Athens Mayor Steve Patterson on Monday asked Athens City Council to consider removing an “opt-out” clause from an ordinance approved in November that enters the city into a contract to pay $90,000 or more annually for 20 years toward construction of a new 88-mile trail system in the Wayne National Forest.
Patterson’s request drew stiff opposition from City Council members, however. At this point, it doesn’t look as if anybody on council will support removing that clause.
The opt-out clause would allow the city to end its financial support for the trail system early, if the project north of Athens failed to bring in anticipated revenues, so long as the city closed out its current year of payments.
Yet, it appears that leaving the opt-out clause in the city’s Baileys ordinance may jeopardize a key funding source for the project.
Patterson Monday evening reiterated concerns to City Council expressed by the Athens County Port Authority – an economic development agency created by the Athens County Commissioners in the 1990s – that the Port Authority would be unable to take out a bond for the Baileys Trail System project if the opt-out clause remains in the City Council agreement. The Port Authority is one of the few agencies being considered as the entity to take on the bond for the project.
Athens City Council voted unanimously in early November to enter into a contract with the Outdoor Recreation Council of Appalachia (ORCA) to pay $90,000 or more annually over the next 20 years to fund the Baileys Trail System. Project supporters have billed the 88-mile mountain-bike (and other non-motorized uses) trail system, under construction north of Chauncey on the Wayne National Forest, as the greatest hope for economic development in Athens County in many years.
Patterson, a member of ORCA, argued that the opt-out clause that City Council added into its agreement after much debate this past fall is a major “roadblock” to the Baileys project being able to obtain a bond.
“It would be like going to a bank and asking the bank for a loan for X amount of money, but also please put in a clause to where after I receive that money and start using it for whatever, that I can opt out after 90 days and not pay anything further on that,” Patterson explained.
He added that he had hoped that the Athens County Commissioners would see the city removing the opt-out clause as a signal for them to move forward with their own share of funding for the project.
The Commissioners have been asked to provide a similar level of support as the city of Athens, but the two Commissioners involved with those discussions have said they doubt the county can afford to support the project at the same level as the city.
During Monday’s meeting, City Council member Sarah Grace said council added the opt-out clause to the city’s agreement with ORCA after its members expressed concern about the long-term financial impact of the payments. She noted that council members also expressed skepticism about the project’s ability to bring tens of thousands of money-spending visitors to Athens County each year, which project managers have predicted will happen.
Grace added that as it stands now nobody else outside of the city of Athens would be “on the hook” for the bond if the Baileys Trail System fails to generate the amount of transient guest taxes expected to make the project worth it for the city.
“At this point, no one else has signed up other than the city, so because our ordinance – what we passed last December – is contingent upon the county also making a commitment and the county has not yet done that, I’m not sure why the city should make changes at this point,” Grace said.
She also noted that the county Commissioners have requested that state legislators who represent Athens County consider providing up to $3.6 million in state capital funding appropriations for the Baileys project, which is equal to the dollar amount that the city and county are being asked to provide over the next 20 years.
Patterson responded that there’s no guarantee that the county will get that capital funding request approved by the state Legislature, recalling two failed previous attempts by the city.
City Council member Jeff Risner expressed frustration about the amount of time council has invested in discussing the Baileys Project – and the commitment council made in adopting the funding ordinance – without “reciprocity” yet from the County Commissioners.
Risner said he’s looking for a “promise” from the Commissioners that they will support the project before City Council moves to remove its opt-out clause.
SETH BROWN, DIRECTOR OF Quantified Ventures, the Washington D.C.-based capital firm that was hired to conduct the feasibility study for the Baileys project, argued during the meeting that the change requested by the mayor is a small one that simply “signals” the city’s willingness to commit to the project. The city of Athens has representation on ORCA, Brown said, so if the project fails to have the impact estimated by QV, City Council would have an avenue for recourse, though he didn’t explain exactly how that would work.
“This isn’t an agreement with some third-party stranger who you don’t know; this is with ORCA, of which you have a representative on the committee, and a representative on the board, which is Mayor Patterson,” Brown said.
Grace noted that while she’s not an expert on finances or bond procurement, she remains concerned that nobody informed City Council when it included the opt-out clause last fall that the addition would potentially jeopardize the city’s ability to take out a bond.
Council member Chris Fahl similarly expressed concern about removing the opt-out clause. She also cited a lack of clarity on how exactly the city’s funds are going to be spent, with some money likely going toward administration and management of the trail system, rather than physical construction.
Brown said in a follow-up message to this reporter Wednesday that he "can't speak to specifics" of a hypothetical question about what remedies the city might have if the project fails and the city does not have the opt-out clause in place.
"The exist clause complicates (and) adds uncertainty to the city's commitment," Brown said. "I can't speak to the specifics of your hypothetical, as it would depend on the circumstance. That said, the fact that the city has a representative who sits on the board of directors of ORCA should help."
IN OTHER NEWS, Patterson noted at the meeting Monday that during the most recent ORCA meeting, that organization voted to move forward with hiring an executive director to manage operations of the Baileys Trail System, promote the system and potentially help raise additional funds. The money for the first year of the position’s salary will come from a portion of the $1.235 million Appalachian Regional Commission grant that was awarded to Rural Action and several other area partners late last year, most of which is earmarked for the Baileys project.