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January 6, 2003 Page 2 SCHOOL DEBT CONSTRUCTION TIMING Ms. Dubois presented the following scenario for borrowing funds in 2003 to finance the Bethel and Pitts Road Elementary Schools and the Kannapolis Middle and other Kannapolis School projects. Borrow funds in 2003 with capitalized interest: Anticipated Rate on Debt (TIC): COPS Proceeds Capitalized Interest Cost, Financed: Total Cost over Life of Financing: 4.65% 41,530,631 1,091,263 60,831,742 Estimation of school completion, 18 months December 2004 Stating the Kannapolis Middle School project would not be ready for bid until June, Ms. Dubois outlined the proposed time schedule to issue the Certificates of Participation in June or July 2003. She explained that a separate issuance for the two school systems would result in an additional cost of $350,000.00. Also, Ms. Dubois pointed out that borrowing the funds with capitalized interest would delay the first debt payment until FY 2005. Ms. Liz Poole, Vice Chair of the Cabarrus County Board of Education, commented on the time schedule for funding the school projects. She stated the County Schools could bid the new Bethel School quickly and the new Pitts School Road Elementary in approximately 60 days. There was brief discussion regarding the financing for the schools, including the schedule, the bidding process and the need to do the financing for both school systems at the same time. UPON MOTION of Commissioner Carpenter, seconded by Commissioner Carruth and unanimously carried, the Board authorized the Finance Director, Interim County Manager and County Attorney to proceed with necessary steps for financing the new Bethel and Pitts School Road Elementary Schools and Kan~apolis Middle and other Kannapolis School projects as outlined by Ms. Dubois. Mr. Day reported that in the past the County had funded the cost of constructing the ballfields/school parks at new schools through the County's general fund. Since funding is no longer available, he suggested that the ballfield/school park construction be included as an alternate in the bid specifications for the new schools and that those costs be included in the debt financing. Ms. Poole commented on other needs for the schools, including furniture, school buses and technology requirements. Mr. Day indicated that the County would work with the Schools in addressing those needs. By consensus, the Board agreed for the construction of ballfields/school parks at the new schools to be included as alternates in the school construction bids and, if the bids are acceptable, to include those costs in the debt financing for the new schools. Mr. Day reported that several years ago the Board had discussed the possibility of establishing a committee to discuss the future use of the existing Bethel Elementary School. This issue had been delayed until plans were finalized for the construction of the new school. By consensus, the Board agreed for Chairman Freeman and Commissioner Carpenter to meet with representatives from the Midland community concerning the future use of the current Bethel School property. BUDGET ISSUES - NEW REVENUE SOURCE Proposal for the Use of the Hotel Occupancy Tax Revenue Mr. Day proposed that the Board consider using funds from the approximately $1.1 million of capital money raised through the hotel occupancy tax for improvements at the Arena and Events Center (Expo). He stated the Expo exists at this time and has the potential for promoting tourism and bringing people to Cabarrus County. Mr. Day outlined the immediate needs at the facility, including additional parking and improvements to the midway. He stated other improvements such as a basketball court for hosting tournaments and an equestrian facility would expand the opportunities for the use of the facility and would generate new room nights at local hotels. In regards to a prior proposal to use the hotel occupancy