To Build or Not to Build; To Tax or Not to Tax
Decatur Metro | September 2, 2010According to a newspaper website, the city of Decatur currently has two financing options on the table if it decided to build the unfinished projects left over from the 2006 bond referendum (Fire Station #1, the Rec Center, and the Public Works building.)
The city could raise the millage rate by .4 (equivalent to $72 a year on a $400,000 house) or it could dip into its reserve fund for two years and then use $900,000 a year in capital improvement sales tax money, which is currently being withheld by DeKalb County, to make the loan payments for the remainder.
As the Mayor pointed out in an off-hand comment during a recent commission meeting, the city has to make a decision regarding the ongoing HOST sales tax lawsuit it has with DeKalb County. Either the city can continue the lawsuit, which is slowly crawling its way back to the GA Supreme Court again, and hope that they win AND that DeKalb can somehow come up with the $10 million in owed back taxes, or they can drop the lawsuit, give up the $10 mil and start getting their nearly $1 million a year from the County “tomorrow”.
I’ll have to get clarification, but I’m assuming that the idea of using two years of reserve fund money is mainly a time-cushion to insure that whatever the outcome of the lawsuit, the city will at least be receiving its annual $1 million from the county by that point.
The city is holding a public information session on our options tonight at 6:30p at City Hall. Click here for more info.
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I don’t think Dekalb has the $10 million – even if we win the lawsuit.
Sadly a $mill in hand is worth ten in the coffers of the cesspool that is DeKalb County Government.
Every time an issue related to the lawsuit comes up, I ask the same question as Ren – if Decatur wins, where is the $10M going to come from?
Dekalb is a big county and has the power to tax its citizens. A judge could force them to raise taxes to force them to pay the judgment.
I certainly would rather get a $10 million award from a county government than a bankrupt private company.
But to be clear, based on the legal status of the case right now, it may be a long shot that Decatur “wins.” It’s really on the verge of lost, unless the GA Supremes step in.
The Supreme Court has ruled against the County twice on this matter.
And a Decatur resident sits on the Court!
No matter what, building needs to wait until the economic climate improves. If the city doesn’t have the money, the taxpayers don’t either.
For a little context: In 2006 voters supported a $33 million dollar 30-year bond, with roughly half going to the City and half to CSD. The City’s portion was to fund a long list of projects including renovating Glenlake Park, the McCoy pool, streetscaping, sidewalks, new signage, and renovating Fire Station #2 — all which were done, plus some of the biggest items, which were not done: renovating fire station #1, the rec center, a joint (with CSD) public works facility, and the cemetery. Renovating the police station was not part of the bond, but is also on the city wish list.
As it turns out, the City grossly underestimated, even as recently as a 2008 bond update before the City Commission, what could be done with the $16.5 million it borrowed. During a recent public survey, the idea was floated of a new bond, larger than the last at, I think, around $18 million, to fund what was supposed to have been funded by the first bond, plus renovating the police station. The estimated price tag for the public works facility (now a new plan) and the rec center has almost doubled — from $7.8 million to 14 million — since the bond update in 2008.
Given this history, given the current economic downturn, given the slew of new agenda items and priorities bound to arise from the 10-year planning sessions, given that City spending already takes up by far the largest chunk (double CSD’s share) of the tax differential between Decatur and unincorporated DeKalb, the current proposals need very careful oversight by the City Commission and the public.
Thanks Judd, this is helpful. I’ve been looking through the City of Decatur site and there is lots of good info on bond/capital projects. I don’t see, and it may be my poor searching skills, a city employee in charge of capital projects. Do you, or anyone on DM. know how the capital projects budget process works? I’m curious who determines when the City needs a capital improvement, who solicits the bids, and who reviews the various bids before they are presented for approval to the commissioners.
No new spending on big projects and no new taxes until the economic enviroment is a little more certain!
Given how WRONG the city was about how much it was going to cost the first time around, I am hesitant to give them another blank check.
I disagree, I feel now is the time to spend money, we have to bust out of this funk in some way and until people are willing to take calculated risks the economy will not change. It goes to the old adage, buy low, sell high. The economy is low now, so we should buy. If we spend now it helps people get employed and creates a more positive environment all in more competitive environment to obtain competitive bids. This is important even on the local level. I feel the same about the GM project that fell through. I am not advocating irresponsible spending, but calculated spending that creates jobs and value for the future!