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HomeMy WebLinkAbout2016/03/07 RESOLUTION AUTHORIZING REFINANCING OF COUNTY INSTALLMENT FINANCING OBLIGATION TO REFINANCE 2009 COPS 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 Monday, March 7, 2016,at 9:00 a.m. in the County Commissioners' Meeting Room, Harnett County Administration Building, 102 East Front Street, Lillington, North Carolina,Jim Burgin,Chairman of the Board presiding and the following Commissioners present: Jim Burgin,Chairman Gordon Springle,Vice-Chairman Abe Elmore,Commissioner Barbara McKoy,Commissioner Joe Miller,Commissioner Commissioners absent: N/A Also present: Joseph Jeffries,County Manager Paula Stewart, Deputy County Manager Dwight Snow,County Attorney Kimberly Honeycutt, Finance Officer Margaret Regina Wheeler,Clerk * * * * * * Commissioner McKoy 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 REFINANCING OF A COUNTY INSTALLMENT FINANCING OBLIGATION 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 financing contracts in order to finance and 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 previously executed and delivered an Installment Purchase Contract dated as of February 1, 2009 (the "2009 Contract") between the County and Harnett County Public Facilities Corporation (the"Corporation") to finance, in part, (1) the construction, furnishing and equipping of a new Boone Trail Elementary School and the acquisition of land therefor, (2)the construction, furnishing and equipping of a 24-classroom and auxiliary gymnasium addition to Harnett Central High School, (3)the construction, furnishing and equipping of a 15-classroom addition to Johnsonville Elementary School and (4) the construction, furnishing and equipping of a gymnasium at Highland Elementary School(collectively,the "2009 Projects"); WHEREAS, in order to secure its obligations under the 2009 Contract, the County executed and delivered a Deed of Trust and Security Agreement dated as of February 1, 2009 (the "2009 Deed of Trust") from the County to the deed of trust trustee named therein, granting a lien on the real property on which the Boone Trail Elementary School is located and all improvements thereon and on the real property on which Harnett Central High School is located and all improvements thereon; WHEREAS, the Corporation previously executed and delivered its Certificates of Participation, Series 2009 (the "2009 Certificates"), evidencing proportionate undivided interests in rights to receive certain revenues (the "Revenues") pursuant to the 2009 Contract under an Indenture of Trust dated as of February 1, 2009 (the "2009 Indenture") between the Corporation and First Citizens Bank & Trust Company,the successor to which is U.S. Bank National Association(the "Trustee"); WHEREAS,the Board of Commissioners of the County(the"Board")hereby determines that it is in the best interests of the County to refinance all or a portion of the County's installment financing obligation pursuant to the 2009 Contract in order to achieve debt service savings; WHEREAS, in order to accomplish the refinancing,the County staff and Davenport & Company, LLC,as the County's financial advisor,have solicited proposals to either: (a)execute and deliver an amendment to the 2009 Contract(the "Contract Amendment") in order to refmance the County's installment financing obligations under the 2009 Contract corresponding to the 2009 Certificates maturing on and after June 1,2020 to be secured by the 2009 Deed of Trust,or (b)execute and deliver(i)a new installment financing contract(the "New Contract")to refinance all of the County's installment financing obligations under the 2009 Contract corresponding to all of the 2009 Certificates and(ii)enter into a deed of trust, security agreement and fixture filing(the "New Deed of Trust") related to the County's fee simple interest in the real property on which either Boone Trail Elementary School or Harnett Central High School are located and all improvements thereon; WHEREAS, the Board has previously determined that (1) the acquisition of the 2009 Projects is essential to the County's proper, efficient, and economic operation and to the general health and welfare of its inhabitants and (2) the 2009 Projects will provide an essential use and will permit the County to carry out public functions that it is authorized by law to perform; WHEREAS, the Board hereby determines that entering into the Contract Amendment or the New Contract is necessary and expedient for the County by virtue of the findings presented herein; WHEREAS, the County hereby determines that either the Contract Amendment or the New Contract would allow the County to refinance all or a portion of the 2009 Certificates 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 all or a portion of the 2009 Certificates 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 all or a portion of the 2009 Certificates pursuant to the Contract Amendment or the New Contract is expected to exceed the cost of refinancing all or a portion of the 2009 Certificates pursuant to a bond financing for the same undertaking,the County hereby determines that the cost of refinancing all or a portion of the 2009 Certificates pursuant to the Contract Amendment or the New Contract 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 PPAB 3141798v2 1 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 all or a portion of the 2009 Certificates; and (3) insufficient revenues are produced by the 2009 Projects so as to permit a revenue bond financing; WHEREAS, the County has determined and hereby determines that the estimated cost of refinancing all or a portion of the 2009 Certificates pursuant to the Contract Amendment or the New 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 Amendment or the New Contract; WHEREAS, the sums to fall due under the Contract Amendment or the New Contract will be adequate but not excessive for its proposed purpose; WHEREAS, Parker Poe Adams& Bernstein LLP,as special counsel, will render an opinion to the effect that entering into the Contract Amendment or the New 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 Amendment or the New 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 Amendment or the New 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 "Commission"), external auditors or any other regulatory agencies in connection with such debt management and contract obligation payment policies; WHEREAS, the Board hereby reaffirms each of the findings it made with respect to the 2009 Contract and the 2009 Projects in the resolution adopted by the Board on November 17,2008;and WHEREAS, the County must obtain the Commission's approval to enter into the Contract Amendment or the New Contract; NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE COUNTY OF HARNETT, NORTH CAROLINA,AS FOLLOWS: Section 1. Authorization to Negotiate Contract Amendment or the New Contract. The County Manager, the Finance Officer and their designees, with advice from the County Attorney and Special Counsel, are hereby authorized and directed to negotiate on behalf of the County for the refinancing of all or a portion of the 2009 Certificates under either the Contract Amendment or the New PPAB 3141798v2 Contract in a principal amount not to exceed $34,000,000, to be entered into in accordance with the provisions of Section 160A-20 of the General Statutes of North Carolina. All actions of the County, the County Manager, the Finance Officer, the Clerk to the Board, the County Attorney and their respective designees, whether previously or hereinafter taken, in effectuating the proposed refmancing in a manner consistent with this Resolution are hereby approved, ratified and authorized. Section 2. Application to the Commission. The Finance Officer or her designee is hereby directed to file with the Commission an application for its approval of the Contract Amendment or the New Contract and all relevant transactions contemplated thereby on a form prescribed by the Commission 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 Commission. Section 3. Public Hearing. A public hearing(the "Public Hearing")shall be conducted by the Board of Commissioners on March 21, 2016 at 7:00 p.m. in the County Commissioners' Meeting Room, Harnett County Administration Building, 102 East Front Street, Lillington, North Carolina, concerning the refinancing of the County's installment payment obligations with respect to the 2009 Contract and either the execution and delivery of the New Contract and the New Deed of Trust or the execution and delivery of the Contract Amendment. Section 4. Notice of Public Hearing. The Clerk to the Board is hereby directed to cause a notice of the Public Hearing in the form attached hereto as Exhibit A 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 5. Financing Team. The County Manager and the Finance Officer, with advice from the County Attorney, are hereby authorized and directed to retain the assistance of Parker Poe Adams& Bernstein LLP,as special counsel,and Davenport&Company LLC, as financial advisor. 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 McKoy, and seconded by Commissioner Elmore, the foregoing resolution entitled "RESOLUTION OF THE BOARD OF COMMISSIONERS OF THE COUNTY OF HARNETT, NORTH CAROLINA, AUTHORIZING THE REFINANCING OF A COUNTY INSTALLMENT FINANCING OBLIGATION AND PROVIDING FOR CERTAIN OTHER RELATED MATTERS THERETO" was duly adopted by the following vote: AYES: 5 NAYS: 0 PPAB 3141798v2 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 REFINANCING OF A COUNTY INSTALLMENT FINANCING OBLIGATION 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 7th day of March,2016. WITNESS my hand and the corporate seal of the County of Harnett,North Carolina, this the 7th day of March,2016. `EcOMMI / . I a i♦ co 1 �Sr * MARG• ' T REGIN 4 HEELER * Clerk t�. the Board IF � Coun i, of Harnett,North Carolina , *• hi, PPAB 3141798v2 EXHIBIT A NOTICE OF PUBLIC HEARING At its meeting on March 7, 2016, the Board of Commissioners (the "Board') of the County of Harnett,North Carolina(the"County"),adopted a resolution which: 1. Authorized the County to either: (a) execute and deliver an amendment (the "Amendment") to an Installment Purchase Contract dated as of February 1, 2009 (the "Prior Contract" and collectively with the Amendment, the "2009 Contract") in order to refinance a portion of the County's installment financing obligations thereunder,or (b) execute and deliver a new installment financing contract (the "New Contract") to refinance all of the County's installment financing obligations under the Prior Contract. 2. Authorized the County, should it proceed with the New Contract, to proceed to enter into a deed of trust, security agreement and fixture filing(the "New Deed of Trust") under which the County will grant a lien on in the real property on which either Boone Trail Elementary School or Harnett Central High School are located and all improvements thereon,as security for the New Contract. Boone Trail Elementary School is located at 1425 Adcock Rd, Lillington, NC 27546. Harnett Central High School is located at 2911 Harnett Central Rd, Angier,NC 27501. If the County proceeds with the New Contract, either Boone Trail Elementary School or Harnett Central High School will be mortgaged under the New Deed of Trust. If the County proceeds with the Amendment, the obligations under the 2009 Contract will be secured by a Deed of Trust dated as of February 1, 2009 (the "Existing Deed of Trust") on both Boone Trail Elementary School and Harnett Central High School. On payment by the County of all installment payments due under either the 2009 Contract or the New Contract, the corresponding deed of trust and any lien created thereunder will terminate and the County's title to any properties mortgaged thereunder will become unencumbered. NOTICE IS HEREBY GIVEN, pursuant to Sections 160A-20 of the General Statutes of North Carolina, that on March 21, 2016 at 7:00 p.m. in the County Commissioners' Meeting Room, Harnett County Administration Building, 102 East Front Street, Lillington, North Carolina, a public hearing will be conducted concerning the approval of the execution, delivery and performance of either (a) the Amendment and the projects to be refinanced thereby or(b)the New Contract and the New Deed of Trust and the projects to be refinanced thereby. All interested parties are invited to present comments on either of the options referenced above at the public hearing. /s/ Margaret Regina Wheeler Clerk to the Board of Commissioners County of Harnett,North Carolina Published: March 9,2016 PPAB 3I41798v2