The city of Fayetteville, North Carolina, will ask a state agency for permission to borrow millions of dollars to pay for additional costs associated with a new Segra baseball stadium and downtown parking garage.
The City Council approved a resolution Monday night asking the Local Government Commission to authorize the city to approve taking out up to $8 million in limited obligation bonds. The vote would only give the council the option of approving the bonds, but did not lock the council into using that financing method or spending the dollar amounts that are being requested, council members emphasized in their discussion.
The actual vote on the bonds would not take place until May 13.
Several members said they have concerns about using bonds that come with interest to fund all of the projects.
City staff is proposing that the municipality take out limited obligation bonds over 20 years to pay for an additional $1.5 million for the new downtown parking deck that would be in addition to the $14.8 million the city already has borrowed for the project; $2.58 million for the new Segra baseball stadium for upgrades to the stadium for possible settlement funds with contractor Barton Malow, and $2.8 million for a new Lake Rim aquatic center.
The Prince Charles Hotel developers have asked for an additional $1.5 million to fund cost for the parking garage, saying the $14.5 million initial estimate of the project in December of 2017 was preliminary and did not include a massive ceiling that had to be built for the hotel and office to be built above the deck, which will have a major positive economic impact on the city. They also said rising concrete and steel prices have added to the project costs.
The vote on the resolution to ask the LGC to approve the bonds was 7-3, with Mayor Mitch Colvin and council members Larry Wright and D.J. Haire dissenting.
Councilman Bill Crisp said the city is trying to beat the timeline on some of these projects by asking for permission to issue the bonds.
"There are two words that haven't been said and I'm going to say it now, 'as necessary,'" he said. "It doesn't necessarily say that we are going to spend these amounts of money. But we've got to secure approval to borrow these amounts of money in the event that we need them."
But Colvin said it was premature to be approving of bonds when the city has just started negotiating with the parking deck developer about its $1.5 million request.
"I don't think it's responsible to prepare to borrow money that you have no plans on borrowing if that is the case, and potentially cost taxpayers additional interest they would have to pay if you are going to choose to do it," he said.
Colvin said in a dinner meeting before the regular council meeting that he is "squimish" about voting in favor of the bond proposal as the city is still trying to negotiate a deal with the Prince Charles Hotel and the $1.5 million request.
He said approving the resolution to ask the LGC to approve the bonds "makes it tougher to explore other options or negotiate."
Councilman Jim Arp and Crisp said during the dinner meeting that they'd like the city to find a way to pay for the pool without financing it. Crisp said the city didn't finance other pools it has built. Several council members pointed out that the city has found $1.9 million in funds that weren't spent on other projects that could be used for a project like this.
The city's financial advisors put the three projects together in the bond package to save money on closing costs.
Jerry B. Reinoehl spoke in opposition to the bond proposal, saying it could result in a property tax increase that would hurt people in the lower-income levels.
"My concern is that eventually the bond structure is not going to support these cost overrides," he said. "We continue to see raising (prices), and this stuff is going to wind up becoming a tax increase.
In other action, the council:
- Gave final approval to rejecting bids that were put in by private companies who responded to an ad the city put out to privatize solid waste disposal. The bids came in millions of dollars higher than what it costs the city to provide the service, even with employee benefits.
- Approved of a preliminary assessment roll charging west Fayetteville single-family homeowners who are in the Phase 5 annexation area $5,000 to hook into city sewer. With sanitary sewer construction now complete in the Southgate, Southgate Village and Arran Lakes West areas, staff recommended — and the council concurred — to adopt the resolution declaring cost and ordering the assessment roll.
