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Home My WebLink About2010/10/04 RESOLUTION AUTHORIZING THE NEGOTIATION OF AN INSTALLMENT FINANCING CONTRACT & PROVIDING FOR CERTAIN OTHER RELATED MATTERSEXTRACTS FROM MINUTES OF BOARD OF COMMISSIONERS A regular meeting of the Board of Commissioners (the "Board ") of the County of Harnett, North Carolina (the "County") was held on Monday, October 4, 2010, at 9:00 a.m. in the County Commissioners' Meeting Room, Harnett County Administration Building, 102 East Front Street, Lillington, North Carolina, Timothy B. McNeill, Chairman of the Board presiding and the following Commissioners present: Commissioners Present: Timothy B. McNeill, Chairman Beatice B. Hill, Vice Chair Dan Andrews, Commissioner Jim Burgin, Commissioner Gary House, Commissioner Commissioners Absent: none s s * ► s s Commissioner House moved that the following resolution (the "Resolution "), a copy of which was available with the Board and which was read by title: RESOLUTION OF THE BOARD OF COMMISSIONERS OF THE COUNTY OF HARNETT, NORTH CAROLINA, AUTHORIZING THE NEGOTIATION OF AN INSTALLMENT FINANCING CONTRACT AND PROVIDING FOR CERTAIN OTHER RELATED MATTERS THERETO WHEREAS, the County of Harnett, North Carolina (the "County") is a validly existing political subdivision of the State of North Carolina, existing as such under and by virtue of the Constitution, statutes and laws of the State of North Carolina (the "State "); WHEREAS, the County has the power, pursuant to the General Statutes of North Carolina to (1) purchase real and personal property, (2) enter into installment purchase contracts in order to finance or refinance the purchase of real and personal property used, or to be used, for public purposes, and (3) grant a security interest in some or all of the property purchased to secure repayment of the purchase price; WHEREAS, the County has previously executed and delivered (a) an Installment Purchase Contract dated as of April 15, 2000 (the "2000 Contract ") between the County and Harnett County Public Facilities Corporation (the "Corporation "), (b) an Installment Purchase Contract dated as of May 15, 2002 (the "2002 Contract ") between the County and the Corporation and (c) an Installment Financing Contract dated as of May I, 2008 (the "2008 Contract, " and together with the 2000 Contract and the 2002 Contract, the "Prior Contracts") between the County and Branch Banking and Trust Company; PPAB 1733746v WHEREAS, to secure its obligations under the Prior Contracts, the County has previously executed and delivered various deeds of trusts encumbering, among other collateral, the sites on which Angier Elementary School, the County Courthouse Facility, Overhills High School, Highland Elementary School and Lill ington-Shawtown Elementary School are located (collectively, the "Sites ") and the improvements thereon; WHEREAS, the Board hereby determines that it is in the best interest of the County to (1) enter into an Installment Financing Contract (the "Contract") with a financial institution to be determined (the "Bank') in order to pay the capital costs of refinancing its installment payment obligations under the Prior Contracts, and (2) to enter into a deed of trust, security agreement and fixture filing (the "Deed of Trust") relating to all or such portion of the County's fee simple interest in one or more of the Sites and the improvements thereon as may be required to secure the refinancing; WHEREAS, the County has previously determined and hereby determines that the acquisition of the projects financed under the Prior Contracts are essential to the County's proper, efficient and economic operation and to the general health and welfare of its inhabitants; that the projects financed under the Prior Contracts are providing an essential use and are permitting the County to carry out public functions that it is authorized by law to perform; and that entering into the Contract and Deed of Trust is necessary and expedient for the County by virtue of the findings presented herein; WHEREAS, the County has been advised that it can achieve savings by refinancing the principal portion of the County's installment payments due under the Prior Contracts; WHEREAS, the County hereby determines that the Contract allows the County to refinance the Prior Contracts at a favorable interest rate currently available in the financial marketplace and on terms advantageous to the County; WHEREAS, the County hereby determines that the estimated cost of refinancing the Prior Contracts is an amount not to exceed $53,000,000 and that such cost of the refinancing of the Prior Contracts exceeds the amount that can be prudently raised from currently available appropriations, unappropriated fund balances and non -voted bonds that could be issued by the County in the current fiscal year pursuant to Article V, Section 4 of the Constitution of the State; WHEREAS, although the cost of refinancing of the Prior Contracts pursuant to the Contract is expected to exceed the cost of refinancing the Prior Contracts pursuant to a bond financing for the same undertaking, the County hereby determines that the cost of refinancing the Prior Contracts pursuant to the Contract and the Deed of Trust and the obligations of the County thereunder are preferable to a general obligation bond financing or revenue bond financing for several reasons, including but not limited to the following: (1) the cost of a special election necessary to approve a general obligation bond financing, as required by the laws of the State, would result in the expenditure of significant funds; (2) the time required for a general obligation bond election would cause an unnecessary delay which would thereby decrease the financial benefits of refinancing the Prior Contracts; and (3) insufficient revenues are produced by projects financed under the Prior Contracts so as to permit a revenue bond financing; WHEREAS, the County hereby determines that the estimated cost of refinancing the Prior Contracts pursuant to the Contract reasonably compares with an estimate of similar costs under a bond financing for the same undertaking as a result of the findings delineated in the above preambles; WHEREAS, the County does not anticipate a future property tax increase to pay installment payments falling due under the Contract; PPAB 1733746v1 WHEREAS, Parker Poe Adams & Bernstein LLP, as special counsel ("Special Counsel"), will render an opinion to the effect that entering into the Contract and the transactions contemplated thereby are authorized by law; WHEREAS, no deficiency judgment may be rendered against the County in any action for its breach of the Contract, and the taxing power of the County is not and may not be pledged in any way directly or indirectly or contingently to secure any moneys due under the Contract; WHEREAS, the County is not in default under any of its debt service obligations; WHEREAS, the County's budget process and Annual Budget Ordinance are in compliance with the Local Government Budget and Fiscal Control Act, and external auditors have determined that the County has conformed with generally accepted accounting principles as applied to governmental units in preparing its Annual Budget ordinance; WHEREAS, past audit reports of the County indicate that its debt management and contract obligation payment policies have been carried out in strict compliance with the law, and the County has not been censured by the North Carolina Local Government Commission (the "LGC "), external auditors or any other regulatory agencies in connection with such debt management and contract obligation payment policies; WHEREAS, a public hearing on the Contract after publication of a notice with respect to such public hearing must be held and approval of the LGC with respect to entering the Contract must be received; and WHEREAS, the County hereby determines that all findings, conclusions and determinations of the County in this Resolution are subject to modification or affirmation after all interested parties have been afforded the opportunity to present their comments at a public hearing regarding the execution and delivery of the Contract, the Deed of Trust and the projects to be refinanced thereby. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE COUNTY OF HARNETT,, NORTH CAROLINA, AS FOLLOWS: Section 1. Authorization to Negotiate the Contract. The County Manager and the Finance Officer, with advice from the County Attorney and Special Counsel, are hereby authorized and directed to proceed and negotiate on behalf of the County for the refinancing of the Prior Contracts for a principal amount not to exceed $53,000,000 under the Contract to be entered into in accordance with the provisions of Section 160A -20 of the General Statutes of North Carolina and to provide in connection with the Contract, as security for the County's obligations thereunder, the Deed of Trust conveying a lien and interest in one or more of the Sites, including the improvements thereon, as may be required by the entity or entities, or their respective assigns, providing the funds to the County under the Contract. Section 2. Application to LGC The Finance Officer or her designee is hereby directed to file with the LGC an application for its approval of the Contract and all relevant transactions contemplated thereby on a form prescribed by the LGC and to state in such application such facts and to attach thereto such exhibits regarding the County and its financial condition as may be required by the LGC. Section 3. Direction to Retain Special Counsel, Financial Advisor. The County Manager and the Finance Officer, with advice from the County Attorney, are hereby authorized and directed to PPAB 1733746vl retain the assistance of Parker Poe Adams & Bernstein LLP, Charlotte, North Carolina, as special counsel, and Davenport & Company LLC, as financial advisor. Section 4. Public Hearing. A public hearing (the "Public Hearing") shall be conducted by the Board of Commissioners on October 18, 2010 at 7:00 p.m. in the County Commissioners' Meeting Room, Harnett County Administration Building, 102 East Front Street, Lillington, North Carolina, concerning the Contract, the Deed of Trust, the refinancing of the Prior Contracts and any other transactions contemplated therein and associated therewith. Section 5. Notice of Public Hearing. The Clerk to the Board is hereby directed to cause a notice of the Public Hearing to be published once in a qualified newspaper of general circulation within the County no fewer than 10 days prior to the Public Hearing. Section 6. Repealer. All motions, orders, resolutions and parts thereof in conflict herewith are hereby repealed. Section 7. Effective Date. This Resolution is effective on the date of its adoption. On motion of Commissioner House, the foregoing resolution entitled "RESOLUTION OF THE BOARD OF COMMISSIONERS OF THE COUNTY OF HARNETT, NORTH CAROLINA, AUTHORIZING THE NEGOTIATION OF AN INSTALLMENT FINANCING CONTRACT PROVIDING FOR CERTAIN OTHER RELATED MATTERS THERETO" was duly adopted by the following vote: AYES: 5 NAYS: O PPAB 17337460 STATE OF NORTH CAROLINA ss: COUNTY OF HARNETT 1, MARGARET REGINA WHEELER, Clerk to the Board of Commissioners of the County of Harnett, North Carolina, DO HEREBY CERTIFY that the foregoing is a true and exact copy of a resolution entitled "RESOLUTION OF THE BOARD OF COMMISSIONERS OF THE COUNTY OF HARNETT, NORTH CAROLINA, AUTHORIZING THE NEGOTIATION OF AN INSTALLMENT FINANCING CONTRACT PROVIDING FOR CERTAIN OTHER RELATED MATTERS THERETO" adopted b� the Board of Commissioners of the County of Harnett, North Carolina, at a meeting held on the 4 day of October, 2010. WITNESS my hand and the corporate seal of the County of Harnett, North Carolina, this the 4th day of October, 2010. `,00F Conar.�rssoo ; p MARGARET REGIN UHEELER Clerk t the Board m Coun of Harnett, orth Carolina l i l t PPAB 1733746v