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Commission acknowledges revenue shortfall on renovation project if tax plan fails

Tuesday, March 18, 2014 10:48 PM
Last updated Wednesday, March 19, 2014 2:59 AM
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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.”

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Butterman
3459
Points
Butterman 03/18/14 - 11:12 pm
4
2
Where's Wayne?

Well when you are unopposed for reelection, I guess you can miss all the meetings you want.

sand gnat
400
Points
sand gnat 03/18/14 - 11:36 pm
3
0
Just wondering

Just wondering if there are any members of the county commission or the Urban Redevelopment Authority that have not paid their county taxes while wanting to raise them on those who do?

Brad Owens
4119
Points
Brad Owens 03/18/14 - 11:41 pm
5
4
Butterman...

I know you are all emotional about the fact Wayne has done such a good job that he didn't draw opposition, but the attacks are getting old.

I suggest you do a GORA request and see who has missed the least number of meetings. I challenge you to do that and when you do, your last statement will be quite ironic.

Brad

Butterman
3459
Points
Butterman 03/18/14 - 11:44 pm
5
2
No payment schedule?

That sure sounds fishy. How do we know the money will run out before May 20th if they cannot even produce a payment schedule? How are all of these high paid consultants earning their keep? Tim Schroer and Andrew Mckenzie need to go. Who is this McNabb woman? How much is she getting paid by the way? This hole bunch of baffoons wouldn't know their rear ends from a hole in the ground. So we know Wayne was absent (how conveeeenient!), so who were the 5 commissioners who voted to issue the bonds?

Butterman
3459
Points
Butterman 03/18/14 - 11:48 pm
2
4
Isn't Wayne for the SPLOST?

There's no defending that. I did not say he missed the most meetings (I think that would be Grady), but he sure does pick the right ones to miss. Anytime anything particularly controversial comes before the commission and Wayne has a sick day. I guess that is smart because he can say to one group "hey, I didn't vote for that" and they other group ":Hey, I didn't vote against that." Smart strategy.

Butterman
3459
Points
Butterman 03/18/14 - 11:52 pm
5
1
Much ado about nothing

so in the end all the histrionics and teeth gnashing were much ado about nothing. Bonds get passed. Taxpayers get screwed.

dichotomy
30808
Points
dichotomy 03/19/14 - 06:20 am
6
1
So the URA turned out to be

So the URA turned out to be nothing more than an assisted suicide team for our very sick county commission. "Are you sure you want to do this....are you sure? Okay, hang on while we make the taxpayers swallow this pill."

"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."

Ya THINK ?????????????????????? Well, with the way things have been headed I think we all knew that we would eventually hit Detroit South status. I think I see the Detroit South city limits sign just up ahead.

And ALL of those candidates for mayor and commissioner are out there making vague promises about how much more apple pie and ice cream they will be passing around with our money.

Every commissioner and mayor who voted LAST YEAR and LAST NIGHT to spend UNAPPROVED SPLOST money should be prosecuted for malfeasance. Believe me folks, THERE IS NO OTHER POT OF MONEY SITTING AROUND TO PAY FOR THIS IF SPLOST FAILS. They have already given each other the backroom high sign that they will RAISE OUR TAXES to pay for THEIR IDIOTIC DECISIONS.

Riverman1
79774
Points
Riverman1 03/19/14 - 06:26 am
5
1
Call Dave Ramsey For Help

All the drama reminds me of a call to the Dave Ramsey show from a financially dysfunctional, sobbing family. I can hear Dave now, “You mean you were spending money you didn’t have and weren’t sure you would get?” Dave would tell them to eat Ramen noodles for a few years, work a second job, take his how to manage money course and pray for the caller.

Riverman1
79774
Points
Riverman1 03/19/14 - 06:49 am
8
1
Deke's Big Moment

“Six hands went up, including that of Mayor Deke Copenhaver, who said the project could not be stopped or delayed.”

So Deke raises his hand for the first time in six years and it’s this Wimpy, “Give me a hamburger and I’ll gladly pay you Tuesday,” vote. What a humorous, quixotic career he’s had.

dichotomy
30808
Points
dichotomy 03/19/14 - 07:15 am
7
1
This is what happens when the

This is what happens when the politicians ALL have the "all that glitters is gold" phobia. Instead of paying for BASIC services FIRST, they BLOW the money on pie in the sky development and redevelopment SCHEMES. Now the SCHEMES are all broke AND we don't have the money to fund the sheriff's department.

Augusta/Richmond County.....PLEASE realize that you are ruled by idiots and that you are fixing to elect some more (or some of the same ones to a different office).

Little Lamb
44030
Points
Little Lamb 03/19/14 - 07:45 am
5
0
False

From the story:

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.

Copenhaver’s comment is patently false. The remodeling project most definitely can be delayed, and all that would happen would be minor inconvenience. The remodeling project can certainly be completely cancelled, and a new plan put in place. Copenhaver knew what he was saying was false. It's similar to his falsehoods about the $8 million for the cancer center. He told the commissioners that there was no choice, the city had to pay Grooo the $8 million. Then Tom Corwin reported quotes from Grooo executives saying that they would build the cancer center with or without Augusta's $8 million.

I wonder why Copenhaver tries to influence others with falsehoods?

Riverman1
79774
Points
Riverman1 03/19/14 - 08:12 am
5
1
Weekend in Half-way House

LL asked, "I wonder why Copenhaver tries to influence others with falsehoods?"

Anyone who answers correctly gets to spend a weekend at the proposed half-way house in Laney Walker owned by guess who.

Brad Owens
4119
Points
Brad Owens 03/19/14 - 08:43 am
0
2
I have received some inquiries about this issue...

and the role of the URA, here it is in a nutshell; on SPLOST VI (the current SPLOST) $16,000,000.00 was approved by voters to reconfigure the three floors of the municipal building that were vacated by the courts when the courthouse opened.

The commission voted to expand the renovations on the municipal building and to build a new IT building that raised the project's cost to $42,000,000.00.

To cover the additional cost the commission decided to finance it by having the URA issue revenue bonds covered by existing SPLOST in the construction account and by adding the balance needed to service the bonds onto SPLOST VII (the one we are voting on in May).

The process was delayed because they wanted to appoint new members (I am one of them) to the URA. When the issue came before the new URA we all studied the documents (given to us on a Friday afternoon and the meeting was the following Monday afternoon I might add) and saw that the method in which the bonds would be paid was noted as an "ad valorem" taxes.

When questioned in the meeting on Monday about that we were told no tax increase would happen unless there was no other way to pay the URA back and that the funds would be taken out of the Capitol Fund before that would happen.

That was not noted in the Intergovernmental Agreement between the URA and County so several issues raised some red flags; it became obvious that there was some things that needed to be cleared up with our commissioners before we could issue the bonds.

The URA wanted clarity that the commission was willing to raid the capital fund or raise taxes to pay for the servicing of the bonds should the SPLOST fail to pass. We voted to delay the vote until we received clarity from the commission or until after the May 20th vote.

A joint URA/Commission work session was planned (this meeting yesterday) so we could all get on the "same sheet of music" and to determine if the will of the body was to have us do the bond issue before the May 20th vote.

We had extensive discussions and debate at this work session and the commission took a straw vote to give us the direction we needed. All now know what the repercussions will be should the SPLOST not pass. Once the URA had that clarity we could vote to do the bond issue with the certainty that it was indeed the will of the governing body.

The URA does not have the authority to override a Commission resolution, it is the governing body, and it voted to do this project using the URA as the bond issuing instrument. So the bond issue for the URA was simply to make sure the will of the body was to service this debt no matter what happens with SPLOST of any other source of revenues for the county.

I hope that clears up the role of the URA in this and why this happened the way it did.

At least there is complete transparency and now clarity for all on what this is and what it means.

Brad

Brad Owens
4119
Points
Brad Owens 03/19/14 - 08:47 am
3
5
Butterman...

Wayne had a work conflict, this wasn't a "sick day" so give it a rest.

soapy_725
43557
Points
soapy_725 03/19/14 - 08:53 am
0
0
Ever bit of government construction has a special "hidden prize"
Unpublished

Ever bit of government construction has a special "hidden prize"

Butterman
3459
Points
Butterman 03/19/14 - 09:10 am
1
2
Well then Wayne should not

Well then Wayne should not have criticized the four black commissioners who did not show up for Deke's dog and pony show special called meeting pushing the SPLOST on the May ballot. I believe that was called on a Friday with little notice. I notice Wayne showed up for that one so he could crow about getting some goodies for his district from SPLOST. Oh he also conveniently missed the meeting last year when the commission voted to borrow all this money in the first place. Like I said, it's pretty convenient for him politically.

Little Lamb
44030
Points
Little Lamb 03/19/14 - 09:40 am
2
0
Fred Russell II

From the story:

If the commission approved a two-mill [property] tax increase alongside the energy tax, it would not need to take from savings, [Interim City Administrator Tameka] Allen said.

Uh, oh. Tameka Allen studied at the feet of Fred (What, me worry?) Russell for many years. It looks like she is reading from his playbook. Hopefully the commission will hire a permanent administrator soon that is not so quick to jump on increased property taxes and new taxes on businesses to solve funding problems resulting from bone-headed proposals from the administrator and rubber stamped by the commission.

Butterman
3459
Points
Butterman 03/19/14 - 09:09 am
2
2
URA is Meaningless

It looks like some of the early critics were right, this URA sounds like a meaningless board. I really do not understand why we even have these authorities if all they do is just mirror what the commission does. It's just another layer of bureaucracy leading to the same result. They make a lot of noise but that's it.

Little Lamb
44030
Points
Little Lamb 03/19/14 - 09:18 am
3
0
Shuffle

Let's cobble some paragraphs together from Ms. McCord's story up above:

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

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.

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

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.

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

IT does not need a Taj Mahal building to sit alongside the Marble Palace. They could put the server farm in a surplus building in the center of the county (maybe the board of education will donate them a vacant school building). There could be just two or three IT workers at the server farm. The other IT employees could work from home. All they need is a fast internet connection. They can set up some VPNs for them as needed.

Remember, you can do FTP on the internet at lightning speeds.

Besides, that proposed IT building in the Marble Palace parking lot looks ugly.

story1
791
Points
story1 03/19/14 - 10:31 am
2
2
Augusta, we must...

Get out and vote "No" for Splost VII. The commissioners (at least the ones that have a vested interest in this Splost) and the Mayor will be counting on all the special interest private groups to brainwash their folks into voting for this package. Keep spreading the word to "Just Vote No". Richmond County residents are willing to listen.

Brad Owens
4119
Points
Brad Owens 03/19/14 - 11:19 am
2
1
"Blame the dead guy"

This is a Fred Russell special and guys, this was done over a year ago.

This is no surprise to folks who pay attention and given the fact the commission authorized this last March.

Butterman
3459
Points
Butterman 03/19/14 - 11:20 am
3
3
SPLOST

Little Lamb.. in the end it is the SPLOST that created this monster. Just like with the TEE center they sold it to voters under false pretenses. To get it to pass they told voters it would cost x amount of dollars and then once SPLOST passed the commission doubled the price tag without putting it back before voters, just assuming the voters would give the extra money in a subsequent SPLOST. They pull this stuff all the time. remember how the TEE center was put on the SPLOST in 2005 as a $20 million project and ended up ballooning to a $40 million project with a parking deck and a payoff bribe to Laney-Walker? This is why voters must say No to this SPLOST on May 20th.

countyman
19174
Points
countyman 03/19/14 - 11:47 am
3
2
Reality

There's enough funding to cover the municipal building renovation until 2018. The article didn't mention this very important piece of information. The excise tax should always come up before raising property taxes if the Spolst didn't pass by 2018. How can you raise the taxes on citizens but not million/billion companies?

This another prime example why Splost must include revenue generators and not solely infrastructure. The T-Splost will already bring new infrastructure and everything can't revolve around new roads.. How can you expect to pay for law enforcement, roads, sidewalks, potholes, etc without 'new' revenue? How can you attract 'new' revenue by simply building new infrastructure?

The TEE Center was approved in 2005 and didn't break ground until several year later. The price tag rose, because the commissioners argued over the location. The Splost package created years before wasn't the problem.

Sweet son
9716
Points
Sweet son 03/19/14 - 11:48 am
3
1
Augusta = Detroit

Quote: “this government is looking at being totally broke in three years,” Smith said.

Donnie Smith may be the only commission member who really understands the concept of spending your savings until they are gone.

Budget cuts and 'nice to haves' should be the way to go. And who cares of the IT people have 'dilapidated' housing! These people are different anyway. All they need is a computer and a cubby. LOL!

dichotomy
30808
Points
dichotomy 03/19/14 - 01:14 pm
2
0
"and now clarity for all on

"and now clarity for all on what this is and what it means."

The only clarity I have is that WE do not have $900,000 to fund the sheriff's department and that means that we ALSO do not have $2.9 million a year to service the bond debt.

What that tells me is that we SHOULD NOT be floating any bonds until there is a revenue stream.

That means we should wait until SPLOST is approved or until the commissioners grow the cojones to raise taxes UP FRONT. That's right, I said raise them up front. Don't do something stupid last year and then tell me this year you are going to raise my taxes because you were stupid last year.......I ALREADY KNEW YOU WERE STUPID LAST YEAR.

"to make sure the will of the body was to service this debt no matter what happens"

The "body" already admitted they were "misled"...which means they did not understand what they were doing.....and they still don't understand....which means they will be in the crap or go blind mode if SPLOST does not pass. You might think that is the will of the "body" but my granddaddy always told me the road to hell was paved with good intentions. Try getting those 5 "straw poll" commissioners to march out on the steps of the Marble Palace and announce THEY are raising our taxes because THEY spent $25 million dollars we don't have.

The commissioners who approved this thing last year and the 5 commissioners and lame duck mayor who participated in this non-binding "straw poll" yesterday were WRONG then and are WRONG now.

In my opinion, the URA should have demanded a full 10 member commission "on the record" vote before they approved the bond issue. Instead you settled for getting smoke blown up your butt by the same crew of know nothings who admitted they did not understand what they did last year but now think it was a good idea.

I am absolutely flabbergasted. I guess there is NO protection or oversight for the taxpayers in this county. If the URA is going to bend to the will of 1/2 the "body" and a lame duck mayor on all redevelopment issues, the what do we need with a URA? Do away with the pretense of oversight, wait until the right 5 or 6 commissioners are in the room, take a "straw poll", and do whatever they were going to do even if they don't have the money to pay for it. It's the Detroit way of doing things. And now we have a URA to put their stamp of approval on it.

corgimom
28498
Points
corgimom 03/19/14 - 01:59 pm
0
1
" How can you expect to pay

" How can you expect to pay for law enforcement, roads, sidewalks, potholes, etc without 'new' revenue?"

Um....isn't the SPLOST tax the new revenue?

corgimom
28498
Points
corgimom 03/19/14 - 02:00 pm
0
1
What Dichotomy said! Well

What Dichotomy said! Well written, absolutely spot on!

Riverman1
79774
Points
Riverman1 03/19/14 - 05:03 pm
1
0
Straw vote thing is suspect

That whole straw vote thing is suspect. The renovation should be stopped.

nocnoc
38794
Points
nocnoc 03/19/14 - 05:49 pm
0
0
Our simple solution to the Spend, Tax and Spend more craziness

We submitted an offer on a 4/2 2130 SQ/FT home,located on .75 ac
Friday. Located in rural NNE Walton Co.

Waiting to hear back now.

nocnoc
38794
Points
nocnoc 03/19/14 - 05:54 pm
1
0
BTW: Since when do we pass bonds and add to ARC taxpayers

For ARC employee morale?

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.

BTW: How much VACATE office space does ARC have now, Besides the Marble Money Pit?

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