HomeMy WebLinkAboutAgenda - 08-19-2008- 6aORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: August 19, 2008
Action Agen a
Item No. ~-~
SUBJECT: Issuance of Remaining 2001 Voter Approved Bonds
DEPARTMENT: Finance PUBLIC HEARING: (Y/N) No
ATTACHMENT(S):
INFORMATION CONTACT:
Gary Humphreys, 245-2453
Robert Jessup, 919-755-1800
PURPOSE: To request authority to issue the remaining unissued $1. 4 million Affordable
Housing 2001 voter approved bonds and $5.5 million Parks and Open Space unissued bonds
as Alternative Financing.
BACKGROUND: In the November 2001 referendum, $75 million in general obligation bonds
was approved by the voters for several purposes. Included in that amount was the authorization
to issue $4.0 million for Affordable Housing and $20 million for Parks and Open Space. In April
of 2003, the County issued the first installment of $19.175 million in general obligation bonds
from the 2001 authorization which included $1.3 million of Affordable Housing bonds and $3.625
million of Parks and Open Space Bonds. In August of 2004, the County issued the second
installment of $19.74 million in general obligation bonds from the 2001 authorization which
included $1.3 million of Affordable Housing bonds and $3.625 million of Parks and Open Space
Bonds. In September of 2005, the County issued the third installment of $29.185 million in
general obligation bonds from the 2001 authorization which did not include any bonds for
Affordable Housing or Parks and Open Space. There is currently $6.9 million of unissued
general obligation bonds from the 2001 voter approved authorization, which consists of $1.3
million for Affordable Housing and $5.5 million for Parks and Open Space.
In consultation with Bond Counsel, staff believes that due to the small size of the issue relative
to the issuance costs and additional requirements involved in issuing general obligation bonds,
along with the favorable environment which has persisted for alternative financing, that it could
be advantageous to issue alternative financing for this remaining amount rather than general
obligation bonds. In the near future, staff will be asking the Board to proceed with the issuance
of additional alternative financing to accomplish the purchase of the Gateway Center, County
Campus, Chapel Hill Carrboro Elementary School #11, and the Efland Sewer project. The
issuance of this financing would occur in the early part of calendar year 2009. At that time, the
County would also issue the remaining $6.9 million for Affordable Housing and Parks and Open
Space discussed here. Due to the reasons previously stated, staff would ask the Board for
approval to issue alternative financing rather than general obligation bonds for this $6.9 million.
The issuance of general obligation bonds approved by the voters must occur within seven years
of the referendum. The Local Government Commission can approve a three year extension for
good cause. The current authorization will expire November 6, 2008 unless an extension is
granted. While staff believes that the issuance of alternative financing is the best route to
proceed, in abundance of caution, staff believes it is prudent to also ask the Board to authorize
staff to proceed to apply for an extension of the existing authority to issue general obligation
debt.
FINANCIAL IMPACT: There is no financial impact related to the actions being proposed.
However, there will be a financial impact connected with the future request to move forward with
the actual issuance of debt.
RECOMMENDATION(S): The Manager recommends that the Board authorize staff to move
forward with plans to issue alternative financing rather than general obligation bonds for the
remaining $6.9 million of Alternative Housing and Parks and Open Space authorization and also
authorize staff to move forward to seek approval of an extension of the general obligation
authority to issue general obligation debt.