HomeMy WebLinkAboutAgenda 05-05-2026; 5-a - Public Hearing on the Financing of Various Capital Investment Plan Projects 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: May 5, 2026
Action Agenda
Item No. 5-a
SUBJECT: Public Hearing on the Financing of Various Capital Investment Plan Projects
DEPARTMENT: Finance and Administrative
Services
ATTACHMENT(S): INFORMATION CONTACT:
Attachment 1. Public Hearing Notice Gary Donaldson, (919) 245-2453
Attachment 2. Resolution Kirk Vaughn, (919) 245-2071
Attachment 3. Presentation Robert Jessup, (919) 933-9891
PURPOSE: To conduct a public hearing on financing contracts for up to approximately $60.8
million to pay for capital investment projects and equipment for the fiscal year, and to approve a
related resolution supporting the County's application to the Local Government Commission
(LGC) for its approval of the financing arrangements. The financing and transaction costs will be
included in the loan amount.
BACKGROUND: This item marks the first formal steps in the Board's approval of the County's
annual financing for capital investment projects and equipment for County purposes. County staff
estimates that the total amount to be financed this year will be approximately $60.8 million.
This year County staff recommends dividing the total financing package into two (2) parts, with
one financing closing in June 2026 and the other closing in late July or early August 2026. This
division into two (2) separate bond issues will allow the County to both replenish funds advanced
for project costs before the end of the County's fiscal year, and then allow the County to borrow
the required funds for the crisis diversion center without having to advance funds for a full year.
The law requires that the County conduct a public hearing on the proposed financings. A copy of
the published hearing notice is provided at Attachment 1. The notice of public hearing was
advertised in the News of Orange.
After conducting the public hearing and receiving public input, staff requests that the Board
consider the adoption of a resolution (Attachment 2). This resolution formally requests the
required LGC approval, makes certain "finding of fact" as required under the LGC's guidelines,
and authorizes County staff to continue the process. County staff has been in contact with the
LGC staff, and staff expects no issues in receiving LGC approval for either phase of the financing.
This public hearing and adoption of the attached preliminary resolution will fulfill those particular
legal requirements for both financings.
If the Board adopts the attached resolution, the Board will be asked to consider a resolution giving
final approval to the Phase I financing plans at its Business meeting on May 19, 2026.
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The Board will be asked to consider a resolution for the Phase II financing at the July 9, 2026
Business meeting. The primary use of the Phase II proceeds will be for construction costs of the
crisis diversion center, and so that borrowing amount can be set after the final construction
contract amounts are established. Any changes to the plans for the Phase II financing will not
have any material adverse effect on the Phase I financing.
County staff does not expect to use any of the 2026 financing proceeds to fund capital projects
for public schools. For projects through the current fiscal year, the County has identified other
funds in hand sufficient to fund school projects. Staff expects the County will finance school project
costs in the coming fiscal year through the issuance of some of the voter-approved general
obligation bonds or otherwise.
Notes regarding certain projects:
- The Blackwood Farm Park project pertains to re-graveling and drainage work. There is no
financing associated with this item for the proposed disc golf course.
- The Affordable Housing project pertains to Habitat East Village (funding for site
infrastructure and development for East Village at Meadowlands 76 new units (2, 3, and 4-
bedroom) of which 64 will be affordable Habitat homes for first-time homebuyers earning
between 30% and 80% of area median income (AMI). The remaining 12 units (15%) in
East Village will be market-rate homes. Pee Wee Homes pertains to construction of three
new affordable rental homes ("tiny homes") at 106 Hill Street in Carrboro.
- The 510 Meadowlands Phase 2 project pertains to remediation costs.
COLLATERAL: In this type of County installment financing, the County secures its obligations to
the lender by a mortgage-type interest in some or all the property being acquired or improved
through the financing. The County plans to secure the 2026 financing with a variety of County
facilities previously pledged to secure County financings, with the addition of the crisis diversion
center and the County Justice Center as new collateral. The financing documents provide broad
flexibility to release individual properties from the financing lien if that becomes desirable for the
County.
No school facilities are being used as collateral for the 2026 financings, although schools remain
as collateral for other County financings.
The pledged properties will secure not only the planned 2026 financings, but also existing County
financings. Lenders generally require that the County offer collateral equal to at least 50% of the
total loan amount. The County expects to offer collateral with a value exceeding 100% of the
existing and proposed loan amounts.
FINANCIAL IMPACT: There is no financial impact related to this action. However, there will be
a financial impact in proceeding with the financing. A preliminary estimate of maximum debt
service applicable to the combined financing would require the highest debt service payment of
approximately $6,395,000 in FY 2028. The tax rate equivalent for the estimated highest debt
service payment based on the current (FY 2026) value of a penny of$3,299,538 is approximately
$0.0194 (1.94 cents). These amounts are consistent with those shown previously in County
capital and operating budget plans.
ALIGNMENT WITH STRATEGIC PLAN: This item supports:
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• MISSION STATEMENT — Orange County is a visionary leader in providing governmental
services valued by our community, beyond those required by law, in an equitable,
sustainable, innovative and efficient way.
RECOMMENDATION(S): The Manager recommends that the Board:
1) Conduct the public hearing;
2) Close the public hearing; and
3) Adopt the resolution supporting the application to the Local Government Commission for
approval of the financings.
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Attachment 1
Orange County, North Carolina -- Notice of Public Hearing
2026 Installment Financings for Various Prom
The Board of Commissioners of Orange County, North Carolina, will hold a
public hearing on May S, 2026, at 7:00 p.m. (or as soon thereafter as the matter may
be heard).The purpose of the hearing is to take public comment concerning proposed
financing contracts, under which the County would borrow a total amount currently
estimated at $60,800,000 to pay for the various public improvements and
acquisitions shown below, and to pay financing costs:
Financing Phase I - Series 2026A Bonds -- Est.Amount ($)
Project Components
Blackwood Farm Park 61,039
Generator Projects 17,1S4
Interior finish replacements 367,108
Affordable Housing 966,S00
Emergency Services Renewal & Replacement 484,927
Orange County Bidirectional Antenna (BDA) 1,264,317
Upgrade
Board of Elections Expansion for Storage 107,S82
911 Computer Aided Dispatch (CAD) Replacement 302,S34
DTCC Academic Building 11,27S,000
HVAC Projects 2,130,047
Parking Lot Improvements 437,946
Facades 911,648
Electrical Upgrades 74,80S
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Vehicle replacements 379,815
Sportsplex 126,581
Fire Alarm, Fire Suppression System 261,488
Replacements
Information Technologies Infrastructure 419,834
Electrical Vehicle Charging Stations for County 402,069
Vehicles
510 Meadowlands Phase 2 291,647
Efland Cheeks Community Center 150,000
Parking Lot Repairs 29,453
Solid Waste Vehicle and Equipment 3,834,632
Orange Grove Fire District- loan for station 1,700,000
Crisis diversion center - land acquisition and 3,569,656
preliminary (design etc.) costs
Project Totals 29,765,781
Estimated total amount of Phase I Financing, 30,200,000
including borrowing costs and contingencies
Financing Phase II - Series 2026B Bonds -- Est.Amount ($)
Project Components
Crisis diversion center - construction costs, incl 29,929,352
construction contingencies
Estimated total amount of Phase II Financing, 30,600,000
including borrowing costs
The hearing will be held in the Board's usual meeting room in the County's
Whitted Building, 300 West Tryon Street, Hillsborough, North Carolina.
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The County plans to divide the project funding into two phases (two separate
financings) as indicated above. The proposed financings would be secured by a lien
on some or all of the property purchased or improved through the financing as well
as the County's promise to repay the financing, but there would be no recourse
against the County or its property (other than the pledged property) if there were a
default on the financing. The County expects that the collateral for each phase will
include several County facilities that are already pledged for earlier financings, plus
the County's new crisis diversion facility and the County Justice Facility.
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 County's entering into the financings 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 more information concerning the subject of the hearing may contact Gary
Donaldson, Orange County Chief Financial Officer, Post Office Box 8181, Hillsborough,
NC 27278 (telephone 919/245-2453, email gdonaldson@orangecountync.gov).
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RES-2026-028 Attachment 2
Resolution supporting an application to the Local Government
Commission for its approval of County Financing Agreements
- 2026 Multiple Proiect Installment Financings
Introduction --
The Orange County Board of Commissioners has previously determined to
carry out various public improvements and acquisitions, as identified in the County's
capital improvement plan and as described in Exhibit A.
The Board has determined to finance the costs of these projects through
installment financings, as authorized under Section 160A-20 of the North Carolina
General Statutes. The County also expects to divide the project funding into two
financing phases and two separate series of limited obligation bonds, also as
described in Exhibit A. In an installment financing,the County's repayment obligation
is secured by a mortgage-type interest in all or part of the property being acquired or
improved, but not by any pledge of the County's taxing power or any specific revenue
stream. In this case, the County expects that the collateral for each phase will include
several County facilities that are already pledged for earlier financings, plus the
County's new crisis diversion center and the County Justice Facility.
State law requires that the County's financings be approved by the North
Carolina Local Government Commission (the "LGC"), a division of the North Carolina
State Treasurer's office. Under the LGC's guidelines, this governing body must make
certain findings of fact to support the County's application for the LGC's approval.
1. The Orange County Board of Commissioners RESOLVES, as follows:
(a) The County makes a preliminary determination to finance
approximately $60,800,000 to pay capital costs of public improvements and
acquisitions, and in particular those described in Exhibit A, and to pay financing costs.
The improvements and acquisitions will be divided between two financings.
(b) The Board will determine the final amounts to be financed, and the
division of projects among the phases, by later resolutions. The final total amount
financed may be higher or lower than $60,800,000, depending on financial market
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conditions and the final results of the project bidding process. Some of the financing
proceeds may represent reimbursement to the County for prior expenditures on
project costs, and the County will use some proceeds to pay financing costs.
2. The Board makes the following findings of fact to support the
County's application to the LGC:
(a) The proposed projects are necessary and appropriate for the County
under all the circumstances.
(b) The proposed installment financings are preferable to a bond issue for
the same purposes.
The County has no meaningful ability to issue non-voted general obligation
bonds for these projects. It is appropriate for the County to balance its capital
program between various types of financings, and the County has made (and will
continue to make) extensive use of voter-approved and two-thirds general obligation
bonds for other capital purposes. The County expects that in the current interest rate
environment for municipal securities there would be no material difference in the
overall financing costs between general obligation bonds and installment financings
for these projects. These projects will not produce sufficient revenues to support a
self-liquidating financing.
(c) The estimated sums to fall due under the proposed financing contracts
are adequate and not excessive for the proposed purpose. The County will closely
review proposed financing rates against market rates with guidance from the LGC and
the County's financial adviser. All amounts financed will reflect either approved
contracts, previous actual expenditures, or professional estimates.
(d) As confirmed by the County's Finance Officer, (i) the County's debt
management procedures and 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 expects there will be tax increases associated with the
County's overall capital improvement program. Given the County's need for the
projects, the Board believes that the overall effect on the County's budget and the tax
rate from repaying the borrowed money will be reasonable under all the
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circumstances. The County will manage the projects and its borrowing plans so as to
minimize the tax impact while still allowing projects to proceed and addressing the
County's full range of needs.
(f) 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 may be
expended pursuant to the Constitution and laws of North Carolina.
3. Additionally, the Board resolves as follows:
(a) 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 for
project costs, or which may be so advanced, from the County's general fund, or any
other County fund, may be reimbursed from the financing proceeds.
(b) The Board directs the County Manager and the Finance Officer to take
all appropriate steps toward the completion of the financings, including completing
applications to the LGC for its approval of the proposed financings. The Board ratifies
all prior actions of County representatives in this regard.
(c) This resolution takes effect immediately.
* * * * * * * * * * * * * * * * *
I certify as follows: that the foregoing resolution (which includes the attached
Exhibit A) was properly adopted at a meeting of the Board of Commissioners of
Orange County,North Carolina; that this meeting was properly called and held on May
5, 2026; that a quorum was present and acting throughout this meeting; and that this
resolution has not been modified or amended, and remains in full effect as of today.
Dated this day of May, 2025.
[SEAL] _
Laura Jensen
Clerk, Board of Commissioners
Orange County, North Carolina
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Exhibit A - Proposed Projects and Cost Estimates
Financing Phase I - Series 2026A Bonds -- Est.Amount ($)
Project Components
Blackwood Farm Park 61,039
Generator Projects 17,154
Interior finish replacements 367,108
Affordable Housing 966,500
Emergency Services Renewal & Replacement 484,927
Orange County Bidirectional Antenna (BDA) 1,264,317
Upgrade
Board of Elections Expansion for Storage 107,582
911 Computer Aided Dispatch (CAD) Replacement 302,534
DTCC Academic Building 11,275,000
HVAC Projects 2,130,047
Parking Lot Improvements 437,946
Facades 911,648
Electrical Upgrades 74,805
Vehicle replacements 379,815
Sportsplex 126,581
Fire Alarm, Fire Suppression System 261,488
Replacements
Information Technologies Infrastructure 419,834
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Electrical Vehicle Charging Stations for County 402,069
Vehicles
510 Meadowlands Phase 2 291,647
Efland Cheeks Community Center 150,000
Parking Lot Repairs 29,453
Solid Waste Vehicle and Equipment 3,834,632
Orange Grove Fire District- loan for station 1,700,000
Crisis diversion center - land acquisition and 3,569,656
preliminary (design etc.) costs
Project Totals 29,765,781
Estimated total amount of Phase I Financing, 30,200,000
including borrowing costs and contingencies
Financing Phase II - Series 2026B Bonds -- Est.Amount ($)
Project Components
Crisis diversion center - construction costs, incl 29,929,352
construction contingencies
Estimated total amount of Phase II Financing, 30,600,000
including borrowing costs
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4 vo-N.Wen 14
ORANGE COUNTY
NORTH CAR LIN
Limited Obligation Bonds, Series 2026A&B
Financing Resolution and Public Hearing
Gary Donaldson, Chief Financial Officer
May S, 2026
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Purpose
➢ Conduct Public Hearing for Limited Obligation Bonds, Series 2026A&B pursuant to NC
Statute Section 160A-20
➢ Close Public Hearing
➢ Obtain Board Approval of Resolution to Proceed with Filing Local Government
Commission Application for Limited Obligation Bonds, Series 2026A&B
➢ The final Issuance Resolution for the Series 2026A Bonds will be considered on May 19, 2026
➢ The final Issuance Resolution for the Series 2026B Bonds will be considered on July 9, 2026
➢ Funds obtained for our FY 2025-26 Capital Investment Plan through the Series 2026A&B
Limited Obligation Bonds are secured by a Deed of Trust, with a security interest in
various County facilities
➢ The Series 2026A&B Limited Obligation Bonds will fund various County projects
including the Crisis Diversion Facility as well as the Durham Technical Community College
Academic Building
➢ A detailed project list can be found on the following page
ORANGE COUNTY
NORTH CAROLINA
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FY 2026 Projects
A B I C
Project •• Amount
1 Vehicle Replacements County Vehicles $ 379,815
2 Information Technologies Infrastructure County 419,834
3 911 Computer Aided Dispatch (CAD)Replacement County 302,534
4 Emergency Services Renewal&Replacement County 484,927
5 Electric Vehicle Charging Stations for County Vehicles County 402,069
6 HVAC Projects County 2,130,047
7 Behavioral Health Crisis Diversion Facility(Land &Design) County 3,569,656
8 510 Meadowlands Phase 2 County 291,647
9 Board of Elections Expansion for Storage County 107,582
10 Parking Lot Improvements County 467,399
11 Facades County 911,648
12 Electrical Upgrades County 74,805
13 Fire Alarm, Fire Suppression System Replacements County 261,488
14 Interior Finish Replacements County 367,108
15 Affordable Housing County 966,500
16 Blackwood Farm Park County 61,039
17 Efland Cheeks Community Center County 150,000
18 Generator Projects County 17,154
19 Orange County Bidirectional Antenna (BDA)Upgrade County 1,264,317
20 Durham Technical CC Academic Building College 11,275,000
21 Orange Grove Fire District OGFD 1,700,000
22 Solid Waste Vehicles&Equipment Solid Waste 3,834,632
23 Sportsplex Sportsplex 126,581
24 Limited Obligation Bonds, Series 2026A Total $29,565,781
25 Behavioral Health Crisis Diversion Facility(Construction) County 29,929,352
26 Limited Obligation Bonds, Series 2026B Total $29,929,352
27 Limited Obligation Bonds, Series 2026A&B Grand Total $59,495,133
Note:Series 2026A&B LOBs do not include debt financing for school capital projects. Iv
ORA GE COUNTY
Current school capital projects are anticipated to be funded from reactivated 2019
Bond Proceeds, increased Capital Reserves, and Pay-Go NORTH CAROLINA
Key Financing Terms
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Limited Obligation Bonds, Series 2026A&B
➢ Security Pledge- County assets serve as collateral, with payments subject to annual County appropriations
➢ Maturity Term- 5-20 Year maturities matches the useful life of the assets
➢ April 1 and October 1 Repayment Dates to Bank Trustee; First Interest Payment on October 1, 2026, and First
Principal Payment on April 1, 2028, consistent with the Debt Model
➢ Estimated Interest Rates- Between 4.5% - 5.5% subject to market conditions
➢ Maximum Annual Debt Service- Estimated to be $6.395 million in FY 2028
➢ Source of Repayment- Property Taxes, Solid Waste Fees, Sportsplex Fees, and OGFD Repayment
➢ Because Limited Obligation Bonds are not secured by a direct pledge of the County's taxing power, they are
usually rated one notch below the County's general obligation bonds
➢ Current Limited Obligation Bonds- Aa1/AA+/AA+ from Moody's, Standard & Poor's, and Fitch Ratings
ORANGE COUNTY
NORTH CAROLINA
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Limited Obligation Bonds Collateral Overview
➢ Security Pledge- County assets serve as collateral, with payments subject to
annual County appropriations
➢ Lenders generally require that the value of the collateral be equal to at least
50% of the financing amount (for example, at least $10 million of collateral
for a $20 million loan)
➢ The collateral for the Series 2026A&B Bonds will include the County's
Northern and Southern Campuses, the County Justice Facility, and the new
Crisis Diversion Facility. The value of this collateral will comfortably exceed
lender requirements
➢ Pursuant to the County's financing document, the County can continue to
borrow money against this same collateral pool as long as a meaningful
portion of the amount financed is used to improve property in the collateral
pool .
ORANGE COUNTY
NORTH CAROLINA
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Debt Service Model Metrics
All CIP Projects (Tax-Supported Debt)
Debt Ratios 10-year Payout Debt to AV DS to GF Revenues
2026 63.55% 1.11% 11.42%
2027 58.82% 1.58% 12.78%
2028 57.55% 1.90% 13.64%
2029 61.14% 1.85% 17.31%
2030 63.36% 1.66% 18.61%
2031 62.29% 1.81% 18.30%
2032 62.87% 1.85% 18.60%
2033 65.59% 1.73% 19.71%
2034 68.13% 1.49% 19.51%
2035 95.47% 1.38% 18.63%
2036 97.51% 1.28% 17.71%
ORANGE COUNTY
NORTH CAROLINA
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Questions
ORANGE COUNTY
NORTH CAROLINA