VLCIA has already issued $15 million in bonds for which apparently the Lowndes County Commission has committed the county, that is, we the taxpayers, to pay the debt service. That comes out of VLCIA’s one mil of dedicated tax income. But according to the intergovernmental contract, it’s actually not even just from VLCIA’s current millage:
The current VLCIA millage is one mil, or about $3 million a year, collected by the county in property taxes and handed over to VLCIA.
Section 4.4 Security for Contract Payments and for Bonds.(a) The obligation of the County to make the payments required pursuant to Section 4.1(a) hereof shall be a general obligation of the County for which its full faith and credit is pledged, and shall be payable from any lafully available funds, subject to the Tax Funding Limit. In particular, the County agrees to levy an annual tax on all taxable property located within its boundaries, as now existent and as the same may be extended, at such rate or rates, as limited by the Tax Funding Limit, as and when it may be necessary to provide the County with sufficient revenues to make all payments required to be made by the County under this Contract.
But VLCIA’s charter says (in Section 5):
The County of Lowndes is hereby authorized to levy and collect an annual ad valorem tax not to exceed two (2) mills for developing and promoting industry and agriculture, and is hereby directed to pay to the authority all funds derived from such levy to be used for the purposes provided herein.The Tax Funding Limit on VLCIA millage is 2 mils, not 1. So apparently VLCIA can run up debts that require the county to increase VLCIA’s millage, even as far as doubling the current millage. That would be from the current $3 million a year for 1 mil to $6 million a year for 2 mils.
Can VLCIA float another bond issue using the same intergovernmental contract? I wouldn’t thank so, but I’m not a lawyer. Can they refinance the existing bonds within that contract? I wouldn’t be surprised. See Section 5.6(b):
The Authority may, from time to time, in its sole discretion and at its own expense, make any additions, modifications or improvements to the Project, which it may deem desirable for its purposes.So if VLCIA paid attorneys to modify the debt package, i.e., refinance, would the County and we the taxpayers be on the hook for the result? And given that interest rates are lower now, they could finance even more debt.
Whether VLCIA can do that or not, if interest rates go up on the debt they’ve got, we the taxpayers are stuck with paying for it, even if it requires raising our taxes to do it.
Brad Lofton may be gone, but we’re stuck with his debts, while he’s busy trying to get Horry County, SC to dedicate tax millage.