Morrisville, North Carolina
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Frequently Asked Questions
Frequently Asked Questions

What is a bond referendum?

A bond referendum gives voters the power to decide if the Town should be authorized to raise funds through the sale of bonds.  A general obligation bond is long-term borrowing in which a Town pledges its full faith and credit (taxing power) to repay the debt over a specified term.  General Obligation bonds are the least costly financing option available to the Town for these projects. Given the Town’s strong credit rating and financial management, Morrisville can borrow money at lower interest rates and issuance costs, thus saving Morrisville taxpayers hundreds of thousands of dollars over the repayment period. The Town will have seven (can be extended to 10) years to issue the bonds and 20 years to pay back the bonds after the funds are received.

The Morrisville Town Council has approved the opportunity for voters to consider the issuance of 20 million to finance the Capital Improvement Projects listed below at the polls on November 6, 2012.

Why issue General Obligation Bonds?


Bond financing is often used for capital projects that are above and beyond the scope of the annual operating budget and are for facilities that will be used for many years in the future.  General Obligation (GO) Bonds is the least expensive debt obligation for a local government, because under this type of long-term borrowing a Town pledges its full faith and credit (taxing power) to repay the debt over a specified term.  While there are several ways to finance the construction of major capital projects – current revenues, capital reserve funds (setting aside money over time), and other bonds - GO bonds provide the cheapest source of borrowed cash to fund major projects.  In addition, the Town of Morrisville maintains a "AA+" bond rating by Standard & Poor's and an "Aa2" by Moody's Investors Service; this excellent bond rating also contributes to keeping interest rates low on money borrowed by the Town.


For what purpose will the bond funds be used?

Under North Carolina law, a local government holding a referendum for the purpose of issuing General Obligation Bonds must specify one of three general categories of capital projects for which bond proceeds may be used – road improvements, parks and recreation facilities, and buildings/other facilities. Within these categories, a local government may identify specific projects which are intended to be funded by the bond proceeds – the “bond package”.  However, due to the lengthy process involved with identifying, designing, and implementing projects, as well as the lack of detailed cost and other project information available at the time of the bond referendum, the specific projects identified in the bond package may change over time. The question which the actual bond referendum therefore asks of voters is whether they authorize local government to use the GO bond as a financing tool for the general category of projects.

What are the specific bond packages?


Street Improvements for the construction of NC 54 Bypass by completing the McCrimmon Parkway Extension from NC54 to Evans Road

How will this help the traffic congestion? Extending McCrimmon Parkway to Evans Road will relieve congestion in two main ways. First, it will provide a parallel alternative to NC 54 between the NC 54/McCrimmon intersection on the north to Aviation Parkway on the south (also extending further south along Evans Drive).  The new roadway will expand roadway capacity for drivers now travelling north and south on NC 54 by providing an alternative north/south route. Second, the proposed McCrimmon Parkway extension will provide an alternative northbound routine for traffic from Aviation Parkway to the business and light industrial areas east of NC 54, thus alleviating congestion at the intersection of NC 54 and Aviation Parkway/Morrisville-Carpenter Road.  

Parks and Recreational Bonds for the renovation of Morrisville Aquatics and Fitness Center and completion of Morrisville Community Park-Phase 3

Why is this important?  The Town acquired land and started the development of phase 1 of Morrisville Community Park in 1992.  The second phase of the park was completed in 2004 and this project would construct the third and final phase to help keep up with the increasing recreation needs of the Town.  The Morrisville Aquatics and Fitness Center was purchased by the Town in 1993 when the Town population was less than 2,000.  The renovation will improve the facility to accommodate the growing population of Morrisville, which is now over 20,000 people.

Why issue bonds?

There are several ways to finance the construction of major capital projects – use current revenues, capital reserve funds (setting aside money over time), and the issuance of bonds (borrowing money to be paid back in the future).  Bond financing is often used for capital projects that are above and beyond the scope of the annual operating budget and are for facilities that will be used for many years in the future.  Since most Towns have few reserve funds set aside for major capital projects, it is necessary to issue bonds to build major projects.

Are there additional financial implications?

Yes, in addition to actual costs associated with the payment of bonds, some facilities will need additional funds for staffing, maintenance and operations. Some of these costs can be offset by additional revenue generated by having the expanded facilities. For example, enlarging the pool and fitness area will allow for more customers to use the facility as well as providing an increased capacity for swim lessons.

What is the procedure for a bond issue?

The major steps in the process leading up to a referendum include:

  • The Town retained the services of Bond Counsel to ensure a proper procedure under State statutes.

  • The Town provided a number of opportunities for citizens to provide input as to projects and priorities.

  • Town staff provided preliminary cost and other analyses of possible projects.

  • The Town Council set priorities based on citizen concerns and selects bond issues and amounts.

  • The Town of Morrisville filed an application with the NC Local Government Commission for the authority to issue bonds.

  • The Town Council holds a public hearing to receive public input on the proposal to issue bonds. Based on citizen comments, Council may remove items or lower dollar amounts.  

  • A bond referendum is held for citizens to vote and decide on each of the general project categories on the bond ballot.

  • If one or both project categories are approved by the voters, Town staff will proceed with steps to implement the bond package projects.  Once a design has been finalized and cost estimates prepared, the Town will issue GO bonds.

  • If the voters reject a bond issue, the project cannot be funded with General Obligation Bonds.  If the Town Council determines a project contained in the bond package is worthwhile to pursue, other financing options would be explored.

Exactly what am I voting for?

Your vote for the Bond Referendum will authorize Town officials to borrow funds to provide infrastructure improvements through the intended projects listed above.

Can I vote for one bond issue but not the other?

Yes.  There will be two bond questions; one for Street Improvements Bonds and one for Parks and Recreational Bonds.  You can familiarize yourself with the questions that will appear on the ballot by viewing a sample ballot here.

Will this increase the tax rate?
 

Yes, Council and staff anticipate a tax increase of up to four cents.  More information on the tax increase can be found here.


Why issue bonds?


There are several ways to finance the construction of major capital projects – use current revenues, capital reserve funds (setting aside money over time), and the issuance of bonds (borrowing money to be paid back in the future). Bond financing is often used for capital projects that are above and beyond the scope of the annual operating budget and are for facilities that will be used for many years in the future. Since most Towns have few reserve funds set aside for major capital projects, it is necessary to issue bonds to build major projects.

Has Morrisville issued bonds before?

Yes, click here to view information about past bond referendums.

When are bond referendums held?


Bond referendums can be held at any time of the year but most Towns hold bond referendums during a regular election. Since other elections are already being conducted, more voters are likely to participate in the bond referendum.  This bond issue will be held on November 6 in conjunction with the Presidential election.


How do I vote?

Early Voting begins on October 18 and Election Day is November 6.  For more information on how to register, where to vote, and early voting dates and locations, call 919.856.6240 or visit www.wakegov.com/elections.  Voters in Morrisville are registered in Wake County.


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