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Augusta's Urban Redevelopment Agency panel again delays bond issue

Friday, March 14, 2014 8:40 PM
Last updated Saturday, March 15, 2014 2:46 AM
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The Urban Redevelopment Agency, charged with issuing a $28.5 million revenue bond to finance ongoing renovations at Augusta Municipal Building, on Friday held off approving the matter until members meet with the Augusta Commission on Tuesday.

Workers place steel beams into place during renovations at the Municipal Building in downtown Augusta in January.  MICHAEL HOLAHAN/FILE
MICHAEL HOLAHAN/FILE
Workers place steel beams into place during renovations at the Municipal Building in downtown Augusta in January.

The $28.5 million bond, to be paid off using a future special purpose, local option sales tax, was intended to fund the remainder of the $40 million renovation project when city commissioners approved the project a year ago.

Now, as opposition in the community and even among commissioners and mayoral candidates to the May 20 SPLOST grows, agency members are questioning whether commissioners were aware that debt service on the bonds, about $3 million annually, will have to come from property tax revenues if the SPLOST doesn’t pass.

Deputy Finance Director Tim Schroer has told the panel and said again Friday that the ongoing construction project under management by consultant Heery International is running out of cash rapidly and the city “can’t wait” to issue the bonds or it will have to suspend construction while costs escalate.

What’s left in the bank to pay Heery, construction manager Turner Construction and other contractors will be spent by May 20, while delaying the project will cost the city “at least $2 million,” Schroer said, adding that he’d request more specific cost escalation estimates from Heery, whose representatives were out of town and unable to attend the Friday meeting.

“I think we’ve put ourselves in a precarious position,” said agency appointee Terry Elam, the president of Augusta Technical College. “I can say this. I think the commission needs to be very clear to us about their intent to repay this. … I just want that message to come clearly from the commission.

“We started a project before the funding was in place,” he said.

Jim Plunkett, an outside counsel who works with the city on bonding and other development projects, reviewed a timeline of when commissioners had been informed about and signed off on the project’s various elements, including a March 8, 2013, meeting when financial consultant Dianne McNabb described using existing SPLOST 6 and future SPLOST 7 funds to pay for the project and using the city’s existing .71-mill property tax levy to service the debt if SPLOST 7 hasn’t been approved.

Three days later, former city administrator Fred Russell referenced using the property tax levy in discussion surrounding the commission’s vote at a called March 11, 2013, meeting when commissioners voted to approve the project, Plunkett said.

“Where is the resolution on that additional issue” of using the property tax levy, Elam questioned. Plunkett said it was all part of the discussion and in documents commissioners had approved.

Should the SPLOST fail, the city can put it before voters again, and again, if need be, Plunkett said.

Former mayor Bob Young, who also serves on the five-member panel and raised similar questions at the group’s first meeting last week, said renovating the municipal building where he’d worked for almost two terms was “long overdue” but he just wasn’t certain the commission knew what it was getting into.

“I don’t have the clarity that they understand,” Young said, and motioned to table the bond issue. He got no second.

Panel chairman Henry Ingram, insisting no “inferences” that three members of the panel were prepared to pass the matter Friday should be drawn from his decision Thursday to call the meeting, then asked for a motion to approve the bonds and an accompanying intergovernmental agreement between the city and the agency. None was offered.

“It’s resounding to me,” that the project’s costs would escalate from $1.5 million to $2 million if the Urban Redevelopment Agency delays the bond issue, Ingram said, asking for further detail about the costs.

In the end, the group decided to delay acting on the bonds until members could meet Tuesday with the commission, preferably before the commission’s 2 p.m. meeting.

“Tuesday, we will take a vote; you will know one way or the other,” Elam said.

A notice about a called 1 p.m. Tuesday joint work session between the commission and agency on the municipal building’s eighth floor was sent to The Augusta Chronicle on Friday.

Comments (13) Add comment
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dichotomy
37489
Points
dichotomy 03/14/14 - 09:40 pm
9
1
I don't care what the

I don't care what the commissioners say. No Bond floating until after SPLOST is approved. The commissioners SHOULD NEVER have obligated money against a future SPLOST that may, or may not, be approved. Ought to be ILLEGAL to do that....just like it OUGHT to be illegal to give SPLOST money to PRIVATE organizations.

Pops
14426
Points
Pops 03/14/14 - 10:11 pm
8
1
According to Bob Young

"he just wasn't certain the commission knew what it was getting into.
“I don’t have the clarity that they understand,” Young said."

Welcome to Augusta-Richmond County government.
English is a second language these days...........

Butterman
3696
Points
Butterman 03/14/14 - 11:29 pm
4
2
Alvin Mason
Unpublished

Just so you know, Commissioner Alvin Mason appointed Bob Young to this board. I'd say that shows that Mr. Mason has some fine judgement.

Little Old Lady
8937
Points
Little Old Lady 03/15/14 - 06:41 am
4
0
Bob Young

What is up with Bob Young's hair. He is an accomplished man in many areas, but the hair??????????

Riverman1
93727
Points
Riverman1 03/15/14 - 07:05 am
7
1
Burn The Trailer Steps For Firewood

Richmond County is going to end up burning the trailer steps for firewood before they realize they can't spend money they don't have.

nocnoc
49169
Points
nocnoc 03/15/14 - 07:38 am
6
0
So do to political trickery or stupidity

The Taxpayers either PASS a Pork filled SPLOST or face a Property Tax Increase.

Someone please remind me.
What was the original Marble Place projected remodel cost sold to the TAXPAYERS vs. what they say they now need?

What did we pay the ARC hired Consultants for the Project Estimate?
Because we need to ask then for the $$$$ back AND QUIT using that consulting group in the future?

seenitB4
97596
Points
seenitB4 03/15/14 - 08:15 am
5
0
Keep putting it b4 voters

When you get a NO vote it means what---MAYBE--& try again til you get a yes....
GEEZ folks....I feel for yall, sitting ducks on the pond.

Brad Owens
4906
Points
Brad Owens 03/15/14 - 08:17 am
4
0
nocnoc...

The original voter approved SPLOST project was $16,000,000.00. Fred Russell expanded the size and scope of the project which inflated the cost to $42,000,000.00

There was not another voter referendum but commission approved the expansion with a vote of six.

Hope that helps,

Brad

nocnoc
49169
Points
nocnoc 03/15/14 - 09:38 am
3
0
Thanks Brad for the quick response.

Do I understand correctly?

The ARC Commission adjusted the Voter Approved spending cap of a SPLOST after it had been voted on ?

Given my limited understanding of this Commissions SPLOST Project spending habits.

What is to keep the ARC Commissioners from abusing the NEXT SPLOST, if it is passed and again overspending $Million$ on Non-Voter approved cost overruns?

$42M - $16M = a $26M Non-Voter Approved overrun.

That is over 150% the Voter approved funding.

BTW: Why is ARC paying so much Interest on BONDS is because of the ARC rating is low?

Little Lamb
49080
Points
Little Lamb 03/15/14 - 10:08 am
4
0
Sanity

I am so thankful that Brad Owens and Bob Young are now on the Urban Redevelopment Agency. Hopefully they can end the practice of rubber stamping every idea the city sends their way. Many of those rubber-stamped ideas in the past have hurt taxpayers.

The enemy of responsibility is haste. These expensive, complicated projects with even more complicated financing need to be studied carefully, questions asked and answered, understood, and agreed to. There is no harm in delaying a project for a while to get the financing right. The fear tactic that Fred (What, me worry?) used to use was that if we do it right now we can save a little money, but if we delay, the good deal is gone. Does that sound familiar to you? It is a tactic that life insurance salesmen use to trick young adults into buying life insurance they don't need. It is a tactic many fly-by-night hucksters use to sell something.

Hopefully, Mr. Owens and Mr. Young can slow things down.

The ideal would be to stop bad projects in their tracks, even if they have commenced. There is no shame in admitting a project is a bad idea.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Oh, yes, by the way — vote NO! on SPLOST.

Butterman
3696
Points
Butterman 03/15/14 - 10:17 am
4
0
Reform SPLOST
Unpublished

Brad, you just gave an excellent reason why this SPLOST needs to be shot down. They always do this.. they put a project on one SPLOST and lowball the figure, then they come back and double the price tag without putting it back before the voters and the commission borrows the money based on the next SPLOST that has not been approved. then they threaten if the new SPLOST is not approved, then property taxes will be raised. I say if the price tag of a SPLOST project changes this drastically, it must be put back before the voters. No more bait and switch. the same thing happened with the TEE Center. This insanity needs to stop. If voters just rubberstamp another SPLOST, these hijinks will continue.

nocnoc
49169
Points
nocnoc 03/15/14 - 01:21 pm
3
0
March 15, 2014 -

I agreed with Butterman.

Proving there is some common ground between everyone at some point.

badmoon426
1187
Points
badmoon426 03/15/14 - 01:32 pm
2
0
Say No To SPLOST Augusta...

...for the present as well as the future. The SPLOST has become a travesty of what it was suppose to cover. With the current SPLOST still in place why are we rushing to another SPLOST. Why?

Where did the SPLOST become some sort of local government goodie bag for individuals or groups financing private colleges, funding a collaboration center jazz cafe or giving money to arts and cultural groups?

A special-purpose local-option sales tax (SPLOST) is a financing method for funding capital outlay projects in the U.S. state of Georgia. It is an optional 1% sales tax levied by any county for the purpose of funding the building of parks, schools, roads, and other public facilities. The revenue generated cannot be used towards operating expenses or most maintenance projects.

Capital outlay projects are defined as major projects of a permanent, long-lived nature, such as land and structures. Among the projects explicitly included are road, street, bridges, police cars, fire trucks, ambulances and garbage trucks. Georgia law allows counties and municipalities complete discretion over the types of projects selected for SPLOST funding.

Obviously there needs to be reform in law that allows for a government to issue a SPLOST just as there needs to be reform in local government.

badmoon426
1187
Points
badmoon426 03/15/14 - 01:35 pm
3
0
A Big Thank You Goes Out To...

...Brad Owens and former Mayor Bob Young, so stay strong in your conviction and always remember the taxpayers.

Vote NO on the SPLOST!

Riverman1
93727
Points
Riverman1 03/15/14 - 04:04 pm
4
0
Stop Renovation of Municipal Buliding

Is it time to halt renovations at the Augusta Municipal Building because future funding is not assured? Of course Butch Gallop, the community facilitator, and Heery Int. will not like it if their monthly checks stop coming.

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