Avondale DDA approves purchase-sale agreement on Juvenile Justice building
By Zoe Seiler, contributor
The Avondale Estates Downtown Development Authority has voted unanimously to a accept a purchase-sale agreement for the Department of Juvenile Justice Building.
Forum Management, the building’s property managers, offered to buy the building and issued a Purchase Sale Agreement for the amount of $7 million, according to a letter written by DDA Chair Dave Deiters.
Deiters was unavailable for additional comment about the purchase-sale agreement.
Through previous efforts, the DDA built and took ownership of the Department of Juvenile Justice building at 3408 Covington Highway in 2002. The DDA entered into a 17-year lease with the department and the state. The lease was “structured to cover the 16-year bond’s payments with one year of ‘free and clear’ rent collections,” the letter says.
Earlier this year, as the DDA approached the end of the lease, its goal was to “negotiate a new, fair and equitable long-term lease with the State to keep the [Department of Juvenile Justice] in the building for another 15 years,” the letter says.
Once a new lease was secured, the DDA’s goal was to sell the building because as a volunteer board, it is not equipped to be an on-going landlord of a building that size.
However, additional terms for a new extended lease would result in the building being valued less than what was estimated and less than what the DDA believes to be a fair market rate. Multiple terms also presented significant risk to the DDA, according to the letter.
“We understand and respect the State’s position – given that the original 17-year lease more than paid for the building, and we now enjoy ‘free and clear’ ownership,” Deiters’ letter says. “However, this proposed new lease would significantly devalue the building. Our position is that the building has a fair value, regardless of how it was paid for, and the DDA’s job as stewards of this building is to extract a fair and equitable value.”
The DDA has been unable to secure a new lease with the state.
“The obvious downside of this lease negotiation impasse to the DDA and our stakeholders is that an empty building serves no one and quickly becomes a devalued liability,” Deiters said in the letter.
Hence, the purchase-sale agreement with Forum Management.
The DDA hopes to close on the building soon and is excited to shift it priorities towards the immediate needs in the Central Business District, according to the letter.
City Commission meets
In other news, the Avondale Estates City Commission met Wednesday to discuss the 2019 budget amendment and the 2020 budget.
While the City Commission works with the DDA and shares one member, Commissioner Lisa Shortell, the two boards operate separately from each other. Shortell declined to comment on the Juvenile Justice purchase sale agreement, referring questions to Deiters.
City Manager Patrick Bryant discussed two amendments for technological improvements to the 2019 budget. They will be the last amendments made to that budget.
“One is for a Laserfiche program, which will allow us to move forward with our records retention project,” Bryant said.
Most of the city’s records are still in paper form and stored in city hall in no particular order. Bryant said it’s difficult to retrieve records that are older than several years.
“With the Laserfiche program, we can house all of those documents online in an online database that is both easily searchable not only for staff but for the public as well,” he said. “It’s a $10,000 project.”
Bryant also proposed another project for new software that will move the city’s permitting process online. This will free up the city’s permit concierge to also perform additional duties.
“So those are the last two proposed amendments for the 2019 amendment process,” Bryant said. “We do not expect there to be any substantive changes to that amended budget throughout the remainder of the year. We feel it’s fairly accurate to stay within it.”
Deputy City Manager Paul Hanebuth gave a presentation on the budgets, which included examples of how the city staff came up with the numbers in the 2020 budget.
One example Hanebuth mentioned was property taxes. He discussed two ways to project the total value of real estate for the city in 2020. The method used was to look at the trend from 2015 to 2019 to make a projection of $256 million.
Hanebuth said using a four-year trend was better since looking at a five-year trend starting in 2014 shows and unusual increase from 2014 to 2015.
The projection also included other calculations including the motor vehicle tax trend, the public utility tax trend, the tax abatement reduction and a 98.5 percent property tax collection rate.
Hanebuth discussed the city’s zero-based budgeting approach and how that informs the budget process.
He said in some categories this approach works better than in others.
For example, in some categories such as communications, the city knows how much will be spent.
For communications, the city knows approximately how many email addresses will be needed so the staff can calculate out the hosting fee for Microsoft Office. Same with the host site of the city’s ordinances and email blasts. The city knows the annual fees for those services.
Additionally, the city has received a report for the Georgia Municipal Association which says how much the city will need to contribute to retirement in 2020 for it to be fully funded.
Other categories are more complicated, like estimating the cost of gasoline use for various departments.
Hanebuth also accounted for personnel projections, although this is dependent on the results of the Carl Vinson Institute study on compensation and classification.
Hanebuth projected a part time position to be added to the police department and projected a 5 percent increase in salaries for the court and public works departments. He also calculated out what the difference would be if parks and sanitation had a $15 per hour wage, with a 4 percent increase for some employees in parks and a 3 percent increase for some employees in sanitation.
He also projected a 5 percent increase in salaries across the board in administration, plus the addition of a new position.
Bryant said that included within the budget is a proposal to add another full-time position to the administrative department.
Currently, the department has a three-person team made up of the city manager, the finance director and the city planner.
“We think for the purpose of sustaining the organization into the future and handling all of the new capital work that we need to do, we need to free up some space to do that from a from a personnel standpoint,” Bryant said. “So, the plan is to change the city planner position to a community development director/assistant city manager.”
The community development director would be responsible for administering the capital program, perform all planning and permitting functions, as well as perform communications related functions. This position would act as half of the chief operations officer of the organization, Bryant said.
The finance director would then serve as the other assistant city manager and would be the other half of the chief operations officer.
Bryant said the additional position to be in the finance department would be somebody who can handle daily duties to free up the finance director to do more administrative executive work.
Additionally, with the addition of new software to the permit process, the permit concierge would be able to perform other work such as daily planning work along with permitting work.
“So, we would kind of have we would create a line of succession in the administrative department in community development and finance up to the city manager,” Bryant said.
In the long-term, this would allow lower positions to move up in the organization as higher-level members transition out, and would maintain institutional knowledge, Bryant said.
The city commission will hear the third and final reading of the 2019 budget amendment and the second reading of the 2020 budget at 6:30 p.m. on Monday, Nov. 18, at City Hall, located at 21 N. Avondale Plaza
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