Instead of the $35 million bond deal that the council agreed last week to send before voters, Mayor Steve Tumlin said Friday that the 2-mill increase would actually raise about $68 million.
A mill is $1 for every $1,000 of assessed property value.
Tumlin said the original amount was based on estimates by city staff when the bond issue was first being discussed, but a much larger number was given to him Thursday after an independent firm did a tax assessment.
Tumlin said his desire to move the bond to the next stage and approve the $35 million amount was a mistake on his part.
“It’s my fault,” he said.
Tumlin said there is no check list, besides what is in his head, on each step to take when instituting a government obligation bond, especially one that does not yet include specific construction plans for each project.
The miscalculation means the council’s June 12 approval of the bond language as it will appear on the Nov. 5 ballot must be rescinded. A new vote of the council will be needed in order to finalize the ballot initiative.
The issue will likely be a hot topic of debate at the council’s next meeting Wednesday at 5:15 p.m.
Tumlin said he has no regrets about the earlier “conservative” estimate that guided the redevelopment projects discussed by the City Council.
“It made us tighten our belt from the get-go,” Tumlin said.
At the June 12 meeting, the funding for a Lemon Street School project was stripped from the bond project and council members also denied residents’ requests to improve Allgood Road.
Tumlin said there are community needs that weren’t possible with $35 million, but the extra cash has broadened the possibilities.
Tumlin said he is “very open to looking at needs all over the city” that fall within defined redevelopment areas.
Lewis agreed, and said more money means there is a better chance to impact the community in other areas that are blighted.
Both Tumlin and Lewis said they have talked to many concerned citizens who do not feel the $35 million is enough to make the Franklin Road project successful.
Tumlin said he would like to take advantage of the whole $68 million, or an amount between $55 million to $60 million.
But the public debate could frame that as “needy,” Tumlin said.
Public speakers at City Council meetings have stated the Franklin Road project is a gamble with a large amount of money. No one knows for sure if the investment will pay off in an economically better corridor.
“Some might say stay at $35 million and let it ride, but I don’t like to leave money on the table,” Tumlin said.
The redevelopment bond has to be passed by voters with a finite dollar amount, and the property tax increase is based on meeting that sum, Tumlin said.
Tumlin said the goal was to keep the taxation rate at 2 mills for 20 years.
If passed, the new tax would go into effect as another 2 mills expires on a bond that funded the Marietta City High School auditorium, resulting in a “revenue neutral” situation.
The PFC Group, financial consultants working on behalf of the city on the bond issue, almost doubled the amount that could be raised at the 2-mill rate.
“I never dreamed that 2 mills would bring $68 million,” Tumlin said.
Tumlin said the new amount is still based on fluctuating interest rates and speculation in the bond market.
The financial report delivered to Tumlin on Thursday stated that $5 million would be collected each year, and with interest rates averaging around 4 percent, the total interest paid on the bond over the 20-year term would be $32 million.
The total cost of the bond including principal and interest payments would be $100 million over 20 years.
Tumlin said each member of the City Council was sent an email Thursday with the financial statements on the difference between the bond estimates and his request to discuss the matter Wednesday.
Councilwoman Annette Lewis said she would not weigh in before Wednesday’s council meeting.
“I would rather wait until we are all sitting down and talking about things,” Lewis said.
City Attorney Doug Haynie said the new estimate will not legally require any more public hearings about the bond issue, but the council could decide to call one.
Lewis said although there may not be a public hearing, “there will be time for public comment” during the regular council meeting.
Haynie said the latest possible date the council could adopt the bond resolution, or the last chance for any changes, would be at the Aug. 14 meeting.
That would be the city’s final opportunity to meet the federal deadline to have the wording of the referendum approved 60 days before the Nov. 5 election, Haynie said.
Tumlin said he thinks the council will still reach a consensus on a final figure and the bond referendum will be on the November ballot for voters to decide.
“Worst case scenario,” if the council decides to keep the amount at $35 million, it would lower the tax rate needed for the bond, Tumlin said.