Building Authority OKs Changes to Reservoir Bond Agreement

The Canton Building Authority is meeting now to discuss an amendment to the Hickory Log Creek Reservoir bond agreement. Currently, the bond money is to be used for Reservoir-related projects only. The city to include projects unrelated to the reservoir. It needs to draw $1 million from the $8 million bond to cover non-Reservoir water and sewer emergency capital projects which have drained the water fund's cash reserves. The meeting is taking place at .

Canton-Sixes Patch is at the meeting providing live updates.

4:13 p.m.: Chapman said he would be disturbed if the council didn't approve the conditions. It actually covers them, he said. Meeting adjourned.

4:12 p.m.: Barry Bishop seconds. Motion passes. Now the city council must meet to approve new conditions.

4:10 p.m.: Rush amends motion to stipulate a payback date of end of fiscal year 2014.

4:09 p.m.: Rush moves to approve amendment to reservoir bond agreement. There's no second.

4:03 p.m.: Chapman wants a deadline to pay the money back in the agreement to show the public that there's some intent on the city's part. Bishop said he agrees.

4:01 p.m.: Dyer said this is a cash flow issue.

4:01 p.m.: Rush said even if city draws $1M from Reservoir bond, there will still be a 9 percent water hike.

3:55 p.m.: The quicker you say it has to be paid back, the more it will necessitate another water rate increase, CFO Price said.

3:50 p.m.: "You're putting us on the spot to make a decision in a day or two when the council" has known of indebtedness for a long time, Bishop said.

3:50 p.m.: "I would like to see something in the agreement about a deadline" (to pay the money back), building authority member Barry Bishop said.

3:49 p.m.: "I don't have a problem helping the city out," Chapman said. "I think it's in our best interest (to) have some semblance of payback."

3:46 p.m.: Unfinished reservoir projects include a mechanism to warm the water, which is the biggest risk, city attorney Bobby Dyer said.

3:42 p.m.: CFO Price said the bond rating for the city of Canton is A+. Rush said that is "equivalent to that of Italy."

3:40 p.m.: There's about $600,000 of the $900,000 to $1 million the city is requesting that has already been spent, Price said.

3:34 p.m.: "There is no plan," Rush said.

3:34 p.m.: "What is the plan," School Board member Mike Chapman asked.

3:32 p.m.: Wood: "We'll probably have to go borrow" money if the building authority does not approve reservoir bond agreement amendment.

3:31 p.m.: CFO Price said Wood is correct.

3:31 p.m.: Wood to Price: "We don't have a water and sewer fund to speak of?"

3:30 p.m.: CFO Price just printed a list of projects the bond money would pay for.

Water capital projects include: Alum Sludge Pond dredging ($200,000); Great Sky booster pump station ($166,707); 10-inch line repair ($70,000); and the water master plan ($19,500).

Wastewater capital projects include: Marietta Road sanitary sewer ($40,000); Brown Industrial/Etowah River Park lift station relocation ($310,000); Video caemra for sanitary sewer lines ($20,000); wastewater master plan ($37,770); pump for Laurel Canyon sanitary sewer lift station ($20,000); Great Sky hydrogren sulfide control system ($10,000); and Cherokee Overlook and East Killian ($104,000).

3:28 p.m.: All the projects have been completed. This won't cover new projects.

3:26 p.m.: Chapman said he would feel better amending the reservoir bond agreement if there was a specific list of projects the money would pay for.

3:26 p.m.: There's no clear date when the city would be able to pay the money back if it gets the $900K in reservoir bond money.

3:26 p.m.: CFO Price said it comes close.

3:25 p.m.: Chapman asked if the city had to take money from the general fund, would it go down to zero?

3:24 p.m.: "We are at our driest quarter of the year as far as revenues," Canton City Manager Wood said. " ... It significantly impacts the general fund."

3:23 p.m.: "We'll have to take it out of the general fund," CFO Price said.

3:23 p.m.: "If we don't do this," Canton Building Authority member Mike Chapman asked, "what happens next week?"

3:22 p.m.: "We've got large debt payments coming out Sept. 1," Price said.

3:22 p.m.: Here's page 1 of the resolution the Canton Building Authority is considering right now. http://twitvid.com/Z5V3R

3:20 p.m.: Rush points out memo of understanding to unload Reservoir on Cobb and Cherokee Water.

3:17 p.m.: "No one has identified how that money could be paid back," Hobgood said.

3:17 p.m.: "I respect what the council has done," Hobgood said.

3:17 p.m.: "If we don't pay back these monies by 2014," Hobgood said, "we're going to end up paying another half-mil in interest -- maybe more."

3:16 p.m.: "I really oppose using the bond money," Mayor Gene Hobgood said. "We sold this to the citizens that we were going to use this $8 million to finish the Reservoir. The Reservoir is not finished."

"We're hoping within a year to 18 months the economy is better," Chapman said. "The city's finances are better."

"We have an immediate need," Chapman said. "The city's in a situation."

To get an understanding of the situation, Chapman recaps: "We've borrowed $8 million for the reservoir. The city is asking for $900K (to $1 million)."

"It does help cash flow," Canton Chief Financial Officer Scott Price said.

"No," Rush said.

"Does this help offset the discussion of water increases," School Board member Mike Chapman asked.

"There's no intent to take any money out of that bond to pay for any other projects," Council member Bob Rush said.

3:04 p.m.: Present at the meeting are the city attorney, the CFO, the mayor, the clerk, council member Bob Rush and Canton Building Authority members Barry Bishop and Mike Chapman.

3:04 p.m.: We're at a meeting where the Canton Building Authority may co-sign the council's desire to use at least $600,000 in reservoir bond money for unrelated projects that have already been completed. The line of credit is not to exceed $1 million.