On Tuesday, December 1, Henry County commissioners voted 3-3 to deny the water authority’s ability to pay off existing bond debt through new bonds at a lower interest rate. The refinancing would save the water authority $2.8 million in interest over the next five to six years.
The water authority has outstanding principal bond debt of $25 million from bonds issued in 2010 at approximately five-percent interest rates. Current interest rates near one-percent would allow the water authority to achieve debt service savings on the remaining payments.
The question before the board of commissioners was to reaffirm the two mill property tax through which the bonds are backed. The two mill tax — collected since 1984 for the purpose of capital projects — is scheduled to end in 2030. The refinancing would not affect the ending date for the two mills.
The water authority has a thirty-year $900 million dollar capital improvement plan that the bonds have provided funding to help construct. The water authority’s plan for the $2.8 million in debt savings is to reinvest it into the capital plan. Board members objected to passing the county’s resolution until more specifics were presented by the water authority.
Commissioner Clemmons commented “we don’t know how you’re going to allocate [the two million]. There are some areas that need water and sewer lines as we build and develop.” Commissioner Holmes added “I have not had any conversations with anybody regarding the capital improvement plan. I don’t know what [the water authority’s] short-term plans are or long-term.”
Commissioner Thomas remarked “I, too, don’t understand what [the water authority is] actually doing…We need to know how we compliment each other.” She requested the water authority present to the board how they intend to use the cost savings. A motion by Commissioner Thomas to table the item failed earlier in the meeting.
Several commissioners commented more joint meetings were needed between the board of commissioners and water authority board, comprised of one appointee by each district commissioner. The last joint meeting, held in September 2019, included discussion about the capital plan with four commissioners in attendance. Clemmons and Holmes were absent.
The water authority updates its capital improvement plan every five years with annual reviews. The latest five-year update is in the final stages of preparation before being presented to the water authority board for adoption. Staff present from the water authority offered to meet with commissioners to discuss the capital plan.
“This is all about refinancing. This is all about saving money for the county,” said Commissioner Barham. “I think we need to move forward with this as quick as possible.” Commissioner Wilson added the savings would occur over several years, not immediately.
Commissioner Barham made a motion to approve the reaffirmation of the two mills tax seconded by Commissioner Wilson. Chair Wood, Commissioners Barham and Wilson voted in favor of the motion; whereas, Commissioners Clemmons, Holmes and Thomas voted in opposition.
The featured image is an aerial photo of the Walnut Creek Wastewater Treatment Plant. Photo credit to Henry County Water Authority.
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