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A referendum is a general vote by the electorate on a single ballot question. The County is required by state law to obtain voter approval to issue its general obligation bonds. Voters will have an opportunity to vote YES or NO on the 2019 transportation bond referendum question during the General Election on November 5, 2019.
Bond financing is a long-term financial obligation used by most local governments to borrow money to pay for public facilities and infrastructure. Once issued, bonds require annual payments for the cost of debt service (principal and interest) by the County.
The annual debt service on a $50 million bond would be approximately $4.2 million each year. The County has eight years to access the bond funding and will not issue all $50 million at one time. The selected project list could be completed with the bond amount in conjunction with other funding sources. Stafford County enjoys a Triple-AAA bond rating and, as a result, should be able to obtain competitive interests rates on its bonds. The debt payments associated with the bond package fit within the County’s current debt capacity. The County has four revenue streams dedicated to transportation, including gasoline sales tax, state recordation tax, interest earnings and transportation impact fees. If these funds are insufficient to pay the debt service, money would come from the General Fund. The debt service is spread out over several years based on the timing of construction, as the County only issues bonds as needed.
Stafford is among only 47 counties in the nation that have the highest credit rating possible for a local government from Moody’s Investors Service Inc.; from Standard & Poor’s; and from Fitch Ratings. The County’s Triple-AAA bond rating lowers its borrowing costs. The County’s financial guidelines state that the annual debt service should not exceed 10% of General Government expenditures and total outstanding debt should not exceed 2.75% of the total market value of the taxable real property. The proposed bond package stays within these guidelines, maintaining a balance between operating expenses and long-term capital needs.
Proceeds from the sale of the transportation bonds, by law, are authorized only for the transportation projects listed in the ballot question. The County did submit the ballot question to the Circuit Court without the Hope Road road-widening project listed. Hope Road is still listed on the 35 road-widening projects list. The County intends to complete the Hope Road project with alternative transportation funding sources, as bond proceeds cannot be used for this road. As for Woodstock Lane, the road was incorrectly mislabeled as Woodstock Road on the ballot question, but that does not affect that bond issuing status for the project.
The projects were identified through an objective Comprehensive Road Study performed by Stafford County that studied roads most in need of improvement throughout the County, over and above the construction already planned by the Virginia Department of Transportation (VDOT) who is the primary entity responsible for roads construction and maintenance throughout the County.
Within the Comprehensive Road Study, road evaluations with traffic counts above 1,700 vehicles per day (vpd) were considered as major reconstruction candidates. Whereas, roads with counts under 1,700 vpd were considered for safety and widening improvements. As part of the evaluation, several factors focused on recommended improvements, cost estimates and the assessments of the practicality of implementation.
The Comprehensive Road Study identified possible sources of funding. The Board of Supervisors felt that the amount of identified funding was insufficient and held several transportation work sessions to determine and evaluate multiple funding options. After narrowing down the final list of road projects, the Board came to a consensus to ask the citizens of Stafford County to consider a $50 million bond referendum on the November 5, 2019, general election ballot.
The project costs are estimates derived from the Comprehensive Road Study (www.staffordcountyva.gov/roadstudy). The County worked alongside the Virginia Department of Transportation, the agency responsible for building, maintaining and operating the state's roads, bridges and tunnels. These estimates also include preliminary engineering, right of way acquisition, utility relocation and the coordination of VDOT’s repaving schedule for road widening projects.
Stafford County bond packages are planned to fund specific road projects and are issued, as needed, in increments until 2027. These projects take a number of years to complete with the goal to complete them as quickly as possible. Prudent financial management dictates that the proportionate amount of bonds be issued to coincide with the annual cash flow requirements for construction costs associated with the respective capital projects.
Stafford recently adopted its first Strategic Plan with a priority of achieving a “Responsible Transportation System.” This Board is dedicated to transportation system improvements. If the bond does not pass, work on the road projects will not begin until a funding source is identified, which could delay some or all of them indefinitely.
From the 2008 transportation bond referendum, 15 projects were completed at a total cost of $140 million, which is an 80 percent completion rate of the proposed 19 road projects. Voters approved a bond amount of $70 million; only $24 million worth of bonds were issued. As bonds are only issued as the money is needed, which resulted in authorized but unissued bonds. Those remaining bonds are now expired. Approximately $100 million was leveraged from state and federal funds with $16.4 million from additional County funds outside of bond proceeds. Out of 55 total lane miles proposed for improvement, the County was able to complete 43.5 lane miles during one of the country’s worst economic recessions.
Over the last eight years, the County has initiated and helped fund 22 road improvement projects, including Youth Driver Task Force projects, with an investment of $57 million of County funds, which might never have happened without voter support for the 2008 referendum. The status of completed, current and future road projects may be found on the Transportation Projects page of the County’s website: www.staffordcountyva.gov/1549/Road-Projects.