Why doesn’t the Town just use cash or pay-as-you-go financing instead of bond debt to pay for these projects?

The Town of Cornelius is in good financial health. However, the Town does not have enough cash available to pay for all of these capital projects while still sustaining the high level of service our citizens expect, and while maintaining fund balance levels that are in line with the Town’s Fund Balance Policy. Using a debt instrument, such as bonds, allows citizens to pay for substantial capital projects over the useful life of the assets. Another consideration for using multi-year financing instead of cash is the equity factor: future citizens of Cornelius pay for a portion of the new projects that they will benefit from.

Also, since all of the identified potential projects are partnerships with NCDOT and occur within NCDOT right-of-way, the Town does not have any collateral to obtain pay-as-you-go financing.  This means that bond debt is the only financing available for these projects.

Show All Answers

1. What is a bond referendum?
2. For what purpose will the bond funds be used?
3. How much will the Town issue in bonds?
4. Why doesn’t the Town just use cash or pay-as-you-go financing instead of bond debt to pay for these projects?
5. What is the value of one penny on the tax rate?
6. How will the Town pay back the bonds?
7. What are the property tax rate implications of these bonds?
8. What happens if the bond proposal doesn't pass in November?
9. If voters don’t approve the bonds, does this mean that the Town Board will be prevented from raising property tax rates in the future?
10. If these bonds are approved by the voters, how will the additional debt be viewed by bond raters in light of Cornelius’ existing debt?
11. If the bond referendum is approved, how quickly could the projects begin?
12. Where can I obtain additional information?