Orange County Financial Director Ken Chavious said past bond sales are responsible for $90 million of the $140 million debt the county faced at the end of the last fiscal year. The debt, coupled with economic uncertainty, has made the Orange County Board of Commissioners hesitant to issue the bonds this year.
Officials say their hesitation is compounded by Gov. Mike Easley's announcement earlier this month that he would withhold funds from county and municipal governments -- about $712,000 from Orange County.
The bonds were scheduled to be sold in July, but officials have decided to save money by delaying the process until January 2003.
Orange County Budget Director Donna Dean said the six-month delay will save the county $600,000 in interest payments. "If we sold the bonds in July as planned, the county would owe half a year's interest," Dean said. "This way we save $600,000 in bond interest next year."
Dean said county officials are taking a conservative stance by postponing the sale of the bonds until they are more certain about the future of the economy. "With the fiscal situation being what it is, we are uncertain what kind of losses to expect in the county budget," Dean said. "This year losses are $712,000, but next year we could lose $3.1 million."
When bonds are approved by voters, the county has seven years to sell or issue those bonds and does not have to start paying interest on them until after they are sold.
The bond package that was approved in November will allocate $47 million to schools in Orange County, $20 million to parks and recreation and $4 million each to affordable housing and the senior center.
Dean said the delay likely won't affect bond- funded projects. "The school renovations will receive funding to continue construction, and affordable housing has funds left over from 1997," she said. Dean also said the delay will not disrupt the timeline for any construction primarily because the entire bond amount wouldn't be distributed in one year. "This delay will not affect construction timetables, and all projects can go ahead," she said.
The bonds are sold over a four-year period with a specific amount allocated for each year. But officials have not yet decided which projects will receive funding in a particular year. "Within the next month, (the county) will develop a priority list to decide which projects to fund first," Chavious said. "It's just like a family budget."
