Anyone Have a Penny? We Need to Build an Empire!

Anyone Have a Penny? We Need to Build an Empire!

One penny here, another penny there. Here a penny, there a penny, anybody got a penny?

 

When I was little, my father use to sing this crazy little song that went something like this:

Christmas is A’coming, and the geese are getting fat
Put a penny in the old man’s hat
If you ain’t got a penny, a Hay Penny will do
And if you ain’t got a Hay Penny, then may God bless you!

 

The way government seems to think they can vote themselves more money by charging us “just a penny” I sure do wish we could find a lot of those Hay Pennies to send our elected officials.
Here in Hall County and in several other places in our state, we have a SPLOST vote coming up on Tuesday, March 17. Early Voting has already started. SPLOST is a Special Purpose Local Option Sales Tax. Essentially it means the government needs more money to do some projects they can’t fund using money we’ve already given them or will in the future. But it’s only a penny. A penny on everything you buy. Don’t forget the ESPLOST. That’s a special tax for education. And it’s a penny too. But only a penny, so don’t worry. A penny on everything you buy. Because the dollars you already pay for education through other means aren’t enough. So a penny. Every time you buy something.
Bringing this SPLOST a little closer to home, let’s look at how the city of Flowery Branch wants to spend the $4.27 million dollars it will get if the penny tax passes. By the way, that’s a lot of pennies!
Here’s the list of how the city will spend its SPLOST money over five years:
$1.62 million for buildings (most of this is for a new City Hall)
$1.31 million for water and sewer infrastructure
$1.11 million for road improvements
$231,000 for new police cars
The largest allocation goes to buildings. Buildings. What is this fascination the city government of Flowery Branch has with buying buildings? The city already owns almost every building on Main Street and has invested a lot of money in downtown real estate. The city voted to spend $400,000 for a building in 2009. An interesting note about that purchase involved the lack of a competitive appraisal to arrive at the purchase price for the building. The purchase was also approved at the same meeting where city employees were placed on furlough! You can read about it here.
One issue I have with the buildings owned by the city is confidence that Flowery Branch is properly managing the buildings they already own. Knowing we had a vote coming up for SPLOST and the city was asking to allocate a sizable portion of those revenues for another building, I requested lease documents for two buildings the city currently leases to private businesses located at 5509 and 5511 Main Street. I wanted readers of The Truth to see how the city has been managing those buildings. As a little history, the city originally purchased these buildings in February 2008 at a cost of $300,000 which you can read about here.

 

Are you keeping count? We’re up to $700,000 in building acquisition costs in just 15 months. Our economy certainly wasn’t blazing a spectacular path during that time.
What I found in the lease documents doesn’t seem to add up. And unfortunately, there seems to be very little discussion in the City Council minutes about these leases that would explain some of the discrepancies I found. There’s coverage in the minutes when the initial leases for the buildings were signed in August and September 2010 and a renegotiation of the 5511 building lease in October 2011 but nothing substantive after that despite the lease at 5511 being renegotiated a 3rd time in October 2012 and a new tenant being signed to the 5509 building in December 2013. You can view minutes of the City Council here.  The lease for the new tenant at 5509 Main Street is briefly discussed in the December 2013 minutes after the council returns from Executive Session but lease terms are not disclosed and there’s certainly no explanation for the discrepancy between rents.
Essentially what I found is that the building at 5511 Main Street has been rented at or below $250 a month to a private business for roughly a 60 month or 5 year term. This is a substantial reduction from the original lease terms in 2010 which were structured quite differently to increase to as much as $700 by Year 3 of the original lease. You can view all the leases for 5511 Main Street that I obtained by paying for an Open Records request here:

(1) Original Lease: 09-27-10 FBK Lease

(2) Amended Lease: 10-01-11 FBK

(3) Current Lease for 5511 Main Street: 10-31-12 FBK lease

 

The real problem, however, may be the city owned building at 5509 Main Street. According to the terms of that lease which was initially signed in December of 2013, the building is being rented under a similar 3 year tier structure but unlike the rents for 5511 Main Street, the rent does change each year and it is at a substantially higher rate. You can read that lease here: 5509 Main St Lease

 

The first year rent starts at $500 a month, moves to $600 a year for the second year and in the final year of the lease, ends at $700 a month. Over the course of the lease terms, the business at 5509 Main Street will pay quite a bit more per month to lease the space than the other private business at 5511 Main Street.
If 5511 Main Street is being rented to a private business at $250 a month but 5509 Main Street is being renting to another private business at $500/$600/$700 a month over essentially the same period, why is there such a substantial difference? On the surface, there would seem to be very small differences between the two buildings that may not add up to the differences in the two assigned market rates. Perhaps market rates are not the basis for how the council set the lease rates for the two buildings. So far, a lot about the management and leasing of these two buildings seems to have gone unexplained in public forums.

 
And therein is the central problem I have with sending “only a penny more” to our local governmental entities. I don’t necessarily quibble with some of the projects that need to be funded with SPLOST, particularly some transportation projects and larger scale infrastructure needs. But presently at all levels of government, we severely lack the transparency and accountability we need to feel confident our money is going to be spent correctly, efficiently and wisely. Least of all that we’ll be guaranteed an explanation as to why or how the funding decisions are being made. Ultimately, we have a trust issue. Do you trust your government to be sage and efficient stewards? After all, it’s just a penny.

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