Dalton council approves resolution to pursue up to $130 million in bonds for 57‑MW gas plant

Dalton’s mayor and council on Jan. 27 approved a resolution authorizing the city to proceed with the proposed issuance of combined utilities revenue bonds to finance a 57‑megawatt natural‑gas electric generation facility on property the city already owns.

Council considered Resolution 26‑04, which seeks authority to offer bonds in a private placement that would be held by Regions Bank and would not be sold on the public bond market. The offering cap described at the meeting was $130,000,000, with up to $30,000,000 of the issue potentially structured as immediately refundable for flexibility during early project stages.

John Thomas, who briefed the council on the proposal, described the financing mechanics and the project scope. He said the bonds would fund on‑site infrastructure and the electrical connection to the transmission grid and that the private placement gave the city “the most flexibility and the lowest interest range.” He told the council the exact interest rate will be known only at closing, which staff anticipated in April or May, and that the council would be presented final financing numbers in the spring.

Council members questioned the refundable portion and whether the $30 million figure was an absolute cap. Thomas said the figure was a high‑end estimate derived from contingency analysis and that financial institutions typically limit the amount of refundable principal they will accept at closing.

On projected savings, Thomas said Dalton has purchase power contracts running through 2037 and expects recurring cash‑flow savings during the first 10 years while debt service is paid. He also stated the facility’s useful life is expected to be about 35–40 years and estimated the capacity‑avoidance value at “over $15,000,000 a year,” with aggregate savings described in the meeting as on the order of $150 million to $200 million over 20 years. Several council members pressed Thomas about avoiding past problems with cost overruns on other projects; Thomas responded that the proposed facility is simpler in design than larger plants and expressed confidence in the cost estimate.

A council member asked for the record to show the project is not intended to serve data centers long term; Thomas confirmed the city has been transparent with data‑center customers that long‑term infrastructure investments to serve them would require their partnership. Another council member asked staff to make clear to residents that any near‑term rate increases are part of ongoing operations and not caused by this bond authorization.

A representative said the water, lot and sinking fund board reviewed the plan and recommended approval. The council moved to approve Resolution 26‑04 and voted in favor. No roll call vote with names and counts was recorded in the transcript.

Next steps: staff said they expect to return in the spring with finalized financing documents, including exact interest rates and repayment details for council approval.