From June’s edition of Georgia Trend:
Earlier this year, the Newton County Water and Sewerage Authority finished a $14 million sprint. They installed about 89,000 linear feet of pipe, creating a 14-mile sewer line to serve the $1 billion Baxter International manufacturing facility being developed at Stanton Springs, the industrial park on the border of Morgan, Newton and Walton counties.
The whole thing only took 16 months because Baxter (lured to Georgia by an incentive package worth more than $200 million) was in a big hurry, and the community (which felt it needed Baxter, and the 1,500 jobs promised by the company) didn’t want to disappoint. Newton had begun work on a wastewater treatment plant on the Little River near Stanton Springs, but that’s a three-year project.
“Baxter couldn’t wait that long,” says Mike Hopkins, the authority’s executive director. “We needed to save some time.”
So they installed the pipe connecting Baxter to a treatment facility in Covington, they did on time, and on budget, thanks to a boost from a couple of state agencies.
Along the way, Newton County earned WaterFirst designation through the state’s Department of Community Affairs (DCA), which qualified them for a one percent discount on interest for the $14 million loan from the Georgia Environmental Finance Authority (GEFA) that paid for the project.
“The WaterFirst designation sends a clear signal that we are responsible stewards of this valuable resource, but it also means we’re getting a substantial savings on that GEFA loan,” Hopkins says.
According to DCA Commissioner Gretchen Corbin, who helped work the Baxter deal when she ran global commerce for the Department of Economic Development (GDEcD), WaterFirst designation was a game changer in negotiations with the pharmaceutical company.
“[It] helped the county respond to the specific water requirements of a company like Baxter,” Corbin says, and the GEFA loan, “was the means that enabled Newton County to provide the wastewater service that Baxter needed. So being designated WaterFirst gives Newton and other designated communities a unique advantage when being considered for economic development projects.”
It’s a bit more complicated than that. To understand how Newton County became a WaterFirst community, and got its sweet deal with GEFA, and how it was in the running with Baxter at all, you have to look back, way back.
The story of how this sewer line project happened – and about a thousand others across the state through the years – starts more than 40 years ago, at a time when Georgia’s rivers were thick and wretched, and when public officials began crafting innovative government finance programs that are still impacting communities today.
“A lot of people today don’t realize how much progress has been made in Georgia over a period of time,” says Joe Tanner, former two-time commissioner of the Department of Natural Resources (DNR), and a key policy advisor under four governors, who has chaired his own lobbying firm, Joe Tanner & Associates, since 1997. “When I think back and consider where we came from, it’s pretty amazing.”
For example, he remembers the first water quality hearing of his life, in 1964, when Georgia created the Water Quality Control Board (WQCB), forerunner of the state’s Environmental Protection Division. They met in Savannah, where there was virtually no treatment of industrial or municipal wastewater, and the harbor was black, mostly dead, oxygen levels at one part per million, not enough for fish to survive. But then, the sight of rivers flowing with unhealthy, unnatural colors wasn’t very uncommon then.
“Georgia was in pretty bad shape, like a lot of the country,” says Harold Reheis, former director of Georgia’s Environmental Protection Division (EPD), who worked 32 years in state government and now works with his old boss, Tanner, at the firm.
“I guess there was almost no industrial wastewater treatment here,” says Reheis, who in 1969 began his career with the Water Quality Control Board.
“The Chattahoochee would go septic every day in the summer, a black stream with no oxygen, no fish at all. Mill Creek in Dalton, coming out of Rocky Ridge, would turn blue, black, green, yellow, every 15 minutes, depending on which carpet mill was dumping which color of dye. Down in middle Georgia, in kaolin country, Commissioner Creek was the color of whole milk, with the same consistency.
“And we weren’t all that different from the rest of the country.”
In 1964, eight years before Congress passed the national Clean Water Act (overriding President Nixon’s veto of the bill), Georgia passed its own measure, the Water Quality Control Act. It was mostly a symbolic move because, as Tanner says, “the law was very weak.” At least it was a start.
But even before that, one statewide organization was already spreading an environmental message.
“Years before there was an EPA (Environmental Protection Agency) at the federal level, our organization was talking about water pollution control,” says Ross King, executive director of the Association County Commissioners of Georgia (ACCG), which began a water pollution awareness campaign in the 1950s. “ACCG was on the bleeding edge, ahead of the curve in the conversation over water quality.”
They even created an iconic mascot to help spread the word – decades before the Aflac duck started selling insurance, ACCG’s ‘Georgia Quacker’ helped push the state toward water quality standards in the 1960s. This campaign helped inspire Georgia to become only the second state in the nation with standards and specifications for all streams and waterways, opening the door to federal funding.
The federal Clean Water Act (CWA) threw the door wide open, eventually, and for a while. The law required industries and municipalities have a permits to discharge wastewater, which had to be properly treated beforehand. The new law also promised funding in the form of construction grants to help local jurisdictions build the infrastructure meet the new standards.
Nixon called the grant program a budget buster, and vetoed the bill. After the House of Representatives and the Senate resoundingly overrode his veto (with bipartisan support), Nixon basically held the money ransom, until $9 billion became available under the Gerald Ford administration in 1975.
The program would provide construction grants to the states for water system improvements – 75 percent from the fed, with a 25 percent match from the state.
“This was a really big deal. There had been some piddly little grants before the Clean Water Act of 1972. Nothing like this, though,” says Reheis. “But the formula was geared toward the Northeast and upper Midwest more than anywhere else. The growth states in the Southeast were gonna get screwed.”
OK, so it’s 1975 and there’s this new public money wagon. This is when the strong, silent hero, J. Leonard Ledbetter, enters the story.
Strong because of his work ethic: “He was the ultimate workaholic, someone I was never able to outwork, and I tried,” says Reheis, who managed water quality control for EPD back then, when Ledbetter was the director.
Silent because, according to Reheis, “When he left state government and went into the private sector in 1990, he stopped talking with reporters and other media people, and has abided by that as a strict personal rule ever since. So he is not going to return your calls or emails.”
The hero because Ledbetter’s colleagues say that he was the main reason Georgia got its fair of the pie at first, then later rewrote the recipe to create a more sustainable funding source.
“If I were giving credit, I’d give it to Leonard,” Reheis says. “Leonard went after Gov. [George] Busbee, who liked a good cause, and told the governor, ‘this funding formula is bad for the South, we should be betting more money.’ He must have made eight or ten trips to Washington over the period of a year to work with Senators [Sam] Nunn and [Herman] Talmadge.”
The resulting ‘Talmadge-Nunn Amendment’ ensured a more equitable distribution of funds so that, for the life of the CWA grant program, through 1986, Georgia received $720 million in federal funds for construction of sewerage treatment infrastructure, about $300 million more than it would have received under the original formula.
And the money paid for some impressive stuff, such as Clayton County’s innovative E.L. Huie Water Reclamation Facility, which uses thousands of acres of wetlands to treat wastewater.
But it couldn’t last forever, the free federal money wagon. Congress reduced the federal proportion of the grants to 55 percent, but even before that, Reheis says, “we realized that the gravy train couldn’t go on for long.”
Changing the Formula
The construction grant process was broken down into three steps – planning, design and construction. Congress was authorizing at least $3 billion a year for projects, but from start to finish, it could take 10 years, from start to finish.
“We saw a whole lot more need than there was money, and saw that Congress was not going to be able to fund these projects at that rate forever,” says Jack Dozier, who took over water quality control at EPD when Reheis was its director.
By the early 1980s, a handful of Georgia leaders saw the writing on the wall, and started working to change the funding formula, with Ledbetter (now commissioner of the Department of Natural Resources) apparently doing much of the stirring.
“It was Mr. Ledbetter’s brainchild,” says Dozier, who still calls him “Mister,” and not “Leonard.”
“The concept was, let’s allow states to convert that grant money. Instead, let’s use it to capitalize a revolving loan program, and create a renewable source of low-interest funding.”
It wasn’t a new idea, and Ledbetter was by no means alone. This was an ensemble effort, with a cast of major players, including two powerful and respected legislators from rural Soperton – State Rep. Pete Phillips and State Sen. Hugh Gillis, both deceased, as well as Tanner.
“They were involved in everything, Phillips and Gillis,” says Tanner, chuckling. “Two great state legislators, both very good people.”
Reheis, Dozier and King were there, also, and the whole bunch of them had a hand in changing the mechanism. A lot was going on. Congress was phasing out the construction grants program, as suspected, and finally did so in 1987, replacing it with the federal revolving loan program that Ledbetter and his pals with the national Association of State Water Pollution Control Administrators had been pushing. Meanwhile, Phillps, Gillis, Tanner and Gov. Joe Frank Harris (among others) were setting the table at home.
The legislature appropriated $20 million in state funds to provide local jurisdictions with low interest loans for water and sewer improvements, and in 1986 created GEFA as a successor to the Georgia Development Authority Environmental Facilities program.
Today, GEFA administers the federal Clean Water State Revolving Fund (CWSRF) and Drinking Water State Revolving Fund (DWSRF), both of which require a state match of about 20 percent, as well as the state-supported Georgia Fund. Since its inception, GEFA has provided more than $3 billion in low-interest loans to local governments and authorities for more than 1,400 projects (improvements to water, sewer and solid waste systems).
“What’s easy to forget over time is, there was virtually 100 percent buy-in from ACCG and the Georgia Municipal Association,” Dozier says. “They were used to standing in line waiting for federal grant funds and had the wisdom to support a program they saw as long term.”
It was a hit from the get-go, says King, who was state program coordinator for GEFA. Other states wanted to copy what Georgia was doing with its revolving fund loan program. King sent a bunch of information to Virginia, and two months later got a package of brochures touting that state’s new program. Apparently, they followed directions a bit too closely.
“They had plagiarized everything we’d written and put it in this tri-fold brochure,” King says. “They even listed Joe Frank Harris as the governor of Virginia. We busted a gut over that.”
Since the WaterFirst program was launched in 2003 by DCA, at least 32 communities have achieved the designation, and there are at least 20 trying right now. These are cities and counties, or their water/sewer authorities. ACCG deserves some credit for the program, which recognizes communities for top-notch water stewardship.
“With the old construction grant, there were municipalities with poor water quality, some derelict situations, low scores from the EPD, and they were getting money for their recovery,” King says. “We raised our hand and made the point, ‘why not look at a new concept. Let’s reward those who are spending their own dollars, who are visionary, thinking forward with regard to management, and show them some appreciation for the work. That, in essence, is how it started.”
Randy Hartmann, chief operating officer of the ACCG, was heading the DCA’s now-depleted environmental management program at the time. It was a collaborative effort between Region IV of the federal Environmental Protection Agency (EPA), GEFA, the DCA and ACCG, among others.
“We’d penalize communities or fine them when they weren’t in compliance, but there was no recognition, so that was the birth of WaterFirst,” says Hartmann, who managed a staff of 13 in his department at the time. “So we thought of providing the incentive, the reduced interest rate at GEFA, and that’s been a great carrot.”
WaterFirst participants have to adequately address seven components to achieve WaterFirst status. These are: watershed assessment, stormwater master planning, water supply planning, water supply protection, conservation, wastewater treatment systems and management, and water reclamation and reuse.
“We started the process back in 2009, and it wasn’t easy,” says Marilyn Hall, water conservation coordinator for Athens-Clarke County, which which finally won designation in 2013. They had to complete upgrades on their wastewater treatment plants, for one thing.
“Ultimately, we demonstrated our commitment to water quality, and our financial commitment, to DCA,” says Hall, who coordinated the community effort. “The application process brought a lot of departments together. My job is water conservation, but what I think really stood out for us is our other departments’ focus on water issues.”
The Douglasville-Douglas County Water and Sewer Authority won earned WaterFirst badge back in 2008, but executive director Peter Frost says they aren’t using the one-point discount on Georgia Fund loans.
“Our cost to capital is less than what we can get through GEFA,” Frost claims. “So, [the discount] isn’t as enticing as it used to be.”
Nonetheless, this WaterFirst community is the site of one of the state’s more interesting projects. Google is using proprietary technology in Douglasville, taking wastewater from the local community into a treatment plant about five miles from the Internet service company’s local data center, using the water to cool its servers.
“We’re now operating the largest water reuse facility in the state,” says Frost.
GEFA hasn’t included the federal CWSRF or DWSRF loans in the discount program yet, but could be changing soon (if it hasn’t by the time you read this).
“I’m confident that we’ll soon incentivize our federal programs as well,” says GEFA Executive Director Kevin Clark. “Generally speaking, the federal programs were designed to handle larger projects. The Georgia Fund was never designed to fund these $25 million jobs.”
The rates for something like the CWSRF already are around 1.4 percent. With the one-point reduction, Newton County will pay about 1.8 percent on its 20-year Georgia Fund loan, allowing for the completion of the Baxter sewer line.
But then, it isn’t just about Baxter, says Mike Hopkins.
“Sure, they got the ball rolling and they’re the reason we set records to get a job this big done on time,” Hopkins says. “But Baxter is in Stanton Springs, and that’s 1,600 plus acres. And they just broke ground on the Georgia Bio Science Center out there, a $20 million investment from the state.
“I see some potential for growth there. I see a lot of opportunity there.”