Members of Canton’s reservoir committee met with board and staff members of the Cobb County-Marietta Water Authority at the Chambers at City Center in downtown Woodstock in an attempt to settle disagreements about the reservoir, including projects needed to complete the facility and the future of Canton’s stake.
They discussed whether Canton can sell its portion of the $100 million reservoir to Cherokee County Water and Sewerage Authority, or if they can make a deal with other potential buyers, and who is going to fund improvements such as a new office building and computer monitoring system.
Officials who attended the meeting include Canton Mayor Gene Hobgood; Canton City Manager Scott Wood; Canton’s Reservoir Manager David Hatabian; Canton City Council members Glen Cummins, John Beresford, Bob Rush and Bill Bryan; Cobb authority General Manager Glenn Page; Board Chair and Smyrna Mayor Max Bacon; board members Don Mabry and Earl Smith; and the authority’s reservoir manager Heath Lee.
Page said it is unlikely the Cobb-Marietta authority would stand in the way of a sale to the Cherokee County authority, but wants to make sure his agency has the right to match an offer if Canton should try to sell its stake in the Hickory Log Creek Reservoir to a private company or investor.
The Cobb general manager said they fear a private company may have different goals for the project than a public entity like a water authority.
Page said that while no action was taken at the meeting, it was only an opportunity for both sides to hear each other’s concerns.
“It was more of trying to find some common ground,” he said. “The meeting was very cordial, but it was also honest.”
Discussions Monday centered on whether the improvement projects could be scaled back.
“They want to be ensured that everything we put in there is necessary for operation and there’s no bells and whistles,” he said, adding the authority has already reviewed the project’s costs for extras.
Cummins said he and other Canton council members want to be sure the authority and the city aren’t wasting taxpayer dollars on an elaborate building.
“Unless they come (back) with a highly revised building, I can’t go along with it,” he added, referring to approving the bid to build the facility.
The meeting comes on the heels of the Cobb authority unanimously rejecting Hobgood’s request to give up its say in who the city can sell its 25 percent stake to the reservoir.
Right now, Canton can only sell its portion if Cobb agrees, which Hobgood has said is keeping the city under water on the deal.
Hobgood’s request to look for other buyers came after a consultant hired by Cobb last month advised against the authority taking over the city’s 25 percent ownership in the reservoir.
The consultant said the value of Canton’s share would depend on whether Cobb’s authority can get approval from the U.S. Army Corps of Engineers to withdraw additional water from Lake Allatoona.
The Cobb authority owns 75 percent of the reservoir, while the city is responsible for its 25 percent of the ownership.
However, the city of Canton has 50 percent of the decision-making ability about the reservoir.
Page said both entities agreed on working toward a memorandum of understanding that would give an entity interested in purchasing Canton’s share “a level of comfort” in negotiating with the city.
Also discussed was the historical background on why the city in 2006 agreed to delete Section 402 of the original agreement, which revoked Canton’s ability to unilaterally walk away from the reservoir project costs and sell its share of the reservoir to any buyer it chose.
The completion of the reservoir has rested on the city council approving two portions of projects at the reservoir: an office building and a SCADA computer monitoring system.
The Canton City Council has held up the approval of those projects over concerns about the money to be spent.
The city has not approved its 25 percent share of the cost of the reservoir office as well as the SCADA computer monitoring system.
The city of Canton and the Cobb-Marietta authority entered into a 50-year agreement to build the pumped-storage reservoir just off the Etowah River in 2000.
The Cobb authority is paying three-fourths of the tab, with the city responsible for the remainder — with the same split for sharing the drinking water supply created by the reservoir.
The nearly $100 million price tag for the dam and reservoir was significantly more than the original $20 million estimate when officials approved the project in 2000.
The city took on $10.3 million in debt in 2005 for the reservoir and another $8 million two years later to help fund its portion of the project.
In 2009, the council approved bonds of as much as $8 million to finance the remaining costs.
Canton last year approached the authority to purchase its stake in the reservoir, which was part of an overarching plan for the city to reduce its water and sewer costs.
“We all understand the financial situation of the city,” Page said. “We all want to help them. Of course, we have obligations to our customers and the money we have is public money that’s entrusted to us to use to serve our customers.”
The city has also bounced around the idea of selling its share to the Cherokee County Water and Sewerage Authority, which provides water to unincorporated Cherokee residents as well as serving residents in Holly Springs, Waleska and parts of Woodstock.
Page said it is unlikely the Cobb-Marietta authority would stand in the way of a sale to the Cherokee County authority, but wants to make sure his agency has the right to match an offer if Canton should try to sell its stake in the reservoir to a private company or investor.
Page fears a private company may have different goals for the project than a public entity like a water authority.
Page said board members reminded Canton that both entities volunteered to sign on to the project and that Canton “is still our preferred partner.”
“But we are trying to be creative in finding some solutions that’ll work for everybody,” he said.
Hobgood said the city will continue to work with the authority in completing the reservoir, but added he still thinks the city should be allowed to market its 25 percent stake to any entity it chooses.
“Since they have indicated our portion has no value to them, I don’t think it’s good we be held hostage from being able to market our portion legitimately to other utilities,” he said.
Hobgood added he understood the authority’s desire to “control” who they enter into a partnership with in the future, but “we ought to be able to make that decision.”