Wednesday, June 28, 2000 |
Bonds
rates and tax allocations: It's the clueless consulting
the clueless On May 11, the AJC tells us that the Henry County school board had just sold $32.7 million of 30-year bonds with an annual interest rate cost of 5.21 percent; less than a month later, on June 7, The Citizen tells us that the Fayette County commissioners had just sold $55.25 million of 30-year bonds (for the courthouse and jail) at an annual rate of 5.968 percent. Why are the Fayette County citizens paying an extra three-fourths of 1 percent (which is well over $400,000 a year)? Possibility number one is that the newspapers were wrong in their reporting. Since I verified the Henry County information with their school board, that part ought to be right; The Citizen can verify its own report on Fayette County. Possibility number two is that our elected officials are clueless. Since Henry County is reported to have picked the lowest of the eight bids it had received, while local reports indicate our county officials just asked the usual good-ole-boy firm to price the bonds, we may have our answer right there. Possibility number three is that our county's credit rating is not as good as our county officials have told us, and certainly not as good as Henry County's. There may be other possibilities I haven't listed. (It is unlikely tax-free interest rates surged up very fast in three weeks, and we then picked the worst possible day to determine our interest rate.) I wish The Citizen would take a greater interest in investigating matters like this. Four hundred thousand dollars extra a year is serious money, don't you think? On June 14, and in prior weeks as well, The Citizen reported on an ongoing dispute between county officials and the cities within Fayette County on whether the cities pay more or less than their fair share for the services provided to the citizens (Multijurisdictional tax tiff may take time to sort out). One item in dispute is the value of the patrolling the Sheriff's Department does in the unincorporated areas, which cities with their own police force have little need of. Before I address that issue, let me point out that on Jan. 19 of this year, The Citizen published an article of mine in which I very clearly explained how the citizens who live in the unincorporated areas of the county give away 52.5 percent of their local option sales tax to the people who live in the cities of Fayette County. It would be nice (as a sign of competence) to see our county officials bring this up in their discussions with the cities. As to the police patrol issue, consider this. When a sheriff's deputy gives a traffic ticket in the unincorporated area of the county, the fine that's paid by the hapless motorist goes into the county coffers, to be split among all the citizens of the county including those who live in the cities (whose police didn't have anything to do with the arrest). When a Peachtree City police officer gives a traffic ticket in Peachtree City, the resulting fine goes to Peachtree City, not to the county. If the unincorporated area residents could keep all the fines generated by the sheriff's department, without sharing them with the city residents, then the cities might have a point. (For the record, Peachtree City's budget for 2000 shows it earns $1 million a year from fines and receives a federal grant of $200,000 for its police, to help offset a police department cost of $2.15 million.) It's been my experience that the clueless hire a lot of consultants, especially with hot potato issues where they seek to avoid hard decisions and being exposed to criticism. It is worrisome to read in The Citizen articles which suggest our elected officials, and even their consultant, are blind to issues like the sales tax subsidy given the cities (over $7 million a year) and the cities' revenues from their police department. Claude Y. Paquin Fayette County cypaquin@msn.com
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