As the Liberty County Development Authority looks at financing its proposed wastewater treatment plant, its members are asking the county commission for some backup — in a worst-case scenario.

The LCDA likely will issue bonds to cover the cost of building the treatment plant, but it has a couple of hurdles to negotiate. First, it still needs to finish its audits and there are existing bonds that need to be paid off.

While the LCDA has its audits from 2021–23 done, its 2024 audit is in the works, though it is expected to be done soon, and its 2025 audit is projected to be done by November.

“That’s important because in order to apply for state funds, we have to have those done,” Courtney Rogers, senior vice president of Davenport and Company, which is advising the LCDA.

A 2018 bond issued for an expansion at Hugo Boss is almost paid off, and a 2019 bond will be paid off in 10 years.

But the millage rate the LCDA creates is barely enough to cover the debt test, Rogers warned.

The LCDA has an agreement with the adjoining Laurel View development to provide sewer capacity. The first phase of the development will be about 180 homes, and it will pay about $1.6 million in three installments for phase 1A.

The LCDA’s debt service does not take into account the full buildout of Laurel View, which could be as many as 3,000 homes, nor any associated commercial development — and it doesn’t include any potential industrial or commercial users.

And the LCDA has been fielding a multitude of requests from potential users, CEO Brynn Grant said.

“There are others we have been meeting who have been asking for a pathway to capacity,” she said. “We have had private landowners asking for capacity. The first one knocking our door down was Laurel View. Others are asking when we might secure capacity going forward.

“We’re hearing from a lot of people.”

The proposed wastewater treatment plant, with a projected cost of $32.5 million, is expected to treat 3 million gallons of water per day once it is fully operational.

Not having the wastewater capacity has hurt the county, Grant said.

“In the last two and a half years, we have had to turn away nine prospects in the Tradeport East because we could not accommodate their water and wastewater,” she said. “That’s thousands of jobs and millions in investment we could not compete for.”

Worst-case scenario

The worst-case scenario, Rogers laid out, is Laurel View going belly up in the first 10 years of the bond. There is a letter of credit to pay a fraction of that load, but the rest has to come from somewhere. To protect the current bond holders, the LCDA has to show it can pay back at 1.2 times the bond amount.

“So the worst case scenario — what happens if the developer goes belly up? We have a letter of credit for one year. But then what?” Rogers asked. “We’re looking for support from the county in the case of a worst-case scenario.”

Once the 2019 bonds are paid off in 10 years, that should free up one of the LCDA’s mills for debt service, though Rogers said that isn’t ideal. The value of the mills has gone from $2.6 to nearly $4.2 million “We have to meet a test in order to get more debt,” he said. “We have to prove to the credit world we can pay it with the 2 mills.”

Right now, the mills cover the LCDA’s operational expenses and its existing debt service, but not much more than that.

There may be other financing tools available, such as loans and grants from the Georgia Environmental Finance Authority. The LCDA has to get its audits done first before it can ask for funding from the state or federal government.

“If you get the mills and the pledge from the county, you’re in a good position to do the project,” said Tony Rojas, a principal at TPR Consulting. “There is still the opportunity to use GEFA for some of this financing.”

The proposed wastewater treatment plant also could be a boon for the rest of the county. Grant said it could spur more commercial development at Liberty’s two interstate exits, leading to more sales tax and property tax revenues, and perhaps leading to a lower millage rate for homeowners.

Grant has been a proponent of industrial growth raising the county’s per capita income through more and better-paying jobs.

“I believe this will benefit the entire county,” she said.

State Rep. Al Williams, the LCDA chairman, reinforced the push for a new treatment plant.

“You will find very rural counties discussing something like this,” he said. “If you don’t have sewer coming in, they are not going to come. We have a unique opportunity. If we don’t take it, we’ll be behind for 40 years.”

Commissioner Tim Blount added the wastewater treatment plant under consideration could help alleviate the strain Midway has with its own plant.

“It’s going to be a great help to them,” he said. “Hinesville wouldn’t be Hinesville without the infrastructure it’s got.”

Other possible payers and benefits

Grant added the goal is to have private builders and developers pay for what is public infrastructure through connection fees and capacity reservation agreements.

“They are willing to commit to paying those connection fees,” Rojas said. “If you want industry, they are looking for an industrial park with water, sewer, electric and natural gas. The reality is if we don’t add wastewater, we’ll have a beautiful industrial park we can’t sell.”

The question now, LCDA and county attorney Kelly Davis said, is timing.

“Certainly, the developers and builders will pay for this,” he said. “We are not providing any incentives for any residential developers.”

Grant also noted that if Laurel View is fully built out, it could mean as much as $19 million in property taxes and $11.2 million in sales taxes annually. And that’s without any other users connecting to the plant.

“It is not growth for growth’s sake. It is strategic and thoughtful growth,” she said. “We happen to be the water/sewer provider in a service area. We are not in the residential development business.”

Davis also cautioned that without county backing, the LCDA’s interest rates on potential bonds may be higher.

“We’re doing everything we can with capacity agreements to minimize the risk of a public project, building vital infrastructure,” he said. “We have a great opportunity before us. I think it’s a great opportunity. It’s not without risk. But if you’re ever going to do it, now is the time to do it.”

Rogers said any bond issuances likely will go out in early 2027. But further industrial and commercial growth could be stifled without the wastewater treatment plant, Rojas warned.

“Your worst-case scenario is to not do the project, and not have sewer capacity for jobs and growth in the community,” he said. “I’m not being sarcastic — I’m being straightforward.”