Aug. 27--HOLLY SPRINGS -- Town leaders hope to secure funding for four capital projects by the end of September.
The Holly Springs Town Council wants to sell bonds to finance a combined $19 million of construction on the North Main Athletic Complex, a new police headquarters, an extension of Main Street and the realignment of the intersection at Avent Ferry Road and the N.C. 55 Bypass.
About $8 million would go toward the second phase of the athletic complex, which will include a multipurpose field, grandstand and seating for between 1,800 and 2,800 people.
The 28,000-square-foot police station, which the town says it needs to accommodate the addition of 40 staff members since 2002, would get about $7.5 million.
The road projects would get a combined $3 million.
The town is seeking an 18-year deal and an interest rate of less than 4.25 percent. The Local Government Commission, a branch of the N.C. Treasurer's Office that regulates municipal spending, is scheduled to review Holly Springs' plan Sept. 9.
Holly Springs leaders expect the the group to approve it because town staff has been in talks with the commission for months, town spokesman Mark Andrews said.
"We're not hitting them cold with this," he said. "We get guidance from the LGC on how to prepare requests to them."
The town will likely sell the bonds Sept. 18 and close on the sale of the bonds the week of Sept. 25, Andrews said.
Holly Springs is already breaking one of its three self-imposed rules for maintaining financial health: that annual debt payments not exceed 15 percent of annual expenditures.
The town is paying about $4.6 million toward debt this year, which equates to about 16.3 percent of town expenditures, according to Senior Programs Manager Daniel Weeks. An additional $19 million would boost that percentage to 19.05 percent.
But the town is well within range to borrow more money under two other guiding principles.
Holly Springs has another self-imposed rule that says its total debt shouldn't exceed 2.5 percent of the town's assessed property value. The town owes a total of $34.6 million, and adding $19 million would put its total debt at 1.38 percent of the assessed property value in Holly Springs, Andrews said.
The town also aims to pay off at least 55 percent of its total debt within 10 years.
"Next year, we'll be at 65 (percent) even with the added borrowing," he said.
A few residents have contacted the council to express concern over the town's borrowing, Councilman Jimmy Cobb said.
Cobb, a certified public accountant, said he thinks the financing plan is good for the town because it helps Holly Springs pay for projects that seek to accommodate growth and spur economic development without raising taxes.
Holly Springs is expected to grow by 25 percent to more than 37,000 residents by 2019, according to the town's economic development department.
"We'll pay for (the projects) with internally generated funds," Cobb said. "It's a step in the right direction."
Specht: 919-460-2608; Twitter: @AndySpecht
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