AGENDA #

AGENDA #7

MEMORANDUM

TO: Mayor and Town Council

FROM: W. Calvin Horton, Town Manager

SUBJECT: Resolutions Ratifying Actions to Begin the Process for a November Bond Referendum, Introduction of Bond Orders and Calling a Public Hearing on September 8, 2003

DATE: August 25, 2003

Attached Resolution A would begin the formal steps necessary for the Council to hold a bond referendum on a proposed expansion of the Town’s Library and on green infrastructure improvement projects as discussed by the Council in June, 2003. The attached resolution would:

Ratify the form of a Notice of Intent to make an application to the Local Government Commission for approval of the issuance of bonds.
Ratify the publication of such notice.
Ratify the filing of the application for approval of the issuance of bonds with the Local Government Commission.
Approve the use of bond counsel in connection with the issuance of the proposed bonds.

In addition to the adoption of Resolution A initiating the process for approval of bonds, the attached five individual Bond Orders should be introduced at tonight’s meeting for consideration at a public hearing on September 8, 2003.

Attached Resolution B would call for a public hearing at 7:00 o’clock P. M. on September 8, 2003 to consider the five separate Bond Orders as introduced, and direct the publication of Notices of the Public Hearing and the filing of a sworn Debt Statement.

BACKGROUND

On June 9 and June 23, 2003, the Council adopted resolutions to begin the formal process necessary to hold a bond referendum on November 4, 2003. The purpose of the referendum would be to consider the issuance of General Obligation bonds to finance an expansion of the current Town Library as recommended by consultants and to finance various capital improvements called green infrastructure projects recommended by the Council’s Committee on Sustainability, Energy and Environment. Attached is an updated Timetable prepared by bond counsel setting forth the steps necessary to complete the process leading to the referendum (Attachment 1).

The Council’s discussion on June 23 indicated a desire to consider bonds for the Library totaling $16,260,000, the full amount recommended in the Library Master Plan adopted earlier by the Council. For the green infrastructure bonds, the Council indicated a desire to finance projects totaling $13.1 million as recommended on June 9 by the Committee on Sustainability, Energy and Environment. The proposed bonds to be considered would thus total $29,360,000.

DISCUSSION

Proposed Ratification of Actions Taken

In discussions with bond counsel, Womble Carlyle Sandridge & Rice, PLLC, in August, bond counsel reviewed all the proposed projects discussed by the Council in June. Counsel then prepared appropriate Bond Orders that would be required for these projects in accord with N. C. Statutes regarding issuance of General Obligations bonds, and prepared a required Notice of Intent for publication in a local newspaper. The notice was published in the Chapel Hill Herald on August 12, 2003, and calls for consideration of five separate Bond Orders totaling $29,360,000. Below is a brief discussion of the assignment and categorization of the proposed green infrastructure bonds projects into the appropriate Bond Order questions in accord with the categories authorized the N. C. Local Government Bond Act (NCGS Chapter 19, Article 4).

In addition to the publication of the Notice of Intent, we have filed an application with the Commission for the issuance of bonds in accord with the attached timetable. Attached Resolution A would ratify the filing of the publication of the Notice of Intent, ratify the filing of an application for the issuance of bonds to the Commission and formally approve the designation of Womble Carlyle Sandridge & Rice, PLLC to serve as bond counsel in connection with the proposed bonds.

Assignment of Proposed Projects to Appropriate Bond Order Questions

The purposes for which General Obligation bonds may be issued in N. C. are prescribed in N. C. General Statutes. Bond counsel advises that the questions proposed to voters be considered in broad general language that would allow the maximum flexibility for the Council to make final decisions on the use of bonds for specific purposes. Consequently, the language proposed for each Bond Order question is purposefully broadly stated.

For the proposed Library expansion, construction and improvements to Library facilities is a category authorized by statutes. Therefore, we propose one Bond Order for these improvements in the amount of $16,260,000, the full amount recommended in the Library Master Plan adopted earlier by the Council.

Regarding the green infrastructure bonds, there are no specific statutes that identify or authorize the issuance of green infrastructure bonds. However, each of the proposed green infrastructure improvement projects is authorized under various existing statutes. For example, several of the proposed projects such as sidewalks, pedestrian and bicycle safety improvements and streetscape improvements would be fall under State statutes authorizing the issuance of bonds for construction of sidewalks and street improvements. The table below shows the green infrastructure projects as originally proposed and the appropriate authorized bond category for each project as determined by bond counsel.

Assignment of Proposed Green Infrastructure Projects to

Appropriate Bond Categories as Authorized by State Statutes

Proposed Green Infrastructure Project	Committee Funding Recommendations 6-5-03	Appropriate Bond Category
Sidewalk Construction	$ 2,600,000	Sidewalk Bonds
Upgrade in Pedestrian Amenities	$ 350,000	Sidewalk Bonds
Neighborhood, Pedestrian and Bicycle Safety Improvements	$ 650,000	Sidewalk Bonds
Downtown Streetscape Improvements	$ 2,000,000	Sidewalk Bonds
Subtotal Sidewalk Bonds	$ 5,600,000

Greenway Construction	$ 5,000,000	Parks & Recreation Bonds
Open Space Purchases	$ 2,000,000	Open Space Bonds
Funds to Establish an Energy Bank	$ 500,000	Public Building Bonds

Total Proposed Green Infrastructure Projects	$ 13,100,000

In summary, bond counsel recommends that the proposed green infrastructure projects be assigned to four individual Bond Order questions in the referendum as follows:

$ 5,600,000 for Sidewalk and Street Improvement Bonds
$ 5,000,000 for Parks & Recreation Bonds
$ 2,000,000 for Open Space Bonds
$ 500,000 for Public Building Bonds

The additional Bond Order included in the total of five individual Bond Orders would be $16,260,000 for expansion of the Town Library.

Introduction of Bond Orders

The next action to be taken at tonight’s meeting would be the introduction of the separate Bond Orders as noted above. At this point in the process, the Bond Orders included in the agenda item would be introduced by Council Members, but no further action on the Orders would be required until the public hearing proposed for September 8, 2003.

In order to continue the bond authorization process following introduction of the five individual Bond Orders, the Council would need to adopt Resolution B setting the date for a public hearing on the proposed bonds orders at 7:00 o’clock P. M. on September 8, 2003, and authorizing publication of the hearing and proposed Bond Orders in a local newspaper prior to the public hearing. The public hearing would provide an opportunity to hear from citizens regarding the proposed bond projects and Bond Orders specifying the amounts of proposed funding for each project.

Next Steps

Assuming adoption of the proposed resolutions to continue the approval process for considering a bond referendum, we would publish the required notice of the public hearing and publish the Bond Orders as introduced at tonight’s meeting. A sworn statement of debt of the Town would be filed with the Clerk’s office on August 25 in accord with the attached timetable. The Council would then hold the public hearing on September 8, 2003.

After hearing from the public and following discussion by the Council on September 8, the Council may adopt the Bond Orders as originally proposed or as amended, and set a date for the bond referendum. The Council would have the option to alter the proposed timetable and defer adoption of the Bond Orders until its next regular meeting on September 22, 2003 if desired. Bond counsel recommends that the Council consider adopting the Bond Orders on September 8 in accord with the timetable as currently proposed.

Bond counsel advises that the financing amounts for each project as specified in the published Bond Orders may be reduced after the public hearing, but may not be increased without restarting the bond authorization process and timetable.

RECOMMENDATION

We recommend the following steps:

1. Adoption of Resolution A, ratifying steps as discussed above.

2. Introduction by a member of the Council of each of the five proposed bond orders using the following language:

“I move the introduction of the ‘Bond Order Authorizing the Issuance of…….’ (full title of each Bond Order)”

3. Adoption of Resolution B, authorizing publication of the proposed Bond Orders and calling for a public hearing on September 8, 2003 at 7:00 pm to consider the Bond Orders.

ATTACHMENTS

Timetable and steps for holding a public referendum on the issuance of General Obligation Bonds as prepared by bond counsel (p. 14).
Copies of Council agenda items of June 9 and June 23 regarding proposed capital improvement projects and the steps and process necessary for holding a bond referendum (p. 16).
Recommendation from the Library Board of Trustees (p. 24).

A RESOLUTION RATIFYING THE FORM OF THE NOTICE OF INTENT TO MAKE APPLICATION TO THE LOCAL GOVERNMENT COMMISSION FOR APPROVAL OF ISSUANCE OF BONDS, RATIFYING THE PUBLICATION OF SUCH NOTICE OF INTENT, RATIFYING THE FILING OF THE APPLICATION FOR APPROVAL OF ISSUANCE OF BONDS WITH THE LOCAL GOVERNMENT COMMISSION, AND APPROVING BOND COUNSEL (2003-08-25/R-18a)

WHEREAS, the Council desires to pursue the possibility of issuing general obligation bonds of the Town of Chapel Hill, North Carolina in the aggregate principal amount not to exceed $29,360,000 (the “Bonds”);

WHEREAS, the proceeds of the Bonds would be used to finance all or a portion of the costs of the following projects: $5,000,000 to pay capital costs of providing parks and recreation facilities; $2,000,000 to pay capital costs of acquiring real property in order to maintain, protect, limit the future use of or otherwise conserve open spaces and areas; $5,600,000 to pay capital costs of providing sidewalk and street improvements; $16,260,000 to pay capital costs of providing library improvements; and $500,000 to pay capital costs of providing public building improvements; and

WHEREAS, the form of notice of intent to make an application to the North Carolina Local Government Commission for approval of the issuance of the Bonds, which notice was published on August 12, 2003 in a newspaper of general circulation in the Town of Chapel Hill, North Carolina, is attached as Exhibit A hereto; and

WHEREAS, the law firm of Womble Carlyle Sandridge & Rice, PLLC, has been recommended to the Board as a law firm possessing capabilities in each of the following areas:

(a) North Carolina municipal law, including in particular the Local Government Finance Act;

(b) Municipal finance and municipal securities law;

(d) Tax Law, including Section 103 and Sections 140 through 150 of the Internal Revenue Code of 1986, as amended;

NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill, North Carolina as follows:

Section 1. The form of notice of intent to make an application to the North Carolina Local Government Commission for approval of the issuance of the Bonds, which notice is in the form of Exhibit A attached hereto, is hereby ratified and approved and the publication of said notice on August 12, 2003 in a newspaper of general circulation in the Town of Chapel Hill, North Carolina is ratified and approved.

Section 2. The form of the Application for Approval of Issuance of Bonds is hereby ratified and approved and the filing of said Application with the Local Government Commission of North Carolina is ratified and approved.

Section 3. The law firm of Womble Carlyle Sandridge & Rice, PLLC is hereby designated to serve as bond counsel in connection with the issuance by the Town of Chapel Hill, North Carolina of the Bonds, or any series thereof, and in connection with the issuance by the Town of Chapel Hill, North Carolina of such additional issues of bonds as the Town Council shall deem appropriate.

Section 4. This resolution shall taken effect upon its passage.

Section 5. A certified copy of this resolution shall be filed with the Local Government Commission.

This the 25^th day of August, 2003.

EXHIBIT A

NOTICE OF INTENT TO FILE AN APPLICATION WITH THE

LOCAL GOVERNMENT COMMISSION TO ISSUE BONDS

The Town Council of the Town of Chapel Hill, North Carolina, for and on behalf of the Town of Chapel Hill, North Carolina (the “Issuer”), hereby gives notice of its intent to file an application with the Local Government Commission of North Carolina for approval of the issuance by the Issuer of its general obligation bonds (collectively the “Bonds”). The Bonds shall be subject to the approval of the voters of said town, shall be issued for the following purposes, and shall be issued in the following respective maximum amounts: $5,000,000 to pay capital costs of providing parks and recreation facilities; $2,000,000 to pay capital costs of acquiring real property in order to maintain, protect, limit the future use of or otherwise conserve open spaces and areas; $5,600,000 to pay capital costs of providing sidewalk and street improvements; $16,260,000 to pay capital costs of providing library improvements; and $500,000 to pay capital costs of providing public building improvements. Any citizen or taxpayer of the Town of Chapel Hill, North Carolina, may, within seven (7) days of the date of publication of this notice, file with the Town Council of the Town of Chapel Hill, North Carolina and the Local Government Commission of North Carolina a statement of any objection to the issuance of the Bonds. Each statement shall set forth the objection and the name and address of such citizen or taxpayer. Such statement of objections should be forwarded to the Town Council of the Town of Chapel Hill, c/o Ralph D. Karpinos, Town Attorney, 306 North Columbia Street, Chapel Hill, North Carolina 27516, and to the Local Government Commission, c/o Janice Burke, Secretary, 325 North Salisbury Street, Raleigh, North Carolina 27611.

Joyce A. Smith

Town Clerk,

Town of Chapel Hill, North Carolina

BOND ORDER AUTHORIZING THE ISSUANCE OF $5,000,000 PARKS AND RECREATION FACILITIES BONDS OF THE TOWN OF CHAPEL HILL, NORTH CAROLINA

WHEREAS, the Town Council of the Town of Chapel Hill, North Carolina deems it advisable to make the capital improvements hereinafter described; and

WHEREAS, an application has been filed with the Secretary of the Local Government Commission of North Carolina requesting Local Government Commission approval of the bonds hereinafter described as required by The Local Government Bond Act, and the Secretary of the Local Government Commission has acknowledged that the application has been filed and accepted for submission to the Local Government Commission;

NOW, THEREFORE, BE IT ORDERED by the Town Council of the Town of Chapel Hill, North Carolina as follows:

Section 1. The Town Council of the Town of Chapel Hill, North Carolina has ascertained and hereby determines that it is necessary to provide additional parks and recreation facilities, including without limitation the acquisition, construction and installation of real estate improvements and equipment required therefor and the acquisition of necessary land or rights in land, and to pay the capital costs of such improvements.

Section 2. In order to raise the money required to pay the capital costs of providing the improvements referenced above, in addition to any funds which may be made available for such purpose from any other source, general obligation bonds of the Town of Chapel Hill, North Carolina are hereby authorized and shall be issued pursuant to The Local Government Bond Act. The maximum aggregate amount of the bonds authorized by this bond order shall be $5,000,000.

Section 3. A tax sufficient to pay the principal of and interest on said bonds when due will be annually levied and collected.

Section 4. A sworn statement of the debt of the Town of Chapel Hill, North Carolina has been filed with the Clerk to the Town Council of the Town of Chapel Hill, North Carolina and is open to public inspection.

Section 5. This bond order shall take effect when approved by the voters of the Town of Chapel Hill, North Carolina at a referendum.

BOND ORDER AUTHORIZING THE ISSUANCE OF $2,000,000 OPEN SPACES AND AREAS BONDS OF THE TOWN OF CHAPEL HILL, NORTH CAROLINA

WHEREAS, the Town Council of the Town of Chapel Hill, North Carolina deems it advisable to make the capital improvements hereinafter described; and

NOW, THEREFORE, BE IT ORDERED by the Town Council of the Town of Chapel Hill, North Carolina as follows:

Section 1. The Town Council of the Town of Chapel Hill, North Carolina has ascertained and hereby determines that it is necessary to acquire land or rights in land for the preservation of open spaces and areas and to pay the capital costs of such improvements.

Section 3. A tax sufficient to pay the principal of and interest on said bonds when due will be annually levied and collected.

Section 5. This bond order shall take effect when approved by the voters of the Town of Chapel Hill, North Carolina at a referendum.

BOND ORDER AUTHORIZING THE ISSUANCE OF $16,260,000 LIBRARY FACILITIES BONDS OF THE TOWN OF CHAPEL HILL, NORTH CAROLINA

WHEREAS, the Town Council of the Town of Chapel Hill, North Carolina deems it advisable to make the capital improvements hereinafter described; and

NOW, THEREFORE, BE IT ORDERED by the Town Council of the Town of Chapel Hill, North Carolina as follows:

Section 1. The Town Council of the Town of Chapel Hill, North Carolina has ascertained and hereby determines that it is necessary to provide additional library facilities, including without limitation the acquisition, construction, equipping and installation of real estate improvements and machinery and equipment required therefore and the acquisition of necessary land or rights in land, and to pay the capital costs of such improvements.

Section 3. A tax sufficient to pay the principal of and interest on said bonds when due will be annually levied and collected.

Section 5. This bond order shall take effect when approved by the voters of the Town of Chapel Hill, North Carolina at a referendum.

BOND ORDER AUTHORIZING THE ISSUANCE OF $5,600,000 SIDEWALK AND STREET BONDS OF THE TOWN OF CHAPEL HILL, NORTH CAROLINA

WHEREAS, the Town Council of the Town of Chapel Hill, North Carolina deems it advisable to make the capital improvements hereinafter described; and

NOW, THEREFORE, BE IT ORDERED by the Town Council of the Town of Chapel Hill, North Carolina as follows:

Section 1. The Town Council of the Town of Chapel Hill, North Carolina has ascertained and hereby determines that it is necessary to acquire, construct, improve, reconstruct, provide and replace certain sidewalks and streets, including without limitation curbs and gutters, bridges, viaducts, overpasses, underpasses, culverts, drains, traffic controls, signals and markers, lighting, grade crossings and related facilities, including the acquisition of machinery and equipment required therefor and the acquisition of necessary land or rights in land, and to pay the capital costs of such improvements.

Section 3. A tax sufficient to pay the principal of and interest on said bonds when due will be annually levied and collected.

Section 5. This bond order shall take effect when approved by the voters of the Town of Chapel Hill, North Carolina at a referendum.

BOND ORDER AUTHORIZING THE ISSUANCE OF $500,000 PUBLIC BUILDING BONDS OF THE TOWN OF CHAPEL HILL, NORTH CAROLINA

WHEREAS, the Town Council of the Town of Chapel Hill, North Carolina deems it advisable to make the capital improvements hereinafter described; and

NOW, THEREFORE, BE IT ORDERED by the Town Council of the Town of Chapel Hill, North Carolina as follows:

Section 1. The Town Council of the Town of Chapel Hill, North Carolina has ascertained and hereby determines that it is necessary to acquire, construct, equip and install energy efficient facilities in certain existing public buildings, including without limitation the acquisition of lighting, heating, ventilating, air conditioning and related fixtures, machinery and equipment, and to pay the capital costs of such improvements.

Section 3. A tax sufficient to pay the principal of and interest on said bonds when due will be annually levied and collected.

Section 5. This bond order shall take effect when approved by the voters of the Town of Chapel Hill, North Carolina at a referendum.

A RESOLUTION CALLING A PUBLIC HEARING ON BOND ORDERS, DIRECTING PUBLICATION OF NOTICES OF PUBLIC HEARING AND FILING OF DEBT STATEMENT (2003-08-25/R-18b)

WHEREAS, the bond orders entitled, “BOND ORDER AUTHORIZING THE ISSUANCE OF $16,260,000 LIBRARY FACILITIES BONDS OF THE TOWN OF CHAPEL HILL, NORTH CAROLINA”; “BOND ORDER AUTHORIZING THE ISSUANCE OF $5,600,000 SIDEWALK AND STREET BONDS OF THE TOWN OF CHAPEL HILL, NORTH CAROLINA”; “BOND ORDER AUTHORIZING THE ISSUANCE OF $5,000,000 PARKS AND RECREATION FACILITIES BONDS OF THE TOWN OF CHAPEL HILL, NORTH CAROLINA”, “BOND ORDER AUTHORIZING THE ISSUANCE OF $2,000,000 OPEN SPACES AND AREAS BONDS OF THE TOWN OF CHAPEL HILL, NORTH CAROLINA” and “BOND ORDER AUTHORIZING THE ISSUANCE OF $500,000 PUBLIC BUILDING BONDS OF THE TOWN OF CHAPEL HILL, NORTH CAROLINA” have been introduced at the meeting of the Town Council of the Town of Chapel Hill, North Carolina held on August 25, 2003, and the Town Council of the Town of Chapel Hill, North Carolina desires to provide for the holding of a public hearing thereon and the submission of a statement of debt in connection therewith as required by the Local Government Bond Act;

NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill, North Carolina, as follows:

Section 1. The public hearing with respect to said bond orders shall be held on the 8th day of September, 2003 at 7:00 o’clock P.M., or as soon thereafter as the matter may be heard, in the Town Council Chambers in the Town of Chapel Hill, in Chapel Hill, North Carolina.

Section 2. The Town Manager is hereby directed to cause a copy of each of the bond orders to be published with a notice of such public hearing in the form prescribed by law in a qualified newspaper no fewer than six days prior to such public hearing.

Section 3. The Town Manager is hereby directed to file with the Clerk to the Town Council of the Town of Chapel Hill prior to publication of the bond orders with the notice of such public hearing, a statement setting forth the debt incurred, the appraised value of property subject to taxation by the Town of Chapel Hill, North Carolina and the net debt of the Town of Chapel Hill, North Carolina.

This the 25^th day of August, 2003.

ATTACHMENT 1

Timetable

For

Town of Chapel Hill, North Carolina General Obligation Bonds, Series 2004

Date Event

August 12, 2003 Publication of Notice of Intent to File Application

August 14, 2003 Preliminary Conference with LGC on Application

August 25, 2003 Application filed with LGC

August 25, 2003 Council adopts Resolution ratifying the form and the publication of the Notice of Intent and the filing of the Application and approving Bond Counsel; Introduction of Bond Orders before Council; Council sets date for Public Hearings

August 26, 2003 Sworn Statement of Debt filed with Clerk

August 27, 2003 Publication of Bond Orders as Introduced and date of Public Hearings

August 28, 2003 Clerk consults with Board of Elections on proposed date of Bond Referendum

August 29, 2003 Notice from Secretary of LGC that Application has been filed

September 8, 2003 Public Hearings held, Bond Orders adopted and date of Bond Referendum set by Council

September 9, 2003 Clerk delivers certified copy of resolution setting date of Bond Referendum to Board of Elections

September 10, 2003 First publication of Notice of Bond Referendum;

publication of Bond Orders as adopted

September 17, 2003 Second publication of Notice of Bond Referendum

September 30, 2003 Absentee ballots available

October 10, 2003 Last day for voter registration for Bond Referendum

November 4, 2003 Bond Referendum

November 7, 2003 Canvass and certification of results of Bond Referendum by Board of Elections

November 17, 2003 Certification of results of Bond Referendum by Council

November 20, 2003 Publication of Statement of Results of Bond Referendum

December 22, 2003 Expiration of 30-day period to set aside Bond Referendum