Alachua County Commission reluctantly agrees to loan $68k to Archer to avoid missing permit deadlines

BY JENNIFER CABRERA

GAINESVILLE, Fla. – At their May 27 meeting, the Alachua County Commission reluctantly agreed to lend $68,732 to the City of Archer to help them pay their engineering firm and avoid missing a permit deadline.

Original request from Archer

The agenda item was a request from the City of Archer to approve two applications for infrastructure surtax funds to construct a wastewater collection system and replace aging portions of the City’s potable water distribution system. The County had previously set aside $253,333 in infrastructure surtax funds for the City of Archer, but under a County ordinance, the funds must be reimbursed after they are spent and cannot be advanced to the City.

Lieberman: Money must come from General Fund because of limitations on surtax funds

County Manager Michele Lieberman explained that the County is “not able to lawfully advance them surtax funds; it would have to come from your General Fund.” She explained that the County Commission would also need to find that the projects are a permissible use of surtax funding and that each project has county-wide significance. 

New request: a temporary loan for $253,000 from the General Fund

Archer Assistant City Attorney Kiersten Ballou apologized for her “confusion” regarding the County’s ordinance and offered an alternative that she thought was “at least legally defensible.” She said the City had changed their request and was now asking for a temporary loan from the General Fund, to be secured with the $253,000 remaining from the surtax funds set aside for the City.

Ballou explained that the wastewater project is a $30 million project; the first part of that is $10 million to purchase capacity in Newberry’s planned advanced wastewater treatment plant, and that will enable 700 homes to move from septic tanks to sewer, which she said makes the project “of county-wide significance.” The second part of the project is to build a collection system to transport the wastewater from Archer to Newberry for about $20 million.

Archer owes over $200,000 to an engineering firm

Ballou said Archer owes over $200,000 to an engineering firm for the design of the wastewater collection system, that project is on a tight timeline for a Florida Department of Environmental Protection permit, and the engineering firm will not transmit the design documents until they are paid. She said Archer has two grants pending, one for $6 million and one for $13 million, along with a $2.5 million appropriation from the State, but those funds are not currently available to pay the invoices. She also said there are significant financial penalties for failure to fulfill their part of the agreement with Newberry. 

Ballou said about $68,000 was due right then to the engineering firm, and “I’m sure that you’re all aware that Archer is in some pretty tough financial straits, and $68,000 is simply not available for us to make those payments,” but the City would repay the County “pretty quickly” after receiving reimbursements from other entities.

Archer has a line of credit with a 6.25% interest rate

Mayor Fletcher Hope said the City has a $1.5 million line of credit with a bank, with a current balance of $625,000; they are currently paying interest only on that at a rate of 6.25%, a payment of $3,300 a month, “which is killing us.” He said he hoped the County could loan the City the money at a significantly lower interest rate.

Commissioner Ken Cornell said he wanted to help Archer “get off septic and improve the environment,” but he was concerned about setting a precedent of loaning money from the General Fund to a City “because there’s eight others that will be in line tomorrow if we do this.”

Cornell asked if the City had asked Newberry to lend them the money, and Hope said they had not. Cornell said he would prefer for Archer to first ask Newberry, then go to their bank, and only then come back to the County.

Alford: “The sooner we can get those folks off of septic systems,… the better off we’ll be.”

Commissioner Mary Alford disagreed: “I feel that this is an extenuating circumstance that we don’t come across – in decades… The sooner we can get those folks off of septic systems,… the better off we’ll be… I feel like we just need to bite the bullet on this one and do it for the environmental reasons and make it very clear to the other cities that we’re not opening a bank.”

Commissioner Marihelen Wheeler said, “Anything that has to do with protecting the aquifer is going to be a priority for me.” She said that Archer’s growth has been “stagnant” because of the lack of a sewer system, and “Gainesville is moving out in your direction; there’s going to be a lot of activity, coming and going through Archer. And I just feel like $253,000 is not a bad bet to hedge.”

Prizzia: “I don’t think that it’s pertinent to call this thing a project that’s about environmental protection… It’s about cities that want to grow.”

Commissioner Anna Prizzia said, “I first want to say to my colleagues, putting a wastewater treatment facility forward as an environmental protection mechanism is – it’s not accurate. As soon as you put a wastewater treatment facility, you get housing starts, and every single house that’s built is probably using somewhere in the neighborhood of 1,500 gallons of water per day… Yes, it will help the environment for the people who are already in Archer,… but this is bringing development… I don’t think that it’s pertinent to call this thing a project that’s about environmental protection; it’s just not. It’s about community development… It’s about cities that want to grow.” She agreed that Archer should ask Newberry for the loan. She was also concerned that if the project fell through and the grants weren’t awarded, Archer might not be able to pay the money back. 

Prizzia: Archer should adopt all the County’s land development regulations, environmental protection ordinances, and landscaping ordinances

Prizzia said that if the County did decide to lend Archer the money, she would want them to develop land development regulations with an urban cluster, no development outside the urban cluster, and no development where they don’t have wastewater and sewer. She also wanted Archer to adopt all the County’s environmental protection and landscaping ordinances “so that when you build all of those houses, they are not pouring a bunch of our drinking water on their lawns and landscapes and dumping a bunch of fertilizer… So that would be a minimum for me, and it might be a big enough win that I’d almost be willing to do it.”

Mayor Hope said the projects have “strict deadlines” at the end of the month, and they’d rather pay interest to the County than a bank, plus he hoped the County would not charge 6.25%: “If you are, then it’s a no-go, and thank you for your time… As much as we don’t want 1,000 homes on the west side of Alachua County, the growth is happening, and we want to do it appropriately.” He said that although he couldn’t speak for the rest of the Archer City Commission, they would consider implementing the County’s land development regulations. He also said he didn’t think there was time to start over with a request to the City of Newberry.

Chair Chuck Chestnut said he wanted to know how the City had gotten into a position where they owed the engineering firm “this kind of money and not knowing if you had it or not to continue your project.” He also asked when the County would get paid back, “and when – are we one, two, three, down the line, or five or six, seven down the line to get paid?… Because it’s a big risk to the County.”

$68,000 could be paid back quickly

Ballou said $68,000 is “immediately reimbursable from the Suwannee River Water Management District, so that could be paid back as soon as we receive those funds.” She added that Archer had not gone to the Newberry City Commission, but they’d had informal discussions with the City’s staff, “and they have not expressed a willingness to move forward with providing funding at this point… Their response was that the citizens of the city of Archer are not Newberry citizens, but they are Alachua County citizens… They said, ‘Go ask the County.'”

Chestnut was also concerned about setting a precedent because “the kind of guy I am, if I did it for one, I’m going to do it for the other, that’s just the kind of person I am… And then it just opens a Pandora’s box… It’s just a big mess here.” He said he was “torn” but wanted assurance that the County would be repaid. He also said Archer had not said anything about an interest rate that would be considered acceptable.

Ballou said Archer envisioned a loan “at the lowest potential interest rate that you all would be willing to do, up to and including 0% interest rate.” Chestnut responded, “Good try, good try. I love it,” but then said he was “just joking, I’m sorry.”

The remaining funds would be paid back when the project is complete in 2028

Ballou said the City hoped that the County would find that the wastewater project would qualify for the infrastructure surtax funds, and if so, the repayment would be at the completion of that project, when the infrastructure surtax funds can be awarded under the ordinance. So, she said, the repayment “would be from the County’s funds, dog-eared for the City of Archer” when the project is complete in 2028. She reiterated that $68,000 would be paid back “fairly quickly” when the City receives its reimbursement from the Suwannee River Water Management District. 

Torres clarified that this would be a General Fund loan that “may or may not be able to be paid back from the [infrastructure surtax] funds in the future, if the project is complete, because it may not be complete. That’s one of the things that you’re going to need to decide.”

Prizzia said that, in her opinion, a wastewater treatment facility for a municipality does not have county-wide significance, “other than it’s taking the nitrates out of the system, but again, it’s also increasing housing development.”

Wheeler: “They want to have a tax base, just like every other community does. To deny them that because of a system like this, I think, is pretty arrogant… To deny them the opportunity to grow, I think, is pretty paternalistic.“

Wheeler said, “Yes, they want to grow. They want to have infrastructure in place for the community. They want to have a tax base, just like every other community does. To deny them that because of a system like this, I think, is pretty arrogant… To deny them the opportunity to grow, I think, is pretty paternalistic, and I just don’t understand why that would even enter into it… $253,000 is not that big an ask, and I can’t believe that any of our other municipalities would hold that against Archer.” She said the only thing standing between Archer and their permit application is a payment to the engineering firm to get the design documents that have already been completed.

Chestnut: “I don’t feel comfortable in loaning money to somebody and not knowing if I’m going to get paid back or if I ever get paid back.”

Chestnut said he remembered disputes over the gas tax and added that he had not heard how the County will get paid and what the interest rate would be, “and if I don’t hear that, I’m not supporting this…. I don’t feel comfortable in loaning money to somebody and not knowing if I’m going to get paid back or if I ever get paid back.”

Cornell said, “What I would say to the City of Archer elected [officials] is, ask the City of Newberry elected [officials] because if the electeds at the City of Newberry say, ‘We’re not willing to help you on less than 1%, temporarily, on a $75 million project,’ then I would question that partner for the next three decades.” He said that if the County Commissioners decided to loan the money, “it would be with Commissioner Prizzia’s additions. That’s where I am.”

Prizzia: “You cannot tell me that 1,000 new homes, taking up an average of 200 to 400 gallons a day out of our rivers and streams and dumping fertilizer and irrigating their yards every day is a positive thing for the environment.”

Prizzia said to Wheeler, “I cannot leave this alone. You are our water advocate. You are the strongest water advocate that I’ve ever known, up on this dais, in a lot of ways. You cannot tell me that 1,000 new homes, taking up an average of 200 to 400 gallons a day out of our rivers and streams and dumping fertilizer and irrigating their yards every day is a positive thing for the environment… I am not saying that small towns do not deserve to grow. That is not what I’m saying. All I’m saying is that you cannot make the argument that this is an environmental project, and that was the argument that was being made.”

Wheeler: “The people that are right now in Archer… deserve to have the same resources that all of us have.”

Wheeler responded, “I can. I can make that because even the people that are right now in Archer, having to walk through yards that have feces in them because of flooding,… those people deserve to have the same resources that all of us have.”

Speaking slowly and distinctly, Prizzia responded, “And their cities could be providing better systems to protect them from that. It doesn’t mean that we need to build a regional wastewater treatment facility that’s going to bring thousands of home starts to the other portions of our county… I do not think that a wastewater treatment facility is the solution to environmental problems, necessarily, especially at this scale.”

County earns 4%-4.5% on their money

Assistant County Manager Tommy Crosby said the County earns 4% to 4.5% on their money, so he would recommend an interest rate in that range because otherwise “you’re asking the rest of the taxpayers to subsidize your interest rate.” He said there is risk because Archer might not be able to repay a bigger loan if a grant doesn’t come through, but he considered the $68,000 to be a “short-term advance… that gives me a lot less heartburn” because the Water Management District grant was already awarded. He added, “We don’t have the funds to bail out cities,” but he said the decision on making a loan was a policy decision, not a financial decision.

Alford: “Unbelievable” that Newberry would not loan the money to Archer

Alford suggested that Archer use their line of credit with the bank in the short term, “with the idea that we could mitigate at least part of that interest rate.” She said she had just exchanged text messages with “folks from Newberry, and I didn’t get very good responses.” Somebody (off the microphone) said that was unbelievable, and Alford said, “Yeah, I agree. Unbelievable.”

Mayor Hope reminded the board that in their joint meeting, they told the City of Archer, “‘Hey, have you tried to reach out to us? We’re here, we’re your partners,’ and I’m not holding you to any of that, but this is that first opportunity, with a quick payback.” He said he would happily pay 4.5% on $68,000, rather than 6.25%.

Prizzia said, “I would never hold the City of Archer over a barrel for $200,000 to stop a regional wastewater facility that has been in the works for 10 years just to prove a point about development… It’s much bigger than that. That’s just a comment to my colleagues when we use an argument for environmental protection, when we’re also talking about major growth and development as a result of something, because that growth and development will far surpass any sort of environmental benefits… But that isn’t my point with this conversation.” She reiterated that she wants the City to adopt the County’s land regulations and that they could “beg, borrow, and steal every bit of ours. We certainly are proud of them.”

Initial motion

Alford made a motion to advance $68,000 from the County to the City of Archer, to be refunded from the Water Management District grant, at an interest rate of 4.5%. She said she would also like to see Archer adopt the County’s land regulations, but she didn’t make that part of the motion. Cornell seconded the motion “for discussion.”

Amended motion

After public comment, Torres suggested delegating authority to the County Manager to provide a $68,000 General Fund loan to the City of Archer for payment of water project invoices by the engineering firm at 4.5% interest. She suggested that the loan should mature in six weeks, and if Archer has not paid it back by then, Archer will agree to forego $68,000 of its potential surtax partnership project funding. 

Alford said that was an excellent motion, and Cornell, as the seconder, agreed, but Cornell also asked Alford to add a statement that this is a one-time loan and the County is not creating a precedent for other Cities to ask for similar loans, so Alford added that. Torres said she had been told that the exact amount was $68,732.

Cornell said he wanted Archer to ask Newberry for a short-term loan for the remaining funds owed to the engineering firm for the wastewater project, about $185,000. Alford added that to her motion, and Cornell agreed. 

Torres added, “We’re wanting to waive, release, and assign to Alachua County the funds if they do not pay in six weeks.” Wheeler asked if six weeks was enough time, and Ballou said it’s up to the Water Management District, but “we believe six weeks will be sufficient.”

The motion passed unanimously.