A reconfigured downtown agency declined to sign off on a $28.5 million revenue bond issue Monday after members questioned how the bonds will be paid off if voters don’t approve a new special purpose local option sales tax May 20.
The Augusta Commission voted almost a year ago to make the bond issue the funding source, with debt service to come from a future SPLOST, to complete $40 million in renovations at the Augusta Municipal Building complex in the 500 block of Greene Street, and the construction project is well underway.
At a Monday meeting of the new Urban Redevelopment Agency, however, members agreed the city commissioners “weren’t 100 percent convinced of the ramifications” of issuing debt without a certain repayment scheme, said chairman Henry Ingram.
Ingram, downtown activist Brad Owens, former mayor Bob Young, Universal Plumbing owner Larry Jones and Augusta Technical College President Terry Elam were named to the board last month by Mayor Deke Copenhaver at the commission’s recommendation. They replaced a prior URA panel first assembled in 2010 to issue debt to finance the ongoing Laney-Walker and Bethlehem redevelopment projects, but whose terms had expired in the 18 months since members last met.
While the former URA met rarely and did not prepare an annual report or budget or obtain an audit as required by an intergovernmental agreement with the city, the new URA “could be a very active board,” said Jim Plunkett, special city counsel over the projects.
The new URA is assigned to a reconfigured downtown redevelopment district that includes the Laney-Walker and Bethlehem tracts as well as the municipal building complex, the James Brown Arena and Bell Auditorium complex, the former main Augusta library building, the former chamber of commerce building on Broad Street, the riverfront former depot property in the 500 block of Reynolds and the publicly-owned portions of Port Royal, the riverfront condominium complex, Plunkett told board members.
Invited to attend, Housing and Community Development Director Chester Wheeler said he’d need two to three hours with each member individually to explain the Laney-Walker and Bethlehem projects’ status. Last year, Wheeler said the projects had run out of funds and needed a $2.5 million “bridge loan” to cover consultant expenses until more funds – borrowed against the project’s guaranteed allocation of $37.5 million in hotel-motel room charges – became available.
The URA members– particularly Owens and Young – questioned Plunkett and Deputy Finance Director Tim Schroer about paying off the debt if SPLOST 7 fails. Commissioners approved Friday a $194.3 million sales tax package to present to voters May 20, as well as to ask them to approve a separate $21.7 million bond issue to jump-start several SPLOST 7 projects.
Plunkett said the backup plan for a SPLOST defeat was to use all of the city’s existing 0.71-mill property tax levy that is currently reserved for capital outlay to cover service on the bonds.
“I don’t believe that you can rob from the capital budget to pay bonds,” Young said. “The city is potentially on the hook for $2.9 million a year to service the debt if SPLOST fails.”
Meanwhile, according to Schroer, the municipal building renovation is low on funds. Started a year ago using SPLOST 6 dollars, the $40 million renovation project’s “cash flow is getting critical,” Schroer said. “We are dangerously close to running out of funds on this project.”
Schroer said he didn’t know how long the project could sustain without the bond issue, but Plunkett said the commission would have to halt the project if the board didn’t agree to the bond issue. “If we don’t borrow the money and receive the $28 million,” Plunkett said, “we stop building.”
The URA panel, with Elam absent, voted unanimously to table a decision on the bond issue until May 21. Ingram encouraged the board members to speak with their city commissioners about their intentions for moving forward. “We might vote earlier,” he said.