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Gainesville cannot issue bonds for Public safety facility project

Ownership will have to transfer until bonds paid

POSTED: April 2, 2009 11:37 p.m.
City officials soon will sign over the ownership of their public safety facility to the Gainesville-Hall Redevelopment Authority to secure bonds for the site.

Gainesville’s Chief Financial Officer Melody Marlowe told council members Thursday that because of a technicality the authority will have to issue bonds for the public safety facility and the downtown parking deck.

During voting for the Special Purpose Local Option Sales Tax, a 1 percent sales tax to fund capital projects, city and county residents were mixed at some polling sites. Elections officials are unable to differentiate between votes from city or county residents at those locations. Even though Gainesville residents voted "overwhelmingly" for the referendum, Marlowe said, it cannot be certified.

Therefore, the city must transfer the title of the property to the authority, which is not a city entity, so it can issue the bond, Marlowe said.

The issue never came up in previous incarnations of the tax because the city used the tax money on smaller projects that didn’t require taking on debt.

"We just never had a bond issue for a SPLOST project," Marlowe said.

Still, the city has a way to move forward with the facility, which it broke ground on last week.

"It doesn’t matter; we’re just going to do it with the redevelopment authority," Marlowe said.

Marlowe presented a draft of an intergovernmental agreement to the council Thursday, which would transfer the title of the property to the authority and allow the city to lease it.

The agreement also allows the authority to issue a bond not to exceed $27 million for the facility and one not to exceed $6.5 million for the parking deck.

The city would repay the parking deck bond over a period of 15 to 17 years, Marlowe said. However, the city would be able to repay the bond for the public safety facility in four years because of an agreement to receive advance proceeds from SPLOST VI when county officials start collecting it in July.

Once the bonds are paid, the authority would then return the title to the city’s ownership, City Manager Kip Padgett said.

The authority likely will meet next week to approve the agreement, Marlowe said, and the City Council also should vote on a final version of the agreement Tuesday.

The county’s interim elections superintendent, Charlotte Sosebee-Hunter, was not available for comment Thursday.



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