Special purpose, local option sales tax 7 questions

Augusta voters are set to vote on the consolidated government’s latest special purpose local option sales tax May 20. The Augusta Chronicle addresses the 1 percent sales tax collection in a continuing series until election day.

Q: If SPLOST 7 fails, how will the city pay for ongoing renovations at the Augusta Municipal Building?

A: While $18 million of the renovation project is paid from SPLOST 6, Augusta commissioners pointed to the new tax package to cover the remaining expense of the massive renovation project and authorized a five-member panel, the Urban Redevelopment Agency, to issue $28.5 million in SPLOST 7-backed bonds for the project.

Pushed in March to get bonds issued to cover project bills, the agency cautiously approved the issue, acknowledging that if the tax ballot failed, the city’s capital outlay budget would be depleted about $2.9 million annually to cover debt service until a SPLOST source is approved.

However, the agency was dissolved last week and its approval of the bond issue voided upon realization that three of its members – Henry Ingram, Terry Elam and Larry Jones – violate a city ordinance by serving on more than one board.

“It was decided the better course would be to have people appointed and not try to find some legal exception to hang your hat on,” said Jim Plunkett, the special city counsel for the bond issue, who expected only a short delay before a new panel approved a new issue.

One of two legal appointments on the board, Brad Owens, said Plunkett’s decision to dissolve the panel and redo the issue ran counter to excuses Plunkett and city staff made in March to get the issue approved – that without it, the project would run out of funds and grind to a halt.

“That’s what we were told was going to happen,” Owens said.

Q: How much does the SPLOST cost a typical family?

A: It depends on a household’s spending on retail items such as clothes, electronics and food.

If a household spends $1,000 a month, it will pay $600 in special purpose local option sales taxes over the roughly five-year lifespan of an Augusta SPLOST.

If a household spends $3,000 a month, it contributes $1,800 toward the SPLOST over five years.

The pennies are in addition to the 1 percent local option sales tax, education SPLOST, the Transportation Investment Act sales tax and a 4 percent state sales tax, some of which exempt groceries.

Q: Will SPLOST 7 increase fire protection by Augusta Fire Department?

A: The approved package includes $2.5 million for a new fire station, but Augusta Commissioner Donnie Smith said commissioners have agreed to divide the money between two, smaller two-bay stations to cover areas lacking in coverage.

The precise locations of the stations have not been named, but the areas are off Jimmie Dyess Parkway near Fort Gordon’s Gate 1 and on the southern end of Deans Bridge Road between Bobby Jones Expressway and Tobacco Road, Smith said.

Q: What’s in SPLOST 7 for Augusta’s Downtown Development Authority?

A: The DDA has a $1.5 million allocation in SPLOST 7 to create a “surface parking lot” on a vacant city-owned tract at 511 Reynolds St., between a historic railroad depot building and the city marina on the Savannah River.

Construction of the lot was initially proposed as an inducement to lure Medac, Inc., downtown to the vacant mall inside the nearby Port Royal building, according to city Deputy Finance Director Tim Schroer.

While Medac opted to accept another deal to locate in North Augusta, the DDA is continuing to market the property and the parking lot project remains, he said.

Q: What will Paine College do with its $6 million SPLOST allocation?

A: Paine College, expected to raise a 25 percent or $1.5 million match to secure its $6 million allocation, intends to use the funds toward construction of the $17.9 million James Brown Community and Fine Arts Cultural Center, named with permission from the legendary singer’s family, Paine Vice President Helene Carter told city commissioners at a Feb. 27 meeting.

Carter did not return messages seeking additional information about the center, but according to Paine’s request for the funds, it will house a variety of cultural and visual arts activities, including art exhibits, auditorium, recording studios and office space.

The facility, to face Druid Park Avenue across the street from Gilbert-Lambuth Memorial Chapel and the SPLOST-funded HEAL Complex, will employ six people full time and cost $378,000 annually to operate, the document said.

 Q: What will Greater Augusta Arts Council do with its $2.775 million included in SPLOST 7?

A: The arts council’s allocation includes $25,000 for a public arts master plan and $2 million for public art implementation. According to Executive Director Brenda Durant, the council will use the funds to seek more grants and create public art exhibits, such as sculptures, at each city gateway, starting with Augusta Regional Airport.

A second public art project supported by the allocation will involve Augusta Public Transit. The funds will be used to create history-themed bus stops with public art and solar-powered charging stations, and an outdoor performance area at the Southgate bus transfer station, Durant said.

Lastly, the council’s $750,000 for Artspace will be used as seed money to help developers convert a downtown building into units of apartment/studio space for artists, Durant said. Last year Artspace developer Joe Butler said there was sufficient interest, based on survey findings, to create 40 of the rental units using low-income tax credits in an existing downtown building.

 Q: What’s in SPLOST 7 for Augusta’s Planning and Development department?

A: Listed in the package for Planning and Development is $6.5 million, with $4 million for demolition of dilapidated structures and $2.5 million for flood reduction, including the acquisition of flood-prone properties.

Q: What’s in SPLOST 7 for engineering?

A: While the $194 million package includes $50 million for the engineering department, the project list has not been determined and probably won’t be until after the May 20 election.

Engineering Director Abie Ladson has presented commissioners a few versions of how he’d spend the $50 million on drainage, road, bridge, sidewalks and other related projects, but only a handful of the projects have been fully funded. The commission has at several times been unable to agree on what to include in the package, and Monday a commission committee referred the decision to a June retreat.

Q: What projects are included in the special purpose, local option sales tax package for libraries?

A: The May 20 package includes $2 million for renovations at three aging library branches named by East Central Regional Library Director Darlene Price as in dire need of repair. The libraries are the Friedman, Wallace and Appleby branches.

Q: What’s in the tax package for the Development Authority of Richmond County?

A: The development authority has two items: $1.25 million for further construction of an access road through the new south Augusta corporate park where Starbucks’ soluble products plant is under construction, and $500,000 for industrial infrastructure, which Development Authority Executive Director Walter Sprouse means for partial funding for a spec building.

 Q: How long does the special purpose, local option sales tax last?

A: Under Georgia law, a consolidated government may collect SPLOST revenues until the total amount on the SPLOST referendum is collected if the government issued general obligation debt in conjunction with the SPLOST.

Augusta’s current SPLOST won’t be fully collected until early 2016, according to Deputy Finance Director Tim Schroer, and a government can’t have two in effect at once. At around $3 million a month collected, if voters approve SPLOST 7 its collection will continue until mid-2020.

 Q: What’s in the tax package for Hephzibah?

A: Richmond County’s second largest-municipality, Hephzibah’s population of 4,021 residents will benefit from $8.375 million in sales-tax-funded improvements inside city limits if voters approve the tax May 20.

Those additions include a $4.45 million multi-use recreation center included among a small set of projects to be funded upfront by a bond issue, with the remaining projects to be built as collections permit.

Other projects, according to documents approved by the Au­gus­ta Commission, include $1.8 million for an agricultural center and arena, $220,000 for an automated water meter reading system, $200,000 for bike lanes, $100,000 for the beautification of Windsor Spring Road, $145,000 for water department equipment, $125,000 for public safety equipment, $385,000 for fire and emergency medical services equipment and $950,000 for new fire department facilities.

Q: What’s in the May 20 sales tax package for the sheriff’s office?

A: Listed specifically for the Richmond County Sheriff’s Office in the document commissioners approved – if the sales tax referendum passes – are $407,000 for a digital in-car video system; $332,000 for high-definition body cameras; and $700,000 for downtown video equipment.

Included under Information Technology to be utilized by the sheriff’s office is $13 million for a new public safety radio system and $900,000 to replace mobile data terminals. Under Fleet Management is $8 million for public safety vehicles.

Q: If voters reject the sales tax referendum May 20, when could they vote on one again?

A: If a sales tax referendum doesn’t pass, Georgia counties must wait one year before returning a tax package to a ballot.

A law change since voters last approved a sales tax referendum in 2009 requires the referendum to be held on the date of a regularly scheduled election, making the next opportunity for Augusta voters to ratify a tax package Nov. 3, 2015, according to Deputy Finance Director Tim Schroer.

Q: What can penny sales tax funds be used for?

A: Projects eligible for special purpose local option sales tax funds under Georgia code include construction; maintenance of roads, streets, bridges, sidewalks and bicycle paths; land acquisition, drainage and utility work. Publicly owned water, sewer, stormwater and drainage “capital outlay” projects – of a long-lived nature – also may be funded. Dollars may fund construction but not maintenance of public facilities, including courthouses, administrative buildings, civic centers, jails, and others.

From there, usage is less clear. When Augusta allocates funds to outside entities – such as $6 million for Paine College’s new James Brown Community and Fine Arts Center or $4.25 million for Symphony Orchestra Augusta to renovate the Miller Theater – a contract ensures the facility will be open to and serve the public, said Tim Schroer, the deputy city finance director. If the entities sell the projects, the city would get most of its money back, Schroer said. Clint Mueller, the legislative director for Association County Commissioners of Georgia, the entity that lobbied for creation of the tax in 1985, said requirements for funds to outside entities are greater. The government needs “joint ownership at the very least.”

Q: How is the special purpose local option sales tax collected?

A: Although the funds are expended by the local government, special purpose, local option sales taxes are not collected by the tax commissioner but by retailers, manufacturers, and occasionally, users who don’t otherwise pay sales taxes. Retailers and manufacturers collect the special purpose local option sales tax at the point of purchase and remit payment to the Georgia Department of Revenue.

In Augusta-Richmond County, where retail goods are also subject to an additional 7 percent in sales taxes, including 4 percent for the state, 1 percent for the Transportation Investment Act, 1 percent used to roll back property taxes and 1 percent for Richmond County Board of Education’s capital outlay needs, the special purpose local option sales tax generates approximately $3 million a month toward special purpose local option sales tax-funded projects, according to city Deputy Finance Director Tim Schroer.

Q: Which sales tax 7 projects will be paid for first?

A: Because the tax is collected by the penny, larger projects typically must wait months or years for collections, generally about $3 million a month, to reach sufficient amounts to complete them. Collections won’t start until mid-2016 after the current sales tax expires, according to Deputy Finance Director Tim Schroer.

Certain sales tax 7 items will be paid first, however. According to an intergovermental sales tax agreement among Augusta, Hephzibah and Blythe, the government must set aside semiannual interest and principal payments on a $21.7 million general obligation bond that’s part of the May 20 sales tax referendum to finance certain projects upfront.

If approved, the bond proceeds will repay, ahead of the tax collections, an $8 million loan taken out by the city as matching funds sought by Georgia Regents University to proceed with expanding its cancer center, according to a previous Augusta Commission agreement. The remainder of the bond proceeds are intended for a $4.45 million multi-use recreation center in Hephzibah; $4 million in tax assessment and billing software upgrades; and $5.25 million for the Augusta Regional Collaborative’s Mills Campus proposal, which the commission agreed to in March.

Q: Why are special purpose local option sales tax funds designated for nongovernmental entities?

A: The 1987 and 1991 packages were billed to Augusta-Richmond County voters as an easy funding source for needed road, drainage and related infrastructure work. By the third package in 1995, funding was specifically designated for three private entities – Augusta Mini Theater, Lucy C. Laney Museum and Springfield Baptist Church – for the stated purpose of attracting support from black voters.

Not-for-profit entities that are private, yet generally open to the public, such as Historic Augusta, Fore Augusta, the mini theater, Laney museum, Imperial Theatre and Symphony Orchestra Augusta requested and received similar sales-tax allocations from subsequent tax packages with no known legal challenges.

Allocations for private entities in the proposed $194 million package include $5.25 million for Augusta Regional Collaborative, $2.775 million for Greater Augusta Arts Council, $2.5 million for the Imperial Theatre, $4.25 million for Symphony Orchestra Augusta, $6 million for Paine College and $500,000 for Southeastern Natural Sciences Academy.

Q: Is it OK to campaign for or against passage of the sales tax referendum?

A: Yes, under certain conditions. Georgia law prohibits elected officials and government agencies from spending public funds on a campaign, including for promotional materials, and all official descriptions should not “express an opinion” about the proposal, according to Association County Commissioners Georgia, citing Georgia Code 21-5-30 and case law.

It’s legal and not unusual, though, for groups to form and raise funds to spend to promote passage or defeat of a ballot question, according to ACCG.

For the local sales tax referendum, campaign committees must register and file reports with Richmond County Board of Elections when contributions exceed $500. Promotional materials must identify the committee and its principal officer, according to Georgia law.

At least two groups – Augusta Together for SPLOST and Say No to SPLOST Augusta – have formed locally, although as of Wednesday no group had registered with the elections board.

Q: Has a sales tax referendum ever failed in Augusta?

A: Yes. On Nov 2, 2004, 79 percent of voters rejected Augusta’s fifth attempt at extending the special purpose, local option sales tax.

The $478.7 million proposal, expected to take a decade to complete, included $94 million for buildings and $174.7 million for infrastructure, in addition to an $81 million sports arena, $18 million performing arts center and $40 million amphitheater as well as numerous allocations to charities and outside agencies.

A year later, 66 percent of voters approved a revised $160 million sales tax package that included $125 million for a new courthouse, jail expansions, main library and a convention center and $18.5 million for infrastructure.

Q: What’s in the sales tax referendum for Blythe?

A: Richmond County’s southernmost, smallest municipality will benefit from about $1.975 million in sales-tax-funded projects if voters approve the $194 million tax package. City leaders have said they hope to beef up infrastructure in the city of 721 residents and capitalize on nearby development at Plant Vogtle and Fort Gordon.

Included in the package for Blythe are $350,000 for water system upgrades; $400,000 for paving and other unspecified road work; $125,000 for police vehicles and equipment; $900,000 for a “community building/library/park”; $100,000 to install wireless Internet and complete other information technology upgrades; and $100,000 for vehicles and equipment unrelated to public safety.

 Q: Can 1 percent sales tax funds be used to pay people’s salaries?

A: Yes. While Georgia law prohibits using sales taxes to pay for maintenance and operations of government facilities, it makes an exception for roads, streets, bridges and drainage work.

As a result, while the tax can’t be used to staff a new library or pay its utility bill, governments such as Augusta-Richmond County routinely use the tax collections to pay and provide benefits to personnel who complete road and drainage work, including legal work associated with land acquisition, and other tasks associated with the completion of sales tax projects.

Q: What will Augusta Recreation, Parks and Facilities do with its $19 million allocation of sales tax funds if voters approve the package?

A: Recreation Director Robert Levine said his department plans to adhere to the list of 28 projects included in the package Augusta commissioners approved in February as collections allow.

The package allocates between $250,000 and $500,000 each for eight city parks: Dyess, May, Minnick, McDuffie Woods, Eisenhower, Blythe, McBean and Valley. It also designates $400,000 apiece for Riverwalk Augusta and the Boathouse Rowing Center, $500,000 for Fleming Tennis Center, $250,000 for Butler Creek and $500,000 for multipurpose court upgrades.

Larger-ticket items included in the package are $1.5 million for the Augusta Aquatic Center; $2 million for Newman Tennis Center; $2 million for playground unit replacement and $2.75 million for Diamond Lakes Regional Park.

Also for water activities, the package allocates $1.85 million for a “splash pad water playground initiative” and $500,000 for citywide pool renovations.

Q: Why are sales tax funds allocated for project administration?

A: Georgia laws governing the imposition of sales taxes allow the local government to reimburse itself for actual costs associated with the sales-tax-funded projects.

The $5 million listed in the package for administration, plus $1 million included on a proposed Engineering project list for administration are typically used for legal advertising and other “legal fees” associated with the tax, including designing contracts between the city and outside agency recipients, according to Deputy Finance Director Tim Schroer.

“More importantly,” however, collections for administration are used to repay city departments – finance, law, procurement and others – whose functions support the tax-funded projects, Schroer said. The city has an annual study done by an outside firm to assess this indirect cost allocation, he said.

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New Augusta-Richmond County sales tax package doesn't have majority support, poll shows
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Richmond County Sheriff Richard Roundtree announces sales tax support
Mason, Davis go head-to-head over SPLOST 7 funds in forum
City committee authorizes first phase of $3 million countywide demolition program
Commission acknowledges revenue shortfall on renovation project if tax plan fails
SPLOST questioned at Augusta public hearing
Augusta Commission passes sales tax plan to pitch to voters May 20
Mayor pushes for SPLOST OK today
Mills proposal seeking $12 million, still no GRU interest in campus
SPLOST work session scheduled Monday
More make case for sales-tax funds
Museum, others seek SPLOST funding
SPLOST lets residents vote on taxing selves
Augusta arts groups request SPLOST funds for venues, cultural projects
Hephzibah, Blythe want more sales-tax funds
Augusta Commission seeks to narrow SPLOST projects to about $200 million
Augusta Commission sets work session to discuss SPLOST
Local match needed by state before Georgia Regents University Cancer Center funds released
May election date causes 'time crunch' on sales tax package

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Sun, 12/04/2016 - 20:05

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