On November 3, 2015, voters in Greenville voted to approve a bond referendum for street and pedestrian transportation improvements. Below are some of the most frequently asked questions and their answers.
If you have questions about the bond referendum and do not see it listed below, please send an email to the Public Information Officer.
What is a bond referendum?
A bond referendum gives voters the power to decide if the City of Greenville should be authorized to raise money, through the sale of bonds, for specific purposes. A general obligation (G.O.) bond is a long-term borrowing instrument in which the City pledges its full faith and credit (taxing power) to repay over a specified term.
What is the purpose of this bond referendum?
The bond referendum on November 3rd will provide an opportunity for the voters of Greenville to choose whether the City should issue debt to pay for certain street and pedestrian transportation improvement projects.
What projects are included in the bond?
Ask anyone who has driven the streets of Greenville and they will tell you that there are streets that need immediate rehabilitiation. The City is responsible for maintaining about 700 lane miles of roads in Greenville – 100 miles of which are in poor condition. $10M of the bonds sought will go towards fixing the worst, most heavily-traveled roads.
West Fifth Street, much like West Greenville, is in the midst of a renaissance, with a transformation on the western end that includes streetscape improvements near Thomas Foreman Park and Eppes Gym. The eastern side of the street (leading up to the railroad tracks) needs improvements in flow and aesthetics. $1.95M of the bonds would pay for those improvements.
NCDOT is getting ready to build the 10th Street Connector. $1.75M would upgrade the new road to add street lights, full sidewalks, and landscaping to make it safer and look better along this major corridor which will connect the hospital area with Greenville’s downtown. Since most visitors from places west of Greenville will use this as their entry into the downtown, building a safer, more attractive road here will help create a better first impression for those coming to visit, stay, or invest.
The sidewalk network within the City of Greenville, while growing, is still limited. The City does not have sidewalk connectivity along many of our major roads. $1.4M of the bond funds would be used to build new sidewalks along these routes. This will provide greater access for many individuals who use our sidewalk network. It will also make it easier for people to walk around town safely, off of the road.The final project proposed is the expansion of the city’s popular greenway system to connect with neighborhoods on the eastern side of town. $750,000 would be used to start that project.
Does this mean Dickinson Avenue and Greenville Boulevard would be repaved?
No. Those are two of the roads in the city which are owned and maintained by the State. For a map showing State roads inside Greenville City limits, click here.
How long will these projects take?
The City plans to complete all of the projects within 7 years and will begin with construction after the first debt is issued in 2016.
Who identified the need for these projects?
A bond advisory committee made up of citizens recently recommended the street improvement projects as well as a major sports complex. Community input provided over several years of public meetings, surveys, stakeholder requests, and other forums shaped the proposed bond projects and can be seen in the diversity of the offerings in each of the propositions – new sidewalks and street improvements. City Council finalized the projects and even increased the amount recommended for the street repairs to jump-start the process of improving our roads.
How much will the City issue in bonds?
If residents vote in favor of the bond financing question on the November 3rd ballot, the City will have the authority to issue up to $15.85 million in G.O. bonds over seven years. The issuance of this debt may occur at several different times throughout the seven years for various amounts.
How will the bond funds be used?
Under North Carolina law, a local government holding a referendum for the purpose of issuing general obligation (G.O.) bonds must specify general categories of capital projects for which bond proceeds may be used. Within these categories, a local government may identify specific projects that are intended to be funded by the bond proceeds – the “bond package.”
The City plans to do several projects with the money from these bonds, including repairing streets, adding sidewalks, improving our gateways, and expanding the greenway system.
West 5th Street Streetscape
10th Street Connector
East Side Greenway
Why is a bond referendum needed?
The City’s current property tax rate does not have the capacity to pay for these transportation improvements up front. Fixing the roads will only get more expensive as the longer the City waits to fix a road, the worse it becomes; the more likely it will fail and end up costing up to $1 million per lane mile to rebuild instead of substantially less to fix now. With the 10th Street Connector, the improvements need to be made as they are building the road. The current low interest rates make now the right time to finance the other projects before interest rates climb.
Why does the City want to use debt to pay for the projects instead of cash?
Bonds make capital projects more affordable and put less stress on the City’s budget. By using bonds to finance these projects, Greenville can pay for them in installments over time rather than needing all the money up front. Multi-year financing also allows future residents of Greenville to contribute financially to the projects that they will reap the benefits of instead of people who live here now fully paying for things which others will enjoy. Since interest rates are still very low, now is a great time to borrow money for long-term projects.
How will the City pay off the bonds?
The bonds will be paid back over 20 years with money from the City's budget.
What are the property tax rate implications of this bond?
Assuming that voters choose to invest in the bonds, which total $15.85 million – and the City embarks on all five investments at once – the property tax impact could be up to 2.25 cents per $100 of assessed property. For a home with a $100,000 value, the annual property tax would increase $22.50 per year in order to fix the roads and make these improvements. However, the City will stagger the projects over the next few years (up to seven years) which will minimize the tax impact on residents.
Cost of the projects and their potential impact on the property tax rate (per $100 of assessed property):
West 5th Street Streetscape
10th Street Connector
East Side Greenway
Total potential tax rate impact
The City intends to work to absorb much of this potential increase into the existing tax rate, but that cannot be guaranteed.
Will the tax increase go away after the bonds are paid off?
Any increase to the tax rate for the transportation projects, if needed, would remain until the bonds are paid off in 20 years. Although it is difficult to bind future City Councils, the City's intent is to keep the tax rate as low as possible while maintaining the quality of service and amenities that our residents expect.
If voters don’t approve the bonds, does this mean that the City Council will be prevented from raising property tax rates in the future?
No. The bond referendum is simply a vote on whether the city may specifically use general obligation (G.O.) bond financing for specific purposes; it is not a vote on the property tax rate. The City Council may raise or lower the property tax rates each year at their discretion.
What would the potential debt service of the bond be?
The City’s sound fiscal management has earned it an AA Bond rating from Standard & Poor’s and Aa2 from Moody’s. This allows the City to finance the proposed projects at competitive rates. Increased revenue from growth in the tax base, while not guaranteed, is anticipated to cover much of the debt service. Although the bonds will be issued over a seven-year period, if $15.85 million were issued today at an interest rate of 4.008% for 20 years, the average annual debt service would be $1.2 million.
Why is this a good time to issue $15.85 million in bonds?
With interest rates at historic lows and the City’s recent credit rating upgrade by Standard and Poor’s, now is the optimal time to issue bonds for capital improvement needs. The cost of the bonds is expected to be less than the price of inflation, so borrowing now saves money in the future. For projects like the street repairs, ignoring the problem means the roads will continue to deteriorate and end up costing up to ten-times more to fix in the future.
Has Greenville issued bonds before?
Yes, previous General Obligation Bond programs in Greenville include a $25.5 million issuance in 1992 which included funding for a new Police-Fire/Rescue Facility, Streets, Storm Sewer Drainage Improvements, Housing, and Sanitary Sewer and the most recent one in 2004 which consisted of four projects totaling $20.8 million. These bonds allowed for street improvements for West Third Street, the Moye Blvd – Hooker Road connector, and Thomas Langston Road Extension (now Regency Boulevard); the revitalization of West Greenville and Center City; and stormwater drainage improvements.
What happened the last time the City issued these types of bonds?
The City’s last General Obligation Bond referendum was 11 years ago in 2004. At that time, voters overwhelmingly approved $20.8 million for street improvements, West Greenville and Center City revitalization, and stormwater drainage. All of those bond funds have been used for their intended purposes and, thanks to increased growth in Greenville, there was no tax increase needed to repay the bond debt.
What happens if the bonds don’t pass in November?
The recent recession has meant that the City has had to reduce its budget and cut back what it can spend on capital projects and improvements. If the bond does not pass, some of the roads will get worse and become even more expensive to fix in the future. Interest rates will likely go up in the coming years and borrowing money for these projects will become even more expensive for the city.The 10th Street Connector is getting ready to be built, but there is no money budgeted for the street lights, 60% of the sidewalks, and most of the landscaping. Using G.O. bond money for these items means that taxes will not have to be raised to pay for these improvements in the next year. Instead, the debt can be spread out over many years, which will reduce the impact on the tax rate.
What will the bond referendum look like on the ballot?
ORDER AUTHORIZING $15,850,000 STREET AND PEDESTRIAN TRANSPORTATION BONDS
BE IT ORDERED by the City Council of the City of Greenville: 1. That, pursuant to The Local Government Bond Act, as amended, the City of Greenville, North Carolina, is hereby authorized to contract a debt, in addition to any and all other debt which said City may now or hereafter have power or authority to contract, and in evidence thereof to issue Street and Pedestrian Transportation Bonds in an aggregate principal amount not exceeding $15,850,000 for the purpose of providing funds, together with any other available funds, for providing street and pedestrian transportation improvements in said City, including, but without limiting the generality of the foregoing, constructing, reconstructing, widening, extending, resurfacing and improving streets and roads, thoroughfares, and bridges; constructing, reconstructing, relocating and eliminating grade crossings and grade separations; constructing and installing traffic controls, signals, gateway treatments, markers, lighting, street trees and street furniture; improving, relocating and installing utility lines; constructing sidewalks, bike and pedestrian trails, greenways, curbs, gutters, culverts and drains; and acquiring any necessary rights of way or easements therefor. 2. That taxes shall be levied in an amount sufficient to pay the principal of and the interest on said bonds. 3. That a sworn statement of the debt of said City has been filed with the City Clerk and is open to public inspection. 4. That this order shall take effect when approved by the voters of said City at a referendum as provided in said Act.
When can I vote on the bond referendum?
One-stop early voting begins on October 22nd and election day is on November 3rd. For information on voter registration, absentee ballots, polling locations, or any other matters relating to elections, please contact the Pitt County Board of Elections at 252.902.3300 or email@example.com.