The transfer, approved during the authority’s Wednesday called meeting, is part of a process that will allow Cartersville to use 2014 Special Purpose Local Option Sales Tax dollars to pay off the debt.
The utility debt will eventually be transferred to a second Joint Development Authority recently formed to hold the Highland 75 property titles. Transferring the utility debt to the new JDA will re-classify the debt as debt for a new project, which will allow the city to use the 2014 SPLOST funds.
Such transfers are necessary, Cartersville City Manager Sam Grove said, because SPLOST funds cannot be used to pay off previously existing debt.
“The good thing [the transfer] does between now and 2014 is it offsets some of that debt and lets us pay for it, so we don’t have to take it out of operation [funds],” he said.
By delaying the debt payments Cartersville will have additional funds available for city projects, Grove added. In the current budget approximately $450,000 is slated to go toward debt payments. Those funds could be used to repair streets or other maintenance, Grove said.
CBA legal counsel Keith Lovell said debt payments should take place in 2015 and 2017, with a final payment in 2019.
The debt will be transferred to the new JDA at a future meeting, and it will not require the CBA’s approval, Lovell added.