County discusses issuing $9.9 million in bonds

Orange County officials had hoped voters would approve a sales tax increase. But after its failure, the Board of County Commissioners is reaching for other funding — and may issue bonds.

Clarence Grier, financial services director for the county, presented an option Thursday night to issue up to $9.9 million in construction bonds for structural improvements in Chapel Hill-Carrboro City and Orange County schools, though commissioners made no decision.

The county expects that BB&T will purchase the tax credit bonds with a 1 to 0 percent interest rate. The bonds must be issued by Dec. 31 to qualify for schools funding.

“It’s a financially sensible thing to do,” commissioner Alice Gordon said. “With such a low interest rate, it makes a lot of sense.”

Chapel Hill-Carrboro City Schools would be allotted $4.6 million for major roofing projects at McDougle Middle School along with other projects.

Orange County Schools would be allocated $5.3 million for projects, including auditorium renovations at C.W. Stanford Middle School.

The board also discussed steps for future economic development programs in light of the failed sales tax increase.

“We did a good job informing the public of the sales tax, but people made a decision based on tough economic times,” said County Manager Frank Clifton.

The money that could have been gained from the sales tax would have been used for infrastructure improvements to future and existing businesses and the funding of loans for local businesses.

“We regret that the tax didn’t pass,” commissioner Steve Yuhasz said.

“It would have provided economic opportunities, and I don’t want these issues put on the backburner.”

The board considered alternative fiscal options to fund the programs and postponed discussion on the economic issues until the board’s retreat.

“It is critically important to support economic development, but it needs to be consistent in the budget,” Yuhasz said.

Commissioner Barry Jacobs said that most residents had never heard about the sales tax increase despite the more than $30,000 the county dedicated to educating voters.

He said when he handed out information on the proposed uses at the polls, most people weren’t aware it was even on the ballot.

“It’s always one of our problems … communicating anything we’re trying to do,” Jacobs said.

Gordon said the tax might have been passed in a different economic climate, and the looming possibility of an increase in sales tax by the N.C. General Assembly might have discouraged voters to raise the tax at a county level.

“I don’t know what the general assembly will do,” she said.

“These are times of fiscal constraint.”

Gordon and other commissioners said many of the voting public don’t understand the ramifications of voting down the tax.

“Even though the referendum didn’t pass, we want to send a message to the public that if we want to have fiscal health in the long-term future, we can’t just look to the short-term,” Commissioner Bernadette Pelissier said.

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