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HomeMy WebLinkAbout2016/03/07 RESOLUTION AUTHORIZING NEGOTIATION OF AN INSTALLMENT FINANCING CONTRACT QSCB 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 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 all or a portion of the projects identified as eligible "Qualified School Construction Bond projects" in the resolution of the Harnett County Board of Education adopted on December 7, 2015 (the "School Board Resolution") including improvements at Coats Elementary School, Coats-Erwin Middle School, Harnett Central High School, Harnett Central PPAB 3154468v 1 Middle School, LaFayette Elementary School, Lillington-Shawtown Elementary School, Overhills High School, Triton High School, Western Harnett High School and Western Harnett Middle School (collectively, the "Projects") and (2)a deed of trust, security agreement and fixture filing (the "Deed of Trust") related to the County's fee simple interest in the real property on which LaFayette Elementary School is 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 Projects are essential to the County's proper, efficient and economic operation and to the general health and welfare of its inhabitants; (2) the Projects 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 Projects 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$2,200,000 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 Projects pursuant to the Contract is expected to exceed the cost of financing the Projects pursuant to a bond financing for the same undertaking, the County hereby determines that the cost of financing the Projects 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 Projects; and (3)no revenues are produced by the Projects so as to permit a revenue bond financing; WHEREAS, the County has determined and hereby determines that the estimated cost of financing the Projects 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 real property tax increase in order to pay sums estimated to fall due under the Contract; 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; PPAB 3154468v1 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 will be held on March 21, 2016; 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 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 negotiate on behalf of the County for the financing of the Projects for a principal amount not to exceed $2,200,000 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 LaFayette Elementary School is 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. 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 execution and delivery of the Contract and the Deed of Trust and the Projects to be financed thereby. 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. PPAB 3154468v1 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 NEGOTIATION OF AN INSTALLMENT FINANCING CONTRACT AND PROVIDING FOR CERTAIN OTHER RELATED MATTERS THERETO" was duly adopted by the following vote: AYES: 5 NAYS: 0 PPAB 3154468v1 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 7th day of March, 2016. WITNESS my hand and the corporate seal of the County of Harnett, North Carolina, this the 7"' day of March,2016. -,;(cl .,. Ated04 OM 4. MAR T REGIN WHEELER q, i..., Cler o the Board Coun y of Harnett,North Carolina PPAB 3154468v1 EXHIBIT A NOTICE OF PUBLIC HEARING The Board of Commissioners (the "Board") of the County of Harnett, North Carolina (the"County") is considering (1) entering into an installment financing contract in an amount not to exceed $2,200,000 (the"Contract") to finance all or a portion of the projects identified as eligible "Qualified School Construction Bond projects" in the resolution of the Harnett County Board of Education adopted on December 7, 2015 (the "School Board Resolution") including improvements at Coats Elementary School, Coats-Erwin Middle School, Harnett Central High School, Harnett Central Middle School, LaFayette Elementary School, Lillington-Shawtown Elementary School, Overhills High School, Triton High School, Western Harnett High School and Western Harnett Middle School (collectively, the "Projects") and (2) executing and delivering 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 LaFayette Elementary School is located, together with the improvements thereon (collectively, the"Premises"), as may be required by the entity providing the funds to the County under the Contract. LaFayette Elementary School is located at 108 LaFayette School Road, Fuquay-Varina, North Carolina 27526. The Premises identified above would be mortgaged under the Deed of Trust. On the County's payment of all installment payments due under the Contract, the Deed of Trust and any lien created thereunder would terminate and the County's title to the Premises would be 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 will be conducted concerning the approval of the execution,delivery and performance of the Contract and the Deed of Trust and the Projects to be financed thereby. All interested parties are invited to present comments at the public hearing regarding the execution, delivery and performance of the Contract and the Deed of Trust and the Projects to be financed thereby. /s/ Margaret Regina Wheeler Clerk to the Board of Commissioners County of Harnett,North Carolina Published: March 9,2016 PPAB 3154468v1