Title
Appointments- Industrial Facilities & Pollution Control Financing Authority
Action
ACTION:
Nominations/Appointments are needed on the Industrial Facilities & Pollution Control Financing Authority to fill two (2) six-year terms.
Applications are attached.
Staff Contact: Kristine M. Smith, Clerk to the Board
Madison Little, Assistant Clerk
Presentation: No
BACKGROUND/JUSTIFICATION:
Appointments are needed on the above-said board. Charles "Charlie" Stewart has been a member of this Authority since 2002. He resigned from the authority this year, but is willing to return to assist until his replacement is found.
In 1976, pursuant to NCGS § 159C-4, the Mecklenburg Board of Commissioners established "The Mecklenburg County Industrial Facilities and Pollution Control Financing Authority" (“the Authority”) to act as a conduit bond issuer for industrial development bonds to finance new and expanding businesses in the County. The Authority consisted of seven members appointed by the Board of County Commissioners who would serve six-year terms. The Authority was authorized under the Act to issue revenue bonds for the purposes authorized by the Act. In 2007 the Act was amended to broaden the scope of the Authority’s powers to include the issuance of bonds for the benefit of various nonprofit entities and purposes, referred to in the Act as “special purpose projects.” In 2010, the Authority issued its Special Purpose Project Revenue Bond (Thompson Child & Family Focus Project), Series 2010A in the amount of $2,440,000 and its Special Purpose Project Revenue Bond (Thompson Child & Family Focus Project), Series 2010B in the amount of $9,120,000 (collectively, the “2010 Bonds”) pursuant to a bond purchase and loan agreement that was executed on October 1, 2010 between the AUTHORITY, BRANCH BANKING AND TRUST COMPANY (“BB&T,” now Truist), the "Purchaser" and THOMPSON CHILD & FAMILY FOCUS, a North Carolina nonprofit corporation (the “Borrower”). The proceeds of the 2010 Bonds were loaned to the Borrower to refund and retire the outstanding principal amount of the bonds previously issued by the North Carolina Capital Facilities Finance Agency in 2000 to finance various capital projects of the Borrower. The 2010 Bonds bear interest at a floating rate based on the London Interbank Offered Rate (One Month LIBOR), which is a benchmark interest rate for many adjustable rate mortgages, business loans, and financial instruments traded on global financial markets. One Month LIBOR is expected to be phased out in June, 2023; therefore, the Purchaser and the Borrower need to amend the applicable documents in order to change the applicable benchmark interest rate for the 2010 Bonds from a LIBOR based rate to one based on the Secured Overnight Funds Rate (SOFR). Since the SOFR based rate is expected to be the same equivalent rate as the LIBOR based rate, the Local Government Commission (LGC) does not require approval for the change (although they will note it on their information agenda once completed). Since the referenced interest rate is in the bond documents, it requires an amended document signed by the Authority. The last appointments to the Authority were made December 17, 2013 and thus the terms expired in 2019, therefore there are no active members of the Authority. Therefore, it is necessary for the BOCC to appoint or reappoint members to the Authority to approve and execute the necessary documents to change the benchmark interest rate and take any other appropriate action as necessary. As with all bonds issued by the Authority, all costs are paid by the Borrower. Neither the Authority nor the County is responsible for the repayment of the bonds, but having the Authority as the issuer makes them tax exempt, which lowers the cost of the debt. No further action with respect to the 2010 Bonds is required by the BOCC.
PROCUREMENT BACKGROUND:
N/A
POLICY IMPACT:
N/A
FISCAL IMPACT:
N/A