Bald Head Island 2021 Bond Referendum
In 2017, the Village initially supported the formation of the Bald Head Island Transportation Authority (BHITA) because it appeared to provide a good long-term solution for the unique transportation challenges that come with living, working, and vacationing on Bald Head Island. However, when the BHITA proposal was first made public in December 2020, issues of the purchase price, transparency, governance, lack of responsiveness to Island concerns, and others were raised by various stakeholders. The Village investigated these issues and the Village Council unanimously determined the BHITA proposal for acquisition and operation of the ferry transportation system was not the solution that Village officials had hoped for when they supported the BHITA formation because it is not in the best interest of the Island.
Consequently, the Village took the following actions:
March – Announced its intent to explore whether the Village could independently develop a proposal for acquisition of the ferry transportation system that addressed stakeholder concerns raised after the BHITA proposal was made public.
April/May – Obtained satisfactory answers to legal questions as to the Village’s ability to acquire and operate the transportation assets. See the Village’s May 3, 2021 letter to the NC Local Government Commission (LGC) HERE.
May/June – Employed experienced bond counsel (Robinson, Bradshaw & Hinson) and financial advisor (First Tryon) to develop the bond application and schedule to obtain NC Local Government Commission (LGC) approval. After input from bond counsel and financial advisor, determined general obligation bonds were advantageous over revenue bonds. This form of debt financing is the best and least expensive tax-supported debt resulting in significant savings for the taxpayers over the repayment period. Submitted a notice of intent to seek approval for issuance of general obligation bonds.
July – Submitted an application to the North Carolina Local Government Commission for approval of the issuance of general obligation bonds and that a bond referendum is added to the November ballot. Adopted resolutions making required findings, introducing the bond order, and calling for a public hearing on the bond order.
August – Held an Informational Meeting on August 6 which was available on Zoom to present the Village’s proposal to acquire the transportation system. The presentation details the benefits of this proposal including financial, governance, and operational advantages. The presentation can be viewed HERE. Conducted a Public Hearing on August 20 on the bond order and adopted a resolution to adopt the bond order and authorize the bond referendum. Public hearing comments can be viewed HERE.
In summary, when compared to the BHITA proposal, the VIllage offers more responsive local control over governance and operations of the transportation system. More info regarding governance can be found HERE. Additionally, the Village saves bond issuance expenses at closing and debt service payments over the term of the bond from a lower interest rate. More information regarding finances can be found HERE.
What is a bond referendum?
A bond referendum is a voting process that gives voters the power to decide if a municipality should be authorized to raise funds through the sale of bonds, for specific purposes. A general obligation (G.O.) bond is long-term borrowing in which a municipality pledges its full faith and credit (taxing power) to repay the debt over a specified term. G.O. bonds are the least costly financing option available to the Village to finance major capital costs and offer significant savings to taxpayers over the repayment period.
During the upcoming November 2, 2021, municipal election Bald Head Island voters will be able to vote YES or NO to the following question:
SHALL the order authorizing $54,000,000 of bonds secured by a pledge of the faith and credit of Village of Bald Head Island to pay capital costs of providing public transportation facilities including ferry, barge, and ground transportation assets, vessels and vehicles and related facilities and property, and including the acquisition and construction of such public transportation facilities, the improvement, and expansion of existing such public transportation facilities and the acquisition and installation of furnishings and equipment and the acquisition of interests in real property required therefor and the annual levy of property tax without restriction as to rate or amount for the payment thereof, be approved?
Below are documents associated with the Village’s concerns with the BHITA purchase and efforts regarding the acquisition of the Bald Head Island transportation system. BHITA documents (such as agreements, resolutions, appraisals, etc.) can be found on this webpage.
Questions & Answers (10/20/2021)
Supplemental Information on Debt Capacity (8/18/2021)
BHITA – VBHI Comparison Table (7/19/2021)
Village FAQs (6/25/2021)
Q & A’s Regarding Village Acquisition of Ferry (3/29/2021)