Under a proposal that was discussed on Tuesday, the City of Fayetteville would borrow from an internal fund to help finance its new ballpark.
North Carolina’s Local Government Commission has stated its preference that the city retire ballpark project-related debt over 20 years rather than 30. The city had planned to borrow roughly $31 million in limited obligation bonds, which would be paid back over 30 years.
With the possibility of tweaking the funding plan, the city council’s baseball committee has taken a closer look at the borrowing method. One proposal that has surfaced calls for the city to borrow $9 million from its internal risk management fund to help cover a 20-year bond. When the bond is retired, the city would begin to pay the $9 million plus interest back into the risk management fund over a period of 10 years.
City officials sounded open to the possibility of utilizing risk management funds. More from The Fayetteville Observer:
“We are basically using the Risk Management fund as a line of credit to be able to service the (bond) debt over 20 years,” said Councilman Kirk deViere, a Baseball Committee member.
The city uses its Risk Management fund to pay its insurance costs.
The city has made this arrangement before, borrowing from the fund and then repaying it with interest from other city funds.
Tracey Broyles, the city’s Budget and Evaluation director, said that under the new financial model, the city would pay $2.7 million in debt retirement in the first year after issuing the bonds. The payments would decrease every year, to $1.7 million when the debt is retired in 20 years.
The Houston Astros, who will own the Carolina League franchise that is set to occupy the facility, and the city have already come to terms on a 30-year lease. Officials are hoping to begin construction on the ballpark this summer, allowing it to open in time for the 2019 season. In the meantime, the Astros-owned club will play as the Buies Creek Astros at Campbell University’s Jim Perry Stadium.
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