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HomeMy WebLinkAbout03-14-1997 Meeting I I I SUBCOMMITTEE FOR PRIORITIZING PROJECTS SPLOST for PHASE III (URBAN) COMMITTEE ROOM - March 14, 1997 4:00 p.m. PRESENT: U. Bridges, Commissioner; R. Oliver, Administrator; J. Wall, Attorney; B. McKie and C. Nelson, Accounting Dept.; D. Goins, Engineering and Lena Bonner, Clerk of Commission. Also Present: George Eskola, WJBF; Gayle Mino, WBBQ; Rosemary Forrest, Metro Spirit; Sylvia Cooper, Augusta Chronicle. Ms. Nelson: Drew and I have been working on this for a little better than a week, and what we started out with is a draft (see attached). In column 1 were the actual projects that were listed as those to be approve on the referendum and the dollar amounts allocated to them. A number of those projects listed are categories from which projects can be drawn from, such as the first one, the Urban Streets and Drainage Improvements, that was a category, and we have some projects that have already been identified for those funds. Then, just to show that we don't always spend as fast as we collect, I showed what was actually expended in 1996 (see attachment). It won't always be that way, but when you first start, things start out real slow, it'll progress. The next five columns, are the allocations by year. The 1996 Budget was set last year, and these are the figures that were actually budgeted for last year for the projects listed. From there, knowing that we only budgeted $5.4 million and collected a little better than $6 million, I rolled the revenue that was actually collected in '96 into the '97 budget for allocation, and there through the year 2000, Drew and I have worked on trying to spread out these projects. The total column should actually balance to the referendum approved column, but you'll notice that it's $3,170,000.00 over and that is due to the fact that we are allocating administration cost and then there was a project for $50,000.00 called A.C. Griggs, that was approved and expended. What we are supposed to do to get us back in balance, is take that administrative cost and pro rate it back to the projects, thereby reducing the actual cost of the project construction itself and having administrative cost added to, to eliminate that deficit. Mr. Oliver: And for example, what that would do, I think the administrative cost, is 8%, then with Augusta Commons being the first one on the list, rather than having actually $2 million dollars, they would have a $160,000.00 less than, so they would have $1,840,000.00, for actual project cost, the other $160,000.00 would be for administration. The other thing we discussed was, we have not, just to be conservative, at this point we have not factored in the anticipated interest earnings on the money because of the difference, and we are going to do some projection, Cheryl is going to do that with David on interest earnings. We know the A.C. Griggs project can easily be taken out of interest earnings. Ms. Nelson: All projects have been accounted for, and the approved sub-category projects have gone before the Commission. And what we had to do on the balancing, is based on the revenue proj ections provided by David, I had. to balance the proj ect I allocation to that years collections. We can still move things around, if you want to move a '98 project to '97 or vice versa, you'll have to find a like dollar amount to swap, to match the revenues. We can do that, we've worked on that several times a day to get to this point. We're only calling this a draft, because we don't want to put something in the wrong form and then go back and tweak it and hopefully that will be the final version. Mr. Bridges: everything done Committee meeting We may have to, If we're today, have another meet ing to support the projects. not able to get right before the Ms. Nelson; Just a little research to be done, I think with Drew on a couple of things, and I want to go back and look at a couple of things, but we are fairly comfortable with this, and we may tweak it just a little bit, but I don't expect it to be significantly changed. We will go back and pro rate the administration cost. I'll have a column with the administration for each project beside the cost, so that you'll know how much it is. Mr. Bridges: Is the budget the collection or the expenditure. Ms. Nelson: The budget is the anticipated collections, no interest, no reimbursements from anybody, just pure collections. Mr. Bridges: So you may not necessarily expend that amount of I money. Ms. Nelson: No, we very rarely do. Mr. Bridges: And that will be where the interest earned would come in. Ms. Nelson: Historically, based on Public Works South, they may have been collecting around $20 million a year, but they have only spent about $14 million, so you've had this $6 million, even though it was dedicated to proj ects, eventually, that actually rolled into the next fiscal year. I don't show any roll forwards, because if I did, of course, that would be a progression. I wanted to show it exactly the way we set it up for them and that is by year when the project can start. Once this is adopted by the Commission, this is the timetable for these projects and when they can begin. But if something comes up, and all of a sudden, a year 2000 project needs to be done in '98, that will have to come back before the Commission to be approved, and what will have to happen, is something that is budgeted in '98 will have to be moved to the year 2000, of a like dollar amount. Mr. Bridges: What I'd really like to do, is to present this,* almost in contrary*, and let these organizations know that this is I your budget for these years, please make financial arrangements to operate getting lease collections over the years and not change I I I this thing if we can. Or if we have to, if they come back and say can't do that, to do it pretty early on. Mr. Oliver: The other thing we would add, is that this does not anticipate, it's possible that on some of these projects we may get participation from State DOT. This does not anticipate any State participation. Should that participation materialize, which is unknown at this point, then it would permit us to do more projects. Mr. Goins: I think you made a good point about getting with these outside agencies. For example, the Augusta Master Plan, I think we need some input from the Canal Authority. If you'll notice on page 2, we've got their $1 million dollars, the last half, that's obviously not something that I think they'll be delighted with. This is a first flush, our best guess, and they obviously will want to push that back toward the beginning, and we may be able to accommodate them, but we need to reach a happy medium. Ms. Nelson: The other thing too is that, just because you have allocated your funds in a certain year, doesn't mean you have to spend them before that year, it just means that you can't spend them before that year. You may not get started with everything until September, and not really need the money until the beginning of next year. Mr. project process. McKie: without And it doesn't mean you go ahead and start the going through the formal approval and budget Ms. Nelson: This is a guide line that we're going to strictly adhere to. Mr. McKie: Can I make a recommendation regarding administration? The $3,120.000.00 is an arbitrary number, I mean it's a percentage that was arrived at in the old City. But since we are not, or probably don't want to do it against the outside agency, the cultural and historic, we can reduce that amount. As long as we don't really mess with our '97 budget, of going forward. Mr. Oliver: Yea, but the problem is, that if we reduce it, if it's a real cost, and you've calculated it correctly, it's coming out of the general fund, and I don't want it to come out of the general fund. I understand the problem, but what I would hope is between interest earnings and being able to apportion it against these projects, that we can make it up, without having to reduce the percentage. Mr. McKie: I don't want to call it arbitrary, but it's not as scientific as some of the other things are. Mr . Oliver: But if we get the approved Indirect Cost Allocation Plan, it won't be arbitrary at all. Mr. Bridges: The CSO Projects, I thought that was Phase II. Mr. Goin: There were two sets of them. A Phase I and a Phase II. Phase I was paid out of Phase II, and Phase II is being paid out of Phase III. Well actually, Phase II is reimbursing Water and Sewer. Water and Sewer paid for Phase II and Phase III is reimbursing Water and Sewer for the CSO's. Mr. McKie: Did you all look at the debt payment schedule on those? We had a plan in there for doing that. Ms. Nelson: I did it according to what you had told me, that any of the funds that over collections for 1996 would start the repayment on the CSO's and then next 4 years would be split evenly with the difference in the same. Mr. Goins: Ms. Nelson: 4 years. Mr. Oliver: Mr. McKie: It is as aggressive as it can be. The Wetlands were just a flat percentage of the Are you using it to redeem debt? Yes. Mr. Oliver: The problem is that if you use it to redeem debt, we will lose interest earnings, significantly, and what it's going to do is reduce the interest cost and utilities. Ms Nelson: What we're doing as far as the general ledger is concerned is, right now we are just allocating these funds back to Water and Sewer. I don't know that Water and Sewer is actually making the payments at this point and time. . Mr. Oliver: Well, you have capitalized the debt for some period, at least 1 year, I would think. The only thing I am saying is, that if you use it to pay debt service with any excess funds for a given year, you're going to drastically reduce your interest earnings. Ms. Nelson: Due to either a miscommunication or a key punch error on my part with Mary Grady, for whatever reason, we key punched in for '96, $90,000.00 more on the Discovery Center Entrance project than we should have, so this fiscal year I'm doing the budget change to reduce it, to balance it back. Actually, that's a project that Drew has let the bid to actually build it separately, they are not physically receiving these funds themselves. Mr. McKie: I thought we were going to borrow the money for that Wetlands Project from GEMA. Mr. although, Goins: We did. This is the loan payment this is the most aggressive schedule that we on can GEMA, repay I I I I I I that, but we don't necessarily have to. repay that, and we are earning interest at 4%. Mr. Oliver: As long as we can invest it at more than 4%, then we should. Ms. Nelson: I don't think it actually has to be repaid until later on into the project. You start these payments after the project is Mr. McKie: completed. Ms. Nelson: The money is being banked. Mr. Oliver: Did the call provisions in the bonds coincide with certain repayments, is that the reason, Butch? Did we have certain maturities that provided for this schedule. Mr. McKie: and look at it. We had a 4 year maturity, and I have to go back Mr. Oliver: If we had a 4 year maturity, we don't want to pay it back until the end anyway, because I'm sure there is a call provision in those bonds. Ms. Nelson: But if I don't start banking it now though, in the year 2000, you won't be able to do any projects, because, then I'd have to pay it all at one time. Mr. Oliver: No, but what you could do is have the whole $4 million in the year 2000. Ms. Nelson: It's 10.5 million. Mr. Oliver: What I'm saying, you could take the $4 million out in '97, or say $2 million of it, and move it to 2000, and then move some of the 2000 projects back, just to make them work quicker. The only thing we have to watch, is our interest cost. Mr. McKie: She had spread some of them out before then, because the total of them is more than 1 year's collection. Mr. Goin: Not only are we working with the total docket, but we can't over budget our annual collections. Mr. McKie: Another thing we have not considered in here, collections really jumped last year. We were looking for, and had been collecting somewhere around $5.5 million a year. Mr . Oliver: Here is the question I have for Jim Wall; if we've budgeted, say we went out for referendum one cent for five years, and let's say we anticipate a $165 million, when we get a $165 million, we don't get anymore, so it drops off three months or six months, or whatever time it is. Ms. Nelson: Whatever the amount was that's specified in the referendum. I Mr. Bridges: So the dollars ends the referendum if it's before five years. Mr. McKie: It's either date or dollar amount. Mr. Oliver: Here is the question, Jim, we budgeted some amount of money to be collected over five years, what happens when we hit that dollar figure? And what we concluded was, that the collection of the one cent local option stops, and didn't we over budget. Mr. Wall: Yes. You had to put two numbers in the referendum. You have to put a time limit and you have to put a dollar limit. When you reach the first of those two of those events the tax stops. So, we put a five year period and we put a dollar amount in there. Then we had a Tier I set of projects, and a set of Tier II set of projects. And yes, we were very generous. Mr. Oliver: So it's unlikely that we'll go over with Tier II, that's not going to be an issue. Ms. Nelson: The taxes have come in a lot faster than we thought they would, we have a $1 million. I Mr. McKie: Tier I is the real budget, what we originally thought we would collect. Tier II is the overage amount, and we really didn't think we would get into them, but now we are thinking we may collect the whole dollar amount that's in Tier I and Tier II . Mr. Goins: None of this list is Tier II, Tier I only. Mr. Oliver: And that's all we should deal with until we know we have additional funds. Mr. Wall: The total amount that we are talking about is five years and not more than $58,858,234. Mr. Oliver: Butch, what did we collect last year? Mr. McKie: Around $8.3 million. In terms of collection, we had progressed each year that they would grow. So right now in '96, we were really at the level of year three that we thought would be a year four. We are close to or right on the average in that first year. But we still have anticipated growth to go. That's what makes this a little confusing. After further discussion; I I I I Mr. Wall: I'm sorry $58,858,234.00. is not right. Roads and Bridges is $58,858,234.00, this includes City and County, Buildings, Administrative, Libraries, etc. $24,572,500.00 for both City and County. Under contracts with the city of Augusta and the city of Hephzibah, $44,112,460.00, and Recreational and Cultural facilities, $36,279,632. We had a high growth rate or $163 million. Mr. Bridges: So we're pretty much in agreement that what we have in both Roadways and drainage, we can recommend and any changes made there as we go along, are not going to affect anyone but ourselves. Mr. Wall: I think that Butch and I need to go back and review the official statement in so far as those two CSO projects and the Wetlands. We could not finance those through the bond documents for long detail reasoning, so the anticipation was that those would be paid back early. Now whether or not we put those in the documents, and required ourselves to do, I don't know, but it was certainly discussed. Mr. Oliver: I just want to make sure that unless we are legally obligated to, we maximize our interest earnings and we don't create a call condition. Because we'll pay $102 premium probably on a call. Mr. McKie: I think they we did it was to just have different maturity dates in there and we had timed most of this to correspond with the collection of sales tax. Mr. Oliver: Hopefully it's set up so it'll go into a sinking fund. Mr. McKie: It just stays in our investments until we pay it. We sit on it all year and pay it at the end of the year. Mr. Oliver: into sales tax. It'll be better for us if the interest can go Mr. Goins: Again this is the most aggressi ve payback, anything better than this will be to our favor. Mr. Bridges: We need to send this list to the Historic people for comment, and give them a week to get back to us. After further discussion; Mr. Bridges: Jim, since we have consolidated, but we are still separated with the sales tax between urban and suburban, can we say that this is Phase III and list all the projects together, do we have to keep them separate, or how are we keeping up with the separate collections? Mr. Wall: We entered into a contract with the City of Augusta, at the time the referendum was passed and we listed that I and we included a contract. One of the things that the City was insistent upon, was that this language be included; "In the event the Justice Department shall approve consolidation of the City and County pursuant to House Bill 805, all obligations and responsibilities imposed upon and assumed by the parties, hereto, shall devolve upon and be assumed by the newly formed government". Basically saying, that you have to keep this contract as though it's still in place. ADJOURNMENT: With no further business to discuss, the meeting was adjourned. Lena J. Bonner Clerk of Commission bjb I I