Friday, May 4, 2001
Friday, May 4, 2001 |
|
As PTC growth slows, so does cash flow: loans considered for projects By JOHN MUNFORD Growth has been very good to Peachtree City, keeping the city financially afloat with plenty of cash on hand to finance capital projects. But now the growth is slowing, and city officials have plenty of projects that still need to be funded. City officials say the solution likely will be going into debt, which the city historically has tried to stay away from over the years. The city owes just $4.06 million currently, although it qualifies for up to $121 million in loans. "We certainly don't want to go into any more debt than is absolutely necessary," said City Manager Jim Basinger. "We're not going to say 'let's go spend a lot of money.' We're saying there appear to be some facility needs that the city has not yet met. Now, the only way to do it is borrow the money." The City Council has authorized city staff to prepare information for a possible bond issue referendum which would ask voters to authorize certain projects so the city can seek low-interest loans for financing. Committees have been formed among city staff to study the feasibility of each proposed project, and the structuring of the various bond issue questions has not been finalized. For many years, the city's policy was to fund necessary projects with cash, which was readily on hand thanks to impact fees and growing income from property taxes and sales taxes, Basinger said. Basinger estimated the growth boom from the late 80s through the early 90s brought the city's revenues up from between 8 to 15 percent each year. That provided cash for the projects city council had approved in a priority order, he said. "The object was to lower taxes and try not to go into debt so we would pay as we go," Basinger said of the City Council's philosophy of handling city finances when he first came on board in 1984. "We have continued to follow that philosophy over the years." The city councils over the years deserve the credit for maintaining that policy, Basinger said. "The city has had good financial management over the years to conserve its debt capacity," said city Finance Director Paul Salvatore. Debt had become necessary at times, however, at least to fund the construction of a new City Hall and other recreation projects, Basinger added. Now seems to be another one of those times, as city officials are considering how to present the bond issue proposals to voters. If a bond issue is approved, the city will get a low-interest loan to pay off the approved projects over 20 or 30 years. That, Basinger said, would allow future residents to pay for the new amenities and necessities. But if voters reject some or all of the bond issues, some projects might be scrapped altogether, most notably the $5.5 million community center and the addition of a gymnastics area and another basketball court at the Kedron recreation complex. Even if the bond issue is shot down at the polls, the city will likely continue with all the other projects proposed in the bond, such as playgrounds, Basinger said. It might mean that some projects are deferred to another budget year for funding, Salvatore said. But those decisions will ultimately be left with council, Basinger added. Committees have been formed to study the projects and determine how they should take shape. One crucial element the committees will focus on is how much it will cost to maintain the new facilities on a yearly basis, particularly when it comes to adding more employees, Basinger noted. The city is proud of having the fewest employees per 1,000 residents of any municipality in metro Atlanta, Basinger said. Employees are the most expensive asset to the city, he added.
|