City council members got a glimpse into the future last week, as City Manager Tom Barber mapped out a 20-year plan that would see the city pay for its many needs through a pattern of steady growth.
Council members discussed the plan last week during a four-hour conference as the council members began the hard work of hammering out the proposed $35 million budget for 2021.
The goal of the 20-year plan was to address a few wants and many needs for the city, including the numerous infrastructure issues that past councils have been unable to address.
The Council’s challenge is to determine which parts — if any — of the comprehensive plan can begin to be tackled in the 2021 fiscal year budget while facing critical revenue shortfalls due to the economic impact of the ongoing pandemic.
Barber discussed individual problems in five different categories: water, sewer, transportation, recreation and facilities. None of the issues can be solved overnight, but Barber discussed how they might be addressed over time.
Water and sewer issues remain the biggest challenge for the city. Over the previous three budget cycles, the city has significantly improved the cash available for solving those problems by asking residents to pay more for those services. The 2021 budget breaks that pattern by not calling for another round of water and sewer fee hikes.
While the improved revenue for those departments has helped to address some infrastructure issues, there are several big-ticket problems that Barber said cannot be solved through higher fees.
Those include finding another source of water. The city has two reservoirs that can produce 1.3 million per day. But the city needs 2 million gallons daily and must make up that deficit by buying water from Carroll County.
What water the city does supply is produced by a 50-year-old water plant that is showing its age and cannot be further expanded without the city running afoul of state regulatory agencies. And the water is delivered through a network of inadequately sized pipes that leak. Sewage is carried by antique conduits that are crumbling because a network of underpowered lift stations can’t adequately move sludge that produces corrosive chemicals in the pipes.
Barber estimated that solving the water issues alone would cost $35 million — the same amount of money in this year’s total budget. Solving the sewer issues would take an additional $21 million, he estimated.
Similarly, Barber discussed transportation challenges facing the city, which include improvements to the heavily used Punkintown Road and paving the way for North Bypass. He also discussed issues with the city’s recreational facilities as well as new projects for downtown, including a long discussed municipal complex that would replace government buildings scattered throughout the city.
All together, he estimated the price tag of tackling these issues at $123 million.
To pay these costs, Barber proposed primarily a combination of low-interest loans from the Georgia Environmental Finance Authority (GEFA), or longer-term general obligation bonds. But paying back that debt would require avoiding mistakes of the past.
Barber pointed out that when the west wastewater plant was financed, it was through a $35 million interest-only loan. Over the past 12 years, the city has only paid off $2.2 million of the principal, while more than $16 million has been spent to pay interest on the loan. When the $35 million plant — which is already showing its age — is finally paid off, the city will have spent more than $60 million.
Barber favors an approach that boils down to steady growth; a combination of adding population to the city and increasing the value of its commercial, industrial and residential properties.
The city manager calculated that the city must add at least 500 new residential units to the city each year, or about 1,000 new residents. Those new users of city utilities would increase the revenue needed to pay back those loans. Barber reckoned that to be less risky than the borrowing the city has previously done.
He also advocated the creation of a second industrial park, to supplement the one that now exists on the northwest side of the city. But he said that this park should attract business and industries that pay higher wages, to increase the number and buying power of the city’s workday population.
That plant would add to the city tax digest, but even more value to the city would be added through TADs, or Tax Allocation Districts. These are currently undeveloped tracts of land that the city would pay to install infrastructure, while offering bonds to developers to create new buildings. The property taxes those structures generate would be deferred until the bonds and infrastructure investment are paid.
A new senior living complex called Avemore south of the city on Highway 61, and the corridor expected to grow along the new North Bypass, are seen as the best opportunities for TADs, Barber said, but to make everything work, the city would need developers to invest $20 million per every $1 million put in by the city to get the land ready for development.
The combination of new homes, new industry and new development was calculated by Barber to raise the city’s tax digest from its current $1.75 billion to $2.5 billion.
The result of this 20-year project, Barber believes, will give the city sustainable growth, providing the revenues and tax dollars to pay for current and future needs. But the plan depends on some unpredictable factors, including continued health in a housing market that encourages building high-end homes, and the continued attraction of Interstate 20 to new industrial and commercial development.
It is not known how much of this plan will be reflected in the new budget that the council is debating. City leaders had to increase the millage rate just to offset the loss in revenue that the city has experienced this year due to the economic impact of COVID-19.
Council members are expected to complete work on the budget before the start of the new fiscal year in October.