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Commission to consider $14 million sales tax bond

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.

Comments

Justice4Moma 2 years, 5 months ago

This is what is wrong with Albany now.Our leaders spending money they dont have. Who can say they did not see this comming?

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dingleberry 2 years, 5 months ago

Unfortunately it is not just Albany but the entire nation living as though there is no tomorrow. But one the subj of Albany, you would be surprised at the amount of potential debt the city and its authorities have generated, some of which you may be liable for if the deals go sour. Don't know anything about this 'pay tax on the amount" stuff--new to me.

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chinaberry25 2 years, 5 months ago

What happens when the pot runs dry. This is what happened to our Social Security, but not borrowed, just stolen.

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Abytaxpayer 2 years, 5 months ago

Please !!! This is one the City Commissioners got RIGHT. Thanks to City Manager James Taylor’s leadership the Commissioners will allow more SPLOST projects to get started now.......................... . 1. All SPLOST projects were voted on and approved by the citizens of Albany. ..................... 2. All SPLOST funds collected are required to be spent only on projects that were voted on. .............. 3. With the low interest rates available for this bond it makes $ and cents to borrow against the future collections while cost of the projects are low. ................ 4. If the projects are delayed until funds are available it is likely the projects will cost more due to inflation..................... . Is it a gamble that that the low interest will offset the inflation factor? Yes ….But on the upside rather than wait years for some of these infrastructure improvements for Albany we can enjoy them sooner and that has got to be worth something too….The voters wanted these projects and it is Smart Money Management by the City Manager to move Albany forward and make them happen sooner rather than later.

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Abytaxpayer 2 years, 5 months ago

This decision is a ray of sunshine and proof that with Qualified Leadership Albany can move Forward.

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