Valdosta Mayor John Gayle asked The Valdosta Daily Times to print the following letter to the citizens of the community. His letter appears today in its entirety, with no editing.
To the Citizens of Valdosta and Lowndes County,
Much has been written lately about the management and finances of the City and the issues we have with our Withlacoochee Wastewater Treatment Plant. In the limited space I have I feel it is of the upmost importance for me to provide you with the facts about these issues.
First and foremost, the City is in good financial shape. We have assets of $304.5 million and $69.2 million in debt. In accounting terms that is a 4.4 to 1 ratio, which is strong. Secondly, the City has never been late on any loan payments to the Georgia Environmental Facilities Authority (GEFA). The City enjoys an excellent working relationship with GEFA and according to GEFA staff member Mr. Shane Hix, “the City of Valdosta is and has always been one of our best customers.” The City has no General Obligation Debt. We run the day to day operations of the City on the revenues and fees we collect for our services. This in itself is an indication of how well the city is professionally and financially managed. The city has been run in a fiscally sound manner. Since the inception of the SPLOST, the City has collected approximately $178 million in proceeds. During that same time period, the City has expended more than $158 million on water and sewer projects.
Since 1995 we have continually lowered the property tax millage rate keeping your property taxes one of the lowest in the state. Your water and sewer rates are the second lowest in the state for comparable size communities and utility systems. A Master Plan was adopted by the Mayor and City Council in 2006 to address and update the needs of our wastewater treatment plants and sewer lines and the 6000 manholes in the city. That plan was being followed when the flood of 2009 seriously impacted our community. This was a presidentially declared disaster and because of that, the City was informed of our eligibility to apply for federal funding to address the damage from the flood event. The City navigated through state and federal agencies with their direct guidance for more than three years until last August we were denied any federal funding to address the serious damage to the Withlacoochee Wastewater Treatment Plant. This plant, which was built more than thirty years ago, was appropriately designed, located and permitted per all regulations and
requirements at that time. At that time, it was a state-of-the art facility and was built and later expanded to have sufficient capacity to address existing utilization and projected growth. It still has twice the capacity needed to handle two-thirds of the wastewater treatment needs of our community. Due to the impact of development in our region and north of our community we are the recipient of all of the rainwater that flows south from a 1500 square mile drainage area. As a result of the 2009 event, it was determined our wastewater treatment plant is now located in 100-year flood plain.
The City of Valdosta is fully committed to address the issues that we have the ability to deal with locally to include significant improvements to the wastewater transmission lines to the plant and the construction of a new plant outside of the flood plain. We have estimates that it will cost approximately $55 million to construct these projects. The question now is how to pay for these necessary infrastructure projects. In order to fast track all of this construction the City continues to work with GEFA to pursue immediate funding so that the projects may commence upon completion of the necessary design work. We are expecting completion of the plans for the new transmission line soon and the project will be bid this summer. As with any loan, it must be repaid. We feel that the most fair revenue source to repay the loans for all concerned is to continue the existing SPLOST tax. Of the amount of the SPLOST the City will receive, approximately 70% will be committed to financing and funding these critical infrastructure projects. We are fortunate to have a good working relationship with the Lowndes County Board of Commissioners that assisted us in negotiating the allocation of SPLOST funds to the City of Valdosta. Both the City and County heard from our citizens at the last referendum and we both removed several significant projects in order to accommodate the distribution of funds. We are predicting that the receipts from the SPLOST VII tax will be $150 million over the six-year referendum period, of which $80 million of the proceeds will be allocated to the City. With these proceeds we will be able to fully fund these critical infrastructure projects. We also have other capital needs that must be addressed to include road, sidewalk and drainage projects. The City has also proposed funding on the SPLOST project list to ensure these projects have allocated funds, as well. I want to remind everyone that we are asking for our citizens to continue this existing one penny sales tax so that the local governments in Lowndes County have the necessary funds to continue to address important infrastructure projects.
It has been stated that we do not have a plan in place in the event the SPLOST referendum does not pass in November. At that point, the City would have several options; a Municipal Option Sales Tax (MOST) referendum, or to increase property taxes and utility rates to significant levels. This could have far reaching impacts on the continued economic growth of our community. We are fortunate with the sales taxes collected in this community that over 50% of the proceeds come from residents and visitors from outside of Lowndes County. I hope the citizens of our community understand that raising property taxes and utility rates to that level would have a significant impact on all of our property owners, renters, residents and businesses. We would bear 100% of the financial burden to fund these projects.
In closing, I want to again reassure the citizens of our community that we are prepared and committed to address the issues before us and we hope to move beyond any conflict and implement the solutions we have planned. We know the citizens of this great city will support us in these efforts.