The General Assembly continues to work on the FY2011 state budget, which includes packaging together and selling off the Georgia Environmental Facilities Authority (GEFA) Georgia Fund portfolio, a valuable state asset, for a one-time quick fix to help balance the state’s budget.
The Georgia Fund is Vital for Georgia’s Continued Economic Development
The Georgia Fund has provided more than $594 million in low-interest loan financing to local governments in the last five years for water, sewer and solid waste projects. It is vital for funding the infrastructure which has made Georgia’s economic development possible.
GEFA has an excellent interactive map where you and your legislators can see how your community has benefitted from the Authority’s lending programs over the years, including the Georgia Fund.
GEFA Releases RFP for Selloff of Georgia Fund Assets
As part of this multi-step process, on Monday, March 1, GEFA released a Request for Proposal (RFP) for assistance in bundling together Georgia Fund loans so that they can be packaged and sold to Wall Street investors. In technical terms, the RFP seeks "underwriters or a sell-side advisor in conjunction with the sale of the Georgia Fund Loan Portfolio." To review the RFP and other supporting documents, click here.
GEFA proceeded to release this RFP without further public guidance from the General Assembly. Many legislators and counties have expressed concern about the proposed sell-off of the Georgia Fund, which requires GEFA to sell off "all or a portion" of the current loans as a one-time quick fix to meet the state's budget deficit.
Do the Promises and Numbers Add Up?
The Governor’s Office and GEFA staff have made assurances that they only intend to selloff the GEFA loans taken out by credit-rated governments; however, this is only 20 percent of the total value of loans out there (or $135 million) and cannot generate the $288 million sought to plug the budget hole. Other promises have been made that the Georgia Fund will still have enough funds remaining to serve smaller local governments, but ACCG’s research leaves the very real possibility that the program will be decimated. For more information on ACCG's questions and concerns, click here.
Oppose HB 244 and any other Legislation Authorizing GEFA to Upload Funds
On another front in selling off GEFA’s assets, HB 244 has passed out of the Senate Special Judiciary Committee and is currently being held in the Senate Rules Committee. This legislation authorizes GEFA to "transfer to the state any funds of the authority determines to be in excess of those needed for its corporate purposes," providing the authorization needed by GEFA to legally transfer monies from the Georgia Fund to the state’s General Fund. This makes it much akin to raiding the state’s other environmental trust funds.
ACCG continues to monitor this issue very closely and will provide updates on actions as they occur.
