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

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!g On what basis does the Local Government Commission make its decision? The law establishes seven specific criteria that a community's development plan must meet before the bonds can be issued. One of the most important is that the conunission must be satisfied that the project would not proceed without the public improvements paid for with the self financing bonds.. North Carolina has some of the most rigorous standards in the country for using self financing bonds. What happens if the project fails? In more than 50 years no local bond approved by the Local Govermnent Commission has defaulted. In addition the Connnission can require some bonds to be insured and local governments have a lien and may foreclose on private development to collect the taxes owed on the project. The local governments can require other safeguards of private businesses as part of the agreement to use the bonds. Also, the amendment specifically prohibits pledging the taxing power of the local government to repay the bonds without a referendum, Does approval of the bonds require a vote? No There are three reasons why. First, the law requires a vote onl if the taxing power of the conununity is pledged to pay off bonds. The law clearly states that with these bonds communities will not be pledging their taxing power to pay off these bonds, Secondly, the bonds are used to support projects that are ready to start now and can't afford to wait around months for a referendum. Third, self-financing bonds can be insured. Also local governments can put a lien or foreclose on private development to collect the taxes owed, What about the development's impact on the existing neighborhood? The law specifically requires the development plan to include a description of the benefits to the residents and business owners in the development district and to address what steps will be taken to deal with any possible negative impacts the project will have, How have the bonds worked in other states? There are a variety of economic studies about the benefit of self=financing bonds, There is little, if any dispute, among those studies that there are significant increases in jobs, private investment, property values and tax revenues within the development districts. For example, in Iowa the value of land within development districts grew fiom $650 million to $4 billion - a growth rate 10 times faster than overall municipal property valuation. Property tax revenues collected from development districts there grew from $22 million in 1989 to $118 million in 1999.