One of Barrow County’s top developers and real estate leaders warned the Barrow County Board of Commissioners Monday that much tougher economic times are coming and he urged the board to slash spending immediately.
Jerry Maynard of Maynard & Bartlett Realty Group LLP called on the BOC at its Monday meeting to cut spending in half instead of trying to sustain current levels of services and warned that the county faces bankruptcy if leaders don't take drastic action.
In an interview after the meeting, he said both the county and city governments should immediately stop all capital spending. Asked if that includes suspending the county’s multiple sewer projects now under development in order to prepare for future economic development, Maynard responded, “Yes.”
Maynard told the BOC Monday that in 2008, he warned the previous county administration of the coming economic downturn and urged them to slash the county budget at that time in order to prepare for it. But he said former BOC chairman Doug Garrison, former commissioner Bill Brown and former county administrator Keith Lee “ignored the opportunity” to make the cuts that would have preserved the financial well-being of the community.
Maynard told the Barrow Journal that he became aware of where things were headed because of his involvement as a director of First Piedmont Bank, a Winder-based bank that failed the following year.
He said the previous officials thought there would be an economic setback, but that it would be temporary.
“They did not agree with my analysis of the coming downturn in real estate,” Maynard said. “Obviously, they didn’t or they would have done things differently.”
He said the previous administration was not a bad group of people, but they just didn’t believe things would get this bad.
“It was obvious to those of us in the business that we were sitting on a huge inventory of lots, that there were a lot of homes that people had recently purchased or refinanced that were very leveraged, and any small downturn in real estate values would be a major event. And of course, it has not been a small downturn.”
Maynard said the true scope of the decline of property values has not yet been reflected in the county’s tax digest. He said it is difficult to gauge real value of properties when nothing is selling. But this year’s digest will be closer to reality because the state is now requiring local governments to include foreclosure prices in determining assessed value.
OUT OF TOUCH
Maynard said he believes the current BOC members also are out of touch with the economic reality faced by the local business community because most of them are either current or retired government employees.
If the BOC were in touch with the economic situation of this community, he said the board wouldn’t be trying to sustain current service levels, but would be making substantial cuts.
BOC chairman Danny Yearwood told Maynard that the current board has significantly cut spending from the FY2009 funding level of $37 million set by the previous board.
However, Maynard said instead of cutting the budget to $32 million, the board should take steps to get it back down to the FY2002 funding level of $17 million.
Local businesses like his have had to cut their spending by 50 percent and the local governments should follow suit, Maynard said.
“The financial ability of the people has gone down since 2002, not doubled since 2002,” Maynard told the board. “If you guys don’t be proactive in controlling spending, I think the county as a whole … is going to be bankrupt.”
He said it isn’t right for the BOC to keep spending for FY2011 the same as FY2010, when members of the business community are at 50-percent of their budgets and taxpayers have had a 50-percent cut in their home values. “I can tell you if don’t make drastic adjustments down, in the next few years that well is going to dry up,” Maynard said.
