WORK SESSION AGENDA REQUEST

Sponsor:

Board of Supervisors Meeting Date: 

Finance Committee

September 10, 2009

Staff Lead:

Department: 

Anthony I. Hooper, Deputy County Administrator

County Administration

Topic: 

A Work Session to Consider Resolutions Approving A Plan Of Financing With The Industrial Development Authority Of Fauquier County, Virginia, and a Lender to Provide the Long-Term Financing of the Vint Hill Sewer Treatment Plant and to Secure Such Financing with a Lease Structure

 

Topic Description:

The Funding Agreement signed on March 25, 2009, between the County and the Water and Sanitation Authority provides for long-term financing on the Vint Hill Farms Wastewater Treatment Plant.  On June 11, 2009, a Board resolution authorized the County to enter into short-term financing to meet cash requirements of ongoing construction prior to completing permanent financing.  The proceeds from the permanent financing will be used to payoff the short-term financing and reimburse the County’s Utility Fund for the initial deposit of $855,000 into an escrow account.

 On the recommendation of the County’s Financial Advisors, a Request for Proposal for a bank qualified private placement loan was distributed on August 13, 2009.  The RFP was sent to 18 banks for bids. We received a strong response and bids from five banks.  Attached is a summary of the bids.

Under the IDA Act, an IDA is authorized to undertake financings for local governmental facilities. An IDA lease revenue note is sold to the lender and is secured by a financing lease agreement between the IDA and the County. The County will use the Alice Jane Child’s Building as collateral for the loan.  The County's payments under the financing lease are subject to annual appropriation and the lender has remedy of foreclosing on the leased property if the County does not appropriate funds to meet the payment schedule.

Resolutions that will be considered include:  a Prime lease between the County and IDA and a Note Purchase and Lease Agreement Between the County, the IDA and the purchasing bank and authorization for the County Administrator and certain County officials to execute the necessary documents.

 

Requested Action of the Board of Supervisors: 

Conduct a work session and consider adoption of the attached resolution.

 

Financial Impacts Analysis:

The County considered a number of financing options to provide permanent financing for the expansion of the Vint Hill Waste Treatment Plant.  In the final analysis the most viable options were the IDA lease revenue note sold in a competitive process to a bank or participation in the Virginia Resource Authority Loan Pool.  VRA will be preparing an offering this Fall which would make proceeds available to the County by the end of the year.  Given the uncertainty of the bond market, the strong bids received in response to the request for proposals for financing and the enhanced flexibility to refund the note if interest rates fall that is available with the lease revenue note, it is recommended that this option be exercised.  This approach will also allow the County to terminate the short term borrowing program in place at the end of the month thereby reducing interest costs.

 

Identify any other Departments, Organizations or Individuals that would be affected by this request:

Fauquier County Treasurer’s Office
Fauquier County Finance Department

 

Attachment:

1.  Summary of Bids 2009

2.     Prime Lease

3.     Note Purchase Agreement

4.   Resolution

 

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