Commission acknowledges revenue shortfall on renovation project if tax plan fails

Faced with few alternatives, five Augusta Commission members and the mayor waved through their approval of a $28.5 million bond issue to fund ongoing renovations at Augusta Municipal Building, although voters have not yet passed the revenue stream intended to service the bonds.

The straw poll was enough to satisfy five members of the Urban Redevelopment Agency charged with issuing the bonds, who met with the commission for 90 minutes on Tuesday to hash out the details before voting to move forward.

While the current special purpose, local option sales tax package included $18 million for renovations, the commission approved an expanded renovation project at the government complex on Greene Street a year ago to include a new headquarters for the city IT department, a new elevator tower and relocating the front of the municipal complex to Telfair Street – with the extra funds to come from the next tax package.

With several candidates in the May 20 election and community members now voicing opposition to that new tax package for its rushed schedule and lack of infrastructure, Urban Redevelopment Agency members in two earlier meetings have questioned whether commissioners realized the city is responsible for debt service of about $2.9 million annually no matter what the voters decide.

Meanwhile, the construction project is under way, and Deputy Finance Director Tim Schroer said Tuesday he recommended scuttling or suspending it if the agency didn’t proceed with the bond issue. Monthly construction bills will escalate as the project nears completion, and existing funds will run out before the May 20 vote, he said.

If the tax package fails, the designated alternative for debt service is an existing .71 mill levy for capital outlay that is typically “barely enough to cover our necessities through the year,” Finance Director Donna Williams said. The fund typically pays for equipment such as bucket trucks, public safety vehicles, computer equipment and other capital purchases not covered by a special purpose, local option sales tax, she said.

Commissioner Donnie Smith asked why the commission couldn’t modify the scope of the construction project.

“I can’t understand how we are the policymakers and we can’t decide to cut $9 million out of this project’s budget,” Smith said. “We’re the ones that make the rules, these 10 people right here.”

None of the staff or consultants present offered an immediate answer. After a moment, special city counsel Jim Plunkett said another construction contract already had set the guaranteed maximum price of the project, and General Counsel Andrew MacKenzie said a prior commission motion could be rescinded “as long as the original motion has not been implemented.”

If the commission doesn’t do the IT building, IT “will continue to operate in a dilapidated structure,” which is bad for morale as other staff move into remodeled offices, said IT Director and interim City Administrator Tameka Allen.

URA board member Brad Owens said he still hadn’t received a payment schedule demonstrating where the project might run out of funds if the bonds aren’t issued before May 20.

Commissioner and mayoral candidate Alvin Mason said it was odd that Schroer did not have a payment schedule or projections of the project’s monthly bills, the type of documents he receives at his contracting work at Fort Gordon.

“That’s just standard operating procedures,” Mason said.

City financial consultant Dianne McNabb, who attended Tuesday’s meetings, said it was clear when she discussed the project with commissioners a year ago “if SPLOST 7 never passed, this debt service has to come from somewhere else … The original project schedule and funding had no connection with whether the sales tax passed or not.”

McNabb said she expected the bond issue to be done last year, avoiding the scenario Tuesday.

URA Chairman Henry Ingram called for the commission to do a straw poll. Six hands went up, including that of Mayor Deke Copenhaver, who said the project could not be stopped or delayed.

URA member Terry Elam said when the panel convened alone he believed the commission knew what it was getting the city into.

“They understand their commitment to pay those bonds back with some sort of public funds,” Elam said.

URA member Bob Young agreed.

“This is not the way I prefer to do business,” but based on the meeting “the commissioners understand the ramifications,” he said.

IN ANOTHER MATTER Tuesday, commissioners voted 8-1 to exempt Sheriff Richard Round­tree from 2.4 percent budget reductions implemented to balance the 2014 budget.

Charged with finding a source of funding for the resulting $900,000 shortfall, Williams and Allen pointed to implementing an excise tax on energy used in manufacturing, to replace revenue lost when Georgia exempted manufacturers from the sales tax last year.

If implemented in Octo­ber, the tax could generate $625,000 to be dedicated to law enforcement, if all other departments cut their budgets. Another option is five furlough days, Williams said.

With $4 million already taken from city savings this year because of money lost to the new exemption and for balancing the budget “this government is looking at being totally broke in three years,” Smith said.

If the commission approved a two-mill tax increase alongside the energy tax, it would not need to take from savings, Allen said.

A motion from Smith to implement the excise tax and use it for law enforcement failed 3-6, with only Commissioners Bill Lockett, Joe Jackson and Smith voting yes. Commissioner Wayne Guilfoyle was absent Tuesday.

After that vote, Roundtree mentioned the ramifications of cutting his budget.

“There is case law in Georgia that says you cannot reduce the sheriff’s budget arbitrarily,” he said. “That is not the direction we want to go.”

A motion to exempt the sheriff from the cuts and dip into savings for the $900,000 passed 8-1, with Commissioner Mary Davis opposed.

Her vote did not show a lack of confidence in the chief law enforcement officer, she said.

“I just wanted to be assured that we had a funding source to cover the loss of exempting the 2.4 percent cut,” Davis said. “I am proud of our sheriff and his department for all they have done for the continued safety of our community.”

Urban Redevelopment Agency to meet with commissioners to discuss bond controversy
Augusta's Urban Redevelopment Agency panel again delays bond issue
Repayment issues remain for bond issue, URA board member says
Urban Redevelopment Agency panel delays bond issue
SPLOST questioned at Augusta public hearing
TOPIC PAGE: Augusta-Richmond County Commission

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