Frequently Asked Questions (FAQs)
General Obligation Bonds and Voting in General
What are General Obligation Bonds? The Town would use General Obligation bonds to improve our road system. General Obligation bonds are a financing tool towns use to raise money for major capital projects like parks and road systems. Banks and brokers sell the bonds to investors who have faith they will earn reliable interest because bonds are backed by the Town’s authority to collect taxes.
What is a bond referendum? In a municipal bond referendum, residents vote on whether the Town will incur a specified debt. With their vote, residents are also deciding whether they are willing to pay increased taxes, if necessary, for the improvements provided by the bond funds. Click here for more information.
Why not just borrow the money? Because it has taxing authority to secure the debt, the Town receives more favorable borrowing terms through the sale of bonds. The interest rate is lower and repayment periods are better than traditional financing.
When do I vote on the referendum? The bond question will appear on the Nov. 6, 2018 general election ballot, along with the candidates for federal, state and county offices.
What is the bond question? The bond question on the ballot will read as follows:
“Shall the order authorizing Town of Holly Springs general obligation bonds in the maximum amount of $40,000,000 plus interest to pay capital costs of providing transportation improvements and paying related costs, and providing that additional taxes may be levied in an amount sufficient to pay the principal of and interest on the bonds, as that bond order was adopted by the Town Council on August 7, 2018, be approved?”
What exactly does that mean? In other words, the bond question is, “Do you want the Town to issue $40 million in transportation bonds to pay for major road improvement projects, given there will be a tax rate increase of 5 cents per $100 value?”
How do I vote? You can vote on the transportation bond if you are a Holly Springs resident and are registered to vote. Go here to register to vote or to make sure you are properly registered.
$40 Million Transportation Bond
What’s driving the need for this bond? Traffic congestion—both now and in the future. Residents and commuters through Holly Springs experience traffic slow-downs every day. Town staff has analyzed traffic hot spots and has identified the road projects that would relieve congestion.
In addition to addressing everyday congestion, the Town needs to improve roads for the future. Soon, the I-540 interchange will be built near Sunset Lake Road and Holly Springs Road. This new interchange will have a major impact on Holly Springs Road and adjacent roads. This bond will help us prepare for the influx of vehicles to that area.
The Town Council has heard residents' concerns about traffic congestion and wants to give them a voice in determining how the Town responds with solutions.
How much will the town issue in bonds? $40 million is the amount approved by the N.C. Local Government Commission for the referendum.
Why $40 Million? Town officials identified more than $100 million in road projects and elected to take on a more moderate bond amount, enough to tackle key projects but that will result in a modest tax increase.
How will the money be used? The $40 million raised by the bond issue will help fund a number of transportation improvements, including road widening, new roads, crosswalk, sidewalk and bike lanes.
Approximately $16 million will be put toward projects that will be funded 100% by bond proceeds, which can begin immediately. These Bond-Funded (Green) Projects will be local road improvements that likely would not draw the participation of state or federal grants.
Approximately $24 million will be used toward larger, costlier projects on State-maintained commuter roads inside the Town limits. These Bond and Partner-Funded (Purple) Projects, which will very likely invite funding participation from NCDOT, will be initiated once matching grant funding or NCDOT reimbursement is secured. The wait for partnership funding could save the Town millions over taking on the projects alone; therefore, the $24 million in seed money could translate into much more in valuable road improvements.
Will my taxes go up if this passes? Yes. You will incur a 5-cent annual tax rate increase—from 43.25 cents to 48.25 cents per $100 value, which will be used to pay the bond debt over the next 20 years. This translates into an increase of $50 per $100,000 in property value. For example, the property tax on a $300,000 property would increase by $150 per year. Click here for more information.
When does the new tax rate take effect? Beginning with tax bills due in September 2019. Click here for more information.
How long will the Town and citizens pay off the debt? The debt would be repaid over the next 20 years, using the 5-cent increase in the property tax rate beginning next year.
Could the Town use the money for other purposes? No. State law requires that bond proceeds be used for the purpose for which they are approved by voters. The Local Government Commission would oversee the use of money raised by bonds and would not allow the Town to use money without specifying which projects would be funded.
What if I vote YES? The Town commits to completing the Bond-Funded (Green) Projects using bond money. The Town commits to using some of the bond money to gain NCDOT cost-sharing for the Bond and Partner-Funded (Purple) Projects. Taxes will go up $50 per year per $100,000 value (i.e., $150 per year for a property with a tax value of $300,000).
What if I vote NO? Most of the Bond-Funded (Green) Projects would not be completed in the foreseeable future. The Bond and Partner-Funded (Purple) Projects (and any work to state-maintained roads) would compete with others throughout the State for NCDOT funding and may not be funded for years. Property taxes would not increase because no bond debt would be incurred. Traffic will continue to worsen as this region draws more people (and more cars).
The Projects to be Funded by the Bonds
What projects are planned? The $40 million raised by the bond will help to fund different types of projects, including road widening, new roads, sidewalks, crosswalks, and bike lanes. All of the projects will benefit Holly Springs by relieving traffic congestion, creating a safer community, building more cross-town connections, and providing for future growth in this area. Projects fall into two categories:
- Approximately $16 million – Will be put toward Bond-Funded (Green) Projects that can begin immediately. These projects consist of local road improvements that likely would not draw the participation of state or federal grants. The Town will have to fund 100% of these projects using bond money, but since the Town does not have to seek partner funding, the projects can be initiated quickly.
- Approximately $24 million – Will be used toward Bond and Partner-Funded (Purple) Projects that will be initiated once matching grant funding or NCDOT reimbursement is secured. These larger, costlier projects are slated for State-maintained commuter roads that very likely would invite funding participation from NCDOT. The Town would apply and seek approval for cost-sharing funds, then wait for fund availability. This approach, however, could save the Town millions by sharing with others in the cost of improvements, thereby growing $24 million in seed money into much more in valuable road improvements.
- Holly Springs Road – Widening, bike lanes, sidewalk from Flint Point Lane to Sunset Lake Road
- N.C. Hwy 55 – New right turn southbound lane starting at Avent Ferry Road to Main Street Extended
- Main Street – New right turn lane northbound at Holly Springs Road
- Estes Lane – Connection will complete route for local traffic between N.C. Hwy. 55 and Bass Lake Road
- Avent Ferry Road – Realignment and new construction will create cross-town connection from Avent Ferry Road to Bass Lake Road by way of Stinson Avenue
- Grigsby Avenue – Improvements to include widening, sidewalk, curb and gutter, and crosswalks
- Sunset Lake Road – Improvements to help move traffic in the vicinity of the 540 interchange at Kildaire Farm Road
- Holly Springs Road – Widening, sidewalk, bike lanes from Main Street to N.C. Hwy. 55 Bypass, completing improvements on one of the most used thoroughfares in town
- N.C. Hwy 55 Bypass – Increase the capacity of the turning lane onto Avent Ferry Road by extending it northward to Holly Springs Road
How long will these projects take? Timing would vary, depending on the size of the project and what additional funding would be needed from NCDOT or other sources. Some projects would be entirely bond-funded and could be done more quickly. Others would depend on cost-sharing agreements.
Why don’t developers fix the roads? Residential and commercial developers are partners with the Town in building road infrastructure to serve local traffic. Developers in Holly Springs are required to conduct traffic studies and then complete all street improvements resulting from the studies using their own money. They are not required to mitigate the additional impact of other development outside of Holly Springs that nonetheless impacts our traffic.
Since these are mostly State roads, why won’t NCDOT fix the roads? NCDOT has thousands of miles of roads and highways across the state, all competing for limited funding from NCDOT. While NCDOT has done an extraordinary amount of work in Holly Springs in the past, the Town has shared in the cost. The Transportation Bond allows our Town to “partner” with NCDOT to “share” (70% NCDOT/30% Town or 80% NCDOT/20% Town cost sharing) and stretch our dollars as far as possible with NCDOT.
Can't we just stop development to reduce traffic? Stopping residential and commercial development in Holly Springs is not the answer. Growth inside and outside of Holly Springs will continue regardless, and that traffic will be going through Holly Springs to get anywhere. If there is no development IN Holly Springs, then there would be no additional revenues to be able to partner with NCDOT and/or developers. In addition, the Town budget would be very limited as to what additional transportation improvements to our existing roads (middle turn lanes, widening, sidewalks, bike lanes, etc.).
Most Local Improvements are not Bond-Funded
If the bond passes, will my street will be repaved? No – at least, not with bond funding. City streets are resurfaced on an annual rotation using money from the state called Powell Bill Funds. Engineers survey pavement conditions throughout Town every few years. Streets are ranked for resurfacing priority, taking the type of street and condition into account. Approximately every year, town engineers create a batch of streets for repaving, working off the priority list.
Bond proceeds would be used for higher impact projects to improve traffic flow by widening, extending, or realigning existing roads or possibly to build new ones. Typically, these are very costly projects that would not be feasible except as part of a bond package.
Is this bond for only Town roads? Yes. All projects will be to roads within the Town limits. Although some of the improvements will benefit commuters, the focus of the projects are to serve those who pay taxes in the Town.
Are all road projects in Town included in the bond? No. The Town uses a few different ways of paying for road system improvements:
- Street Reserves – a savings account of sorts into which developer fees are deposited to be used exclusively for roads. This account finances smaller local road projects and also is used to provide matching funds for grants in larger projects on State roads.
- Powell Bill Funds – this is money provided by the State for towns to use primarily on smaller projects, resurfacing, ongoing street maintenance, sidewalk construction, curb and gutter, crosswalks, etc.
- General Fund – the Town’s annual budget also includes separate funding for routine work like repaving, fixing potholes, and building sidewalks and crosswalks.
- State and Federal Grants – road projects that will serve the entire region often invite funding participation of NCDOT and the federal government (through NCDOT). The extension of Main Street to Piney Grove-Wilbon Road and the widening of Avent Ferry Road are examples.
- Combinations – funding in any number of combinations among street reserves (developer fees), Powell Bill Funds, the general fund and grant funding. Most times a project is paid for from several “pots of money."
What are examples of projects funded without bond money? The Non Bond-Funded (Orange) Projects have the approval to move forward and are in various stages of start-up right now. Some are funded by the Town. Some will be funded in partnership with NCDOT. Some are funded by developers who are making improvements as part of their development agreements.
Although these projects will provide some traffic and congestion relief, they are not enough to make a significant impact. To achieve greater impact, the transportation bond projects are needed. If combined, the Non Bond-Funded (Orange) Projects, Bond-Funded (Green) Projects and Bond and Partner-Funded (Purple) Projects would go a long way to improve traffic conditions in Holly Springs.
Give me some examples of these. There are a lot of projects that are in various stages of start-up right now. These Non Bond-Funded (Orange) Projects have the approval to move forward. Some are funded by the Town. Some will be in partnership with NCDOT and developers who are making improvements as part of their development agreements. While these projects will provide some relief, they are not enough to make a significant impact. For this, the transportation bond projects are needed. Together in concert, all the projects should go a long way to improve traffic conditions in Holly Springs.
- Avent Ferry Road – Widening from N.C. Hwy. 55 Bypass to Cass Holt Road
- Holly Springs Road – Full widening from Main Street to Flint Point Lane
- Innovation Parkway – New road connecting Rex Road to Avent Ferry Road
- Teal Lake Drive – Connection through to Grigsby Avenue
- Sportsmanship Way – Connection through to N.C. Hwy. 55 Bypass
- N.C. Hwy. 55 – New right turn lane, southbound at Ralph Stephens Road
What Else Do I Need to Know?
- Your vote Nov. 6 will decide whether the bond referendum passes.
- Whether or not the bond passes, traffic will continue to get worse as this area continues to grow and I-540 opens. However, without bond funds, the Town cannot help. Improvements to state roads like Sunset Lake Road, Holly Spring Road, Avent Ferry Road, and NC 55 Bypass will have to compete with projects all across the state for NCDOT funding.
- Wake County also will have three bond referenda for parks, schools and Wake Tech on the Nov. 6 ballot. Corresponding tax increases are proposed. At last report, the County estimated a 3.8-cent tax rate increase if all three Wake County bond referenda were to pass.