Judge validates $30M bond issue

Photo by J.D. Sumner

Photo by J.D. Sumner

ALBANY, Ga.-- A Dougherty County Superior Court judge has validated a bond issue requested by the city of Albany that will allow the city to float up to $30 million in bonds to begin projects approved under the latest special sales tax referendum.

While the measure approved by Superior Court Judge Denise Marshall Thursday morning doesn't bind the Albany City Commission to spend the money, the $30 million is essentially a line of credit backed both by taxpayers of the city and the revenues generated by Special-Purpose Local-Option Sales Tax VI.

City Finance Director Kris Newton testified before the court that the bond measure would allow the city commission, if it chose to use it, to jump-start projects approved by the voters in the SPLOST referendum last November while revenues from the renewal of the 1 percent sales tax were being collected.

There are currently two SPLOST projects that the city may need to finance through what are essentially sales tax anticipation bonds.

The first project, the construction of a new airport terminal, has already had its bids let and will be coming before the commission in the coming weeks for consideration. That project is being funded jointly by sales tax dollars and dollars from the Federal Aviation Administration and needs to meet certain time constraints imposed by the FAA, Assistant City Manager Wes Smith said.

The second project, the demolition and construction of the Broad Avenue Bridge, is a priority for the Georgia Department of Transportation and the city in order to take stress off the city's other two bridges.

Within the next 72 hours, area utilities will be marking lines on the bridge as GDOT moves forward with the planning process.

Demolition and construction should start in late summer or early fall, Smith said.

Under examination by City Attorney Nathan Davis, Newton testified that the SPLOST VI revenues generated are expected to be more than $60 million for the city of Albany, which she said "would more than cover any" bonds floated by the city with a ceiling of $30 million.

William Wright, the former head of the local NAACP chapter, questioned Newton while she was on the stand about who would be responsible ultimately for paying any bond proceeds back before urging the court to consider stipulations that would recommend the commission use minority-owned or -operated businesses when awarding contracts for SPLOST projects.

If the commission chooses to float the bonds, there are two major factors that could impact taxpayers.

If, for some reason, the sales tax revenues didn't cover the repayment of the bonds, the commission would have to repay them out of the city's general fund and could feasibly -- although unlikely -- raise the millage rate for property taxes to pay them back.

Second, laws governing sales tax bonds require that the funds be spent on a set timetable and if they are not, then there are financial penalties that the city would incur.

The bond language was incorporated into the referendum that was passed overwhelmingly in Dougherty County last November.

In total, more than $90 million is projected to be generated over the life of SPLOST VI through renewal of a 1 percent sales tax. More than $60 million will go to fund city projects, while the remaining $30 million will fund county projects.

The county has not yet chosen to pursue a bond on its portion of the sales tax proceeds.