February 4, 2016
Citizens should now be aware there are $1,136,600,000 (yes billion) of bonds that the Four County Development Authority (JDA) took out to “loan” to Baxter to build and equip a building. Baxter is to pay back the bonds in a lease agreement with the JDA over an 18 year period. In a TWG blog that I authored, I said IF … “IF Baxter/Baxalta/Shire decides to move on or there is any other economic calamity, JDA’s debt will bankrupt all 4 counties.” JDA has sent their attorney, Andrea Gray, to both Newton County and Jasper County to assure the commissioners this would NEVER, EVER happen, and that I was misleading them all. This assurance was to make sure the Commissioners of each of the 4 counties would sign the tax pledge to the Bank of Madison for a note that the JDA has defaulted on.
I’ve been accused of misleading people before. Back in 2002 when JCWSA was getting a $2.2+ Million in 40 year USDA bonds to run their water system, I complained (as did many others) to the BOC, through the Monticello News’ letters to the editor, and with TWG emails that JCWSA was going to end up costing the taxpayers of Jasper County. At least 3 JCWSA members responded in the newspaper, all saying I didn’t know what I was talking about, and insinuating that I was lying. They emphasized that the taxpayers of Jasper County would NEVER have to put one dime in the system; it would run entirely on revenues from the system. In response to a TWG letter they wrote in the Monticello News:
“The Jasper County government will not own the lines, and will not be responsible for repaying any loans.”—Roger Bell, Vice Chair, 3/14/02.
“The Watchdog Committee has misled the readers twice. We (JCWSA) have to prove these loans can be repaid from income generated by this service. So to relieve your minds this is not done with money of taxpayers through the Commissioners office. If the Watchdogs Committee would like to know the truth.” –Merrill Clark, Chair, 3/14/02.
“We will soon have 30 miles of water lines serving over 500 customers at no cost to the taxpayers.” –Tom Brazil, JCWSA member, 7/8/04.
Today the taxpayers are paying over 30% of the annual USDA note that JCWSA owes because of an intergovernmental agreement signed by the current BOC, even though the taxpayers were repeatedly told they would never pay a dime. Who misled whom?
The above example of JCWSA is proof positive that taxpayers do end up paying on bonds for which they supposedly are not liable. This taxpayer bailout of debt they didn’t incur and were promised they wouldn’t owe, has happened not just in Jasper County, but all over the State of Georgia with economic development deals—but only when the county governments agree to an intergovernmental agreement like Jasper’s BOC did with JCWSA.
The Jasper County BOC (as well as the other 3 counties) has now agreed, by signing the Tax Pledge Agreement, to be responsible for JDA’s $1.3M loan and to forego all their estimated advalorem tax payments from Baxter in 2018 and 2019 and take partial tax payments for the years following through 2025 to pay back the $1.3M loan plus interest at 5% (the rate changes every 36 months) and the $600,000 line of credit plus interest. In addition, a $5.9M GEFA loan taken out by JDA (to build Baxter a water treatment plant) will come out of the estimated tax payments in the amount of $273,979 annually starting in 2018 and will be paid for 30 years. You can see the payment schedule here.
Comm. Pennamon, who now sits on the JDA, made the comment in the BOC meeting to assure the others, “It’s not money we are taking out of our pocket, it’s just money we won’t get.” If JDA happens to sell any of the land they still own, that money will be applied to the Bank of Madison note first.
No effort was made to shop out the loan for the best interest rate. The 4 counties will end up paying $1.9M on the $1.3M loan and $713,000 on the $600,000 line of credit to the Bank of Madison according to the payment schedule.