Toccoa Commission Approves GEFA Loan Re-financing

March 12, 2013

Toccoa City Commissioners make a decision on moving forward with re-financing the city’s Georgia Environmental Finance Authority loans.

On Monday, city commissioners unanimously voted to allow Robert W. Baird and Company of Atlanta to take the re-financing of just over $6 million in GEFA water/wastewater fund debt the city has out to bid with lending institutions, with the city paying the estimated $75,000 in re-financing costs up front out of the Commission Reserve Account.

The commission’s discussion Monday prior to the vote centered on whether or not to pay the estimated $75,000 cost of re-financing the debt up front or finance that into the loan.

If that $75,000 cost was included in the financing, Baird said the city would end up saving about $327,000 over the life of the loan, or about $41,000 per year compared to what the city is currently paying. Meanwhile, Baird said that if the city pays that $75,000 up front, the city’s total savings would increase to just under $410,000 over the life of the loan, or about $51,000 per year compared to what the city is currently paying.

Toccoa City Commissioner Ron Seib said he supports paying the $75,000 up front out of the Commission Reserve Account and re-paying the CRA, using the approximately $4,250 in monthly savings the city would reap from the re-financing.

“Take the $4,250 in savings and pay off the $75,000 that it costs to ‘re-fi’ and in 18 months, you have reimbursed the CRA and then the savings it whatever it is, it goes back into the general fund,” said Seib.

Toccoa City Manager Mike Jackson said he supports doing that, but adds he does so with just a little reservation.

“We all know what we have had to do lately with the CRA and it pains me a little bit to go hit that CRA again,” said Jackson. “We have had some rough seas lately from a cash flow standpoint.”

Toccoa Finance Director Cathy Loudermilk noted that the gas fund has improved and has been able to re-pay another $200,000 to the CRA that had previously been borrowed to help cover Municipal Gas Authority of Georgia invoices.

As of February 28, the CRA had just over $1.5 million in it, an increase of more than $300,000 from the end of January.

Baird said it will now seek out formal bids to bring back to the city.

As part of its motion, the city commission also agreed to re-pay the CRA through savings the city receives by re-financing.

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