Minutes 10-16-2014 - Laserfiche WebLink

Browse Search

Due to recent changes enacted by the North Carolina General Assembly related to the dates in which a general obligation bond referendum can be held, a general obligation bond referendum can only be held on even numbered years. Therefore, the two possible closest upcoming dates for the Board of County Commissioners to conduct a voter approved general obligation bond referendum are May 2016 and November 2016. If not held at one of these dates, a potential general obligation bond referendum would be required to be held in May 2018 or November 2018 or in subsequent even numbered years. 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. Mayor Lavelle said the blue sheet refers to the breakdown from the 2001 bond referendum. Clarence Grier said there have been some preliminary discussions with the local government commission, and they are generally in favor of the current sizing of the debt. Alderman Gist asked about the progress of paying off the bond from 2001. Clarence Grier said there are 5 more years to pay off that debt. He said there was a recent refinancing of that debt that will save an additional $830,000 over the next 5 years. Alderman Gist asked if the tax burden to citizens will be decreased when this debt is paid off. Clarence Grier said that is a Board of County Commissioners decision, though in theory this could happen. Alderman Gist said if one was passed two years from now, then residents would be paying on two bonds for a two or three year period. Clarence Grier said the current outstanding general obligation debt is $86.5 million, but this will all be extinguished in the next 10 years. He said if this referendum is passed in 2016, the existing debt will be gone within 10 years, and the bond referendum will be the only outstanding debt. Alderman Gist said her problem is that money is borrowed to pay the bond, and then when the bond is paid off residents keep paying. She said 4.5 cents on the tax rate is real money for some people. She wonders if there is some way to cut some of this. Clarence Grier said this rate is at current economic conditions. He said this can go up or down. Alderman Gist said this depends on how you define current economic conditions. She said sometimes the economy may only be getting better for a small group of people, but the middle class is not getting better. Chair Jacobs said one of the key components of a proposed bond package would be parks and open space. He said the Commission for the Environment has proposed that 12 percent of the County's land be preserved, and currently this number is about 10 percent. Chair Jacobs said the main drivers of this bond are the schools. He said the two school systems have identified a combined total of$300 million in needed safety improvements, repairs and upgrades to improve capacity. He said there may need to be more than one bond issue in order to swallow this amount of school needs.