Fairburn goes against the grain in reservoir bond vote

Mon, 05/28/2007 - 8:54am
By: Ben Nelms

A vote by Fairburn City Council in a called meeting Friday morning may have upset the apple cart of the remaining members of the South Fulton Municipal Regional Water & Sewer Authority. The vote goes against the wishes of Palmetto and Union City, who wanted the refinancing of the authority’s $41.7 million bond to provide an additional $13 million of new money for the long-standing reservoir project.
Prior to the Friday meeting, Fairburn had voted to go along with the option that would have provided $13 million in new money, but with the stipulation that any expenditures by the authority other than those necessary to obtain the required state and federal permits be approved by all three mayors. Otherwise, said council members, Fairburn would approve the option that generates $9 million designated for paying down on the monthly bond debt.
Palmetto Mayor Clark Boddie at a recent city council meeting disagreed with Fairburn’s approach.
“Everybody needs to understand that the actions are controlled by an authority,” Boddie said. “You can’t arbitrarily change the way the authority operates. As long as four of the seven members vote, the authority will move forward.”
At the Friday meeting, Fairburn voted to refinance the bond at the same interest rate, but with the understanding that the $9 million it would generate must be used to begin paying off the monthly debt from the original 2003 bond. Fairburn will be responsible for paying $67,000 per month on the principal and interest beginning in July. Union City is obligated to pay $95,000 per month with Palmetto responsible for $21,000 per month. Fairburn City Administrator Jim Williams said the council’s vote, if enacted by the authority, would reduce Fairburn’s monthly debt repayment by approximately $10,000.
Union City and Palmetto voted earlier this month to refinance the bond in a way that provides approximately $13 million in new money for the authority’s use. Fairburn objected, saying that the authority had not honored the authority’s original agreement and had already spent $9.2 million of the bond money without obtaining any of the required state and federal permits needed to begin the project. Fairburn officials cited expenditures such as property purchases and questionable engineering costs as unnecessary in light of the absence of the required permits, saying those expenditures were not in keeping with the spirit of the agreement at the time the bonds were sold in 2003.
The authority was initially formed to provide drinking water to the three south Fulton cities. With $9.2 million of the $41.7 million bond already spent, the authority has no permits in hand to build the reservoir in Chattahoochee Hill Country, construct a water treatment plant and lay water lines to the three cities.

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