South Fulton holds millage-cap hearing as officials prepare $96 million bond for public safety buildings

City of South Fulton officials opened a public hearing Aug. 12 on whether to remove or raise the city’s statutory millage-rate cap as staff and the city’s financial adviser outlined plans to borrow roughly $96 million to help pay for new police and fire headquarters and a training facility. The city manager and finance team said the city’s proposed fiscal 2026 budget already includes the first year of debt service tied to those projects and no millage-rate increase is proposed for 2025.

Why it matters: a millage-rate cap set in the city charter limits the legal tax rate the city may levy and is part of what bond investors examine when pricing municipal debt. Financial adviser Ed Wall and bond counsel told the council that, with the current cap in place, investors see limited collateral capacity; removing the cap or raising it to a higher ceiling would make the city’s debt look stronger to lenders and could yield lower long‑term borrowing costs.

At the hearing Wall described recent, competitive private‑placement bids the city solicited for a 20‑year term. He said Regions Bank offered a 20‑year, fixed interest quote in the mid‑4 percent range (4.26–4.30% during the meeting), with an investor option to prepay without penalty after five years. Wall said the city pursued a private placement because the city’s audited financials and timing made a public bond offering less attractive at this moment, and the private placement produced a competitive rate. He described the Public Facilities Authority’s role as a conduit that would lease the finished facilities to the city and receive lease payments from the city that the bank would use to repay the bonds.

Concerns and alternatives: Several council members and members of the public said they were uneasy about removing a cap that was included in the city charter when the city formed. Some residents urged the council to slow the process, or to approve borrowing for one building at a time. Mayor Pro Tem Linda B. Pritchett and City Manager Sharon D. Subadan framed the choice as one of timing and long‑term planning: Subadan said the city is “poised” and that delaying risks higher construction and financing costs.

Options presented: Bond counsel and the financial adviser presented three practical options: (1) leave the cap in place and accept the city’s current financing terms, (2) raise the cap to an intermediate level (an example given was 18 mills) that would produce similar borrowing capacity and preserve some charter restraint, or (3) remove the cap entirely so the city can pledge its full faith and credit and seek the strongest possible credit profile in future rating efforts.

Public comments: Three residents spoke during the hearing. Harold Reed called the projects “vanity” projects and said residents were critical and worried about the city’s financial history. Jewel Johnson also urged caution and said residents distrusted city leadership. Penny Webster Lewis suggested a legally binding guarantee to reassure taxpayers that rates would not “balloon.”

Next steps: The council did not vote on removing or raising the cap at the Aug. 12 hearing. Members agreed to hold a follow‑up action on Aug. 26 (advertised earlier in the meeting) to allow the council to consider a formal vote after more public notice and additional staff analysis. The finance team will lock a final interest rate when the council takes formal action; Wall said the price quoted during the hearing would be expected to float with U.S. Treasury rates until a rate lock is placed at closing.

Ending note: City staff emphasized the council’s stated intent to avoid increasing the millage rate for 2025. Any change to the charter cap is separate from the annual millage decision; the council’s immediate choice is whether to amend the cap to support the financing structure the city prefers.