Dear Editor: This is an open letter to Madison County citizens, board of commissioners (BOC) and industrial authority (IDA). Georgia Renewable Power (GRP) appears to have trouble paying its bills on time. Margie Richard’s March 5th Madison County Journal article, “Industrial authority discusses GRP debts; company responds,” informs us that GRP owes the Madison County Industrial Building and Development Authority (IDA) $363,548. My main concern, besides the money owed, is the statement by GRP Executive VP Carey Davis: “GRP has exchanged communication with the IDA to sit down in the near future and work through remaining project overruns and the pending return of the escrow payment. In early discussions we are planning on using a portion of the escrow funds to pay for project overruns and additional items provided outside of the MOU.”
In my opinion, the $1 million should not be returned to GRP to pay their bills.
The “MOU,” memorandum of understanding, is the legal contract between our IDA and GRP setting forth the terms and conditions by which they will cooperate to provide public water for the development and operation of the PROJECT…. Here is the part of the MOU that Mr. Davis is referring to.
Section 4.5 (page 5)
b. GRP shall contribute the sum of $1 million on or before August 21, 2018, to be held in escrow by the authority for the cost of design and construction work for the authority to complete the Elberton connection. In the event the authority should receive or be awarded a grant to financially assist with the design and construction of the Elberton connection, the authority will refund, at such time as the project has been in Commercial Operation (“CO”) as defined in Section 2.1 for a period of thirty (30) days, the sum contributed by GRP pursuant hereto the extent of the grant amount or $1 million whichever is smaller, and shall retain the balance as its own fund. In the event the project does not obtain Commercial Operation by Oct. 31, 2019, then the $1 million held in escrow shall be disbursed to the authority to reduce the outstanding principal balance on the GEFA loan to the authority. The parties may execute escrow agreement, the material terms of which are set forth in this MOU.
GRP did not receive its CO by Oct 31, 2019 the date stated in the legal contract (MOU) with the IDA. GRP obtained their CO on Dec. 14, 2019. I believe that on Nov. 1, 2019 the million dollars should have been disbursed to the IDA and used to reduce the balance of the outstanding principal on the GEFA loan. It seems that someone made a decision to not follow the contractual legal agreement (MOU) between the IDA and GRP. The escrow money still sits in an IDA bank account instead of being used to pay down the GEFA loan as agreed upon. Additionally, Carey Davis implies that the IDA will give the money back to GRP.
I have asked for an explanation as to why the escrow money was not used to reduce the balance of the GEFA loan. As of today I have yet to receive an answer to my question. The IDA’s Executive Director, Frank Ginn, told me that because GRP has been such a good thing for the county he didn’t see any reason to use the escrow money. When I asked Victor Johnson, who at the time the MOU was signed (9/17/18) was the attorney for the IDA, I was told that he could not discuss IDA business and that it was protected by attorney/client privilege. Michael Pruett, general counsel to the governing authority, replied with this, “I do not, however, respond directly to inquiries from the public at large, for reasons of fiscal responsibility as well as attorney/client privilege.”
As I stated before I believe the $1 million should have been used by the IDA to pay down the principal balance on the GEFA loan as stated in the MOU. I, and the citizens of Madison County, need an answer as to why this did not happen.
This brings me back to Mr. Davis’s plan to get back and spend a portion of the $1 million escrow money to pay GRP bills. The escrow money belongs to the county, not to Mr. Davis, not to GRP.