HomeMy WebLinkAboutORD-2026-008-Resolution Authorizing Loan to Orange Grove Fire District for fire station improvements as part of FY 2026-26 oxD-2o26 -008� lo -a � l.�la �l�
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
NONNNINK
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 151 2047s
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 . )
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 $ 117001000
Total Costs $ 0 $ 1 ,700 ,000 $ 1y700 , 000
ALIGNMENT WITH STRATEGIC PLAN : This item supports :
• GOAL 6 : DIVERSE AND VIBRANT ECONOMY
RECOMMENDATION ( S ) R. 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 .