Although nothing can be certain until the state provides the loan contracts, Hard Labor Creek Reservoir Project Manager Jimmy Parker said he does not expect the state to require that Oconee and Walton counties share water from the reservoir with Atlanta as a condition for the $32 million in loans the state is offering.
“I don’t anticipate any language in there to that effect,” Parker told me by telephone last Tuesday. He said he expects the state to issue a standard Georgia Environmental Finance Authority loan that will not include any state involvement in the project.
|Chris Atkinson, 8/21/2012|
That view is shared by Oconee County Attorney Daniel Haygood, who said when I talked with him later that day that he did not expect the loan documents to make any reference to Atlanta and its water needs.
Haygood said he will be reading the contracts carefully. “We don’t want any gotcha’s in there,” he said.
Those contracts are not expected to be available until Oct. 8, and Parker told the Hard Labor Creek Reservoir Management Board at its meeting on Aug. 21 that Chris Atkinson, representing Walton County, and Haygood would have until Oct. 12 to complete their reviews.
At that meeting, Parker laid out a schedule for action on the loans once the documents are reviewed.
The loans are to be approved by the Management Board itself on Oct. 16. The Oconee County Board of Commissioners will give the loans first consideration on Oct. 30 and take final action on Nov. 6.
The Walton County Board of Commissioners also is scheduled to approve the loans on Nov. 6.
The Georgia Environmental Finance Authority and the Georgia Department of Community Affairs announced on Aug. 1 that they had awarded two loans to Oconee and Walton counties for the reservoir as part of the Governor’s Water Supply Program.
The larger loan is for $20 million. The second loan is for $12 million.
In the application for state funds, the two counties made much of the availability of the water from the reservoir to metro-Atlanta. The counties asked for direct investment by the state in the project but received the loans instead.
Direct Investment Would Have Required More
Parker told me that he expected, had the state made a direct investment, it would have required that Atlanta get access to the water from the reservoir.
The state loans would give the two counties money to build the dam to create the reservoir. The loans would not provide sufficient money to build a water treatment plant or the distribution system for any water such a plant would produce.
To be able to treat and distribute water from the reservoir, the two counties would have to spend an estimated $80 million in addition to the $91 million needed to get the dam built.
At present, neither county needs the water the reservoir will provide, and neither has the resources to borrow additional money in the market to finance the project.
Oconee Part of Loan: $9.2 Million
Oconee County Finance Director Jeff Benko told me that Oconee County will assume 28.8 percent of the debt for the $32 million in loans, based on the agreement signed by the two counties back in 2007. That translates to $9.2 million.
This new debt would be added to the $42.2 million in debt the county already owes on bonds sold earlier for Utility Department projects, according to information Benko gave me in an email message on Friday.
The county owes $19.5 million on the initial Hard Labor Creek Reservoir bonds, sold in 2007. No payments have been made against the principal.
The county owes $8.4 million for bonds sold for the county’s participation in the Bear Creek Reservoir in Jackson County. Oconee is a partner with Clarke, Barrow and Jackson counties in that project. The county’s original obligation back in 1997 was for $12.7 million.
The county still must repay $6.5 million on revenue bonds sold in 2009. The original bonds were for $7.1 million
The county issued revenue bonds for Utility Department projects in 2003 in the amount of $9.4 million and refinanced that debt in 2012. It still owes $7.8 million after refinancing.
Source of State Funds Unclear
The source of funds for the $32 million in GEFA loans to Oconee and Walton counties isn’t clear.
In 2011, Gov. Nathan Deal announced a commitment of $300 million over four years for reservoir and water supply development as part of what he termed a Georgia Water Supply Program.
The Fiscal Year 2012 budget passed by the General Assembly authorized the issuance of state of Georgia general obligation bonds in the amount of $45.8 million for that purpose.
Deal also appointed a Water Supply Task Force to provide guidance on how to manage the initiative. The Task Force issued its report in December of 2011.
According to that report, of the $45 million in bonds authorized for the 2012 Fiscal Year, $25 million is to be available for direct state investment through the state’s Department of Community Affairs and $20.8 million is to be available for loans through GEFA.
The $20.8 million will be added to $28.5 million held by GEFA in the Georgia Reservoir and Water Supply Fund, according to the Task Force report.
The report said that the Georgia Water Supply Program “budget anticipates similar annual commitments of bond funding in each of the next three fiscal years (FY 2013 – FY 2015).”
On Aug. 1, the state announced $90.5 million in loans and $9.1 million in direct investment as part of the Water Supply Program, including the $32 million for Hard Labor Creek Reservoir.