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 (GO) 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. The parks and recreation bond referendum will be placed before the voters on November 8th, 2022.
The City currently has no outstanding general obligation (GO) debt but the implied bond rating is AAA. The AAA bond rating will lower the issuance costs for the City, and a lower interest rate results in lower borrowing costs. The AAA rating is the highest rating that may be assigned to an issuer’s bonds by any of the major credit rating agencies. AAA rated bonds have a high degree of creditworthiness because their issuers are easily able to meet financial commitments and have the lowest risk of default. For an investor, bonds that are rated AAA are safe and secure investments.
GO bonds are the least costly financing option available to the City for these projects. Given the City’s excellent credit rating and financial management, Concord can borrow money at low interest rates and issuance costs. Concord is in excellent financial health; however, the City does not have enough cash available to pay for these important recreation projects while still sustaining the high level of service our citizens expect, and maintaining fund-balance levels that are required by law and directed by the City Council. In addition, financing these projects over 20 years allows future citizens who will also benefit from the projects to contribute towards paying for them.
The last time a GO bond referendum was approved was in the 1984. A bond referendum was held on June 5th of 1984, the following issues were approved:
$2,315,000 Electric System improvements
$1,300,000 Fire Facility
$8,605,000 Sewer Improvements
$7,780,000 Water Improvements
The City currently has no GO bond debt.
The bonds listed above have been fully paid, and the City has no outstanding general obligation debt.
If citizens vote in favor of the bond financing issue on the November 8th, the City will have the authority to borrow up to $60 million in general obligation (GO) bonds over 7 years with the ability to seek Council and State authority to extend that borrowing authority to 10 years.
City fiscal policy requires that the annual debt service should not exceed 15% of the City’s operating expenditures. The City’s (fiscal year ending June 30, 2022) budget projects debt service as a percentage of the City’s operating expenses to be 3% for the general fund. If these bonds are approved, the annual debt service as a percentage of the general fund’s operating expenditures is estimated be to 7%, well below the 15% debt ceiling.
Per the last audit ending June 30, 2021, the City’s debt per capita is $649 which is much lower than the average of $1,456 for municipalities with populations of 100,000 or more.
Future tax increases will be required to support operations, maintenance and capital projects associated with these parks and recreation projects over the 7-to-10-year period. The schedule and amount of bond issues is dependent upon timetables, economic conditions, and resources needed to fund these parks and recreation projects as well as the associated operating costs. If the City issues $60 million in debt all at once, the estimated property tax increase to cover this debt service would be 3 cents per $100 assessed property value.
For example: If you own a home valued at $250,000, your current annual property tax is $1,200. If the City implemented a 3-cent tax increase, your new tax bill would be $1,275; thus, increasing your annual tax bill by $75.
The repayment of the bonds will be spread out over 20 years, so costs are shared by current and future taxpayers. If all the bonds are issued at once the annual debt service is currently estimated in excess $4 million annually. Property tax revenues would support the debt service payments.
If the bond referendum does not pass in November, the projects will likely not move ahead within the next five to ten years. Some projects may be canceled, and if projects are deemed critical the board could decide to fund those projects through alternative means.
Master plans are in place or currently underway for these projects and work will begin immediately.
For Fiscal Year 2023 (effective July 1, 2022) adopted property tax rates are as follows:
(Calculations are based on $100 valuation)
|Town of Harrisburg
|City of Concord
|Town of Mt. Pleasant
|City of Kannapolis
|City of Locust
|Town of Midland
|City of Gastonia
|City of Monroe
|Town of Mooresville
|City of Mount Holly
|City of Salisbury
The City of Concord is proud to be a Tree City USA. We recognize the value and importance of a healthy tree canopy and take care to appropriately balance our growth and development. If approved by voters, the park projects included in the GO Bond will require the removal of mature trees. However, the city actively looks for opportunities to replace lost canopy and add trees to city-owned parks, greenways, and facilities. The Parks and Recreation Department will work closely with the city’s arborist to identify these opportunities.
Additionally, the city has a Memorial Tree Program. If you are interested in adding a tree to one of the city’s parks in memory of a loved one or to commemorate a special occasion, visit concordnc.gov/memorialtrees.
No. The FY23 budget allocates $2.9 million for roadway resurfacing projects and $1.44 million for affordable housing programs and projects. The park projects included in the bond can be completed without negatively impacting other city services, programs and commitments.
No, the city does not use revenues from taxes to pay for operations related to water, sewer, or electric services. Our utilities are enterprise funds, which require all operating expenses to be paid for only using revenues collected from users of those services.