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Design and engineering work is nearly complete for the "Medical Mile" extension of the Endor Iron Furnace Trail and for the downtown streetscapes. Because these projects are close to "shovel ready," they are likely to be the first projects embarked upon, should voters approve them. Of course, there is no way to predict definitively until voters make their choice and the City is able to begin the final phases of those projects.
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A bond referendum is a voting process that gives voters the power to decide if a municipality should be authorized to raise funds through the sale of bonds. A general obligation (G.O.) bond is long-term borrowing in which a municipality pledges its full faith and credit (taxing power) to repay the debt over a specified term. G.O. bonds are the least costly financing option available to the City for these projects.
Under North Carolina law, a local government holding a referendum for the purpose of issuing general obligation (G.O.) bonds must specify general categories of capital projects for which bond proceeds may be used. Within these categories, a local government may identify specific projects that are intended to be funded by the bond proceeds - the “bond package.”
However, due to the lengthy process involved with identifying, designing, and implementing projects, as well as the lack of detailed cost and other project information available at the time of the bond referendum, the specific projects identified in the bond package may change over time.
The question that the actual bond referendum therefore asks of voters is whether they authorize local government to use the G.O. bonds as a financing tool for the general category of projects up to the amount specified in the question.
Bonds make capitol projects more affordable and put less stress on the City’s budget. By using bonds to finance these projects, we can pay for them in installments over time rather than needing all the money at the outset.
If citizens vote in favor of the four bond financing questions on the September 10th ballot, the City will have the authority to issue up to $14.5 million in general obligation (G.O.) bonds over 7 years. If the projects cannot be initiated in 7 years, the City may ask for a 3-year extension from the North Carolina Local Government Commission.
The 7 years allotted for these bonds are not meant to give municipalities the ability to shelve projects until seven years have passed. The 7-year time period is meant to give municipalities some leeway in when they issue debt so that they can watch the bond market and initiate the bonds when the time is best financially - just like how shoppers wait until interest rates are low to make a large purchase.
The City’s goal is to initiate these projects as soon as possible and to stagger them over time to minimize the tax impact on residents. Seven years is the longest the City can take to initiate a project, not a goal for getting started.
Yes. There will be four bond projects: Streetscape and Pedestrian Improvement Bonds, Parks and Recreational Bonds, Greenways and Trails Bonds, and Sidewalk Improvement Bonds. Each type of bond will pass or fail on its own. Therefore, a voter does not have to vote "yes" to all four projects in order to vote in favor of any one of them.
Per $100 of assessed value of personal and real property:
- Streetscape and Pedestrian Improvement Bonds = $6.5 million = 2.33 cents
- Parks and Recreational Bonds = $2 million = 0.72 cents
- Greenways and Trails Bonds = $4 million = 1.43 cents
- Sidewalk Improvement Bonds = $2 million = 0.72 cents
Assuming that voters choose to invest in all four projects, which total $14.5 million - and that the City embarked on all four investments at once - the property tax impact could be up to 5.2 cents, or $52 per $100,000 of home value, each year.
However, Council’s intention is to stagger the projects to minimize the tax impact on residents. The goal is not to embark on all four projects at once.
No. Taxes will be applied to all assessed value, which includes real and personal property, such as your vehicle or boat.
The City is working with limited revenue growth. After operational expenses are calculated, there are little remaining funds left for capital improvements. If the bonds do not pass, the projects will have to compete with the already limited funding. Some projects will likely be postponed or eliminated.
No. The bond vote is a vote on whether the City may specifically use general obligation (G.O.) bond financing; it is not a vote on the property tax rate. The City Council may raise or lower the property tax rates each year depending on the amount of revenues the Council believes is necessary to meet the operational and capital needs of the municipal government.
While the economy hasn’t completely recovered, the City Council has determined that these investments are needed to move Sanford into the future. And, given the City’s sound financial management, Sanford can borrow money at low interest rates and issuance costs, thus saving Sanford taxpayers hundreds of thousands of dollars over the repayment period.
The City will have 7 years (can be extended to 10) to issue/sell the bonds and 20 years to pay back the bonds after the funds are borrowed.
Preliminary work has already been completed on some of these projects. We are now ready to take the next step.