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Adopt a Resolution of Intent to Issue Two-Thirds Bonds in April 2021.
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Staff:
Department:
Amy Oland, Director
Business Management Department
Overview: The Business Management Department is preparing to issue "two-thirds" bonds to fund parks and recreation, public safety, and streets and sidewalks projects in the Capital Improvements Plan (CIP). The two-thirds bonds would be sold on April 27, 2021 in conjunction with an initial issuance of the 2018 affordable housing general obligation (GO) bond referendum.
Recommendation(s):
That the Council adopt the resolution stating the Town's intent to issue general obligation parks and recreation, public safety, and streets and sidewalks "two-thirds" bonds. The actual sale of the bonds is subject to further Council approval.
Key Issues:
Two-Thirds Bonds Background
* Under the Local Government Bond Act, the "two-thirds rule" authorizes local governments to issue general obligation bonds without a referendum under certain circumstances.
* Two-thirds bonds are restricted to two thirds of the net reduction in general obligation bond principal for the previous fiscal year. The Town's reduction in principal for FY 2020 was $4,812,000. Two thirds of which is approximately $3,205,000. Two-thirds bonds must be issued in the fiscal year immediately following the year for which the principal reduction is calculated.
* Two thirds bonds are also restricted to certain uses including streets, parks, public facilities and public safety. All other allowable purposes are listed under Section 159-48 of NC General Statute, Chapter 159, Article 4 (the Local Government Bond Act).
* The availability of two-thirds bonds and the current low cost of borrowing provide an opportunity to fund parks and recreation facility improvements, purchase a replacement Fire truck, and repair streets and sidewalk. The potential issuance of two-thirds bonds was discussed at the Council retreat on Friday, February 5, 2021.
* We are working ...
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