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Hall County debt will be a political point this election
County government is facing a $90M problem, says Dick Mecum
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Just as the national debt has become a rallying cry for some politicians in recent elections, Hall County’s long-term debt is turning into a hot issue in the race for the next Board of Commissioners chairman.

At last week’s candidate forum, sponsored by the South Hall Republican Club, former Sheriff Dick Mecum declared that the county government was facing a $90 million debt problem.

“We’ve got a Barack Obama, liberalistic-style government that’s going on and spending us into a situation,” Mecum said.

“If we don’t save us some money and pay off this debt, it’s going to bite us big time in three years,” he said.

The statements were quickly challenged by incumbent Chairman Tom Oliver, who said the county’s finances were in “great shape.”

Both he and former North Hall commissioner Steve Gailey argued much of the county’s debt was tied into retirement and low-interest loans from the state for sewer projects.

Oliver went on to question Mecum’s ability to “read a financial statement.”

“I think to indict this county of overspending is a misrepresentation of what we’re all about,” he said.

In a lot of political debates, candidates’ claims can be mixed in some combination of facts, ideology and projections of the future to make a case to voters.

In the case of Hall County’s debt, the question of whether taxpayers will be left on the hook for covering skyrocketing debts is difficult to answer — at least without a reliable crystal ball.

Both Oliver and Mecum have challenged the other to put their projections to a professional financing expert for examination.

According to an independent audit of Hall County’s 2011 finances, the government owes $136.9 million in what’s considered long-term debt — but some of those costs are expected to be paid over decades.

No doubt the number looks steep, but it’s far shy of the county’s legal 2011 debt limit, which is $743.3 million.

About $48 million of the long-term debt is tied to employee retirements that are expected to be paid over a number of years. The number reflects how much the county would pay in the unlikely scenario that each employee retired at once.

Mecum said he excluded those retirement costs in his $90 million projection. Instead, the debt he finds troubling is largely tied up in projects through the special purpose local option sales tax VI.

SPLOST VI, which was approved by voters in 2008, includes capital projects to be financed by a penny sales tax over the course of six years.

The original projections for the overall SPLOST VI budget were $242 million (for county and municipal projects), but that was before the economic downturn reduced consumer spending. Since then, officials have lowered those revenue projections to $162 million through 2015. With a little more than three years left in SPLOST VI revenues, Hall County has collected $70.2 million.

Mecum said the recession plus future economic troubles, largely caused by turmoil overseas, will mean the county won’t collect enough to pay for the projects it has started. Based on figures he said he took from county records in February, he projects when SPLOST VI ends in 2015, Hall County could be on the hook for between $50 million and $70 million in debt not covered from sales tax revenues.

He blames poor leadership from the county commission in managing SPLOST funds in light of the economic downturn.

“That’s the job of the commissioners, to see it coming,” he said.

Mecum said if elected, he would look to halt projects or at least let voters decide if they want to pay for them.

County Commissioner Scott Gibbs, who is not up for election this year, called Mecum’s figures “totally impossible.”

He said all of the county’s SPLOST projects would be covered through the tax. For projects not directly associated with the tax, Gibbs said the county has mechanisms planned to pay for them.

County officials have said they are keeping a close eye on project costs and SPLOST revenues.

Tim Sims, Hall County’s purchasing manager, said the county has been trimming SPLOST projects to keep costs in line with incoming revenue.

“We’ve been able to project the collections, so we’ve been able to reduce the budgets,” he said.

Sims said he doesn’t anticipate the county going over budget for SPLOST VI.

However, if some projects are not completed due to lack of funding, then voters will choose whether to cancel the remaining projects or fund them again.

For Gailey, debt should be a nonissue for this campaign.

He said most of the county debt is tied up in long-term, low-interest loans for infrastructure. Most of those loans are for sewer infrastructure in South Hall.

“If you don’t have infrastructure, then you’re not going to bring the development that you need,” he said.

Gailey said the overall debt number looks high, but that’s deceiving since the county can pay for it over the long term once a recovery takes hold.

“There is debt, but in my opinion it’s not debt that concerns me,” he said. “This is not borrowed money where there is no return on investment."

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