Goodbye to garage debt
Summerville’s finance committee voted Tuesday to rid the town of parking garage debt.
Using $3.5 million from the hospitality tax fund balance means the town will save $700,000 in interest, but it also means it will have just barely enough to fund tourism-promoting nonprofits and not much else.
Council members were so relieved to be rid of the parking garage debt, though, that they said it was worth it.
“Knew it was going to be a tight fit,” Councilman Bill McIntosh said in an email. “(The fund) has enough to do what it has to do.”
The parking garage was financed with a 15-year, $4.9 million bond in November 2006.
At this year’s budget retreat, council asked staff to look into paying off the bond.
Tuesday, the finance committee got a spreadsheet showing it had enough money in the fire impact fee fund and the hospitality tax fund to pay off the garage, pay for the new Butternut Road fire station, and have approximately $1 million remaining in hospitality taxes in July 2013 after the last fire station payment.
After the Journal Scene pointed out a subtraction error that meant the town would actually have $173,261 in hospitality taxes in July 2013, calling into question whether the town could fund outside nonprofits with the same $335,000 it gave last year, town staff said the math would still work.
The revenue projections for incoming hospitality taxes are “ultra-conservative,” Finance Director Belinda Harper said.
Further, the spreadsheet conservatively assumes the town receives no further fire impact fees.
If more impact fees came in, they could be put toward the cost of the fire station, freeing up hospitality tax funds.
Currently, the $1.27 million fire station is expected to be funded through $368,166 in fire impact fees and $903,834 in hospitality taxes.
The town still plans to make the same distributions to outside nonprofits, Harper said.
The biggest beneficiaries of the fund this year were the Chamber, DREAM, the YMCA Flowertown Festival Run, Sculpture in the South and the Summerville Community Orchestra.
McIntosh said any funds from the sale of the Berry House would go back into the hospitality tax fund, further boosting the bottom line.
When and for how much the Berry House sells, though, is in the hands of willing buyers. The house is currently listed at $419,000. The town bought it for $700,000 in 2008.
Councilman Bob Jackson said knowing of the subtraction error earlier wouldn’t have changed his vote, because he feels compelled to be conservative with taxpayer money and save the $700,000 in interest payments.
“I'm not comfortable with how we have depleted reserves in general without a long term plan,” he added.