Cautionary Tale: A Water Supply Reservoir Gone Wrong in Georgia

Hickory Log Creek in GeorgiaAmerican Rivers’ new Money Pit report shines a spotlight on recent water supply reservoir projects that have left local communities in Georgia burdened by the expense and debt from building, or trying to build, these major water infrastructure projects.

A notable example is the new Hickory Log Creek Reservoir in Canton, Georgia, which quintupled in price to $100 million during its development. The Hickory Log story throws up a big red flag for other communities considering building new reservoirs.

Built but not yet delivering water, Hickory Log offers a stark example of reservoir debt overwhelming a community. Debt for the reservoir has so strained finances for the small City of Canton that 2011 found the city unable to buy two fire trucks and re-pave streets, and struggling to determine how to pay for needed upgrades at its drinking water treatment plant and sewer system (By the way, kudos to current Canton Mayor Gene Hobgood for his blog-based transparency with constituents on the topic of water supply costs.)

Local leaders in Canton, with a population around 10,000 people and even fewer water customers, initiated the roughly 400-acre Hickory Log project on their town’s outskirts and signed on for a 25 percent share of the reservoir’s water and 25 percent of its costs. They expected to pay 25 percent of a $20 million project, but rather than $20 million, the total to date has come out closer to almost $100 million. Cost figures that are “moving targets” are an all-too-common feature of reservoir projects in the region.

At construction’s end the Mayor and city councilors in Canton have sought to give up their share of the reservoir’s water rather than continue to carry the debt that the city took on for Hickory Log’s development and construction, but this too has proved challenging.

“It’s a big rock around our neck,” Canton City Councilman John Beresford told the Atlanta Journal-Constitution in October of 2011.

Meanwhile, as of summer 2012 the reservoir is not even operating yet—a prolonged delay due in part to the reservoir’s being caught up in a long-running interstate water conflict between Georgia and Alabama. This is a red flag for any reservoir proposal in a river basin where stakeholders downstream might take issue with the idea to impound (and evaporate) water that would otherwise flow their way.

For residents in the small city of Canton, the Hickory Log project is like a mortgage they never should have gotten into. Until they can get out of the deal, they are locked into paying $1.7 million per year on a reservoir they cannot use, don’t need and can’t afford.

Our new Money Pit report shows the way for other Southeastern communities to avoid the mistakes made at Hickory Log Creek and elsewhere in the region. The prudent path for water supply planning in the Southeast is one that’s as responsible with the public’s dollars as it is with our shared natural resources. Planning for cost-effective, low-risk, low-impact and flexible water supply solutions means that reservoirs like this one must be the last option on the list for local communities, not the first.