DeKalb Arts Center Funding Deserves Bad Reviews

September 30, 2007

DeKalb County has decided to shell out at least $11 million (that’s a very conservative estimate; the real number likely will exceed $14 million) of our tax dollars for a new performing arts center to be located on a former dairy farm on Rainbow Drive south of I-20. From the hodgepodge of highly questionable funding sources being used to finance the project, it sounds like the new arts center should be put out to pasture.

DeKalb taxpayers will be paying the principal and interest on bonds to finance this performing arts center for years to come. The county once again has succeeded in using the taxpayers’ credit card without asking for the taxpayers’ consent through a referendum.

The majority of the funding will come from a clever bond financing scheme being run through the DeKalb Development Authority. The Development Authority has floated $6 to 7 million in bonds which will be used to build the facility. After construction, the Development Authority will own the arts center, lease it to the county, and the county will use our tax dollars to pay the principal and interest on the bonds as rent payments to the Development Authority.

Under House Bill 181, which I authored, the legislature passed, and Governor Perdue signed into law earlier this year, this very type of bond financing scheme now requires a referendum. However, the bonds for the performing arts center were floated back in 2006, before the enactment of HB 181. Today, you would have had an opportunity to vote on the proposed performing arts center.

The performing arts center also will use funds from the 2005 general obligation “parks and greenspace” bond issue. As you may recall, that’s the bond issue we did vote on. General obligation bonds already require a referendum.

There was a list of parks and greenspace projects approved by the voters in the 2005 bond referendum. The arts center – which is neither a park nor greenspace – wasn’t on the list. In fact, a performing arts facility intentionally was left off the list because of concerns about how to fund the long-term costs of the project.

Another part of the funding is the interest earned from holding onto the proceeds of the 2005 parks and greenspace bond issue for approximately two years. You fund the principal and interest on these parks and greenspace bonds directly out of your property taxes. The county has been holding onto the proceeds for its own pet projects, rather than proceeding with the projects you approved.

Those of us who have been wondering what took the county almost two years to secure a contract to fix the softball fields at Murphey Candler Park, a project approved in the 2005 bond referendum, now have our answer.

In addition, the county is using the HOST sales tax to help fund its new arts center. This use of HOST funds is a far cry from the original purpose of HOST to provide property tax relief to DeKalb citizens. While up to 20 percent of HOST sales tax proceeds technically can be used to fund infrastructure improvements, the arts center bears only the faintest resemblance to an “infrastructure” improvement.

The CEO’s office has suggested that the final price tag for the project could rise as high as $14 million. That doesn’t include all of the interest we’ll be paying on the bonds. And the $14 million is just the capital costs, not the operating expenses. The county isn’t sure how it will pay for the ongoing expenses of operating the facility.

Every year, the CEO and his administration approach DeKalb’s legislative delegation to approve $30 to 50 million in additional bonded indebtedness to fund public safety projects they tell us are “critical.” When the county stretches this far to find the funds for projects like a new performing arts center, it certainly makes this legislator wonder how “critical” the county’s other projects actually are.

A version of this post was published in the September 26 edition of the Dunwoody Crier.


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