Question: What are ‘General Obligation Bonds?’
Answer: General obligation bonds are debt instruments issued by state and local governments to raise funds for public works. What makes general obligation bonds unique is that they are backed by the full faith and credit of the issuing municipality. The ability to back up bond payments with tax funds is what makes general obligation bonds distinct from revenue bonds, which are repaid using the revenue generated by the specific project the bonds are issued to fund (fees from a public parking garage, for example). General obligation bonds are typically used to fund projects that will serve the entire community.
Question: What are these bonds going to be used for?
The first project is the Fargo Sports Complex building project. The Fargo Sports Complex will address a critically unmet need for indoor recreation facilities available to the public. The concept calls for a highly impactful community recreation facility to accommodate indoor sports, community activities, tournaments and special events. Phase one of the project will include: 1 full size indoor soccer turf field, 4 – 6 full sized basketball courts, 1 indoor ice sheet, administrative offices, multipurpose community space and an indoor walking track. The board previously voted to commit up to $38.5 million for the construction of this project.
The second project is the Island Park Pool, a centrally located summer fixture that has been identified as a Priority 1 project in the District’s 10-year capital budgeting plan. Up to $16 million was committed to the remodel and replacement of Island Park Pool.
Question: How often does the district issue these kinds of bonds?
Answer: This would be the first time the district has issued these kind of general obligation bonds. The projects are the largest in the history of the park district.
Question: What does the passing of the Initial Resolution at the April 13 Park Board meeting mean?
Answer: The passing of The Initial Resolution for the Issuance of General Obligation Park Facilities Bonds, Series 2021A sets the maximum debt issuance possible and establishes a 60-day protest period. Over that time, Fargo Park District staff will continue to value engineer the projects and secure additional resources, which may reduce the final bonding needs.
Question: Are you taking this to a vote?
Answer: Pursuant to NDCC 21-03-07 (11), the Fargo Park District has the authority to issue general obligation bonds for the purpose of Park Development. This legislation passed by the state legislature in 2019 allows park districts to bond for projects upon approval of their boards and thus to pay off the bonds with property taxes without a vote.
Question: What will be the average cost to the taxpayer?
Answer: With the best information we have today regarding taxable valuation and estimated Fargo Park District commitment of $44 million for the 2 projects, it could entail a mill levy increase of 4.18 mills. That would put the annual property tax increase to pay off the bonds on a $100,000 home at about $18 a year and $36 for a $200,000 home.
Question: Are taxpayers footing the bill for the total cost of both of these projects?
Answer: No, the taxpayers will not pay the entire cost of the projects. Instead, they’ll be getting a deal through the use of private-public partnerships. The Fargo Park District Foundation has already raised $21.5 million in private commitments to the Fargo Sports Complex. Even if the maximum bonding is needed, the most important fact to remember is that the community of Fargo and the region will benefit from an estimated $93 million in capital projects with lifelong benefits for the community for a public investment of an estimated $54.5 million.
Question: How does the public learn about these bonds/projects?
Answer: The Fargo Park Board has discussed the option of packaging the Island Park pool project and the Fargo Sports Complex from a debt issuance perspective as a way of maximizing project completion while minimizing long-term financing costs at 2 regularly scheduled board meetings and a board retreat. Each of these conversations were the subject of an individual feature article in The Forum. Any member of the public is still able and welcome to attend any and all public meetings virtually or in person. All public meeting announcements and agendas are posted at FargoParks.com and in The Forum in advance. Videos/minutes of these meetings are posted at FargoParks.com.
Notice of the Bond Resolution was included in The Forum after the April board meeting. Any additional updates will be posted at FargoParks.com.
Question: What are the next steps with the bonding?
Answer: The Park Board won't make a final decision regarding whether debt is issued and if so, how much debt is issued until the 60-day protest period is over. The public protest period lasts until June 13, 2021. During the protest period, the public is encouraged to reach out to Fargo Park District Executive Director Dave Leker with feedback on the projects.