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LCDA: Annual tax revenue up so far

From July 1-Sept. 30, entity received $145K in taxes, up from $114K in same 2010 span

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POSTED: October 5, 2011 9:19 a.m.

Though the budget for its 2012 fiscal year was adopted in July, Liberty County Development Authority board members gave the August financial statement close scrutiny during a Monday meeting.

During the financial statement presentation, board member Paul Krebs scrutinized the revenue and expenditure items and asked the authority’s director of finance, Carmen Cole, to explain multiple lines.

Krebs asked Cole to explain the principal and interest on the group’s $25,177,965.38 debt restructuring plan, which was finalized in June. According to previous Courier reports, board member and County Commission Chairman John McIver requested to see monthly financial reports when the restructuring details were discussed.

Currently, the authority is making monthly payments toward a $199,810 SunTrust bond principal that is due by the close of the fiscal year, Cole said. If revenues are up after the first of the year, the LCDA also has budgeted to make payments against two other bond principals that have a three-year window before the payments are due.

“It’s already in the budget — we budgeted $200,000 for principal against (bond) A2, and then $335,000 against (bond) C, which is one-third of the million dollars that we had agreed to pay,” Cole said. The issuance costs for the bonds have already been paid, she added.

“I know a lot of these are balloon notes, and maybe we don’t need to be concerned with what happens five years down the road — and I’m not at this second — but I am concerned about this amount of money here based on the revenue that we anticipate … I know you’ve figured this out, but I myself have a hard time believing that we’re going to be able to balance this budget,” Krebs said.

“Well, this year, this budget was balanced,” board secretary Brian Smith said. “Next year, as we have said in our prior discussions, we feel like next year will be our most critical of years, and then it gets actually a bit better.”

Smith then asked whether the authority’s tax revenue was projected to be greater than the year previous, and Cole responded that they budgeted slightly below the amount they received last year to keep the number stable.

“I can tell you that we have already received more than we’ve typically received to this date in prior years,” Cole said. From July 1 through Sept. 30 in fiscal year 2010, the LCDA received $114,852 in taxes, while they’ve received $145,671 during the same time span this year.

“It sounds to me like based on more current information that we received, you know, with the city setting their budget, they’re anticipating that their revenues will be up,” Smith said.

“If the city goes up 5 percent and the county even stayed level, guess what — we’d go up,” Smith said. “So it looks like that revenue may actually be a little higher, which is great — that’ll help us with some of this money that we said we’d like to pay.”

But the county finance officer, Kim McGlothlin, explained that while the city may have an increase in tax revenue, the county and LCDA may not.

“In the past, the county has experienced an increase in the gross digest, but because the exemptions have outpaced the growth, the overall impact has been a decrease in the net digest,” she said.

“The number and type of exemptions that apply to county taxes do not apply to city taxes,” McGlothlin said. “For that reason, I would not compare the two.”

The LCDA has the same exemptions that the county has, and depending upon net digest value, their revenue in property tax could fluctuate from year to year, she added.

Just as city departments have been asked to cut their budgets by 10 percent, board member and state Rep. Al Williams, D-Midway, recommended that the board agree to cut a certain percentage from its budget when planning for fiscal year 2013.

Currently, the LCDA is streamlining expenditures, Cole said. They are planning to accept bids for general insurance to replace the current annual $65,000 policy through Travelers Insurance.

In other news, LCDA CEO Ron Tolley announced that the authority received a $417,286 Department of Community Affairs Employment Incentive Program grant for Firth Rixson infrastructure improvements. To meet the grant criteria, 51 percent of the company’s 204 jobs created must go to low- or moderate-income candidates, such as those who previously were unemployed or who met specific income thresholds. The authority placed the funds into a letter of credit until the two-year grant period is over and the state makes a determination about the company’s eligibility, at which time the money will either be released or paid back to the state.

 

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