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Loganville returns $88K in SPLOST funds
Published January 15, 2010
LOGANVILLE — The city has agreed to return $88,140 in Special Local Option Sales Tax funds from the current SPLOST to Walton County.
According to City Manager Bill Jones, the move won’t have any impact on the budget since the money was sitting in an account waiting to be allocated. It will simply be signed back over to the county. The money was given to the city based on projected figures that didn’t quite materialize. All the cities in Walton County that received SPLOST money against these projections were asked to reimburse the county for the portion that was over-estimated. Jones said when the money was allocated, it was done based on relatively conservative estimates. However, nobody expected the economic situation that occurred at the end of 2008 into 2009 accounting for such a significant drop off in sales tax revenue.
According to a letter sent out to all the cities from the chairman of the Walton County Board of Commissioners, the balance in the sinking fund as of Dec. 7 was $8.7 million, leaving an estimated debt service shortfall of $1.2 million. Loganville’s portion of the shortfall amounted to $88,140.85.
In terms of the intergovernmental agreement between the county and the cities, these proceeds were apportioned based on sales tax percentage.
Each city was requested to make up its portion of the estimated debt service shortfall and Loganville chose to make the payment from its bond proceeds. Mayor Ray Nunley said returning the money was simply the right thing to do.
“These funds were given to us in good faith and it is up to us to return them in good faith,” Nunley said, adding he didn’t believe it was a temporary thing and he wasn’t expecting the funds back. “Any city that received funds through the SPLOST would have been asked to do the same thing.”
Nunley said at this point the city hadn’t received any similar request from Gwinnett County. Jones said the system with the Gwinnett County SPLOST was different in that the funds for SPLOST were not bonded.
“We get a check from the county every two weeks on the SPLOST money based on a percentage of intake,” Jones said. “So if the intake is down, the check is less — you feel it immediately.”
Jones said although the city isn’t looking for those specific funds back, in the event the sales tax income situation turns around it is hoped the money gets put back in the bank.
Walton County, as is Gwinnett and most other municipalities in the state and around the country, is struggling to deal with budget constraints as a result of income shortfalls. Commissioners last week were forced to cut $1.5 million from funding for capital outlay projects and noted SPLOST collections are a good indicator of what can be expected from the Local Option Sales Tax.
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