Loading...
HomeMy WebLinkAboutCalled Commission Meeting Sept. 29, 2008 CALLED MEETING COMMISSION CHAMBER September 29, 2008 The Augusta Richmond County Commission convened at 12:20 p.m., Monday, September 29, 2008, the Honorable Deke Copenhaver, Mayor, presiding. PRESENT: Hons. Holland, Smith, Mason, Grantham, Hatney, Beard, Johnson, Jackson, Bowles and Brigham, members of Augusta Richmond County Commission. The invocation was given by Rev. J. R. Hatney. The Pledge of Allegiance to the flag of the United States of America was recited. Authorize the transfer of funds ($10,000,000.00) to or for the Board of Regents of the University System of Georgia and authorize the Mayor to execute a loan agreement with First Bank and any and all related documents necessary or convenient to Augusta’s performance of an Intergovernmental Agreement by and among Augusta, the Board of Regents of the University System of Georgia and the Augusta Housing Authority as approved in meeting of September 16, 2008 of the Commission. Mr. Russell: Yes, sir, Mr. Mayor, in our continuing journey in reference to MCG and Gilbert Manor, as you know, you approved the agreement several months ago, the theory of the agreement, you approved the MOU just recently. This is hopefully the final aspect of that as we’ve got the loan information in front of you and we need the approval of the Commission to actually certify and carry forth the loans. As a reminder of that, we’re purchasing, loaning or giving the money to MCG to purchase the property. Part of the reason for the haste in that today is the fact that the Housing Authority will qualify for another $500,000 federal grant in developing this if we can close in the next little while. That’s why we have it as a special item today and I would appreciate your consideration and movement to move forward with this. Mr. Hatney: Mr. Mayor, and Mr. Administrator, we talked a little earlier and you know where my concern is in that when we approved that, we approved it with the usage of four banks and this document only names one and if you could assure me that the document will be changed to include those four banks. I notice you have First Bank as the main bank and it says one or more banks. That does not name anybody and I’m convinced that those banks need to be named in the document in order for them to participate. Mr. Russell: Yes, sir, and we have taken the liberty of writing the motion that would include those and it would be included on the record that those banks are included. Mr. Hatney: Would you name those banks, please, because I’m remembering one or two . . . Mr. Russell: In the new motion that will be heard in a second. Mr. Mayor: Okay. Mr. Grantham. Mr. Grantham: Thank you, Mr. Mayor. I think this will clarify what Mr. Hatney was I’m going to make the motion that we approve the agenda item in respect to talking about. the transfer of the $10,000,000.00 to or for the Board of Regents of the University System of Georgia for the benefit of the Medical College of Georgia as stated in the agenda and that it be approved with the following modifications, those modifications being that in the agreement that we had talked about and passed several months ago, that paragraph number 4 be modified to read as follows: “To appropriate from the General Fund balance an amount necessary to satisfy interest expense after deducting the interest earned from the CDs, the approximate interest earned, $62,500, approximate gross interest earned of $112,500, which the net interest expense would be $50,000. This would be remitted by the Finance Director to pay interest on said loan payable on December 31, 2008. Item number 2 would be to authorize the Finance Director to purchase certificates of deposits from Capital City Bank and Trust, Georgia Bank and Trust Company of Augusta, Queensborough National Bank and Trust, First Bank of Augusta and Savannah River Bank with the loan proceeds in that portion to the participation by these banks in the loan made by First Bank to Augusta.” So I hope that will clarify that we have included those banks and instead of one or instead of three, we do have five banks participating now which are all independent banks here in Augusta that shows us support of this community as well as this government. Mr. Mayor: We have a motion. Do we have a second? Mr. Smith: Second. Mr. Mayor: We have a motion and second. Commissioner Bowles. Mr. Bowles: Mr. Mayor, I just want to clarify. In what amounts will those funds be dispersed to the banks? Is each bank getting an equivalent amount for the CD? Mr. Russell: At the point the banks are still negotiating what amounts they would have given the nature of the economy at the moment. It will be divided as decided by the banks. Mr. Mayor: Commissioner Hatney. Mr. Hatney: One other question. Now that we have five instead of four, I’m just curious why it was necessary to add another one? Mr. Grantham: Mr. Mayor, we had talked to all of these banks and all of them at one time had to go and get their lending capabilities and whether they wanted to participate in this type of loan based on the interest that they were letting us have or borrow the money for plus turn around and the interest that they would be paying us on the CDs that we were depositing in their bank which not only gave us a short, a small cost of interest but it also gave them the assurity that they had the money in their banks to loan back to us. So once they found out what their lending capabilities were, several of the other banks came back in and wanted to participate in this since they too were independent banks. Mr. Mayor: Commissioner Johnson. Mr. Johnson: Thank you, Mr. Mayor. Fred, I wanted to ask you at what rate would the loans be repaid and at what length of time would it take for these loans to be repaid? In other words, what’s the alternatives if, you know, I see we have the SPLOST here as the primary alternative for these being repaid and I know it’s coming out of the general reserve, right? Mr. Russell: Yes, sir. Mr. Johnson: Okay, and if SPLOST do not go through as far as the loan is concerned, what is the plan to pay this money? Mr. Russell: Obviously the best case scenario would be to take it out of SPLOST. If not, if that did not go through, we have other options available to us by taking it out of the reserve fund that would be available or some additional SPLOST dollars that are currently in SPLOST IV that could be transferred to that if at all necessary. The cleanest thing from my point of view would be to go into the next SPLOST and go ahead and do that as an economic development tool and that’s why the language is written the way it is. There are other options available if necessary. Mr. Johnson: So it won’t cost raising taxes for the citizens? Mr. Russell: I don’t anticipate any tax increase based on this. Mr. Johnson: Okay. Thank you, Mr. Mayor. Mr. Mayor: Commissioner Mason. Mr. Mason: Yes, thank you, Mr. Mayor. Mr. Russell, I have some concerns in reference to two items here. One, I think I heard you say to Mr. Bowles’ question that banks would determine how it was split up. Who’s the determining factor of that? Who’s making that decision? Mr. Russell: I along with the banks. It would be pursuant to the amount of the loan basically. If some of the banks are not able to participate at the same level of others and as they can participate, we will work with them to participate, i. e. if it is a half a million dollars versus two, the others would take up the balance in that and that would be a joint decision by the banks involved so that each one would be able to participate at a level they’re comfortable with. Mr. Mason: Okay, so basically what we agreed to prior is really not what we’re talking about today in terms of – I was under the understanding that there were four banks and there was an even split. That was my understanding from the last meeting but now today something has triggered a change from what we had agreed to a month or so ago. Mr. Russell: You’re absolutely right and the fact that the banks themselves have come up with . . . some of the banks particularly because of the financial market I would assume, have a little bit less ability to lend the amounts of money that were available so we’re working with them for the total amount that would be there based on their availability of funds to be able to participate. So we’re trying to give them some flexibility as we go forth. Mr. Mason: I can understand that, certainly, Mr. Russell, and that’s the reason why I’m a little bit apprehensive now because given the state of the economy and what we are dealing with and not knowing what type of breakdown we’re going to have on these particular ones, I’m just wondering if we are putting the cart before the horse without knowing specifically how we’re going to deal with this and if it’s agreeable to this body. So I’m not sure if we’re not putting the cart before the horse right now without knowing the specific details that in my mind I would need to be clear on in terms of approving this particular deal. Mr. Russell: What you’re basically doing is giving me an upper limit to deal with, obviously, and dealing with the banks themselves to come up with that upper limit based on an equitable division of the money that they can participate in. That’s what you’re doing. Mr. Mayor: Commissioner Hatney. Mr. Hatney: One other question. Before the contracts for these banks are signed, is it possible that we could see before that exactly what is going to be happening with each of these banks? Mr. Russell: Yes, sir. That’s not a problem at all. Mr. Hatney: I mean before the contract is signed, not afterwards so we know exactly where we are. Mr. Russell: As the division is split up. Mr. Hatney: Yeah. We’d like to see a listing of that. At least I would. A listing of that to make sure we are including these folks that we have named here. I’m not so concerned about the volume as I am the inclusion. Mr. Russell: Yes, sir. That would be no problem at all. Mr. Hatney: I hope we would try to be fair as much as possible because before it was 2.5 per bank. Now it’s down to, if each one does the same thing, two per bank. Mr. Russell: And that is based on the wishes of the banks involved but we can provide you that information prior to the contract. Mr. Hatney: And anything that changes I’d hope to see if before the contracts are negotiated. Mr. Russell: Right. Mr. Mayor: Commissioner Beard. Ms. Beard: Fred, at this time you feel the banks will come up with the amount needed here and I say that because a lot of banks are running into problems right now and some of them don’t have anything to lend at this time. Mr. Russell: And that’s why we were asking for some of the flexibility involved with the banks that we’re dealing with but I have no reason to believe that they would not be able to participate at this particular point in time and the total amount would be the amount we need. Mr. Mayor: We have a motion and a second. Mr. Brigham: Who made the motion and the second? Mr. Mayor: The motion was submitted by Commissioner Grantham and was seconded by Mr. Smith. We have a motion and a second. If there’s no further discussion, commissioners will now vote by the usual sign. (Voting begins) Mr. Hatney: You mentioned that there was a deadline somewhere, but you didn’t mention the date. Mr. Russell: What they’re looking at today and the way we’ve got it structured is that if we can go ahead and move forward with today on the total amount of money, the Housing Authority will be eligible for an additional $500,000 of federal money so that’s the purpose of the call today. Mr. Hatney: But the actual contract will come back to us. Mr. Russell: Right. Mr. Holland: Thank you. Before I vote and I apologize for being late and in reading this I see it says that the Mayor in the loan agreement with First Bank and all related documents necessary or convenient to Augusta’s performance. If I’m not mistaken did we mention three or four other banks in reference to this? The Clerk: They revised that. Mr. Russell: Yes, sir, we’ve already taken care of that. The revised motion includes those banks by name. Mr. Holland: Okay. Apologize again, thank you very much. Mr. Mason votes No. Motion carries 9-1. Mr. Mayor: With no further business to come before the body, we stand adjourned. [MEETING ADJOURNED] Lena J. Bonner Clerk of Commission nwm