Mayor Reed’s proposed budget aims for voter support of planned $250 million bond referendum
By David Pendered
Atlanta Mayor Kasim Reed’s goal of winning voter support for a planned $250 million bond referendum to fix roads, bridges and sidewalks is evident throughout the budget he has proposed to the Atlanta City Council.
The proposed budget contains any number of programs and efforts that appear intended to create an environment where the message in a bond referendum campaign could be: “You can trust Atlanta to manage your tax dollars wisely, and to deliver projects and services as promised.”
A snapshot of the debt outlook for the proposed bond was included in a recent budget presentation. The snapshot lists the proposed issuance date in January 2015. Atlanta CFO James Beard said the published date should be one year later, 2016.
Looking to the nuts and bolts of budget adoption, on Tuesday starting at 6 p.m. the council is slated to discuss the budget proposal during a combined public hearing and virtual town hall. Details about how to participate and otherwise comment are listed at the bottom of this story.
The mayor’s proposed $565.5 million budget for Fiscal Year 2015 provides for a reduction in the tax rate in order to offset the rise in property values. The intended result is that homeowners will not see a tax increase even as their homes gain value, Beard said. The fiscal year begins July 1 and the council is slated to adopt a budget at its June 16 meeting.
Here are details of the proposed $250 million bond issue as listed in the snapshot:
- The average annual debt service would be $16.5 million;
- The first payment would be July 1, presumably in 2016;
- The final maturity would be July 1, presumably in 2046;
- The average coupon rate would be 5.2 percent;
- The cost of issuance would be $4.86 million.
The annual debt service on this planned infrastructure bond is a central figure in many of the mayor’s recent announcements concerning the management of the city’s underutilized assets.
The figure consistently floats in conversations about the proposed privatization of Underground Atlanta, the Civic Center and its 16-acre site, and Turner Field.
One proposal that hasn’t garnered much public attention is Reed’s suggestion to close the Eastside Tax Allocation District.
Doing so would provide proof that the city will end a government program that arguably has completed its job. The tax digest of the district has nearly doubled since 2003, from $329.7 million in taxable assessed value to $629.4 million in 2010, according to the most recent audit figure readily available. As the 2011 audit states:
- “To date, all projects have been completed and are performing well with the exception of Renaissance Walk, which Bank of America foreclosed on in late 2009.”
Still, there are those who contend the area still needs a lot of redevelopment and want to use the TAD to help finance it. As one commenter noted on a recent SaportaReport story, the Eastside TAD could benefit Underground Atlanta as well as future developments along the Atlanta BeltLine and Atlanta Streetcar route.
All that said, the mayor surely remembers one of the lessons from the resounding defeat of the 2012 referendum on a 1 percent transportation sales tax: Most voters don’t trust the government to be responsible stewards of a windfall amount of tax dollars. And that said, Atlanta voters did approve the sales tax referendum; it lost because of its overwhelming defeat outside Atlanta.
Combined public hearing and virtual town hall
When: Tuesday, starting at 6 p.m.
Physical location: Council Chamber, 55 Trinity Ave., Atlanta.
Virtual location: TV channel 26; www.atlantaga.gov. Click on the ATL City Channel 26 icon in the middle of the webpage and click on the words: “Watch Channel 26 Live” located on the left of the screen.
Ways to communicate:
- Email questions to [email protected]
- Text questions to 404-392-0159
- Submit questions via twitter to @ATLCouncil and use the hasttag #atlbudget
- Phone questions to 404-330-6823