Loan Documents To Be Reviewed
The Oconee County Board of Commissioners is scheduled to review Georgia Environmental Finance Authority loan documents on Tuesday night as the first step toward approval of an additional $20 million of indebtedness for the Hard Labor Creek Regional Reservoir in Walton County.
It will be the first opportunity for citizens of the county to comment on the loan, and the first real chance for them to review the decision of the Hard Labor Creek Regional Reservoir Management Board to seek state funding to continue work on the project.
Without that state funding, the Management Board will run out of money before it can build the reservoir itself. Even with the state funding, the Management Board lacks money to build a water treatment plant or distribution lines to get the water to customers in Walton and Oconee counties.
|Parker At 11/20/2012 Meet|
Earlier on Tuesday the Management Board is to review the loan documents from the state and pass them on to the commissioners of the two counties for approval.
Both the Oconee County Board of Commissioners and the Walton County Board of Commissioners are scheduled to approve the bond documents at their separate meetings on Jan. 8.
Loans Announced in August
The state announced on Aug. 1 approval of two loans for $32 million to Oconee and Walton counties to allow them to move forward with construction of the Hard Labor Creek Reservoir.
The discussion on Tuesday will only be of the $20 million loan. The Management Board has put off action on the second $12 million loan in order to save the two counties the costs of loan repayment.
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 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.
Intergovernmental Agreement in 2007
Walton and Oconee counties signed an intergovernmental agreement in 2007 splitting the costs of the reservoir, with Walton County responsible for 71.2 percent and Oconee County responsible for the remaining 28.8 percent.
Oconee County will assume responsibility for 28.8 percent of the $20 million loan, or $5.8 million. It will have added $9.2 million in new debt when both GEFA loans are exercised. Jimmy Parker, project manager for the Management Board, has said he expects the two counties to take up the second loan in about a year.
Oconee County assumed a debt of $19.5 million bond as its part of financing of the first phase of the reservoir project. Walton County borrowed roughly twice that amount, for a total of $66 million. (Walton had put funds into the project before Oconee County joined it.)
Split Votes in 2007
The Oconee County Board of Commissioners voted on Oct. 4, 2007, to assume that indebtedness, following the decision on Sept. 4, 2007, to enter into the intergovernmental agreement.
Commissioners Margaret Hale and Chuck Horton voted against the intergovernmental agreement, with Commissioner Jim Luke and then Commissioner Don Norris voting in favor. Commission Chairman Melvin Davis broke the tie in favor of the agreement.
Horton alone voted against the loan agreement.
Those were the last opportunities citizens had to express any opinions before a vote by the BOC on anything involving the Hard Labor Creek project.
Without a vote by the BOC, the Management Board decided to apply for the loans from the Georgia Environmental Finance Authority (GEFA) in April after being rejected in an earlier application for state direct investment in the reservoir under Gov. Nathan Deal’s Water Supply Program.
Horton has joined Luke as one of the county’s three representatives on the Management Board.
Reservoir Filled in 2016
Project Manager Parker estimated earlier this year 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. Neither county needs that water at present because of the slowdown in demand.
The project 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.
Jan. 8 Agenda Does Not List Vote
County Clerk Jane Greathouse released the agenda for Tuesday’s meet late on Friday afternoon and the tentative agenda for the Jan. 8 meeting.
The Jan. 8 agenda does not list the Hard Labor Creek loan document vote or a second, related matter.
County Administrative Officer Jeff Benko told me later in the day on Friday that the county will be voting at the Jan. 8 meeting on the qualifications of the three members Oconee County appoints to the HLC Management Board as well as on appointments to the Management Board.
Commissioner Horton will be leaving the BOC at the end of this month, potentially creating a vacancy. And no one has been serving as an alternate to Benko, also a member of the Management Board.
At present, 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 county has asked the Management Board
to create language that would allow it to appoint a citizen as an alternate. Hank Huckaby, currently chancelor of the University System of Georgia, served as a citizen member of the Board until his resignation in 2011 to assume his current post.
The BOC has not indicated publicly how it will solicit applications for any of the HLC Management Board appointments.
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