Board Chairman Buzz Ahrens said Tuesday he and County Manager Jerry Cooper met last week for several hours with one prospect, and there are at least two more who are interested in taking over the site of the defunct operation of Jimmy Bobo and David Bobo, former operators of the site.
“We have two or three potential operators in play at any one time. We have had a half a dozen total with several inquires that did not go anywhere,” Ahrens said. “Newer options are better than the previous options, and the likelihood of a positive outcome is greater.”
The county formed the Resource Recovery Development Authority in 2006 to guarantee debt on the building of the Highway 5 facility. Since Jimmy Bobo vacated the property in 2012, the county has been on the hook for making lease payments until a new operator is found.
Ahrens said the best case scenario would be that a new operator would buy the property and equipment the county now owns outright.
The county’s RRDA will hold a meeting soon, although a time has not yet been set to discuss the issue, Ahrens said.
Meantime, County Chief Financial Officer Janelle Funk presented a budget update last week that highlights a potential $4 million budget shortfall the county could face this fiscal year.
The FY 2013 budget was built with a $2.1 million SPLOST reimbursement and a $1.9 million pension credit, contributing a total of $4 million to this year’s budget, which will not be available for FY 2014.
The new fiscal year runs Oct. 1, 2012, to Sept. 31, and funding to make the $1.2 million in annual payments on the $18 million the county owes for the bonds used to finance the project is only funded for the first half.
Ahrens said that right now payments on the bond debt are in the budget through March 31, leaving $600,000 unbudgeted.
“Here is the worse case scenario, we planned half a year at the full amount through March 31. I would plan a full year impact of no offset. That being said, it would be another $600,000 to the current budget,” Ahrens said.
That money would come out of reserve funds, he said.
“We had $3 million we were under budget last year, $1.5 million of that is real savings and that went into reserves,” Ahrens said. ”We don’t have to borrow or to do anything out of the ordinary to cover this fiscal year.”
Ahrens said he hopes an operator will be in place by July when the county starts planning for the 2014 budget.
“By 2014 we would hypothetically have a new operator, and if we had an operator to begin making payments Oct. 1 at half the current rate, we could refinance $4 million of the $18 million,” Ahrens said. By refinancing, there is an ability to reduce the county’s out of pocket on the balance.”
For the budget, Funk said the county needs a long-term solution rather than continuing to use one-time inflows to meet cash requirements.
Commissioner Harry Johnston agreed.
“Unless we find a solution we don’t see now, we’re facing the difficult choice between a net tax increase of about a half mill, or drastic cost cutting measures like layoffs and furloughs,” he said.
Revenue is on track to achieve the budgeted amounts for FY 2013. The county has collected $2.8 million more than budgeted across all funds as of the first quarter of the fiscal year. The county has been able to keep revenues flat by raising the millage rate to offset declining property values over the last few years and has reduced some costs, Johnston said.
As of the end of the first quarter, county expenditures were also on target for the fiscal year.