ALBANY — The Albany City Commission gave City Manager James Taylor the authority Tuesday to investigate the possibility of having what would essentially be a $14 million advance on the current sales tax initiative.
Taylor told commissioners that the staff would like to get the sales tax bond to help “jump start some of the projects.”
Albany and Dougherty County voters approved a referendum in November granting a renewal of a 1 percent sales tax to generate funds for local capital and infrastructure improvements.
Those revenues are collected monthly and are generated through purchases made within Dougherty County.
City Engineer Bruce Maples told the commission that, so far, $8 million has been collected in sales taxes since the referendum passed.
The pros to floating a bond, according to city officials, are that it allows for more projects to be undertaken more quickly, rather than waiting for the funding to come in month-by-month and the bond can be repaid as the sales tax proceeds trickle in.
The cons are that bonds are similar to lines of credit. They have to be repaid with interest. There are also rules about how quickly the bond revenues must be spent before the city faces having to pay taxes on the amount, known as arbitraging.
And the bonds are backed by the full faith and credit of the city of Albany, meaning that if something unexpected were to happen and the city was unable to repay the bonds by collecting enough sales tax proceeds, it would have to repay the money from its general funds, which come from a variety of sources, including property taxes.