proposed Facility Ken Chavious, 245-2453
Management Contract Pam Janes, 245 2652
PURPOSE: To review progress related to several aspects of the planned acquisition of the
Triangle SportsPlex property and to take several actions associated with the financing of that
acquisition.
BACKGROUND: The Board of Commissioners received status reports and made several
decisions at its August 16, 2005 and September 7, 2005 regular meetings regarding the
planned acquisition of the Triangle SportsPlex property. The County's interests relate not only
to recreation opportunities, but also to a plan to construct the new Central Orange Senior
Center in conjunction with an expansion of the SportsPlex. The SportsPlex is an 82,000 square
foot facility in the Meadowlands Business Park in Hillsborough that provides a regulation ice
rink, three swimming pools, fitness equipment, and other recreation amenities, The County
operates a small senior center in rented space on property immediately adjacent to the
SportsPlex property, At this September 20 meeting, there are two major aspects of the project
that require BOCC action and/or review.
Financing of the SportsPlex Acquisition
Orange County plans to finance the acquisition of the SportsPlex through third-party financing
that is scheduled to be reviewed by the North Carolina Local Government Commission (LGC) at
its meeting on November 1, 2005, Orange County's Bond Counsel has developed the
accompanying "findings" resolution on the SportsPlex project that will be part of the application
to the LGC. Staff request that the BOCC adopt this resolution at this September 20 meeting to
accomplish several purposes:
make the "findings of fact" that the LGC requires in support of the County's upcoming
application to the LGC far financing approval;
• authorize County staff to pursue the LGC application process;
authorize County staff to solicit financing proposals;
direct staff to arrange for a public hearing on the proposed financing at the Board's
October 18, 2005 meeting; and
function as a "reimbursement resolution", as provided far under federal tax law, to
preserve the County's ability to reimburse itself out of financing proceeds for early project
expenditures.
If the BOCC approves the resolution, staff will proceed to solicit proposals from firms qualified
and interested in loaning the County the necessary funds, The recommended financing
proposal will be the subject of the October 18 public hearing. The notice far that public hearing
on the financing contract that is required by statute is attached for reference, In addition to
conducting the public hearing, the Board will also be asked at the October 18 meeting to
approve the particular terms of the SportsPlex financing, Staff currently expect to make short-
term arrangements for financing the SportsPlex acquisition, and then combine that financing
into the larger Certificates of Participation (COPs) financing the County has planned for early
2006, as reviewed at the September 13 BOCC work session.
Facility Management Services
Last month, staff and the project manager made site visits to two Wake County ice
rink/recreation facilities owned and/or operated by Ice Ventures/Recreation Factory Partners.
Staff were very impressed with the conditions and programming at the facilities and with the
philosophical approach that firm displays towards providing high quality, reasonably priced
family-oriented recreation opportunities,
As noted during earlier BOCC meetings, in the interests of time and having well-qualified
outside management in place prior to closing on the SportsPlex facility (targeted at this time far
November 2005), staff have not solicited a broad array of proposals for managing the overall
SportsPlex operation or subsets of its activities. Staff propose instead to negotiate an
agreement with Ice Ventures/Recreation Factory Partners to manage the overall SportsPlex
property, with appropriate subcontracting to other firms as needed with demonstrated
successful track records in managing the various types of amenities available at the SportsPlex.
Viewing this as a pilot effort, the County would contract with Ice Ventures/Recreation Factory
Partners for atwo-year period, then evaluate the degree of success of the firm and make
recommendations to the Board regarding the advisability of renewing management agreements
at the end of the pilot period or soliciting new management proposals.
An attachment to this abstract lays out some of the major elements of a proposed agreement
suggested by Recreation Factory Partners. Staff request the Board's feedback and direction on
these elements, and any others the Board would like to have included in a final agreement.
The County Attorney and staff would prepare that agreement in collaboration with the firm's
representatives, and bring it back for formal BOCC approval at an October 2005 meeting.
Other SportsPlex Issues
As time permits, staff will also update the BOCC on other related developments such as:
condition of the SportsPlex building, infrastructure, and equipment; SportsPlex financials and
progress on audit results; a Central Orange Senior Center Work Group; and the architect's
progress in Hillsborough development review submission, tentatively targeted for October 2005
Hillsborough Board of Adjustment review. All of these topics will be addressed at either the
October 3 or October 18 regular BOCC meetings (or both),
FINANCIAL IMPACT: There is no financial impact associated with this update. As approved
by the Board at the .tune 23, 2QQ5 meeting, the net cost to the County for the SportsPlex
acquisition will be ± $5.565 million. Funding for the acquisition will come through third party
financing, described in this abstract, that will be subject tc approval by the North Carolina Local
Government Commission, The estimated cost of the Senior Center expansion project is
approximately $2 million, which will come from November 2QQ 1 voter approved bonds and
alternative financing as needed.
RECOMMENDATION(S): The Manager recommends that the Board adopt the accompanying
resolution related to the Local Government Commission financing application, and provide other
appropriate feedback and direction to staff regarding the project,
Orange County, North Carolina -- Notice of Public Hearing
Financing for Triangle SportsPlex Acquisition
The Board of Commissioners of Orange County, North
Carolina, will hold a public hearing on Tuesday, October 18, 2005, at
7:30 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
approximately $6,000,000 to pay for the acquisition of and
improvements to the Triangle SportsPlex facility, located on Dan Kidd
Drive in Hillsborough, North Carolina, The County may also use
additional financing proceeds to provide required reserves and pay
financing costs.
The hearing will be held in the Board's regular meeting room in
the County's Southern Human Services Center, 2501 Homestead
Road, Chapel Hill, North Carolina.
The proposed financing would be secured by a lien on the
SportsPlex facility (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 facility and the
associated land) 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 Gounty'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 mare information concerning 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 ),
Orange County Board of Commissioners
2005 Orange County SportsPlex Project
Resolution suppoi°ting an application to the Local Government Commission
for its approval of a financing agreement, and taking other appropriate action
WHEREAS, Orange County has previously made a tentative decision to pursue the
acquisition, improvement and future operation of the Orange County SportsPlex facility;
WHEREAS, the County's Board of Commissioners desires to provide initial approval to
pursue up to $6,000,000 in financing for the project by the use of an installment contract, as
authorized under Section 160A-20 of the North Carolina General Statutes;
WHEREAS, under the guidelines of the North Carolina Local Government Commission
(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 azrangements for the
project;
NOYV, THEREFORE, BE IT RESOLVED that the Board of Commissioners of Orange
County, North Carolina, makes the following findings of fact:
1. The proposed project is appropriate for the County under all the circumstances. After
extensive review and discussion, the County has determined that providing for public
ownership of the SportsPlex facility is in the best interests of the County and its
residents. The opportunities for, among other things, co-locating a senior center at the
SportsPlex make the acquisition of the facility more desirable for the County.
2. The proposed installment financing is preferable to a bond issue for the same
purpose. It is appropriate for the County to balance its capital finance program
between bonds and installment financing, and the County has elected to pursue bond
financing for other projects. This project is also suitable for installment financing
because the financing is for a single real property asset, and this financing cazi later
be combined with a larger installment financing the County has planned..
3. The estimated sums to fall due under the proposed financing contract are adequate
and not excessive for the proposed purpose. The County will obtain competitive
lending proposals, and will closely review proposed lending rates against market
rates with guidance from the LGC, The County will continue its process of
negotiating a favorable contract for the acquisition of the property and to investigate
the need for repairs and renovations to the facility.
4. As confirmed to the Board at this meeting by the County's Finance Officer, (a) the
County's debt management procedures and policies are sound and in compliazice
with law, and (L) the County is not in default under any of its debt service
obligations.
The County expects to provide for payment of debt service tluough operating
revenues of the facility and from general fund sources, including an allocation to debt
service of amounts previously paid to provide for public access to the SportsPlex
swimming pool. The County expects that any tax increase that maybe attributable to
the current proposed financing will be minimal and will in any event be appropriate
under all the circumstances, because the combination of the existing SportsPlex
facilities with a new senior center Barr be carried out at a lower overall cost than
providing these facilities separately.
6. The County Attorney is of the opinion that the proposed project is authorized by law
and is a purpose for which public funds of the County may be expended pursuant to
the Constitution and laws of North Carolina.
BE IT FURTHER RESOLVED by the Board, as follows:
(a) The County's Finance Officer is authorized and directed to file an application
with the LGC for its approval of the project and the proposed financing arrangements and to take
all necessary and appropriate action related to the LGC approval process.
(b) The Finance Officer is authorized and directed to solicit proposals from financial
institutions to provide the financing contemplated by this resolution and to make a
recommendation to the Board of the proposal that he determines to be in the County's overall
best interests.
(c) 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, or that maybe advanced, from the County's general
fund, or any other County fund, for project costs will be reimbursed from the financing proceeds.
(d) A public hearing on this matter will beheld at the Board's meeting of October 18,
2005. The Manager is authorized and directed Co set the time of the hearing, and the Clerk to this
Board is authorized and directed to publish a notice of such public hearing in the form and
mamrer pr°ovided for by law.
(e) This resolution takes effect immediately.
This, the 20°i day of September, 2005.
09/20/05
Major Elements of RFP-Proposed SportsPlex Facility Management Contract
• Orange County contracts with Recreation Factory Partners (RFP) to provide overall
property/facility management
• Initial agreement is for a two year pilot project period
• County desire is to retain a management company to operate and manage the Facility
in order to benefit the public's recreational opportunities, to minimize County's operating
costs and to maximize the Facility's profit potential
• RFP operates and manages Public Recreation and Ice Arena Facilities and desires to
manage the Facility according to the terms and conditions of agreement
• RFP provides, within the confines of the Operating Budget, the following management
services in compliance with all applicable Federal, State and Municipal laws and
regulations and with all policies and guidelines that County may establish from time to
time:
o Operate and maintain the Facility, its equipment, material and supplies in
accordance with it's operations manual, which shall be submitted to and
approved by County
o Staff the Facility in accordance with the budget approved by County, including a
full time general manager acceptable to County and supervise their conduct and
performance in the operation of the Facility
o Collect on behalf of the County all gross revenues generated by Facility, pay all
operating expenses of the Facility and maintain all financial records pertaining to
the operation of the Facility in accordance with County's polices and graidelines
and generally accepted accounting principles
• County pays RFP monthly fee of $6,250, plus reimbursable expenses not to exceed
$1,000
• Subject to the policies and guidelines established by County, RFP shall be responsible
for and have complete authority over the day to day operation of the Facility
• RFP's operational duties and responsibilities shall include, but not be limited to:
0 opening and closing the Facility
o collecting and depositing all gross revenues generated by the Facility
o hiring, firing and supervising all employees and contractors
o food, beverage vending, retail
o pool and fitness operations(unless excluded on separate schedule)
o payroll and accounting services
o maintenance and repairs
o ticketing
o marketing and promotions
o security
o janitorial services
• RFP, in compliance with County's policies and guidelines, establishes and adjusts the
days and hours of operation and all rates and charges for the use and rental of the
Facility consistent with the operation of similar Facilities in the same geographical area
• County provides RFP with all Facility office space and access reasonably necessary for
the performance of RFP's operational duties and responsibilities
• Far each calendar year, RFP prepares and submits for County's approval a line item
budget for the Facility, to include at a minimum, a projected income and expense
statement and projected year-end balance sheet and statement of projected sources
and applications of fiands
• Budget inclrades, but may not be limited to, the following detailed projections:
~0l05
o Gross Revenues by department sources;
o Operating expenses by department;
o Departmental income;
o Administrative and general expenses;
o Marketing, advertising and promotion expenses;
o Energy costs;
o Repairs and maintenance;
o Capital improvements and repairs; and
o Gash flow budget
• With County's approval, RFP institutes and implements the requisite operating
procedures so as to provide the necessary checks and balances for the collection and
handling of grass revenues from the operation of the Facility
• RFP employs an accounting individual, service or firm approved by County to prepare
all financial reports; County may also require the hire of an accounting firm to perform
audits with cost of all such accounting, financial reports and audits as Facility Operating
Expenses
• RFP submit to County, within thirty (30) days after the end of each month, financial
reports and such other management reports as County may require for the Facility
including a balance sheet and statement of revenues and expenditures (budget to
actual) for the current month, year to date and previous year in accordance with
generally accepted accounting principles; RFP also provides separate cash receipts
and disbursements reports for each event held at the Facility during the month
• RFP and the Far.,ility's accounting staff or firm maintain all financial records pertaining to
the use and operation of the Facility, and these are available for County inspection at all
reasonable times
• RFP secures County's prior written approval to:
o Enter into any vendor, service or user/rental occupancy contracts for the Facility
that have a term longer than one year, or annual expense in excess of $10,000
o Enter into any contracts for the purchase of goods, equipment or services for the
Facility that are in excess of $5,000
• County is responsible for all capital improvements and repairs it wishes to make to the
Facility; RFP annually provides County with a schedule of items that can be reasonably
anticipated as necessary capital expenditures
• All routine and minor repairs, maintenance and equipment servicing are the
responsibility of RFP as a Facility Operating Expense
• RFP obtains approval from County for all repairs and maintenance expenses in excess
of $2500, with all necessary minor repairs and improvements to be made to the Facility
from funds available in the annual operating budget
• Consistent with the approved budget, RFP selects the number, function, qualifications,
compensation and benefits of its employees and controls the terms and conditions of
their employment; all employee compensation and benefits including payroll, taxes and
insurance are Facility operating expenses
• The cost of all insurance required to be carried is a Facility Operating Expense