Tifton Gazette

Opinion

November 4, 2009

Our Opinion: CityNet still looms in city fiscal crunch

The continuing tough economic climate has the City of Tifton considering whether or not to furlough every city employee one day a month from January through June. We don’t like to see any worker being furloughed, but unfortunately many businesses and governmental bodies have had to do so in recent months.

We have seen Georgia state employees face furloughs and even employees of the Tift County School System. Tifton city employees may be the next group to essentially have their pay reduced.

City Manager Michael Vollmer blamed the probable furloughs on shortfalls in the city’s Local Option Sales Tax collections. He said LOST revenue is down $312,562 thus far this fiscal year.

We realize this is causing a major fiscal crunch on the city of Tifton. Revenues are down everywhere.

We were especially glad to see that the city finally sold CityNet, its high-speed Internet, cable and telephone provider company, at the end of September for $3 million cash. The city used the $3 million and $2 million borrowed from its contingency funds to bring that debt down to $5.8 million.

The City borrowed approximately $5.8 million from a local bank in September to pay off part of a $10.7 million debt it owes on the bond borrowed to fund CityNet. The payments on the City’s loan for CityNet debt is expected to be $350,000 per year for the first five years, rising to $562,900 per year for years 16 through 20.

While we understand that the sales tax shortfall is precipitating the furlough talk, the $350,000 annual payment for the CityNet loan would have made up that revenue. For the next two decades, city taxpayers will continue to pay down debt from CityNet.

We believe that any discussion of the city’s financial picture must include the CityNet debt. The city, however, sees it differently.

In an e-mail to Gazette senior reporter Angie Thompson, City Manager Vollmer wrote: "I know the CityNet saga was long and painful – but it is over. … The issues we are facing now have not a thing to do with CityNet, which was sold over a month ago."

Vollmer also writes: "I just hope that no one continues to blame a thing of the past for whatever issues we face now and in the future."

The city is commended for finally selling CityNet and stopping the hemorrhaging costs. However, as long as the City of Tifton continues to pay hundreds of thousands of dollars every year to pay down debt related to CityNet, it remains part of the city’s fiscal picture.

Yes, we are glad that Tifton no longer owns CityNet but its financial legacy won’t be disappearing anytime soon.

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