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Commission approves SPLOST bond bids

The bond would give the city the funding upfront so that sales tax projects could be started, officials say.

ALBANY, Ga. -- The Albany City Commission has approved a resolution that will allow bids to be taken on up to $14 million in general obligation bonds intended to jump start sales tax projects approved by the voters last November.

The commission voted 6-0, with Ward VI Commissioner Tommie Postell absent, to allow Mayor Dorothy Hubbard to sign a resolution that allows bids to be taken for the bond project.

A secondary resolution will need to be passed after investors bid on the bonds before the money can be raised, City Attorney Nathan Davis said Tuesday night.

"We're asking for the bond so we can get many of these projects off the ground; to create a little economic vitality for the area and put some people to work sooner rather than later," Taylor said.

When the voters overwhelmingly approved renewal of a one-percent sales tax shared by the city and county for local projects last November, they also approved language on the ballot that would allow either entity to seek a bond to expedite the start of the projects.

According to the ballot, voters approved that up to $30 million worth of a bonds could be floated in advance of the collection of sales tax proceeds.

Jaime Willson, the city's bond broker, will present the bidders and a presentation before the city commission on May 15.

As sales tax revenues trickle in over the next five years, the bond will be paid back out of those revenues.

As with anything, there are risks with using general obligation bonds.

Like a credit line, interest — in this case up to five percent — will be tacked onto the bonds that are used and, should sales tax revenues not keep pace with the bond payments, the bonds are backed by the full faith and credit of the city of Albany, meaning that your tax dollars could be used to repay the loan. In the worst case scenario, Georgia law allows the city to levy a tax increase on paying off any deficit for debt.

Davis said Tuesday night that Willson has assured him that the actual effective interest rate won't top two percent.

"The investors, he said, like having big coupon items on their portfolios even they're being paid less," Davis said.

By choosing to get a bond, the city is also at risk of being assessed penalties if they don't spend the money fast enough, a process know as arbitraging.

But by choosing to only use $14 million — less than 16 percent of the total revenues expected to be collected by the sales tax — Taylor believes much of the risk is mitigated.

The funding will be used to jumpstart a wide range of sales tax projects including several road resurfacing and repair projects, planning and construction of the SOWEGA Council on Aging's Senior Center, Thronateeska Heritage Center's archives and records building, and the three pedestrian walkways for Albany State University, Darton College and Albany Tech.

The funds will also be used to make sure the contractors are paid who have already started work at the Southwest Georgia Regional Airport where a new terminal is being built, and it will fund an upgrade of the local government's Information Technology system, Taylor said.

Ward V Commissioner Bob Langstaff commented Tuesday that the bonds will also allow the city to "lock in" the prices of productions used in construction; prices that tend to rise over time.

"Building materials like concrete and that kind of stuff tend increase in price, so if we approve this, we'd be able to lock in that price," Langstaff said.

Comments

iko 1 year, 12 months ago

Vote NO! Tell Marietta and the rest to cut spending, not raise taxes. Maybe a place they could start would be by reducing the funding to Judy "Toilet" Bowles and her job killing Keep Albany Dougherty Beautiful.

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KaosinAlbany 1 year, 12 months ago

Glad I voted no on to SPLOST on the ballot last year. Now, they might go up on our taxes no matter what to float "their bond". Hahaha, we all lost so voting yes was the wrong way to go after all. The leaders (and I use that term loosely) tried to scare everyone that their property taxes might be raised if voted down (which they couldn't do in the first place) so now we are under that threat again and it looks like the people who voted this in has egg on their faces because the leaders lied again to us and most fell for the lie. No big shock there!

Please people don't believe what they are saying about the T-SPLOST and vote it down in July. You are welcome to join my facebook page called "Georgians Against T-SPLOST" and take part in the effort in telling the State NO to T-SPLOST.

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Justice4Moma 1 year, 11 months ago

I dont think any of them will have a problem spending the money fast enough.The proof is in the pudding there.Right Mr. Davis?And you all wonder why we have no faith in all of you.You all are so good at spending other peoples money.

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KaosinAlbany 1 year, 11 months ago

and money that hasn't made it into their hands yet.

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Cartman 1 year, 11 months ago

Vote NO on every SPLOST that comes around the corner.

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KaosinAlbany 1 year, 11 months ago

Especially the T-SPLOST. I read yesterday that the legislators went against the GA constitution and did the redistricting illegally. There may be a lawsuit looming to stop it. I think they have a 50/50 chance at winning or losing because nothing like this has never happened before so it will be hard for the lawyers to find cases like it. Join my Facebook group called "Georgians Against T-SPLOST".

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Justice4Moma 1 year, 11 months ago

About time we all got united to fight a war here at home.If you think about it,it is a war against another ponzi deal.Just it is against big Govt. Taking money we dont have to give.When are they gona find this out?It may be a pennie to them,but for us out here,a pennie makes a dollar.And they seem to love our dollars.

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