Brother can you spare a dime? How about $1 million?
During the current county commissioner campaign, questions have been raised about the propriety of Walker County Water & Sewerage Authority’s having loaned $1 million to the county.
The issue was raised during a televised debate among the three candidates — incumbent Bebe Heiskell, Independent candidate Perry Lamb and GOP standard bearer Shannon Whitfield — whose names appear on the Nov. 8 ballot.
The WCWSA is an independent authority that is owned by the local government. The county’s general budget neither funds the water company nor does the company give money to the county.
“This is a lot about nothing,” authority board member John Culpepper said. “Shannon ought to be proud that the water authority is run so efficiently that we have such a large reserve.”
Culpepper, retired after decades as Chickamauga’s utility director and its city manager, said that similar transfers of funds between his city departments were fairly common, particularly during the period when tax bills had been mailed but not yet collected.
Not only that, but as certificates of deposit mature a manager has the authority and obligation to do what is best for the city — or in this case the Authority.
“This did not need to go before the board for a vote,” Culpepper said of the WCWSA loan to the county. “It was a shortterm investment, just like buying a bond or CD.”
While state sanctioned authorities are not intended to make money, they can build cash reserves.
Adopted into law on March 23, 1977, the Walker County Water and Sewerage Authority Act’s enabling legislation that outlines how the authority can operate includes the following:
“To exercise any power usually possessed by private corporations performing similar functions, including the power to make short term loans and approve, execute and deliver appropriate evidence of such indebtedness, provided, no such power is in conflict with the Constitution or general laws of this State;”
Controversy regarding the Authority making a short-term loan is not that it occurred, but the manner in which it was done.
“I see nothing wrong in borrowing the money from the Water Authority,” GOP candidate Shannon Whitfield said. “This shows a lack of transparency, a lack of accountability and of adding to the county debt in an underhanded manner.”
Whitfield questions why the necessity of borrowing, if only for a few weeks, was neither discussed by Commissioner Heiskell during a public meeting nor put before the Authority’s board of directors for a vote.
“It was under the table and without public notice,” Whitfield said.
Culpepper said it is generally considered the norm for a utility to maintain a reserve of about one-third of its anticipated revenue.
For WCWSA, one of nine authorities or companies providing water to Walker County, the reserve fund exceeds $1 million, according to its director, David Ashburn.
He said those reserves can be used as a “rainy day fund” to cover unexpected expenses; be invested, with income supplementing fees paid by customers; or used to secure more favorable interest rates if and when the authority issues bonds.
WCWSA previously has used its financial strength to co-sign as guarantor when the cities of Lookout