Board discusses using SPLOST funds to pay off interceptor loan early, staff cites modest interest savings

Utility staff reported to the board that the payoff figure for the city’s GPO‑held loan for the East‑West interceptor is roughly $10,000,076 (staff‑provided figure). Staff said available SPLOST (special local option sales tax) funds from SPLOST 5, 6 and 7 could be used to make an early payoff that would yield approximately $359,000 in future interest savings.

Staff proposed reallocating $615,000 from funds previously earmarked for Holloway Drainage in SPLOST 5 toward the payoff, which would reduce the requested SPLOST 6 amount for other projects. Board members pressed for clearer, written analysis before the item goes to city commission: they asked for the calculation details, how the payoff would affect long‑term borrowing capacity for future sewer and stormwater projects, and confirmation of the loan’s effective interest rate (staff noted supporting documentation that indicates an effective rate "less than 1%" in attachments).

Several members cautioned that although paying the loan off would reduce indebtedness, the current loan carries historically favorable terms and early payoff could reduce future flexibility. The board voted to recommend the proposal to the city commission with the direction that staff provide a more detailed explanation of the payoff amount, fund sources, and pros and cons.

Next steps: staff will prepare resolution language and supporting analysis for city commission review; board members asked for the full accounting details to be available when the commission considers the recommendation.