Clayton’s dreams of concerts near the Neuse River and zip lines through the woods are further off than imagined, based on a bleak assessment of the town’s ability to hold a parks and recreation bond in the near future.
Following a debt-capacity review with the town’s financial firm, Davenport & Co., council members expressed doubt that Clayton could hold a bond referendum before 2018. Even then, council members wondered how much Clayton would need to fund a list of capital projects and whether they would have to shelve some of those projects.
The town council had considered putting a bond before voters as early as next week’s general election, but the council balked as it sought more accurate costs figures for the projects it intends to fund. Clayton is now shooting, at the earliest, for a bond measure on the November 2018 ballot, with the money going to some $30 million in capital projects. Getting a referendum on next year’s ballot would have likely meant a tax increase, and one is still possible the following year.
Using preliminary numbers, town manager Adam Lindsay listed the projects Clayton could fund with a bond issue, including the next phase of the Clayton Community Center, development of a park off of Little Creek Church Road and an impressive but daunting park along the Neuse River. Those alone could cost upward of $30 million. Clayton also plans upgrade projects at Legend, Municipal and East Clayton Community parks, each costing hundreds of thousands of dollars. At the same time, the town is considering a third fire station down the road and committing more money to street improvements.
The town owns the land it intends to turn into parks, having used its last bond issue in 2008 to purchase property during the economic downturn. Deputy town manager Nancy Medlin said the town likely saved big time by undertaking significant projects during the recession, such as the Clayton Community Center and police station. But now, building costs are stabilizing closer to reality, and like most realities, this one stings.
“I think the thing that’s really frustrating is we’re sitting here talking about monies that we may want to do for a bond, but we don’t have a freaking clue what the cost of any of these things are going to be,” Councilman Michael Grannis said. “So how can we make an intelligent decision?”
Right now, the town pays a little less than $2 million per year in debt service. If it wants to keep total debt payments in that neighborhood, the town has a somewhat limited debt capacity, according to Davenport’s review.
Regardless of how much debt the town decides to take on, its capital projects are a long way off. While citizens could pass a bond referendum for, say, $13 million in 2018, the town would need to sell the bonds as its debt capacity allowed, putting construction possibly seven years after a bond passes.
Councilman Art Holder imagined a scenario where the town raised taxes two cents and stashed the money in savings. By 2024, the town would have $13.6 million in cash, and it would still be more than a few days and dollars short of where it hoped to be, Holder said.
“Even issuing the $13 million is not approaching what our need is,” he said. “Not even looking at streets or fire stations or anything else, it’s just what we already see for parks and rec. We’ve got some hard decisions to make.”
Lindsay cautioned the council not to mistake the town’s debt capacity with what it can issue for a parks and rec bond, noting the town will need borrowing room for other projects.
“I would not recommend to you to issue a parks and recreation ... bond that would max out our debt capacity,” Lindsay said. “We would have to come in somewhere below that.”
Clayton has a popular greenway system, a number of ball fields around town and even a disc golf course coming down the line. Councilman Bob Satterfield suggested that maybe the current roster of parks offerings was enough for now, allowing the town to better prepare for growth in other areas.
“To me, there’s not a whole lot of needs on that list; there’s a whole lot of wants, not a lot of needs,” Satterfield said. “We’ll be needing a fire station later.”