During a city council meeting earlier this month, Councilman Phil Boyum said a project on the Blue Mile was not feasible and was a terrible investment before making a motion to approve additional funding for the project because “he believes in it.”
The comments followed a request by staff for the city to approve federal grant funds which require a match of ~$500,000 for the development on the Blue Mile. City Manager Charles Penny told council the request for acceptance of funds was for ‘the park side’ as opposed to the ‘creek.’
FROM THE COUNCIL PACKET: Governor’s Office of Planning and Budget accepted applications for grant funding to support Improving Neighborhood Outcomes in Disproportionally Impacted Communities by providing an opportunity for local governments to invest in neighborhood features, including parks, recreation facilities, sidewalks, and healthy food access, that can work to improve physical and mental health outcomes. Allowing people access to nature, including parks, has been connected to decreased levels of mortality and illness and increased well-being. Grant awards may be made up to up to $ 2,000,000 per project. Development of or improvements/maintenance to parks or recreational facilities are eligible in Qualified Census Tracts (QCT) in Georgia which a majority of the COTBM project is within the Statesboro QCT. The goal of the Project is the development of a linear park along the creek and tributary to provide pedestrian connectivity, create economic development opportunities, and promote recreation. This award is for construction funds only in the amount of $2,650,000 (80% federal: $2,120,000 & 20% local match: $530,000). Local match will be provided by the existing GEFA loan for the project.
During discussion, Councilman Boyum posed a question to the city manager about the obligations for the city in seeking the funds. “What are we obligated to do with the funding?” Boyum asked.
“It’s to improve the park. It’s for land. And I’m gonna tell you, whenever those elements of the park, that’s what these funds have to be used for. It’s not inside the ditch. It’s for whatever the improvements to that park would be,” Penny told Boyum.
Boyum then pressed Penny on the fact that the improvements themselves have not been determined because the city is still
“We put together some elements of what would be included in the park,” Penny said, “but that has yet to really be defined in its entirety. So what we really started doing is banking the funds for the future and the improvement of that area.”
Councilwoman Shari Barr interjected that the city is still seeking funding sources for some of the project, to which Boyum replied, “We haven’t even approved the project.” Penny said that’s because the city is still designing the project at the present time. Officials, he said, could expect an update in March or April.
“We’re at the thirty percent mark back in last year,” Penny told council. “The next report, you should be at sixty percent of the completion of the design of the project.”
But it was the overall projected cost of the yet to be determined project that had Boyum so vocal.
Economic Development in Project is Lacking
“At what point, Mr. Penny, are we going to decide to move forward or not with that project?” Boyum asked. “Because we seem to be spending a lot of money on designing a project that may not generate the economic development benefit that we think it will. Construction prices have gone up and the size of the project has gone down…since the report, even.”
Penny: “Alright. Well, I believe at some point you will get to a place but I think we have to finish the design first and there’s another side of the project that we’re not actually paying for. There’s a part of the project for the private development and at some point in this…this year, council should be receiving a presentation from The Blue Mile Foundation to show you what the thoughts are for the actual development of that area and what it would add to the area. Um, what we have to remember about this project is the first thing is this is a stormwater management project. That’s the piece that the city [inaudible]. But beyond the storm water management, we’re actually also looking at, um, we’re reducing the floodway, we’re taking property out of the floodway, and that’s what this project also does.”
Boyum: “Very little.”
Penny: “It will increase the amount of land that would be available for development.”
Boyum: “Very little land comparatively to the cost of the project.”
Penny: “Again, we will come back to you and at any point, if this council, if you decide today that you want to pull the plug on this, you could. Um, but we’ve invested quite a bit of money, we are right now using a grant…”
Boyum: “We’ve spent mostly grant money at this point.”
Penny: “You have a line of credit of $15.5 million dollars and you had to use some of that money so what we did, and this was the first year that I was here, I think we borrowed about $15,000 or less…” The $15.5 million loan has a 30-year payback obligation.
Boyum: “We had to activate the loan.”
City Clerk Leah Harden interjected that the city borrowed ‘a little over $6,000.’
Penny: “But before I recommend you move forward, I have to know without a shadow of a doubt first how we pay for it and then the other side of it would be there’s gonna be some debt and how we pay that debt. So all of those things will be factors but none of that we’ll know until we actually finish the design of the project and at this point, it’s all being paid for by grants so other than staff time, we’re not expending a lot of city funds.”
Original Project Purpose Has Been Completely Removed From Plan
Boyum: “The reason I brought this up is Councilwoman Barr mentions that we go to GMA and take these classes and I sat in the water resources class and the original design of this project said we were creating a reservoir to create groundwater storage, right? That portion has been completely removed from the project and as a result, the economic benefit and the water benefit has significantly decreased. Not to mention the fact that our own engineering has looked at the 1970 flood map and looked at today’s flood map and the efforts we have already made for stormwater have had significant effects on the size of that floodplain.
He then reiterated that construction costs have gone up 30-40% for ‘this kind’ of construction.
“It’s a Terrible Investment”
“There’s no reservoir. The floodplain benefit is greatly reduced. And the costs have gone up by nearly 40%,” Boyum said. “So at some point, we gotta say ‘We gotta stop spending staff resources and time on something that would be, quite frankly, a very bad investment. We’re looking at spending $30-40 million for a $10 million in receipts over thirty years. That is what the economic report stated and that was before the cost of construction went up by 40%…that is a terrible investment. No financial person would make that investment. No one in here would make that investment. Would you give $30 to get $10 back? No. No one would. We have to decide at some point if this is really a project that we want to sink so much of the city’s resources into.”
Blue Mile Committee Asked SCVB for Portion of Hotel/Motel Taxes
“The Blue Mile Committee even came to the SCVB and they want part of the hotel/motel tax now too. So they want hotel/motel tax, stormwater, T-SPLOST, SPLOST, TAD money, and money from the general fund. How much more money are we going to put into this project?”
“At some point, we’re going to have to look at this and say, ‘This is really nice but it’s not feasible.”
Penny: “But I would also say to you, I believe you need to see the planning that has gone on on the private side. At this point, you have seen that. And at some point, that will be shared with you. The impact of the revisions of the flood maps is important, it is important, because as long as property is currently in the floodway and we do have property in the floodway, but by being able to revise those flood maps and pull the floodway back, that land then becomes developable. But I think right now we’re still in the design process.”
Economic Impact is Not the Same as Return on Investment
Penny also said, laughing, that the economic impact study said there was an $80 million impact.
Boyum: “Economic impact is not the same as return on investment.”
Boyum: “It’s not the same. $80 million could go to one contractor that’s from Atlanta. That’s an economic impact. Tax revenue is the money we get back to pay for this thing. We’re going to spend $30 million and get $10 back. We’re going to be $20 million in the hole. How are we going to make up for that? That’s what I want to see. I hear you keep saying things about the floodplain, Mr. Penny, but as I’ve said, the amount of property that’s going to be taken out is fairly small and to spend this much money to take this much out, these are legitimate discussions we need to have. I don’t want it to be…”
Penny: “I’m not arguing with you over whether this project ought to be done or not. I will say this again. If this council decides that you don’t want to proceed, that’s all you gotta say.” He then said council is not committed to anything at this point. He went on to say that he has seen what the private sector is working on and that will be revealed to the council at a later date. “If [those things] that the private sector is working on come to fruition, I think it will be of benefit to our community.”
Boyum: “Well there ya go.”
He then asked Penny about the details of what the private sector is planning on revealing but Penny said he ‘didn’t want to go into all of the details.’
It’s Not Our Money, “It’s Free Money”
Councilwoman Paulette Chavers only added that the city is spending ‘free money’ right now and not spending anything else, referring to the federal grant money that is collected from taxpayers across the country. “I want to see what the free money can get us,” she said. “When it gets down to ‘our money,’ then we can focus on is this feasible or not.”
Councilwoman Venus Mack asked how much the city was obligated to match to the federal funds. Penny said “about $500,000,” but that that money would come from the line of credit the city had already taken out. “But it’s not additional money.”
I Believe in This Project
Boyum: “I’m gonna vote for this because I believe in the project, but I believe in the project being bigger than it is. We continue to shrink it down and we’re continuing to minimize the impact and that is dangerous. That will put our city in a situation where the entire region is growing, if we put ourselves in a bad financial situation, we’ll make ourselves even worse. I’m thinking long term. This is not short term. So in light of that, I’ll make a motion to approve [the federal grant funding request].”
The motion was seconded by Venus Mack and approved 4-0.
Mayor Jonathan McCollar and Councilman Jim Riggs were not present for the meeting.