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00:08:44,080 --> 00:08:49,519
Okay, we are reconvening our meeting.
Um, [clears throat] remember that for a

2
00:08:48,800 --> 00:08:55,600
minute.
>> And right off the bat, we're going to

3
00:08:51,360 --> 00:09:01,120
reconvene our 9:15 public hearing.
And that public hearing was to receive

4
00:08:58,080 --> 00:09:06,800
public comments regarding a proposed
installment financing agreement or

5
00:09:03,839 --> 00:09:12,480
similar financing arrangement to finance
improvements to Rosewood Middle School

6
00:09:09,760 --> 00:09:17,279
and Rosewood Elementary School for the
County of Wayne, North Carolina.

7
00:09:15,600 --> 00:09:21,760
And we are checking to see if there's
anyone here to speak at our public

8
00:09:19,279 --> 00:09:26,000
hearing.
And there's no one here to speak. So you

9
00:09:24,560 --> 00:09:28,640
can go ahead and close that and then we
can take action on the necessary

10
00:09:27,680 --> 00:09:34,880
resolution.
>> All right. I close the public hearing

11
00:09:31,519 --> 00:09:39,519
and I'll entertain a motion uh to take
some action on this

12
00:09:36,720 --> 00:09:43,920
» and the motion would be to um adopt a
resolution making certain findings and

13
00:09:41,440 --> 00:09:47,200
determinations regarding an installment
financing agreement.

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00:09:46,160 --> 00:09:51,839
» So move.
>> All right. We have a motion. Is there

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00:09:49,040 --> 00:09:57,640
any discussion on the motion?
Hearing none. All those in favor signify

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00:09:53,680 --> 00:09:57,640
by raising your right hand.

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00:09:57,839 --> 00:10:05,120
» And that passed unanimously.
Uh we have a second public hearing that

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00:10:03,920 --> 00:10:07,440
» Miss AOK, did you raise your hand?
>> Yes.

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00:10:05,360 --> 00:10:10,320
» Oh, I'm sorry. I missed out.
>> Might have been kind of slack, but I

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

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00:10:12,399 --> 00:10:20,560
reconvening.
Um and that uh public hearing is to

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00:10:17,040 --> 00:10:28,880
receive comments on a request to reszone
2.817. 817 acres in Grantham Township

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00:10:24,800 --> 00:10:34,640
from community shopping to R10 for
property located at the northeast corner

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00:10:31,519 --> 00:10:44,120
of the intersection of Paul Hair Road
and US13 Highway 13 South identified as

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tax partial 2546734961.

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00:10:46,240 --> 00:10:55,680
Is there anyone here uh to speak at our
public hearing?

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00:10:51,920 --> 00:11:05,240
Seeing no one, uh adjourn the uh the
public hearing and we'll entertain a uh

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a motion if we so desire to take action.

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» So move.
>> Okay, we have a motion to approve the

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00:11:09,760 --> 00:11:19,200
reszoning request. Any discussion?
Hearing none. All those in favor signify

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00:11:16,480 --> 00:11:25,920
by raising your right hand. And that was
a unanimous vote as well.

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00:11:22,880 --> 00:11:28,880
Uh our next course of action today would
be to

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» public comments. Do you want to do that?
>> Public comments.

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00:11:29,519 --> 00:11:36,399
» Even though nobody
>> Okay. I'm reconvening our public comment

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period. And is there anyone here to
speak during our public comment time?

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00:11:38,720 --> 00:11:45,120
» Yes sir.
>> Uh hearing of no one. I during the

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00:11:43,040 --> 00:11:53,600
public comments.
Um now at this point I think we are to

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00:11:48,640 --> 00:12:01,079
receive some information from uh our
Davenport and company and I hereby

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00:11:56,640 --> 00:12:01,079
recognize them for a presentation.

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00:12:06,399 --> 00:12:09,920
» Good morning.
>> Good morning.

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00:12:08,240 --> 00:12:13,440
» Ted Cole with Davenport. I appreciate
the opportunity to be here. There's a

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00:12:11,600 --> 00:12:17,680
presentation that you have in front of
you. Um, and it's about to be put on the

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00:12:16,480 --> 00:12:22,160
screen as well. [laughter]
>> Okay. I rushed it. I apologize.

44
00:12:19,839 --> 00:12:24,000
» No, that's all right.
>> Um,

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00:12:22,800 --> 00:12:27,839
» it was my fault.
>> Well, while you're getting that

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00:12:25,279 --> 00:12:31,040
together, uh, Mr. Cole, uh, how was your
trip?

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00:12:28,959 --> 00:12:35,600
» It was It was easy. I actually was in
Raleigh yesterday and last night, they

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00:12:33,040 --> 00:12:36,480
had virtually no weather that I could
see.

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00:12:36,079 --> 00:12:37,760
» Wow.
>> Very little.

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00:12:37,440 --> 00:12:40,560
» Wow.
>> And the roads coming here were good. So,

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00:12:39,839 --> 00:12:43,040
» good. Good.
>> No problems.

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00:12:41,279 --> 00:12:47,120
» I'm glad you had safe travels. Sounds
like you all had quite a bit of snow

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[laughter]
>> pockets.

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00:12:50,800 --> 00:13:00,160
» Okay. So, what's on the screen is
exactly what's um in front of you. Um we

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00:12:57,440 --> 00:13:05,279
we have done a request for proposal for
financing for the Rosewood Middle and

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00:13:03,279 --> 00:13:10,639
Rosewood Elementary. I'm sorry. Go to
page two if you don't mind. Thank you.

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00:13:07,760 --> 00:13:16,079
No, back up. There we go. Um we did an
RFP. We sent it out to a large list of

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00:13:12,880 --> 00:13:21,040
banks, national, regional, um, local,
where they have a presence. Uh, we

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00:13:18,639 --> 00:13:27,920
brought back proposals. We had asked
for, uh, an amount, um, up to 9 million.

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00:13:25,200 --> 00:13:31,120
Um, and the structure of this financing
is what's called an installment

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00:13:29,279 --> 00:13:36,240
financing agreement. You all have done a
number of those over the years. uh in

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00:13:33,680 --> 00:13:41,360
essentially borrowing money in this case
from a bank and you're securing that

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00:13:38,160 --> 00:13:48,160
loan with a deed of trust on the school
project uh Rosewood Middle and um your

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00:13:45,600 --> 00:13:51,920
annual payment to go in the budget is
subject to your annual appropriation.

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00:13:50,240 --> 00:13:56,444
So, it's a mortgage back type of
financing. Very typical. Um, as you've

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00:13:54,800 --> 00:13:59,920
held a public hearing, there's a
[snorts] resolution. Uh, we'll be back.

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00:13:58,639 --> 00:14:04,480
I'll talk about the schedule in a
moment. We received proposals from five

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00:14:02,160 --> 00:14:08,959
different banks. Um, they're listed
there. Um, some of them you will

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00:14:06,399 --> 00:14:13,839
recognize as being in the area, others
maybe not present in the area or maybe

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00:14:12,320 --> 00:14:17,199
not even have an office in North
Carolina, but they are very active in

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00:14:15,600 --> 00:14:21,519
lending to local governments. We have
worked with all of these and um would

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00:14:19,600 --> 00:14:27,279
have no issues with any of them in terms
of closing loans. So that was the

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00:14:24,000 --> 00:14:33,920
request we we made. Page three gives you
a summary. Go to the next slide. Thank

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00:14:30,480 --> 00:14:39,199
you. Um so sort of from left to right we
have the lender. Um first we then have

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00:14:36,959 --> 00:14:42,959
what's the the rate lock section. So
it's talking about is the rate locked

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00:14:40,800 --> 00:14:47,600
now? Is it floating? When do we have to
lock it? When do we have to close? Um,

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00:14:46,079 --> 00:14:52,800
we'll talk a little bit about that. The
call provisions,

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00:14:49,760 --> 00:14:57,440
that has to do with your ability to
prepay the loan or refund the loan in

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00:14:55,440 --> 00:15:01,600
the future if there's ever a need or a
desire or an opportunity to do that. And

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00:14:59,680 --> 00:15:05,680
every bank kind of looks at that a
little bit differently. And then we have

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00:15:03,440 --> 00:15:09,920
the rate. And again, we asked for 20
years. We asked for fixed rate. That

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00:15:07,839 --> 00:15:14,000
would be expected by the local
government commission. Um and the rates

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00:15:12,320 --> 00:15:22,639
you can see range from anywhere from a
430 to um upwards of a you know around a

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00:15:17,519 --> 00:15:27,839
460. Um so actually a fairly tight range
for these that we see. Um we talked to a

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00:15:25,440 --> 00:15:32,880
number of other banks. Nobody um chose
to to not bid based on any financial

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00:15:31,120 --> 00:15:37,360
concerns about the county. Some of them
said, "Hey, it's maybe a little bit too

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00:15:34,720 --> 00:15:42,480
large for us or it's not at in our our
our market or our footprint." But nobody

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00:15:40,560 --> 00:15:48,240
had any concerns with the county's
finances. And you'll see Truis Bank

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00:15:44,959 --> 00:15:54,000
offered the lowest rate at a 430. Very
closely followed up by Webster Bank at a

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00:15:50,880 --> 00:15:57,120
432. Uh Webster is one of those that's
very active in lending to local

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00:15:55,680 --> 00:16:02,000
governments, but you're not going to see
a branch of theirs anywhere in town or

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00:16:00,079 --> 00:16:07,040
really in in the county. Their banker is
in Charlotte, but they are not a a

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00:16:04,720 --> 00:16:10,639
commercial bank that operates in North
Carolina. But we do a lot of lending

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00:16:08,720 --> 00:16:17,360
with them. And then the others there
that kind of fell in um behind. So in

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00:16:15,040 --> 00:16:21,600
terms of interest rate lock for truest
um it is locked for a closing through

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00:16:19,600 --> 00:16:25,040
March 21 which works with our calendar
that I'll cover here in a moment. Uh we

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00:16:23,839 --> 00:16:29,199
still need to go to local government
commission. We have submitted that

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00:16:27,040 --> 00:16:34,000
application. We would need to have one
more county board action but we would be

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00:16:31,040 --> 00:16:38,399
able to close by March 21st. they would
like to be notified of an acceptance by

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February 4th. We would be able to do
that if you all give us that direction

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00:16:40,480 --> 00:16:47,759
today. the prepayable language. There's
a lot of language there and dates, but

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00:16:45,360 --> 00:16:52,800
essentially what they've done truest is
they said you can prepay beginning

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00:16:50,480 --> 00:17:01,279
basically a year from now, but there
would be a 5% prepayment penalty and

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00:16:55,920 --> 00:17:06,880
then it would step down to 4% 3% 2% and
eventually you would get to what's

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00:17:03,279 --> 00:17:11,520
called a par prepayment, no penalty
beginning in 31. So call it roughly five

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00:17:09,679 --> 00:17:15,919
years. So, you have the ability to
prepay early if you need to, but there's

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00:17:13,679 --> 00:17:22,400
a penalty. But you will get to a place
with them beginning in um April of 31

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00:17:19,919 --> 00:17:26,799
where you could prepay without penalty.
>> Was that the prepaid of the the uh

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00:17:24,799 --> 00:17:30,160
payment submitted or is that prepay of
the entire loan?

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00:17:27,919 --> 00:17:33,840
» Just if Yeah. the entire loan if you
wanted to refund it or just you had cash

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00:17:32,400 --> 00:17:35,840
and you said, "We don't want this loan
outstanding anymore. How do we pay it

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00:17:35,520 --> 00:17:38,160
off?"
>> So, you said the whole loan, not just

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00:17:37,760 --> 00:17:42,640
Okay,
>> that's right. But no, there would be

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00:17:40,160 --> 00:17:46,880
scheduled payments. No penalty there.
Obviously, that's just an advertising

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00:17:44,640 --> 00:17:52,160
payment schedule.
Um Webster Bank um interest rates are

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00:17:49,600 --> 00:17:56,640
locked through March 20. So again, fits
our closing date. They would like to be

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00:17:53,760 --> 00:18:02,000
notified this week. Um their language a
little bit different. Um they don't

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00:17:58,400 --> 00:18:07,200
allow prepayment until April 1 of 31. So
you're you're not able to prepay for the

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00:18:04,080 --> 00:18:10,640
first five or so years. Beginning in 31,
there'd [cough and clears throat] be a

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00:18:07,600 --> 00:18:16,640
2% penalty. It would step down to 1%.
And beginning in 2033, you could prepay

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00:18:13,840 --> 00:18:22,000
without penalty. So, Truist has slightly
better prepayment language. One, you can

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00:18:18,960 --> 00:18:26,160
prepay as early as next year, and you
get to a place where you can prepay

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00:18:23,760 --> 00:18:33,039
without penalty a little bit early. And
they have a about a not about, they have

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

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unless you have questions about them
because I think we're really in the mix

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00:18:37,280 --> 00:18:46,240
here of talking about truest and Webster
questions on that.

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00:18:42,640 --> 00:18:51,360
» Good. Okay. Little more detail on the
next slide. We can go and that's going

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00:18:49,840 --> 00:18:53,200
to have to look at the paper for that
one. Um,

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00:18:52,000 --> 00:18:55,360
» can you zoom in?
>> Yeah.

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00:18:53,760 --> 00:18:59,520
» Oh, no. I'm good. I've got it here, too.
So, couple of things to note as you go

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down the truest line. We've already
mentioned the rate. We've mentioned the

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00:19:01,120 --> 00:19:09,200
prepayment and the interest rate locking
period. They would um have a $7,000 fee

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00:19:07,440 --> 00:19:14,000
for their attorneys that would be
representing them in the transaction. Um

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00:19:11,840 --> 00:19:18,960
the county and their attorneys would be
drafting the documents. Um which is

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00:19:16,640 --> 00:19:22,320
typical and the bank and their attorney
would be in more of a review mode, but

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00:19:20,880 --> 00:19:28,960
they would have an attorney that would
be representing them. Um, you'll see

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00:19:26,320 --> 00:19:33,520
under line five
when the loan closes, all of the money

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00:19:31,679 --> 00:19:38,799
comes to the county and you have the
funds available to make payments as

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00:19:36,320 --> 00:19:45,360
needed. Um, and you're earning interest
on those monies. For truest, they want

140
00:19:41,840 --> 00:19:51,440
that money held with them um in an
account that is is perfectly acceptable

141
00:19:49,120 --> 00:19:55,760
for state statute. No issues with that
account or what it's invested in. The

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00:19:53,840 --> 00:20:02,160
current interest earnings rate on that
account is a 2.40%.

143
00:19:58,880 --> 00:20:06,480
Um, that is lower than what you can get
at like the North Carolina Capital

144
00:20:04,080 --> 00:20:11,520
Management Trust, but it is a
requirement that Truist has. Uh, we

145
00:20:09,039 --> 00:20:16,640
talked to them about um being able to
man uh do do something different and

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00:20:14,000 --> 00:20:21,520
they um they felt strongly that they
wanted those funds held. there you will

147
00:20:18,720 --> 00:20:26,640
be earning interest at a 240. But when
we talk about Webster there on line

148
00:20:23,679 --> 00:20:30,480
five, they will allow the funds to be
held um for example at the capital

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00:20:29,120 --> 00:20:34,159
management trust and you're going to get
a little bit of rate there. We're we're

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00:20:32,000 --> 00:20:39,360
not quite at 4% there. I think we're a
little under 4%. Remember that's just

151
00:20:36,960 --> 00:20:43,280
during the period of spending the money
on the project and I think there's an

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00:20:41,440 --> 00:20:51,280
expectation that that money will get
spent pretty quickly. So it shouldn't be

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00:20:47,360 --> 00:20:55,520
held in any investment account very long
but

154
00:20:52,799 --> 00:20:59,600
um truest wants it held with them um
whereas Webster said you can put it with

155
00:20:57,440 --> 00:21:04,640
the capital management trust. Both of
them have a a fairly straightforward and

156
00:21:01,600 --> 00:21:09,679
simple requisition process. Um Webster
will I'm on line four they five excuse

157
00:21:07,280 --> 00:21:15,919
me line four they will also have a bank
a council representing them for a $5,000

158
00:21:12,320 --> 00:21:19,200
fee. um they're both subject to final
credit approval. That's really a

159
00:21:17,120 --> 00:21:22,400
formality. They they don't really submit
proposals if they've got any concerns

160
00:21:20,880 --> 00:21:26,080
and it's been pretty well vetted. So,
it's pretty standard. It's subject to

161
00:21:24,480 --> 00:21:30,400
final credit approval and the
documentation. There's nothing odd there

162
00:21:28,880 --> 00:21:36,159
between those [clears throat]
um those two proposals. Um and then at

163
00:21:34,000 --> 00:21:41,440
the very bottom on line eight, just
other considerations.

164
00:21:38,159 --> 00:21:45,760
Um, you know, they're they're going to
truest will take a security interest in

165
00:21:44,000 --> 00:21:51,919
uh Rosewood Middle, I think is what
we've proposed. Um, there will be some

166
00:21:50,000 --> 00:21:58,080
requirements there. Um, flood
certification, title search. They will

167
00:21:54,480 --> 00:22:02,799
not require a title opinion or a title
insurance policy. This is truest. so

168
00:22:00,799 --> 00:22:09,840
that there's a little bit less real
estate required items with truest and

169
00:22:06,640 --> 00:22:14,960
not having a title insurance policy will
save some money. Um I think we estimated

170
00:22:12,320 --> 00:22:19,840
in the range of about $15,000
>> $1,000 that would be added on with

171
00:22:17,600 --> 00:22:25,120
» Webster will require title insurance.
They typically do. So they you'll see

172
00:22:23,039 --> 00:22:28,640
there they they will require title
insurance that will come at a cost to

173
00:22:26,960 --> 00:22:34,400
the county and we've estimated that's
about 15,000. So, they're really close

174
00:22:32,159 --> 00:22:38,640
on rate. Truist has a slightly better
loan rate. Truest is going to have the

175
00:22:36,880 --> 00:22:43,600
money held with them during the
construction period at a lower rate, but

176
00:22:41,520 --> 00:22:47,840
truest also doesn't require title
insurance, which saves about $15,000.

177
00:22:46,159 --> 00:22:51,600
We're going to sort of flush all this
out for you in numbers here in a moment.

178
00:22:49,520 --> 00:22:53,600
Those are the big comparisons between
the two.

179
00:22:52,640 --> 00:22:55,840
» Quick question.
>> Yes.

180
00:22:54,000 --> 00:22:59,919
» It says a security interest in the
school facilities. Since there are two

181
00:22:57,760 --> 00:23:03,520
facilities here, we're only giving
interest in one.

182
00:23:00,960 --> 00:23:06,480
» It's only necessary that we um use the
middle school as collateral. The

183
00:23:04,880 --> 00:23:09,360
elementary school will not be used as
collateral. That's more than enough to

184
00:23:08,159 --> 00:23:13,039
secure.
>> Oh, absolutely. Okay.

185
00:23:11,360 --> 00:23:17,760
» Okay.
So, let's go to five. This is this is

186
00:23:15,360 --> 00:23:25,960
where all the the numbers come together.
If you go to the next slide for me. Um

187
00:23:21,120 --> 00:23:25,960
the planning model. One more slide.

188
00:23:27,760 --> 00:23:35,120
Yeah, you might want to
there. Perfect. So, the column B, that's

189
00:23:33,520 --> 00:23:38,640
the planning model. That's just to show
you where we were when we were running

190
00:23:36,720 --> 00:23:44,799
this three-year capital plan. We were
using a 5% rate, a $9 million borrowing.

191
00:23:41,760 --> 00:23:51,360
The first year was about $900,000.
Um, truest is under column C. Um, and

192
00:23:48,400 --> 00:23:57,120
you're going to see we've got um the
project amount of about 8.8 million. Um,

193
00:23:55,120 --> 00:24:03,280
we've got a cost of issuance placeholder
of 135,000, the bank fee of $7,000, and

194
00:24:00,960 --> 00:24:08,640
you'll see the annual and total payback
there. It's about 13,550, excuse me,

195
00:24:06,559 --> 00:24:14,640
13,54,000.
It's a 20-year loan that's run at the

196
00:24:10,720 --> 00:24:19,840
430 rate. Webster, the only difference
is we've got an extra 15,000 of cost

197
00:24:17,520 --> 00:24:25,279
there to represent the additional title
insurance cost. So, they're at 150,

198
00:24:22,799 --> 00:24:30,960
slightly lower bank rate, uh, bank
attorney rate at 5,000. And you'll see

199
00:24:27,360 --> 00:24:38,480
the payments, um, are starting at about
$850. In total, 13,93. So, it's about

200
00:24:35,520 --> 00:24:45,360
$40,000 of additional interest over the
life of the loan by going with um,

201
00:24:42,080 --> 00:24:50,640
Webster versus Truist. Um,
>> but the interest that we would acrew on

202
00:24:48,000 --> 00:24:53,039
the
You don't think that's going to

203
00:24:51,600 --> 00:24:58,799
outweigh?
>> Yeah, we looked at that, right? So, so

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this 13054
versus 13093 at the bottom is comparing

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the debt service, right? As we talked
about, I think it's where your question

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was going, the we're going to get a
little better earnings during

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construction if we go with Webster
because we can put it with the capital

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management trust. and in talking with
staff and taking not looking at the

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expected spendown of the bond monies
that wasn't enough to eclipse the

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

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

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forward with truest um the lowest rate
um little bit of savings on the closing

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cost because of the title insurance um
not being necessary. Um and they're very

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close, but that was the recommend that
is the recommendation.

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And um the calendar this is very high
level um today or or yeah February 3rd

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let's say that fourth is a day delayed
but um you've held the public hearing um

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getting direction on the winning bidder
from you all today would be very helpful

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that will allow us to um get the
document started we've already submitted

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the application to the LGC we've been
working with staff on that so that's in

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um if everything goes According to
schedule, we would be back for your

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second and final approval on March 3rd.
That's also the day the LGC would

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consider approving the financing. We
don't expect any issues from the LGC

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approval. We've had a call with them.
They know it's coming. This is um a

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pretty straightforward project. And then
we would be in a position certainly to

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close by the the the March 20th deadline
that the banks have given us.

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Any questions?
>> Any questions?

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» Mr. um Mr. Chair, I have just trying to
understand the

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big picture in my mind right of debt
service.

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So
regardless of who who we go with the

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

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» right? that would come out of the 4042
cent sales tax

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that that we have. Um and this is
manageable based on what we are

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» in fact

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» I remember that
>> it also includes the um Brogden purchase

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as well that's been faced.
Yeah, it it's been included in the

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

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budget without requiring finding
additional revenue. And I think we're

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scheduled to come back in early May and
present that again. This presumably will

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be, you know, turned into existing debt
by then if we close. And then you'll see

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we've got um new projects in the future
that we'll be modeling. So I think from

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a affordability perspective it's it's
fully accounted for in the modeling.

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» Thank you Mr. Chair.
>> Okay. Any other questions?

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» Is that standard um with banking with
most banks to try to hold the funds in

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their particular
>> it's a little bit of a mixed bag. Some

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

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as much about the um title
>> the title right and the and the

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collateral whereas
>> you know Webster put the money wherever

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you want but they are very focused on
the real estate related items. So it's

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it's it's not uncommon but it's not
universally applied by each bank. And

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Commissioner Williams, if you recall,
you know, for some of our other projects

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like the jail, Fremont, human services,
we went to borrowing pretty early in the

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process. So, that was more advantageous
for us to be able to invest that because

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we was probably going to sit in the bank
longer while we spent it down with our

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skiff grants that we have with the
middle school um and the timing of that

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construction. And then we anticipate
bids for the elementary school coming

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back later this month. We're only going
to hold this money for a couple of

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months if that. So really there is not
much net benefit to to that. Okay.

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» To being able to invest it. Um I think
it would be different if it if we were

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earlier on in the projects, but given
the timelines

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» and and with truis while they want the
money there, there's absolutely no

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requirement to keep it there for any
period of time. You could pull it all

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out after closing if you were able to.
>> Thank you. I would also point out that

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we stalled this borrowing as long as we
could to hopefully interest rates would

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come down and they actually did come
down.

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

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the last 6 months.
>> We our timing I think was pretty good.

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Okay, any other questions or comments?
Okay, I will entertain a motion

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and Andrew if you'll help us frame that
motion. Um the motion would be to select

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Truis Bank as the lender for the
Rosewood Elementary and Middle School

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projects.
>> Okay, so moved.

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» All right, we've got a motion on the
floor. Any discussion on the motion?

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Hearing none. All those in favor signify
by raise your right hand and that's

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unanimous.
>> Okay,

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» thank you so much.
>> Thank you. I appreciate it.

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» Thank you.

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» All right. Uh at this point, I think we
have concluded everything. Is there

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anything else come before the board
hearing? None. We are