COVINGTON -- County commissioners took several important steps forward on the Bear Creek Reservoir at their Nov. 20 meeting.
First, commissioners agreed to accept a $21 million loan from the Georgia Environmental Finance Authority. Commissioners also approved the design of the dam for $1.9 million by Schnabel Engineering. The design was approved contingent on obtaining the 404 permit from the Army Corps of Engineers for the reservoir. Finally, they hired Krebs Engineering for a master water supply plan.
County Attorney Tommy Craig said the master water supply plan would address the question of when to move forward with water treatment facilities and when and where to build lines to connect to the existing system.
Prior to the vote, Craig defended the need to move forward with Bear Creek Reservoir to commissioners at a work session on Nov. 19. Craig said that while Cornish Creek Reservoir is permitted at 36 million gallons per day, actual yield is 20 or 21 mgd. Currently, on average, 12 mgd is being treated, and on peak days, that rises to 18 mgd, he said. Baxter International will require 1 million gallons per day, so on peak days, yield will be close to the maximum, he said. That doesn't take into account any droughts that might occur. Last year, Cornish Creek Reservoir dropped 12 feet before rains, he said.
Future water demand estimates made about a decade ago were based on a population estimate of almost 400,000 in 50 years.
Craig said the problem with demand estimates is that they consider only population projections and there's no "uncertainty analysis" built in to account for factors like drought or economic development. As a reservoir consultant who has permitted about 85 percent of reservoirs in North Georgia, Craig said he is recommending to regulatory agencies that such an analysis be included in the future.
When industries like Baxter show up, "We don't have any provisions for it," he said. "We've got a lot of economic development ahead of us, I believe, based on success we've had in recent times."
He also said Cornish Creek Reservoir was built taking into consideration the capacity needed to survive the drought on record at that time, the one from 1986 to 1988, and more severe droughts have occurred since then. Water demand models do not take into account these factors, he said.
The 1,242-acre reservoir will yield 28 million gallons per day with supplemental pumping from the Alcovy River. Without pumping, the reservoir will yield 9 million gallons a day.
Craig said the county should move forward with the design and construction of the dam, and install pumps, pipes and the water treatment facility when demand dictates. The entire process could take up to 10 years, although it could be less, he said.
"What we've got to do from this point in time in my estimation is build the reservoir, build the dam and be ready to go by the time indicated. My fear is it may well be indicated by the time we get this project online," Craig said.
The GEFA loan carries zero interest for the first three years of construction, 1 percent for the remainder of construction, accrued and capitalized, and 1.82 percent during the repayment period once construction is complete. The county will make interest-only payments the first seven years of the 40-year loan and will pay principal and interest afterward and will not be charged a closing fee.
Craig said that's a present value of $12 million the county is getting to build the reservoir.
"It's foolish of this community not to accept the generous offer we've gotten under the governor's water supply program," he said.
The total cost of Bear Creek Reservoir is $62,685,831, according to a press release issued by GEFA.
There will be two additional rounds of funding through GEFA, and Craig said he doesn't know if Bear Creek will receive additional funding. Commissioner Nancy Schulz asked if the reservoir could be included on the next SPLOST. Craig said it could, and noted that Cornish Creek Reservoir was entirely funded through SPLOST. The final cost for the reservoir that came online in 1992 was $22 million with the treatment facility, "so we should have built two back then. It's going to cost three times that much to duplicate that supply," Craig said.
Schulz asked what impact debt service payments beginning in year eight of the loan of more than $880,000 a year could have to water customers. County Manager John Middleton said that as debt on the Cornish Creek Reservoir declines, the debt for Bear Creek will begin to accelerate.
While Middleton said he wouldn't guarantee that there won't be a rate hike eight years from now, he anticipates it would be offset by the declining debt on Cornish Creek. A rate hike "would not solely be the result of just the debt service itself" he said, adding that operational costs and other factors contribute factor in to rates.