The Oconee County Industrial Development Authority today (Monday) agreed to sell up to $155 million in tax-exempt bonds for the construction of Presbyterian Village Athens.
The Authority will earn a total of $600,000 in fees for issuing the bonds for Westminster Presbyterian Homes Inc., which is building the continuing care retirement community on the 70-acre tract on U.S. 441 at Hog Mountain Road.
The Authority had told Westminster Presbyterian Homes back in May that it was willing to issue the bonds for construction of Presbyterian Village Athens, and the unanimous vote of the Authority today approving the bond resolution is the final step in the process for the Authority.
John Daniell, a member of the Authority and Board of Commissioners chair, said he will sign the agreement on behalf of the county without bringing the issue before the full Commission.
Citizens were not given a chance to speak today until after the Authority had voted, and the one person who did speak merely asked for a copy of the bond resolution approved by the Authority.
Justification For Bond Sales
The agreement between the Authority and Westminister Presbyterian Homes, a nonprofit corporation, allows Westminster Presbyterian Homes to borrow money for construction of its facility at a lower interest rate than it could on its own.
The Authority can issue tax-exempt bonds, and Westminster Presbyterian Homes cannot.
The entities that purchase the bonds are willing to accept a lower interest rate because the interest is tax-exempt.
Daniell, who made the motion to approve the bond resolution, said Presbyterian Homes had demonstrated that “there is a market for this type of facility” in the area.
“We’re netting out $600,000 for use for the IDA in the future,” Daniell added.
The project will generate construction activity and “We also see 175 to 200 jobs created from that facility as well.”
Amount Still Uncertain
When Presbyterian Homes first came before the Authority in May, it stated that the financing was still developing for the Presbyterian Village Athens project, but it expected to ask for $150 million in bond sales.
The bond resolution passed by the Authority authorizes issuing of bonds in an “amount not to exceed $155,000,000.”
“We’re expecting to issue less than that,” Jerry Peterson, bond counsel for Presbyterian Homes, said at the meeting today, “but we’re leaving a cushion just in case.”
The Authority postponed today’s meeting twice to get documents in place for final approval.
County Attorney Daniel Haygood told me the agreement on the $600,000 in fees was the result of negotiations.
The county could charge a larger amount based on U.S. Internal Revenue Service regulations, Haygood said, but the negotiated fee is higher than many counties or authorities are charging.
The county will get paid the $600,000 regardless of how much Presbyterian Homes ultimately borrows, Haygood said.
Actual bonds could continue as long as 34 years, Haygood said, but the county will only receive a fee for 18 years.
In addition, Haygood said, Presbyterian Homes will pay his fees as well as those of Jim Woodward, who serves as a consultant to the county on bond sales and attended the meeting today.
The county, on behalf of the Authority, held a required TEFRA hearing in September to give citizens an opportunity to comment on the bond sales. TEFRA is from the Tax Equity and Fiscal Responsibility Act of 1982.
Twenty-five people attended that hearing, with most who spoke raising concerns about the county’s liability for the bonds and the rationale for assisting Presbyterian Homes with its financing.
Haygood said at that time that neither the county nor the Authority had any liability for the bonds and that the bond documents would specify that.
“The Bonds...will not constitute a debt or a general obligation or a pledge of the faith and credit of the State of Georgia, Oconee County, or the Authority, and will not directly, indirectly, or contingently obligate said State or Oconee County to levy or to pledge any form of taxation or other revenues whatever for the payment thereof,” the resolution passed today states.
The resolution also states that Waller is “directed to immediately notify the District Attorney of the Western Judicial Circuit of the action taken by the Authority, (and) to request said District Attorney to institute a proceeding to confirm and validate the Bonds.”
Haygood had said at the TEFRA hearing that the resultant ruling of the Superior Court would certify that the county and Authority had no liability for the bonds.
Six citizens (myself included) attended the Authority meeting today, but two left immediately after the vote on the bond resolution.
Tom Remar, 1521 Crystal Hills Drive, who questioned the Bond issuance at the Authority meeting in August and again at the TEFRA hearing, left the meeting once the vote was taken today but returned a few minutes later.
When Waller allowed for citizen comment at the very end of the meeting, Remar asked for access to the bond resolution the Authority had approved.
“I don’t have a copy to give you right now,” Waller said.
Daniell said he would send Remar a copy tomorrow (Tuesday).
No one else spoke during the allowed time for citizen comment.
Daniell told me following the meeting that he will sign the bond resolution on behalf of the county and that he does not intend to bring the matter before the full Board of Commissioners.
The meeting took place at the Oconee County Chamber of Commerce office, 55 Nancy Drive in Watkinsville.
The video below is of the entire meeting.
Discussion of the bond resolution begins at 1:20 in the video.
Citizen comment is at 22:10.