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CABARRUS COUNTY BOARD OF COMMISSIONERS REGULAR MEETING NOVEMBER 15, 2010 6:30 P.M. AGENDA CATEGORY: New Business SUBJECT: Kannapolis - COPS (Certificates of Participation) Financing for NCRC (North Carolina Research Campus) BRIEF SUMMARY: After five years of complex negotiations and fluctuating economic conditions, the City of Kannapolis has developed of plan of action to finally implement funding to support the first phase of the North Carolina Research Campus. An attempt to secure an investment grade rating for the planned Tax Increment Financing was not successful. Unrated bonds in this current economic environment are nearly impossible to sell without creating very high yields for buyers (and obviously higher interest rates for the seller). As a result of the latest challenges, the City has decided to pursue issuing Certificates of Participation (COPs) which will secure far more attractive interest rates. The Kannapolis City Council is prepared to secure the transaction with a pledge for repayment due to the much lower amount being issued and fact that the university and RCCC leases guarantee half the taxes are secured. Attached is the overview of the proposed financing plan. Also included is a rather aggressive schedule which would result in having funds available by December 31. This assumes the Cabarrus County Board of Commissioners considers and makes a decision on the Interlocal Agreement (also attached) at its November 15 meeting. The City has discussed this matter with the Local Government Commission staff and they appear to be supportive but indicated that they needed the County to execute the Interlocal Agreement before we submit it to them formally. The schedule reflects that (December LGC consideration). The reason for the urgency: 1) the very low bids for the new Cabarrus Health Alliance building expire at the end of December and it is questionable that those Page 113 G -3