Why Flowery Branch City Council pauses vote on sewer plant funding

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Without disclosing much detail, Flowery Branch City Council backed off a potential sewer funding vote Thursday night.

“We’re having some changes come in this sewer plan and that’s why we paused (a vote),” Mayor Ed Asbridge said at the City Council’s Oct. 6 meeting.

Asbridge also didn’t divulge much after the meeting.

“We just got some new developments on how we can do this sewer system differently,” he said. “It’s fairly complicated and just happened in the last couple of days. … It’s a substantial savings.”

A decision about the sewer system could come by the council’s Nov. 3 meeting, Asbridge said.

The city had budgeted some $23 million to expand the sewer plant from 400,000 gallons per day to 2.2 million gallons, but bids came in between $52 million and $57 million.

Going into Thursday’s meeting, the city was weighing three options to handle the shortfall, two of them financial.

The financing options were requesting another $30 million in loans from the Georgia Environmental Finance Authority or the city selling the same amount in revenue bonds through the Gainesville and Hall County Development Authority.

Payback through the finance authority would result in 16.5% rate increases while the revenue bonds route would mean 8.5% hikes, according to city documents.

Through the state source, repayment of loans would come strictly from the city’s water/sewer system, meaning ratepayers and users.

Trey Monroe of Stifel, a company advising the city on its options, has said that a “bond scenario would shift (financing) away from a lien on your water and sewer revenues. You don’t necessarily have to come up with (repayments) from water and sewer.”

Other sources can be used, such as special purpose local option sales taxes or the general operating budget, and bonds can be refinanced as interest rates drop, officials said.

A third option would be to “rebid the project with a different scope,” city documents state.

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