BRADENTON, Fla. - Atlanta plans to do a debt feasibility study on the advisability of issuing $250 million of general obligation bonds for infrastructure improvements.
The city currently expects to schedule a referendum on March 17 to ask voters for permission to issue the debt in order to chip away at a backlog of capital needs estimated at nearly $1 billion.
"I feel that the City Council should be fully aware of the financial impacts of approving a bond issue of this magnitude," said Atlanta City Councilmember Felicia Moore, who introduced an ordinance requiring the debt study. "A financial feasibility or debt affordability study should be performed prior to the approval of legislation authorizing the bond referendum for the issuance of any bonds."
The council's finance committee approved the ordinance Sept. 24. It is expected to be approved by the full council on Oct. 6.
Paul Kwaw, interim treasurer, debt and investment director, told the finance committee that a financial advisor has already been engaged to prepare the study.
Moore said the study will provide a basis for measuring the impact of future debt issuances on the city's financial position, allowing policy makers to make informed decisions on financing alternatives and capital spending priorities.
The City Council is expected to decide Dec. 1 whether to authorize the referendum. In the interim, the council will also consider other reports, including the basis for creating bond capacity and the projects to be funded by the bonds.
Mayor Kasim Reed recommended the referendum, and has said property taxes will not be increased to issue the GO bonds.
He appointed a committee to examine waste and efficiency strategies to reduce city expenditures, and create bond capacity within the budget.
The council has yet to see what Reed will recommend.
Ideas suggested by his committee included directing tax revenue from new construction to capital needs, selling surplus assets, implementing risk management and safety improvements, and instituting performance-based budgeting.
Atlanta's general obligation bonds are rated Aa2 by Moody's Investor Service and AA by Standard & Poor's. Both have stable outlooks.