August 13, 2002
The Alexander County Board of Commissioners held a Special Called Meeting on Tuesday, August 13, 2002 in the Commissioners Room of the Alexander County Courthouse, Taylorsville, North Carolina.
CALL TO ORDER
Chairman Odom called the meeting to order at 7:30 PM.
ADOPTION OF AGENDA
Commissioner Watts made a motion to adopt the agenda as presented. Commissioner Hammer seconded the motion. The Board voted unanimously in favor of the motion.
PUBLIC HEARING: NCLGC FINANCING FOR ALEXANDER COUNTY SCHOOLS PROJECTS
Chairman Odom recognized the Board of Education liaison Commissioner Watts and asked him to conduct the public hearing. Commissioner Watts stated that this public hearing would be held to receive public comment regarding the Board of Commissioners request to the Local Government Commission (LGC) to borrow $3,850,000 for Phase 3 of the Alexander County School Construction projects. These projects include:
Commissioner Watts stated that county staff had been informed by LGC staff that the required information could not be received in time by the LGC to be placed on the agenda for the September LGC Meeting and would therefore be placed on the October agenda.
Jennifer Herman, Budget Officer, distributed the bids received by the school system as well as a recommendation from the architect to accept the low bid of $3,930,241. Ms. Herman stated that the county planned to seek approval from the LGC to borrow $3,850,000 for the school projects. The additional cost of $80,000 will be paid by the Public School Building Capital Fund that the school system has already applied for. Ms. Herman noted that staff would have to file an application with the LGC for an installment purchase contract.
Ms. Herman explained that on Friday, August 9, 2002, she was made aware that the LGC had changed the timeline for having applications and supporting documents in for consideration from 21 days in advance to 28 days in advance. Ms. Herman stated that staff would need to have the proper forms filed with the LGC office by September 3, 2002 in order to be placed on the agenda for the October 1, 2002 LGC Meeting. Ms. Herman stated that she was originally led to believe that this item would be placed on the agenda for the September LGC Meeting. Ms. Herman noted that she had spoken with Jack Hoke, Alexander County Schools Superintendent, regarding the delay. Mr. Hoke spoke with the contractors who agreed to keep their bids valid for 90 days instead of 60 days. Ms. Herman stated that, if placed on the agenda for the October LGC Meeting, the earliest closing date would be October 7, 2002.
Ms. Herman also presented a resolution which authorized the filing of the application for approval of the installment financing agreement. Ms. Herman stated that on July 30, 2002, RFPs were mailed to 7 banks for financing of the projects which were to be delivered by August 8, 2002 at 5:00 PM. Ms. Herman reviewed the results of the RFPs which included the following:
First Community Bank
First Community Bank called to state that they would not be able to provide a quote on financing and they declined to bid on the proposed financing.
Peoples Bank called to state that they would have to decline bidding on the proposed financing due to the length of the term for fixed rate financing.
First Citizens Bank
No response was received from First Citizens Bank.
Taylorsville Savings Bank
No response was received from Taylorsville Savings Bank.
Northwestern National Bank
No response was received from Northwestern National Bank.
Ms. Herman stated that she had spoken with Mr. Hoke regarding the bids for financing. Mr. Hoke informed Ms. Herman that he and the Board of Education were in favor of a 15-year term for the installment financing in order to spread out the payments and provide a measure of security for the county that adequate funds would be available to make all debt service payments for this project as well as the previously approved ACHS and Ellendale Elementary School projects.
Commissioner Watts asked if the payments would be monthly or semiannually for the Phase 3 projects. Ms. Herman replied that the payments would be semiannually and noted that if the closing took place in October, the first payment would be due in April 2003. Ms. Herman stated that the average principal and interest payment per year with BB&T would be $420,000 which would decrease each year. Ms. Herman also noted that BB&T had also agreed to guarantee their rates until the October 7, 2002 closing date.
Commissioner Watts inquired about the difference between what the school system received in half-cent sales tax monies and what had already been committed for payment of projects. Ms. Herman replied that the school received approximately $1.4 million per year in half-cent sales tax monies which equaled approximately $350,000 per quarter. Ms. Herman also noted that the school system was currently paying $688,000 per year for payment of the ACHS and Ellendale Elementary projects, approximately half of what they were currently receiving on an annual basis.
Ms. Herman discussed the fact that Wachovia Banks interest rate was very low; however, not guaranteed. Ms. Herman stated that Wachovia Bank staff informed her that they could probably move forward with quoting a guaranteed rate for the closing date if the LGC planned to approve the application at their October 1, 2002 Meeting. Ms. Herman also stated that Wachovia Bank had given the county an option of signing a breakage compensation agreement which when signed would guarantee a rate as of that day. However, if the county did not close on the loan by the specified date, the county would pay a penalty. Ms. Herman noted that LGC staff strongly discouraged signing the breakage compensation agreement and Ms. Herman therefore informed Wachovia Bank staff that the county was not interested in such an agreement.
Ms. Herman informed the Board that Wachovia staff was scheduled to give her a rate on Tuesday, August 20, 2002 that was anticipated to also remain the rate as of the October 7, 2002 closing date.
Commissioner Robertson asked if it would be possible to send 2 packages to the LGC for the 2 bank proposals. Ms. Herman felt that LGC staff would not have any problems with sending 2 packages and noted that she would research the matter. Commissioner Robertson felt that Wachovia Bank was the way to go if they locked down an interest rate.
Ms. Herman suggested holding another meeting on August 20, 2002 in order for the Board to select a bank and to allow time for Ms. Herman to further discuss the issue with Wachovia, BB&T, and LGC. Ms. Herman informed the Board that they could select Wachovia Bank contingent upon an acceptable rate. Commissioner Watts felt that such action would lead to BB&T withdrawing their offer. Ms. Herman also requested a meeting with the Finance Committee before the August 20, 2002 Special Called Meeting.
Commissioner Harbinson asked Ms. Herman when the loans for the ACHS and Ellendale Elementary projects would terminate. Ms. Herman stated that the loan for ACHS would terminate in 8 years. The approximate payment per year totals $227,000. Ms. Herman stated that the loan for Ellendale Elementary would terminate in 19 years. The approximate payment per year totals $461,000. Chairman Odom inquired about the interest rates for the ACHS and Ellendale Elementary projects. Ms. Herman replied that the interest rate for ACHS was 5.05% with Northwestern Bank and the interest rate for Ellendale was 4.97% with First Union (now Wachovia).
Ms. Herman also noted that along with the application, staff would also need to send to the LGC a draft of the proposed financing from each bank and an opinion letter from the County Attorney.
Commissioner Watts suggested approving the concept and text of the resolution tonight in order to prepare the required documents without plugging in a banking institution or definite numbers. Commissioner Watts also suggested holding the Finance Committee Meeting during the evening of Friday, August 16, 2002. Commissioner Robertson agreed.
Chairman Odom called the public hearing to order and requested any public comment. There being no public comment, Commissioner Robertson made a motion to close the public hearing. Commissioner Hammer seconded the motion. The Board voted unanimously in favor of the motion.
Commissioner Watts made a motion to accept the resolution authorizing the filing of the application for approval of the installment financing agreement and the concept of borrowing $3,850,000 for Phase 3 of school construction with the understanding that the Finance Committee would meet with the Budget Officer upon receiving more information from Wachovia Bank and the Board would hold a Special Called Meeting on Tuesday, August 20, 2002 at 7:00 PM to finalize the selection of the banking institution. Commissioner Hammer seconded the motion. The Board voted unanimously in favor of the motion.
Nancy Coley, WPCOG Community Development Administrator, presented 2 agreements between Alexander County and the Western Piedmont Council of Governments for the provision of grant management assistance. Ms. Coley stated that these agreements simply gave the WPCOG the authority to administer the following grants:
2002 Scattered Site Housing CDBG Project
CDBG Individual Development Account (IDA) Project
Ms. Coley also discussed Section 8 Rental Assistance and explained that there had been a push by the Federal Government to try to help people enrolled in Section 8 Rental Assistance get their own homes by using the Section 8 Rental Assistance for mortgage payments. Ms. Coley stated that staff was currently working to get 10 to 15 eligible participants enrolled in classes in order to possibly help them purchase a home.
Commissioner Harbinson made a motion to approve the contracts authorizing the WPCOG authority to administer the 2002 Scattered Site Housing CDBG Project and the CDBG Individual Development Account (IDA) Project. Commissioner Watts seconded the motion. The Board voted unanimously in favor of the motion.
BOARD APPOINTMENTS AND REAPPOINTMENTS
Chairman Odom presented the following appointments and reappointments:
Appoint Phyllis Douglas 3-year term
Reappoint Tom McNeely 3-year term
Commissioner Watts made a motion to approve the appointments and reappointments as presented. Commissioner Hammer seconded the motion. The Board voted unanimously in favor of the motion.
There were no items discussed during Other Business.
CLOSED SESSION N.C.G.S. 143-318.11(a)(5 & 6) CONTRACTUAL/PERSONNEL
Commissioner Watts made a motion to enter into Closed Session at 8:05 PM to discuss contractual matters and personnel issues pursuant to N.C.G.S. 143-318.11(a)(5 & 6). Commissioner Hammer seconded the motion. The Board voted unanimously in favor of the motion.
There being no further business, Commissioner Watts made a motion to adjourn at 9:20 PM. Commissioner Harbinson seconded the motion. The Board voted unanimously in favor of the motion.
David S. Odom, Chairman Jamie C. Millsaps, Clerk to the Board