November 30, 2016
On November 10, 2016 TWG posted a blog entitled JDA IS THE GIFT THAT KEEPS ON GIVING. If you didn’t read it, please do so by clicking the link so you can understand the information in the JDA letter below.
The JDA board and their attorney, Andrea Gray, met in a special called meeting on Thursday, November 17 and then sent TWG a demand letter to correct and retract the blog. Below is a copy of their letter. Tomorrow, (12/2/16) we will post the response to their demand.
November 17, 2016
Kathy Mudd, Editor
247 West Washington Street
P.O. Box 30
Monticello, GA 31064
Re: Joint Development Authority of Jasper County, Morgan County, Newton County and Walton County’s Response to the November 10, 2016 article by Mary Patrick titled “JDA is the Gift that Keeps on Giving”
Dear Ms. Mudd:
The Joint Development Authority of Jasper County, Morgan County, Newton County and Walton County (“JDA”) recently announced that Shire will make an $85,000,000 additional investment in its Stanton Springs facility. With this additional investment comes additional tax revenues for the JDA’s four member Counties and School Districts. In addition to the tax revenues, Shire will pay the JDA a lump sum of $2.5 million toward the JDA’s $5.9 million GEFA loan debt used to fund a portion of the onsite wastewater pretreatment facility. Shire’s additional investment, reallocation of value from personal property to real property, and $2.5 million contribution equates to a 100% increase in tax revenues projected for the Counties and School Districts over the 10-year tax abatement period.
The magnitude of the tax revenues projected over a relatively short time-period is unprecedented in the four Counites. The JDA expects and welcomes questions and is happy to provide additional information to interested persons. To keep the public accurately informed, the JDA seeks to correct erroneous information provided in the letter to the editor and blog post titled “JDA is the Gift that Keeps on Giving” by Mary Patrick of the Taxpayer Watchdog Group. The letter focuses on three main topics, each of which are addressed below:
- Revenue Sharing Intergovernmental Agreement
The Revenue Sharing Agreement was amended effective September 20, 2016 to address the payback of tax monies collected prior to 2016 and the collection and payment of tax monies from 2016 forward. It is a 50-year agreement. It allows Newton and Walton Counties and the Newton County School District to payback the monies owed using tax revenue proceeds they receive under the Revenue Sharing Agreement starting in 2020.
The Revenue Sharing Agreement amendment was a joint effort of the attorneys from the four Counties, four School Districts, and the JDA. It was presented at nine (9) public meetings and approved by nine (9) government bodies which include: Jasper County, Morgan County, Newton County, Walton County, Jasper County School District, Morgan County School District, Newton County School District, Walton County School District, and the Joint Development Authority of Jasper County, Morgan County, Newton County and Walton County. At each meeting, the payback provisions and the details of tax collection and distribution going forward were discussed in detail.
As a part of the Revenue Sharing Agreement, the JDA is required to prepare and submit an annual budget to the Counties and School Districts. The JDA complied with this requirement in October 2016.
The $85,000,000 in additional bonds were not approved as “part of the new 50-year agreement”.
The JDA agreed to take the steps necessary to issue the $85,000,000 bonds by separate agreement, the Amended Inducement Agreement, which was approved on November 1, 2016. The bonds do not constitute a debt of the Counties and therefore do not require approval by the Counties. Tax revenues received from Shire, or any tenant in Stanton Springs, will be distributed in accordance with the Revenue Sharing Agreement. This was the point made at the November 7, 2016 Jasper County Board of Commissioners meeting. Utilizing the projections which account for the Revenue Sharing Agreement distribution process, Jasper County is projected to receive $5,371,365 in tax revenues over the 10-year tax abatement period.
The 2012 bonds issued in connection with Baxter were not “secret”. In its January 27, 2016 letter the JDA dispelled this accusation and demanded that this false statement be retracted from theTaxpayer Watchdog’s Blog post. Having this statement reappear in a new post after it having been proved false is egregious. The JDA, once again, demands that it be retracted and corrected.
As stated above, the JDA and the Counties are not and cannot be obligated to make payments on the Bonds. The Bonds are issued solely to evidence Shire’s capital investment in its facility located at Stanton Springs. Shire is both the bondholder and lessee under the bond program, obligated to pay itself on the Bonds through a book-entry notation. Pursuant to Georgia case law, in order for the Project to receive the reduction in ad valorem property taxes offered to Shire by the JDA, the Project must be owned and financed in connection with a bond deal. There is no economic value to the bonds outside of the property tax reduction and they are not considered to be true debt.
The benefits to Shire associated with the 2016 bond transaction are the $22 million in property tax savings over a 10-year period. This tax savings is in addition to the substantial state and local incentives provided in the 2012 Inducement Agreement. The benefits to the JDA are an additional $28 million in property tax revenues over the 10-year period, approximately $10,000,000 per year in tax revenues after the abatement ends (year 11 forward), and a $2.5 million lump sum payment towards its GEFA loan debt which reduces its annual payments by $100,000. These benefits have a direct positive impact on the amount and timing of tax revenues received by the Counties and School Districts.
The estimates of tax revenues to Jasper County is based on the best available information. Shire provided estimates of its real and personal property values.
- Sale of JDA Land/Bank of Madison debts
In the Fall of 2015 an opportunity to sell a portion of the JDA’s property was carefully considered but ultimately not consummated. The land sale would have paid off the JDA’s Bank of Madison debts. Instead, the four Counties pledged a portion of their tax revenues received from the Shire project to pay the debts. The JDA applied timber sale proceeds to reduce the balance.
The JDA is grateful for the support of its state and local leaders and citizens. The vision, planning and investment in Stanton Springs has resulted in great success with just one tenant, Shire. The latest news of Shire’s additional investment is celebratory. Publicly circulated inaccurate information should not cast a cloud of negativity on the four Counties’ accomplishments.
Alan S. Verner,