LAFAYETTE, Ga. - Walker County has entered the loan zone, level three.
Commissioner Bebe Heiskell said Thursday the county's Development Authority is taking out a $15.2 million bond. Of that money, $10 million will go to pay off a tax anticipation note that Heiskell asked for in March.
That March loan had helped pay off yet an earlier loan.
Taken out in 2013, that original loan cost the county $4.8 million but helped Hutcheson Medical Center pay its employees. The March tax anticipation note repaid that 2013 loan and required another $5.2 million to cover the county's day-to-day expenses.
Now, with this new bond, the county will pay back the entire tax anticipation note and another $5 million from the bond will go toward finishing construction on industrial parks in Rock Spring and the Noble community.
The county will pay back the whole $15.2 million in 20 years. County Attorney Don Oliver expects the interest rate will be 5 percent. The county is also paying a bond insurance company to keep that rate low.
While the county hired Moody's and Standard & Poor's to rate previous bonds, the county chose to pay an insurance company called Build America Mutual this time because the rating agencies gave Walker County a negative outlook for its financial future last summer. Oliver said the county will pay the insurance company an interest rate on the bond of 0.67 percent.
Assuming the $15.2 million loan is repaid on a regular schedule for the next 20 years, the county also will pay about $10 million in interest, according to a loan calculator. The bondholders will get $8.8 million over 20 years. The insurance company will get $1 million.
Walker County Commissioner Bebe Heiskell speaks at a news conference at the Walker County Court House Annex in LaFayette, Ga., in this file photo.Heiskell said Thursday that this bond was her best way to keep property taxes relatively low this year while still paying back the tax anticipation note that is due Dec. 31. She said the county will levy a 1 mill property tax increase to make bond payments.
The county will go before a Superior Court judge Sept. 15 to discuss the bond. Any residents who oppose the loan can voice their opinions then.
The county is putting up its civic center and Mountain Cove Farms as collateral for the bond. If Heiskell can't make payments, the creditors could try to take those properties.
Heiskell said she has also received a $2 million offer from out-of-state investors to buy Mountain Cove Farms, which the county bought for $2.5 million in 2008 and has cost taxpayers an extra $2 million in operational costs since then. Heiskell said the investors want to build a golf course, which she does not like.
She said Thursday that residents think the property is beautiful and have wanted to explore it for years. But until Walker County bought Mountain Cove Farms, the property was private.
"For the first time, they've been able to go on it and they love it," she said. "People who are living in the cove want me to put a clause in that it can never be sold."
No line-item budget
Despite a resolution earlier this year at the Walker County Republican Convention, Heiskell said she will not release a line-item budget for the fiscal year that begins next month.
While surrounding counties release budgets explaining specific expenses, Heiskell said her accountant, Greg McConnell, does not want to print out such a thorough document. Heiskell she also doesn't want to have to approve budget amendments every time county agencies spend money differently than they planned to at the beginning of the fiscal year.
"That happens a lot," she said.
Heiskell said she is not worried that her budget will upset the majority of the local Republicans.
Contact staff writer Tyler Jett at tjett@times freepress.com or at 423-757-6476.