Fresh Loaf

Nothing kicks off a Monday morning like a 170-page audit of Atlanta’s $4 billion sewer system overhaul. We’re still combing through the beast, but Atlanta Unfiltered’s Jim Walls has already found some tidbits.

Walls:

Atlanta’s water department has illegally kept $4 million that should have been refunded to 29,000 customers who closed their accounts, a city audit shows.

Apparently, part of the problem is that no one ever told customer-service reps in the water department about changes last year in the city code. Auditors said employees who handle refunds were unaware of consumer-friendly changes in refund procedures.

On Friday, the AJC’s D.L Bennett wrote a good overview on some, uhm, financial hurdles facing the city and the project:

Atlanta officials fear the city’s $4 billion water and sewer system overhaul could collapse because the city’s crushing debt and already low credit rating threaten the city’s ability to borrow money in ever-tightening credit markets.

The city hopes Monday to issue $500 million to $700 million in new bonds for the program, with much of the money to refund old debt that must be repaid before interest rates or other factors send payments skyrocketing.

“We’ve got some considerable issues facing us,” city CFO Jim Glass said Friday.

No joke. And we’ve got some considerable reading to do. The audit is available here. (Warning: large PDF)

Bookmark It

I think it’s worth taking a moment from laughing at their informercials to note that, without the excellent work of the AJC’s news staff in general, and reporter D.L. Bennett in particular, no one would have noticed DeKalb County’s property tax shenanigans, and DeKalb CEO Burrell Ellis might not have stepped in to clean up the mess.

Bookmark It

D.L. Bennett of the AJC has an article that addresses what many of us have assumed — the intown building boom is hitting the skids. The rush to build homes to welcome the influx of new residents was broadsided by the foreclosure and credit and resulted in shuttered-up houses and dwindling property values.

Says Ben at Terminal Station:

The combination of factors hitting these areas is brutal.  First, all the subprime mortgages that got people into these homes in the first place reset and foreclosures follow.  Housing prices plummet, and you might think there would be a wave of people who could get into some infill homes for a great price.  However, tighter credit standards are going to prevent people from getting loans, and the cratering economy will further depress things.  So these homes will just sit empty for who knows how long.

The city has received $12 million to buy foreclosures, but it will barely make a dent in the problem. I don’t really know what sort of policy solutions are available. There needs to be an infusion of capital somewhere to buy these houses and get them occupied. I know some folks who are buying up cheap houses (~$30k), renovating them, and renting them to people with Section 8 vouchers. The problem is that this is not a recipe for revitalization. Instead, it can become a recipe for concentrated poverty and can prevent new residents from wanting to move in. I’m not enthusiastic about an infusion of capital of this sort, but it is probably the only sort of private capital available.

Bookmark It