The state of Georgia today announced approval of $32 million in loans to Oconee and Walton counties to allow them to move forward with construction of the Hard Labor Creek Reservoir in Walton County.
The counties will not be required to make any payments on the larger loan of $20 million until it comes due in 40 years. No interest will be charged against the loan during construction of the reservoir, and the single balloon payment will be of principal and 1 percent interest. The second loan of $12 million also will be due in 40 years, and the two counties will pay 0 percent interest for the first three years of construction, 1 percent for the remainder of construction, and 2 percent during the repayment period once construction is complete.
The counties will be required to make only interest payments during the first five years of the loan and begin paying against principal after that point.
Neither loan will have any closing fees.
The announcement was made by the Georgia Environmental Finance Authority and the Georgia Department of Community Affairs as part of the Governor’s Water Supply Program.
The allocation of funds to Oconee and Walton counties was the largest amount made by the state, which awarded $90.5 million in loans and $9.1 million in direct investment.
Oconee and Walton County had sought direct state investment through a grant as well as loans but received only loan money.
Project Construction Frozen
The two counties have halted construction on the reservoir because they cannot justify raising additional money in the regular bond market because there is no current need for water from the reservoir.
The reservoir had been billed as a source of drinking water for the two counties, but current customers are being satisfied with existing water sources. Current debt for the reservoir is being paid by existing water customers in the two counties.
The state loans will give the two counties money to build the dam to create the reservoir. They will not provide sufficient money to build a water treatment plant or distribution system for any water such a plant would produce.
One long-term criticism of the project has been that it would produce a lake that would benefit landowners in Walton County rather than serve the need of water customers in the two counties.
Oconee BOC Updated in June
At the June 26, 2012, meeting of the Oconee County Board of Commissioners, Jimmy Parker of Precision Planning, Inc., of Lawrenceville, consultant on the project, updated the Board on the project and indicated that both state loans and direct investment were being sought.
Parker said that permitting, design and mitigation were complete, and that 71 percent of the required land for the reservoir had been acquired. He said an additional 20 percent of the land was in the negotiation stages.
He said that reservoir design and construction could be completed in 2014 and the reservoir could be filled in 2016.
He offered no projection on when the two counties would build a treatment plant or begin selling water. The two counties would have to raise additional monies to build the plant and distribution system.
The project from its initial proposal was to be built in two phases, with the first scheduled to come online in 2014. Cost for that first phase was estimated at $170 million, including $73 million for the treatment plant and transmission system.
The second phase, not scheduled for completion until about 2050, would involve pumping water from the Apalachee River to the reservoir to increase its capacity.
Other large loans announced by the state today included $21 million for Newton County to create a reservoir on Bear Creek in that county and $29.1 million for Paulding County for a reservoir on Richard Creek in that county.