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COMANCHE -- The views in the southwestern
and southern portions of Comanche County may soon be similar to those
in west Texas, where large, three-bladed wind turbines dominate the
skyline. That is, if the counties and school districts involved are
agreeable to tax abatements for the power generating equipment, the
Commissioners Court was informed on Monday.
The commissioners met in regular session
on May 14, with windmill power generation, bond refinancing, and
District Court records storage needs as the primary items of
discussion on the agenda.
County Judge James Arthur opened the
meeting with an invocation. Commissioners Garry Steele-Precinct 1,
Kenneth Feist-Precinct 2, Bobby Schuman-Precinct 3 and Jimmy Dale
Johnson-Precinct 4 were in attendance. County Clerk Ruby Lesley read
the minutes from the April 23 meeting, which were approved by
unanimous vote.
Windfarm Tax Abatement Proposal
The first agenda item for consideration
was a presentation by Wes Jackson of Cummings Westlake, industrial
property tax consultants based in Houston. Jackson explained that his
firm had been retained by Renewable Energy Systems in connection with
a windfarm power generation project that would either partially, or
perhaps wholly, be based in Comanche County. He described the
project’s plan for 119 power generation sites in Comanche County, 53
in Mills County and 12-15 in Brown County. The windfarm project is
variously referred to as the RES Roadrunner Windfarm or the Roadrunner
Project.
Jackson stated that the project's
progress depended to a great degree upon the availability of property
tax abatements. "We don't come in here expecting handouts," he added.
"We know that tax abatements don't come easy for the county,
especially if you are struggling financially. We know times are
difficult here... It is merely a fact that in the windfarm development
business, abatements are important to the development, to make the
project attractive to investors."
Jackson then stated that the property tax
abatement terms proposed to the county were, as far as he knew,
consistent with terms being offered and available from counties across
Texas. He then stated that a 60% abatement was requested for five
years, and then 40% for the succeeding five years. He further
described it as the "going rate" for windfarm tax abatements and added
that after 10 years the project would then be fully taxable.
Jackson distributed a handout that showed
the value of 119 Comanche County wind turbine generators, valued at
$3.5 million each, for a project total of $416.5 million, only $166.6
million of which would be taxable under the abatement proposal. The
value of the tax-abated project would still increase the total taxable
value of Comanche County, currently around $527 million, by roughly
one third.
Since wind-powered generators have
relatively low operating costs, particularly when new, property taxes
are one of the primary continuing costs, thus the request for
abatement, Jackson added.
Jimmy Dale Johnson asked what would be
the expected life of the windfarm project.
William Coats, a land acquisition
specialist with Renewable Energy Systems in Austin, who arrived a bit
late but had by then joined the presentation, responded that the
operational life was largely unknown, adding that wind generators
installed in the early 1980's are still operating. He guessed an
operational life for current generators being installed at 30-50
years. He added that the amount of capital costs and infrastructure
involved in the total project would keep it in place for as long as it
was economically feasible to keep the wind towers operating. He stated
that the tower and blades were long lived, and that the generators
housed in the hub of the rotor could be upgraded and replaced with
more efficient models as the technology progressed.
Coats noted that roughly half of the land
desired in Comanche County had already been leased, including the
Dudley Ranch west of Comanche. He added that the project might not
reach the 119 turbines currently planned if land leases are not
successfully completed, although he expressed optimism that they
would. The project was described as very fluid at this point, being
dependent upon land leasing success.
Both Coats and Jackson mentioned the competitive aspects of where to
locate wind farm projects, noting that tax abatements were key to a
county's competitiveness.
Garry Steele asked about the number of
jobs that might be created. Coats responded that 10 or fewer permanent
jobs would be created, noting that jobs creation is a requirement for
school tax abatement.
Bobby Schuman inquired regarding the project's impact on county
property tax revenues.
County Auditor Joey Boswell responded
that with state limitations in place controlling the growth of
governmental property tax revenue, that the increased tax value would
not automatically provide for much larger revenues for the county, but
could result in lower taxes for other county property owners.
Coats stated that the project was on the
"fast track", that adequate power transmission lines were already
available and that the windmills took around nine months to construct.
He noted that his company was the actual construction contractor and
hoped to start construction in 2008.
Jackson said that the first year of
significant property tax impact would be in 2009, even if the total
project was not complete on January 1, 2009.
It was noted that the agenda item was for
information and discussion only, that no action was being requested at
the present time.
Both John and Jim Dudley were present at
the meeting. When asked his opinion, John Dudley stated, "We're very
enthusiastic about it." He added that the matter had been being
investigated for some time.
Dudley continued, "To be honest, we
haven't been able to find a negative. We all know that wind turbines
change the landscape, but we're convinced..." He added that once
construction has been completed, that the land will be restored, that
wildlife and ranch livestock will return, and that noise will not be
an issue.
Dudley noted that cattle ranching is
getting more difficult with each year, and that with no Barnett Shale
gas potential, the wind turbines offer the best option for the ranch
to continue in business as a traditional ranch.
Jim Dudley seconded John's opinion that
it would be good for the ranch and added that it would also be good
for the county.
Garry Steele offered his opinion that tax
abatements actually make the county money in the long run and that he
was inclined to support the abatement request.
A map of the proposed project was placed
on the table and discussed by all. The Comanche, Blanket, Mullin,
Priddy and Zephyr ISD territories were identified as each is
potentially involved in the planned windfarm.
Kenneth Feist again asked the Dudley's if
they were for the project and was again reassured that they were.
Jimmy Dale Johnson asked, "What is the
downside? Is this a rose bush without any thorns?"
Coats responded that there will be public
hearings on the project, and that some will likely object based on the
changed appearance of the landscape and the temporary increase in
truck traffic and construction-related activity.
Jackson commented that school districts
would be able to benefit from the windfarms through contractual
payments outside of the property tax system, thus allowing them to
receive additional revenues without an offsetting reduction in their
level of state support payments.
Jackson added that the law which allows
such payments requires the addition of at least 10 permanent jobs,
which would be a difficult requirement for the Roadrunner Windfarm to
meet. It was noted that the jobs requirement hurdle, if not
surmounted, might act to limit the project only an area inside the
Comanche ISD.
Jimmy Dale Johnson asked if the project
could afford only a 50% tax abatement. Coats responded that the
project needed to be sold and built quickly and needed all the
economic advantages it could gather to be successful.
Garry Steele noted that over the 10 year
period that the abatement as requested would average a 50% reduction,
and that it would be viable for many years thereafter.
Coats expressed his hope that the land
leasing process could be concluded in 4-6 months. At that point in
time a better definition of the reinvestment (abatement) zone could be
determined.
Bobby Schuman asked Joey Boswell for his
opinion on the project and Boswell affirmed his strong support for it.
Jimmy Dale Johnson asked for further
clarification that the project would be remaining in place and valued
at $416 million after 10 years.
Jackson responded that federal production
tax credits of two cents per kilowatt hour expire 10 years after the
project has been put on line and that the credits are critical to the
economics of wind generated power. He added that with inflation
driving wind turbine costs, that the value of the windfarm should be
stable, and perhaps even go up.
Coats told the commissioners that they
would request another opportunity to discuss their abatement request
sometime toward the end of the year.
Jimmy Dale Johnson said, "It seems like a
win, win, win situation for everybody."
Joey Boswell restated his opinion that
currently existing state law would automatically act to require an
automatic roll-back of county tax rates due to the significant
increase in taxable property values that would result from the
Roadrunner Windfarm.
After Coats and Jackson thanked the
commissioners for their time and made their exit, the discussion
continued on the windfarm topic for a few minutes, with remarks still
favorable to the abatement prospect.
Bond Refinancing
Joey Boswell then introduced Thomas
Lawrence of Lawrence Financial Consulting in Dallas to the
commissioners. Boswell explained that he and Lawrence had been
investigating refinancing a portion of the county's bonded
indebtedness.
Lawrence then described how the county
could save approximately $68 thousand in interest expense by
refinancing the outstanding adjustable rate bonds to a blended rate of
3.875%. He noted that the county had saved interest expense in the
original 2002 issue by selecting a low initial rate that was subject
to adjustment after five years. He explained that if the fixed rate
financing option had been selected originally, that the total interest
cost would have exceeded what will be the cost if the refinancing
recommendation is approved.
Boswell stated his opinion that the chief
advantage to refinancing to a fixed rate would be the elimination of
the risk of rising interest rates in the future and the consequential
increase in bond interest costs under the existing bonds.
Lawrence noted that Boswell was one of
the sharper county auditors that he deals with and gave him credit for
initiating the refinancing investigation.
Boswell commented that the worst risk
faced in refinancing would be that interest rates would drop
substantially.
Lawrence stated that interest rates were
currently near historical lows and added that the risk of a
significant interest rate decline was remote.
Lawrence noted that the matter was a
discussion item only, with no action being allowed until the
commissioners' next regular meeting date in June. He stated that the
closing of the refinancing needs to be completed before June 28.
Garry Steele asked for reassurance that
no voter approval was needed on the matter since it was a refinancing
of existing debt that had already been duly approved.
Lawrence responded that this would be a
refinancing of an earlier refinancing and that no voter approval would
be necessary.
Steele then asked Boswell if an early
paydown of a portion of the bonds was still planned for later in the
county's fiscal year, utilizing a projected budget surplus.
Boswell responded that he thought it
could be done.
Lawrence suggested that any surplus funds
be placed instead in short term money market investments yielding well
over 5% rather than early paydowns of 3.875% bonds. He added that the
higher yielding short term investments would be liquid and provide
greater flexibility.
Garry Steele then suggested to Joey
Boswell that he pursue the refinancing and get it set up for a later
Commissioners Court approval. Steele then added his appreciation for
Boswell keeping up with the financing situation.
Jimmy Dale Johnson laughed and said,
"That's his job!"
District Court Records Storage
Following a meeting break, District Clerk
Brenda Dickey met with the commissioners to discuss a growing records
storage problem in her office. She described how the burgeoning burden
of both civil and criminal cases was outstripping her available file
storage space. She said she only had room to contain another two
months growth in criminal files. She stated that just since January
she had received 92 new civil cases, 58 new criminal cases and 10 tax
cases for a total of 160 new files.
Garry Steele asked how long the files
were required to be retained and Dickey responded that on criminal
cases the requirement is forever, adding that she has criminal case
records in her office dating back into the 1800's.
Steele then asked about using the
courthouse annex building for storing the older files. Dickey
responded that the unique manner of filing the old files in hardback
cases called shucks, would make it very difficult to move them. She
said it would be a “train wreck” to try to move them.
District Judge James Morgan interjected
that most of those wishing to do historical research were looking at
the oldest of the records and speculated that unsupervised
investigation would likely result in harm to the records.
The commissioners and county judge
discussed the use of various spaces in the courthouse. Dickey
suggested the space formerly used by adult probation would be
convenient since it is on the same floor of the courthouse and
relatively handy for her office.
The county game warden is currently based
in one of the offices in that space, but Judge Arthur suggested that
the game warden could be moved to another office.
When asked, Dickey expressed her opinion
that the space would provide adequate storage room for a good while.
Judge Arthur was given the commissioners'
blessings to handle the relocation.
Other Business
Judge Arthur noted that no depository
bids had been received following a recent advertising for bids. After
a brief discussion, Garry Steele offered a motion to leave the
county's funds in the current bank accounts at Comanche National Bank
and to re-advertise for depository bids. Kenneth Feist seconded and
the vote of approval was unanimous.
Ruby Lesley distributed spreadsheets
showing the results of the May 12 local elections in Comanche County.
She noted that the results are unofficial.
The commissioners will meet again at 3:00
p.m. on Wednesday afternoon, May 16, to canvass the state
constitutional amendment and local option for beer and wine sales in
Comanche elections.
The commissioners approved by unanimous
vote the renewal of a bond for County Auditor Joey Boswell.
The commissioners approved budget amendments, payrolls coming due
prior to the May 29 meeting and accounts due and owing totaling
$116,458.22.
In Sheriff Jeff Lambert's absence, Chief
Deputy Chris Pounds discussed the Sheriff's desire to request bids to
replace a wrecked vehicle. He was advised by Garry Steele that the
matter needed to be on the meeting agenda since it involved budgets in
future fiscal years. Joey Boswell agreed.
Pounds was asked if it was an emergency
situation that the vehicle be replaced and responded that it was not.
Pounds noted that no applications had
been received for the Lake Deputy position and that the contract with
the Corps of Engineers would be fulfilled with regular Sheriff's
deputies. He said it would not involve overtime. Pounds reported that
the Sheriff is continuing to research the laws regarding roaming dogs.
Garry Steele noted that he believed there was legislation pending that
would increase the legal burden on dog owners for dog bites.
Pounds advised the commissioners that the
department had implemented changes in their search and seizure
policies to be compliant with the standards of the Texas Association
of Counties insurance. |
