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Gainesville wants sales tax advance from Hall County

Voters have yet to approve extending tax

POSTED: December 9, 2008 5:00 a.m.

If Hall County voters approve a Special Purpose Local Option Sales Tax in March, Gainesville might get an advance.

The city’s officials are hammering out an agreement with the county that will allow them to receive advance payments on collections from the next round of the 1 percent sales tax in the first three years of the agreement.

The agreement would give the city approximately $9.5 million in sales tax collections each year in the first three years of the sales tax cycle, allowing the city to pay for its new public safety facility that must be built by June 2010. The city expects to use no more than $27 million of its expected $35.5 million in revenues from the sales tax to pay for its public safety facility.

The City Council will vote on the city’s portion of the deal at its meeting this morning, but the agreement would be subject to voters’ approval of the six-year sales tax, dubbed SPLOST VI, in a March referendum.

If the referendum is approved, the advance money Gainesville would receive would come from the county government’s portion of the sales tax collections, interim City Manager Kip Padgett said.

The county will receive about 81 percent of the $240 million that officials expect to collect between July 1, 2009, and June 30, 2015, for SPLOST VI, he said.

"They would advance that to the city," Padgett said.

After the first years of advanced collections, the county would give the city its normal allotment of sales tax revenues — 14.7 percent of countywide collections — minus the amount of money the city received in advance, Padgett said.

The agreement would allow the city to pay back loans that will finance construction of the public safety facility in a three-year loan, thus keeping the city from incurring as much debt in interest, Gainesville’s Chief Financial Officer Melody Marlowe said.

"The last three years (of collections) are going to be significantly less, but ... the shorter time we can finance it, the cheaper it’s going to be on us as far as debt service and all the payments we have to make," Padgett said.

Gainesville plans to move forward with the construction of its public safety facility near the Public Utilities Department early in 2009, Padgett previously said.

The new facility, which will house the city’s municipal court, police and fire headquarters, must be complete by June 2010 because of an agreement the city has with developers who plan to build a hotel and office complex on the site of the current public safety facility.

If voters approve the sales tax, the city will take out a loan to pay for the construction of its public safety facility and repay those loans with the advanced sales tax revenues, Padgett has said.

If the referendum is not passed, the city will have to find another way to pay for the public safety facility, and delaying construction is not an option.

"If for some reason, you know, SPLOST doesn’t pass, we still have a commitment to build that facility, because of (the construction of the hotel-office complex)," Padgett has said. "We’re going to have to look at the other options, which aren’t many, to do that."



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