Durham Citizens Financial Report (Part III)

Each year, the City of Durham publishes a Citizens' Financial Report, akin to an annual report for a company or non-profit.  The report highlights some of the accolades and successes from the year and outlines the city's financial health. 

In this third part, we will provide an overview of the Financial Report related to debt.

 

Bond Rating

The city of Durham currently has a triple-A credit rating as assessed by Moody's, Standard & Poors, and Fitch.

 

Planning Capital Projects

Long-term financial planning usually focuses on large capital expenditure projects.  The City of Durham guides this process using their Capital Improvement Program (CIP).  This is the principal planning tool for urban growth and development and covers a six-year period, being updated and revised annually.  To be included in CIP, a project requires a total expenditure of at least $100,000.  The FY2014-2019 CIP included $77 million for planned projects including a new $45 million police headquarters facility.

Funding for major projects is provided through general obligation bonds (GOs), certificates of participation (COPs) and limited obligation bonds (LOBs), in additional to general fund revenue, grants, impact fees, and program income.

 

General Obligation Debt Ratio

North Carolina state statutes limit general obligation outstanding debt to 8 percent of a local government's assessed valuation for property tax purposes.  In 2013 the total GO debt stood at $243 million compared to a assessed valuation of all property of $23.5 billion, or 1.032%.

 

FY 2012-2013 Debt Issuances

In July 2012, the City sold $68.3 million of GOs to fund the remaining projects for the 2005 Bond authorization, all the projects related to the 2010 Bond authorization, and projects approved in the last two CIPs.  Total outstanding debt is $466.4 million broken down by fund as follows: General Fund $291 million, Water and Sewer Fund $126.3 million, Performing Arts Center Fund $30 million, Solid Waste Fund $17 million, Transit Fund $2.1 million.

In October 2013, the City sold $34.7 million of LOBs to fund the cost of stadium improvements and deferred maintenance at the Durham Bulls Athletic Park, Ninth Street improvements, police facility improvements, purchase of fleet vehicles, roll-out trash carts, and various other projects.

 

The 2005 Bond Referendum

The 2005 Bond referendum included $110 million dollars split between Parks and Recreation ($38.3 million), Streets and Sidewalks ($18.5 million), Culture Facilities ($11 million), Water and Sewer ($20 million), Public Safety ($6.2 million), and Parking ($7.3 million).  Some examples of projects included in these bonds are listed below.

Parks and Recreation - This bond provided funds for acquisition, construction, renovation and major improvements to specific parks and recreational facilities.  This includes the 20-acre Bethesda park in the eastern part of Durham.

Streets and Sidewalks - Much of this bond was focused on constructing, enlarging, extending and improving City streets and sidewalks.  It included funds for routine maintenance and repair.

Cultural Facilities - This bond provided funds for renovations at the Carolina Theater and renovation and upgrade of facilities at Durham Athletic Park.

Water and Sewer - This bond provided funds for construction, expansion, and improvement of designated City water and waste treatment plants, extension of water and sewer services and rehabilitation of existing water mains and sewer lines.

Public Safety - This bond provided funds to pay for renovations and improvements of certain Police and Fire stations.  It also helped replace public safety communications equipment.

Parking - The bond provided funds for renovation and improvement of parking facilities including Centre Deck parking garage at 300 West Morgan St, and parking facilities at Chapel Hill St and Corcoran St.

 

The 2010 Bond Referendum

The 2010 Bond Referendum was a $20 million bond intended for use in repair and maintenance of city streets.  This bond passed By a vote of 35,968 (56.98%) to 27,159 (43.02%).

 

 

 


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