By Dave Vieser. The Town of Cornelius has a $24 million bond referendum for transportation improvements on the ballot. It will help fund seven large-scale NCDOT projects worth $112 million. In other words, every town dollar will generate almost $4 from NCDOT for major road projects. The Lake Norman Chamber has endorsed the bonds, as has former Town Commissioner Jim Duke, a finance expert. Early voting runs till 7 pm on Friday, and from 8 am to 1 pm Saturday.
What are some of the benefits besides new roads?
Bond funds will accelerate seven road and intersection projects by as much as 20 years. Some of the projects include widening West Catawba Avenue and US 21, which will significantly improve congestion and safety. The bond issue will also fund pedestrian and bicycle accommodations. including new sidewalks, bike lanes, and multi-purpose paths.
Will town property taxes go up if the referendum is approved? If so, when and how much?
According to the town’s financial forecast, the property tax rate may increase by 1 cent as a result of the bonds starting in Fiscal Year 2020. A penny tax increase for a home valued at $300,000 would equate to a $30 tax hike annually. (Many factors influence if and how much the tax rate might change, such as future interest rates and timing regarding exactly when the bonds are issued. Additionally, revenue and expenditure changes, legislative changes and operational decisions will impact the town’s tax rate in future years regardless of whether the bonds are approved.)
Is there a time frame to use the funds?
The town would have at least seven years to sell the bonds. However, it can receive an extension for an additional three years, if necessary.
Voters approved a similar referendum in 2013 and some of that money has not yet been spent. Why do we need another one now?
All of the transportation bonds that were approved in 2013 were previously earmarked for specific road and intersection projects. All of these projects are either complete or under development, with some beginning construction within the next 12 months. The potential seven projects being considered as part of the 2018 November referendum are all different and need a new funding source to be constructed.
Will any of the funds be used on I-77?
No. If approved, these funds will go toward improving our local road network—the roads that allow residents to travel around town to and from home, school, work, shopping, and also for providing short-distance alternatives to I-77.
How are the interest rates determined?
Market conditions at the time the bonds are sold will certainly influence interest rates. Additionally, whenever the Town sells bonds on the bond market, it must be rated by at least one rating agency. For several years, the Town has received the highest rating possible, AAA, by Standard & Poor’s. The higher the rating, the lower the interest rate and cost to borrow.
Have other similar municipalities utilized transportation bonds like these?
Municipal transportation bonds are very common everywhere. Transportation bonds are used by various jurisdictions for both local projects and to partner with state transportation agencies—just as Cornelius is partnering with NCDOT.
If the referendum is approved but it is determined at a later date that the funds are not needed, can they be used for other purposes, such as parks or the arts center?
They would not be allowed to be used for other purposes.
How soon can the funds be used?
It takes about three or four months to go through the actual process of selling bonds and receiving the proceeds. The Town forecasts that it will need to sell the first phase of the bonds in 2020 to allow for funding to be in hand in time for the commencement of the road and intersection projects.
Would approval of the referendum have any impact on the town’s credit rating?
An actual referendum approval by the voters will not have an impact on the Town’s bond rating.
