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Authorize the Issuance of $1,980,000 of Two-Thirds Bonds, $5,245,000 of Affordable Housing Referendum Bonds and $7,700,000 of Streets & Sidewalks Referendum Bonds.
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Staff:
Department:
Amy Oland, Director
Business Management
Overview: The Town is pursuing the issuance of $1.98 million of "two-thirds" bonds to fund public safety equipment, the second and final issuance of $5.245 million of the 2018 General Obligation (GO) referendum bonds for Affordable Housing, and the third and final issuance of $7.7 million of 2015 General Obligation (GO) referendum bonds for Streets & Sidewalks. On January 11, 2023, the Council held a public hearing on the bond order for the two-thirds bonds. The next step is for Council to adopt a resolution formally authorizing the issuance of both the two-thirds bonds and the referendum bonds.
Recommendation(s):
That the Council adopt the resolution authorizing the issuance of $1,980,000 of two-thirds bonds, $5,245,000 of Affordable Housing referendum bonds, and $7,700,000 of Streets & Sidewalks referendum bonds.
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 2022 was $2,977,000. Two-thirds of which is approximately $1,984,667. 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).
Two-Thirds Bonds Recommended Use
* The availability of two-third...
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