The Madison County Industrial Development and Building Authority (IDA) has installed water lines in the county as quickly as possible in recent years, with the long-term aim to improve infrastructure and attract businesses to the county.
But customers haven’t signed up for water services as quickly as some have hoped. And IDA chairman Bruce Azevedo raised some questions during the group’s July 15 meeting about the authority’s overall strategies. He suggested the IDA focus on seeking more customers before it commits to installing more lines in the ground. The cost for customers to hook up to county water lines is $1,650.
“We’ve got a certain amount of lines out there and we need people to hook up, but they’re not,” said Azevedo. “And if they don’t have the money to hook up, it doesn’t matter how many miles of lines we have, they’re still not going to do it unless they absolutely have to. Shouldn’t we come up with some sort of marketing plan or incentive plan to get people on the lines that we have right now? If we keep putting lines in the ground and nobody hooks up, sooner or later we’re not going to be able to afford to do anything.”
Azevedo raised the questions after IDA executive director Marvin White presented the authority with a proposed $1.5 million loan from the Georgia Environmental Finance Authority. White noted that the terms would be favorable, with $375,000 of the loan forgivable and the rest paid back over 20 years with a 1.4 percent interest rate.
White suggested the loan funds could be used to install a water tank at Columbia Feed Mill on Hwy. 72 and to install more water lines in the Hull area, adding that the money could probably cover the cost of seven to eight miles of new lines. Azevedo asked White how many customers might connect to those lines and White said he hoped to get 60 to 70 new customers.
area, adding that the money could probably cover the cost of seven to eight miles of new lines. Azevedo asked White how many customers might connect to those lines and White said he hoped to get 60 to 70 new customers.
Azevedo said the IDA needs to function as a business, with a focus on generating revenues to offset debts.
“We’re building up debt, but we’re not getting new income and we haven’t increased our amount of customers in quite awhile,” said Azevedo. “That bothers me a lot.”
White said “there’s no way to start a profitable water system” — the executive director has said the main aim of establishing water services is to draw new business, not to make money. White added that there hasn’t been much construction in the county in recent years, but that customers do connect when there is construction.
IDA member Gerry Burdette added that a 1.4 percent interest rate on loans won’t be available forever for water line installation.
“When it (the economy) turns around and people are wanting to hook up, can we borrow at 1.4 percent?” asked Burdette. “I bet you we can’t.”
But Azevedo said he fears the group’s debt could handcuff it in years to come. The IDA will pay $720,000 (or $60,000 per month) over the next year in GEFA loan costs. He said he worries that a big business will want to locate in the county, but the IDA will be too saddled with debt to offer infrastructure assistance.
“It’s just like any business,” said Azevedo. “There’s a time when you invest and a time when you don’t invest and I didn’t have a problem putting water lines in the ground. I think it’s important. It’s just a matter of being cautious of the costs up until we figure out how long is this going to go. We were adding customers at a regular pace and that has stopped. And I fear that part of it has to do with the cost of people hooking up.”
White responded: “Have you checked on the cost of having a well drilled?”
Azevedo said times are tough and there are people letting wells go dry and just going without water. IDA member Randy Wilson said that even with a limited-time reduced connection rate of $900, some people he talked to couldn’t afford the connection.
Azevedo said he’d like to know how many people in the county would like to hook up to county water but just can’t afford it.
Utility director Steve Shaw said customers don’t have to pay every dime at once. He said the county will accept half of the connection payment up front followed by $100 per month payments until the cost is covered.
IDA member Roger Tench suggested the group hold a work session to talk about whether they want to take on another loan, as well as how the IDA might attract new customers to existing lines. As of press time, no date had been set for that meeting.