Bonds are the primary sources of funding for many projects that give the community a change to grow and prosper. Below are frequently asked questions that provide some insight into the City's Bond Program.

 

- Why are bond projects important to the community?
- What is a General Obligation Bond?
- What kind of credit rate does Charlotte have?
- Why does the City issue bonds?
- How does the City pay holders of the bonds?
- How are bond projects selected?
- What kinds of projects make up a bond package?
- If and when a bond package is approved, when will construction of the bond project begin?
- Why doesn't the City start preliminary work early, so construction may begin immediately after voters approve the bonds?
- What happens if the bonds are not approved by voters?
- How is the public notified about bond project construction?
- How does the City work with residents and businesses that will be affected by the construction?

 

Q. Why are bond projects important to the community?
A. Keeping pace with an expanding population, replacing aging infrastructure and improving quality of life often emerge as major factors that drive the City of Charlotte bond program. Transportation projects such as new roads and sidewalks, neighborhood improvements like curb and gutter, and economic development projects like affordable housing are just a few of the projects funded by (General Obligation) bonds approved by Charlotte voters in the last few years. Constructing these bond financed projects ensures a stable quality of life in our city and makes Charlotte a better place to live.

 

Q. What is a General Obligation Bond?

A. A General Obligation bond is a financing tool similar to a home mortgage that the City uses to finance large capital projects over a 20-year period.

 

Q. What kind of Credit Rate does Charlotte have?
A. The City's credit rating is "AAA," the highest rating a city can receive from national rating agencies. This makes bonds a low risk investment for lenders and also provides the City with a low interest rate.

 

Q. Why does the City issue bonds?
A. The City's capital needs exceed the ability to fund these projects on a "pay as you go basis." Bonds allow the City to pay for projects over a longer period of time. Typically the City asks voters to authorize bonds for major projects or package of several similar projects.

 

Q.  How does the City pay holders of the bonds?
A. The City pays the holders of these bonds through a number of funding sources such as property taxes, sales taxes and City fees.

 

Q. How are bond projects selected?
A. Here is the process:
     - Projects are compiled from the City's Capital Budget or Capital Investment Plan (CIP), a five-year infrastructure plan that matches the City's highest priority capital needs with a financing schedule.

     - City staff recommend projects to Council for inclusion in the bond package. Their recommendations are based on feasibility and cost effectiveness.

     - City Council reviews the list, often making additions or deletions and approves a final list of projects for inclusion into bond package(s), to be placed on the ballot.

 

Q. What kind of projects make up a bond package?
A.  Projects are selected from the City's Capital Budget or Capital Investment Plan. These plans include investments in neighborhoods, housing and roads.

 

Q. If and when a bond package is approved, when will construction of the bond project begin?
A. Voter approval of the bond packages only authorizes funding for the project. There are several crucial steps that must occur before construction:
     - planning
     - project design (which includes public input)
     - Acquisition of land
     - Solicitation of construction bids

Depending on the project, this process may take several months or several years to complete.

 

Q. Why doesn't the City start preliminary work early, so construction may begin immediately after voters approve the bonds?
A. In the case of projects that fulfill a critical need, some design may occur before bonds are approved. However, in most cases, work starts after bond approval to ensure the most prudent use of resources, and because the City does not assume voters will approve all bonds on the ballot.

 

Q. What happens if the bonds are not approved by voters?
A. If an assessment determines that certain infrastructure needs that would be fulfilled by a project are too important, Council may fund projects through other sources. However, if funding is not available, the projects are held for inclusion into future bond packages.

 

Q. How is the public notified about bond project construction?
A. After a contract is award to the lowest responsible bidder, the residents in the vicinity of the construction site are notified of when construction is expected to begin and end.  For large projects the City will often develop printed materials, - such as newsletters, develop a web presence, hold public meetings, and work with the local news media to keep the public informed.

 

Q. How does the City work with residents and businesses that will be affected by the construction?
A.  Here are some of the ways:
     - At the initial public meeting, the City asks residents and business owners what issues should be addressed as the plan is developed for the project.
     - The preliminary design is presented and discussed at future public meetings.
     - The final design includes details of the project including the impact on the environment, motorists, transit, homes and businesses.
     - Once construction is underway, a City inspector will either remain on-site full time or make daily visits to the project.
     - Work of multiple agencies, such as Utilities, Storm Water and Engineering & Property Management are coordinated to minimize the impact of disruption on the community.

 

Q: What is a General Obligation Bond?
A: A General Obligation Bond is like a signature loan. It enables the City to finance capital projects over several years. All City resources, such as property tax revenue, are pledged toward the repayment of the loan. This makes it a low risk investment for lenders and allows the City to get a low-interest rate on the loan.

 

Q: Why does the City issue bonds?
A. The City's capital needs exceed its ability to fund these projects on a "pay as you go basis." Bonds allow for the City to pay for projects over a longer period of time.
Typically the City asks voters to authorize bonds for major projects or a package of several similar projects.

 

Q: How does the City pay holders of the bonds?
A: The City pays the holders of these bonds through a number of funding sources such as property taxes, sales taxes and City fees.

 

Q: How are projects selected?
A: These projects are compiled from the City's Capital Budget or Capital Investment Plan (CIP), a five-year infrastructure plan that matches the City's highest priority capital needs with a financing schedule. The plan includes investments in neighborhoods, housing, storm water, roads, transit, water, sewer and the airport. City staff recommends projects to Council for inclusion in bond packages. Recommendations are based on feasibility and cost effectiveness. City Council approves a final list of projects for inclusion into bond package(s), to be placed on the ballot.

 

Q: If and when a bond package is approved, when will construction of the bond project begin?
A: Voter approval of the bond package only authorizes funding for the project. There are several crucial steps that must occur before construction. They include planning, project design (which includes public input) acquisition of land and solicitation of construction bids. Depending on the project, this process may take several months or a couple of years.

 

Q: Why doesn't the City start preliminary work early, so construction may begin immediately after voters approve the bonds?
A: The steps before construction can take several months or a couple of years, depending on the scope and complexity of the project. In some cases, road projects and neighborhood improvements can be planned ahead of time to take advantage of early design work that shortens the time from the bond vote to completion of construction. Over a dozen road projects and several neighborhood projects have benefited from this approach.

 

Q: What happens if the bonds are not approved?
A: If an assessment determines that certain infrastructure needs that would be fulfilled by a project are too important, Council may fund projects through other sources. However if
funding is not available, the projects are held for inclusion into future bond packages.