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Introduction of Bond Orders for Two-Thirds Bonds and Call for a Public Hearing for the Issuance of Two-Thirds Bonds.
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Staff:
Department:
Amy Oland, Director
Business Management
Overview: The Business Management Department is pursuing the issuance of "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 April 27, 2021 in conjunction with an initial issuance of the 2018 referendum general obligation (GO) bonds for affordable housing.
Recommendation(s):
That the Council take the following actions concerning the issuance of $3.205 million of two-thirds bonds.
1. Formally introduce the Bond Orders describing the use of the bonds.
2. Adopt the resolution setting the public hearing for March 24, 2021 and authorizing the filing of a sworn statement of debt.
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 are an opportunity to fund parks and recreation facility improvements, purchase a replacement Fire truck, and repair streets and sidewalks. The potential issuance...
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