Bond issue may get $33M boost
by Rachel Miller
June 22, 2013 12:15 AM | 1877 views | 6 6 comments | 40 40 recommendations | email to a friend | print
MARIETTA — City leaders learned Friday that a proposed 2-mill tax hike to fund the redevelopment of Franklin Road and other blighted areas of the city would raise almost twice the amount of money previously thought.

Instead of the $35 million bond deal that the council agreed last week to send before voters, Mayor Steve Tumlin said Friday that the 2-mill increase would actually raise about $68 million.

A mill is $1 for every $1,000 of assessed property value.

Tumlin said the original amount was based on estimates by city staff when the bond issue was first being discussed, but a much larger number was given to him Thursday after an independent firm did a tax assessment.

Tumlin said his desire to move the bond to the next stage and approve the $35 million amount was a mistake on his part.

“It’s my fault,” he said.

Tumlin said there is no check list, besides what is in his head, on each step to take when instituting a government obligation bond, especially one that does not yet include specific construction plans for each project.

The miscalculation means the council’s June 12 approval of the bond language as it will appear on the Nov. 5 ballot must be rescinded. A new vote of the council will be needed in order to finalize the ballot initiative.

The issue will likely be a hot topic of debate at the council’s next meeting Wednesday at 5:15 p.m.

Tumlin said he has no regrets about the earlier “conservative” estimate that guided the redevelopment projects discussed by the City Council.

“It made us tighten our belt from the get-go,” Tumlin said.

At the June 12 meeting, the funding for a Lemon Street School project was stripped from the bond project and council members also denied residents’ requests to improve Allgood Road.

Tumlin said there are community needs that weren’t possible with $35 million, but the extra cash has broadened the possibilities.

Tumlin said he is “very open to looking at needs all over the city” that fall within defined redevelopment areas.

Lewis agreed, and said more money means there is a better chance to impact the community in other areas that are blighted.

Both Tumlin and Lewis said they have talked to many concerned citizens who do not feel the $35 million is enough to make the Franklin Road project successful.

Tumlin said he would like to take advantage of the whole $68 million, or an amount between $55 million to $60 million.

But the public debate could frame that as “needy,” Tumlin said.

Public speakers at City Council meetings have stated the Franklin Road project is a gamble with a large amount of money. No one knows for sure if the investment will pay off in an economically better corridor.

“Some might say stay at $35 million and let it ride, but I don’t like to leave money on the table,” Tumlin said.

Bond amount

The redevelopment bond has to be passed by voters with a finite dollar amount, and the property tax increase is based on meeting that sum, Tumlin said.

Tumlin said the goal was to keep the taxation rate at 2 mills for 20 years.

If passed, the new tax would go into effect as another 2 mills expires on a bond that funded the Marietta City High School auditorium, resulting in a “revenue neutral” situation.

The PFC Group, financial consultants working on behalf of the city on the bond issue, almost doubled the amount that could be raised at the 2-mill rate.

“I never dreamed that 2 mills would bring $68 million,” Tumlin said.

Tumlin said the new amount is still based on fluctuating interest rates and speculation in the bond market.

The financial report delivered to Tumlin on Thursday stated that $5 million would be collected each year, and with interest rates averaging around 4 percent, the total interest paid on the bond over the 20-year term would be $32 million.

The total cost of the bond including principal and interest payments would be $100 million over 20 years.

Election deadlines

Tumlin said each member of the City Council was sent an email Thursday with the financial statements on the difference between the bond estimates and his request to discuss the matter Wednesday.

Councilwoman Annette Lewis said she would not weigh in before Wednesday’s council meeting.

“I would rather wait until we are all sitting down and talking about things,” Lewis said.

City Attorney Doug Haynie said the new estimate will not legally require any more public hearings about the bond issue, but the council could decide to call one.

Lewis said although there may not be a public hearing, “there will be time for public comment” during the regular council meeting.

Haynie said the latest possible date the council could adopt the bond resolution, or the last chance for any changes, would be at the Aug. 14 meeting.

That would be the city’s final opportunity to meet the federal deadline to have the wording of the referendum approved 60 days before the Nov. 5 election, Haynie said.

Tumlin said he thinks the council will still reach a consensus on a final figure and the bond referendum will be on the November ballot for voters to decide.

“Worst case scenario,” if the council decides to keep the amount at $35 million, it would lower the tax rate needed for the bond, Tumlin said.

Comments
(6)
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OTG
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July 04, 2013
School Board controls the school budget, the City controls the City budget. Why is Tumlin trying to off set the cost of the school system? The City tax, not the City School tax, is already falsely low, 4 mils. The cost of services to the Citizens has continued to increase while taxes have been cut. Who has been paying for this offset. The City employees have. It is time the City develops a pay plan for the City employees. City employees are 56 percent behind the cost of living for the last 20 years. The City has not had a pay plan in over 20 years, pay scale yes, pay plan no. You can say we have benefits, but the employees have absorbed that cost as well over the years, so that is now something we have paid for. If the Citizens do not desire to have the services then they should be cut, but to continue placing the cost on the employees is just wrong. With this new bond looming will the City employees have to off set this cost in the future? I hope not.
Phillip Maloney
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June 24, 2013
A MCSB member posted on a social media site the error in the projected revenue was due to a misplaced decimal. Amazing staff.
anonymous
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June 24, 2013
Mr Bittner is wrong.
anonymous
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June 22, 2013
WHY 2 mil? WHY not 1 mil?? WHY not no mil???

This is the most liberal leaning city government and county government has been that under Tim.

They think nobody is looking or is smart enough to figure out how they think. Now that our homes go up in value and they raise tax in big gulps we taxpayers are going to get the neck squeezed.

All our utilities have skyrocketed, water, electric, gas, cable and we are on fixed income!!!

They can pour millions into Franklin Rd and it will never make Franklin Rd a place people will want to hang around much less live!!!Get Real and treat our tax money like it is real money not monopoly money. That is our hard earned dollars

we spend our lives working for dollars only to be blown to the wind by the frivolous simple minded .
Dave Z.
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June 22, 2013
It's hard to understand why the estimate was off by so much. Nonetheless, it would make sense to include developing the new Franklin Road park and the connecting Rottenwood Creek trail in the bond as well.
Dave.
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June 22, 2013
I don't understand why the estimate was off by so much. Nonetheless, it would make sense to include developing the new Franklin Road park and the connecting Rottenwood Creek trail in the bond as well.
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