HomeMy Public PortalAbout01-14-1998 Emergency Session
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MINUTES
HILLSBOROVGH TOWN BOARD
January 14, 1998
8:30 AM, Police Department Training Room
The HiIlsborough Town Board held an emergency meeting on January 14, 1998 at
8:30 AM in the Police Department Training Room to consider adopting a Resolution explaining
the fmancial plan for the Water Reservoir Project. Present for the Board Meeting were Mayor
Horace H. Johnson, Sr., Commissioners Kenneth Chavious, Richard Simpson, and Evelyn Lloyd.
Absent from the meeting were Commissioners Catherine Martin and Frances Dancy. Staff
present were Town Manager Eric Peterson, Town Clerk Donna F. Armbrister, Finance Director
Sherry Carter, and Town Engineer Tom Hartye.
Mayor Horace H. Johnson, Sr., called the meeting to order at 8:40 AM.
Town Manager Eric Peterson stated that the purpose of the meeting was to consider
adopting a Resolution explaining the financial plan for the Water Reservoir Project. The
Resolution is necessary for the preparation ofthe Town's Final Official Statement for the sale of
Bonds on February 3rd. Emergency notice was necessary to meet the "printing" deadline for
preparation of the Final Official Statement.
Manager Peterson presented the Resolution for the Board's consideration and gave them
both a report ofEno West Fork Reservoir Estimated Expenditures and a Summary of Funding
Sources. A copy of both reports are hereby made a part of these minutes as Attachment I and II.
Upon a motion by Commissioner Chavious, seconded by Commissioner Simpson, the
Board moved to approve the Resolution By the Hillsborough Board of Commissioners Pledging
FiscallManagerial Support to Complete the Water Reservoir Project and Meet All Subsequent
Fina~cial Obligations by a vote of 3-0. The motion was declared passed. The Resolution is
hereby made a part of these minutes as Attachment III.
Town Manager Eric Peterson commended Finance Director Sherry Carter and Town
Engineer Tom Hartye for their efforts in compiling this information.
Upon a motion by Commissioner Chavious, seconded by Commissioner Simpson, the
Board moved to adjourn at 9: lOAM.
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~Ubmitted,
Donna F. Armbrister, Town Clerk
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ATTACHMENT I
292
Eno West Fork Reservoir
. Estimated Expenditures
Budget Current
Item Amount Expenditures Account #
Environmental Impact Statement $59,600.00 $59,600.00 60-8100-040
Surveying $145,000.00 $138,000.00 60-8100-041
Archaelogical Investigations $17,500.00 $14,500.00 60-8100-042
Appraisals $40,000.00 $37,585.00 60-8100-043
Title Search $5,000.00 $4,475.25 60-8100-044
Design Services $220,000.00 $186,263.18 60-8100-045
aal Fees $130,000.00 $101,383.19 60-8100-046
Miscellaneous/Contingency $272,900.00 $81,091.99 60-8100-570
Fees $17,000.00 $12,068.40 60-8100-571
Land Purchase\Mitigation $1,900,000.00 $1,764,812.53 60-8 I 00-710
Construction $4,100,000.00 $0.00 60-8100-720
Services During Construction $260,000.00 $0.00 60-8100-721
ElectricallInstrumentation $50.000.00 $0.00 60-8100-722
Total
$7,217,000.00
$2,399,779.54
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TEH 1/13198
SUMMARY OF FUNDING SOURCES
Water Reservoir Project
January 14, 1998
. Estimated Project Cost for the Eno West Fork Reservoir: $7,217,000
ATTACHMENT II
293
Revenue Source
Amount
CDBG - ReservoirlFlynt (fund balance)
235,000
168,000
104,000
100,000
100,000
155,000
15,000
40,000
500,000
1,417,000
5,800,000
Interest from Bond Anticipation Notes (non-budgeted surplus)
Interest from Installment-Fin. Ag. on Water Tank Project (non-budgeted surplus)
Appropriation from Water Fund Balance
Interest from General Obligation Bonds (to be sold on February 3rd)
Wastewater Plant - Residual Tank (Transfer expenditure from FY98 to FY99)
Wastewater Plant - Filter Pump (Transfer expenditure from FY98 to FY99)
Water Plant - High Service Pump (Transfer expenditure from FY98 to FY99)
Installment-Finance Agreement (FY99)
Sub-Total of Non-G. 0. Bond Funding Sources
General Obligation Bond Sale (February 3rd Sale)
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Total Revenues
7,217,000
ProiectIFinancing Notes:
· Option may exist to defer fIrst principle payment on G.O. Bonds, beyond FY99 if necessary, to leverage
additional revenues for unexpected overruns, etc.
· Possibility of $300,000 surplus available from water tank projects coming in under budget - these funds may
or may not be available depending on escrow agreement for use of these funds (part of installment fInancing
agreement to fmance this project).
· $2.5 million principle payment due on Bond Anticipation Notes (February 15~
· Use of CDBG Funds will result in a net loss of approximately $77,000 over next 12 months to due water
payment reimbursements to Flynt Fabrics. This loss will have to be absorbed by water fund operating revenues
or fund balance in FY98 and FY99..
· The terms and exact amount of the Installment-Financing Agreement (160A-20) will be determined during the
budget process as the FY99-01 Financial Plan is developed for the Water Fund.
· The funding gap is primarily due to the additional $800,000 needed for the construction phase of the reservoir.
Inflation has affected the project cost since the voters approved the bonds four years ago. In addition, the State
of N.C. required the height of the dam to be raised, thus adding to the cost. To a lesser extent, unexpected
costs for the offsite wetlands mitigation project and legal costs all contributed to the project's expense.
~ · The funding gap is a budgeting/scheduling issue and essentially has no impact on the Town's ability to
., repay/meet its debt service obligations. Due to the aforementioned reasons and because reasonable funding
options exist for this project, the situation will have DQ impact on the Town's bond rating.
· The Town will still have approximately $700,000 in its Water/Sewer fund balance.
Town
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ATTACHMENT III
294
RESOLUTION
By the Hillsborough Board of Commissioners
Pledging Fiscal/Managerial Support to Complete the Water Reservoir Project
And Meet All Subsequent Financial Obligations
WHEREAS, the Town of Hillsborough needs a water reservoir to provide a consistent and healthy water supply
to its citizens, businesses, and industry; and
WHEREAS, a water reservoir is necessary to ensure the long-term economic health of Hillsborough; and
WHEREAS, the Town plans to start construction on the Eno West Fork Reservoir in April 1998 and complete the
project in eighteen months; and
WHEREAS, the estimated cost of the project is $7,217,000 and the amount of General Obligation Bonds authorized
for the planned bond sale on February 3, 1998 is $5,800,000, thus creating the need for an additional $1,417,000
in revenue sources to completely fund the West Eno Fork Reservoir Project; and
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WHEREAS, the Mayor and Board of Commissioners plan to provide the $1,417,000 of non-General Obligation
Bond funding for this project through $917,000 in budget amendments and financial plan changes for FY98 and
FY99 - these changes include deferring capital projects, appropriating Water/Sewer fund balances, and
appropriating non-budgeted (unexpected) revenue sources to the reservoir project. The remaining $500,000
(estimated need) will be obtained through an Installment-Purchase Agreement (in accordance with North Carolina
General Statute 160A-20) to complete the funding needs for the reservoir project.
NOW, THEREFORE LET IT BE RESOLVED, that the Town of Hillsborough Board of Commissioners resolve
to support, and create when necessary, the managerial and financial policies needed to ensure the completion of
the West Fork Eno Reservoir Project, as well as meeting all financial commitments enjoined by the Town related
to the funding of this project.
ADOPTED THIS 14TH DAY OF JANUARY 1998.
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Mayor Horace H. JoMnson, Sr., Mayor
ATTEST:
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D nna Annbnster, Town Clerk
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137 North Churwn Street · P.O. Box 429 · Hillsborough. North Carolina 27278
919.732.2104 · Fax: 919.732.1028