HomeMy WebLinkAboutResolutions - 2015.11.12 - 22078MISCELLANEOUS RESOLUTION #15281 November 12, 2015
BY: FINANCE COMMITTEE, TOM MIDDLETON, CHAIRPERSON
IN RE: FACILITIES MANAGEMENT/FACILITIES MANAGEMENT ADMINISTRATION — RESOLUTION
ASSIGNING ALL OF OAKLAND COUNTY'S QUALIFIED ENERGY CONSERVATION BONDS
ALLOCATION TO THE STATE OF MICHIGAN
To the Oakland County Board of Commissioners
Chairperson, Ladies and Gentlemen:
WHEREAS Section 54D of the Internal Revenue Code of 1986, as amended, and the American Recovery
and Reinvestment Act (ARRA) of 2009, PA 111-5, authorized the issuance of Qualified Energy
Conservation Bonds (QECB); and
WHEREAS QECBs were initiated with the Federal Energy Improvement and Extension Act of 2008,; and
WHEREAS the QECB is not a grant program but, rather, is a loan program which requires full repayment
of the amount borrowed; and
WHEREAS QECB loans are restricted taxable bonds; and
WHEREAS prior to the ARRA effort, tax credit bonds had historically been issued in small volume; and
WHEREAS including the QECB program, multiple tax credit bond programs were established or
expanded by ARRA in 2009 such as Build America Bonds (BABs), including Recovery Zone Economic
Development Bonds, and Qualified School Construction Bonds; and
WHEREAS tax credit bonds are bonds which the issuer is responsible for paying back the principal and
the Federal Treasury Department provides to bondholders tax credits quarterly with the amount of credit
being based on a percentage of the tax credit bond rate determined by the Treasury Department; and
WHEREAS purchasers of these bonds are allowed a federal tax credit against regular income tax
equivalent to the interest that the QECB would otherwise pay; and
WHEREAS each type of ARRA tax credit bonds has a different level of subsidy allowed by the Federal
government for the purchaser of these bonds, a different purpose for which it may be issued, and other
varying rules; and
WHEREAS although tax credit bonds were designed to be issued at an interest-free rate, the bonds are
typically sold at a discount or with a supplemental cash interest payment; and
WHEREAS in 2010 Oakland County issued approximately $19.6 million of BABs for four projects (Airport
terminal and three Water Resource Commission projects) which initially provided a 45% interest expense
reimbursement to the County over the life of the bonds but the reimbursement was subsequently reduced
by the Federal government in 2013 by 8.7% as a result of the budget sequestration, costing the County
an estimated $419,597 in additional interest payments over the remaining life of the bonds; and
WHEREAS the QECBs initially qualified for a 70% tax credit rate, but that credit rate has been reduced
since to a 64% discount rate based on the most recent information obtained through the Federal
TreasuryDirect website; and
WHEREAS QECBs can be used for projects that reduce energy consumption in public buildings by at
least 20%, green community programs, rural development involving renewable energy, and other
qualified projects; and
WHEREAS the State of Michigan received a federal allocation of $103.8 million for QECBs, of which
$82.1 million was divided among local units of government; and
WHEREAS at least 70% of a State's allocation must be allocated to governmental bonds and up to 30%
may be issued as private activity bonds; and
WHEREAS in a letter dated January 27, 2010, the Michigan Department of Energy Labor and Economic
Growth (MDELEG) notified Oakland County that it had been allocated $12.4 million for QECB capacity of
which $8.7 million could be used for governmental purpose bonds and a maximum of $3.7 million could
be used for private activity bonds; and
WHEREAS in an effort to alert local Oakland County governments and private entities to the availability of
the QECB's Oakland County hosted three "Green Summit" sessions with participation from cities, villages,
FINANCE COMMITTEE VOTE:
AYES: Kowa'', Long, Taub, Middleton (4)
NAYS: Woodward, Zack, Quarles (3)
ABSENT: Matis, Crawford
Motion carried on a roll call vote.
and townships and information about the QECB program was disseminated during those summits; and
WHEREAS the available allocation of QECBs has not been used by any governmental or private entity
located within Oakland County; and
WHEREAS instead of using taxable QECB's for energy improvements, Oakland County government
chose to use $4.8 million of Federal Energy Efficiency and Conservation Block Grant (EECBG) funding
for its energy conservation initiatives which do not require repayment as the QECB program does; and
WHEREAS since 2009, energy consumption in Oakland County facilities has been reduced by $5 million
annually which is a reduction of 15%; and
WHEREAS no government or private entity within Oakland County has requested to utilize any portion of
the County's QECB allocation; and
WHEREAS pursuant to Section 54D of the Internal Revenue Code of 1986, as amended, Oakland
County may assign all or part of its QECB allocation to another entity; and
WHEREAS in a letter to the Oakland County Treasurer dated September 23, 2015, the Michigan
Department of Treasury requested that communities which do not intend to use QECBs to officially
waive the unused portion of their allocation so that the State of Michigan may allocate them elsewhere;
and
WHEREAS AAA-rated Oakland County government finds use of tax-free bonds to be more fiscally
advantageous than is the use of taxable QECB's for energy improvements; and
WHEREAS Oakland County desires to comply with the State of Michigan's request and assign its full
$12.4 million allocation of QECBs back to the State of Michigan; and
WHEREAS of the State's total allocation of $103.8 million, approximately $30.3 million of QECBs have
been issued statewide to date; and
WHEREAS to assign Oakland County's allocation of QECBs to the State, a resolution must be approved
and a waiver form must be signed by an authorized officer of Oakland County as designated in an official
resolution and sent to the Bureau of State and Authority Finance.
NOW THEREFORE BE IT RESOLVED that the State of Michigan be and is hereby assigned the amount
of $12,415,518 of Oakland County's QECB allocation, and authorizes the Chairperson of the Oakland
County Board of Commissioners to sign the attached waiver.
BE IT FURTHER RESOLVED that all resolutions and parts of resolutions insofar as the same conflict with
the provisions of this resolution be and the same hereby are rescinded.
BE IT FURTHER RESOLVED that the Board of Commissioners directs the Oakland County Clerk to send
a certified copy of this resolution and the completed waiver form to the Michigan Department of
Treasury's Bureau of State and Authority Finance, to the Michigan Agency of Energy, and to the Oakland
County Treasurer.
Chairperson, on behalf of the Finance Committee, I move the adoption of the foregoing resolution.
Qualified Energy Conservation Bond (QECB) Waiver Form
Name of Municipality: County of Oakland, MI
Original Allocation Amount: $12,415,518
Amount of Allocation Used: $-O-
Amount (if any) Issued as Private Activity Bonds: $-O-
Amount Waived to State: $12,415,518
Authorized Signature:
Print Name: Michael J. Gingell
Title: Chairman of the Board of Commissioners Date:
Telephone: 248-858-0100 Email: gingellmgoakgov.com
DECBs hack to DT micniann: ono
NOW THEREFORE BE IT RESOLVED
Df 3103.8 million. 001310
Resolution #15281 November 12, 2015
Moved by Middleton supported by Bowman the resolution be adopted.
Discussion followed.
Moved by Woodward supported by McGillivray the resolution be postponed until December 2, 2015
Discussion Followed
Vote on postponement:
AYES: Gershenson, Jackson, McGillivray, Quarles, Woodward, Zack, Bowman. (7)
NAYS: Fleming, Gingell, Gosselin, Hoffman, KowaII, Long, Middleton, Scott, Spisz, Taub,
Weipert, Crawford, Dwyer. (13)
A sufficient majority having not voted in favor, the postponement failed.
Moved by Woodward supported by Jackson the resolution be amended as follows:
WHEREAS no government or private entity within Oakland County has
• '4' • " It • • . •
-
WHEREAS pursuant to Section 54D of the Internal Revenue Code of
WHEREAS in a letter to the Oakland County Treasurer dated September
23, 2015, the Michigan Department of Treasury requested that communities
which do not intend to use QECBs to officially waive the unused portion of
and
'1/1/1 rated Os
bonds to be more fiscally
advantageous than is the use of taxable QECB's for energy improvements; and
request and 3-sign its full
Commissioners to sign the attached waiver.
BE IT FURTHER RESOLVED that all resolutions and parts of resolutions
same hereby are rescinded.
nonce, to the Michigan Agency of Energy, an-to the
Oakland County Treasurer,
NOW THEREFORE BE IT RESOLVED that the County QECB allocation be
utilized to create a residential energy upgrade loan program modeled on the
Saint Louis County Sustainable and Verifiable Energy Savings (SAVES)
program, which allowed residential homeowners to finance up to $15,000 in
eligible energy efficiency improvements at a low interest rate.
BE IT FURTHER RESOLVED that the County QECB allocation be utilized to
implement energy efficiency improvements to county or local municipal
facilities similar to the measures taken to successfully acheive LEED
certification at the new terminal at the Oakland County Airport.
Discussion followed.
Vote on amendment:
AYES: Gershenson, Jackson, McGillivray, Quarles, Woodward, Zack, Bowman. (7)
NAYS: Gingell, Gosselin, Hoffman, KowaII, Long, Middleton, Scott, Spisz, Taub, Weipert,
Crawford, Dwyer, Fleming. (13)
A sufficient majority having not voted in favor, the amendment failed.'
Discussion followed.
Vote on resolution:
AYES: Gingell, Gosselin, Hoffman, KowaII, Long, Middleton, Scott, Spisz, Taub, Weipert,
Crawford, Dwyer, Fleming. (13)
NAYS: Jackson, McGillivray, Quarles, Woodward, Zack, Bowman, Gershenson. (7)
A sufficient majority having in favor, the resolution was adopted.
I HEREBY APPROVE THIS RESOLUTION
CHIEF DEPUTY COUNTY EXECUTIVE
ACTING PURSUANT TO MCL 45.559A (7)
STATE OF MICHIGAN)
COUNTY OF OAKLAND)
I, Lisa Brown, Clerk of the County of Oakland, do hereby certify that the foregoing resolution is a true and
accurate copy of a resolution adopted by the Oakland County Board of Commissioners on November 12,
2015, with the original record thereof now remaining in my office.
In Testimony Whereof, I have hereunto set my hand and affixed the seal of the County of Oakland at
Pontiac, Michigan this 12th day of November 2015.
6747i/121----
Lisa Brown, Oakland County