Sunday, September 09, 2018

Citizens Voice Concerns At Hearing About Oconee County Sale Of Bonds For Presbyterian Homes

***County Attorney Says No Liability***

Citizens who spoke at the hearing on Thursday regarding the county’s plans to issue $155 million in bonds for Presbyterian Village Athens raised two concerns.

Some said they felt the bonds represented a risk to the county.

Some questioned why the county was issuing the bonds for Westminster Presbyterian Homes Inc. of Quitman, a nonprofit organization that is building Presbyterian Village Athens on U.S. 441 north of Hog Mountain Road.

County Attorney Daniel Haygood addressed the first of the concerns even before the citizens spoke, saying that a Superior Court Judge will hold a hearing on the bonds to make sure there is no risk to the county before the bonds are sold.

Haygood, acting as hearing officer on Thursday, encouraged speakers to raise whatever concerns they had regardless of what he had just said and returned to the issue of risk, as did bond counsel Jerry Peterson, representing Presbyterian Homes, at the end of the hearing.

Neither Haygood nor anyone else addressed in specific terms why the Oconee County Industrial Development Authority wants to issue bonds for Westminster Presbyterian Homes Inc.

TEFRA Hearing

The meeting on Thursday at the Courthouses in Watkinsinsville was officially a TEFRA hearing, from the Tax Equity and Fiscal Responsibility Act of 1982.

That Act requires the Industrial Development Authority to give the public an opportunity to comment on the use of the tax-exempt bonds.

The Authority passed a resolution in May indicating its willingness to issue bonds for Presbyterian Homes for up to $150 million.

In announcing the TEFRA hearing, the county specified the amount as $155, which is more than twice the total amount of the bonds the Authority has issued for five different organizations since 1989.

Westminster Presbyterian Homes Inc. can use the revenue generated by the bonds to refinance and finance the costs of acquiring land and for construction, furnishing and equipping its continuing care retirement community.

The Authority meets at 4 p.m. tomorrow (Monday) at the Chamber of Commerce, 55 Nancy Drive in Watkinsville, but a vote on a bond resolution–the next step--does not appear on the agenda released for the meeting.

The Authority can amend that agenda once the meeting begins.

Large Turnout

Twenty-five people were in the audience when Haygood opened the meeting on Thursday.

Haygood

“I think this may set an all-time record for attendance at a TEFRA hearing in this part of the world, anyway,” Haygood said.

Haygood was joined at the desk at the front of the Commission Chamber by Board of Commissioners Chair John Daniell, Commissioner William “Bubber” Wilkes, and County Clerk Kathy Hayes.

Seven people spoke, and another four had signed up to speak but passed when given the opportunity. Among those passing was Alex Patterson, vice president of Presbyterian Homes of Georgia.

Amry Harden, 1100 Briar Lake Court, off Mars Hill Road, was the only speaker who gave unqualified support for the project.

Harden is retired president of Oconee State Bank and a former member of the Industrial Development Authority, and he said “the use of Industrial Development bonds for this project is appropriate.”

Public Justification

Tom Remar, 1521 Crystal Hills Drive, who questioned the Bond issuance at the Authority meeting in August, gave a lengthy statement in which he said that he remained concerned about risks to the county and challenged the decision by the county to get involved in the project.

“The public justification for this project is weak,” Remar said. “One of the main issues in my opinion is what business do we as a county have being this involved in this kind of project anyhow?”

“Let them finance this monstrosity themselves,” Remar said.

George Rodrigues, 105 Hight Drive, Watkinsville, and a member of the county’s Planning Commission, said “I guess my question really comes down to ‘How will this benefit Oconee County?’”

Rodrigues noted that Presbyterian Homes will not be paying any property taxes and that the development will add to traffic problems in the area.

The development will create jobs, Rodrigues said, but “very few of them are going to be people coming out of Oconee County. Most of the folks doing the work over there will be coming from elsewhere.”

Limited Capacity

“Why is the Oconee County Industrial Development Authority using its precious and limited development bonding capacity for a project that’s of this scale and this magnitude and that has been advertised as a very profitable and financially stable entity?” Tim Burgess asked.

Burgess, who lives at 1030 Buckeye Point, off Daniells Bridge Road, is a member of the Board of Education.

Maria Caudill, 1300 South Rossiter Terrace, off Simonton Bridge Road, called on Presbyterian Homes to provide something back to the community, such as scholarships or space for people from the county who cannot afford to pay the fees required to enter the community.

Caudill also is a member of the county’s Planning Commission.

Charles Baugh, 6292 Greensboro Highway in the far south of the county, said he wanted to know “what the potential impact is on the county bond rating.”

“I’m not sure we’ve stated clearly exactly what the public benefit is of the project,” Baugh added. “And that’s a very necessary and basic requirement for it to be a tax exempt bond issue.”

Presbyterian Homes’ Response

Haygood gave Peterson, bond counsel for Presbyterian Homes, a chance to respond to the comments by the citizens.

Peterson

“I’ve been involved in conduit financing since 1973,” Peterson said. “I’ve done billions of dollars in bond issues. I’m not aware of any instance in which the governmental body that issued has been held liable.”

“Throughout the documents, we write in bold-faced type that it is an obligation of the conduit borrower, not of the bond issuer or the sponsoring governmental entity. Security laws require us to make it very clear.”

Peterson said it “does not affect the county’s rating because the rating agencies understand the differences between conduit and general obligation debt."

Peterson “said there was a lot of talk about the Presbyterian Church. It’s not involved.”

While the borrowing entity “has the name Presbyterian in it,” Peterson said. “It is not affiliated with the Presbyterian Church.”

Haygood’s Response

“I can just assure you personally,” Haygood said after Peterson spoke, “if there was any–even a pinhole--chance of liability for the county or the IDA, we would not be doing this. (Remar has referred to “pinhole risk” in his comments.)

“There is simply not liability,” Haygood said.

Haygood referred back to the validation process he had mentioned at the start of the meeting.

“Once the judge has signed, there’s just not a way to get past that,” he said.

Video

The video below is of the entire TEFRA hearing.

Remar was the first speaker and was followed by Harden.

The remaining speakers are in the order discussed above.

OCO: IDA TEFRA Hearing 9 6 18 from Lee Becker on Vimeo.

12 comments:

JM said...

Given the issues over residential sewer usage request and the limits the commission imposed, what is the impact on the county's ability to handle the increased flow.

Lee Becker said...

JM,
The county has not raised a concern about the ability to handle the sewage from Presbyterian Homes.
Lee

Anonymous said...

How does a project this size get to this point without financing already in place? Also if the Presbyterian church has nothing to do with Presbyterian Homes how to they get their non profit status?

Anonymous said...

The IDA can't come up with anything to do with the Gateway Technical park, why on earth would we trust them with $150 million on such a deal. I'd have to say with the Gateway Technical park undersold and unsold, that there is great proven risk that this too could be a failure. I just wish the meeting wasn't at 4, when no ones voices can truly be heard.

Brian said...

The bonds are a tried and true economic development approach across the state. Presbyterian Homes responds to a need that will grow in Oconee in the decades ahead without the traffic impact, public safety challenges, and relatively rapid deterioration of a retail outlet, which would have been the other likely use for that property given land values and location. Bond proceeds will give our economic development authority additional resources to pursue other job generating companies. A win win.

Zippity said...

Presbyterian Homes is not affiliated with a church, but is tax exempt. Nice business model for them. Not so good for the county since many services will be required (but at least little school impact). Interesting that sewage is not an issue for this large project, but seems to be for everything else. They advertise how they are in beautiful, rural, green Oconee county and then they strip every tree off their property, leaving not even a twig or a bugger. UGLY and environmentally irresponsible. I like their ads, but not their actions.

Anonymous said...

Dr. Becker:
Your in-depth reporting is outstanding on this issue and so many in the past.
Thank you for caring about Oconee.

Anonymous said...

Yes, like Zippity said, that is one massively horrendous project.

Takes your breath away. Good job, let's just strip this beautiful place bare. What is the aim here? Just raise up one devastating project after another? My oh my.

Xardox said...

Supposedly this is a common vehicle for the County to serve as a conduit for the sale of bonds.
It raises the bond ratings and lowers the interest rate.
I am a little shaky on just why there is no monetary risk to the county,
except that the property values usually are worth more than the bonds sale.
The risk is in the possible damage to the county debt rating.
There are many steps to satisfy monetary concerns.
However, as noted above, the impacts to infrastructure have not been voiced.

Anonymous said...

It may be a win win in your opinion, but its easy to see what this really is. The developers get the tax payers of the county on the hook and the take the profits. They can claim that the county will not be liable for the bonds until the cows come home. I dont buy it. The county will have to provide water, sewer, police, fire, and ems services for pretty much free since they are claiming to be somehow affiliated but not affiliated with the church.They will pay no taxes. As far as a need in this county for such a burdensome place, why did they pre-sell it in Atlanta?

rightway1974 said...

Zippity nailed it. So far they have six violations that I am aware of. I cant understand why they dont have their own funding? If its such a positive thing they would have investors beating a path to them. The whole thing doesnt smell right and we will be stuck with the burdensome eyesore while the "non profit" profits, leaves, and laughs at the suckers they rolled all the way to the bank.

Patrick Cline said...

I asked all of the commissioners about sewer before this was approved. Don't act like this is something new. It is not. I asked for volume and capacity numbers. I asked specific commissioners this by email and I asked Melvin by email. No response.