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HomeMy WebLinkAboutAgenda - 08-19-2008- 5cORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: August 19, 2008 Action Agenda Item No. ~~ SUBJECT: Public Hearing and Final Resolution for Financing of the Animal Services Facility DEPARTMENT: Finance PUBLIC HEARING: (Y/N) Yes ATTACHMENT(S): Resolution INFORMATION CONTACT: Gary Humphreys, 245-2453 Robert Jessup, 919-755-1800 PURPOSE: To adopt a resolution required for final approval of the financing for the construction of the Animal Shelter. BACKGROUND: On February 19, 2008, the Board approved a contract for site preparation for the Animal Services Facility and a reimbursement resolution which authorized the issuance of a maximum of $8.0 million of non-general obligation debt (alternative financing) to pay for the costs of this project. At its June 3, 2008 meeting, the Board approved the contract for construction of the Animal Services Facility. 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. Financing proposals were requested from seven institutions and four institutions responded with proposals. The County's request provided that the financings for the Solid Waste equipment financing 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 Animal Shelter Facility is financing is for 15 years and therefore it does require Local Government Commission approval. The lowest cost and most advantageous financing proposal was from Bank of America at a rate of 3.68% for a fifteen year period. Debt service payments will be paid semi-annually beginning in September 2009; therefore there will be no debt service payments until fiscal year 2009-10. The attached resolution was prepared by bond counsel in accordance with statutory requirements and makes the determination to proceed with the financing, authorizes staff to execute necessary documents related to the financing, and authorizes the Finance Officer to complete the closing. FINANCIAL IMPACT: The financing will increase the debt of the County by $8.0 million. There will not be a budget impact in the current fiscal year. Debt Service payments of $990,957 will be due in fiscal year 2009-10. The tax rate impact in Fiscal Year 2009-10 is estimated at $0.0065 and will reduce in future years. The Manager will include the amount necessary to pay the debt in the Fiscal Year 2009-10 and future years through Fiscal Year 2023-24. RECOMMENDATION(S): The Manager recommends that the Board conducts the public hearing and adopts the resolution authorizing staff to complete the financing. 3 Resolution Providing Final Approval of Terms and Documents for Financing of Animal Services Facility WHEREAS: Orange County has previously determined to carry out a plan (the "Project") to finance the acquisition and construction of a new animal services facility through the use of installment financing under Section 160A-20. The County has solicited competitive proposals from banks to provide the desired financing, and Bank of America, N.A. (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 amortgage-type interest in the animal services facility 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 to 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 acceptable to the North Carolina Local Government Commission, and 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 $8,000,000, (b) for an annual interest rate not to exceed 3.68% (in the absence of default, or a change in tax status), and (c) for a financing term not to extend beyond December 31, 2023. 4 3. Authorization to Finance Officer To Complete Closing -The Board authorizes and directs the Finance Officer to hold executed copies of all 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