Walker County, Ga., leaders paid back $10 million with two days to spare.
The county, which took out a tax anticipation note from Rosemawr Management in March, wired the principal amount plus about $300,000 in interest to the New York investment firm on Tuesday and Wednesday. The money was due at the end of the year - unless the county wanted to watch the interest rate on the loan rise by about 55 percent.
About half of that borrowed money went toward paying off separate loans in 2013. And those original loans - from Regions Bank and Erlanger Health System - were used at the time to help Hutcheson Medical Center pay its employees. Earlier this month, ApolloMD became the manager of the bankrupt hospital.
"We are thankful we have been able to meet our financial obligations," Commissioner Bebe Heiskell said in a news release. "We had hoped our support of Hutcheson would have allowed it to function independently. Our hopes were realized, and we are grateful a buyer has been found for the hospital."
In the release, Heiskell said the second half of that $10 million tax anticipation note went toward building an industrial park in the Noble community. But in August, she told the Times Free Press the second half of the loan went toward day-to-day county needs, like paying employees.
"We spent it on things we didn't have revenues for," she said at the time.
Heiskell did not return a call seeking comment Wednesday. County Attorney Don Oliver, however, stood by the fact the tax anticipation note went toward the industrial park, not payroll. But he also said the money flowed from the general fund, making it difficult to know specifically how the $10 million loan was spent.
"We had day-to-day expenses we had to take care of," he said. "At the time, the industrial park expenses were being paid out of the day-to-day. I guess technically what [Heiskell] said was right. But basically, ultimately, [the tax anticipation note] went toward finishing the industrial park."
Bebe HeiskellEarlier this month, Oliver said paying back the tax anticipation note would be tougher than he originally thought because the county is behind on property tax payments. Normally, all residents have to give the county their money by Dec. 20. This year, however, the deadline is in the beginning of February.
Carolyn Walker, the county's tax commissioner, said the delay is due to Georgia Department of Revenue employees dragging their feet. The DOR asked appraisers to reassess property values this year. Residents would then have 45 days to appeal the new property assessments.
Walker said the process was supposed to be finished in May or June. Instead, she said, the appraisers didn't finish until September. And because it was finished late, residents' appeals came in late. And because that process was late, Walker could not get the new taxes approved until late. And because the approval was late, the county didn't send out tax notices until Dec. 3.
And residents don't have to pay back those tax notices, Walker said, until 60 days after they are mailed.
This year, Walker said, the county expects to get about $11.1 million in property tax revenue. So far, almost one week after the usual Dec. 20 deadline, the county has recovered about 56 percent of that revenue.
Erlanger sues
Erlanger Health System filed a demand in U.S. District Court on Monday, asking a judge to force Walker County to give the Chattanooga hospital about $8.9 million. Erlanger loaned Hutcheson $20 million in 2011 as part of a management agreement, and the elected leaders of Catoosa and Walker counties voted to each guarantee half of that loan.
Earlier this month, with ApolloMD offering to purchase Hutcheson for $4.2 million and Maybrook Healthcare offering to buy the hospital's nursing home for $7.3 million, Erlanger set itself up to receive portions of the revenue from each of those sales. Still, the counties owe the rest of the money.
Walker County has not filed an answer to Erlanger's demand yet. Catoosa County, meanwhile, has not been sued in U.S. District Court - even though both counties owe about the same amount.
Clifton "Skip" Patty, the attorney for Catoosa County, said Wednesday, "We are working with Erlanger to get our issue resolved."
Christmas letter
Heiskell sent a letter to Walker County residents in honor of "this season of thanksgiving and celebration of the birth of our Savior, Christ the Lord."
In the letter, Heiskell told residents she has worked hard to avoid raising taxes during "difficult situations." Among those situations, she listed the April 2011 tornadoes, the Marsh crematory scandal of 2002 - and the Sept. 11 terrorist attacks.
"Through all the hard times," she wrote, "I never raised your taxes."
Heiskell also said the county's finances should improve in the future. She pointed to expansions of Nissin Brake Georgia, Unique Fabrication, United Synthetics and Roper Corp. She said she is looking to build a strip mall in Rock Spring. She also said the Audia International plant in the Noble community should open soon.
Earlier this year, Walker County Development Authority Executive Director Larry Brooks said Audia officials wanted to begin work Aug. 1. Oliver said that date was later pushed to Dec. 1, but the rainy weather delayed construction. He said Audia has already hired employees and is putting them to work - as municipal employees.
"They've been paying them to have them volunteer for public service work," Oliver said of Audia. "They're just trying to keep them on payroll until they can get the doors open and get this mud out of here."
Contact staff writer Tyler Jett at tjett@timesfreepress.com or at 423-757-6476.