Thu
Oct 4 2007
01:58 pm
By: WhitesCreek

Mayor Farmer was kind enough to respond to an email I sent by getting a few documents together for us. Unfortunately, they are on paper and not in digital form (Mayor Farmer is working on that problem) so I'll have to excerpt them bit by bit.

After a quick read, I have this assessment of the agreements:

The Interlocal Cooperation Agreement is excellent.

The Economic Impact Plan, which creates the Industrial Board and allocates revenue, is not.

It's not a bad deal, mind you, It's just not a good one.

The short version is that none of the new Industrial park is in Roane County, but we will receive one third of the "excess" property tax revenues only until any loans are paid off and then we're out of the picture.

Essentially, Roane County seems to be acting as one third of the bank for Cumberland County and Morgane County to enhance their tax base, since they'll get all the tax revenue once the bonds are retired.

"Excess" seems to mean everything left after the base tax is paid to the "host" county. No word on whether the "base" amount can be raised to unfairly reduce the leftovers, but we'll see.

I would be interested in hearing what Roane County's legal representation has to say about this deal. There are peripheral advantages to Harriman and particularly to Rockwood. To Kingston, I don't see too much and Oliver Springs has nothing to gain that I can see. Maybe it will be their turn next time.

Topics:

More to come

Several questions have been forwarded to me since I posted this. I'll try to figure out what I can from the contracts and get back to you folks.

One thing I can answer is the question regarding current tax revenues. No base taxes will be paid to the host counties until revenue actually exists. No way to tell if the base taxes acrue, but I suspect they will.

I also can't tell is the base tax would be calculated on the appreciated value of the land because of the price paid by the county. That would be interesting to know.

Excerpt from the Economic Impact Plan

4. Term

The term of the Plan shall commenceJanuary 1, 2008 and expire upon the earlier to occur of (i) December 31, 2027 or (ii) the date upon which the Bonds are paid in full and redeemed.

I read that to say that if this plan times out and Roane County has NOT been paid in full for loaning this Industrial Board money...Well gee, that's too bad. Bye! And thanks for helping build Cumberland County's and Morgan County's tax base, sine Roane County won't get a dime of the revenue from then on.

Assuming, for the sake of discussion,...

That this thing works and there are new jobs created in the process...

Is there a guarantee that none of the jobs will go to people who will live or do live in Roane County?

Is there a guarantee that none of the employees in this park will not spend money in Roane County and contribute to the sales tax revenues?

In other words, what consideration is given to the idea that there are more ways to have a positive economic impact on a region - such as Roane County - other than revenue from property taxes?

Diversification of revenue streams is a good idea, seems to me. We could use more of it. Some is better than none, IMHO.

Have I missed the boat here and failed yet again to be "progressive?"

RB

I think it's fair to say you don't get it

But there's nothing wrong with that,,,I just wouldn't trust you as my stockbroker.

Show me the "revenue streams" you are talking about. roane County is spending millions on this...I just want to see the pay back. So far, it doesn't look like a very good deal.

I mean what's wrong with us loaning Cumberland County the money to build an industrial park in their county...and then not requiring the money to be paid back...and then letting them keep the future tax revenue?

This deal is highly questionable at this point. Let's see the numbers that make it work is all I'm asking. So far I don't see them.

Another concern: pollution; Roane County is downwind

Whitescreek,

I have the same questions as you. Thanks for bringing this up.

While all those millions invested outside the county are a concern—a big concern!—the environmental impact is more worrying. Most winds here are west to east or southwest to northeast. The industrial park's air-borne by-products would affect Roane County directly, far more than the counties that would get the revenue.

Already air quality in parts of the county is a concern; I remember reports of high levels of some pollutants in Rockwood and downwind of the Kingston plant. I remember reading that asthma, etc., levels have risen over the decades.

Is there an environmental impact analysis? What protections would this agreement provide for the downwind peoples of Roane County against any increase in air pollutants?

-- OneTahiti

OneT - good point, and I got a question...

Your point is well made and one that we cannot ignore, IMHO.

But I got a question: We can't do (or have done) an environmental impact study without knowing what kind of industry or business is going in there. I have no idea what's going in there. I may have missed the info - do you know what it might be?

But I don't see how there can already be an environmental impact analysis on an unknown industry that uses process we don't know what they are.

The prevailing winds in Roane usually travel in a SW to NE direction, and many emissions on that rim of the plateau would be traveling from, for instance, the area of the airport toward Oakdale, and up in that direction. Obviously wind doesn't always blow in the same direction, but there is that general direction in which winds blow up the valley and along that ridge.

RB

RB

RB,

You wrote, "I don't see how there can already be an environmental impact analysis on an unknown industry that uses process we don't know what they are."

Very true. :) This brings up another question: why would the county want to invest in something that will dump an unknown amount of unknown poisons into our air without assurances of us having some control over the nature of the industries allowed into the park and without an agreement for recompense for any polluting that does take place?

The points that we don't know what the environmental impact will be and are not in control over it in the future ought to be huge deal-breakers.

Clean air, and cleaner air, have significant economic value too, not to mention the health of the people of Roane County and their children.

-- OneTahiti

Of course... I don't get it...

I must be content to maintain my obvious role as the Poster Boy for Dumbassity :-)

What I tried to say - and probably will STILL not wind up saying - is that there is more than one kind of revenue to a county. Property tax is one kind, and usually one of the first kinds that comes to mind. But there are more ways than property tax for an area to benefit financially from a growth in business or industry. Every growth in business or industry also brings with it people who have to buy food somewhere, who have to find housing somewhere. Not all those people who might work at some place in this park will necessarily refrain from contributing financially to Roane County.

I agree that it's not as much (hence not as good) as receiving ALL the income possible from a given tract of investment land. But receiving some additional revenue seems to me to be an improvement over receiving no additional revenue.

Has it happened yet? Nope. I'm dumb, but not totally dumb... Future income is like many other things - it's not a certainty. Much in the world of investment is not a certainty (are there good stockbrokers that will tell you otherwise?).

I'm not arguing that this will somehow become the financial sugardaddy for Roane County. I bet it won't. But I personally don't see it as wise to expect ANY industrial park, any business park, any business, or any industry to be the county's sugardaddy financial savior.

I can't show you revenue streams right now. I can see where potential ones are. I think that in the history of the county, one of the problems has been that there has been too much of a demand for instant gratification (show me the money right now or forget it!) as opposed to a willingness to accept that not all investments - even good investments - make scads of money up front. So the county had failed to be PROGRESSIVE enough to engage in investment for the future, and has failed to do so in favor of demanding situations that make money right now or refusing to try anything else.

We know how well Roane County has done financially by its past practices. My mama taught me that a good definition of insanity was doing the same things the same ways and expecting different results. I'm just saying that maybe we oughta consider being progressive enough to look at some different ways, and not chucking them in the dustbin out of hand because they don't provide us with a contractual agreement for X Million dollars in the first 6 month of operation.

This may fail, it may be an astounding success, or it may wind up somewhere in the middle. But we know where we were going financially with our old tried and true financial practices of being parochial and insular.

And the beat goes on...

RB

RB,

I'm not asking for this project ot show us a profit "right now" as you suggest. I'm saying that I can't tell that it's a good deal for Roane County based on what we know so far.

I am assuming that there must have been some rational decision process that our Commission went through where they looked at the cost versus the benefit and I would like us all to be let in on it.

We've committed to putting a bunch of money into an industrial park while the Commissioners, in the same breath, denied our schools the stop gap money the School Board asked for.

There's either something wrong with our thinking or our process, or something. So far, only County Mayor Mike Farmer has responded with any information at all. The Commissioners, and I've cornered at least one of them and aked point blank, are not being particularly forthcoming with information and I have to ask why?

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