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GWSP Round II Application Notes

July 8, 2013

In April of 2013, the Georgia Environmental Finance Authority (GEFA) announced receipt of eleven applications for Round II of the Governor’s Water Supply Program (GWSP).  In short, the GWSP is a three year initiative that is supposed to fund water supply projects for communities in need of supply.  An assessment of Round I awards and the scoring process reveals missed opportunities, political favoritism, and projects that demonstrated no need but that were funded anyway.  For example, read about Newton County’s Bear Creek Reservoir or the Flint River aquifer storage and recovery project in southwest Georgia.

What can we see in the Round II applications?  You can find all the applications in a GEFA’s Dropbox, and find the geographic locations for Round I awards and Round II applications on this Google Map.

First: Round II Basics.  GEFA intends to distribute approximately $65.25 million – about $20.75M in loans (that have to be repaid) and $44.5M in state direct investment (SDI) that does not have to be repaid to Georgia’s taxpayers.  The eleven applicants have requested a combined total of $140M ($85M in requests for loans and $55M in SDI requests).

Projects Focused on Existing Water Supplies:

The Coosawattee Regional Water and Sewer Authority seeks a $17M loan for a new water treatment plant that will utilize the U.S. Army Corps of Engineers’ Carters Lake in the Alabama-Coosa-Tallapoosa basin (ACT).  Once the plant is operational, the authority will build an interconnected system and tie four utilities together.  This is a far better solution than what the authority proposed in 2008: a new reservoir.

The Madison County Industrial Authority and Elbert County Board of Commissioners has requested $10M in SDI to assemble a massive interconnected municipal drinking water system in northeast Georgia.  The plan will optimize Elbert County’s underutilized permit for water withdrawals from the Corps’ Lake Russell in the Savannah River basin.

Projects with Big Questionable Marks:

The City of Auburn applied for $2.5M SDI to convert a rock quarry into a pump-storage system in the upper Oconee River (Altamaha River Basin).  It remains to be seen if the Mulberry River can sustain the withdrawals, and if the Upper Oconee Basin Water Authority thinks this project will affect water withdrawals from the Middle Oconee River for Bear Creek in Jackson County.

Forsyth County seeks an $800,000 loan to drill new water wells.  Assessing the need for this water supply should not be that complicated: Forsyth has a water supply.  However, the municipality does not like to purchase water from the city of Cumming; Cumming holds the withdrawal permit to Lake Lanier.  Forsyth’s justification for water wells along the Chattahoochee River?  They want water security.

The City of Stockbridge (in Henry County and the Ocmulgee River basin) has requested a $2M loan to develop two new water wells and explore other sites.  Stockbridge currently purchases half their water supply from Henry County Water and Sewerage Authority.  This project will result in at least two production wells that could enable Stockbridge to produce and store a greater percentage of their own water supply.  Again, no real need here beyond a desire for water security.

The Big, Baad Dawgs: Reservoirs & Money Pits

The City of Dawsonville seeks $20M in SDI to acquire land (that was supposed to be a suburban sub-division before the Great Recession) for the Calhoun Creek reservoir project on an Etowah River tributary (ACT).  This project appears to be part of a much larger pipe-dream to use this reservoir to store and distribute water from the ACT and Apalachicola-Chattahoochee-Flint (and perhaps the Tennessee, see slide 13).  The City of Dawsonville has secured water withdrawal permits from the Georgia Environmental Protection Division but has no Clean Water Act Section 404 permit.  Newsflash – this might be a dead application: Governor Nathan Deal’s office has given the impression the application will not be approved; but the applicant counters, ‘not dead yet.’

Carroll County has submitted an application for $9M for a massive reservoir expansion project in west Georgia’s Indian Creek (part of the ACT basin).  The GWSP loan will only pay for 1,300 acres to complete land acquisition around an existing National Resources Conservation Service watershed impoundment.  This project is currently in the Section 404 permit process.

Paulding County has received a large chunk of change from Georgia’s tax payers to finance the Richland Creek reservoir.  Last year, Paulding County received almost $32M in Round I loans.  This year, the county seeks an additional $21.6M loan to move this un-needed reservoir in the ACT basin along.  Paulding County is also in the Section 404 permit process and has leaned on Gov. Deal and Georgia’s Congressional Representatives, who have in turn leaned on the Corps to get the permits moving.

Hall County seeks a $14.5M loan for the Glades Farm amenity lake in the ACF basin.  This reservoir has been the focal point of a city-county water war for years.  And the plans for Glades have changed as many times as the clouds in the sky (resulting in two separate 404 permit applications), further demonstrating the project’s need is dubious at best.  As such, the Corps launched a rare Environmental Impact Statement review of this moving target.  It’s worth noting that the GWSP application calls Glades “innovative” because like Hickory Log Creek Reservoir, Glades will deposit water into a federal reservoir for use by permitted withdrawal entities in a process the applicants believe can be replicated throughout north Georgia.  Finally, the applicants furthered muddied their credibility by utilizing outdated water demand and population data to inflate the project’s need, according to this Gainesville Times news report.

The last big baad dawg: South Fulton’s Bear Creek reservoir (ACF).  The South Fulton Water Authority submitted an application for a whopping $42M – or $20M in loans and $22M in SDI.  This project is also in the 404 permit process.  Astute readers may say: didn’t this boondoggle project apply to the GWSP last year and get rejected by GEFA?  Yes.  This go around the applicant claims they have financial security.  But according to the applicant’s own financial consultant, financial security is contingent upon South Fulton getting the full requested GEFA loan, getting the full requested GEFA SDI, and having the ability to float an additional $65M in revenue bonds.  In other words, financial security in South Fulton is not a fact but a presumption based upon investment instruments that have not been offered, accepted or secured.

Goes to Eleven?  There is indeed one final project, but the Camp John Hope water well (Macon County) is essentially a blank and incomplete application form.  So no real information there.

There are other details and items of interest buried in GEFA’s Round II applications and documents.  That information – and eventual analysis of the actual awards that will be announced in early August – will come in subsequent posts.

-Chris Manganiello

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