Valdosta city leaders warn they could have to raise property taxes to move the wastewater treatment plant if voters don't pass a sales tax referendum. The city is working to borrow $30 million to prevent massive sewage spills that have plagued the Withlacoochee Wastewater Treatment Plant. The city is already in debt because of other water projects, and leaders say they need SPLOST revenue to pay off the new loan.
While the City of Valdosta is working to pay off $45 million it borrowed through the Georgia Environmental Finance Authority, city leaders plan to borrow another $30 million from the same agency to fix sewage and flooding issues at the Withlacoochee Wastewater Treatment Plant.
And for the first time, they hope to use Special Purpose Local Option Sales Tax revenue to pay off the loan. But that means voters have to pass the SPLOST VII referendum in November.
"In the past we've not used SPLOST funding to repay debt at all. Other local entities in our community have, we have not. But again we've not been in a situation where we've had this much debt," said Deputy City Manager, Mark Barber.
The city is on its way to racking up $75 million in debt with GEFA. The first $45 million they're still paying off from the early 1990's when they made improvements to the Mud Creek plant. Currently the city pays for that debt with the utility fee revenue city customers pay. But now they're looking to other options.
"That would be one of the last resorts we go to, to raising property taxes, honestly - But it's out there on the table. Because if SPLOST VII does not pass we've got to look at all the different options to debt repayment," said Barber.
To fix the Withlacoochee Plant it will take two projects: $30 million will go to install a new force main pump to send sewage under pressure, underground. Then another $20 million to relocate the plant to higher ground. Project one will be funded with the GEFA loan and the city hopes to fund project two with SPLOST VII revenue in a few years.
If SPLOST isn't passed in November, they may have to take out another GEFA loan.
City officials say they are in good standing with GEFA and have not missed any deadlines on their loan payments.