Commissioner Mary Davis said city leaders needed to reconsider all the options after the extensive plan caught the governing body by surprise when it appeared on a committee agenda Sept. 5.
“It’s back to the drawing board, in my mind,” Davis said after commissioners declined to approve the plan Tuesday. “We need to have a lot of discussion about the various options we have. We need to find a way without relying on a SPLOST that hasn’t passed.”
Commissioners voted 7-1 in March to issue $26.5 million in bonds to complete a $40 million renovation of Augusta Municipal Building, with future service on the debt derived from a sales tax referendum yet to go before voters.
There had been no discussion about the funding mechanism presented Sept. 5, however, and commissioners were taken aback by its plan to characterize and designate the entire 595-acre downtown business district as a “slum” for the stated purpose of obtaining tax savings on the bond issue for the government building.
Property rights advocate Al Gray seized on the issue and assailed the plan at the start of Tuesday’s meeting, citing Department of Community Affairs guidelines for creating an Urban Redevelopment Area that include public involvement and offer alternatives for borrowing money.
“You are not supposed to be presented with a resolution like this with no warning,” he said.
Mayor Deke Copenhaver, noting he’d served on the DCA board “for many years” stopped Gray when the Lincolnton resident referred to Augusta’s “treasure trove” of “fraud and corruption.”
The plan relied on an existing five-member Urban Redevelopment Agency approved to oversee an $8 million bond issue for redevelopment in the nearby Laney-Walker and Bethlehem areas. The commission had been asked to appoint new members to the URA board, while the Laney-Walker project has run out of money and was seeking a $2.5 million loan Tuesday. Commissioners also declined to approve the loan.
Dianne McNabb, the city’s financial adviser, said DCA gives wide latitude to governments to create Urban Redevelopment Areas. Unlike a development authority, however, the URA agency can issue bonds and otherwise facilitate development of “governmental-purpose faciliites” such as the Municipal Building or educational facilities, she said.
Other financing sources, such as Georgia Municipal Association, effectively “mortgage” the facility in question, creating greater risk for investors and higher interest rates, McNabb said.
Columbia County, meanwhile, in 2011 created a similar district, approved by DCA in Martinez but avoided using terms like slum. Commissioner Bill Fennoy asked McNabb if Augusta could do the same, but she said she was unaware of the suburban county’s efforts.
“We may save $2 million over the (20-year) life of the bonds, but how much revenue will merchants lose because people don’t want to come to a slum area?” asked Fennoy, who represents the area in question. “I have yet to run across anybody that supports the language that’s in this grant application.”
Meanwhile, if the next city SPLOST fails to pass, the bonds must be serviced by operating revenues, McNabb said.
Commissioner Bill Lockett again raised questions about why the city was spending $6,000 a month for consultants Melaver-McIntosh to “rebrand” the Laney-Walker and Bethlehem districts but now is attempting to designate the adjoining central business district as a “slum.” The documents presented for approval went further, detailing the slum district’s propensity to foster disease and crime, he noted.
City Administrator Fred Russell defended the plan as the work of people “we have been using for the last 15 years.” Russell suggested a special work session on the issue, but Fennoy offered a motion to send it back to the city finance committee and would not change it after Russell’s suggestion.
Lockett offered a substitute motion to hold a work session on the matter. Needing six votes to pass, it failed 5-1, with Fennoy voting no. By that time, commissioners Marion Williams and Grady Smith had left the meeting. Mayor Pro Tem Corey Johnson and Commissioner Joe Jackson were absent for the entire meeting Tuesday.
Fennoy’s primary motion to send the matter back to committee also failed, 3-3, with Davis, Lockett and Guilfoyle voting no. Copenhaver, whose authority allows him to schedule meetings and work sessions, requested that the session be held.