Chapel Hill Town Council discusses future of $50 million bond referendum

The Chapel Hill Town Council could soon vote to place a $50.5 million bond on the November ballot — which could lead to funding for the Town's affordable housing initiatives and Town facility updates.

For the bond to appear on ballots in November, the council must possess a rough plan for the bond by May 1, and formally vote to approve the final version by May 15, Chapel Hill Mayor Pro Tem Amy Ryan said. The Chapel Hill Town Council held its first work session dedicated to discussing the bond referendum on April 15.

Ryan said the council was advised at its retreat in February that the Town had the capacity to issue the bond without raising taxes.

“The bond will pay for itself with its current debt fund,” Ryan said.

She said the Town already sets money aside each year to cover any debt that it might take on, which includes this bond.

While the bond would fund $50.5 million in projects, the Town identified approximately $104 million in unfunded projects.

“What we are trying to do is figure out how to allocate the maximum amount of money possible to different buckets based on urgency, and it’s unlikely that any single group around town will be fully satisfied with the way in which we make that allocation," Theodore Nollert, Chapel Hill Town Council member, said.  "But the question of impact and urgency is not lost on any of us.”

In addition to deciding how the bond’s funding would be allocated, the council discussed whether or not to include the referendum on the upcoming November 2024 ballot or to wait until 2025. He said deferring the referendum until 2025 would allow more time for discussion, but not necessarily a better outcome. 

Jackie Jenks, the president and CEO of the Inter-Faith Council for Social Service, said she did not agree with some members of the town council who expressed they felt the approval process was moving too quickly. 

"We feel like it really needs to be in 2024," Jenks said. "We cannot wait, and there’s no need to wait."

$6.5 million of the $50.5 million has already been allocated to fund a parking deck, a new ladder truck for the Chapel Hill Fire Department, and a police station upgrade. The council still needs to decide how to allocate the remaining $44 million.

“We urgently need to fund our affordable housing plan," Jenks said. "I also have a concern that the amount that is being proposed for affordable housing in the bond is well below what we need in order to fund the Town’s own Affordable Housing and Investment Strategy."

At the council’s work session on April 26, Town staff presented a revised budget which included some decreases in funding to budget items like public facilities and climate action projects, and raising affordable housing funding from $10 million to $15 million, Ryan said.

She said she is concerned that the current funding allocation is unbalanced. 

“People care passionately about all of these things and they’re all really, really important, which is why I would really like to see a more even financial distribution on it,” Ryan said. 

She said if the council approves the referendum, Town staff will file the bond with the state and begin public education campaigns over the summer ahead of the voting process. 

“The voters can choose to approve the allocations that we’ve chosen, and we get the lowest interest rate when we do it this way,” Nollert said. 

If the referendum is approved in November, three bond issuances of $13-15 million are proposed for 2025, 2027 and 2029-30. Nollert said, if the referendum is not approved in the voting process, the Town can propose a different bond structure in a later election. 

Ryan said the Town will hold another work session on May 3 to continue finalizing the bond’s allocation.

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