A commission studying the possibility of replacing the 46-year-old Columbus Government Center ventured into the dicey arena of finances.
At a meeting held at the 10th Street facility on Thursday, City Finance Director Angelica Alexander presented the commission with several ways to fund the project, which could cost anywhere from $68 million to $100 million, depending on whether the building is renovated or replaced. Alexander said options for funding the project include:
- A Special Purpose Local Option Sales Tax, which would require the imposition of a tax approved by Council resolution, and a referendum to be passed by more than 50 percent of the voters.
- General obligation bonds, which rely on general tax revenues as security for the payment of the principal and interest due on the bonds, requiring an increase in the debt service millage rate. For every $25,000,000 issued, the millage rate would increase by 0.33 mills or $1.7 million for an annual debt service payment. That option would also require a referendum.
- Revenue bonds, which rely on a specific revenue source to repay the principal and interest due over the life of the bonds and would require the reallocation of existing revenues such as OLOST due to the lack of excess revenue in the General Fund, which would subsequently reduce other appropriations currently funded by this revenue source.
- Brick and Mortar Funding administered by the Georgia Municipal Association, which can be used to facilitate the funding for SPLOST-approved projects with financing terms ranging from 5 to 30 years.
- Developer Financed Lease-Purchase in which a third party acquires or provides the property and makes it available to the City in return for incremental payments consisting of principal and interest.
In her presentation, Alexander broke down the city’s current 8 percent sales tax as follows:
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- State - 4 percent
- City LOST - 1 percent (does not expire)
- City OLOST - 1 percent (does not expire)
- School District Education SPLOST- 1 percent (expires 6/30/2020)
- City Transportation SPLOST - 1 percent (expires 12/31/2022)
Mayor Teresa Tomlinson said 70 percent of the OLOST was earmarked for public safety. About $33 million of that money was slated for jail expansion. She said the expansion is not needed at this time, and wondered if that money could be used to build a judicial center instead. City staff said it may be possible.
Members of the commission said they were open to exploring various possibilities. But City Manager Isaiah Hugley said the option with the most promise was a SPLOST, which would generate approximately $33 million per year based on current collections at 1 percent. He said all the other options would put a financial strain on the city and taxpayers, while 35 percent of SPLOST dollars would come from outside of the city.
“I think we need to look at all the options, I mean, I’m not necessarily advocating that Special Purpose Local Option Sales Tax be the source,” he said. “But I think we’ve got to keep in mind that we have infrastructure needs and demands beyond the building. RiverWalk has been there for more than 20 years. South Commons has been there, the ball field, for more than 20 years, and I could go on and on with a list.
“We have got to do something to upgrade, to reinvest in those things, and we don’t have a funding source,” he said. “A Special Purpose Local Option Sales Tax can be the funding source for those needs, and this need.”
Hugley said it may be that the city would have to wait until the Muscogee County School District’s ESPLOST expires in 2020 or the city’s TSPLOST expires in 2022 before adding another penny sales tax. He said the city could list the most critical infrastructure needs, including replacing the government center, and get bonds on the same referendum ballot or through the Columbus Building Authority or Georgia Municipal Association, and then use SPLOST dollars as a revenue source to pay off the debt.
The Rev. James Elder, Jr., pastor of First Baptist Church and a commission member, asked the mayor if they were making the assumption that the school system wouldn’t want to impose another ESPLOST. “Because I think that’s a dangerous thought,” he said. “The school system needs to constantly have the upgrading of schools and that’s part of our economic development, too.”
Tomlinson said sometimes the different government entities get in line, and MCSD waited for a city sales tax to expire before imposing the ESPLOST. “If we went through history, it would be our turn,” she said.
Hugley said MCSD could come back with another tax after the city’s TSPLOST expires.
The mayor said the commission would continue to explore that and other issues related to the project. She hopes to make a recommendation to Columbus Council by September.