Decatur City Commission To Vote on Bond Projects Tonight
Decatur Metro | September 7, 2010 | 3:00 pmThe Decatur City Commission is set to vote this evening on City Manager Peggy Merriss’ proposal to repurpose the remaining $3.6 million in bond funds tagged from public works to the Decatur Recreation Center and “to authorize the City Manager to develop a financing package for additional capital improvement needs.” (The City Commission is also scheduled to hold a work-session on “Capital Improvement Options” at 6:30p, prior to the city commission meeting.)
In her letter to the commission (page 19 of the materials PDF), City Manager Peggy Merriss reflected on why projects ended up costing more than the original estimates, and recommended approval of the item.
As part of each project, significant public input was included to define the needs and desires of the community. As master plans were developed, recommendations were made to develop long-term solutions to address facility needs instead of making short-term renovations and repairs. This resulted in investing more of the bond funds in the projects that have been completed in order to assure that we were constructing high-quality facilities and making improvements that would be an asset to the community.
…”It is recommended that the City Commission approve moving forward with financing improvements to those three facilities [Public Works, Rec Center, Fire Station #1] in order to take advantage of existing competitive construction prices and a highly favorable capital market. In addition, if the projects are not completed, it is quite possible that costs will be incurred for significant non-budgeted maintenance activities. By making these capital improvements at this time, we will continue to support the desirability of the City of Decatur as a well-maintained community, we will see significant improvement in energy and utility costs and current and future budget estimates indicate that based on conservative assumptions, improvements can be made without a millage rate increase.
In case you missed it, the city told the AJC last week that the way to fund these projects without a millage rate (tax) increase was to pay for it using reserve funds until the HOST issue with DeKalb was resolved, and then use that nearly $1 million a year in new sales tax revenue to pay off the bonds.
Actually, that’s much more definitive than what the City told the AJC (worth linking to) or what was said on Thursday night. In a way, it’s less definitive, though, since she doesn’t actually make the recommendation to pay for the debt by using the City’s reserve funds and the HOST money we hope will kick in within a few years. I don’t see that the decision of how to pay for the new debt is on the table tonight. I also don’t see anything about these interest free loans you mentioned, DM.
What do you make of this, DM? Do you read this as confirmation that the City will recommend to eat into the reserve fund and is fairly confident in getting the HOST funding sooner rather than later — i.e. is ready to cut bait on collecting the back taxes? I wouldn’t have been inclined to make so much out of the line you highlighted and would have thought the AJC report was more accurate.
Yeah, that was sort of a scattered post. I was struggling with the server being down while I was writing it. I changed the title to better summarize what the majority of the post is actually about.
I agree that how to pay for the funds isn’t currently on the table for tonight. They’re just checking off the next item on the laundry list to move this financing forward. I sent a note of clarification about this to the City Manager this morning, but she’s OOO until September 13th and I haven’t heard back from anyone else.
My GUESS based on the commissioners’ comments at the last meeting and this new “no millage increase!” option is that the commissioners are leaning hard on the city to figure out a way to do this without raising the millage. They see the value in doing it now, but don’t want to raise taxes in this climate. Interest-free loans are no small savings, so the only way to do it is to use the reserve funds to cover the gap and then once DeKalb is paying us HOST money again, use it to pay back the loan. I think they’re assuming that in two-years they’ll know whether they’ve lost the DeKalb lawsuit or not and at least be receiving their $1 million/year, which will cover the loan payments going forward.
As for the Build America Bonds, that’s been Peggy’s stated impetuous for doing this since she wrote her original letter to the commission back in June.
http://www.decaturmetro.com/wp-content/uploads/2010/09/Public-Works-DRC-Financing.pdf
So what happened?
I guess I’ll have to go over to Decatur News Online to find out.
http://www.decaturnewsonline.com/news/article_0c0e5e1a-bb3f-11df-a34c-001cc4c002e0.html