Minutes 09-30-2014 - Laserfiche WebLink

Browse Search

All of the individual items on the bond referendum passed in the November 2001 bond referendum. The total bond referendum passed with an average approval rate of approximately 55 percent. Additionally, some of the steps included in the process to prepare for the general obligation bonds referendum were as follows: 1. The Board of County Commissioners decided to proceed with a general obligation bond referendum. 2. The Board of County Commissioners formed and appointed members to a Capital Needs Task Force to make a recommendation as to the needs and components of the bond referendum (See Attachment b). 3. Once the components of the general obligation bond referendum were decided, the Board of County Commissioners appointed a Bond Education Committee to inform the public of the purpose of and the components of the general obligation bond referendum (Attachment c). Currently, the County and both School Districts (Chapel Hill— Carrboro City Schools and Orange County Schools) have capital projects that would be included as part of the general obligation bond referendum. Moreover, both school districts have older facility needs totaling approximately $330 million that could potentially be addressed in part with a general obligation bond referendum. At the September 11, 2014 Board of County Commissioners Work Session, the recommended sizing of the potential general obligation bond referendum was discussed at a range between $100 and $125 million over a period of 20 years. At current AAA municipal bond interest rates, the total combined debt service for $100 million is estimated to be $6.1.million annually. This would represent 4.00 cents on the current property tax rate. At current AAA municipal bond interest rates, the total combined debt service for $125 million is estimated to be $7.6 million annually. This would represent 4.67 cents on the current property tax rate. Future debt capacity for a potential general obligation bond referendum can increase or decrease due to the following circumstances: • Future increases or decreases in interest rates • Future changes or modifications to the capital investment plans of the County and or both School Districts (individually or collectively) • Future changes of a legislative or regulatory nature Clarence Grier said for the May 2016 date the process would need to start by August of 2015. He said for November 2016 date it would need to start around November or December of 2015. He noted that the dates and steps for this process are outlined in the attachments. Chair Jacobs asked about the ultimate tax impact Clarence Grier said the tax impact for $100 million would be 4 cents on the current tax rate, and $125 million would be 4.67 cents on the current tax rate. Andrew Davidson asked about the ability to use staggered borrowing if a bond is approved for a certain amount. Clarence Grier said this can be done. He said in previous meetings there was discussion of a bond schedule to initially issue $40 million, then an additional $35 million, followed by the final $35 million. He said this would be staggered over two year periods of time. He said this makes the debt service more affordable, so it does not have such a large impact on the budget each year. Commissioner McKee said this also staggers the tax increases. Clarence Grier said yes. He said the County has a Triple A bond rating, so rates are low. He said this will impact debt capacity and the debt service. He said a lot of debt service will be declining and being paid off as soon as the debt is issued and staggered. He said,