HomeMy WebLinkAboutAgenda 04-21-2026; 6-a - Resolution Authorizing Loan to Orange Grove Fire District for Fire Station Improvements as Part of FY 2025-26 Spring Financing and Approval of Budget Amendment #9-A 1
ORD-2026-008
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: April 21, 2026
Action Agenda
Item No. 6-a
SUBJECT: Resolution Authorizing Loan to Orange Grove Fire District for Fire Station
Improvements as Part of FY 2025-26 Spring Financing and Approval of Budget
Amendment #9-A
DEPARTMENT: Finance and Administrative
Services
ATTACHMENT(S): INFORMATION CONTACT:
Resolution Gary Donaldson, 919-245-2453
Promissory Note Bob Jessup, 919-933-9891
Bond Request Revision Letter
Year-To-Date Budget Summary
OGFD Chief Response to Residents'
Questions
NOTE: This item was tabled at the April 7, 2026 Business meeting for discussion at this April 21,
2026 Business meeting.
PURPOSE: To approve a resolution authorizing a loan to the Orange Grove Fire District in the
amount of $1.7 million for capital improvements to Fire Station #2 and approve Budget
Amendment #9-A. The County will in turn include the loan amount in its FY 2025-26 Spring
Financing amount.
BACKGROUND: Orange Grove Fire District, Inc. (OGFD) has requested financial assistance to
support renovations and upgrades to Rocky Ridge Fire Station #2 within the Orange Grove Fire
District. The project will convert the existing facility from a garage structure into a fully functioning
fire station with living quarters, office space, and kitchen facilities to support long-term emergency
service delivery in the district. The estimated project cost is approximately $1.7 million.
To facilitate the project, staff proposes that Orange County provide a loan in the amount of
$1,700,000 to OGFD. The loan will be evidenced by a promissory note and repaid through annual
payments of principal and interest due each January 15 beginning in 2027, with final maturity no
later than January 15, 2047.
Schedule I of the Promissory Note references the OGFD debt service schedule through final
maturity. It is important to note that the debt service schedule uses a planning rate of 5%. (Note:
The 5% planning rate is subject to the final bond pricing rate. The final interest rate will be updated
in the signed Promissory Note.)
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OGFD Annual Tax Levy
The Fire District has adjusted its tax rate from 5.81 cents to 7.00 cents per $100 of assessed
valuation beginning in FY 2025-26 to ensure sufficient revenues to cover operating costs and the
required annual debt service payments to the County.
Under the proposed structure, the Fire District will reimburse the County annually for the full
amount of debt service. If the Fire Department fails to make the required payment, the County will
have the authority to offset overdue amounts from district tax distributions or other funds payable
to the department, and per the promissory note can impose a 5% penalty on the amount due.
County Recourse for Annual OGFD Repayment
The County provides annual property tax revenues to OGFD in four equal quarterly payments
each fiscal year based on their district tax levy. The OGFD debt service repayment date will be
set for January 15 every fiscal year which coincides with peak tax collections for OGFD. If debt
service payment is not received by January 15, the County will deduct and apply, through a right
of set-off, an amount from the fourth quarter (March) property tax distribution to OGFD sufficient
to satisfy the annual debt service requirement. The OGFD repayment will be recorded in the
County's Debt Service Fund.
FINANCIAL IMPACT: Because the Fire District will provide annual payments equal to the debt
service obligation, the borrowing will not create a net General Fund tax burden for the County.
The OGFD FY 2025-26 annual tax levy is projected to generate $1,133,337 for operating and
maintenance expenses and the proposed debt service requirement (See draft debt service
schedule).
Budget Amendment #9-A increases authorization in the County Capital Fund by $1,700,000 and
creates the following project ordinance:
Orange Grove Fire Station #2 ($1,700,000) - Project# 17200
Revenues for this project:
Current FY 2025-26 FY 2025-26
FY 2025-26 Amendment Revised
Alternative Financing $0 $1,700,000 $1,700,000
Total Project Funding $0 $1,700,000 $1,700,000
Appropriated for this project:
Current FY 2025-26 FY 2025-26
FY 2025-26 Amendment Revised
Project Expenditures $0 $1,700,000 $1,700,000
Total Costs $0 $1,700,000 $1,700,000
ALIGNMENT WITH STRATEGIC PLAN: This item supports:
• GOAL 6: DIVERSE AND VIBRANT ECONOMY
RECOMMENDATION(S): The Manager recommends that the Board adopt the attached
resolution authorizing Orange County to make a $1,700,000 loan to Orange Grove Fire District,
approve the Promissory Note and Budget Amendment #9-A in substantially the form presented,
and authorize the County Manager and Chief Financial Officer to take all actions necessary to
implement the loan.
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RES-2026-024
Resolution authorizing loan to Orange Grove Volunteer Fire Department
Whereas, Orange Grove Volunteer Fire Department, Inc., has requested that the
County loan the Department $1,700,000 to allow the Department to complete an
addition and upgrades to its Rocky Ridge fire station #2,
Be it resolved by the Board of Commissioners of Orange County, North
Carolina, that the County agrees to make the loan, that the loan will be evidenced by
a promissory note in substantially the form of Exhibit A, and that the County
Manager and Chief Financial Officer are authorized and directed to take all actions
necessary or appropriate to put the loan into effect. The County's funding of the loan
in exchange for a signed promissory note shall be conclusive evidence of the
County's approval of the final form of the note.
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July 2026
Promissory Note
For value received,Orange Grove Volunteer Fire Department, Inc.,a North Carolina
nonprofit corporation, hereby promises to pay to the order of Orange County, North
Carolina, the principal sum of One Million Seven Hundred Thousand Dollars
($1,700,000), together with interest on the unpaid principal balance at the annual
rate of %, to be calculated on the basis of a 360-day year consisting of twelve
30-day months.
Payments of principal and interest are due as described in Schedule I. Each annual
payment is due on or before January 15 of each year, commencing January 15, 2027,
and continuing annually thereafter until the principal and all accrued interest are paid
in full. If not sooner paid, all outstanding principal and all accrued interest are due on
January 15, 2047.
If any payment is not received by the Lender within fifteen days after its due date, the
Borrower shall pay a late charge equal to five percent (5%) of the overdue amount.
This late charge is in addition to all other rights and remedies available to the Lender
under this Note or applicable law.
If any payment due under this Note is not made within thirty days of its due date, the
Lender shall have the right to offset and withhold from any fire district taxes or other
funds payable by the Lender to the Borrower an amount equal to all amounts overdue,
including principal and interest and any applicable late charges, until all amounts due
are satisfied in full.
The Borrower may prepay the outstanding principal balance of this Note at any time,
in whole or in part,but if in part (a) the prepayment must be in the minimum amount
of$10,000, (b) the Borrower may make only one prepayment in any calendar month,
and (c) prepayments will be applied first to interest due on this Note, and then to
installments of principal in inverse order of their due dates. The Lender will prepare
and deliver a substitute Schedule I upon each prepayment. No prepayment affects the
Borrower's obligation to make future payments when due.
The parties intend that North Carolina law will govern this Note and all matters of its
interpretation.
[Signature on the following page.]
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Orange Grove Volunteer Fire
Department, Inc.
6800 Orange Grove Road, Hillsborough, NC 27278
By:
Daniel Snipes
Board President
Attest:
Name/title
This instrument has been preaudited
in the manner required by The Local Government
Budget and Fiscal Control Act.
Gary Donaldson
Finance Officer
Orange County, North Carolina
[Promissory note for $1,700,000
in favor of Orange County, North Carolina,
Dated July , 2026]
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Schedule I - Payment Schedule
Principal of this Note is payable on dates and amounts as shown below.Interest
is payable on the dates shown below, at the annual rate of %, calculated on
the basis of a 360-day year consisting of twelve 30-day months (subject to
prepayment as described above). The table below shows the estimated interest
payments.
Payments to the Lender must be delivered not later than the payable date and
paid by check delivered to the Lender at Orange County, Attn: Finance Office, Post
Office Box 8181, Hillsborough, NC 27278, or in such other manner as the Borrower
and Lender may agree from time to time.
[This table shows estimated debt service at the planning rate of 5.00% and is
subject to final bond pricing, among othermatters, the final interestrate the date
the County funds the loan.]
Date Principal ($) Interest ($) Total Payment ($)
1/15/2027 0 65,166.67 65,166.67
1/15/2028 85,000 85,000.00 170,000.00
1/15/2029 85,000 80,750.00 165,750.00
01/15/2030 85,000 76,500.00 161,500.00
01/15/2031 85,000 72,250.00 157,250.00
01/15/2032 85,000 68,000.00 153,000.00
01/15/2033 85,000 63,750.00 148,750.00
01/15/2034 85,000 59,500.00 144,500.00
01/15/2035 85,000 55,250.00 140,250.00
01/15/2036 85,000 51,000.00 136,000.00
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01/15/2037 85,000 46,750.00 131,750.00
01/15/2038 85,000 42,500.00 127,500.00
01/15/2039 85,000 38,250.00 123,250.00
01/15/2040 85,000 34,000.00 119,000.00
01/15/2041 85,000 29,750.00 114,750.00
01/15/2042 85,000 25,500.00 110,500.00
01/15/2043 85,000 21,250.00 106,250.00
01/15/2044 85,000 17,000.00 102,000.00
01/15/2045 85,000 12,750.00 97,750.00
01/15/2046 85,000 8,500.00 93,500.00
01/15/2047 85,000 4,250.00 89,250.00
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,,pNGE 6 F.
'FJRE OEP[.'
Orange Grove Volunteer Fire Department
March 17th, 2026
Mr, Travis Myren
Orange County Manager
PO Box 8181
Hillsborough, NC 27278
Dear Mr. Travis Myren,
We are requesting to be included in the upcoming County bond issuance process that the County
handles for capital projects. We will be transforming our Rocky Ridge fire station # 2 from a garage
building into a fully functioning fire station to include living quarters, office space and kitchen. This
renovation will provide well for the future for our community's service area.
The renovations and upgrades to the station are estimated to be 1.7 million to complete the
addition and upgrades to this fire station. We are requesting 1.7 million to cover the cost with a
payback period up to 20 years and potentially be able to repay some earlier if funding becomes
available. We have already incorporated this type of payment into our budget planning and used
some funding to complete designing and are now ready to move into the next phases of
construction etc. We plan on starting construction in the summer of 2026 and hopefully complete
the project before the summer 2027.
After our bid opening on March 12t", Central Builders of Mebane Inc was our lowest bidder, and the
board has agreed to move forward into a contract.The department's reserve funds will be used for
any contingencies or overruns. We don't expect to ask for any additional funds to cover the
renovation.
The board approved the project by vote of our Board of Directors on Oct 6th, 2025. Since the bid
opening and the cost increase has occurred the board of directors have approved the 200,000
increase in funding request to the County bond process.
If we need to meet with you to discuss this request, please do not hesitate to contact us directly.
Thank you for your continuous support of our department and the citizens of Orange Grove.
Sincerely,
� 11
ielni�-es
Board President
cc: Chief Ricky Baker
6800 Orange Grove Rd Hillsborough, NC 27278 1919 967-5858
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Year-To-Date Budget Summary
Fiscal Year 2025-26
Fund Budget Summary County
Capital
Original Budget Revenue $36,635,068
Interfund Transfer Revenue $1,400,000
Fund Balance Appropiation $0
Total Original Budget $38,035,068
Additional Revenue Received Through
Budget Amendment#9-A (April 21st)
Grant Funds $1,408,059
Non Grant Funds $2,170,657
Additional Interfund Transfer Revenue $290,954
Additional Fund Balance Appropriation
Total Amended Budget $41,904,738
Dollar Change in 2025-26 Approved Budget $3,869,670
Change in 2025-26 Approved Budget 10.17%
.ORANGE GROVE 10
'FIREmt.`
Orange Grove Fire Department
6800 Orange Grove Rd Hillsborough, NC 27278
April 14, 2026
Gary Donaldson, CFO
Orange County Administration Department
131 W Margaret Ln.
Hillsborough,NC 27278
Reference: Information requested from April 7 meeting
Subject: Orange Grove Fire Responses
Resident concern that there was no prior community awareness (lack of transparency)with
no meaningful communication to district residents about the project's purpose, budget, or
progress
Response: We understand and respect residents' interest in the purpose,budget, and progress of
Station 2, however, disagree with the claim that there was no prior community awareness or
transparency. The department has used multiple, ongoing public channels to share information
and invite participation, including public meetings, an active social media presence, the digital
sign at the fire station, newspaper advertisements, open house, and community education events
and breakfasts. In addition, our corporation membership has grown, and the addition of an active
auxiliary program has expanded our ability to share information broadly within the district.
Project communication timeline (high level):
• 2023: The recommendation to work on Station 2 was presented in the department's 5-
year plan.
• Since 2023: The project has been included in annual budget requests.
• July 2025: The project was presented at the annual meeting, including renderings.
We remain committed to two-way communication. Residents are encouraged to attend meetings,
follow our social media updates, and reach out directly with questions. Department information,
including meeting materials and financial records, are available to residents upon request, and we
will continue to use our existing outreach methods while also looking for additional ways to
share project updates going forward.
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.ORANGE GROVE 1 1
'FIREMt.`
Orange Grove Fire Department
6800 Orange Grove Rd Hillsborough, NC 27278
Unclear justification for the investment
• No demonstrated ISO rating improvement or clearly defined community benefit
Response: We understand the desire to see clear justification and measurable community benefit
from any capital investment. The purpose of the Station 2 addition is to maintain and improve
our ability to deliver timely emergency response to the eastern side of the district and to keep the
department positioned to sustain our current service level over time.
ISO rating and what drives it: ISO ratings are based on multiple components-not only a
building project-including how calls are dispatched and communicated, the personnel and
equipment responding to incidents, available water supply, and overall department performance
capabilities. We are evaluated every five years, and maintaining our current rating requires that
we maintain our service level across these areas. The Station 2 project is part of maintaining that
service level by strengthening response coverage and deployment capability; it is not presented
as a single change that guarantees a specific ISO rating increase.
Clearly defined community benefit: Station 2 was originally built in 2012 to meet the needs of
the eastern portion of the district and support the five-mile response travel criteria, because
response time is a key factor in outcomes for fires and medical emergencies. Our incident
records show the highest number of calls occur in the Station 2 service area, and demand is
expected to continue. However, the current Station 2 facility is essentially a garage shell with a
small bathroom and is not suitable for assigning personnel there during peak demand periods,
severe weather standby, or extended operations during disasters. Renovating and adding to
Station 2 will make it a functional station so we can staff it when call volume is highest,
improving deployment and reducing response times for citizens in that part of the district. It also
supports district-wide operations by relieving space and workload pressure at the main station.
This aligns with our long-standing commitment to community response needs, including our first
responder program established in the mid-1980s to assist residents and support OCEMS.
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.ORANGE GROVE 12
'FIREMt.`
Orange Grove Fire Department
6800 Orange Grove Rd Hillsborough, NC 27278
Unclear justification for the investment
• The station is not currently being staffed 24/7
Response: We understand the concern about investing in a station addition when Station 2 is not
currently staffed 24/7. The addition is needed because the existing Station 2 facility is not
conducive to housing personnel-whether volunteer members are responding there, crews are
asked to stand by for severe weather, or the station must be used during extended incidents and
natural disasters. The project is also about preparing for the near future: we know we will soon
need to provide personnel to deploy fire apparatus 24/7, and Station 2 must be a functional, safe
workspace to support that level of service.
Today, we meet operational needs by matching personnel resources to time-of-day demand-using
daytime staffing and part-time personnel to cover peak workload periods. This approach is
common practice in emergency services nationwide. At the same time, we-like many
departments-are experiencing a decline in volunteer availability while service demands continue
to increase. Improving Station 2 helps us support the staffing model we must use now and
positions the district to transition to expanded staffing as community needs require.
We welcome questions and input, and we will continue sharing project purpose, budget status,
and progress through our public meetings and regular district communication channels.
Ongoing lack of notification about meetings, board elections, and financial decisions
Response: Our meetings are open to the public, and we provide regular notifications and updates
about meetings,board elections, and key financial decisions through multiple channels, including
an active social media page, the digital sign at the main station, newspaper advertisements, open
houses, and community education events and breakfasts. In addition, our corporation
membership has increased, and the addition of an active auxiliary program helps broaden
outreach and share information across the district. We also maintain an open-door policy and
respond to community questions and requests for information, including access to meeting
materials, minutes, and financial records.
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.ORANGE GROVE 13
'FIREMt.`
Orange Grove Fire Department
6800 Orange Grove Rd Hillsborough, NC 27278
Below is an insert from our history book and the department still functions in this manner
today.
Transparency
We have tried from the very beginning to be an open and transparent organization. The motivation
for this is twofold: First, we are supported by taxes paid by our fellow citizens; second, Article 5
of our Bylaws states that all residents of our Fire District who are 18 or more years old are
members of the corporation An early indication of this openness was when, in 1977, the Board
voted to allow "any responsible group" to use our fire station's meeting room. For several years
in the `80s the Bingham Township Advisory Council met regularly here. The balloting for at least
one election was held here. We have had several open houses to put the building and equipment
on display.
So we operate as if there are no secrets. Our minutes, SOPS, Bylaws, and financial records are
open to any resident who wants to see them. We also make our station meeting room available to
local groups when they are not being used for fire service functions. We also let people come into
the station to look around and to check out the equipment they helped pay for.
We will continue to make efforts to provide information to the community through the
existing methods and look for other ways to decimate the information in the future.
If you have any questions or need additional information, please contact me.
Sincerely,
Ricky Baker
Fire Chief, Orange Grove Volunteer Fire Company
Station# 919-967-5858 Cell# 843-251-5201
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