Key points:
• The Norcross City Council discussed financing the new $26.9 million public safety building, set to be completed in mid-August, through a bond issuance.
• City officials and an external financial adviser discussed a plan to borrow $6 million, setting up an annual debt payment of around $500,000. The vote is on April 6.
• Norcross officials expressed concerns about potential revenue decline as a result of state legislation affecting homesteads and property taxes.
The Norcross City Council discussed financing the construction of the new, $26.9 million public safety building at Buford Highway and Stephens Road during its March 16 policy work session.
In early March, elected officials approved the transfer of $5 million from an electric authority (MEAG) trust fund to provide cash flow for the project and drive down borrowing costs.
While no action was taken at the work session, elected officials seemed to agree that the best course of action was to commit $20 million in existing funds to the project and borrow $6 million over a 20-year term.
Construction on the Norcross Public Safety Building is on schedule, city officials stated in a March 6 progress update. Completion is slated for mid-August, with about half of the project cost already expended.
In March, contractors began drywall installation inside the building, while exterior brickwork and window installation continued to move forward. The city says interior mechanical, electrical, and plumbing work are progressing steadily, with some paving already completed.
Paying for public safety building
Finance Director Jon Robinson said the city used several funding sources for the project, including revenues from RedSpeed school zone cameras, 2023 SPLOST dollars, and the city’s main operating fund.
“These funds were intentionally used to reduce the amount the city would need to borrow and to help minimize long-term financing,” Robinson said. “We’re now asking to secure some remaining funding necessary to ensure that the project continues to be on schedule or completed as planned. This approach, hopefully, will help us lower the cost.”
Ed Wall, the city’s financial adviser and managing director of government at Pipe Sandler, said the city’s estimated annual debt payment ranges from $455,000 to $515,000, depending on its final approval and closure.
“You can carry it 20 years if you need to,” Wall said. “If things go great, and you do build up cash balances, you can pay it off early after five years from a prepayment bill. I’ll send the bids out to about 50 Georgia banks … it’ll take about two weeks.”
Initially, council members discussed financing more of the project or borrowing more money for construction, in order to keep more cash on hand amid a city revenue crunch. After Wall told them the annual payment would double to about $1 million, elected officials opted for the $6 million in bond financing over 20 years.
At the end of the discussion, elected officials said they would revisit it if future revenue projections change. The bond financing is set for a vote on April 6.
Potential property tax changes
The Georgia General Assembly, scheduled to adjourn on April 2, is considering legislation that could reduce the city’s speed camera and property tax revenue, depending on which versions are signed into law.
A property tax reform bill has cleared the state House of Representatives and awaits approval in the Senate. House Bill 1116 would cap increases to property taxes at 3% annually for all property types, including residential and commercial.
The bill also includes protections against retroactive assessments and ways for local governments to increase sales tax revenue. It’s focused on restraining property tax growth and providing homeowner protections.
Wall said an earlier version of the bill, tied to a constitutional amendment, failed. It would have eliminated all local property taxes on primary residences, or homesteads, by 2032, with larger exemptions and a shift to sales tax revenue.
“All the homestead exemption stuff that took … money away from you without the ability to replace it, that’s gone because the constitutional amendment didn’t pass,” Wall said. “If you adopt a millage rate that’s more than 3% or inflation, whichever is higher … you have to submit that millage rate to your voters for a referendum … if we have a recession or if your tax digest falls out, you don’t have the room, so you have to lay off police officers … or you’re going to have to put it to the voters.”
Wall said the current bill includes a “straw poll” on November ballots, gauging voters’ desire to eliminate all local property taxes for homestead properties.
Projected city revenue decline
City Manager Eric Johnson said he is concerned about legislative actions affecting the city budget during his report to the council. He said they will discuss how to balance the fiscal year 2027 budget during April’s policy work session
“I’m trying to minimize how much you build into the next 20 years’ worth of budgets because the legislature is looking at opportunities to make balancing future year budgets more difficult,” Johnson said. “Half a million dollars is a heavy lift for us to absorb in the future, and with the cash flow we have, if RedSpeed [funding] lasts one more year, we will have the cash in the bank to help you make that $0.5 million debt payment for the next three years.”
Mayor Craig Newton said city officials have a duty to notify and educate residents if significant revenue impacts clear the legislature, which could jeopardize police funding and other city services.
“The Gwinnett Municipal Association is considering lobbying the state legislature,” Newton said, mentioning a meeting earlier that day. “We’re going to work hard to curtail this if we can.”
