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HomeMy WebLinkAboutAgenda - 08-19-2008- 4mmORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: August 19, 2008 Action Agen a Item No. ~--~g~ SUBJECT: Final Resolution for Financing of Solid Waste Equipment DEPARTMENT: Finance PUBLIC HEARING: (Y/NJ No ATTACHMENT(S): Resolution INFORMATION CONTACT: Gary Humphreys, 245-2453 Robert Jessup, 919-755-1800 PURPOSE: To adopt a resolution required to authorize the final steps to complete the financing of equipment purchased by the County's Solid Waste Department. BACKGROUND: On June 24, 2008, the Board authorized and directed the Financial Officer to take all appropriate steps toward the completion of up to $9.3 million in financing, $1.3 million for Solid Waste equipment and $8 million for the construction of the Animal Shelter Facility. Proposals were requested from seven institutions and four institutions responded with proposals. The County's request provided that the financing for the Solid Waste equipment and the Animal Shelter Facility could be awarded to different institutions. Based on the proposals received, the result with the lowest cost for the County was to award the financings separately. The solid waste financing is for 59 months (less than five years and therefore it does not require Local Government Commission approval). The solid waste financing is for four pieces of equipment that the Board has authorized to be purchased and financed. The Board has also approved the required reimbursement resolutions for all of the equipment in the event it was received before the financing was completed. The equipment being financed totals $1,191, 638 and consists of the following: 1) Hook Lift Truck authorized December 3, 2007 $144,821 2) Two front loading garbage trucks authorized February 19, 2008 $401,592 3) Landfill compactor authorized April 1, 2008 $645,225 The proportion of the debt service related to the hook lift truck and one of the garbage trucks, which are for Sanitation, will be allocated to the General Fund and the remainder will be paid for by the Solid Waste Fund. The lowest cost financing proposal was from RBC Centura at a rate of 3.27%. Debt service payments will be paid annually; therefore there will be no debt service payment until fiscal year 2009-10. The attached resolution was prepared by bond counsel in accordance with statutory requirement and makes the determination to proceed with this financing, authorizes staff to execute necessary documents related to the financing, and authorizes the Finance OfFcer to complete the closing. FINANCIAL IMPACT: The financing will increase the debt of the County by $1,191,638. There will not be a budget impact in the current fiscal year. Debt Service payments of $953,310 will be due in fiscal year 2009-10, of which $276,460 will be paid by the General Fund and $678,850 will be paid by the Solid Waste Fund. The tax rate impact in Fiscal Year 2009-10 is estimated at $0.0018 and will reduce in future years. The County Manager will include the amount necessary to pay the debt in the Fiscal Year 2009-10 and future years through Fiscal Year 2013-14. RECOMMENDATION(S): The Manager recommends that the Board adopt the resolution authorizing staff to complete the financing. 3 Resolution Providing Final Approval of Terms and Documents for 2008 Landfill Equipment Financing WHEREAS: Orange County has previously determined to carry out a plan (the "Project") to finance certain landfill equipment through the use of installment financing under Section 160A-20. The County has solicited competitive proposals from banks to provide the desired financing, and RBC Bank (USA) (the "Bank") has submitted the best proposal. BE IT THEREFORE RESOLVED by the Board of Commissioners of Orange County, North Carolina, as follows: 1. Determination To Proceed with Financing -The County confirms its plans to undertake and finance the Project. The County will carry out the plan with financing from the Bank, substantially in accordance with a financing proposal dated July 28, 2008. Under the financing plan, the Bank will make funds available to the County for use on Project costs. The County will repay the amount advanced, with interest, over time. The County will grant to the Bank a security interest in the landfill equipment to secure the County's repayment obligation. 2. Direction To Execute Documents -- The Board authorizes and directs the Board's Chair, the County Manager and the County Finance Officer to act on the County's behalf and execute and deliver all appropriate documents (the "Documents") for the proposed financing. It is the Board's understanding that the Documents will be in forms substantially similar to those used by the Bank in similar financings provided to other North Carolina local governments. The execution and delivery of any Document by an authorized officer will be conclusive evidence of his approval of the final form of such Document. The Documents in final form, however, must be consistent with the financing plan described in this resolution and must provide (a) for the amount financed by the County not to exceed $1,200,000, (b) for an annual interest rate not to exceed 3.27% (in the absence of default, or a change in tax status), and (c) for a financing term not to extend beyond 59 months from the closing date. 3. Authorization to Finance Officer To Complete Closing -The Board authorizes and directs the Finance Officer to hold executed copies of all 4 financing documents authorized or permitted by this resolution in escrow on the County's behalf until the conditions for their delivery have been completed to such officer's satisfaction, and thereupon to release the executed copies of such documents for delivery to the appropriate persons or organizations. Without limiting the generality of the foregoing, the Board specifically authorizes the Finance Officer to approve changes to any Documents, agreements or certifications previously signed by County officers or employees, provided that such changes do not conflict with this resolution or substantially alter the intent from that expressed in the form originally signed. The Finance Officer's authorization of the release of any such document for delivery will constitute conclusive evidence of such officer's approval of any such changes. 4. Resolutions As To Tax Matters -- The County will not take or omit to take any action the taking or omission of which will cause its obligations to pay principal and interest (the "Obligations") to be "arbitrage bonds," within the meaning of Section 148 of the "Code" (as defined below), or "private activity bonds" within the meaning of Code Section 141, or otherwise cause interest components of the installment payments to be includable in gross income for federal income tax purposes. Without limiting the generality of the foregoing, the County will comply with any Code provision that may require the County at any time to pay to the United States any part of the earnings derived from the investment of the financing proceeds. In this resolution, "Code" means the United States Internal Revenue Code of 1986, as amended, and includes applicable Treasury regulations. S. Obligations are "Bank-Qualified" -The County designates its payment Obligations as "qualified tax-exempt obligations" for the purpose of Code Section 265(b)(3), which provides certain tax advantages for financial institutions providing financing to the County. 6. Miscellaneous Provisions -- All County officers and employees are authorized and directed to take all such further action as they may consider necessary or desirable in furtherance of the purposes of this resolution. All such prior actions of County officers and employees are ratified, approved and confirmed. Upon. the absence, unavailability or refusal to act of the County Manager, the Board's Chair or the Finance Officer, any other of such officers may assume any responsibility or carry out any function assigned in this resolution. All other Board proceedings, or parts thereof, in conflict with this resolution are repealed, to the extent of the conflict. This resolution takes effect immediately. ~ * ~ ~ ~ * ~ I certify that the foregoing resolution was duly adopted at a meeting of the Board of Commissioners of Orange County, North Carolina,. duly called and held on 2008, and that a quorum was present and acting throughout such meeting. Such resolution remains in full effect as of today. Dated this day of , 2008. [SEAL] Donna Baker Clerk, Board of Commissioners Orange County, North Carolina