Dear Editor: I am writing this letter because I think that the taxpayers of Madison County deserve a more complete picture regarding the MOU, i.e. the Memorandum of Understanding, with Georgia Renewable Power (GRP).

This letter is not in any way a criticism of the related articles written by the Madison County Journal staff. In my opinion, you all have a done a fine job, even-handedly reporting on what is presented within the open board meetings.

Regarding the $1 million in escrow money, my understanding of the intent of the escrow fund has been that its purpose was to protect the taxpayers in the event that GRP was not successful in achieving and maintaining operational status. GRP was late, but successful, in obtaining the Certificate of Operation, but it remains to be seen if they can maintain operation and for how long.

The intended purpose of the escrow funds was to have a cash reserve, a safety net, that could be used to pay down the $3.2 million in debt the IDA took on to fund the water system improvements needed to provide service to GRP. The payoff time for that loan is 20 years at least — anyone who has a mortgage understands how long and relentless that kind of commitment is. An economic downturn like 2008, a change in market conditions, failures to meet environmental permit requirements, a pandemic – there are many things that could cause GRP to not be able to maintain operations and make the payments for water usage that are needed to meet the GEFA loan obligation. GRP can fold, but the taxpayers of Madison County will still have the financial obligation for that $3.2 million GEFA loan, in addition to the $8 million debt that was owed prior to the 2018 loan.

Next, that three-million-gallon water tank was not a Christmas present to the taxpayers. It was a condition of the original MOU that GRP would fund construction of the water tank and the pump station and then deed them to Madison County. The tradeoff to GRP in the original agreement is that they pay for water at a substantially reduced rate, approximately 42 percent less than other IDA water customers pay, for the next 30 years, even as our costs for providing water to GRP increases.

And then there is the matter of the actual amount of the construction funds that should have been paid by GRP, a financial burden that has now been shifted to the taxpayers. The original MOU stated the GRP would pay the costs for the water line extension to serve the plant and the costs for the pump station at the plant. This is consistent with the Madison County Water Policy that is referenced in the original MOU. GRP was never billed for the cost of the pumps — something in the range of $177,000, or the $45,700 in costs for the emergency power generator and related expenses. Add that to the $316,000 in unpaid construction costs that were billed to GRP, and that comes to $538,700. Add to that the loss in revenue for the several months delay in which GRP did not make the minimum monthly payments called for in the original MOU and that total climbs to over $600,000.

At our most recent IDA meeting, in our discussions regarding the proposed change to the MOU, I presented as a comparison a recent water main extension that was constructed to provide service to a poultry farmer. That farmer paid the construction costs in accordance with the policy. This is a large part of what I find inequitable. That farmer was required to comply with the policy in order to have service. GRP was not. Much has been made of the fact that GRP paid their property taxes, and paid the ad valorem taxes due on fixtures and equipment. That farmer paid his taxes too, but he was not forgiven the water line construction costs. And that is just one taxpaying business owner who has been similarly short-changed in the modification to the MOU with GRP.

The change in the MOU stipulates that the construction costs not paid by GRP be deducted from the escrow funds as a means of making payment back to Madison County, and that the remaining portion of the escrow money be spent for new water system improvements. That money should be held in reserve for the term of the GEFA loan to provide a means for making the loan payments in the event that GRP does not provide the revenue anticipated. To spend that money now is a large mistake. A big point to keep in mind is that the IDA has the power of taxation. If GRP fails to provide the revenue needed to make the payments for the term of the GEFA loan, the likely result will be an increase in the portion of the property tax millage rate that is set by the IDA.

It is not clear if the changes to the MOU were initiated by Senator Ginn or by GRP. What is clear is that the taxpayers of Madison County came out on the losing end of the deal. It is beyond laughable that Senator Ginn would provide as justification that the original MOU was “ambiguous at best and not very well written. It was a terrible document.” If that was truly the case, then our Senator would bear the responsibility for that, as he was instrumental in drafting the original MOU, requesting more than 20 revisions that proved to be in the best interest of GRP rather than his constituents. Madison County met all of the commitments it made in the original MOU. GRP should have been held to the same standard. The taxpayers of Madison County deserve no less.


Patricia Mahoney


Member of the Madison County IDA

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