Fairfield Ledger
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Neighbors Growing Together | Oct 24, 2014

Farmers show interest in Heartland project

By DIANE VANCE | Mar 24, 2014
Photo by: DIANE VANCE Jefferson County Board of Supervisors moved its meeting today to the courtroom to accommodate an overflow crowd interested to hear the board’s discussion about the proposed Heartland Co-op grain facility. Audience members asked questions and several area farmers expressed support to have the facility built at Nutmeg Avenue and Highway 34.

About 25 people attended today’s Jefferson County Board of Supervisors meeting, which moved up to the second floor courtroom to accommodate seating everyone for the first 75 minutes.

A majority of those in attendance were farmers, interested to hear the supervisors’ discussion about the proposed Heartland Co-op grain storage facility.

County resident Joe Ledger said he brought Jefferson County’s grain numbers produced in 2013, which are: 10.5 million bushels of corn and 2.6 million bushels of soy beans.

“Heartland Co-op talked about adding 10-cents per bushel to prices when buying our grain,” said Ledger. “That’s adding money to local farmers’ pockets and adding to the county’s economy. Most farmers keep that money in the local economy by buying things, including farming equipment, near home.”

Another resident said he was concerned about the supervisors not considering paving Osage Avenue as part of the project.

“I live on Osage and it has heavy traffic already,” he said. “There are safety concerns.”

Supervisor Dick Reed said if the Heartland Co-op project goes through, something should be done for Osage Avenue.

“Since day one, I’ve wanted Osage Avenue to be paved,” said Reed. “We have not been in the business of bonding for roads, but that’s about to change. It’s time for the county to step up and figure out how to pay for it.”

The segment of Osage Avenue under consideration, between Glasgow Road and Highway 34, is 1.5 miles.

County Engineer Scott Cline said he had a conversation with Iowa Department of Transportation Friday about using road safety funds for Osage Avenue paving.

Another farmer in Jefferson County, Mike Ledger, said he’s in favor of Heartland Co-op constructing a grain elevator facility in the county.

“It’s new business for the county, it will benefit farmers with increased prices,” he said.

Reed opened the meeting explaining that today would be the second actual discussion among the three supervisors about Heartland Co-op.

“Heartland Co-op first came to the board Dec. 16 to propose their idea,” said Reed. “That’s the only time we have sat across the table with them. The board of supervisors signed a memorandum of understanding with Heartland Co-op Dec. 30, which outlined what they wanted and what the county wanted. It’s not a legal document; none of it is binding.

“We’ve had a lot of small things leading up to discussion, but last week [March 17] was the first discussion the board had among the three of us. It’s the law that we [supervisors] can’t discuss this with one another outside of a public meeting. We can talk individually with one of the community, but the board can’t hold private discussions.

“Lee Dimmitt was board chairman last year, when this first began, so he was asked to stay on as liaison working with Heartland. Lee, and Adam Plagge [executive director of Fairfield Economic Development Association] have met with Heartland Co-op up in Des Moines.

“Some people think this project is further along than it is,” said Reed.

Reed said the Dec. 30 memorandum of understanding included a 15-year Tax Increment Financing district, as proposed by former FEDA executive director Tracy Vance.

“Adam looked at the numbers and he and Lee worked on the infrastructure numbers and some things have changed,” said Reed.

Dimmitt said the memorandum of understanding included a TIF rebate for 10 years.

“The dollar amounts Adam and I have worked with to establish the bond debt and payments are predicated on two factors; the estimated amount of the assessed valuation and the cost of infrastructure upgrades,” said Dimmitt.

He went through the dollar amounts.

“The estimated assessed valuation of Phase I and II of the project is $15.5 million,” said Dimmitt. “We deducted $2.5 million to establish a working figure; then deducted $13 million as the 10 percent commercial property tax rollback, leaving us a taxable valuation of $11.7 million.

“We established a levy rate of $24 per $1,000 taxable valuation at the direction of [financial consultant] Jeff Heil so that we were less than the currently established levy to account for any changes,” said Dimmitt.

“That is how we arrived at the amount of property tax that would be generated in the TIF district, $280,800, against a bond payment maximum equaling $251,920, based on interest amounts from Jeff Heil.

“We have never taken into account Phase 3 or any other potential development for bond payments,” said Dimmitt.

The supervisors had asked Cline and French-Reneker Associates Inc. to estimate the upgrades needed for Nutmeg Avenue, which included a traffic light system and changes in the road grade for sight distance improvements on the one-lane railroad underpass on Nutmeg Avenue to make it safer.

“French-Reneker’s estimate added approximately $900,000 to the cost of upgrading Nutmeg,” said Dimmitt. “This caused us to reassess our ability to upgrade Osage Avenue. I believe we some potential room to reduce the costs for Nutmeg, but none the less, we have used French-Reneker’s total estimate to arrive at our conclusions for bond debt estimates and payments.”

Dimmitt said the supervisors could perhaps use other funds to upgrade the intersections at Pleasant Plain Road and 185th Street and Pleasant Plain Road and Salina Road.

He and Plagge went with conservative numbers so as not to have unpleasant surprises.

“Our county engineer is looking into other possible dollars for upgrades to Osage that would not include any bond debt,” said Dimmitt.

Dimmitt asked the audience to remember that no contracts are signed and no negotiations have taken place, because the county intends to hire a financial advisor to guide the supervisors through the process.

“However, any rebate talk consideration is solely based on ‘excess’ and only for 10 years,” said Dimmitt. “After 10 years, the county would receive 100 percent of the revenue for the bond debt and/or any excess generated that can be used for infrastructure in the area.”

Dimmitt said as liaison, he could not agree to anything with Heartland Co-op on his own.

“I also want to go on record saying that if the dollars do not pencil out, I would not support going forward with this project,” said Dimmitt. “However, without consulting a financial advisor, we cannot make any kind of an informed decision.”

Heartland Co-op does have one deadline coming up. It is required to sign an agreement with the railroad by May 19 if it intends to break ground in June. Heartland plans to have a railroad tracks spur come onto its property at Nutmeg Avenue and Highway 34 that can hold 100-110 railroad cars and be filled on site for transport.

“The state has indicated if Jefferson County supports this project, it may consider financial incentives,” said Dimmitt. “The state has already provided some help to Heartland for railroad infrastructure costs and that $1 million-plus commitment was based on our memorandum of understanding.”

More about Monday’s supervisors meeting will be published later this week.

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