0

Lee Utilities Authority manages debt

Photo by Laura Williams

Photo by Laura Williams

LEESBURG -- People have a tendency to hear what they want to hear, or -- at best -- to focus on buzz words.

So when members of the Lee County Commission or the Lee Utilities Authority talk about debt service and the Authority, this is what many people hear: "Blah, blah, blah, DEBT, blah, blah, blah, $26 MILLION."

The Utilities Authority, which provides water and sewer service for residences and businesses in the southern portion of the county, is one of the reasons that region has seen such substantial growth over the past decade. And Lee officials say the Authority is vital to any future growth in the county.

"The Targets of the world will not build in a community that does not have a sewer system," County Administrator Alan Ours said. "Economic development is so important to the future growth of Lee County, and economic development is not possible without infrastructure."

The Lee Utilities Authority currently is paying off debt service that's at $26 million, a staggering number when taken alone. But it's understanding where that debt came from -- and where it's going -- that's crucial to seeing the authority as a growing asset rather than a liability.

Utilities Authority Director Chris Boswell notes that purchasing privately owned water systems and bringing them all under the authority's umbrella has been vital in developing a water system capable of pumping a million gallons of water more than the county is currently using.

"That's where a lot of that debt came from," Boswell said. "We felt that we needed a consistent and plentiful water supply for our growth areas, and we are able to provide that now that we've purchased these private systems and tied them into ours.

"The cost was pretty staggering at first, but we've implemented measures that have allowed us to get it under control. We'll end up saving a considerable amount of money because we were able to refinance the debt through bonds with an interest rate that's in the 4's (percent). We were around 6 1/2 percent."

County Commission Chairman Ed Duffy, who also serves as vice chair of the Utilities Authority, stresses the key role the authority has played in the county's growth. The commercial development advocate notes that the authority has been able to whittle down its debt service while cutting access fees and dramatically reducing the amount of funding it needs from the county's general fund.

"Citizens here need to realize the Utilities Authority has made major investments in infrastructure on all the main arteries in Lee County: (Georgia) Highway 82, U.S. 19, Ledo Road and Forrester Parkway," Duffy said. "Without infrastructure, we'll never be able to attract commercial development, which is the key to keeping us from having to raise the millage rate.

"The authority had to spend money to get into business, but they've made consistent progress in cutting into the debt service. And they've done so even after lowering water access fees by $600 and sewer access fees by $1,400."

Duffy and Commissioner Bill Williams, who serve together on the commission's Budget Committee, say the reduction in needed budgetary contributions from the general fund offers further insight into the Utilities Authority's progress.

County Finance Director Heather Kittrell notes that the authority needed $806,544 from the general fund as recently as 2006, but has reduced that number steadily: to $365,220 in 2007, $108,193 in 2008 and $295,094 in 2009.

"They were budgeted to receive $400,000 in 2009 because of work they had going on, but they used only $295,000," Duffy said. "I think it's a matter of time before the Utilities Authority will be self-sustaining without a transfer from the general fund."

Williams, a CPA, agrees.

"They've really turned that thing around in a short time," he said. "They've cut access fees and increased rates to about where they should be, and once they get a few more customers online, I think they're going to generate enough revenue to do well.

"I am definitely confident they'll have no problem paying off their debt in a timely fashion."

Boswell said the authority can continue to provide quality service while reducing its debt by implementing elements of a master plan it is working to put in place.

"One of the things we're really emphasizing is using SPLOST (special-purpose local-option sales tax) funds to finance future infrastructure projects," Boswell said. "We've put together an extensive wish list that, if the economy starts up like we expect it to and we get the funding, we'll be able to make necessary upgrades."

Utilities Authority Director of Administrative Operations Tricia Quinn said priority No. 1 on the upgrade list is wastewater treatment capability.

"We'd like to upgrade our capability from 1 million gallons to 2 million," Quinn said. "We're currently in the range of around 600,000 gallons a day, but EPD has a magic number that once you hit it, you have to have plans in place to show how you're going to expand.

"The land for our expansion is in place -- it was donated in 2009 -- but we've got to work on putting together a full expansion plan. Because once you have a plan in place, the review and approval process takes from two to five years."

Water improvements on the Utilities Authority's wish list include a 1.5 million-gallon water tank for Forrester Parkway (estimated cost, $1,911,760), water meter replacement ($1,869,300), replacement work in Glendale Subdivision ($732,908), Brentwood ($452,367), Palmyra ($256,250), Kinchafoonee ($183,343), Highland Crossing ($517,366), Lee High Acres ($453,684), Morgan Estates ($120,719), Canuga ($631,924), and looping at Old Leesburg Highway ($139,640), Lovers Lane ($175,037) and Winifred/Cookville roads ($415,195).

Sanitary sewer improvements on the list include rehab work in the Glendale Subdivision ($1,238,460), Raintree condos ($133,860) and Lee High Acres ($522,000).

The bottom line: improved infrastructure means better service and more customers.

"The Utilities Authority is working from a position of strength, and it's only going to increase as new customers are added," Ours said. "It's important from an economic development standpoint, and it's important from an ecological standpoint.

"Lee County is a recharge area for the Floridan Aquifer, and there is a need to limit the number of septic systems in the area. Studies show that over time, (septic systems) can leech into the ground. We can't allow that to happen. We have to protect the most precious commodity in the world: our water."

That's a warning even casual listeners hear, loud and clear.