Albany officials vote to loan WG&L $3.5 million from Deal-Closing Fund

ALBANY — Albany City Commissioner Tommie Postell, serving as chairman of the commission’s Long-Term Financial Planning Committee that oversees the allocation of a lauded Deal-Closing Fund created by the city and the Albany-Dougherty Economic Development Commission, warned LTFP Committee members Thursday that “we’re not setting up a loan company here.”

Then the committee kind of did just that.

The committee, comprising members of the City Commission and the city’s Water, Gas & Light Commission, voted 3-2 to recommend a change in LTFP policy to allow for the use of a portion of the funding generated by Municipal Electric Authority of Georgia credits, which are for citywide investments. Then the board voted, again 3-2, to approve a 10-year, $3.5 million loan to WG&L for repairs of the aging utility offices at 207 Pine Ave.

“We really need to make changes in that building, which is usually the first contact we have with new customers,” Assistant City Manager-Utilities Stephen Collier told the LTFP Committee during a called meeting. “If you visit, it’s extremely cold, and that’s not fair to our employees either. We have an HVAC unit that is so intricately designed, it cannot be repaired.

“We need facilities that are not 80 degrees in the summer and 50 degrees in the winter.”

A proposal, drawn up by the city manager’s office, would change LTFP policy to allow for use of no more than 30 percent of the fund’s amount for investment loans, include a payback interest rate of prime plus 1/2 percent, allow for a recall of the principal amount at any time during the course of the loan as needed, and require that any department seeking a loan have budgeted repayment resources.

The decisions that were made by the committee did not sit well with member Chad Warbington, who is a WG&L commissioner.

“I’m extremely concerned and frustrated that this committee has apparently lost its vision of creating jobs,” Warbington said. “This meeting was thrown together and this policy change thrown together with little discussion. If there is no vision for what we’re supposed to be doing with this funding, we’ve got a large sum of money that’s going to be gone in no time.

“I will be very disappointed if our citizens don’t hold this committee accountable, if they don’t call their (city) commissioners and demand to know what’s going on. I did not vote against WG&L today; I voted against this process. I expect our citizens to be upset with the frivolousness of this committee.”

Albany City Attorney Nathan Davis said after the meeting that the policy change was needed in order for the LTFP Committee to use the Deal-Closing Fund for anything other than economic development and job enhancement. The fund is made up of one-third of credits returned to WG&L by MEAG, which collected them from member utilities as a hedge against threatened deregulation that never happened.

City CFO JoEllen Brophy told the Long-Term Financial Planning Committee on Wednesday that the Deal-Closing Fund currently had a balance of $17,170,890. The committee allocated $200,000 in funding to Albany-based Thrush Aircraft, which is planning an expansion that would bring 100 new jobs to the agricultural aircraft manufacturer.

“Personally, I think the most important thing (concerning the policy change) is that if the city needs those funds, it can tell Water, Gas & Light, and they will pay off the principal amount of the loan immediately and find another funding source,” Postell said during discussion. “Even if you take the $3.5 million away from the fund, we’ll still have around $13.5 million for new investment. I don’t see where we’ll run into any problems.”

Davis called the policy changes approved by the committee “good protection for this committee” in the event that the balance of the loan had to be called in by the city.

City Commissioners Bob Langstaff, who offered a motion to approve the policy change, and B.J. Fletcher voted along with WG&L Commissioner Bob Hutchinson to approve the changes, then Hutchinson offered a motion to approve the $3.5 million request by WG&L. Fletcher and Postell voted with Hutchinson to approve that matter.

“I’m very much in agreement with this request,” Fletcher said. “The money’s just sitting there. The city will eventually get a return on the loan, which will increase the amount in the fund, and WG&L will save money once the improvements are made at their facilities.”

Both the policy changes and the loan to WG&L must be approved by the full Albany City Commission before any action is taken. Collier said the utility will send out requests for proposals and be ready to move forward with the “redevelopment, refurbishing and restructuring” of WG&L facilities once approval is granted.