Valdosta Daily Times

April 1, 2013

A city in debt: A look at Valdosta’s GEFA loans

Kay Harris
The Valdosta Daily Times

VALDOSTA — The City of Valdosta currently has seven loans from the Georgia Environmental Facilities Authority, with an eighth loan already approved.

According to Mark Barber, assistant city manager and finance department head, the city paid off the oldest loan in the two weeks the Times has been requesting information about the loans. According to the city’s records, the $1 million loan matured at 20 years, in 2009, but a balance of $34,984 was still outstanding at the end of the last fiscal year.

Barber said there were no penalties assessed for not paying the note off in the time it was due.

Of the remaining seven outstanding GEFA loans, one list from the city shows that the notes combined at the time of issuance was for $50,696,482, with a balance outstanding of $45,151,323. Of these, one note is also past due, having matured in 2011.

The oldest three of the GEFA loans were granted in 1990, 1993 and 1994, for a total amount of $3,478,600. The remaining loans have all been borrowed since 2004, in the amount of $47,217,882. Of these, four of the loans, in the amount of $32,552,452, were borrowed to expand the Mud Creek Wastewater Pollution Control Plant.

Barber provided a press release from the city in 2012 that detailed the $36 million Mud Creek expansion, with Mayor John Gayle stating that the money came from the Clean Water State Revolving Fund (CWSRF) and from the American Recovery and Reiinvestment Act (ARRA), better know as stimulus funding.

The ARRA funding of $10 million included $4 million that was “forgiven” as the project was considered “green,” according to Gayle’s statement, which accounts for the difference between the total price tag and the loan amounts.

On the city’s spreadsheets provided to the Times, the CWSRF loans are referenced as GEFA loans. The Mud Creek plant is located on New Statenville Highway and serves approximately one third of the city’s residents and commercial businesses. It adjoins the property where the proposed Wiregrass Power LLC biomass plant was going to be located. The plant was built in 1977 and expanded in 1986 and again in 2011-2012.

Barber points out that the city has no GO, or general obligation debt, outstanding, and owes only the GEFA loans.