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Flowery Branch OKs financing to pay off city offices
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1203FLOWERaud

Flowery Branch City Manager Bill Andrew talks about a plan to pay off a loan using existing city money, then repaying itself through special purpose local-option sales tax money.

Flowery Branch City Council voted Wednesday to pay off the $411,611 note on Main Street offices across from City Hall, using money from its 1-cent sales tax and water/sewer capital funds.

Council members Allen Bryans Sr., Pat Zalewski and Mary Jones supported the move while Councilman Craig Lutz opposed it. Councilman Chris Fetterman was absent from the meeting.

“We had agreed to buy those buildings with (special purpose local-option sales tax) funds using tax-anticipation notes,” Lutz said.

“By doing this ... we’re going to be taking away interest that we’re getting (from the water/sewer fund) that we’re not going to recover. That’s revenue lost.”

The city had taken out a $405,000 loan, at 3 percent interest, on the 5512 and 5514 Main St. offices, which house City Manager Bill Andrew’s office, conference space and the city’s planning department.

Plans were to pay it off at the end of this year using a new loan that the city would pay off “through next year with SPLOST funds,” Andrew told the council.

In examining financing options, Andrew said he considered using current city funds and then “owing the loan to ourselves without the interest rate, fees and closing (costs) a bank would charge on new loan.”

He estimated by going that way, the city would save about $9,500.

The council’s action calls for paying off the self-loan through future sales tax payments over 16 months.

“We’ve always anticipated that we would have enough SPLOST money by October or November at the latest to make these payments,” Andrew said.

However, “SPLOST, right now, is about 73 percent of what the maximum allocation was thought to be,” he added. “... This is a huge ‘if,’ but if the SPLOST continues as the level it is now, we’ll only be getting $1.8 million instead of the (projected) $2.5 million.”

The city plans to use $66,000 in SPLOST money collected so far and $345,611 from the water/sewer account.

In other business, the council asked Andrew to file an open records request with Gainesville in an effort to obtain billing information for water customers.

The move was in response to Andrew saying that Gainesville plans to start on Jan. 1 charging the city $1 for each water meter reading of customers who get their water from Gainesville and sewer from Flowery Branch.

Flowery Branch bases its sewer bills on the water data collected by Gainesville.

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