Supporting the City's vision to drive economic development and attract both job opportunities and population to the area, Hickory citizens passed a $40 million bond referendum in November 2014, which assumed a six to eight cent property tax increase to repay the bonds.
Following the passing of the referendum, the City continues moving forward with four major projects currently in the essential and extensive design and engineering phase: a City Walk that will greatly enhance pedestrian access from Lenoir-Rhyne University through Downtown Hickory, a Riverwalk that will follow the Lake Hickory waterfront to connect the current Rotary-Geitner Park to the Highway 321 bridge, a Streetscapes and Gateways plan that will enhance Hickory's entrances and roadways, and Trivium Corporate Center (formerly Park 1764), which will be an advanced manufacturing business park, jointly developed by the City of Hickory and Catawba County.
The City chose to pursue the most difficult and most expensive projects first, the City Walk and the Riverwalk. These two projects also require the greatest amount of regulatory review and oversight from various state and federal agencies, including the North Carolina Department of Transportation, Federal Highway Administration, Norfolk Southern Railroad, Duke Energy, and the Department of Environmental Quality.
With plans for the City Walk nearing completion and Riverwalk plans approaching 60% design, the City of Hickory prepares to develop a funding strategy for the bond projects and coordinate with the Local Government Commission (LGC), a division of the State Treasurer, to obtain its approval per state law. During the design and engineering phase, the City of Hickory has utilized General Fund monies to cover expenses, as the LGC will not approve bonds until projects are designed and construction costs are calculated, typically in the form of a construction bid.
Hickory City Council held its annual planning retreat on March 15 and 16, where Council and staff discussed funding strategy options for the bond projects. No action was taken by City Council at the retreat, as decisions regarding funding will be considered as part of the FY 2018-2019 City budget.
The City's only means of repaying the bonds or paying down City debt is through property tax increases. With the adoption of the FY 2018-2019 budget, City Council will determine potential property tax increases associated with the bonds. Three factors will determine the tax increases: timing of the bond issuances, the amount borrowed, and interest rates associated with the City's credit rating. From the 2014 passing of the bond referendum, the City has a seven year window to issue the bonds. However, a three year extension is permitted by law.
The City of Hickory's current property tax rate is $0.5665/$100 in assessed value. The average home in the City of Hickory is valued at $150,000. Using that home value as an example of how potential tax increases may affect Hickory residents, please consider the following: property taxes will increase $15 per year for each cent increase on the property tax rate. Therefore, with the issuance of $40 million in bonds, the average homeowner's property tax would ultimately increase by $120 per year, based on an eight cent property tax increase. City Council heard various options for tax increases that could be put into effect over the next few years.
In addition to City bonds, these projects will also be funded by state and federal grants. The City of Hickory has already received commitments of up to $15.5 million in state grant funds, allowing the City to make several enhancements to the City Walk, including increasing the size and scope of the iconic bridge on Hwy 127, as well as increasing the length of the City Walk to extend from Fourth Street NW to Ninth Street NW.
"The City is excited to see the progress with the bond projects over the last few years," said City Manager Warren Wood. "As we prepare to move from the design phase to the funding phase, it is important to keep sight of the ultimate goal of the projects, which is to drive economic development, enhance the quality of life for our citizens, and craft a community that attracts businesses and population."