2023-291-Resolution No. 2023-051 Recorded 9/20/2023Recorded in Deschutes County CJ2023-291
Steve Dennison, County Clerk
RE D Commissioners' ,journal 09/20/2023 4:41 :43 PM
^;
LEGAL COUNSEL �• 1� II I I I'�I�I'II (� I I II II I I (�I I I �II
2023-291
For Recording Stamp Only
BEFORE THE BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY, OREGON
A Resolution Authorizing Financing of a
Project in a Principal Amount not to
Exceed $20,500,000 and Refunding the
County's Full Faith and Credit Bonds
* RESOLUTION NO. 2023-051
WHEREAS, Deschutes County, Oregon (the "County") is authorized by Oregon Revised
Statutes ("ORS") Section 271.390 to enter into financing agreements to finance or refinance real
or personal property which the Board of County Commissioners (the "Board") determines is
needed, and to authorize certificates of participation in the right to receive the payments due from
the County under those financing agreements, so long as the estimated weighted average life of a
financing agreement does not exceed the estimated dollar weighted average life of the real or
personal property to be financed or refinanced by such agreement; and
WHEREAS, the County is authorized by ORS 287A.105 to incur bonded indebtedness
within the meaning of Section 10, Article XI of the Oregon Constitution in an amount not to
exceed one percent of the real market value of the taxable property in the County, in the form of
a financing agreement, and to commit the County's full faith and credit and taxing power
pursuant to ORS 287A.315 to pay the amounts due under the financing agreement; and
WHEREAS, it is desirable to obtain financing to provide improvements to and expansion
of the county courthouse (the "Project") in an aggregate principal amount of not more than
$20,500,000 pursuant to ORS Sections 271.390 and ORS 287A.105, and other applicable
provisions of ORS Chapter 287A; and
WHEREAS, the Project constitutes real or personal property, and the Board hereby
determines the Project is needed; and
WHEREAS, the County issued its Full Faith and Credit Bonds, Series 2013 in the
original principal amount of $8,405,000 (the "Refundable Bonds") to finance a jail expansion
project, including a new medium/maximum security inmate housing unit, improvements and
renovations to the existing jail facility and related site work (the "Refunded Project"); and
WHEREAS, the County may be able to reduce its debt service costs by refunding all or a
portion of the outstanding Refundable Bonds, and it is desirable to refinance all or a portion of
the outstanding Refundable Bonds pursuant to ORS Sections 271.390, 287A.105, and 287A.365
and other applicable provisions of ORS Chapter 287A; and
Page 1 —Resolution No. 2023-051
3823656.3 046904 RSIND
WHEREAS, the Refunded Project constitutes real or personal property, and the Board
hereby determines that the Refunded Project was needed at the time it was financed and
continues to be needed; now therefore
BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF
DESCHUTES COUNTY, OREGON, as follows:
Section 1. Financing Agreement Authorized.
The County is hereby authorized to finance the Project under the authority of
ORS Sections 271.390 and 287A.105, and other applicable provisions of ORS Chapter 287A, by
entering into one or more financing agreements, loan agreements, credit facilities, or other
financing documents (the "New Money Financing Agreements") in an aggregate principal
amount of not more than $20,500,000. The County may also pay costs of issuing the New
Money Financing Agreements and any associated Obligations (as defined below) with proceeds.
Section 2. Refinancing of the Refundable Bonds Authorized.
The County is also authorized to refinance all or a portion of the outstanding Refundable
Bonds under the authority of ORS Sections 271.390, 287A.105, and 287A.365, and other
applicable provisions of ORS Chapter 287A, by entering into one or more financing agreement,
loan agreements, credit facilities or other financing documents (the "Refunding Financing
Agreements" and together with the New Money Financing Agreements, the "Financing
Agreements") to refinance all or a portion of the outstanding Refundable Bonds. The Refunding
Financing Agreements may be issued in an amount sufficient to pay and redeem the Refundable
Bonds to be refunded, plus an amount sufficient to pay estimated costs related to accomplishing
the refunding and the issuing of the Refunding Financing Agreement and any associated
Obligations (as defined below);
Section 3. Delel4ation.
The Chief Financial Officer, the County Administrator, or the designee of either of those
officials (each of whom is referred to herein as a "County Official") are hereby authorized on
behalf of the County and without further action by the Board, to:
3.1. Negotiate, execute and deliver the Financing Agreements which obligate the
County to repay the financed amounts, with interest. Subject to the limitations of this
Resolution, the Financing Agreements may be in such form and contain such terms as the County
Official may approve, including covenants for the benefit of the lenders or credit enhancement
providers.
3.2. Negotiate, execute and deliver one or more escrow agreements or similar
documents (the "Escrow Agreements") which provide for the issuance of one or more series of
"certificates of participation" or "full faith and credit obligations" (the "Obligations") which
represent ownership interests in the financing payments due from the County under the Financing
Agreements. Subject to the limitations of this Resolution, the Escrow Agreements and each
series of Obligations may be in such form and contain such terms as the County Official may
approve, including covenants for the benefit of the lenders or credit enhancement providers.
Page 2 — Resolution No. 2023-051
3823656.3 046904 RSIND
3.3. Determine whether the interest payable on each Financing Agreement will be
includable in gross income or excludable from gross income under the Internal Revenue Code of
1986, as amended (the "Code") and covenant for the benefit of the owners of tax-exempt
obligations to comply with all provisions of the Code which are required for the interest
component of financing payments payable under the related Financing Agreements to be
excluded from gross income for federal income tax purposes.
3.4. Designate the Financing Agreements and Obligations as "qualified tax-exempt
obligations" under Section 265(b) of the Code, if applicable.
3.5. Issue any Financing Agreement as a "taxable bond" bearing interest that is
includable in gross income under the Code.
3.6. Deem final and authorize the distribution of a preliminary official statement for
each series of Obligations, authorize the preparation and distribution of a final official statement
or other disclosure document for each series of Obligations, and enter into agreements to provide
continuing disclosure for owners of each series of Obligations.
3.7. Apply for and purchase ratings, municipal bond insurance, or other forms of credit
enhancements for the Financing Agreements and Obligations, and enter into related agreements,
as necessary.
3.8. Enter into additional covenants for the benefit of the purchasers of the Financing
Agreements and Obligations which the County Official determines are desirable to sell the
Financing Agreements and Obligations on favorable terms.
3.9. Engage the services of verification agents, escrow agents, paying agents, and any
other professionals whose services are desirable for the financings and enter into agreement with
these service providers.
3.10. Select the maturities of any Refundable Bonds to be refunded.
3.11. Enter into one or more escrow deposit agreements for the refunding, take actions
to call, defease, and redeem all or any portion of the outstanding Refundable Bonds, file any
required advance refunding plans with the State of Oregon.
3.12. Subject to this Resolution, determine the final principal amount of each Financing
Agreement, the interest rate or rates which each Financing Agreement and each series of
Obligations shall bear, and the County's prepayment rights and other terms of each Financing
Agreement and each series of Obligations.
3.13. Solicit competitive bids for the purchase of each series of the Obligations and
award their sale to the bidder offering the most favorable terms to the County, select one or more
underwriters, negotiate the tenns of the sale of each series of Obligations, and sell that series to
those underwriters; or select one or more commercial banks, negotiate the terms of the sale of
each Financing Agreement and sell each Financing Agreement to those commercial banks.
3.14. Execute and deliver any other certificates or documents and take any other actions
which the County Official determines are desirable to issue, sell, and deliver the Financing
Page 3 — Resolution No. 2023-051
3923656.3 046904 RSIND
Agreements and the Obligations and to accomplish the refunding of the }refundable Bonds in
accordance with this Resolution.
Section 4. Security.
The Financing Agreements shall constitute "limited tax bonded indebtedness" as defined
in ORS 287A.105 and the obligation of the County to make financing payments under the
Financing Agreements is unconditional. Pursuant to ORS 287A.315, the County Official may
pledge the County's full faith and credit and taxing power within the limitations of Section 11
and 1 lb of Article XI of the Oregon Constitution, and any and all of the County's legally
available funds, including the proceeds of the Financing Agreements, to make the payments due
under the Financing Agreements.
Section 5. Appointment of Bond Counsel and Municipal Advisor.
The law firm of Hawkins Delafield & Wood LLP is appointed as bond counsel to the
County, and PFM Financial Advisors LLC is appointed as municipal advisor to the County, with
respect to the Obligations.
Section 6. Effective Date.
This Resolution shall take effect immediately upon its adoption.
Page 4 — Resolution No. 2023-051
3923656.3 046904 RUND
DATED this 13th &,-v 2023.
ATTEST:
Recording Secretary
Record of Adoption Vote
Commissioner
Yes
Anthony DeBone
X
Patti Adair
T
Phil Chang
Page 5 — Resolution No. 2023-051
BOARD OF COUNTY � OMMISSIONERS
OF DESCHUTES COUNTY, OREGON
ANTHONY DEBONE, CHAIR
PATTI ADAIR, VICE CHAIR
PHIL CHANG, COMMISSIONER
No Abstained Excused
3823656.3 046904 RSIND
BOARD OF
COMMISSIONERS
MEETING DATE: September 13, 2023
SUBJECT: Authorization of Issuance of Debt for Courthouse Expansion and Potential
Refinancing
RECOMMENDED MOTION:
Move approval of Resolution 2023-051 Authorizing Financing of a Project in a Principal
Amount not to Exceed $20,500,000 and Refunding the County's Full Faith and Credit Bonds
BACKGROUND AND POLICY IMPLICATIONS:
Courthouse Expansion Project
The Board of County Commissioners approved the Courthouse Expansion Project, with an
estimated cost of $40.5 million. The Oregon Legislative Assembly allocated $15 million to
the project through Senate Bill 5506 (2023) out of the State's General Fund. In May 2023,
the Budget Committee approved $5 million toward the project, comprised of $4.6 million
from ARPA Local Assistance and Tribal Consistency Funds (LATCF) and $400,000 from
discretionary ARPA interest earnings. The Board adopted the budget allocations in June
2023. There remains $20.5 million needed from debt financing to fund the project.
Finance met with PFM Financial Advisors to discuss options of issuing bonds in October
2023 or April 2024. After evaluating the potential costs and benefits of issuing debt in
either timeframe, we ended up with an October/November timeframe. Issuing bonds
earlier would add additional costs but would mitigate interest rate risk associated with a
later sale. Given the inverted yield curve
(relatively high short-term investment courthouse Expansion Debt Service
rates), issuing bonds early may reduce net $1,800,000
interest expense by increased interest $1,600,000
$1,400,000
earnings for the six-month period. $1,200,000
$1,000,000
$800,000
Preliminary analysis estimates a true $600,000
interest cost at 3.96%, par amount of bonds $400,000
issues at $18.6 million, and total debt $200,00$0
service of $30.6 million. Annual debt service N N N N N m M M M m m m v v a g N
000000000000 000000
N N N N N N N N N N N N
payments are estimated at $1.6 million. InPrincipal 0Net Interest LGIP Earnings
Refunding 2013 Bond
On July 24, 2013, the County issued $8.4 million in Full Faith & Credit Obligations, with a
final maturity of June 1, 2038, to finance the expansion of the Deschutes County Adult Jail,
including building a mediumlmaxirnum security inmate housing unit, the conversion of a
dorm unit into a medical and mental health segregation unit, and building an outdoor
recreating unit, among other projects.
The County's outstanding 2013B Bonds became callable on June 1, 2023. As part of the
County's 2022 Full Faith & Credit financing for the Negus Transfer Station, the Board of
County Commissioners authorized the refinancing of these outstanding maturities.
However, due to market conditions at the time the 2022 obligations were sold, the County
elected not to include the refunding as part of that transaction. Approximately $6 million
remains outstanding.
Current analysis indicates potential savings refunding the 2013 obligations of over
approximately $30,000 annually for the remaining 15 years of the bond. This produces a
cash flow savings of $457,520 and a net present value savings of $228,201, as follows:
SAVINGS
Deschutes County, Oregon
Full Faith & Credit and Refunding Obligations, Series 2023
Assumes AA+ Muni BVAL as of 819/2023 + 26 bps
(Preliminary - Subject to Change)
Present value
Prior Refunding to 1113012023
Date Debt Service Debt Service Savings @ 3.6203112°10
06130/2024
545,381,26
537,761.11
7,620,15
9,696.02
06/30/2025
543,581.26
509,000.00
34,58126
32,633.83
06/30/2026
546,381.26
516,250.00
30,131.26
27,420.44
06/30/2027
543,58126
512,500,00
31,081.26
27,299,44
06/30/2028
545,381.26
513,250.00
32,131.26
27,238.77
0613012029
546,581,26
513,250.00
33,331.26
27,272.70
06/3012030
547,181.26
517,500.00
29,681.26
23,430.74
06/30/2031
547,181,26
515,750.00
31,431.26
23,954.06
06/3012032
546,581.26
513,250.00
33,33126
24,522.94
06130/2033
544,875.00
515,000.00
29,875.00
21,210.89
06/30/2034
542,550.00
510,750.00
31,800.00
21,795.91
06/3012035
542,975.00
510,750.00
32,225.00
21,311.58
06/3012036
547,500.00
514,750.00
32,750.00
20,898.75
06/30/2037
545,900.00
512,500.00
33,400.00
20,566.25
06/30/2038
543,400.00
509,250.00
34,150.00
20,291.20
8,179,031.34
7,721,511.11
457,520,23
349,543.53
Source: PFM Financial Advisors LLC
Savings Summary
PV of savings frorn cash flood 349,543.53
Less: Prior funds on hand (125,190.63)
Pius: Refunding funds on hand 3,84776
Net PV Savings
BUDGET IMPACTS:
Source: PFM Financial Advisors LLC
228,200.66
The issuance costs of approximately $150,000 will be covered by bond proceeds. For the
Courthouse Expansion Project, future annual debt service payments of approximately $1.6
million will be paid by the General Fund, including transfers from the Transient Room Tax
Fund. These debt service costs have been factored into the long-term General Fund
financial forecast. For the refunding bond, future debt services payments will continue to
be paid by the Sheriff's Office and General Fund, with savings of approximately $30,000
annually.
ATTENDANCE:
Robert Tintle, Chief Financial Officer
Lee Randall, Facilities Director