Charlotte, NC The Mecklenburg Board of County Commissioners decided this morning to go on a "debt diet."
Approving the recommendation of County Manager Harry L. Jones Sr., the Board decided to delay borrowing $253 million in bonds until next year's operating budget is developed. The delay will reduce a projected $90 million budget gap for next year (FY2010) by approximately $18.3 million. Borrowing the $253 million may be put off until FY2010 to defer incurring additional debt service costs until FY2011.
The $253 million in bonds, previously scheduled to be borrowed in February, were targeted for schools ($188 million), CPCC ($25 million), park and recreation ($20 million), and land ($20 million). Projects already underway that require funds between now and next January could be paid for with capital funds on hand. As part of the debt diet, the Board also will reassess the need for all capital projects previously authorized, and will not consider adding capital projects in FY2010.
The decision to delay borrowing came during the first session of a two-day Strategic Planning Conference being held at The Lodge in Ballantyne Resort in Charlotte. Each year, the Board holds the conference to discuss key issues and identify priorities for the coming fiscal year's budget that is adopted in June. This year, the Bissell Corporation donated the facility to offset costs.
Today's conference began with Jones urging the Board to "think differently" due to new circumstances resulting from the economic recession. Jones told the Board that if the County current budget of $1.4 billion were to remain the same next year, the County would face a projected $90 million gap between projected revenues and expenses. The gap is driven by lower tax revenue and increased debt service costs.
Jones said thinking differently includes the County going on a "debt diet" to moderate high debt levels that threaten the County's Triple-A credit rating. "The issue of debt and moderating our debt is the top issue for this Board and this community," said Jones.
The planning conference continues through Friday afternoon. To learn more about the conference, go to www.mecklenburgcountync.gov.
Media Contact: Danny Diehl (cell) 704-572-1035 or daniel.diehl@MecklenburgCountyNC.gov