2017 Parks Bond
- Apex residents supported the Parks Bond with a 76% approval rate during the November 7, 2017 general election
- Bond amount up to $48 million for use in the development of parks and recreation amenities.
- Property tax increase will be necessary to repay this debt (see details below).
Each project meets a specific need identified in the current Parks, Recreation, Greenways, and Open Space Master Plan. (Created with significant input from Apex residents.)
What is a General Obligation (GO) bond?
Bonds are a method used by towns and cities to finance major capital projects. They work similarly to your home mortgage, through which you finance a large purchase over time. Because of the longer payback period (typically 20 years), the financial impact is not applied only to current residents, but also to citizens who move to Apex after the projects are complete and will also be potential users of the facilities.
What are the benefits of paying for projects with bonds?
Because the Town of Apex has a very favorable bond credit rating, we can finance the repayment at a low interest rate. Bonds also enable the Town to complete major projects now rather than wait until there is enough cash accumulated to pay for the project. Construction costs are currently increasing at a rate that exceeds the costs of borrowing, particularly in this area of the State. Building today can result in a significant costs savings and place the project in use much sooner. Interest payments on the bonds are exempt from Federal income tax and also State income tax for North Carolina residents, which lowers the costs of borrowing. Finally, bonds are sold competitively, resulting in the lowest possible financing cost at the date of the sale.
What is the impact on my property taxes?
An increase in property tax rate will be necessary to repay the bond debt. We anticipate incremental increases spread out over the period of about 4 years, beginning with an additional 1.5 cents in 2019, and another 1.5 cents in 2022 and 2023. For the median home value in Apex of $273,400, this would result in about $123 more per year in property taxes if the full 4.5 cent increase was applied.
Why do residents vote on bonds?
GO Bonds are secured by a pledge of taxing power as voted by the citizens. Therefore, Apex residents will choose whether or not to authorize the 2017 Parks Bond during this November’s general election.
What other types of financing can been used to pay for Parks, Recreation and Cultural Resources projects?
Grants, donations, subdivision fees and general revenues of the Town have been used to pay for smaller projects in the past. The Town will continue to aggressively pursue grants and other initiatives that would help to reduce the amount of bond funds to be sold.
Over the years the Town has been very successful in securing grants from the Federal Land and Water Conservation Fund, the N.C. Parks and Recreation Trust Fund, the Wake County Open Space and Recreation Grant Fund, the United States Tennis Association, and the North Carolina Recreational Trails Grant program.
What happens if the economy goes bad?
The referendum only provides the authorization for the Town to issue up to a certain amount of bonds. However, the Town is not required to issue any debt. The Town Council must still approve each bond sale. They may elect to delay, reduce the amount sold or not sell bonds at all depending on the financial climate at the time.
How long does the Town have to sell the bonds once they get the authorization?
The Town will have 7 years from the date of authorization to sell the bonds and may apply to the State for an extension of 3 additional years.
If approved, when would the Town start construction on the approved projects?
If the authorization is granted in November, the Town will have plans in place to begin construction on selected projects as early as spring/summer of 2018. Several of the projects are already in various stages of planning and design which will allow construction to begin fairly quickly, assuming the first bond sale is early in 2018.
How were these projects chosen, and how will they be prioritized?
The four projects were chosen as a result of needs identified in the adopted Parks, Recreation, Greenways, and Open Space Master Plan (PDF), which was created with significant public input. They will be prioritized based on the adopted Capital Improvement Plan, and the Town’s ability to adequately manage the construction of the projects.
If the bond referendum is not approved, how will the Town fund these capital projects?
The Town would rely on reserves or current revenues, grants and donations as the only alternatives to bond financing. This would limit the size of most projects, and delay their design and construction.
What is the Town’s current Growth Rate?
Apex’s current population is approaching 50,000. In 2016, the growth rate was 4.1%. The Planning Department estimates a small up-tick in the growth rate for 2017 if the current pace continues. Through April 2017, the Town had added 716 new residents or an average of 6 new residents per day.
What are the Town’s needs for meeting the current and projected program needs?
A majority of non-athletic programs currently have waiting lists, and in many cases, residents are forced to go to other municipalities to participate in preschool, youth, teen and adult programs as well as youth summer camps. The Town’s current growth projections, especially of young families with children, will further add to the need for expanded programming. Senior (55+) and preschool programs share the same facility space throughout daytime hours. Evening hours are shared between youth programs and adult programs. Night program opportunities are in heavy demand but there is not space to expand those programs without additional facility space.
When was the last time Apex had a Parks Bond? What was included and what were the results?
The Town of Apex has had two bond referendums related to Parks, Recreation and Cultural Resources. The first in 1996 was for $6 million and the most recent was in 2004 for $13 million. Both referendums passed with over 80% approval. Current facilities funded either totally or in part by bonds include Apex Community Park, Apex Nature Park/Seymour Athletic Fields, the Apex Community Center, Hunter Street Park, and The Halle Cultural Arts Center.
How does Apex compare with surrounding Municipalities when it comes to issuing bond for Parks, Recreation and Cultural Resources?
Wake County municipalities (Cary, Morrisville, Holly Springs, and others) have passed GO bond referendums for parks and recreation of more than $157 million since 2011.
Will the tax increases disappear and revert to current levels after bond is paid for?
The incremental tax increases are being applied specifically to cover the cost of the bond projects. So in theory, after the 20-year debt service is paid off, and if all other economical factors stayed the same as they are today, then there would be no need for the continued 4.5 cents in tax rate. However, there is no way to predict/guarantee the tax rate that far out.
Why don’t developers pay for these projects?
The Town’s current development ordinances require all new residential development to dedicate land for public recreation, pay a fee-in-lieu based on the number and type of residential units, build public recreation facilities, or a combination of these options. The Parks, Recreation, Greenway and Open Space Master Plan, approved in 2013 after eight months of public input, guides development requirements and helped set the proposed bond projects. For example, the 92-acres associated with Pleasant Park were purchased with developer fees and virtually all of the Town’s public greenways have been the result of development requirements. Currently, there are 20 approved developments which will be constructing additional portions of the public greenway system as well as others that will be paying fees to help offset the cost of various bond projects, used to match grant funding requests, and complete smaller park projects such as improvements to existing parks and greenways; Salem Pond Park, Apex Nature Park, and the planning and design of future segments of the Middle Creek and Beaver Creek Greenways.
The amount dedicated to Pleasant Park seems out of line with other parks similar in nature. Why is it so expensive?
Pleasant Park is a rolling 92-acre site with streams, wetlands, and a single access across a CSX rail corridor. This site presents significant challenges with regards to offsite roadways improvements (including providing a second entrance), utility connections, and site work. The proposed budget includes over $4M to deal with those issues alone. The concept plan and final design were developed and approved by Town Council after considerable public input, workshops, and multiple reviews by the Parks, Recreation, and Cultural Resources Advisory Commission. The approved plan for Pleasant Park accomplishes two major objectives:
- Addresses both current and future needs for athletic field space as outlined in the PRGOS Master Plan and
- Provides a destination site that will allow the Town to host regional, state, and national events, allowing residents to stay and play in Apex, as opposed to having to go to surrounding municipalities.
The plan protects sensitive environmental areas while providing 10 turf athletic fields, tennis courts, basketball and volleyball courts, open lawn, shelters, comfort stations, and a cross-country course. Incorporated with the athletic programming are field houses that provide meeting space, maintenance storage, restrooms, locker rooms, officials room, concession area, etc. In addition, the 1-acre amenity area will include a Multi-Aged Inclusive Play Area, splash pad, shelters, and environmental education areas. No other facility in this region offers these athletic amenities together in one public park. Apex is situated in one of the most attractive and fastest growing areas of the country where the construction climate is very competitive which also contributes to the estimated cost of the project.
How does Apex’s current tax rate compare to other municipalities in Wake County?
Apex’s 2016-2017 municipal tax rate of .38 is the second lowest in Wake County. To see the 2016-17 rates for all Wake County municipalities go to: Tax Rates (PDF)
How will the passage of the bond affect other Town services?
Other town services will be maintained and/or progress as normal. The purpose of the bond authorization is to provide funding specifically for recreation capital projects. The associated tax rate increase will cover the required debt service for the bonds, therefore not affecting the financial resources already allocated or planned for other town services.
How will the Town’s AAA bond rating be affected by this bond?
The Town’s Finance Director does not anticipate that the AAA bond rating will be impacted by the referendum.
How will the bond affect the Town’s ability to issue debt in the future?
The Town’s Finance Director has indicated that this bond should have no impact upon the Town’s ability to issue other debt in the future.