Voters in Fayetteville will be asked in November’s election to approve a bond package that would address public safety, infrastructure and affordable housing in the city.
The City Council unanimously voted at Monday’s regular meeting to put the bonds on a referendum.
The bonds would be valued at $97 million, according to city documents, but the city could decrease that number over the next few months as the council finalizes the details of the package.
The amount, however, cannot go above that amount approved on Monday before the election in November.
Any amount approved by the voters would require a property tax increase, city officials said at a special council meeting late last month dedicated to the discussion of the bonds.
“The voters would be able to give us their say on it,” City Manager Doug Hewett said at April’s meeting. “If they say yes, then of course, we would have to raise the tax rate to honor the debt payments that the bond would generate.”
Residents will be able to vote on each area — public safety, infrastructure and housing — separately, as each will have its own portion among the $97 million maximum.
“(The referendum) gives the council full authority, and it also gives the voters and taxpayers in the city of Fayetteville the authority as well to tell us if that’s something they want us to do in these areas,” Hewett said.
The funds from the bonds would not be associated with any federal funds that the city has received from recent federal legislation, such as the American Rescue Plan Act, or ARPA.
Assistant City Manager Jay Toland said one-time funds from ARPA to be used for economic recovery from the COVID-19 pandemic have already been obligated to various city projects.
“It’s not like we’re going to take these projects or this amount here and then supplant it with the ARPA money,” he said. “This is (for) additional needs outside of that.”
The funds from the bonds would be used for more recurring expenses, according to city officials.
“Despite all of the federal money that we have and the very careful financial planning that we do here as the city, we find that we have capital needs, which far exceed our ability to fund,” Hewett said.
“To address the significant public safety, unfunded needs, and not to mention potentially any housing, affordable housing issues that the council wishes to take, we would need a different funding method.”
If the bonds are approved by voters, it would cause an increase in property taxes in Fayetteville.
With each cent increase to the property tax, the city could fund $1.45 million in annual costs of repaying the bond, Toland said.
If the maximum $97 million is eventually put on November’s ballot, it would require an annual increase in property tax of just under 4 cents, based on a presentation Toland gave to the City Council.
Property taxes are calculated by dividing the value of the home or property by 100 and then multiplying by the cent increase.
A $200,000 home, for instance, would see a one-time annual property tax increase of about $80 under the 4 cents scenario, or a monthly increase of just under $7. If the total bond amount is decreased, though, the taxpayer burden will go down as well.
If the voters approve the bonds, the tax increase would not occur until fiscal year 2024 starts next summer, Toland said.
Aside from the bonds issue, there will be no tax increases in the upcoming city budget for the next fiscal year, Hewett said.
“There will not be a tax rate increase proposed in my budget that I’ll present to you in May,” he told the council at April’s bonds meeting. “There will not be an increase proposed in the budget for transit, solid waste or stormwater.”
The city had previously considered an increase in solid waste fees, Carolina Public Press reported earlier this year.
How each area will be funded
The maximum amount that could be approved for public safety, infrastructure and housing is $60 million, $25 million and $12 million, respectively.
The preliminary plans for the public safety portion is to construct and renovate various fire stations across the city and to build a police call center that would cost over $30 million.
Hewett said that the call center “is a must.”
Fayetteville Fire Chief Mike Hill said that the fire station locations are based on need, according to various data collected by the Fire Department.
The $60 million, though, would not cover all the construction. Details of which projects the bonds will fund will be determined over the next few months before the referendum is filed to the Board of Elections later this summer.
The $25 million infrastructure portion would cover new sidewalks, intersection improvements, new bike lanes and street repaving.
The remaining $12 million would be used to provide and rehabilitate multifamily and single-family housing within the city. It would also fund “programs to provide loans and other financial assistance” for housing-related costs, according to city documents.
The housing funds within the bonds would be used to benefit people of low and moderate income. Details for how that will be defined have yet to be determined.
At April’s bonds meeting, when the City Council approved of an additional housing portion, Mayor Mitch Colvin cited a previous city study, when advocating for the housing funds, that showed Fayetteville is short 20,000 homes for workforce level housing.