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6-4-07 Oconee to sign 50 year contract with Walton on $ 353 million reservoir project

•In the event either county defaults in payment, the WCWSA and the other county can assess and collect an annual tax. . •The agreement cannot be terminated by any party under any circumstances unless already outlined.

AVOC

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June 4, 2007

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Oconee to sign contract with Walton on $ 353 million reservoir project

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By Wendell Dawson, Editor, AVOC, Inc

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The Walton Tribune (June 3 2007) reported that Oconee will sign onto the $ 353 million reservoir project.

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Many folks have reservations about this project and Oconee’s “Hurried Involvement”.It is a long-time commitment that is much easier to get into than out of!

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Reports say that the agreement is modeled after the Bear Creek (Jackson County) Reservoir Agreement with four counties.However, as one who worked for years on the Bear Creek project, I disagree to its applicability.

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1.      Bear Creek was four counties and representation was weighted to keep any one county from dominating the project.The Walton Tribune report clearly shows that Oconee is a minority player without any partners to deal with the major player.

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2.      Bear Creek cost 1/5th as much as this $ 353 million project;

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3.      The Bear Creek agreement involved several years of open meetings discussions while the Walton deal is “hammered together” in a few weeks out of the public arena;

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4.      Bear Creek had unanimous agreement among all the players while Oconee, with Melvin Davis’s vote, entered into this deal on a 3-2 vote.

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Melvin Davis has made some major mistakes in judgment and policies in the last 6 ½ years.   This may be his biggest so far.

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Melvin Davis is big spender and loves long-term debt that he will not be paying back.

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SEE:

3-7-07 Oconee to join Walton Reservoir on split Vote – 3 to 2

3-6-07 Various thoughts and comments on the Oconee Water Decision

3-16-07 What the Oconee 3-2 (Melvin Davis) vote on Hard Labor Creek Means

1-6-07 Oconee Water needs and plans need public discussion and input –large impact on future

1-20-07 Oconee Commissioners seem determined to incur big and lasting debt for Fast Growth


The Walton Tribune

http://www.waltontribune.com/story.lasso?ewcd=9da70e95d647dc14

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June 3, 2007

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Walton, Oconee ink reservoir agreement

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By Robbie Schwartz

WALTON COUNTY — The ink barely had time to dry Thursday night before the Walton County Board of Commissioners unanimously approved a new intergovernmental agreement regarding the Hard Labor Creek Reservoir.

The recent agreement — which was being finalized just minutes before the meeting — was needed to include and outline Oconee County’s obligations for the project. Several meetings between counsel for the two counties took place and the Oconee County Board of Commissioners is expected to vote on the contract at their June 5 meeting.

“I for one think this has been a long time coming,” Commissioner Michael Turner said. “This has become a necessary step that has come to light with the current draught.”

The contract outlines various components of financial obligations by both Walton and Oconee counties as well as the job of the Walton County Water and Sewerage Authority as the entity charged with overseeing the development of and eventual running of the reservoir.

Though different because it is between three parties, the agreement was based on the Bear Creek Reservoir agreement that has been in place since 1996 between Barrow, Athens-Clarke, Jackson and Oconee counties.

According to the agreement, Walton County will have a 71.2 percent entitlement share of the project, a percentage applicable to the costs of the $ 353 million project as well as water allocations, leaving the remaining 28.8 percent for Oconee County. Other highlights of the 46-page contract include:

•A pro-rate reimbursement by Oconee County for the monies already spent for development of the project to date.

The establishment of an advisory committee made up of three representatives from Walton County and two from Oconee County that will make non-binding recommendations to the WCWSA on various aspects of the development of the project and its financing as well as the eventual oversight of the reservoir. Representatives will serve two-year terms and include the chairman of both county commissions as well as the manager and chairman of the WCWSA and the director of the Oconee County Utility Department. Their biggest responsibility will include limited control over the budget during the construction of the project as well as the budgets of the water treatment plant, reservoir and means of distribution once operational.

•If one county opts to sell on a short-term basis some of its share of the treated water output, the other county has rights to first refusal.

•The agreement will exist for 50 years, through May 31, 2057.

•It is expected that Walton County will bond out $ 178 million for the first phase and Oconee County $ 72 million, with the maximum interest rate of 15 percent and the latest maturity date of any bond being June 1, 2057. The total of the first phase – $ 251 million – will serve as a cap and allows ample room for cost increases in each phase of the project, according to Citigroup officials who will be overseeing the bonding out of the project.

•Should one county need more water and has the means to pay for the capital costs and any additional overhead and operation expenses of expansion, that county can expand its water in increments of 2 million gallons per day.

•In the event either county defaults in payment, the WCWSA and the other county can assess and collect an annual tax.

•The agreement cannot be terminated by any party under any circumstances unless already outlined.

In addition, with the emergence of Oconee County as a partner in the project, the initial intention to include the re-financing of existing debt for the WCWSA was removed and will be done at a later time, not affiliated with the bonds that will be sold for this project.

Once Oconee County officials sign enter into the agreement, the project’s first $ 60 million will be bonded out and the first phase begun within three months.


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