Box 21, Folder 6, Document 4

Box 21, Folder 6, Document 4

As noted, relatively small payments would be required in-the early

years of construction of the transit system.

modest because of the initial availability of sizable Federal funds under

MARTA's bond issues could be

the given assumption. Subsequently, however, the impact upon the local

governments would be more substantial.

Following is the schedule of millage rates that would need to be

levied against the net property digests in each county in order to meet

the indicated payments set foreh in Table 5, above:

1969
1970
1971
1972
1973

' 1974

1975
1976
LOTT
1978
1979
1980
1981
1982
1983

Fulton

.

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DeKalb

if

HP RPNADUOCOBOUNOOR

ee

It is possible and it would be desirable to reschedule these levies

to provide more substantial payments in the earlier years and lower pay-

ments during the peak years between 1975 and 1978. It is recommended that

an alternative schedule of taxes might be considered, which would make

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HAMMER.OGAREENE.BILER ASSOOIATES

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ml certo ceieanly main resmctincine attee ai hates







possible a ceiling of only three mills in Fulton County in the peak years

and a ceiling of 1.6 mills in DeKalb County. This revised schedule would

produce more funds in the earlier years than would be needed if the MARTA’

bond program set forth herein is followed. However, this bond program

could be revised to make use of the availabie funds in the early years

and advance.

purchases. of land with these additional funds could well save

a substantial amount of money in face of rising land values in the area.

The recommended schedule of county payments and millage rates for

MARTA bond financing is set forth below in Table 6. The peak year payments

would be substantially reduced under this schedule and the peak impact upon

local taxpayers would be corrospondingly less.

1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983

Table 6. RECOMMENDED COUNTY PAYMENTS AND MILLAGE
RATES, MARTA BOND ALTERNATIVES











Millage Rates Dollar Amounts (000)
Fulton DeKalb Fulton DeKalb
County County County County

1.5 Ls'0 $2,783 $1,081
iS 1.0 2,925 , 1,158
2.0 ieee 4,098 1,367
2.0 Lied 4,324 1,489
2.5 1.4 5,698 2,054
2.5 led... 6,005 2,169
3.0 1.6 7,629 257511
3.0 Li6 °8,064 2,907
3.0 1.6 8,526 3,074
30 1.6 9,033 33,257
3.0 iS 9,576 5,453
2.5 1.3 8,459 3,048
2.5 1.2 8,973 ' 3,235
Zed Ls 8,893 3,206
262 Led 8,893 3,206

(These level annual payments
to the complete retirement of
bond issues beginning in 1997)

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HAMMEA.QGREENE.SILER ABBOOIATES










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Table 7. RECOMMENDED COUNTY PAYMENTS AND MILLAGE RATES,
GOVERNMENT OBLIGATION BOND ALTERNATIVE





Millage Rates Dollar Amounts (000)









Fulton DeKalb Fulton DeKalb
. County County County County

1969 1.5 1.0 $3,015 $1,230 ‘
1970 iso 1.0 3,162 1,312
1971 2.0° is1 4,420 1,545
1972 2.0 4.1. 4,654 1,653
1973 2.5 1.4 6,120 2,260
1974 2.5 1.4 6,448 2,416
1975 2.5 1.3 6,800 2,452
1976 2:5 1.3 7,170 2,585
1977 255 1.3 7,568 2,729
1978 2.5 1,5 8,000 2,884
1979 2.4 1.2 8,124 2,929
1980 Zaid 1.1 8,234 2,968
1981 2.1 1.0 7,959 2,870
1982 2.0 1.0 8,026 2,894
1983 1.9 9 8,076 2,912

(The level annual
payments to the com-
plete retirement of:
bond issues beginning
in 1997)

It is to be noted that the peak millage requirements under GO financing
would be substantially lower than in the case of government payments to under-
write MARTA bond issues. This is true because the overall financing cost is
lower and the gross rather than the net digest is used as basis for the
calculations. The lower interest charges are by all odds the most important
factor in this lower impact, the difference between gross and net digest being
relatively small. As already mentioned, however, the reduced millage rate
does not necessarily produce a lower tax for the residential taxpayer because -
the homestead exemption is not applicable. Following are representative
figures on the tax impact of the maximum millage under GO bond financing, and

these figures might be compared with the earlier figures for servicing MARTA

revenue bonds: Di ete
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HAMMER,.GREENE.DGILER AGBBOGIATER
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Fulton DeKalb

Maximum millage
needed for GO Bond
financing 2.9 1.4

Years of maximum 1973-78 1973-74

Annual cost of
maximum millage to ~
owner of loan with’
market value of:

$15 ,.000 $15.00 $ 8.40
20 ;000 $20.00 $11.20
25,000 $25.00 $14.00

The projected gross and net tax digests/used as a basis for all of the

foregoing calculations are shown in Chart 2.

Combination of Approaches



There is no reason, of course, why both methods of financing might not

be employed by the local governments in meeting their obligations to MARTA
gor constructing the rapid transit system -- the collection of property taxes
to support the issuance of MARTA bonds plus the issuance of general obligation .
bonds by the governments themselves. |

The act establishing MARTA clearly recognized this possibility, as follows:

"A local government may elect any.method provided in this
section to finance the participation required of it in
whole or in part, and the election of one method shall

not preclude the election of another method with respect
thereto or with respect to any additional or supplementary
participation determined to be necessary."

As a purely practical matter, there would be a number of distinct advantages
to both Fulton and DeKalb counties in employing both methods. It would make
possible the use of available GO bond capacity with the consequent saving in
interest charges but it would not demand too much of that capacity in competition

ith other capital improvement needs. It would give each government greater
=50-





HAMMER,GREGENE,BILER AGBOOIATER cu






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The reason for the lower local requirements for the 52-mile system in

the 1973-76 period, of course, is the projected availability of

$100,000,000 more in Federal money. This fact, plus the sharing of the local

cost by four instead of two governments, would produce an actually lower de-

mand upon Fulton and DeKalb for the larger system in a number of years.

ad

1969
1970
1971
1972

1973
1974
1975
1976
1S77
1978
1979
1980
1981
1982
1983
et seq

Table 9. COMPARATIVE MILLAGE RATES NEEDED TO

‘SUPPORT 30-MILE AND 52-MILE SYSTEMS





30-Mile Systen!/ 52-Mile System
Fulton DeKalb Fulton DeKalb Clayton Gwinnett
1.5 1.0 1.5 1.0
1.5 1.0 1.5 1.0
2.0 1.1 2.0 a
2.0 tea 2.0 1.1
2.5 1.4 2.0 i 1.5 1.5
2.5 1.4 2.0 Lyd 1.5 15
3.0 1.6 oe 1.4 1.5 1s
3.0 1.6 2.5 1.4 1.5 1's
3.0 1.6 3.0 1.6 1.5 1.5
3.0 16d » BO 1.6 ae 1.5
3.0 £5 2.8 1.4 1.5 1.5
2:6 1.3 2.8 1.4 15 1.5
3,5 1.2 2.6 1,3 1,5 ib
2.3 1.1 2.4 1.2 Lk 1.5
2.2 1.1 2.5 Led ib 34.8
1/ From Table 6. Assumes $100,000,000 in

Federal and $33,000,000 in state funds.
Assumes $200,000,000 in Federal and
$48,000,000 in state funds.

-56=-



HAMMER, GAEENE.BILER AGBOOIATES