PTC leaning toward WASA refinancing
The Peachtree City Council voted unanimously Thursday to proceed with backing a refinancing of two bond issues for the city’s Water and Sewer Authority, which would save an additional $500,000 for ratepayers.
The matter won’t be finalized until council and WASA both approve the same intergovernmental agreement. City attorney Ted Meeker noted that the language in the agreement is still being finalized ... but it does retain the city’s capability to control any future expansion of the sewer system outside the city limits.
The city’s help, with no additional financial outlay, would bring the grand total savings to $1.8 million over the life of the loan. It also will allow WASA to avoid removing $1.8 million from its cash reserves to create a reserve fund for the bonds, which was a condition if WASA were to refinance the bonds on its own without the city’s help.
Mayor Don Haddix said Thursday that he has asked for a 50-year agreement for WASA to avoid going outside the city limits to provide sewer service, and he said WASA Chairman Mike Harman asked for a concession in return that Haddix deemed “controversial.” Haddix did not explain any details about the concession sought by Harman.
“The WASA portion, what they want, is what’s under debate and I’m not going to get bogged down in it,” Haddix said.
WASA is due to meet Monday night and it is expected the WASA board may vote on the agreement if it is in final form.
When WASA first discussed the refinancing in July, Harman said he supported WASA refinancing the bonds on its own despite the $1.8 million blow WASA would take to its cash reserves. Harman argued that WASA should be able to control, within reason, its ability to expand outside the city limits in an effort to gain revenue.
But last month, Harman suggested to council that council’s veto power could remain in effect if the city were willing to back the bonds for the additional savings. It was also noted that there are no proposals on the table for WASA to extend sewer service beyond the city limits.
WASA nearly two years ago adopted a steep rate increase, with most residential customers paying an additional $20 or more on their monthly bill. The December 2010 rate increase also was applied to business and industrial sewer customers as well.
At the time of the rate increase it was noted that WASA’s annual debt service payments totalled $3.24 million.
Fayette County resident Dennis Chase addressed council on the matter Thursday night, noting that when WASA conducted its most recent plant expansion a number of years ago, sewer officials contended they needed the expanded daily treatment limit to service the entire city including future development and a federally required additional reserve of 15 percent.
Chase said he also had expressed concern about water quality in Line Creek downstream of the location where treated sewer water is released, but WASA officials at the time said they wouldn’t investigate that location because it was outside the city limits and thus outside of WASA’s supervision.