Officials optimistic about new Macon-Bibb government finances

pramati@macon.comDecember 12, 2013 

Incoming members of the new Macon-Bibb County consolidated government got a full briefing Thursday about the new government’s projected finances, which experts say are mainly positive.

Representatives from the University of Georgia’s Carl Vinson Institute of Government and the Richmond-based financial firm Davenport & Co. told officials what to expect with the new government’s bond rating, budget, capital improvement plan and revenue projections.

Trying to digest so much information, Macon Mayor Robert Reichert quipped, was “like trying to take a sip from a fire hose.”

Walter Goldsmith of the Davenport Group said it’s possible the new government could receive a higher AA bond rating, similar to what Bibb County has now, instead of the city’s A bond rating. The higher the rating, the lower the interest rates the government would pay when bonds are issued for projects.

Goldsmith told officials the new government compares favorably financially with the other three consolidated governments in Georgia of comparable size: Columbus-Muscogee County, Augusta-Richmond County and Athens-Clarke County. In addition, the new government also stacks up well in comparing fund balances of other cities and counties with populations between 100,000 and 300,000.

Goldsmith said he thinks the city’s bond rating is underrated because of a low fund balance in 2009, but a look at the new government’s combined fund balance should impress bond rating services such as Moody’s and Standard & Poor’s.

“Do we look like a AA county?” Goldsmith said. “I think we fit in nicely with the other consolidated counties.”

While the new government will inherit a “fair amount” of outstanding debt, Goldsmith said, he doesn’t think it will be enough to hurt the bond rating.

Goldsmith recommended that the government take a proactive approach by reaching out to the bond rating services and make its case for an AA rating. The bond services typically take 10 to 14 days to decide, he said.

Carl Vinson Institute officials showed what the combined budget of the city and county will look like for the remaining six months of fiscal 2014, which ends June 30.

The city and county created separate budgets designed to operate the government over the six-month period, and the institute combined those two budgets to account for all of the departments that the new government will operate as part of consolidation. The budget will be about $137.5 million for the remainder of fiscal 2014.

Carl Vinson’s Paula Sanford said a lot of the work included closing certain accounts that no longer will be necessary in the new government because some of the government offices have been restructured in a new organizational chart. In addition, some of the money the city and county have paid each other as part of the Service Delivery Strategy will go away Jan. 1.

For example, the city pays the county $80,000 a year to house inmates in the jail. That payment will no longer be necessary.

Reichert noted the new government must pass the new budget as soon as the new government takes office.

“We’ve got to have something to start with so we can have something to amend,” Reichert said.

Laura Mathis, deputy director of the Middle Georgia Regional Commission, noted to officials that the new budget must be in place Jan. 1. The Regional Commission has been engaged by the Consolidation Task Force to assist with the merger process.

Carl Vinson Institute representatives also discussed the merging of city and county capital improvement plans, which includes spending on properties and equipment.

Officials also received a mostly positive revenue projection for the new government, which is important because the law mandates a 5 percent budget reduction for fiscal 2016-19.

Carl Vinson’s Chris Pike warned officials that his report is similar to a weather forecast, and many variables could change the outlook. Some sources of revenue, such as franchise fees from utility companies, must still be negotiated, for example.

After the meeting, Commissioner-elect Elaine Lucas said she is pleased the new government could get a higher bond rating than the city. She said officials must remain cautious because of the 5 percent cuts they will face.

“I think we’re headed in the right direction,” she said. “It’s a tremendous task, but we have to do this. There’s a lot of work to be done.”

Reichert said he was encouraged by the meeting and praised the effort to combine the two governments’ budgets into one.

“It’s a road map which will guide us,” he said. “I’m very optimistic that we’ll have a more efficient government, a more effective government and a more equitably framed government. We all recognize that we’re all in this boat together and that we have to row in the same direction if we’re going to move forward.”

To contact writer Phillip Ramati, call 744-4334.

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