The Hard Labor Creek Reservoir Management Board has postponed the dates for approval of a state loan for construction of the 1,400-acre reservoir in southeastern Walton County pending the outcome of negotiations over the language of the loan contracts.
The loan documents as presented to the Board obligate only Walton County to repay the loan, while both Walton County and Oconee County officials expected and want the debt to be split on the agreed-upon ratio of 71/29, with Oconee County the minority partner.
The current tentative schedule calls for the Oconee County Board of Commissioners to give first reading to the loan document at its Dec. 18 agenda-setting meeting and final approval at its regular meeting on Jan. 8. Originally, the BOC was scheduled to approve the loan agreement on Nov. 6, but that date was changed a month ago because of delays in receipt of the loan documents.
Walton County is scheduled to approve the loan on Jan. 8 as well.
The approval will be only for the $20 million loan, the larger of two loans approved by the Georgia Environmental Finance Authority (GEFA). The Management Board has put off action on the second loan, for $12 million, in order to save the two counties the costs of loan repayment.
Project Manager Jimmy Parker outlined the new schedule to the Board at its meeting last Tuesday at the Walton County Government Center.
Originally, Parker and the Management Board had expected to receive the GEFA loan documents by Oct 8, but it did not get them until Oct. 25. Parker told the Board that GEFA has been behind schedule because the documents are different from the ones the Authority usually writes.
The loan is for 40 years, and GEFA usually makes loans for 20 years, Parker said.
The state announced on Aug. 1 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.
The counties will not be required to make any payments on the 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, which the counties have delayed receiving, 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 $12 million loan and begin paying against principal after that point.
By delaying receipt of this loan, the counties will postpone the beginning of the loan repayment.
Parker told the Board it was delaying the receipt of the $12 million unit it needs the money. He told me after the meeting he expects the Board will be acting on the loan documents for that loan about this time next year.
Board Discusses Member Qualifications Again
The Management Board on Tuesday also returned to the discussion at its September meeting about changes in the qualifications for members of the Board.
The Management Board has seven members, three from Oconee County and four from Walton.
At least one of the three Oconee County voting members must be a member of the BOC, and the three alternates must be either members of the Board of Commissioners or employees of the county.
The chairman of the Walton County BOC and the chairman of the Walton County Water and Sewer Authority are members of the Management Board, and the other two members must be Walton County BOC members.
The alternates have to be either BOC members of county employees.
Management Board Attorney Chris Atkinson told the Board he had drafted changes in the intergovernmental agreement between the two counties that would make the Walton BOC chairman and the Sewer Authority chairman members of the Management Board, but the other two positions would be unrestricted.
For both counties, the alternates could be BOC members, employees or citizens.
At present, Oconee County is represented by Commissioners Jim Luke and Chuck Horton and by county Administrative Officer Jeff Benko.
Former county Administrative Officer Alan Theriault is Luke’s alternate. Utility Department Director Chris Thomas is Horton’s alternate. Benko does not have an alternate.
Hank Huckaby, chancellor of the University System of Georgia, had been a citizen member of the Management Board, but the Oconee County BOC replaced Huckaby with Horton when Huckaby resigned.
Commissioner Luke at that time said he wanted a citizen to serve as Benko’s alternate but was unable to propose a citizen because of the language of the intergovernmental agreement.
Horton will step off the BOC at the end of the year, and Theriault will terminate his employment by the county at that same time, leaving the county with only Luke and Benko as Management Board members and Thomas as the sole alternate.
Benko said he expected that the BOC would consider Atkinson’s proposed changes at the meeting on Dec. 18 and approve them on Jan. 8.
The BOC also would have to make its appointments to the Management Board at that Jan. 8 meeting so they could be at the Jan. 15 meeting when the Management Board is scheduled to take final action on the GEFA loan documents.
At the close of the Tuesday meeting, the Management Board elected Luke to serve as Management Board Chairman in 2013.
GEFA Not Accustomed to Negotiations
Parker told the Management Board on Tuesday that GEFA at first said it does not negotiate the language of its loan documents when Management Board Attorney Atkinson and Oconee County Attorney Daniel Haygood questioned document details. Subsequently, GEFA said it would entertain changes.
Atkinson told the Management Board that, in addition to asking that both counties be named on the document, he and Haygood also proposed that only revenue from the Hard Labor Creek project be obligated for loan repayment, but GEFA wanted the two counties to be required to use all county revenues if needed.
Atkinson said he and Haygood decided to drop that objection.
The state loans, if approved by the two counties, will give the Management Board money to build the dam and create the reservoir. The loans will 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 will have to spend an estimated $80 million more.
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 County will assume 28.8 percent of the debt, based on the agreement signed by the two counties back in 2007. That translates to $9.2 million.