Tuesday, October 25, 2011


Wake Community Network friend and former Holly Springs Councilman Vinnie Debenedetto has shared these thougths with us on Holly Springs upcoming bond:

What’s wrong with this picture?

The Federal Government gets its bond rating lowered,  interest rates for state and municipal borrowing will be going up, taxpayers are losing their jobs, homeowners are having a difficult time meeting their current tax obligations and the Town of Holly Springs wants to issue a $20 mil bond for  park and recreational wants.  What’s wrong with this picture?

Councilman Sack, who is running for reelection, is quoted as saying ..”bonds would allow the town to make investments”….and “the longer we wait”….”the more expensive it will be”.  What does Sack mean about return on investment?  In this economic environment it would seem the priority should be to reduce expenses and invest in projects that create jobs.  Regarding the waiting comment, the Town missed the boat on financing of the Hunt Center.  They jumped the gun and as a result of that decision we have a renovation that cost $6.5 million and with the interest it brings the total cost to the taxpayers at over $10 mil.  The Council, including Councilman Sack, approved a financing plan, recommended by town staff, to borrow at a 5.2% interest rate without the ability to refinance for 10 years.  Why would anyone agree to these terms?

Councilwoman Williams recently stated  “she doesn’t think it will be necessary to raise taxes”.  How does she expect to raise this amount of money?  The town is already maxed out on its credit card by having cost of debt at $3.7 million on $23.6 total general fund expenditures.  As a result the town has a 16% debt ratio the highest of any town in Wake County.  And to balance the budget, the town is borrowing $250,000 in installment financing and another $277,000 from fund balance.  With this bleak of a financial borrowing potential, Williams seems to imply that the funds will come from cost reductions. 

In addition, Councilman VanFossen also made a recent statement …”we have the borrowing capacity”.  To many of us it is quite obvious there is no more leverage the town can use to borrow other than raising taxes.  And if VanFossen was so concerned about the Hunt Community Center not having enough space, why didn’t he support land purchase of adjacent land that was put forth by Councilman Womble? 

What’s wrong with this picture?