Faced with a budget shortfall of $140 million, Atlanta has scrambled to close the gap to $40 million by eliminating more than 1,400 positions, boosting property tax revenue by $40 million, and proposing $57 million in spending cuts for fiscal 2009.

These measures cut deep, Mayor Shirley Franklin has said.

"We are now cutting into what we believe is the bone," Franklin told the Atlanta Journal-Constitution in early December.

Spending is projected at $639 million for fiscal 2009 - up $14 million over 2008 - with revenue anticipated to total $499, leaving a $140 million shortfall.

To address this, the city is doing some slashing. Some 788 general fund positions were eliminated and 616 were transferred, resulting in a 21.4% workforce reduction. The city also plans to reduce its contribution to employees' health care plans from 77% to 70%.

More than $15 million in new revenue initiatives are also part of the plan, including $4.6 million from leasing 200 additional jail beds, $2.6 million from increasing fines for municipal code violations and traffic offenses by 20%, and $2.3 million in new plan-review fees. Another $12 million is expected from increases in the commercial property tax base.

"Atlanta certainly is not the only governmental entity facing substantial operating gaps," said Alicia Stephens, ratings analyst for Moody's Investors Service. "The city has been very effective with regard to identifying challenges. They've already demonstrated a very strong willingness to make hard decisions up front in an attempt to close the gap."

In the last of a series authorized in a November 2000 referendum, the city in February 2008 issued $36.8 million of general obligation public improvement bonds. The deal included $13.5 million for sidewalk design and construction in public housing developments and throughout the city; $5.7 million for green-space enhancement; $13.8 million for bridge, bicycle route, and signage projects; and $3.9 million for crosswalk projects, parking meters, school signage, and traffic control devices.

Moody's assigns Atlanta a Aa3 rating with a stable outlook. Standard & Poor's rates the city AA-minus.

In addition to this debt - and an annual general obligation bond issue of about $8 million - officials expect to issue during the next two years $41.3 million in general improvement bonds, $600 million for water and wastewater system improvement, $200 million for various redevelopment projects, $23.5 million for a multi-story parking facility, $35 million for workforce housing opportunity bonds, and $50 million for a public safety headquarters facility and parking deck.

"In terms of their general obligation debt, we continue to consider their debt position as being manageable. One of the benefits to the city's debt load is that they have self-supporting debt enterprises, which support the majority of outstanding debt," Stephens said. "At this point we don't see any immediate risk."

Atlanta also is working to fund the ambitious BeltLine project, a $2.8 billion redevelopment plan that aims to revive a 22-mile railroad corridor as an alternative to continued sprawling patterns of development in the region. The city has had a $120 million tax allocation bond issue on the calendar for the project since late last year. Wachovia Bank is lead manager with First Southwest Co. as financial adviser.

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