[8:44] Okay, we are reconvening our meeting. Um, [clears throat] remember that for a

[8:48] minute. >> And right off the bat, we're going to

[8:51] reconvene our 9:15 public hearing. And that public hearing was to receive

[8:58] public comments regarding a proposed installment financing agreement or

[9:03] similar financing arrangement to finance improvements to Rosewood Middle School

[9:09] and Rosewood Elementary School for the County of Wayne, North Carolina.

[9:15] And we are checking to see if there's anyone here to speak at our public

[9:19] hearing. And there's no one here to speak. So you

[9:24] can go ahead and close that and then we can take action on the necessary

[9:27] resolution. >> All right. I close the public hearing

[9:31] and I'll entertain a motion uh to take some action on this

[9:36] » and the motion would be to um adopt a resolution making certain findings and

[9:41] determinations regarding an installment financing agreement.

[9:46] » So move. >> All right. We have a motion. Is there

[9:49] any discussion on the motion? Hearing none. All those in favor signify

[9:53] by raising your right hand.

[9:57] » And that passed unanimously. Uh we have a second public hearing that

[10:03] » Miss AOK, did you raise your hand? >> Yes.

[10:05] » Oh, I'm sorry. I missed out. >> Might have been kind of slack, but I

[10:09] [laughter] did. >> We have a second public hearing that I'm

[10:12] reconvening. Um and that uh public hearing is to

[10:17] receive comments on a request to reszone 2.817. 817 acres in Grantham Township

[10:24] from community shopping to R10 for property located at the northeast corner

[10:31] of the intersection of Paul Hair Road and US13 Highway 13 South identified as

[10:39] tax partial 2546734961.

[10:46] Is there anyone here uh to speak at our public hearing?

[10:51] Seeing no one, uh adjourn the uh the public hearing and we'll entertain a uh

[10:59] a motion if we so desire to take action.

[11:05] » So move. >> Okay, we have a motion to approve the

[11:09] reszoning request. Any discussion? Hearing none. All those in favor signify

[11:16] by raising your right hand. And that was a unanimous vote as well.

[11:22] Uh our next course of action today would be to

[11:27] » public comments. Do you want to do that? >> Public comments.

[11:29] » Even though nobody >> Okay. I'm reconvening our public comment

[11:33] period. And is there anyone here to speak during our public comment time?

[11:38] » Yes sir. >> Uh hearing of no one. I during the

[11:43] public comments. Um now at this point I think we are to

[11:48] receive some information from uh our Davenport and company and I hereby

[11:56] recognize them for a presentation.

[12:06] » Good morning. >> Good morning.

[12:08] » Ted Cole with Davenport. I appreciate the opportunity to be here. There's a

[12:11] presentation that you have in front of you. Um, and it's about to be put on the

[12:16] screen as well. [laughter] >> Okay. I rushed it. I apologize.

[12:19] » No, that's all right. >> Um,

[12:22] » it was my fault. >> Well, while you're getting that

[12:25] together, uh, Mr. Cole, uh, how was your trip?

[12:28] » It was It was easy. I actually was in Raleigh yesterday and last night, they

[12:33] had virtually no weather that I could see.

[12:36] » Wow. >> Very little.

[12:37] » Wow. >> And the roads coming here were good. So,

[12:39] » good. Good. >> No problems.

[12:41] » I'm glad you had safe travels. Sounds like you all had quite a bit of snow

[12:47] [laughter] >> pockets.

[12:50] » Okay. So, what's on the screen is exactly what's um in front of you. Um we

[12:57] we have done a request for proposal for financing for the Rosewood Middle and

[13:03] Rosewood Elementary. I'm sorry. Go to page two if you don't mind. Thank you.

[13:07] No, back up. There we go. Um we did an RFP. We sent it out to a large list of

[13:12] banks, national, regional, um, local, where they have a presence. Uh, we

[13:18] brought back proposals. We had asked for, uh, an amount, um, up to 9 million.

[13:25] Um, and the structure of this financing is what's called an installment

[13:29] financing agreement. You all have done a number of those over the years. uh in

[13:33] essentially borrowing money in this case from a bank and you're securing that

[13:38] loan with a deed of trust on the school project uh Rosewood Middle and um your

[13:45] annual payment to go in the budget is subject to your annual appropriation.

[13:50] So, it's a mortgage back type of financing. Very typical. Um, as you've

[13:54] held a public hearing, there's a [snorts] resolution. Uh, we'll be back.

[13:58] I'll talk about the schedule in a moment. We received proposals from five

[14:02] different banks. Um, they're listed there. Um, some of them you will

[14:06] recognize as being in the area, others maybe not present in the area or maybe

[14:12] not even have an office in North Carolina, but they are very active in

[14:15] lending to local governments. We have worked with all of these and um would

[14:19] have no issues with any of them in terms of closing loans. So that was the

[14:24] request we we made. Page three gives you a summary. Go to the next slide. Thank

[14:30] you. Um so sort of from left to right we have the lender. Um first we then have

[14:36] what's the the rate lock section. So it's talking about is the rate locked

[14:40] now? Is it floating? When do we have to lock it? When do we have to close? Um,

[14:46] we'll talk a little bit about that. The call provisions,

[14:49] that has to do with your ability to prepay the loan or refund the loan in

[14:55] the future if there's ever a need or a desire or an opportunity to do that. And

[14:59] every bank kind of looks at that a little bit differently. And then we have

[15:03] the rate. And again, we asked for 20 years. We asked for fixed rate. That

[15:07] would be expected by the local government commission. Um and the rates

[15:12] you can see range from anywhere from a 430 to um upwards of a you know around a

[15:17] 460. Um so actually a fairly tight range for these that we see. Um we talked to a

[15:25] number of other banks. Nobody um chose to to not bid based on any financial

[15:31] concerns about the county. Some of them said, "Hey, it's maybe a little bit too

[15:34] large for us or it's not at in our our our market or our footprint." But nobody

[15:40] had any concerns with the county's finances. And you'll see Truis Bank

[15:44] offered the lowest rate at a 430. Very closely followed up by Webster Bank at a

[15:50] 432. Uh Webster is one of those that's very active in lending to local

[15:55] governments, but you're not going to see a branch of theirs anywhere in town or

[16:00] really in in the county. Their banker is in Charlotte, but they are not a a

[16:04] commercial bank that operates in North Carolina. But we do a lot of lending

[16:08] with them. And then the others there that kind of fell in um behind. So in

[16:15] terms of interest rate lock for truest um it is locked for a closing through

[16:19] March 21 which works with our calendar that I'll cover here in a moment. Uh we

[16:23] still need to go to local government commission. We have submitted that

[16:27] application. We would need to have one more county board action but we would be

[16:31] able to close by March 21st. they would like to be notified of an acceptance by

[16:36] February 4th. We would be able to do that if you all give us that direction

[16:40] today. the prepayable language. There's a lot of language there and dates, but

[16:45] essentially what they've done truest is they said you can prepay beginning

[16:50] basically a year from now, but there would be a 5% prepayment penalty and

[16:55] then it would step down to 4% 3% 2% and eventually you would get to what's

[17:03] called a par prepayment, no penalty beginning in 31. So call it roughly five

[17:09] years. So, you have the ability to prepay early if you need to, but there's

[17:13] a penalty. But you will get to a place with them beginning in um April of 31

[17:19] where you could prepay without penalty. >> Was that the prepaid of the the uh

[17:24] payment submitted or is that prepay of the entire loan?

[17:27] » Just if Yeah. the entire loan if you wanted to refund it or just you had cash

[17:32] and you said, "We don't want this loan outstanding anymore. How do we pay it

[17:35] off?" >> So, you said the whole loan, not just

[17:37] Okay, >> that's right. But no, there would be

[17:40] scheduled payments. No penalty there. Obviously, that's just an advertising

[17:44] payment schedule. Um Webster Bank um interest rates are

[17:49] locked through March 20. So again, fits our closing date. They would like to be

[17:53] notified this week. Um their language a little bit different. Um they don't

[17:58] allow prepayment until April 1 of 31. So you're you're not able to prepay for the

[18:04] first five or so years. Beginning in 31, there'd [cough and clears throat] be a

[18:07] 2% penalty. It would step down to 1%. And beginning in 2033, you could prepay

[18:13] without penalty. So, Truist has slightly better prepayment language. One, you can

[18:18] prepay as early as next year, and you get to a place where you can prepay

[18:23] without penalty a little bit early. And they have a about a not about, they have

[18:29] a two basis point um better rate. Um, I'm not going to go through the others

[18:34] unless you have questions about them because I think we're really in the mix

[18:37] here of talking about truest and Webster questions on that.

[18:42] » Good. Okay. Little more detail on the next slide. We can go and that's going

[18:49] to have to look at the paper for that one. Um,

[18:52] » can you zoom in? >> Yeah.

[18:53] » Oh, no. I'm good. I've got it here, too. So, couple of things to note as you go

[18:57] down the truest line. We've already mentioned the rate. We've mentioned the

[19:01] prepayment and the interest rate locking period. They would um have a $7,000 fee

[19:07] for their attorneys that would be representing them in the transaction. Um

[19:11] the county and their attorneys would be drafting the documents. Um which is

[19:16] typical and the bank and their attorney would be in more of a review mode, but

[19:20] they would have an attorney that would be representing them. Um, you'll see

[19:26] under line five when the loan closes, all of the money

[19:31] comes to the county and you have the funds available to make payments as

[19:36] needed. Um, and you're earning interest on those monies. For truest, they want

[19:41] that money held with them um in an account that is is perfectly acceptable

[19:49] for state statute. No issues with that account or what it's invested in. The

[19:53] current interest earnings rate on that account is a 2.40%.

[19:58] Um, that is lower than what you can get at like the North Carolina Capital

[20:04] Management Trust, but it is a requirement that Truist has. Uh, we

[20:09] talked to them about um being able to man uh do do something different and

[20:14] they um they felt strongly that they wanted those funds held. there you will

[20:18] be earning interest at a 240. But when we talk about Webster there on line

[20:23] five, they will allow the funds to be held um for example at the capital

[20:29] management trust and you're going to get a little bit of rate there. We're we're

[20:32] not quite at 4% there. I think we're a little under 4%. Remember that's just

[20:36] during the period of spending the money on the project and I think there's an

[20:41] expectation that that money will get spent pretty quickly. So it shouldn't be

[20:47] held in any investment account very long but

[20:52] um truest wants it held with them um whereas Webster said you can put it with

[20:57] the capital management trust. Both of them have a a fairly straightforward and

[21:01] simple requisition process. Um Webster will I'm on line four they five excuse

[21:07] me line four they will also have a bank a council representing them for a $5,000

[21:12] fee. um they're both subject to final credit approval. That's really a

[21:17] formality. They they don't really submit proposals if they've got any concerns

[21:20] and it's been pretty well vetted. So, it's pretty standard. It's subject to

[21:24] final credit approval and the documentation. There's nothing odd there

[21:28] between those [clears throat] um those two proposals. Um and then at

[21:34] the very bottom on line eight, just other considerations.

[21:38] Um, you know, they're they're going to truest will take a security interest in

[21:44] uh Rosewood Middle, I think is what we've proposed. Um, there will be some

[21:50] requirements there. Um, flood certification, title search. They will

[21:54] not require a title opinion or a title insurance policy. This is truest. so

[22:00] that there's a little bit less real estate required items with truest and

[22:06] not having a title insurance policy will save some money. Um I think we estimated

[22:12] in the range of about $15,000 >> $1,000 that would be added on with

[22:17] » Webster will require title insurance. They typically do. So they you'll see

[22:23] there they they will require title insurance that will come at a cost to

[22:26] the county and we've estimated that's about 15,000. So, they're really close

[22:32] on rate. Truist has a slightly better loan rate. Truest is going to have the

[22:36] money held with them during the construction period at a lower rate, but

[22:41] truest also doesn't require title insurance, which saves about $15,000.

[22:46] We're going to sort of flush all this out for you in numbers here in a moment.

[22:49] Those are the big comparisons between the two.

[22:52] » Quick question. >> Yes.

[22:54] » It says a security interest in the school facilities. Since there are two

[22:57] facilities here, we're only giving interest in one.

[23:00] » It's only necessary that we um use the middle school as collateral. The

[23:04] elementary school will not be used as collateral. That's more than enough to

[23:08] secure. >> Oh, absolutely. Okay.

[23:11] » Okay. So, let's go to five. This is this is

[23:15] where all the the numbers come together. If you go to the next slide for me. Um

[23:21] the planning model. One more slide.

[23:27] Yeah, you might want to there. Perfect. So, the column B, that's

[23:33] the planning model. That's just to show you where we were when we were running

[23:36] this three-year capital plan. We were using a 5% rate, a $9 million borrowing.

[23:41] The first year was about $900,000. Um, truest is under column C. Um, and

[23:48] you're going to see we've got um the project amount of about 8.8 million. Um,

[23:55] we've got a cost of issuance placeholder of 135,000, the bank fee of $7,000, and

[24:00] you'll see the annual and total payback there. It's about 13,550, excuse me,

[24:06] 13,54,000. It's a 20-year loan that's run at the

[24:10] 430 rate. Webster, the only difference is we've got an extra 15,000 of cost

[24:17] there to represent the additional title insurance cost. So, they're at 150,

[24:22] slightly lower bank rate, uh, bank attorney rate at 5,000. And you'll see

[24:27] the payments, um, are starting at about $850. In total, 13,93. So, it's about

[24:35] $40,000 of additional interest over the life of the loan by going with um,

[24:42] Webster versus Truist. Um, >> but the interest that we would acrew on

[24:48] the You don't think that's going to

[24:51] outweigh? >> Yeah, we looked at that, right? So, so

[24:55] this 13054 versus 13093 at the bottom is comparing

[25:01] the debt service, right? As we talked about, I think it's where your question

[25:05] was going, the we're going to get a little better earnings during

[25:08] construction if we go with Webster because we can put it with the capital

[25:12] management trust. and in talking with staff and taking not looking at the

[25:16] expected spendown of the bond monies that wasn't enough to eclipse the

[25:20] savings and the debt. [snorts] And so you're going to note

[25:25] that as you get into the next slide, we've made a recommendation to move

[25:30] forward with truest um the lowest rate um little bit of savings on the closing

[25:36] cost because of the title insurance um not being necessary. Um and they're very

[25:43] close, but that was the recommend that is the recommendation.

[25:47] And um the calendar this is very high level um today or or yeah February 3rd

[25:55] let's say that fourth is a day delayed but um you've held the public hearing um

[26:02] getting direction on the winning bidder from you all today would be very helpful

[26:05] that will allow us to um get the document started we've already submitted

[26:10] the application to the LGC we've been working with staff on that so that's in

[26:15] um if everything goes According to schedule, we would be back for your

[26:19] second and final approval on March 3rd. That's also the day the LGC would

[26:24] consider approving the financing. We don't expect any issues from the LGC

[26:29] approval. We've had a call with them. They know it's coming. This is um a

[26:34] pretty straightforward project. And then we would be in a position certainly to

[26:38] close by the the the March 20th deadline that the banks have given us.

[26:46] Any questions? >> Any questions?

[26:49] » Mr. um Mr. Chair, I have just trying to understand the

[26:55] big picture in my mind right of debt service.

[27:01] So regardless of who who we go with the

[27:06] additional debt service that's needed like for fiscal year 27 900,000 or 849,

[27:11] » right? that would come out of the 4042 cent sales tax

[27:18] that that we have. Um and this is manageable based on what we are

[27:24] » in fact

[27:33] » I remember that >> it also includes the um Brogden purchase

[27:36] as well that's been faced. Yeah, it it's been included in the

[27:42] planning work for some time. Um, and so it's they're prepared for that in the 27

[27:49] budget without requiring finding additional revenue. And I think we're

[27:55] scheduled to come back in early May and present that again. This presumably will

[28:00] be, you know, turned into existing debt by then if we close. And then you'll see

[28:05] we've got um new projects in the future that we'll be modeling. So I think from

[28:09] a affordability perspective it's it's fully accounted for in the modeling.

[28:16] » Thank you Mr. Chair. >> Okay. Any other questions?

[28:20] » Is that standard um with banking with most banks to try to hold the funds in

[28:25] their particular >> it's a little bit of a mixed bag. Some

[28:28] care a about that. Um but on the on the flip side like Truist doesn't care quite

[28:35] as much about the um title >> the title right and the and the

[28:41] collateral whereas >> you know Webster put the money wherever

[28:44] you want but they are very focused on the real estate related items. So it's

[28:49] it's it's not uncommon but it's not universally applied by each bank. And

[28:56] Commissioner Williams, if you recall, you know, for some of our other projects

[29:00] like the jail, Fremont, human services, we went to borrowing pretty early in the

[29:05] process. So, that was more advantageous for us to be able to invest that because

[29:10] we was probably going to sit in the bank longer while we spent it down with our

[29:14] skiff grants that we have with the middle school um and the timing of that

[29:18] construction. And then we anticipate bids for the elementary school coming

[29:21] back later this month. We're only going to hold this money for a couple of

[29:26] months if that. So really there is not much net benefit to to that. Okay.

[29:32] » To being able to invest it. Um I think it would be different if it if we were

[29:36] earlier on in the projects, but given the timelines

[29:39] » and and with truis while they want the money there, there's absolutely no

[29:43] requirement to keep it there for any period of time. You could pull it all

[29:47] out after closing if you were able to. >> Thank you. I would also point out that

[29:52] we stalled this borrowing as long as we could to hopefully interest rates would

[29:59] come down and they actually did come down.

[30:01] » Yeah, these these are for 20-year rates. These are some of the best we've seen in

[30:05] the last 6 months. >> We our timing I think was pretty good.

[30:10] Okay, any other questions or comments? Okay, I will entertain a motion

[30:17] and Andrew if you'll help us frame that motion. Um the motion would be to select

[30:22] Truis Bank as the lender for the Rosewood Elementary and Middle School

[30:25] projects. >> Okay, so moved.

[30:28] » All right, we've got a motion on the floor. Any discussion on the motion?

[30:32] Hearing none. All those in favor signify by raise your right hand and that's

[30:36] unanimous. >> Okay,

[30:37] » thank you so much. >> Thank you. I appreciate it.

[30:39] » Thank you.

[30:44] » All right. Uh at this point, I think we have concluded everything. Is there

[30:49] anything else come before the board hearing? None. We are

Reconvened Wayne County Board of Commissioners Meeting 2/4/26

Transcript