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News and Updates from
DeKalb Citizens Advocacy Council

April 30, 2021 Volume 2: Issue 12

Hello DeKalb Citizens:

One Last Thought from the 2021 General Assembly Session:

Trying to Understand the Significance of HB579 Passage

HB579 has to do with public authorities, so assuming many citizens are not familiar with such entities, we provide the following explanation before proceeding with comments about this specific bill.

Public authorities are agencies created by governments to engage directly in the economy for public purposes. These authorities make key decisions about where and how to build public infrastructure and steer economic development. Typically, they issue bonds to fund capital projects and pay the bond holders with revenues earned from the projects or obtained from other identified funding sources.

According to the Oxford Research Encyclopedia of American History:

Institutions built on the public authority model exist at all levels of government and in every state. A few of these enterprises, such as the Tennessee Valley Authority and the Port Authority of New York and New Jersey, are well known. Thousands more toil in relative obscurity, operating toll roads and bridges, airports, transit systems, cargo ports, entertainment venues, sewer and water systems, and even parking garages.

Despite their ubiquity, these agencies are not well understood. Many release little information about their internal operations. It is not even possible to say conclusively how many exist, since experts disagree about how to define them, and states do not systematically track them.

By the early 21st century, borrowing by authorities constitutes well over half of all public borrowing at the sub-federal level. This change means that increasingly the leaders of these entities, rather than elected officials, make key decisions about where and how to build public infrastructure and steer economic development in the United States

In 2007, the Georgia General Assembly passed a bill that contained financing restrictions worded in such a way that the bill only applied to public authorities activated by DeKalb County. The restriction required authorities to obtain approval by the voters of DeKalb County through a referendum before issuing public bonds. HB579, passed this year, essentially repealed this bill.

DCAC sought an explanation for why the voting restriction should be eliminated. The main answers we were provided is that 1) DeKalb is the only county in GA with this restriction and 2) many projects have not been done because of the restriction. According to the County’s legal department, public authorities activated by the County, such as the Housing Authority, the Urban Redevelopment Authority, and the Public Safety and Judicial Facilities Authority, have not been able to use bond financing.

An additional point was made that interest rates on bonds are currently so low, it’s important that the County be able to take advantage of participating in the bond marketplace. Apparently, the underlying assumptions in all of this is that voters either would not understand the case of support for voting for bond issuances, or it would be too time-consuming to hold a referendum.

Whether those assumptions are true or not, we believe that before issuing bonds, County leaders and authority boards should be expected to explain to the public how any future bond financing is going to be repaid.

In the case of most public authorities, there is usually an identified source of revenue not reliant on sales or property taxes. If the source of income is from property taxes or sales taxes, then best practices call for public referendums. Consider the library bond referendum, the parks bond referendum, the education SPLOST and the County’s SPLOST. All required voter approval.

We’re not bond lawyers or financing experts, but we do think DeKalb citizens should pay attention to any future public projects requiring the sale of bonds. We need to understand how these bonds will be paid back, especially now that the County is “free” of the referendum requirement.

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