Barrow County SPLOST 2018 Citizen Committee Meeting October 17, 2016 Partnership and Collaboration for a Prosperous Community

Why Are We Here? “Meet & Confer” meeting with city officials held on June 29th County intended to call for SPLOST referendum this November. County unable to gain City of Winder’s approval for terms of an Intergovernmental Agreement (IGA) for 2018 SPLOST. IGA was necessary to continue the voter approved funding of 2005 General Obligation debt using SPLOST revenue. Citizen involvement and input is CRITICAL.

SPLOST 101 1% optional county sales tax used to fund capital outlay projects proposed by county and qualified city governments. Levied throughout the entire county and shared with participating cities. Tax collected on items subject to sales and use tax as well as on sale of food and nonalcoholic beverages which are not subject to State sales tax. In general, SPLOST can be levied for 5 year period (6 if county and cities enter into an agreement). Research indicates that approximately 25-30% of SPLOST receipts due to non-resident spending.

Capital Outlay Defined Major projects which are of a permanent, long-lived nature (i.e. land and structures). Chargeable to a capital asset account as distinguished from current expenditures and ordinary maintenance expenses. Includes without limitation roads, streets, bridges, police cars, fire trucks, ambulances, garbage trucks, and other major equipment Roads, Streets, and Bridges Category Acquisition of rights of way Construction of roads, streets, bridges Renovation and improvement of roads, streets, bridges Improvement of surface-water drainage Major equipment

SPLOST Historical Overview In 2005, County issued General Obligation (GO) Bonds in conjunction with voter approved 2005 SPLOST to fund the following projects: Criminal Justice Facility ($46,400,000)- Level One Courthouse Renovation ($4,250,000)- Level One E911 Facility ($1,500,000) Fire Station & Training Center ($2,500,000) Total GO bond debt service obligation at time of issue was $93,857,171 ($58 million in principal and $35,857,171 in interest). $43,165,544 has been paid as of 9/30/2016 ($22,135,00 in principal and $21,030,544 in interest). Intergovernmental Agreement (IGA) was reached resulting in 6-year collection period (July 2006-June 2012). Of $50,045,000 collected, $29 million was dedicated for the GO bond debt service.

SPLOST Historical Overview On March 15, 2011 the citizens of Barrow County approved the continuation of SPLOST. IGA executed in November 2010, resulting in 6 year collection of a projected $60,000,000. Among the projects approved by voters was payment of debt service of 2005 SPLOST General Obligation bonds (principal and interest) in amount of $27,900,000. SPLOST 2012 expires June 30, 2018. Outstanding 2005 GO Bond debt service on June 30, 2018 will be $41,093,163. Of this amount, $27,402,340 represents outstanding debt service for six year period July 2018-June 2024.

State Law: County SPLOST O.C.G.A. 48-8-110 to 48-8-122 Capital outlay project Qualified municipality (provide 3 of 12 specific services) Intergovernmental agreement (IGA) Formula for allocation of proceeds between County and Cities Referendum language State Department of Revenue’s fee (1% of receipts) Use of proceeds Reporting

“In addition to using the SPLOST to retire existing general obligation debt, a city or county may issue general obligation debt in conjunction with the SPLOST. Doing so will enable a local government to commence funding projects in anticipation of receiving SPLOST proceeds to pay the debt.” Source: SPLOST: Building for the Future, GMA Legal Report August 2012

Benefits of Intergovernmental Agreements (IGA) Collaboration and negotiation allows county and municipalities the opportunity to work on joint projects and those projects that will best serve the needs of all citizens. SPLOST can be imposed for a maximum of six years rather than five years, resulting in more revenue available for capital expenses and more projects being funded. Tax may be collected for full six years, regardless of when/if specific projects are fully funded at an earlier time. Excess funds could then be used to retire county debt or placed in County General Fund to roll back property taxes.

Legal Requirements for IGA County must reach a consensus with one or more municipalities within the county representing at least 50 percent of the county’s municipal population. Objective of the agreement is to specify how the SPLOST proceeds would be disbursed among the parties of the agreement and in what priority. O.C.G.A § 48-8-115 requires that the agreement address, at a minimum: Specific capital outlay project or projects to be funded. Estimated dollar amount allocated for each project from the SPLOST proceeds. Procedures for distributing SPLOST proceeds to municipalities. Schedule for distributing proceeds to cities that includes order or priority in which projects will be fully or partially funded. Provision that proceeds from the tax will be kept in separate accounts and used exclusively for the specified purposes.

No IGA: Population Distribution If no consensus reached, Method 2 is authorized by law. BOC may allocate SPLOST proceeds for the construction of county-wide projects “off the top” using 3-step process: “LEVEL ONE” Countywide project (courthouse, administrative building, county or regional jail, health department facility). Collectively may consume up to 100 percent of the total estimated SPLOST revenues. Allows for renovations to existing facilities, debt repayment on existing facilities. If no LEVEL ONE projects are selected, select LEVEL TWO Countywide project(s). No more than 20 percent of total estimated SPLOST revenues may be allocated Allocate remaining proceeds based on population. Pro rata based on population, county share = ratio of unincorporated relative to total county population

Level Two Projects Capital projects which provide benefit to entire county (other than Level 1). Maximum of 20% “off the top.” May also be used for renovating existing facilities, debt service on existing facilities, and furnishing/equipping existing facilities. Examples: Recreational facilities/athletic fields Civic/cultural arts centers

Prorated Population Calculations Based upon most recent U.S. Census (2010) County Allocation Unincorporated population of 44,241 Total Barrow County population of 69,367 County allocation is 44,241/69,367 or 63.78% Municipal Allocation Auburn 6,678/69,367 or 9.63% Braselton 1,085/69,367 or 1.56% Bethlehem 601/69,367 or .87% Carl 255/69,367 or .38% Statham 2,408/69,367 or 3.47% Winder 14,099/69,367 or 20.33%

SPLOST’s Community Impact Property tax avoidance SPLOST funds critical capital needs otherwise funded via Ad Valorem taxation. Road construction/improvement/maintenance Sheriff/Fire/EMS vehicles and equipment Water and sewer infrastructure Reduction of debt obligation 25-30% of SPLOST receipts result of non-resident spending Quality of Life projects Valuable amenities enjoyed by entire community Recreational facilities Cultural Arts Economic benefits Business recruitment and retention Tourism revenue (retail spending, hotel occupancy, etc.)

2005 GO Bond: Millage Impact Annual GO Bond Payment Total Debt Service Mills Required ($1,657,306 per mill Fiscal Year Principal Interest 2019 $3,725,000 $826,671 $4,551,671 2.7464 2020 $3,835,000 $737,841 $4,572,841 2.7592 2021 $3,925,000 $646,661 $4,571,661 2.7585 2022 $4,020,000 $553,307 $4,573,307 2.7595 2023 $4,110,000 $457,780 $4,567,780 2.7561 2024 $4,205,000 $360,079 $4,565,079 2.7545 2025 $4,305,000 $260,086 $4,565,086 2026 $4,405,000 $157,744 $4,562,744 2.7531 2027 $4,510,000 $52,994 $4,562,994 2.7533 $37,040,000 $4,053,163 $41,093,163

SPLOST 2018 Revenue Estimate National GDP growth (2016 to 2018) projections of 2.2% to 2.3% and Terry College of Business projection of Georgia’s GDP being 0.8% higher in 2016: $66 million over six year collection period (IGA) After the GO bond debt requirement ($27,402,340) is met, SPLOST funding for other projects is projected to be $38,597,660 $56.6 million over five year collection period (no IGA)