Brookhaven officials are discussing possibly using general obligation bonds or other debt financing to pay for more than $122 million in projects outlined in plans the city has adopted.
Assistant City Manager Steve Chapman said the bonds would be needed to keep from “nickel-and-diming forever” to pay for the projects.
“If we want to get everything completed in a timely fashion, we have to go into debt,” Chapman said in an interview.
At a Jan. 22 leadership retreat Chapman said a conceptual 10-year capital plan using available revenue sources shows the city would fall more than $70 million short in funds needed for completing major projects, such as those included in the Peachtree Creek Greenway Master Plan or Buford Highway Improvement Plan and Economic Strategy.
“Our revenue sources are about $94 million … and we determined there would be about a $70 million shortfall in projects” over 10 years, Chapman said. “We will always be working on the parks master plan every year. Bottom line, based on current funding sources, we will be working on these projects for the foreseeable future.”
Chapman explained that rising construction costs mean planned projects get more expensive the longer they are delayed. For example, when the Comprehensive Parks and Recreation Plan and Site Specific Plan originally was approved last year, it outlined projects expected to cost $29 million. Now the cost to complete the plan is expected to reach $35 million.
Also, President Donald Trump recently cut money from the Environmental Protection Agency, a funding source the city was counting on to help pay for the Nancy Creek Watershed Improvement Plan, City Manager Christian Sigman said in an interview.
Sigman and Chapman have proposed to council members that the city go to voters with a referendum for two bond issues that would raise a total of $63 million. The first, for $42 million, could go to voters in 2018 and yield funds in early 2019.
“We really put together a capital plan for discussion purposes,” Sigman said in an interview. “These are all policy decisions that need to be made by the council.”
General obligation bonds are not the only possibility for financing the major projects. Taking out other kinds of loans are on the table as well. “We can also hold bake sales every weekend,” Sigman said with a laugh.
The conceptual capital financing plan laid out for council members shows that through issuing bonds the city could complete projects in the Nancy Creek Watershed Improvement Plan by 2020; the Comprehensive Parks and Recreation Master Plan and Site Specific Plan by 2021; the Peachtree Creek Greenway Master Plan by 2023; the Buford Highway Improvement Plan and Economic Development Strategy by 2024; and the Comprehensive Transportation Plan by 2025. The long-term phases of projects in the Bicycle, Pedestrian and Trail Plan would begin in 2024.
The plan does not call for an increase in city taxes, Sigman said.
Messaging to voters will be key, Sigman said, and the hope is that getting shovels in the dirt sooner, rather than later, will provide an impetus for residents to support the idea. Brookhaven currently has no significant debt. Sigman also explained the city is establishing its credit rating with various municipal and state agencies.
City Councilmember John Park compared the idea of the city going into debt to pay for the projects to financing a house – people typically don’t pay cash up front for their house, and instead take out a loan, he said.
“In the long run, it is cheaper to finance than to pay as we go due to inflation,” Park said. “These are generational improvements.”
Councilmember Linley Jones said she’s still interested in finding other financing options, while Councilmember Joe Gebbia praised Sigman and Chapman for their conceptual plan.
“This is the type of management we need,” Gebbia said. “We need to be financing our developments in a responsible way.”
The $122 million in projects in master plans already approved by council include:
- Comprehensive Parks and Recreation Master Plan and
Site Specific Plan: $35 million
- Nancy Creek Watershed Improvement Plan: $19.5 million
- Peachtree Creek Greenway Master Plan: $35.1 million
- Comprehensive Transportation Plan (city’s match of state/federal funding): $7.5 million
- Buford Highway Improvement Plan and Economic Strategy: $13.6 million
- Bicycle, Pedestrian and Trail Plan (for the 5 to 10 year phases): $12 million