Agenda - 10-19-2004-7b - Laserfiche WebLink

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ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: October 19, 2004 Action Agenda Item No. ~ ,~ SUBJECT: Proposed Constitutional Amendment on Use of "Self-Financing Bonds" DEPARTMENT: Manager/Finance/ Economic Development PUBLIC HEARING: (Y/N) No ATTACHMENT(S): September 2004 Report from NC Budget & Tax Center Various Opinion Pieces/News Articles INFORMATION CONTACT: Rod Visser, ext 2300 Ken Chavious, ext 2453 Dianne Reid, ext 2326 TELEPHONE NUMBERS: Hillsborough 732-8181 Chapel Hill 968-4501 Durham 688-7331 Mebane 336-227-2031 PURPOSE: To receive a report on the proposed amendment to the North Carolina Constitution that would authorize local governments to issue so-called "self-financing bonds" BACKGROUND: One element included in the balloting during the November 2, 2004 General Election will be a proposed amendment to the State Constitution that would permit local governments to issue tax-supported debt without voter approval for certain economic development related activities. The Board of County Commissioners requested that staff provide a report on the nature and mechanics of these so-called "self financing bands". Staff have compiled a variety of background documents that describe how these bonds would work and what some of the pros and cons are, from the perspective of advocates and opponents of the proposed constitutional amendment. Of particular note is the September 2004 analysis of the proposed amendment prepared by the North Carolina Budget & Tax Center, which provides some historical context, advantages and disadvantages of this type of financing, and recommended improvements to the proposal on the ballot. Also of note is that the North Carolina Association of County Commissioners' Board of Directors has voted unanimously to endorse the constitutional amendment. County staff, in consultation with the County s bond counsel, are not recommending either support for or opposition to the proposed amendment, but offer the following observations in addition to the varying views cited in the accompanying background materials: Orange County's debt management policy as currently written does not permit the use of debt for the types of activities contemplated under the proposed constitutional amendment.