LaFAYETTE, Ga. -- Facing millions of dollars in overdue loans, Walker County Commissioner Bebe Heiskell announced a solution Tuesday: Take out another loan.
Heiskell agreed to issue a tax anticipation note of $4.5 million to a New York investment company. She will use that money to cover loans from Regions Bank and Erlanger Health System that Hutcheson Medical Center needed two years ago to make payroll.
Walker County was supposed to pay the Regions loan by Dec. 31, 2014.
"We just have to do it now," Heiskell said Tuesday.
This new loan will be due at the end of the year, with an interest rate of 4.5 percent. Assuming the county pays it off by New Year's Eve, that will be a total of about $4.7 million. If the county doesn't pay the money off by the end of the year, the interest rate will jump to 6.5 percent.
Heiskell also announced Tuesday that the county can actually take out another $5.5 million loan this year, if it wants. She did not know whether she will need to do that.
The current loan alone will be tough to pay back this year. The county took in about $17.8 million in taxes in 2014. The money Heiskell borrowed Tuesday represents more than one-fourth of all the money Walker County residents gave their local government last year.
So how will the county recoup that money?
"I don't know for sure," Heiskell said. "We've got a few options."facebook
What are the best options?
"There's things that we can do. I don't know. We might sell something?"
"Maybe. We don't have a public answer at this time."
Heiskell then ended the special meeting she'd called to sign the paperwork on this deal.
The commissioner has been adamant this year that she will try to avoid raising taxes, especially after last fall, when she faced screaming residents to announce that property taxes were going up 64 percent.
But Tuesday's deal -- and, really, the loans she guaranteed for Hutcheson -- puts her in a bind.
Two weeks ago, Heiskell was hopeful that the county would receive a new arm of local government. An advertisement in the Walker County Messenger announced that state Rep. Steve Tarvin, R-Chickamauga, was going to file a bill to create a Walker County Public Facilities Authority.
Heiskell said she was working with Tarvin to craft the bill, which would let Walker County issue revenue bonds without voter approval, as state law demands. The Public Facilities Authority could issue those bonds, pay off that $4.5 million debt immediately, then spend the next 10 or so years paying off a different $4.5 million debt.
That would be much more manageable than the current debt, demanded as soon as possible.
But as of Tuesday, Tarvin still had not filed the bill to create the Public Facilities Authority, a bill he would have to file and pass through the House by Friday. He did not return multiple calls seeking comment.
When asked for an update on Tarvin's bill, Heiskell said, "I don't know. I haven't heard anything from him."
Contact staff writer Tyler Jett at email@example.com or 423-757-6476.