Forsyth Commission Puts Schools, Taxes on Ballot
Forsyth County is a lot like your average American: It has the best financial intentions, but sometimes its spending habits get the better of it.
Until 2007, the Forsyth County Commission — which has four Republican members and three Democrats — adopted along with its annual budgets a policy that limited debt service in a given year to 10 percent of expenditures. When voters approved $275 million in school bonds in 2006, the county’s debt slipped above that threshold for the first time, consuming almost 12 percent of the annual budget.
For the 2008-2009 budget, the board is looking at inflating its maximum debt load to 14.5 percent in anticipation of more bonds. On Monday, the commission took the first step in a process that will add a $62 million educational facilities bond to the November ballot that will benefit Forsyth Tech and the county’s public schools. If voters elect to approve those bonds, Forsyth County residents will owe creditors almost 15 percent of their annual taxes.
Five county commissioners, including two Republicans, voted for the bond. Republicans Debra Conrad and Richard Linville voted against putting the item on the ballot.
“The county’s debt level is continuing to drift up,” said Vice-Chair Debra Conrad, a Republican from District B. “And I’m not sure the public always knows what a bond is when they vote on them. Sometimes they think it’s like hitting the lottery.”
Chair Gloria Whisenhunt, also a Republican, has pushed for revisions to ballot language that will make it clear to voters that bonds aren’t free money. When voters approved the 2006 school bond package, they took on a three-cent increase in the property tax rate. Conrad and Whisenhunt want the bond items on the ballot to contain language that makes it clear to voters that the upgrades are going to come out of their pockets.
Whisenhunt said the commission, which is traditionally fiscally conservative, might need to rethink its debt guidelines.
“With the economy we have today,” she said, “everything cannot be set in stone.”
And what will Forsyth County citizens get for $65 million? Forsyth Tech will get a new building, the current Winston-Salem/Forsyth County Schools career center, and the school system will in turn get new administrative offices. The school system will donate the building to Forsyth Tech, which will spend $21 million to renovate it. The school system will need $38 million to build a new career center.
“Forsyth Tech certainly does a wonderful job,” Conrad said, “and I don’t have anything against them wanting to expand. I just want to retire some of our debt first.”
Conrad said she worries about saddling Forsyth County residents with more taxes during uncertain economic times. The county and the Piedmont Triad as a whole have seen their tax base contract as the big manufacturers that used the make up the economic infrastructure shuffle overseas. New industries and employers like Dell Computers have moved in, but haven’t started contributing to the county’s coffers because of tax incentives that rewarded the company for moving to Forsyth County.
NC House Joint Caucus Leader Dale Folwell was the only member of the public to weigh in on the bond during the public portion of Monday’s meeting. He urged the commission to take more time to consider its options.
“It is not the right time to incur sixty million in debt — one hundred million once it’s all paid off — for a piece of land that’s not going anywhere.” Folwell said.
Paul Fulton, the county’s finance director, said the bond is unusual because it combines projects for two different entities — the public schools and community college — into a single item that must be approved in its entirety. The county designed it that way to keep voters from approving one item and not the other, which would effectively torpedo the project. But if the structure of the bond is a bit unusual, he said, the county’s ballooning debt isn’t.
“I’ve seen large counties with eighteen or twenty percent debt,” Fulton said. “It really just depends on how much the county commission is willing to pay for it.”
Beaufort Bailey, one of the board’s three Democratic commissioners and a bond supporter, said investments in Forsyth Tech and the public school system will help the county attract new industry and taxpayers.
“All our new businesses looking at Forsyth County need the community college,” he said. “Forsyth Tech is a jewel to this community.”
Conrad voted against adding the bond to the November ballot during the commissioners’ business meeting. Bailey voted for it. But neither will have final approval.
Voter had an opportunity to comment on the bond during a public hearing at the commission’s Aug. 11 business meeting. Then, in November, they get to vote to approve or reject the proposal.
The $62 million school bond is a general obligation bond, one backed by the county’s taxing power that requires voter approval in a referendum. In an earlier briefing session, the Forsyth County Commission also approved $11 million in two-thirds bonds, which are also called certificates of participation. The county can issue these bonds without voter approval up to an amount equivalent to two-thirds of the debt retired in any given year.
Unlike general obligation bonds, which are often used to pay for capital-intensive projects like new schools, two-thirds bonds tend to cover repairs and minor facility upgrades. The county commission approved $7.3 million in two-thirds bonds at its July 28 business meeting to pay for infrastructure upgrades at aging schools. That’s on top of the millions approved in 2006.
The commission considers bonds items that originate in the departments that request them. In this case, Forsyth Tech President Gary Green and Winston-Salem/Forsyth County Schools Superintendent Don Martin brought the building request to the commission.
Conrad voted against adding the bond to the ballot because she said she would rather not give voters the opportunity to add more debt to the county ledger. Bailey said he thinks voters should have the opportunity to decide for themselves.
“I think our voters are intelligent enough to decide what they want,” he said. “I don’t think we as a commission should be able to stop them from voting on it.”
Forsyth County voters have a history of approving bond items, Conrad said, raising concerns that they are not fully aware that the figure on the ballot must be paid back — with interest.
“The amount on the ballot is just the principal,” Conrad said. “Add onto that another thirty million in interest payments. Taking out a bond is just like buying a house, and I want the voters to know that.”
To comment on this story, e-mail Amy Kingsley at email@example.com.