……..Many of the personnel, including Board of Directors, at North GA Bank are friends and we wish them well. They are not solely responsible for the failure. However, neither was the Federal Government, as one defender and growth enabler recently editorialized………… ………….Garivernetwork -2.18.11……. the story of the Hard Labor Creek project stands as a cautionary tale with broad applicability when it comes the financial side of lake-building. ……………. In a nutshell, Hard Labor Creek is on the rocks because the new water customers who were supposed to pay off its debt have not materialized. (The shame of it all is that existing customers are paying that bill.) Demand projections were overblown. And if the project is in trouble because its presumed water demand does not exist, then should it even be built? It’s clear from the numbers in the Banner-Herald story that even an infusion of state money can’t save this project. Can’t Georgians statewide avoid repeats of this story by accepting a reality check on reservoirs?

AVOC

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February 19, 2011

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Oconee County’s ‘Chickens Coming Home to Roost’

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By Wendell Dawson, Editor, AVOC, Inc

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Since the failure of North Georgia Bank, much public discussion has dealt with the reasons.   For persons following the banking industry and Oconee’s growth in the 2002-6 years, it was not a surprise.   The Bank was in the top ten banks in the UNITED STATES expected to fail.  

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Top Ten Banks in Danger of Failure in the United States as of February 14, 2011

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The Investor Advocate

The Top Ten Banks in Danger of Failure as of February 14, 2011 are:

1. Chestatee State Bank, Dawsonville, GA -- Failed 12/17/10
2. Montgomery Bank & Trust, Ailey, GA
3. Enterprise Banking Company, McDonough, GA -- Failed 1/24/11
4. First Sound Bank, Seattle, WA
5. North Georgia Bank, Watkinsville, GA -- Failed 2/7/11
6. Habersham Bank, Clarkesville, GA --Failed 2/18/11
7. Georgia Heritage Bank, Dallas, GA
8. American Trust Bank, Roswell, GA -- Failed 2/7/11
9. Oglethorpe Bank, Brunswick, GA -- Failed 1/17/11
10. The First State Bank, Stockbridge, GA

FOR BACKGROUND AND HISTORY OF OCONEE GROWTH ISSUES OF RECENT YEARS, SEE:   Oconee County Economy Links 2011.pdf x

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Many of the personnel, including Board of Directors, at North GA Bank are friends and we wish them well.   They are not solely responsible for the failure.  However, neither was the Federal Government, as one defender and growth enabler recently editorialized in the Oconee Enterprise.    One problem may be too many banks for a relatively small county.

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First GA Bank at Virgil Langford –Oconee Connector 2-19-11-   Daily observation does not indicate volumes of traffic

       Some objected to rezone when this was planned but it was approved in spite of plans for the Oconee Connector.    Jennings Mill Road now detours around this building.

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Bank Owned Commercial Tract at rerouted Oconee Connector and Jennings Mill Road 2.19.11

Tax Parcel # C 01AP002

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Commercial Tract at rerouted Oconee Connector and Jennings Mill Road 2.19.11

Tax Parcel # C 01AP002

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North Georgia Bank and County Government had close ties.   Oconee State Bank also had county ties.   The Bank Presidents serve on many boards etc.   For many years, a Bank President has been chair of the Oconee Development Authority.

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Some of our leaders, elected and in banking, got greedy and wanted a faster pace of growth than we experienced in the 1990’s which I always thought was a good decade for Oconee County.   Several mistakes were made:

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            1.   Oconee’s meager sewer capacity was authorized for residential growth in 2001-1 and that led to scattered subdivisions with small lots and an exhausted sewer capacity; 1-22-09 Oconee County quietly reverses mistaken sewer capacity policies

            http://www.avoc.info/info/article.php?article=3981

    The Oconee BOC, at an Agenda Setting Meeting on November 25, 2008, changed its residential sewer policy of recent years.The Oconee residential sewer policy was discussed and approved at a “Retreat” in late 2002 and at a “called meeting on the eve of the Florida- Georgia game) with little public knowledge or input……..

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            2.   MPDs were a mistake made around 2002 and allowed for a proliferation of dense and scattered developments on sewer. The policy let Metro Atlanta Contractors come in and build houses in an assembly fashion.Many of the MPDs did not do well.

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Parkside Entrance on Mars Hill Road – Tax Parcel # B 05H 001GS - 2-19-11

   Sitting idle for several years

           NOTE: Some remember talk of a mall at this development…….

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            3.   Changing the road projects priorities to allow the Oconee Connector Project (Development Driven) priority over the GA 53-Mars Hill Parkway Project.   We now are getting a ‘Cadillac Road to Nowhere’ and feeding into two lane county roads;

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     Oconee.Connector.Jennings.Mill.Pkwy.Project.3.08.pdfx   - 5-25-10 Oconee Connector Project Over Loop- Economic Opportunity or ‘Road to nowhere’ or Both

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           4.   Leaving Bear Creek Reservoir (UOBWA) partners and committing to the 340 Million Dollar Hard Labor Creek that many consider to be a floundering mistake – it still may be cheaper to just pay the money back and get out of it and work with our existing partners with UOBWA;

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            5.   Spending all monies taken in on large SPLOST Capital Projects that require more personnel, operating and maintenance costs, including recent talks about a Mega Courthouse Complex away from downtown Watkinsville;

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            6.    Not acknowledging the economic slowdown impact on the county digest.   The digest kept spiraling upward with the Land-Housing Rush.   With the crash, values are down everywhere EXCEPT on the County’s Digest.       

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Many folks made money off the big Housing Bubble.  FDIC had to come up with about $ 30 Million for the NGB failure.   Oconee State Bank also lost money and quit paying dividends to longtime stockholders who counted on the annual extra income.   Many of the Players were Metro Atlanta Contractors who have since moved on –many with profit in their pockets.

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At least two incumbent commissioners and some planning commission members were involved in the referenced mistakes.   They have been treated favorably by local media who are seeking revenue from advertising.   At least Bloggers, the Internet and other choices of Media have helped correct the record.    Davis was involved in all of them.   Luke was the deciding vote in the Hard Labor Creek disaster.   Voters have an opportunity to remove these gentlemen next year.   The County would be better off without either of them.

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Mistakes and failings are visible all over the county with vacant office and commercial buildings and For Sale signs up for years.

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HARD LABOR CREEK IS BIG MISTAKE THAT COMMISSIONERS DAVIS, LUKE AND NORRIS APPROVED ON A SPLIT VOTE –March 2007

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6-25-07 Oconee-Walton Water Agreement raises concerns of citizens on tax & other issues

     http://www.avoc.info/info/article.php?article=3754&ENGINEsessID=7c381830e87d23bafb418ae79911bbad

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6-15-07 Oconee County is moving into a huge commitment that will be around for grandchildren

     http://www.avoc.info/info/article.php?article=3752

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6-6-07 Oconee 'delegates' taxing authority with Walton Agreement

http://www.avoc.info/info/article.php?article=3749

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

http://www.avoc.info/info/article.php?article=3748

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

http://www.avoc.info/info/article.php?article=3707&ENGINEsessID=7c381830e87d23bafb418ae79911bbad

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2-18-11 Reservoir Issues – GA Wire- Hard Labor Creek Project described as Failed

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Reservoir Reality Check

http://gawaterwire.wordpress.com/2011/02/18/reservoir-reality-check/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+GeorgiaWaterWire+%28Georgia+Water+Wire%29

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February 18, 2011

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By garivernetwork

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An AP story this week – which ran in practically all the major papers in the state – puts a distinct question-mark on Gov. Nathan Deal’s reservoir-building plan. As an example, the article uses Canton’s Hickory Log Creek Reservoir, which “took years to finish and was expensive, running $ 75 million over original budget estimates,” the AP reports.

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The point is a general one: new reservoirs take years to build and are very expensive – even without cost overruns, which are often more the rule than the exception. The question before Georgians today on water issues is largely one of public spending priorities.

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Be sure to give that story a read. In other news, the Athens Banner-Herald has an update on the foundering Hard Labor Creek Reservoir project, whose backers are looking to Atlanta for what could easily be called a bailout for a failed endeavor. As we’ve noted before, the story of the Hard Labor Creek project stands as a cautionary tale with broad applicability when it comes the financial side of lake-building.

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In a nutshell, Hard Labor Creek is on the rocks because the new water customers who were supposed to pay off its debt have not materialized. (The shame of it all is that existing customers are paying that bill.) Demand projections were overblown. And if the project is in trouble because its presumed water demand does not exist, then should it even be built? It’s clear from the numbers in the Banner-Herald story that even an infusion of state money can’t save this project. Can’t Georgians statewide avoid repeats of this story by accepting a reality check on reservoirs?

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One more important note: Hard Labor Creek backers suggest in the story that their project has “political advantage” at the money trough because it’s in a river basin that doesn’t cross any state lines on its way to the sea. The issue here is interbasin transfer, and the assumption – frankly, an offensive one – is that downstream Georgians have no seat at the table.

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Then again, this project’s proponents seem to be grasping at straws. For example, does anyone really think that Gov. Deal’s reservoir money will magically turn from bonds into grants?

-Ben Emanuel