UPDATE: In November 2012, Wilmington voters did vote on whether to support a taxpayer-funded stadium, and it failed 70-30. Read all about it at StarNewsOnline.com/Baseball.
The Wilmington City Council determines how it will pay for large projects when preparing the annual budgets. Some projects, such as major improvements or expansions to parks, were paid for through a bond that was voted on by the public. In 2006, New Hanover County and Wilmington residents voted for a $35.5 million parks and green space bond.
The convention center, however, did not go to a public referendum because the type of bond being used did not require it. Council is paying off that debt with revenue from a Room Occupancy Tax fund, generated by hotel and motel taxes.
It’s unclear at this point how a proposed baseball stadium would be financed and whether or not a bond would go to a public referendum. The city council has said there is not enough time to take it to the ballot to get the stadium built in time for the team to open in 2014. But a group of citizens is pushing a petition that would force the issue onto a ballot.
The city council has a couple of options when it comes to issuing debt for projects. All debt has to be approved by the Local Government Commission. The LGC votes to either approve or deny the unit’s debt application during its meeting. Cities can issue an installment purchase bond. These can be in the form of certificates of participation or limited obligation bonds, both of which are secured by the asset being financed, according to Julia Vail, deputy director of communications for the N.C. Department of State Treasurer.
A referendum is required when general obligation bonds are to be issued that pledge full faith and credit (i.e. taxing power) to secure the bonds, according to Vail.
Date posted: May 7, 2012
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