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Utility board to recommend using SPLOST funds to pay off GPO loan, citing interest savings
Summary
Staff told the board an early payoff of the GPO loan for the East/West interceptor would cost about $10,076,050 and could save roughly $359,000 in interest; the board voted to recommend the city commission use SPLOST 5, 6 and 7 funds to pay the loan, with staff asked to provide a fuller written explanation.
City finance staff presented an analysis at the Oct. 9 Albany Utility Board meeting recommending early payoff of a GPO loan related to the East Side/West Side interceptor project.
The staff presentation said a payoff figure provided by the lender was approximately $10,076,050.49 and estimated the city would save about $359,000 in future interest. Staff proposed using available sales-tax proceeds from SPLOST 5, 6 and 7 — including reassigning $615,000 originally noted for Holloway Drainage from SPLOST 7 — to complete the payoff. "We would save about $359,000 worth of interest in the future," finance staff said.
Board members discussed tradeoffs. Some members said the loan carries a very low effective rate and cautioned that paying it off reduces low-cost borrowing capacity; others said clearing the loan would free borrowing headroom for future projects. The chair asked staff to prepare a detailed explanation for the city commission so commissioners have context before acting.
After discussion, the board voted to recommend that the city commission pursue payoff of the loan using SPLOST funds and to return supporting documentation. The motion passed by roll call.
Staff noted the payoff figure was current as of an October accounting date and would change if postponed; the board asked staff to clarify timing and how the reallocation would affect remaining SPLOST project budgets before the commission vote.
