Originally created 05/08/00

Building depends on rise in tax

To get a new judicial building in downtown Augusta, voters will have to extend the 1-cent special-purpose sales tax and pay higher property taxes, according to City Administrator Randy Oliver.

Part of the cost of the proposed $37.2 million to $45.3 million building is slated for inclusion on a September sales-tax referendum. The rest must come from a property-tax increase that would add between $14 and $21 a year to the taxes on a $100,000 house with homestead exemption, Mr. Oliver said.

The tax increases are based on the costs of paying off the 25-year bond debt the city would incur, he said.

The Augusta Commission's sales-tax citizens committee that has been working to divvy up revenues from the next phase of the sales tax rejected a proposal to allocate $35 million to the judicial building and other renovations. Instead, the committee voted Thursday to allocate $20 million of the sales-tax revenues and let the commissioners and judges figure out how to pay for the rest -- $14.5 million to $22.6 million.

Smart move, said Ralph Walker, a political scientist at Augusta State University.

Voters are more likely to approve the sales tax for five more years if only a portion of the cost of a judicial building is in the package. And getting some of the money from sales tax and the rest from a bond or Certificates of Participation issue delays the major financial impact, Dr. Walker said.

"I think it's smart to split it partially with a general obligation bond and some of the special 1-cent sales tax," he said.

"People won't be upset until they get their tax bill. So the timing of it is critical. You need to have to have the vote on the sales tax before the property tax hits the people in the mailbox. If it was me, that's what I'd do. We need that 1-cent option. We're dead without it."

During the citizens committee meeting Thursday, member Wayne Frazier's motion not to fund the judicial building died for lack of a second.

"The motion's lost. Where shall we move from here?" asked Dr. James Carter, chairman.

"I'm in favor of funding this for the long-term good of the community," member Monty Osteen said. "It seems to me if we fund a portion of this with sales tax dollars and then leave it up to the commission and judicial system to figure out a way to fund the remainder, that would be the most judicious thing to do.

"And it's my understanding that if we funded a portion of this, in all probability there would be a COPS issue for the balance, but I'd like the administrator to speak to that."

Mr. Oliver said there were two ways to fund the balance: A general obligation bond that voters would have to approve in a referendum and Certificates of Participation.

"The only difference between the two is the certificate does not require the approval of the voters," he said. "However the net impact is the same. Both would necessitate an increase in the tax rate."

A Certificate of Participation is a back-door general obligation bond, Mr. Oliver said.

"It's a financing vehicle that allows governments to finance projects without approval of voters," he said. "Certificates are sold the same as general obligation bonds. The difference is that on general obligation bonds, the backing for the bonds is the full faith and credit of the taxpayers of Augusta-Richmond County.

"With a Certificate of Participation, the backing of the bond to assure you're going to get paid are the lease payments for that building."

Governments theoretically could default on the lease payments, but their names would be mud in the financial market, he said.

The exact costs of the judicial building cannot be calculated until commissioners choose a site. Five are under consideration in downtown Augusta, including Reynolds Street at Riverwalk between Fifth and Sixth streets, Exchange Club Fairgrounds and Greene Street between Sixth and Seventh streets.

Dr. Walker said he thinks voters will extend the sales tax, but he is not so sure about a bond issue.

"I think everybody knows we need a new building," he said. "I think everybody has been expecting spending a lot of money on a new city-county building. So you're either going to have to build a city-county building or a judicial building. So I think if it's presented that way -- you know, people grumble, but I think they realize you don't get anything for nothing."

The citizens committee used the $15 million left over from the $35 million they had previously set aside for possible use on the judicial building to boost the amounts previously allocated to other agencies and city departments.

Top priority was the fire department, which had initially requested $39.5 million. The department was allocated $10 million several weeks ago but ended up with $22 million Thursday at the insistence of Mr. Frazier and others.

District 4 appointee George Rush said there was a serious need of a fire station in his district. He questioned allocating as much for recreation and parks as for the fire department.

"What's important? Fire protection or recreation?" he asked. "Fire protection is more important than parks and recreation, and we gave them $10 million. If my house catches on fire, recreation isn't going to do anything for me."

The committee also gave $2 million to the Canal Authority; $1 million to Fore! Augusta; $1.3 million to Imperial Theatre; and $500,000 to Augusta Mini Theater.

The committee gave the city's utilities department only $6.3 million of the $49.4 million the department director had requested.

Agencies losing out so far are the Georgia Golf Hall of Fame, the jail, Main Street Augusta, Daniel Field and the city's housing and neighborhood development department.

The citizens committee will hold a final meeting May 18 before turning its recommendations over to city commissioners, who will have the final say on the list that goes to the voters.

Reach Sylvia Cooper at (706) 823-3228.


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