Waynesville mulls idea of bond vote

Waynesville, N.C., leaders are pondering the idea of bond referendum to fund a slew of long-range projects, from greenway expansion to a new Hazelwood fire station.

The idea is in its infancy, and town leaders haven’t decided whether a bond referendum is a good idea. Nor are they sure whether town voters and taxpayers would buy into it. Nor when to hold it. Nor exactly what projects it would fund.

But Waynesville town board members seem intrigued by the idea at the very least, based on their discussion at a town board planning retreat last week.

“This is something the board could have in its quiver of arrows, Waynesville Mayor Gavin Brown said. “If we want to do these things, and the community wants to do these things, we have to find a way to finance them.”

Alderman Gary Caldwell said he is definitely interested in exploring the idea further.

“I don’t really have a problem with it as long as the local citizens support it and understand what it’s for,” Caldwell said following the retreat. “It’s just according to what’s on the list. It would be pretty fair though to put it to the public and get the public’s opinion.”

The list of projects to be funded by the bond is hypothetical at this point.

While estimates are extremely rough at this point, some projects mentioned include $1 million for a new fire ladder truck, $3.5 million for a new Hazelwood fire station, and around $1 million to cover the town’s match on a suite of road projects coming down the pike over the next few years that the town has to pony up matching funds for, from rerouting Brown Avenue around Waynesville Middle School to a redesign of Russ Avenue.

The biggest portion of the bond could be recreation amenities, namely greenway development.

If a bond passed, the town could tap the money as need arose.

“The nice thing about bonds is you have a decade really to spend that money down in increments,” Waynesville Town Manager Rob Hites explained.

Brown has been toying with the idea of a bond for some time.

“It was on Gavin’s mind the day I walked in the door,” said Hites, who started as the town manager last summer. “He said ‘We have lots and lots of things we need to do and we don’t have the money to pay for it. But they are all important.’”

The idea of a bond referendum is one that other town board members say they will have to ponder some more.

“That’s the first I had really heard anything about it so I hadn’t really studied it,” Alderman Leroy Roberson said following last week’s town planning retreat. “It sounds like an idea to be considered, but I will have to mull it over.”

Caldwell isn’t sure what he thinks yet either. For example, he’s not convinced the town needs to build a new Hazelwood Fire Station or buy a new ladder truck anytime soon.

“I think the facility we got is suitable and serving the public well. You can get a little it too elaborate sometimes,” Caldwell said.

But recreation projects are something Caldwell could get on board with, particularly an expansion of the greenway. The town is actively pursuing a plan to build out its greenway from Hazelwood all the way to Lake Junaluska.

“The greenway is an awesome an idea. That’s our goal right now is to try to pull that off,” Caldwell said.

Why a bond
The project wish-list, whatever it might look like, couldn’t be funded with the town’s general revenue stream. There’s just not enough money in the budget to cover town operations and pay for the special projects, too.

“To keep the town progressing we aren’t going to be able to use just every day revenue,” Hites said.

For years, the town has been eagerly awaiting the day its long-term debt would be paid off for the downtown parking deck and Waynesville Recreation Center. For 15 years, the town has been paying $300,000 a year on debt for the parking deck. For almost the past 20 years, the town has been paying $440,000 a year in debt for the Waynesville Rec Center.

Those will both be paid off in another 18 months or so. But Hites told town board members not to count on that money for the next round of projects.

“Everybody was looking at that money getting freed up and thinking ‘I’m going to use that to pay for my project,’” Hites said. “Yes, we will have about $700,000 in liquidity freed up, but the truth is, we need that to just keep town overhead and operations going.”

For example, a 1 percent raise for town employees would cost $110,000 annually, every year in perpetuity. A 6- to 7-percent cost-of-living raise meted out over the next six to seven years would eat up the entire $700,000 the town gains when its current debt load is paid off, Hites explained.

Financially, a bond vote makes sense. If the projects are things the town is going to do anyway, an endorsement by voters in the form of a bond would mean cheaper interest rates, and thus less cost over the long run.

“A general obligation bond will produce the lowest interest rate in the market,” Hites said.

Lenders also give better interest rates when borrowing bigger amounts, rather than borrowing $1 million here and there for several different things.

“It is more advantageous to bundle projects,” Hites said.

Bond vote passage
The city of Asheville held a bond vote in November 2016, asking voters to weigh in on a $74 million package of projects, including affordable housing, sidewalks, greenways and parks.

It passed by an overwhelming margin of more than 70 percent, even though voters were told property taxes would go up to pay for it.

“They did it for fun things,” Brown said, citing the greenway and parks funding in Asheville’s bond.

But no town west of Asheville has ever done a bond referendum vote. Brown admitted he doesn’t have a good sense of whether town taxpayers would endorse it.

“Anytime you turn over the management of the community from the elected officials to the voters, you don’t know what’s going to happen,” Brown said. “I am just seeing if the community and board has the stomach to try to do that.”

Haywood County has held two countywide bond referendums in the past 15 years, and both passed.

One was $12 million to build a new county jail in 2003. The other was $25 million in 2005 for a suite of school construction projects, including the new Bethel Elementary School.

Haywood County voters also approved a quarter-cent sales tax referendum in 2008 to fund construction projects for Haywood Community College. While it wasn’t a bond, the question to voters was similar: do you support paying more in taxes to fund special projects?