What is a bond referendum?
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 a form of long-term borrowing in which a municipality pledges the full faith and credit (taxing power) to repay the debt over a specified term. G.O. bonds are generally the least costly financing option available to the town to finance major capital projects.
What are the benefits of the Town of Fuquay-Varina’s AAA bond rating?
The Town of Fuquay-Varina’s AAA rating lowers the Town’s borrowing costs. The Town’s financial policies of maintaining adequate fund balance reserves, retiring debt in a responsible time frame, strong debt management policies, and regular audits serves to keep debt per capita and net debt as a percentage of taxable property at low levels. For this reason, the Town of Fuquay-Varina is able to sell bonds at a low interest rate, resulting in lower borrowing costs for the taxpayer.
How would the town issue bonds?
If citizens vote in favor of the two bond financing questions on the November 2nd ballot, the town will be authorized to issue up to $38.5 million in general obligation (G.O) bonds.
When are bonds issued?
The schedule and amount of bond issues is dependent upon the timetables, economic conditions, and resources, including tax increases, needed to fund capital projects and related operating costs. The Town Board may move forward or delay bond issues on these factors.
How long does the Town have to issue the G.O. Bonds if the referendum passes?
Once G.O. Bonds are authorized by the voters in a referendum, the Town may issue them at any time during a seven-year authorization period. This can be extended by three years before expiration. Pay back of bonds occur within 20 years after funds are borrowed.
How is the debt on bonds repaid?
The repayment of bonds is spread out over a number of years, so costs are shared by current and future taxpayers. This provides for more equitable funding by all taxpayers who will benefit from the bond projects. When bonds are issued, taxes may be increased for property owners to pay the debt.
Can I vote for one bond issue but not the other?
Yes. There will be two separate bond issue financing questions on the November 2nd ballot: Transportation Projects Bonds and Parks & Recreation Bonds. Each will appear as a separate question on the ballot.
What happens if the bonds don’t pass in November?
If bonds do not pass, some projects may be postponed or eliminated. If the projects are critical, the Town Board could decide to fund them through alternative means to meet the need.
What projects were completed with the bonds voters approved in 2015?
In November 2015, 81% of voters approved $21 million in General Obligation (G.O.) bonds for Transportation Projects. The town has used the bonds to fund (partially or entirely) a range of projects that have benefited our residents by reducing traffic congestion. These projects include but are not limited to the completion of NW Judd Parkway; Intersection Improvements at Old Honeycutt & Purfoy Roads; Intersection improvements at NE Judd Parkway and N. Main Street; Intersection Improvements at Sunset Lake Road/Purfoy and Main Streets, and Bridge Street sidewalk Improvements.
If voters don’t approve the bonds, does this mean that the Board of Commissioners will be prevented from raising property tax rates in the future?
No. The bond is a vote on whether the town may specifically use general obligation (G.O) bond financing; it is not a vote on the property tax rate. The Board of Commissioners may raise or lower the property tax rates each year depending on the amount of revenues the Board believes is necessary to meet the operational and capital needs of the town government.