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HomeMy WebLinkAbout2012/09/04 RESOLUTION AUTHORIZING THE NEGOTIATION OF AN INSTALLMENT FINANCING CONTRACT & PROVIDING FOR CETRAIN OTHER RELATED MATTERS HIGHLAND MIDDLE SCHOOLParker Poe Draft - 08/29/12 EXTRACTS 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 Tuesday, September 4, 2012, 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 Beatrice B. Hill, Vice Chairman Jim Burgin, Commissioner Gary House, Commissioner Dan Andrews, Commissioner Commissioners Absent: None Commissioner Jim Burgin 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 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 Board hereby determines that it is in the best interest of the County to enter into (1) an installment financing contract (the "Contract') under Section 160A -20 of the General Statutes of North Carolina (the "Act ") in order to pay the capital costs of acquiring, constructing, furnishing and equipping a new Highland Middle School (the "Project ") and (2) a deed of trust, security agreement and fixture filing (the "Deed of Trust ") related to all or a portion of the County's fee simple interest in the real property on which Highland Middle School will be located, together with the improvements thereon, to provide security for the County's obligations under the Contract; WHEREAS, the County hereby determines that (1) the Project is essential to the County's proper, efficient and economic operation and to the general health and welfare of its inhabitants; (2) the Project PPAB 19958350 will provide an essential use and will permit the County to carry out public functions that it is authorized by law to perform; and (3) 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 hereby determines that the Contract allows the County to purchase the Project and take title thereto 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 financing the Project is an amount not to exceed $31,500,000 and that such cost 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 financing the Project pursuant to the Contract is expected to exceed the cost of financing the Project pursuant to a bond financing for the same undertaking, the County hereby determines that the cost of financing the Project pursuant to the Contract and 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 acquiring the Project; and (3) no revenues are produced by the Project so as to permit a revenue bond financing; WHEREAS, the County has determined and hereby determines that the estimated cost of financing the Project 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, in order (1) to meet the County's existing debt service obligations and (2) to pay sums estimated to fall due under the Contract, the County anticipates that it will be necessary to increase the County's real property tax rate by approximately $0.055 per $100.00 of assessed valuation for the fiscal year ending June 30, 2014, which increase is not considered excessive; WHEREAS, certain additional resources, including revenues from the State of North Carolina Lottery, are expected to provide funds for debt service and school capital needs; WHEREAS, if any such additional resources prove inadequate, an additional increase in the County's real property tax rate may be required, which additional increase will not be considered excessive; 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 PPAB 19958350 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 was held on September 4, 2012; and WHEREAS, approval of the LGC with respect to entering the Contract must be received. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE COUNTY OFHARNETT 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 negotiate on behalf of the County for the financing of the Project for a principal amount not to exceed $31,500,000 under the Contract to be entered into in accordance with the provisions of the Act 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 all or a portion of the County's interest in the real property on which Highland Middle School will be located and 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. Budget for Fiscal Year Ending June 30, 2014. The County Manager is hereby directed to include in his proposed budget for the fiscal year ending June 30, 2014 an increase in the County's real property tax rate in the amount of $0.055 per $100.00 of assessed valuation, or such other amount acceptable to the LGC as the County Manager and Finance Officer determine to be necessary to meet the County's existing debt service obligations and to pay sums estimated to fall due under the Contract. Section 4. Repealer. All motions, orders, resolutions and parts thereof in conflict herewith are hereby repealed. Section 5. Effective Date. This Resolution is effective on the date of its adoption. On motion of Commissioner Jim Burgin, seconded by Commissioner Andrews, 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 AND PROVIDING FOR CERTAIN OTHER RELATED MATTERS THERETO" was duly adopted by the following vote: AYES: 5 NAYS: O PPAB 19958350 STATE OF NORTH CAROLINA ss: COUNTY, OF HARNETT I, 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 AND PROVIDING FOR CERTAIN OTHER RELATED MATTERS THERETO" adopted by the Board of Commissioners of the County of Harnett, North Carolina, at a meeting held on the 4"' day of September, 2012. WITNESS my hand and the corporate seal of the County of Harnett, North Carolina, this the 4th day of September, 2012. PPAB 19958350 MAR ARETREGIN WHEELER Cler to the Board County of Harnett, North Carolina