South Fulton Municipal Regional Water & Sewer Authority May 8 edged closer to a decision on whether to refinance the current $42 million bond to secure an additional $13 million needed to purchase hundreds of acres in the Chattahoochee Hill Country area, build a proposed reservoir and water treatment plant and install water lines that will bring drinking water to Palmetto, Fairburn and Union City.

The interest rate swap proposal was viewed favorably by Palmetto Mayor Clark Boddie and Union City Mayor Ralph Moore, with Boddie giving a detailed overview of the need and rationale associated with refinancing the bond interest rate. Such a move, said Banc of America Securities Managing Director William Johnston, would drop the current rate from 4.896 to 4.09 and would represent a gross savings of more than $9 million. The rate swap proposal was questioned by Fairburn Mayor Betty Hannah, not in terms of accepting the proposal, which the Fairburn City Council supports, but over concerns that 22 percent of the $42 bond money had been spent without any permits being obtained. Hannah had previously stated that an original agreement between authority members held that the only bond funds that would be spent would be those needed to secure the project permits. To date, the authority has spent more than $862,000 for the purchase of 27.74 acres in the vicinity of Woodruff Road. And in total, Hannah said in an April 18 letter, the authority has spent approximately 22 percent, roughly $9 million, yet “it appears we are no closer to getting the necessary permits to build the lake than we were in 2003.”

Hannah, along with board member Adolph Snell, questioned other authority expenditures during previous years that had produced little if any result. Hannah said the first people in charge of the project, an apparent reference to consulting engineering firm Keck & Wood, did not do the job the authority had expected. During its time as the authority’s primary engineering consultant, Keck & Wood was paid more than $624,000. Keck & Wood is also the engineering firm serving Union City and Palmetto.

Palmetto City Council heard the first reading of a resolution supporting the interest rate swap. Fairburn will take up the issue May 14 and Union City will address it May 15.

Meantime, the cities will begin paying off the bond debt in July to the tune of a combined $183,000 per month. Union City’s share will be $95,000 per month, while Fairburn will pay $67,000 and Palmetto will pay $21,000.