[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