NORTH AUGUSTA, S.C. (WJBF) – North Augusta leaders were walked through a presentation outlining how the city would make payments on the Riverside Village bonds if something were to go wrong.
During day two of EnVision 2018, the North Augusta City Financial Adviser Walter Goldsmith presented council with a financial assumptions model.
The city borrowed $69 million dollars to pay for the project in additional to the $13 million it allocated.
Goldsmith presented council with “what if” scenarios that could impact the city’s potential to make payments on the bonds.
The Hospitality Tax, TIF revenue, Accommodations tax and parking revenue act as a cushion to pay the debt, if there are construction delays or projects fall through.
“The financial model that we help the city put together is really just driven off of the construction completion, when property taxes go out.” Goldsmith said. “So our sort of shorthand leading indicator is to look at the construction. So, if the construction is going well, in terms of contractors and dirt being moved and building being built, then that will ultimately result in completed buildings that will result property tax revenues.”
The city set aside $3 million dollars to make bond repayments during construction, since there wouldn’t be an incoming revenue.
The model doesn’t account for the raise in Hospitality Tax passed that council passed at the end of last year.
The first few years the city will only be making payments on the interest of the bonds.Count on WJBF NewsChannel 6 to bring you the latest on this developing story.