Ga. gives $21 million loan to Bear Creek Reservoir
The laborious path to get approval for the planned Bear Creek Reservoir in southeastern Newton County could finally end this year, after the state gave the project a de facto vote of confidence by awarding it a $21 million long-term, low-interest loan.
“The state will not offer you a loan unless they have assurances that you are going to cross the finish line,” said County Attorney Tommy Craig, who is considered a reservoir expert and has handled the 1,242-acre Bear Creek Reservoir project from its initial application in 1999.
Craig said the county is finally on the verge of getting the permits it needs to withdraw water from the Alcovy River and build the dam and reservoir. He said the state told him it plans to issue the 401 water withdrawal permit this month, while the U.S. Army Corps of Engineers has a target date of October or November to hand out the 404 permit.
“We’re on the final leg of the journey, and it’s been a long and an arduous process, but all of them are, and they’ve gotten more and more difficult to get over time,” Craig said.
The $21 million, 40-year loan has very affordable rates and will pay for the construction of the dam and reservoir, which is expected to take about two years. The loan was awarded by the Governor’s Water Supply Program, which gave out a total of $90.49 million
to eight projects across the state; 15 applications totaling $195.59 million were received. The actual money comes from the Georgia Environmental Finance Authority and Georgia Department of Community Affairs.
Newton’s loan calls for 0 percent interest for the first three years of construction and 1 percent interest for any construction time after that, which doesn’t have to be paid at the time but can be added to the loan amount. Then for the remainder of the 40 years, the interest rate will be 1.82 percent, with the first seven years consisting of interest-only payments and the remaining years of principal and interest payments. There are also no loan closing fees.
“If you could get those terms on a home, you’d probably be out buying a mansion. It’s really a wonderful deal for the county,” Craig said.
County Manager John Middleton said the loan “can provide a very favorable arrangement for Newton County that is unavailable through any other funding sources, such as the bond market.”
Chairman Kathy said the county was excited by the allocation, but warned that the board of commissioners had not officially voted to accept the loan.
“Although, this appears to be a very attractive offer, the devil is in the details; the board of commissioners will need to review the details of this or any option,” she said.
The final cost of the reservoir is expected to be $62.68 million, but Craig said those costs don’t have to be incurred until well after the reservoir is built.
Once the permits for reser- voir construction are issued, Craig said the dam would take about six months to design and another six months to be approved by the state’s Safe Dams Program, which would put the county in a position to advertise for construction of the reservoir in late 2013 or early 2014.
Construction is expected to take about two years, and then the reservoir would likely be filled with natural rainfall afterward around 2018.
“The project from start to finish through all its phases would be $62 million, but we don’t anticipate the cost to be more than the $21 million to build the dam and reservoir, and we wouldn’t spend any more money until there was demand and we had exhausted all the available supplies at Cornish Creek (Lake Varner). The project would be built in response to demand and the water rates the county charges would be sufficient to pay the debt.”
Eventually the reservoir is expected to provide a maximum of 28 million gallons per day.
Cornish Creek currently can pump around 23.5 million gallons per day, and will eventually be able to produce 35 million gallons per day, though Walton County owns a 25 percent share of Lake Varner and its water production. Newton County also receives 4.5 million gallons per day from the Williams Street Treatment Facility in downtown Covington.
As of 2010, Newton County residents were using 16 to 18 million gallons per day, but Bear Creek is meant to eventually provide enough water for both 400,000 residents and future industries. In addition, Jasper and Walton counties could also buy water supply from the reservoir, adding a revenue stream for the county.