Gov. Sonny Perdue's plans to slash 40 percent of a state loan fund that has invested at least $10 million in recent local water system upgrades is all wet, local officials say.
The governor plans to trim the Georgia Environmental Facilities Authority loan fund from $74.1 million to about $45 million and to sell $592.6 million of its existing loans on the private market to help shore up the crumbling state budget.
But reduced funding will jeopardize local projects to modernize the water supply, said Dade County Commissioner Robert Goff.
Staff Photo by Allison Kwesell/Chattanooga Times Free Press - An interceptor sewer line that is paid for through city bonds is shown at West Chickamauga Creek on Cloud Springs Road in Fort Oglethorpe.
"So many of our people in rural counties are still on wells," he said. "That's where it can get down to shortchanging and citizens saying 'What in the world's going on here?'"
Dade County has received nearly $2 million since 2006 for water projects, GEFA records show.
Gov. Perdue's press secretary, Chris Schrimpf, said the $45 million is equivalent to annual state financing levels from 2001 through 2005 for the loan fund.
"There's a balance struck to allow GEFA to keep doing what it's been doing," Mr. Schrimpf said.
He said the fund has financed about 200 projects worth about $595 million since 2005, but called that level of spending an anomaly.
"The ramp-up occurred in part because of a couple of very large projects that could not secure funding without GEFA's help," he said.
RECENT GEFA PROJECTS
City of Chickamauga
* $1.28 million in 2007 to upgrade water and sewer system
* $1.24 million in 2007 to conserve and protect Crawfish Spring, the largest water source in the West Chickamauga Creek basin
City of LaFayette
* $4.96 million in 2008 to upgrade water distribution system, including reservoirs and installation of three pump stations
* $1.02 million in 2006 to boost an existing $2 million loan to improve the Sand Mountain Water Treatment Plant
* $900,000 in 2008 for water lines to the Mount Carmel Community in Walker County
* $908,000 in 2006 to build a 400,000 gallon tank for the Walker County Rural Water and Sewer Authority
Source: GEFA Web site
Selling the loans won't affect access or basic operations for the agency, but there will be less money available to local governments, he said.
"That's why we're not selling off the whole thing, we're just returning it to 2005 levels. There's other needs in the state that don't go away."
Mr. Goff said that qualifies as a major decrease in available funding options.
"It's hard to see government forcing this type of legislation that's going to cost counties," said "We can be very easily shortchanged. Not only on the water issues, but a lot of issues. One size does not fit all."
Fort Oglethorpe City Manager Ron Goulart said he typically bypasses GEFA funding altogether by issuing city bonds.
"It makes things much easier when you keep it small," he said. "If we're going to borrow the money, we need to have control of the project, not them.
Going through the state, he said, "is not really worth the red tape. Every time you get through with something like that, you would have been better off to just do it on your own."
Mr. Goulart said that, if all other attempts at financing water and sewer projects failed, he might submit an application to GEFA, but would rather avoid "jumping through the hoops."