Among discussions of how the town could afford its partial match of a hefty $800,000 grant, Mayor Tim Hinnant told Wendell commissioners it may soon be time to consider a bond referendum – once his term is over.
“We’re going to have to look at some bond referendums to move this town forward. We can’t do it on the backs of our citizens and there’s no other way,” Hinnant said at the Oct. 14 Board of Commissioner’s meeting.
The board was wrestling with two versions of proposed parks improvements that they hope to fund through the North Carolina Parks and Recreation Trust Fund grant program. One proposal presented by Parks and Recreation Director Jeff Polaski was for a total of $831,250. The town has three years to match 50 percent of a $500,000 grant. The town would be responsible for paying the remaining $331,250, bringing the town’s obligation to $581,250.
The less-expensive proposal would cost $556,250, making the town’s share $306,250.
The $225,000 difference in the two proposals is in a picnic and restroom facility. The current restroom runs on a septic system, but Polaski’s proposal would hook the new bathroom to town sewer lines. That change is the major cost of the facility, he told commissioners.
Hinnant made his hesitation to fund the project clear. He asked if there was a minimum amount of money the town could pay back each year and said it would be difficult to take even $300,000 out of the town’s fund balance over three years. Using the fund balance is the only feasible option, he said, because the town’s tax base can’t support the cost.
Under the town’s current policy, Wendell’s fund balance has to be 40 percent of the town’s operating budget. Town Manager Teresa Piner estimated the town actually has 53 percent of the operating budget at the last board meeting.
That equaled about $400,000 extra, but Hinnant said it would take about that much to get Wendell’s parks and rec programs and facilities up to par.
“When you start to talk about the amount of money we need to keep our parks and recreation department competitive, we’re going to need to sink hundreds of thousands of dollars into it,” he said.
Commissioner Ginna Gray has been a vocal supporter of parks and recreation programs in town. She would also be on the board when a bond referendum is seriously studied if the town takes Hinnant’s suggestion and starts the process in the next year or so.
While Gray did not speak directly to Hinnant’s bond suggestion, she did voice her support for dedicating money to programs that could attract more residents to use town facilities.
“We’ve reached a point in Wendell where we need to take a leap of faith,” she said at the Oct. 14 meeting.
Bonds and taxes
Piner said Wendell has never issued its own bond referendum as far as she knows. She’s worked for the town for 20 years.
The town has also discussed needs to build a new town hall, but commissioners have chosen to make renovations to the existing facility in order to forestall construction of a new facility.
She said a bond referendum would likely mean the town will have to get authority to issue the bond and then bring in a third party to help with the planning.
Bond referendums allow municipalities to sell bonds to pay for projects that fall under whatever category the bond dictates.
They typically result in tax increases, too.
In 2012 in Knightdale, residents voted for a $3 million parks and recreation bond referendum to pay for the second phase of Knightdale Station Park. It was the most recent bond referendum pursued by a town in eastern Wake County.
That bond came with a 2-cent property tax increase.
In 2006, Zebulon voters approved a $5 million bond that resulted in the purchase of the old Wakelon School and renovations to turn that facility into town offices. That resulted in a 5-cent tax hike.