Monday, August 6, 2018

Avoiding a Bond "Bait and Switch" on Davidson Public Facilities

At Tuesday's Davidson Board meeting, Commissioners are set to vote (or maybe they won't) on putting $16.3 million in bonds on the November ballot.  These bonds will be for "public facilities".

These bonds, if passed in November, will be used to improve facilities for Public Safety at the existing Town Hall and to build a new Davidson Town Hall.  The plan for a new Town Hall being discussed since soon after the new board was seated is to enter into an agreement with CMS to refurbish the Davidson IB Middle School on South Street to serve as the new Town Hall and offices for CMS. This is different than the plan the previous board was discussing which was to build a brand new Town Hall in front of the existing Town Hall on Main Street.

Interestingly, both plans come out to about the same amount of money.

In preparation for this Tuesday's vote and to gather some public input on the subject, Davidson is using its "Open Town Hall" survey tool to get citizen responses.  To date  over 80 responses have been submitted with results evenly split between the IB School plan and "Other" with several people voting for the Main Street plan.  The "Other" category is broadly variations on doing something smaller at the IB site or doing nothing at all.  A major concern was noted by several respondents regarding spending so much money on a building the Town does not own.  It should be noted that while this survey is not scientific, it has garnered the most responses of any survey done on this platform for Davidson.  It should also be noted that a similar survey done on the Save Davidson Facebook group showed overwhelming opposition to spending this much money on a new Town Hall.

Again, while these types of surveys are not scientific, these results do indicate that if a bond referendum is put on the ballot for $16 million, it will likely be a divisive vote for the Town in November.

What bothers aShortChronicle as much or more than the dollar amount or the possibility of a spirited Bond referendum campaign is the possibility that even if these bonds are approved they might not be used for what voters think.  That possibility stems from the way these bonds have been designated.

The recent discussion has been all about the IB Middle School remodeling for the new Town Hall.  Yet, the bond order wording being discussed just says "public facilities".  While that difference may seem insignificant, it is not. The way bonds work drives this wording.

Bonds can only be spent on what they have been designated to be used as worded on the ballot.  The Town could have submitted a bond order specifying these would only be used for the South Street IB Middle School version of a new Town Hall. That's the version the Board has been discussing these past months.  By wording the bond order using the more generic "public facilities" description, in theory this money could be used for anything falling under that much broader category - including the new Town Hall idea on Main Street.

Voters have to ask themselves this question.

"What happens if I support these bonds for the South Street project, but then something falls through?  Will that money be used for something else like the Town Hall on Main Street?"

While aShortChronicle truly does not believe the current Board would intentionally do this, the wording on the bond order is concerning because it allows for the possibility.  aShortChronicle sat through a bond presentation years ago where the Town's outside bond legal counsel specifically advised using such generic language to the previous Board so this type of thing could be done.  It provides flexibility, but flexibility is not always a good thing.  Since bonds have a shelf life of several years, if they aren't used immediately by the current Board for whatever reason, a future Board could change direction.

Avoiding both a divisive November vote and the possibility of a "bait and switch" could have been done.  The bond amount should have been divided into two pieces - one for Public Safety and one for a new Town Hall.  It should have been worded that way instead of the generic "Public Facilities" to cover both.  The Town also should have done more to significantly cut costs on the projects to get the number down to something more reasonable.

Unfortunately, those steps weren't taken, and here we are.

The Board does have the opportunity to lower the bond amount on Tuesday.  It says so on the meeting agenda item.  That could cover both problems.  Instead of a $16 million bond, they could go with something like half that - enough to do the public safety work and more modest updates to the IB School for Town Staff, but not enough to switch plans and do the Main Street Town Hall.

Voters will have to wait until Tuesday to find out if the Board takes that opportunity.

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