The Oconee County Board of Commissions took the first step last night toward acceptance of $5.8 million in new debt for construction of the Hard Labor Creek Regional Reservoir in Walton County.
The action followed approval earlier in the day by the Hard Labor Creek Regional Reservoir Management Board of loan documents from the state of Georgia that will allow Oconee County and Walton County to receive a $20 million loan from the Georgia Environmental Finance Authority (GEFA) for construction of the reservoir dam.
After hearing an outline of the loan terms at the meeting last night, the Oconee County BOC agreed to put the final approval on its agenda for the January meeting.
Loans Due In 40 Years
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 simple interest.
The loan is one of two for the two counties announced by GEFA in August.
The second loan of $12 million also will be due in 40 years. The two counties will pay 0 percent interest on that loan 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 Management Board has delayed action on that second loan until the money is needed to save financing costs.
Loan Terms Called Fantastic
At the meeting last night, County Administrative Officer Jeff Benko said the loan represents a “fantastic opportunity” with “fantastic interest rates.”
Oconee County Attorney Daniel Haygood said he had reviewed the loan documents and described them as about as good as the county could get.
Oconee County will be responsible for 28.8 percent of the $20 million loan, based on the agreement with Walton County. That translates to $5.8 million on top of the $19.5 million the county has already put into the project from bond sales.
BOC Chairman allowed citizen comments following the discussion of the loan by Haygood, Benko and Commissioner Jim Luke, who is vice-chair of the reservoir Management Board. I was the only citizen who spoke.
I requested that the Board clarify the reasons for taking on new debt for a reservoir that will produce water neither county needs at present and is unlikely to need in the near future given current population growth rates.
Chairman Davis said he would ask the staff to address these issues at the next meeting.
Loan Repayment Discussed
The issue of loan repayment came up at the meeting of the Management Board when Oconee County Commissioner Jim Luke said the Management Board had not talked about how the loan was going to be repaid.
Oconee County Administrative Officer Benko, also a member of the Management Board, said he wanted to start putting funds aside in next year’s budget rather than wait until revenue started coming in from the sale of water from the reservoir.
The state loan money only will provide enough money to build the dam. The two counties will have to come up with an estimated $73 million more to built a water treatment plant and transmission lines.
No firm schedule exists for that additional construction.
If Oconee County does start putting money aside in the next fiscal year, as Benko suggested, it would mean that current water and sewer customers will be paying off the new loan as well as the $19.5 million already borrowed.
Under current arrangements, only water customers, rather than all residents of the county, are paying for the Hard Labor Creek project.
Member Qualifications Not Discussed
One issue that did not come up at either meeting yesterday is a possible change in the qualifications of Management Board members.
At the meeting in November, Management Board Attorney Chris Atkinson said he would draft documents to change stipulations in the intergovernmental agreement between the two counties that specify who can be a Management Board member, but the issue was not on the agenda of either of yesterday’s meetings.
Commissioner Chuck Horton is serving on the Management Board as one of the three Oconee County representatives. Horton is leaving the BOC following his unsuccessful challenge to Davis in the July Republican primary.
Horton could stay on the Management Board as a citizen representative, which is allowed for Oconee County by the current intergovernmental agreement signed by the two counties in 2007.
Former County Administrative Officer Alan Theriault, serving as an alternate to Luke, must be replaced under current rules, as alternates for Oconee County must be county employees. Theriault has retired and will leave county service at the end of this month.
Benko told me prior to last night’s meeting that changes in the intergovernmental agreement will be on the agenda for the Jan. 8 meeting.
Both of the BOCs would have to approve the changes at the Jan. 8 meetings if those changes are to affect appointments at the meetings. The Management Board is scheduled to meet again on Jan. 15.
The video from the Hard Labor Creek Reservoir Management Board meeting dealing with the loan documents is on the Oconee County Observations Vimeo site.
The video of the Oconee County BOC meeting dealing with the loan documents also is on the Oconee County Observations Vimeo site.