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• County staff reviews financing proposals from lenders and develops<br />
recommendation for Board approval – by end of March<br />
• County Board adopts resolution formally approving financing provider and the<br />
substantially-final financing documents – April 19<br />
• LGC approves financing – May 3<br />
• Closing on the financing – funds advanced to County – by mid-May<br />
The County's financing is proceeding as an installment financing under the authority of the North<br />
Carolina General Statutes. Under the statutes, an installment financing has to be secured by a<br />
lien on part or all of the property being acquired or improved through the financing. County staff<br />
recommends that the County use Grady Brown Elementary School as the collateral. Grady<br />
Brown is receiving two new roofs through the financing package. For the County to provide a<br />
lien on this school, the County must own the school.<br />
The Orange County Board of Education has approved the use of the school as collateral and<br />
the related transfer of that property to the County (the financing documents will provide for the<br />
return of the school upon the County's repayment of the financing). This is similar to<br />
arrangements the County has used previously, most recently with respect to financings related<br />
to the Orange County Schools District's Gravelly Hill Middle School and with Culbreth Middle<br />
School in Chapel Hill Carrboro City Schools. Ownership of Grady Brown will revert back to<br />
Orange County Schools upon final payment of the installment financing.<br />
FINANCIAL IMPACT: There is no financial impact related to this action. However, there will be<br />
a financial impact in proceeding with the financing. A preliminary estimate of maximum debt<br />
service applicable to the capital investment projects and equipment financing would require the<br />
highest debt service payment of $871,454 in FY 2016-17. The tax rate equivalent for the<br />
estimated highest debt service payment is approximately 1/2 cent. Based on current resources<br />
and the retirement of existing debt, no adjustment to the tax rate associated with this financing is<br />
anticipated to occur during the period noted.<br />
SOCIAL JUSTICE IMPACT: There is no Orange County Social Justice Goal impact associated<br />
with this item.<br />
RECOMMENDATION(S): The Manager recommends that the Board conduct the public<br />
hearing and adopt the resolution supporting the application to the Local Government<br />
Commission for approval of the financing and refinancing arrangements.<br />
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