According to Jim Pehrson, the county’s director of finances, after the county receives the bond proceeds, the funds — which could total up to $397 million — will be deposited with U.S. Bank, who will manage the funds as the county’s trustee for a $2,000 per year fee. The county’s agreement with the bank does not begin until the bonds are issued, however.
As a result, the Cobb Board of Commissioners voted 4-0 on Tuesday, with Commissioner JoAnn Birrell absent, to approve a short-term agreement with U.S. Bank to provide depository and payment services until the bonds are issued, at a total cost of $250.
Although the bank will not yet have the proceeds from the bond issuance, it will emulate the same process it will go through after the bonds are sold, Pehrson said. “We’re using U.S. Bank in the same manner that we’ll use them after the bond issuance, except for the fact that they’re not going to have any bond issuance proceeds. And so, the construction requisitions that we’ll get from American Builders will go through the review process from the Braves’ team — I think it’s primarily going to be Jones Lang LaSalle (the team’s project manager) — and then our team will review it and then it gets sent to the trustee for payment.”
The bank will set up three accounts: one for bond proceeds, one for contributions from the Cumberland Community Improvement District and one for the Atlanta Braves. After a bill is reviewed by the county and the ballclub, Pehrson said, it will have information from both sides identifying where the money to pay it should come from.
“But right now, the only moneys they’ll receive will be (from) the Braves, since they are paying 100 percent of the invoices up until the time of bond issuance.”
American Builders, the joint venture building the stadium, is technically contracted with the county, Pehrson said, so the bills should be paid through the trustee as a matter of good accounting. The short-term agreement was made for this reason.
“So for basically zero cost — 250 bucks — we can emulate the accounting practices (and) the business processes that we’re going to have afterwards, which to all of us makes sense,” Pehrson said.
After the bonds are issued, Pehrson said the county will perform an “immediate accounting” of all the bills paid so far to determine what portion of those bills should be paid with bond proceeds, after which the county will reimburse the team. The funds in the Cumberland CID’s account will only be used for transportation or infrastructure improvements, according to Tad Leithead, the CID’s chairman.
“It’s going specifically toward transportation and infrastructure improvements,” he said. “The CID is limited by law in how we can invest our money. And our investment purposes are primarily — not exclusively, but primarily — transportation, public transportation and other types of infrastructure improvements, which could include parking lots, etc.”
Leithead said the CID will deposit $2.5 million annually from 2015-18, for a total of $10 million.
“We have told the county … that as long as they spend our money on those types of improvements, that they can decide exactly how to divide up our money and how to spend it. We didn’t require that they tell us exactly which projects, only that they assure us that the money would be spent on infrastructure improvements,” he added.