City prepared if MacGregor debt shifts

ALBANY -- Again questioning how the city ended up on the hook for roughly $500,000 in debt left on a local manufacturer's plate, Mayor Willie Adams listened this past week as city staffers presented an update on the situation.

MacGregor Golf closed shop and left Albany last year like "thieves in the night," as Payroll Development Authority Chairman Jeff Sinyard has said, prompting that body to step in and pay $2,000 each month in ongoing debt obligations that were still active by the company when they left.

That debt, a Department of Housing and Urban Development Section 108 loan, was facilitated through the city of Albany's Community and Economic Development Department several years ago in the hopes that MacGregor would honor its promise to create jobs and stay afloat.

The agreement called for the city to pay off the balance owned to HUD or risk the seizure of entitlement funding if MacGregor defaulted.

City Commissioners hear an update Tuesday from staff who said that it appeared that funds were available should the PDA be unable to continue its payments.

"I tell you, I don't know how anyone could've left the city on the hook for this," Adams said. "I wouldn't have done it if I had been at that table."

Wednesday, the Albany-Dougherty Economic Development Commission discussed a wish list of penny sales tax projects they wanted city and county leaders to consider as they ready project lists for approval by voters in November.

The list included servicing the MacGregor debt, an item that some believe would be a hard sell to be included on the ballot.

Georgia law allows for special purpose sales tax revenues to pay off municipal of county government debt. Whether Section 108 loans are covered under that clause of the law needs further discussion, EDC officials said.

The Payroll Development Authority appears to be financially capable of paying the loan for the next year and a half, EDC Vice President and PDA staffer Andrea Shruijer said. There is no immediate threat to the city, she said.

Latoya Cutts, director of Economic and Community Development for Albany, said that the city essentially has two options to pay the debt should the PDA be unable to.

The first would be to pull money from the department's low to moderate income program budget, which uses federal funds to support projects and programs like rental assistance to people who meet certain economic requirements.

The second option is to pay the money directly out of the general fund.

If the money isn't paid, HUD will take the funds directly out of the city's entitlement funding, Cutts said.

In 2009, the city absorbed roughly $25,000 in outstanding debt from MacGregor that was owed between November 2008 through June 30, 2009. On July 1, the PDA took over servicing the debt and made one lump sum payment to the city for the period between July 1 through December 31, 2009.

Currently, the balance left on the loan is roughly $300,000, Cutts said.