07-20-2018 AgendaDunn City Council
Special Meeting Agenda
Friday, July 20, 2018
5:00 p.m., Dunn Municipal Building
Opening
Invocation
Pledge of Allegiance
SECTION
1) Adjustment and Approval of the July 20, 2018 meeting agenda /0 '� -
PUBLICHEARING
2) Consideration to Adopt a Resolution and Accept the Letter of Conditions for USDA
Loan/Grant - Police, Public Works and Recreation Vehicles
ITEMS FOR DISCUSSIONAND/OR DECISION
3) Consideration to Adopt a Resolution and Accept the Letter of Conditions for USDA
Loan/Grant - Police, Public Works and Recreation Vehicles
G) Closed Session —If one is called, the General Statute(s) allowing the Closed Session will
be cited in the motion
INFORMATION
ADJOURNMENT
���� _. _.. north ® caroling gp�y�y�
DLINN All•AmericaCity
All•AraePieaCify rity cf dunn
1City Council
®Meeting l l
19892013 1989 2013
SUBJECT TITLE: USDA Loan/Grant Application
Purchase of Police/Public Works/Recreation Vehicles
Presenter: Mark Stephens
Department: Finance
Attachment: X Yes No Description: Notice of Public Hearing
Public Hearing Advertisement Date:
JuIV 6, 2018
PURPOSE:
The public has been notified that the Dunn City Council will receive comments concerning the City's desire to
secure a loan/grant from the United States Department of Agriculture, Rural Development to obtain sufficient
funds to secure a loan and grant for the purchase of seven (7) vehicles and associated equipment for the Police,
Public Works and Recreation Department.
The Public Hearing is the opportunity for the Council to hear comments and opinions from the public to include
any party for or against the proposed loan application.
The Public Hearing was duly advertised on July 6, 2018.
R7_[a IM iZ61103
BUDGETIMPACT:
RECOMMENDATION/ACTION REQUESTED:
City of Dunn
Notice of Public Hearing
USDA Loan
Purchase of Police Vehicles
The City Council of the City of Dunn will hold a public hearing on July 20, 2018 at 5:00 p.m. in the
courtroom of the Dunn Municipal Building, 401 E. Broad Street, Dunn, NC. It is the desire of the
Dunn City Council to secure a loan and grant from the United States Department of Agriculture,
Rural Development, for the purchase of seven (7) vehicles and associated equipment for the Dunn
Police, Public Works and Recreation Departments. Assets acquired by the City maybe encumbered
to secure any loan obtained. The public is invited to attend the meeting and comment on the
proposed action.
Melissa R. Matti
Deputy City Clerk
Advertise: July 6, 2018
� DUNN
DUNNo
pbAnd ®UNNpu &®
All•Aman Clq city of d . . . All -A ertcaCtry
City Council Agenda Form
Meeting Date:July,20, 20181989
1989'�2013 �'20(3
SUBJECT TITLE: Consideration to adopt a Resolution and Accept the Letter of Conditions for
USDA Loan/Grant — Police/Public Works/Recreation Vehicles
Presenter: Mark Stephens
Department: Finance
Attachment: X Yes No
Description: Letter of Conditions from USDA, Resolution
accepting conditions
Public Hearing Advertisement Date:
PURPOSE:
To accept a loan offer not to exceed $100,000 and a grant not to exceed $100,000 from the USDA for
the purpose of purchasing 7 Police/Public Works/Recreation Vehicles.
BACKGROUND:
BUDGETIMPACT:
Debt service payments will begin in FY 2019-2020.
RECOMMENDATION/ACTION REQUESTED:
Motion to adopt Loan Resolution and accept Letter of Conditions for USDA Loan/Grant.
PLEASE PROVIDE: Sixteen (15) copies of all pertinent attachments with the Agenda Abstract to the City
Clerk no later than noon in accordance with the schedule that you have been given.
USDA
aiffi United States Department of Agriculture
Date: July 20, 2018
City of Dunn
401 East Broad Street
Dunn, NC 28335
Attn: Oscar Harris, Mayor
This letter establishes conditions which must be understood and agreed to by you before further
consideration may be given to your application.
This letter is not to be considered as loan approval or as a representation as to the availability of funds.
The docket may be completed on the basis of a loan(s) and not to exceed the following:
Facility Loan Amount Grant Amount Total
5 Police Vehicles/2 City Vehicles $100,000.00 $100,000.00 $200,000.00
If Rural Development (RD) makes the loan(s), you may make a written request that the interest rate be the
lower of the rate in effect at the time of loan approval or the time of loan closing. If you do not request
the lower of the two interest rates, the interest rate charged will be the rate in effect at the time of loan
approval. The loans will be considered approved on the date a signed copy of Form RD 1940-1, "Request
for Obligation of Funds" is mailed to you. If you want the lower of the two rates, your written request
should ordinarily be submitted at least 30 calendar days before loan closing.
This letter establishes conditions that must be understood and agreed to by you before further
consideration may be given to the Application for Federal Assistance. Any changes in project cost,
sources of funds, scope of services or any other significant changes (this includes significant changes in
the Borrower's financial conditions, operation, organfaatlonal structure or executive leadership) in
the project or applicant must be reported to and approved by Rural Development (RD) by written
amendment to this letter. Any changes not approved by RD shall be cause for discontinuing
processing of the application.
If the conditions set forth in this letter are not met within twelve (12) months from the date hereof, RD
reserves the right to discontinue processing the application.
REPAYMENT SCHEDULE
The loan will be scheduled for repayment over a period not exceeding five (5) years. Each installment
Will be due one year following the date of RD loan closing. The Installment Purchase Contract will
provide for annual installments in the amount of $22,384.00 on the loan.
SECURITY
Rural Development • Asheboro Area Office
847 Curry Drive, Suite 104 • Asheboro, NC 27205
Voice (336) 629-4449, Ext. 4 • Fax (336) 629-1032
USDA is an equal opportunity provider and employer.
If you wish to file a Civil Rights program complaint of discrimination, complete the USDA Program Discrimination Complaint Form (PDF), found onllne at
htto7lwww ascr usda.gov/com Plaint filing cust.html, or at any USDA office, or call (866) 632-9992 to request the form. You may also write a letter
containing all of the Information requested In the form. Send your completed complaint farm or letter to us by mail at U.S. Department of Agriculture,
Director, Office of Adjudication, 1400 Independence Avenue, S.W., Washington, D.C. 20250-9410, by fax (202) 690-7442 or email at
program Intake msda goy.
Security will consist of an Installment Purchase Contract in the amount of $100,000.00 secured by a first
lien UCC-1 Financing Statement and Security Agreement on all vehicles and equipment financed with
Rural Development loan funds.
LOCAL GOVERNMENT COMMISSION
Prior to loan approval, the applicant must provide a copy of the last audit review letter from the Local
Government Commission for the proposed loan to be obtained under the Installment Purchase Contract.
Also, this audit must be satisfactory as it relates to Local Government Commission Requirements.
PREAUTHORIZED DEBIT PAYMENTS (PAD)
Prior to loan closing the applicant must complete U.S. Department of Treasury Form SF-5510,
"Authorized Agreement for Preauthorized Payments." This form will authorize the government to
electronically debit your Rural Utilities Service loan payment(s) from your specified bank account on a
predetermined date (date payment is due). Preauthorized Debit is accomplished through the Automated
Clearing House process providing for a cost-effective, secure, reliable, and convenient payment method,
thus eliminating the need to write a check for each payment, the expense of mailing the payment, and
allows you the certainty of when your payment will be applied. This service is provided to only qualified
borrowers.
PROJECT COST
Funding from all sources has been budgeted for the estimated expenditures as follows:
Project Costs: Amount
Equipment $198,800.00
Legal Fees $ 1,200.00
TOTALS $200,000.00
PROJECT FUNDS
The project funding is planned in the form of loans from the following sources and amounts:
Project Funding Source: Funding Amount:
RHS Loan Funds $100,000.00
RHS Grant Funds $100,000.00
Total from all Funding Sources $200,000.00
INSTALLMENUPURCHASE CONTRACT
The Rural Development loan for this facility is made pursuant to provisions of Section 160A-20 of the
North Carolina General Statutes so that the Town may enter into Installment Purchase Contracts to
finance the purchase of equipment. A copy of the Installment/Purchase Contract is attached hereto.
ORGANIZATION
The Town must provide necessary certification, comments, and recommendations concerning its
organization and authority to construct, operate, and maintain the proposed facility and meet the
requirements of the following:
A. Compliance with special laws and regulations.
B, State Population control or environmental protection agency standards.
C. Consistency with other development plans.
D. State agency regulating water rights.
E. Civil Rights Act of 1964.
F. Title IX of the Education Amendment of 1972
G. Section 504 of the Rehabilitation Act of 1973.
H. Age Discrimination Act of 1975.
ACCOUNTING, AUDITS AND REPORTS
Records, reports and audits will be established and maintained in accordance with RD Instructions 1942-
A, Section 1942.17 (q). These requirements include an annual budget, and an annual audit completed in
accordance with 2CFR part 200 Subpart F.
I1M _ 1_Le_► _ x ► 11 1 ► M
Insurance and bonding should be obtained as required by NC General Statutes and Rural Development
Instructions 1942-A, Subsection 1942.170)(3). Evidence of required coverage must be provided to Rural
Development prior to loan closing. Evidence that coverage is being maintained must be provided annually
thereafter.
Position Fidelity Bond: The Applicant will provide fidelity bond coverage for the positions of officials
entrusted with the receipt and disbursement of its funds and the custody of valuable property. The amount
of the bond will normally approximate the total annual debt service requirements for the Rural
Development loan(s).
Corporate Liability and Property Damage Insurance: The Applicant will provide public liability, and
property damage insurance in an amount to adequately protect the applicant from civil action arising from
the function of the applicant relative to the project.
Real Property Insurance: The applicant will provide fire and extended coverage in an amount equal to the
replacement value of the building and improvements. The United States of America will be named first
mortgagee for all real property held as security for the Rural Development loan.
Workman's Compensation Insurance: The applicant will provide adequate Workman's Compensation
Insurance if applicable.
LOAN RESOLUTION
The Town must formally adopt form RD-NC 1942-47-1, "Loan Resolution" and Form RD 400-4,
"Assurance Agreement", and Form RD 400-1 "Equal Opportunity Agreement".
OPERATING BUDGET
The applicant must adopt an operating budget that provides adequate revenues for operations and
maintenance expenses, debt service, and reserve payments after approval by RD.
RESERVE ACCOUNT
The Town must establish a Reserve Account in accordance with Form RD-NC 1942-47 Loan Resolution
and make amorally deposits of $2,044.08 to that account (ten percent of the RD payment). These deposits
shall be made on a monthly basis until the reserve account has an amount equal to one full RD annual
payment ($20,444.00)
GRADUATION
The Town will refinance the unpaid balance, in whole or in part, of its debt upon the request of the
Government if at any time it should appear to the Government that the Town is able to refinance its loan
by obtaining a loan for such purposes from responsible cooperative or private sources at reasonable rates
and terns.
APPLICANT CERTIFICATION
Form AD-1047, Certification Regarding Debarment, Suspension, and other Responsibility Matters -
Primary Covered Transactions, must be executed by the applicant prior to loan approval.
Form AD-1048, Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion -
Lower Tier covered transactions must be executed by the Contractor(s), supplier(s), and/or dealers prior
to any purchase that exceeds $25,000.00.
Form RD 1910-11, Applicant Certification/Federal Collection Policies for Consumer or Commercial
Debts, must be executed by the applicant prior to loan closing.
DRUG FREE WORKPLACE CERTIFICATION
Prior to grant approval, the Authority will certify that they will provide a drug -free workplace, are not
involved with drugs, and will establish an educational program concerning drug abuse for employees by
executing Form AD-1049, "Certification Regarding Drug Free Workplace Requirement (Grants)."
DEBARMENT CERTIFICATION
The Town is to certify that they are not debarred or suspended for Federal Non -procurement Programs by
the use of the attached form AD-1047, "Certification Regarding Debarment, Suspension, and other
Responsibility Matters - Primary Covered Transitions". Also Form AD-1048, "Certification Regarding
Debarment, Suspension, Ineligibility, and Voluntary Exclusion - Lower Tier Covered Transactions", is
attached and is to be used by lower tier parties (builders, contractors, dealers, suppliers, manufactures, and
others) involved in transactions exceeding $25,000.00.
SYSTEM FOR AWARD MANAGEMENT and UNIVERSAL IDENTIFIER REQUIREMENTS
Requirement for System for Award Management (SAM):
a. You as the recipient must maintain the currency of your information in the SAM until you submit
the final financial report required under this award and all grants funds under this award have
been disbursed or de -obligated, whichever is later. This requires that you review and update the
information at least annually after the initial registration, and more frequently if required by
changes in your information or another award term. Recipients can register on-line at
www.sam.gov).
b. You as the recipient may not make a sub -award to an entity unless the entity has provided its Data
Universal Numbering System (DUNS) number to you. Sub -recipients with sub -awards of $25, 000
or more must also have and maintain a current CCR registration.
c. Recipient Re op rt ng: You as the recipient must report eachfzrst tier sub -awards of $25, 000 or more
ire non Recovery Act fitnds to http://ww v.fsrs,gov no later than the end of the month following the
month the obligation was made. As part of your registration profile at htty:llitnvw.sam.gov, you
mast report the total compensation of the 5 most highly compensated executives (if the award was
$25,000 or more, 80% or more of annual gross revenues subject to Transparency Act, and $25
Million ofannual gross revenues subject to Transparency Act) by end ofmonth following month in
which award was made. This requirement also pertains to sub -recipients (if the award was $25, 000
or more, 80% or more of annual gross revenues subject to Transparency Act, and $25 Million of
annual gross revenues subject to Transparency Act).
OTHER CONDITIONS
All applicable items set out in Form RD NC 1942-13(a), "Processing Checklist', apply to this project and
become a part of the Letter of Conditions. A new property survey and Title insurance will be required.
GRANT AGREEMENT
A copy of Form RD 3570-3, "Agreement for Administrative Requirements for Community Facilities
Grants," is included in your package for review. You will be required to execute the agreement no later
than the time of grant closing.
The grantee understands that any property acquired or improved with Federal grant funds may have use
and disposition conditions which apply to the property as provided by 7 CFR parts 3015, 3016, or 3019 in
effect at this time and as may be subsequently modified.
The grantee understands that any sale or transfer of property is subject to the interest of the United States
Government in the market value in proportion to its participation in the project as provided by 7 CFR parts
3015, 3016, or 3019 in effect at this time and as maybe subsequently modified.
APPLICANT CONTRIBUTION
Applicant will contribute $00.00 from its funds on hand for the development of these projects. Applicant
cash contribution will be the first funds spent on the project.
DISBURSEMENT OF FUNDS
The funds contributed by the Applicant will be the first funds disbursed, followed by Rural Development
Loan funds. The Rural Development grant funds will be disbursed after all authorized costs have been
finalized. After providing for all authorized costs, any remaining funds will be considered Rural
Development grants funds and refunded to Rural Development.
CLOSING INSTRUCTIONS
This loan will be closed in accordance with instructions issued by the USDA Office of General Counsel,
the RD State Office, and applicable RD and State Procedures.
Sincerely,
/s/
Tobais Fullwood
Area Specialist
Position 5
USDA LOAN RESOLUTION
Form RD 1942-47 FORM APPROVED
(Rev. 12-97) (Public Bodies) OMB NO. 0575-0015
ARESOLUTION OF THE city Council
OFTHE Dunn, City of
AUTHORIZING AND PROVIDING FOR THE INCURRENCE OF INDEBTEDNESS FOR THE PURPOSE OF PROVIDING
A PORTION OF THE COST OF ACQU1R[NG, CONSTRUCTING, ENLARGING, EviPROVING, AND/OR EXTENDING ITS
2018-5 Police Cars, 2 City vehicles
FACILITY TO SERVE AN AREA LAWFULLY WITHIN ITS JURISDICTION TO SERVE.
WHEREAS, it is necessary for the Dunn, City of
(Public Body)
(herein after called Association) to raise a portion of the cost of such undertaking by issuance of its bonds in the principal amount of
100,000.00
pursuant to the provisions of The Local Government Finance Act ; and
WHEREAS, the Association intends to obtain assistance from the Rural Housing Service, Rural Business - Cooperative Service, Rural
Utilities Service, or their successor Agencies with the United States Department of Agriculture, (herein called the Government) acting
under the provisions of the Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et seq.) in the planning, financing, and
supervision of such undertaking and the purchasing of bonds lawfully issued, in the event that no other acceptable purchaser for such
bonds is found by the Association:
NOW THEREFORE in consideration of the premises the Association hereby resolves:
1. To have prepared on its behalf and to adopt an ordinance or resolution for the issuance of its bonds containing such items
and in such forms as are required by State statutes and as are agreeable and acceptable to the Government.
2. To refinance the unpaid balance, in whole or in part, of its bonds upon the request of the Government if at any time it shall
appear to the Government that the Association is able to refinance its bonds by obtaining a loan for such purposes from
responsible cooperative or private sources at reasonable rates and terms for loans for similar purposes and periods of time as
required by section 333(c) of said Consolidated Farm and Rural Development Act (7 U. S. C. 1983 (c)).
3. To provide for, execute, and comply with Form RD 400-4, "Assurance Agreement," and Form RD 400-1, "Equal Opportunity
Agreement," including an "Equal Opportunity Clause," which clause is to be incorporated in, or attached as a rider to, each
construction contract and subcontract involving in excess of $ 10,000.
4. To indemnify the Government for any payments made or losses suffered by the Government on behalf of the Association.
Such indemnification shall be payable from the same source of funds pledged to pay the bonds or any other legal permissible
source.
S. That upon default in the payments of any principal and accrued interest on the bonds or in the performance of any covenant or
agreement contained herein or in the instruments incident to making or insuring the loan, the Government at its option may (a)
declare the entire principal amount then outstanding and accrued interest immediately due and payable, (b) for the account of the
Association (payable from the source of funds pledged to pay the bonds or any other legally permissible source), incur and pay
reasonable expenses for repair, maintenance, and operation of the facility and such other reasonable expenses as may be necessary
to cure the cause of default, and/or (c) take possession of the facility, repair, maintain, and operate or rent it. Default under the
provisions of this resolution or any instrument incident to the making or insuring of the loan may be construed by the Government
to constitute default under any other instrument held by the Government and executed or assumed by the Association, and default
under any such instrument may be construed by the Government to constitute default hereunder.
6. Not to sell, transfer, lease, or otherwise encumber the facility or any portion thereof, or interest therein, or permit others to
do so without the prior written consent of the Government.
7. Not to defease the bonds, or to borrow money, enter into any contract or agreement, or otherwise incur any liabilities for
any purpose in connection with the facility (exclusive of normal maintenance) without the prior written consent of the
Government if such undertaking would involve the source of funds pledged to pay the bonds.
8. To place the proceeds of the bonds on deposit in an account and in a manner approved by the Government. Funds may be
deposited in institutions insured by the State or Federal Government or invested in readily marketable securities backed by
the full faith and credit of the United States. Any income from these accounts will be considered as revenues of the system.
9. To comply with all applicable State and Federal laws and regulations and to continually operate and maintain the facility in
good condition.
10. To provide for the receipt of adequate revenues to most the requirements of debt service, operation and maintenance, and the
establishment of adequate reserves. Revenue accumulated over and above that needed to pay operating and maintenance, debt
service and reserves may only be retained or used to make prepayments on the loan. Revenue cannot be used to pay any
expenses which are not directly incurred for the facility financed by the Government. No free service or use of the facility will
be permitted.
According to the Papenvork-Reduction Act of1995, no persons me required to respond to a collection of information unless it displays a valid OMB control number, The valid OMB
control numbs' for this information collection is 0575-0015. Tile time required to complete this information collection Is estimated m average 1 lam' perv'esponse, including the time for
revewing instructions, searching evistingdata sources, gathering and maintaining the data needed, and eonipholag and reviewing the collection ofiaAretation.
-2-
11. To acquire and maintain such insurance and fidelity bond coverage as maybe required by the Government.
12• To establish and maintain such books and records relating to the operation of the facility and its financial affairs and to
provide for required audit thereof as required by the Government, to provide the Government a copy of each such audit
without its request, and to forward to the Government such additional information and reports as it may from time to time
require.
13. To provide the Government at all reasonable times access to all books and records relating to the facility and access to the
property of the system so that the Government may ascertain that the Association is complying with the provisions hereof
and of the instruments incident to the making or insuring of the loan.
14. That if the Government requires that a reserve account be established and maintained, disbursements from that account
may be used when necessary for payments due on the bond if sufficient funds are not otherwise available. With the prior
written approval of the Government, funds may be withdrawn for:
(a) Paying the cost of repairing or replacing any damage to the facility caused by catastrophe.
(b) Repairing or replacing short-lived assets.
(c) Making extensions or improvements to the facility.
Any time funds are disbursed from the reserve account, additional deposits will be required until the reserve account has
reached the required funded level.
15. To provide adequate service to all persons within the service area who can feasibly and legally be served and to obtain the
Government's concurrence prior to refusing new or adequate services to such persons. Upon failure to provide services
which are feasible and legal, such person shall have a direct right of action against the Association or public body.
16. To comply with the measures identified in the Government's environmental impact analysis for this facility for the purpose
of avoiding or reducing the adverse environmental impacts of the facility's construction or operation.
17. To accept a grant in an amount not to exceed $ 100,000
under the terms offered by the Government; that the Mayor
and Deputy City Clerk of the Association are hereby authorized and empowered to take all action necessary
or appropriate in the execution of all written instruments as may be required in regard to or as evidence of such grant; and
to operate the facility under the terms offered in said grant agreement(s).
The provisions hereof and the provisions of all instruments incident to the making or the insuring of the loan, unless
otherwise specifically provided by the terms of such instrument, shall be. binding upon the Association as long as the
bonds are held or insured by the Government or assignee. The provisions of sections 6 through 17 hereof may be provided
for in more specific detail in the bond resolution or ordinance; to the extent that the provisions contained in such bond
resolution or ordinance should be found to be inconsistent with the provisions hereof, these provisions shall be construed
as controlling between the Association and the Government or assignee
The vote was:
IN WITNESS WHEREOF, the
Dunn, City of
Yeas Nays U Absent_,
to be executed by the officers below in duplicate on this
(SEAL)
Attest:
Deputy Clerk, City of Dunn
Title
of the
duly adopted this resolution and caused it
day of
Oscar Harris
Title Mayor, City of Dunn
I, the undersigned, as
hereby certify that the
-3-
CERTIFICATION TO BE EXECUTED AT LOAN CLOSING
of the Dunn, City of
of such Association is composed of
members, of whom , constituting a quorum, were present at a meeting thereof duly called and
held on the day of ; and that the foregoing resolution was adopted at such meeting
by the vote shown above. I further certify that as of , the date of closing of the loan from the Government, said resolution
remains in effect and has not been rescinded or amended in any way.
Dated, this day of
Title