10/24/13 — City's credit is OK for projects

View Archive

City's credit is OK for projects

By Matt Caulder
Published in News on October 24, 2013 1:46 PM

With the Goldsboro City Council hoping to tackle a slew of expensive projects in the coming years, city officials were pleased this week to learn they have plenty of room to borrow the necessary money.

According to the city's plan, the potential debts would come from a possible $18.9 million bond referendum to fund parks and recreation improvements, and the $4 million local match for the recently awarded $10 million grant from the U.S. Department of Transportation for downtown improvements.

The challenge, city officials said, will be managing the payments on those bills.

"We are looking at structuring our debt so it all doesn't come down at once," Finance Director Kaye Scott said.

A debt profile regarding the city's current debt and ability to borrow more funds was presented by the city's financial advisers, Davenport & Company, to the City Council at its work session Monday.

The profile found that Goldsboro has a manageable budget with a low amount of long-term debt, which gives the city room to borrow funds needed for the referendum and financing of the local match.

The city currently maintains a Aa2/AA- credit rating with Moody's and Standard and Poor's respectively -- two of the three major credit rating companies. Fitch does not rate Goldsboro.

Goldsboro is in the top five ratings in both agencies.

"It's good to know we have room to borrow if we're going to do this," Councilman Bill Broadaway said Monday.

The city currently holds almost $15.6 million in debt.

"We can borrow the funds without any problems," Mrs. Scott said. "It just depends whether the council wants us to pursue that."

She also noted that the city would still have room to borrow even more money on top of the proposed debts if future needs arose.

"We would just have to explain the reason why and talk to them about these numbers," Mrs. Scott said.

If the city took on each of the proposed debts, it would structure the sale of the bonds and the financing of the $4 million match over about five years to allow the city to pay them off on an easier schedule.

"The capacity is there within the policies, we have the capacity for them," Mrs. Scott said. "It's structured so it wouldn't be a burden."

The proposed bond referendum, if pursued, would go to fund the construction of the new W.A. Foster Recreation Center, a multi-sports complex with soccer fields, paving greenways and renovations and improvements to Herman Park Center and Herman Park.

The referendum would come up for a vote in May.

A referendum at $18.9 million would raise the property tax rate by about 2.4 cents per $100 of valuation.

If the cost of the new W.A. Foster is lowered to the $4 million desired by City Council the rate would drop to an increase of 1.75 cents per $100.

The current property tax rate is 65 cents.

The local $4 million match for the $10 million U.S. DOT TIGER grant will go to fund the design and construction of the proposed GATEWAY transfer facility.

The grant would go to complete Center Street Streetscape and also renovate the area around the new transfer facility.

The only project not funded in the grant was the renovation of Goldsboro Union Station.