Commission agrees to take Bear Creek debt
All taxpayers, even well users, on the hook

By Merritt Melancon, Staff Writer, Wednesday, August 15, 2007 http://www.onlineathens.com/stories/081507/news_20070815072.shtml

JEFFERSON - The Jackson County Board of Commissioners will temporarily take over payments on Bear Creek Reservoir from the county's independent water and sewer authority starting in January.

The annual $1.6 million obligation will be shouldered by all Jackson County tax payers, including those who currently draw their water service through other separate municipal water systems and those who have private wells.

Bonds to pay for Jackson County's share of the 505-acre, four-county reservoir were issued by the Jackson County Water and Sewerage Authority during the reservoir's construction in the late 1990s. Although the bonds were in the authority's name, they were guaranteed by the county.

At the time, commissioners believed that revenue from water and sewer bills would be enough to cover the monthly $135,000 debt payments. But new water customers have been slow to tap on, and the authority has recently taken on more debt to build infrastructure county officials believe is vital to economic development, authority board member Alex Bryan said Tuesday.

Even with increased water rates, the authority can't continue to make payments on the 5-year-old reservoir that Jackson County shares with Oconee, Clarke and Barrow counties, said Erik Klerk, manager of the Jackson County Water and Sewerage Authority. "We're still going to have a retail rate increase to help cover our costs even if the county takes over the payments," Klerk said.

While the authority has taken a financial hit this summer as water sales dropped nearly 25 million gallons a month due to outdoor watering restrictions, the utility already had trouble finding customers to pay for several recent expansions, Bryan said.

In one case, the authority found itself $5 million in debt after running sewer lines to the Valentine Industrial Park. Toyota had proposed a facility there, and expected to need 133,000 gallons of sewer service a day. But when plans for the site were finalized, the company only required 3,000 gallons a day of sewer service, Bryan said. While water and sewer construction didn't bring revenue to the water utility, that infrastructure did attract development that grew the tax base.

"We have already invested the money into these projects," Bryan said. "And some of those projects are bringing in thousands of dollars in ad valorem taxes to the county. It should eventually draw more development to that area, and that should bring us more customers. But we haven't seen those benefits yet."

But while commissioners at Tuesday's meeting said the decision to pay part of the reservoir debt would benefit both the local government and the water authority, one Commerce official said city residents would pay for water infrastructure for themselves and again for county residents.

"Our citizens will be paying for sewer and water twice, but only receiving it once," said Steve McKown, assistant city manager for Commerce.

Commissioners and authority board members countered that economic development is good for the entire county and will lower the tax burden on everyone, even those who pay the city of Commerce for water service.