Barrow County SPLOST 2018 Citizen Committee Meeting October
Barrow County SPLOST 2018 Citizen Committee Meeting October 17, 2016 Partnership and Collaboration for a Prosperous Community 1
Why Are We Here? v “Meet & Confer” meeting with city officials held on June 29 th v County intended to call for SPLOST referendum this November. v County unable to gain City of Winder’s approval for terms of an Intergovernmental Agreement (IGA) for 2018 SPLOST. v IGA was necessary to continue the voter approved funding of 2005 General Obligation debt using SPLOST revenue. v Citizen involvement and input is CRITICAL. 2
SPLOST 101 v 1% optional county sales tax used to fund capital outlay projects proposed by county and qualified city governments. v Levied throughout the entire county and shared with participating cities. v Tax collected on items subject to sales and use tax as well as on sale of food and nonalcoholic beverages which are not subject to State sales tax. v In general, SPLOST can be levied for 5 year period (6 if county and cities enter into an agreement). v Research indicates that approximately 25 -30% of SPLOST receipts due to non-resident spending. 3
Capital Outlay Defined v Major projects which are of a permanent, long-lived nature (i. e. land structures). v Chargeable to a capital asset account as distinguished from current expenditures and ordinary maintenance expenses. v Includes without limitation roads, streets, bridges, police cars, fire trucks, ambulances, garbage trucks, and other major equipment v Roads, Streets, and Bridges Category q Acquisition of rights of way q Construction of roads, streets, bridges q Renovation and improvement of roads, streets, bridges q Improvement of surface-water drainage q Major equipment 4
SPLOST Historical Overview SPLOST 2005 v In 2005, County issued General Obligation (GO) Bonds in conjunction with voter approved 2005 SPLOST to fund the following projects: q Criminal Justice Facility ($46, 400, 000)- Level One q Courthouse Renovation ($4, 250, 000)- Level One q E 911 Facility ($1, 500, 000) q Fire Station & Training Center ($2, 500, 000) v Total GO bond debt service obligation at time of issue was $93, 857, 171 ($58 million in principal and $35, 857, 171 in interest). v $43, 165, 544 has been paid as of 9/30/2016 ($22, 135, 00 in principal and $21, 030, 544 in interest). v Intergovernmental Agreement (IGA) was reached resulting in 6 -year collection period (July 2006 -June 2012). Of $50, 045, 000 collected, $29 million was dedicated for the GO bond debt service. 5
SPLOST Historical Overview SPLOST- 2012 v On March 15, 2011 the citizens of Barrow County approved the continuation of SPLOST. v IGA executed in November 2010, resulting in 6 year collection of a projected $60, 000. v Among the projects approved by voters was payment of debt service of 2005 SPLOST General Obligation bonds (principal and interest) in amount of $27, 900, 000. v SPLOST 2012 expires June 30, 2018. v Outstanding 2005 GO Bond debt service on June 30, 2018 will be $41, 093, 163. Of this amount, $27, 402, 340 represents outstanding debt service for six year period July 2018 -June 2024. 6
State Law: County SPLOST O. C. G. A. 48 -8 -110 to 48 -8 -122 v Capital outlay project v Qualified municipality (provide 3 of 12 specific services) v Intergovernmental agreement (IGA) v Formula for allocation of proceeds between County and Cities v Referendum language v State Department of Revenue’s fee (1% of receipts) v Use of proceeds v Reporting 7
“In addition to using the SPLOST to retire existing general obligation debt, a city or county may issue general obligation debt in conjunction with the SPLOST. Doing so will enable a local government to commence funding projects in anticipation of receiving SPLOST proceeds to pay the debt. ” Source: SPLOST: Building for the Future, GMA Legal Report August 2012 8
Benefits of Intergovernmental Agreements (IGA) v Collaboration and negotiation allows county and municipalities the opportunity to work on joint projects and those projects that will best serve the needs of all citizens. v SPLOST can be imposed for a maximum of six years rather than five years, resulting in more revenue available for capital expenses and more projects being funded. v Tax may be collected for full six years, regardless of when/if specific projects are fully funded at an earlier time. Excess funds could then be used to retire county debt or placed in County General Fund to roll back property taxes. 9
Legal Requirements for IGA v County must reach a consensus with one or more municipalities within the county representing at least 50 percent of the county’s municipal population. v Objective of the agreement is to specify how the SPLOST proceeds would be disbursed among the parties of the agreement and in what priority. v O. C. G. A § 48 -8 -115 requires that the agreement address, at a minimum: q Specific capital outlay project or projects to be funded. q Estimated dollar amount allocated for each project from the SPLOST proceeds. q Procedures for distributing SPLOST proceeds to municipalities. q Schedule for distributing proceeds to cities that includes order or priority in which projects will be fully or partially funded. q Provision that proceeds from the tax will be kept in separate accounts and used exclusively for the specified purposes. 10
No IGA: Population Distribution v If no consensus reached, Method 2 is authorized by law. v BOC may allocate SPLOST proceeds for the construction of county-wide projects “off the top” using 3 -step process: q “LEVEL ONE” Countywide project (courthouse, administrative building, county or regional jail, health department facility). § Collectively may consume up to 100 percent of the total estimated SPLOST revenues. § Allows for renovations to existing facilities, debt repayment on existing facilities. q If no LEVEL ONE projects are selected, select LEVEL TWO Countywide project(s). § No more than 20 percent of total estimated SPLOST revenues may be allocated q Allocate remaining proceeds based on population. § Pro rata based on population, county share = ratio of unincorporated relative to total county population 11
Level Two Projects v Capital projects which provide benefit to entire county (other than Level 1). v Maximum of 20% “off the top. ” v May also be used for renovating existing facilities, debt service on existing facilities, and furnishing/equipping existing facilities. v Examples: q Recreational facilities/athletic fields q Civic/cultural arts centers 12
Prorated Population Calculations v Based upon most recent U. S. Census (2010) v County Allocation q Unincorporated population of 44, 241 q Total Barrow County population of 69, 367 q County allocation is 44, 241/69, 367 or 63. 78% v Municipal Allocation q Auburn 6, 678/69, 367 or 9. 63% q Braselton 1, 085/69, 367 or 1. 56% q Bethlehem 601/69, 367 or. 87% q Carl 255/69, 367 or. 38% q Statham 2, 408/69, 367 or 3. 47% q Winder 14, 099/69, 367 or 20. 33% 13
SPLOST’s Community Impact v Property tax avoidance q SPLOST funds critical capital needs otherwise funded via Ad Valorem taxation. § Road construction/improvement/maintenance § Sheriff/Fire/EMS vehicles and equipment § Water and sewer infrastructure § Reduction of debt obligation q 25 -30% of SPLOST receipts result of non-resident spending v Quality of Life projects q Valuable amenities enjoyed by entire community § Recreational facilities § Cultural Arts q Economic benefits § Business recruitment and retention § Tourism revenue (retail spending, hotel occupancy, etc. ) 14
2005 GO Bond: Millage Impact Annual GO Bond Payment Total Debt Service Mills Required ($1, 657, 306 per mill Fiscal Year Principal Interest 2019 $3, 725, 000 $826, 671 $4, 551, 671 2. 7464 2020 $3, 835, 000 $737, 841 $4, 572, 841 2. 7592 2021 $3, 925, 000 $646, 661 $4, 571, 661 2. 7585 2022 $4, 020, 000 $553, 307 $4, 573, 307 2. 7595 2023 $4, 110, 000 $457, 780 $4, 567, 780 2. 7561 2024 $4, 205, 000 $360, 079 $4, 565, 079 2. 7545 2025 $4, 305, 000 $260, 086 $4, 565, 086 2. 7545 2026 $4, 405, 000 $157, 744 $4, 562, 744 2. 7531 2027 $4, 510, 000 $52, 994 $4, 562, 994 2. 7533 Total $37, 040, 000 $4, 053, 163 $41, 093, 163 15
SPLOST 2018 Revenue Estimate v National GDP growth (2016 to 2018) projections of 2. 2% to 2. 3% and Terry College of Business projection of Georgia’s GDP being 0. 8% higher in 2016: q $66 million over six year collection period (IGA) q After the GO bond debt requirement ($27, 402, 340) is met, SPLOST funding for other projects is projected to be $38, 597, 660 q $56. 6 million over five year collection period (no IGA) 16
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