MINUTES OF THE INFORMAL MEETING OF THE JOHNSON COUNTY BOARD OF SUPERVISORS:
JANUARY 11 AND 13, 2000
TABLE OF CONTENTS
Chairperson Stutsman called the Johnson County Board of Supervisors to order in the Johnson County Administration Building at 9:01 a.m. Members present were: Charles Duffy, Jonathan Jordahl, Mike Lehman, Sally Stutsman, and Carol Thompson.
Stutsman: Call to order the Informal Meeting of the Johnson County Supervisors for Tuesday, January 11th, year 2000. Second item on the Agenda is review of the formal minutes of January 3rd and 6th. They’re on the Internet or on the Web. I’m trying to look at those. There appears to be no changes. We’ll put those on for action for Thursday. Mark, did you want to discuss the changes in those minutes from…
Deputy Auditor Mark Kistler: Yes. Number (inaudible) we got the wrong file on that list and we’d like to correct those minutes by deleting that list (inaudible) that is in the agenda and replace it with the resolution as it appears in the agenda.
Stutsman: OK. Has everybody had a chance to look at that. I don’t think there is any issue. I wanted to have Mark speak to that so he can go on downstairs, if anybody had any questions or anything.
Jordahl: OK Mark. They’re pretty good about talking to us about that actually.
Thompson: Jonathan.
Stutsman: OK. Thanks Mark.
JAY HONOHAN: SENIOR CENTER UPDATE
Stutsman: 3rd item on the agenda. Business from Jay Honahan, regarding Senior Center update discussion. Morning Jay.
Senior Center Commission Chair Jay Honahan: Madam Chairperson and Members of the Board. Jay Honahan. 2503 Friendship, Iowa City, Iowa. I am a member of the Senior Center Commission and recently they had a lapse of judgement and elected me the Chair of the Commission. They will probably regret that as the year goes by. A couple of things I would like to report to you about the Senior Center Commission’s activities. The Strategic Planning Committee presented a fund drive proposal to the Commission at the last meeting, which was accepted. We are in the process of a fund raising drive to attempt to raise 1/3 of the cost of the proposed sidewalk or pedestrian skywalk from the new parking ramp. The last I heard, in the first week we had raised something like $35,000, which we were pleased with. Part of that was a contribution from an estate of $25,000. But, we had several contributions and we are meeting this afternoon to try to finalize the application to the community development block grant for another $120,000. Our goal is $120,000 for the fund drive. One of our big projects this year will be the seeking accreditation for the Senior Center on a national level. We have begun that process. It will involve a lot of effort from the community. This is a requirement of the application, that community members be involved. We may even call on some of you to give us some of your time in that endeavor. Next, I have more of a personal item. As chair of the commission, I think it’s my responsible to try to bring together something that I perceive in the 28E meetings. There seems to be on both sides the City’s representatives and the County’s representatives a feeling that the County and the City are somehow separate in this endeavor. I feel very strongly that it’s something for both the County and the City together to be involved and not to be considered. Consider it just as one thing, not as the City versus the County. It is something that serves everybody in the county. As I have pointed out a couple of times, I live in the county, even though I also live in Iowa City. I was very concerned about that and I hope that I will address the City Council with the same concerns. I hope that we can put that kind of thinking aside for the year, and I am going to request both you and the City, if the Commission approves, can’t do it on my own, that we reactivate the 28E agreement group. I think that I’ve been doing some thinking about this since the one meeting I attended where we quit, and I think I have some ideas that might be able to bring us all together on this and work forward to the best interest of the Iowa City Johnson County Senior Center and the seniors in this community. Finally, I intend to try to, as Commission chair, to lead the Commission to develop a more active program for what I call the active seniors, who to a certain degree, partly because they don’t think they’re old enough that they need the Center. Nobody is elderly anymore. That kind of thing. But, I think we need to involve the active seniors more in programs. We’ve got a lot of excellent programs. I think we need to publicize them more and as the new chair I am going to look forward to working with the Board of Supervisors this year in efforts for the Senior Center. Thank you. If you have any questions I’ll be glad to try to field them.
Stutsman: It sounds like you have an ambitious agenda for this year. Good luck to you.
Honahan: I’m always too ambitious. My wife calls this my new full time job.
Stutsman: I had a question about the accreditation. What’s the advantage of accreditation?
Honahan: In addition to getting national recognition, it may enable us, in some areas, to get funding that we can’t get right now.
Jordahl: Can you give a thumbnail sketch of what types of things are required for that?
Honahan: Well, we have to have groups meet and evaluate the Center and set goals for the Center. It’s the same kind of thing you see in a lot of these national accreditation’s. People come in from the outside after we’ve made the application, and evaluate the Center, too. But it takes a lot of community effort.
Jordahl: Do you know what the criteria are? Is it educational programs? Is it something you wouldn’t expect that jumps out at you?
Honahan: No, no. From what I’ve seen, and I’m not an expert in it at this point. We’re just beginning. But from what I’ve seen, it’s the usual criteria. How well you serve the community, how well you serve the elderly, the frail elderly and the active elderly.
Jordahl: Well, I mean, for example, the thing that I would like to promote is sort of the intergenerational interaction, the idea of the Senior volunteer program where they go to the schools, interact with the kids. That sort of mixing is, to me, a big plus. I’m wondering if that plays a role in the criteria.
Honahan: I don’t know the answer to that. But on that note, I would welcome at any time, from any of you, any suggestions about the operation of the Senior Center. As I said in my letter in the Post, we will listen to all suggestions. We may not be able to agree with everything, as you well understand as members of the Board, but we will certainly listen and give every consideration to any suggestions made by anybody.
Stutsman: Jay, when do you plan to reactivate that 28E Committee? I think that’s a good move. I’m glad you’re…
Honahan: That’s a personal thing at this point. I think I have to have the Commission’s permission to do that. I don’t feel I could do that on my own. I’m going to ask that at the next meeting, which I believe is the 18th. I will ask the Commission to approve that, and I will be sending a letter to both the Board and the City Council.
Stutsman: OK.
Honahan: My suggestion, again, subject to what the Commission feels like, I would like to have the same people on the 28E from the County, and the same people from the City, except of course Dee’s gone now, so they’ll have to appoint somebody new. It seems to me that that would at least… We wouldn’t be plowing all new ground with all new people. You 2 have served…
Stutsman: That was Jonathan and Carol that were on that Committee. Right.
Honahan: Connie Champion was the other, and Dee Norton, but Dee’s gone, so I assume the Council will want to appoint one of the other members.
Stutsman: All right. Well, we’ll just wait to hear about that. Any other questions?
Thompson: Joe wants to talk about that.
Stutsman: Oh, Joe, did you have a question?
Joe Gjovig: Yes, I have a question for Jay. I’m a senior, so I use the Senior Center quite a bit. One thing that I heard that is along is, because it’s called the Senior Center, it’s the underlying thing is that it’s for old people. Have any of the Commissions given any thought to, instead of calling it the Senior Center, call it a community center?
Honahan: Joe, in response to your question, I served on a task force 6 or 7 years ago about the Senior Center, and we spent a whole day arguing on what to call them, seniors, elderly. Nobody wants to be a senior, nobody wants to be elderly, nobody wants to be old people. We had a very hard time, and I think we came up with seniors as the best compromise. Thank you.
Stutsman: Thank you, Jay.
Duffy: Thank you, Jay.
IOWA CITY AREA DEVELOPMENT GROUP PRESIDENT MARTIN KELLY: REQUEST FROM NOVARTIS SEEDS, INC
Stutsman: Business from the County Auditor. We’ve already discussed the correction to the December 9 formal minutes. Anything else from the Auditor’s Office?
Administrative Assistant Carol Peters: No.
Stutsman: Business from Marty Kelly, President of Iowa City Area Development Group, Inc., regarding request from Novartis Seeds.
Iowa City Area Development Group President Martin Kelly: Good morning.
Stutsman: You’re listed as Martin on the agenda, but I’m guess I’m used to calling you…
Kelly: Well, Martin is my baptized name, but Marty is what everyone calls me.
Stutsman: I didn’t offend you by calling you Marty?
Kelly: No, I’m unaffected by very little in my life. Even talking about the last thing, I’m in that Senior Citizen category and I don’t mind what I’m called as long as I wake up every day and get a chance to get some sunshine, I’m happy. I’m not offended by that. I’m just glad to be around long enough to be considered one of them.
Duffy: I know what you mean, Marty.
Kelly: Fine with me. I’d like to talk a little bit about the Novartis, and then I’ll introduce Bill Creps and Chuck Legare, who is the Manager of the operation down in Lone Tree. Bill Creps is based out of Golden Valley, Minnesota, which is a suburb of Minneapolis. He called me a few months back to explore the possibility of what grants or what would be available to them, and the possibility of expanding the facility just outside of Lone Tree. We talked about tax abatement. I mentioned it to Mike Lehman and found out the County did not have a policy, so I’ve asked the Committee here to look at adopting a policy similar to what is available around the State. Most of all the cities that I work with have tax abatement policies. I’d implore you to address that. Novartis wanted to upgrade their facility outside of Lone Tree by adding more capacity for storage, and to upgrade their systems. That was the first project. Part of what I was getting from Bill and talking to him in their consolidation of their operations around the upper Midwest, other operations that were not fortunate to get the opportunity to upgrade or expand were being closed and consolidated into other facilities. Subsequently after this, I get to work on a project to find a facility in and around anywhere in Johnson County for another project of seed enhancement that they were going to do in the city of Washington. We’re working with them; we’re working with Chuck and with Bill. They’ve now made the decision to do that 2nd project at Lone Tree. We’ve got 2 projects there. One is the enhancement and upgrading of the storage and the computer systems, and the 2nd is the building of a building to do this seed enhancement, which will require the hiring of some people down the road. Coincidentally, in my role as economic development person, I get a call from somebody down in Muscatine who is with the same company and looking for some storage space for some finish seed. Working with (inaudible), we’ve leased her building in Iowa City, 72,000 square foot building, to Novartis for their seed storage. It’s how these things work, starting out with Bill a few months ago, I end up working on 3 separate projects. The seed project in Iowa City is taken care of and done. We’re here today to talk about the possibility of having the Board of Supervisors enact a policy for tax abatement. With that, I will ask Bill if he wants to talk more about the project, talk more about the company. I might want to just mention for those of you who may not know who Novartis is outside of being a seed company. They’re the largest pharmaceutical company in the world. They are primarily in pharmaceuticals, that’s their main business. Their corporate headquarters are in Switzerland. They have operations all over the world. Very interesting company, and obviously seed and seed production has a lot to do with pharmaceutical products for health of animals and the health of humans. Just so you know that this is a very large company. With that, I’ll turn it over to Bill.
Stutsman: Bill, could you introduce you’re full name?
Novartis Tax and Insurance Manager William Creps: William Creps, C-R-E-P-S. I’m the manager of tax and insurance. When we’re talking about Novartis, we market our seed under the NCH, which used to be Northern King brand. That’s kind of the heritage with all these mergers and what have you. I just have 3 points to make, and then I’d like to turn some time over to Chuck Legare, who’s our plant manager, who can fill you in on the project. I handle the tax and insurance, and as Marty mentioned, when this project started coming online, I checked to see if there was a property abatement available, and we found there really wasn’t. We have similar plans in Illinois and Texas and all of those, as they come online, have been given a property abatement. What this does, when we bring a large project online, it helps with the cash flow. Over 5 years, it fazes in the full property tax. What we had also found was in other counties in Iowa, for example down in Green County, our Jefferson plant, they had just done a fairly modest warehouse addition. As the County Official brought out the building permit, he brought out the abatement form, and in fact, a couple months after, followed up just to make sure that they hadn’t been lost. We’re getting this sense of partnership with our commercial business and the local county. We just wanted to approach Johnson County kind of on an equal footing with some of the other projects that we’ve had. This project itself, Chuck can tell you, is the first in the seed industry. It’s very unique. It is a pilot project, and if it works out, we’re going to need somewhere that has twice or 3 times the capacity. It does make a lot of sense to make that expansion here. There is some future potential in additional projects coming online. As far as the cost to the County, when we got our final numbers in, we’re finding that 85 to 90% of the project costs are in the equipment. The real portion is actually a very small part. It would be a very modest, for this part of the project anyhow, a very modest cost on the abatement side. Finally, just this month we closed, as Marty mentioned, a plant up in Wisconsin, similar size. We’re consolidating larger plants, fewer plants. This Lone Tree operation ends up being central to the other facilities we have, and we would just like to be able to point out to management the partnership and the relationship we have with the County in future projects and evaluating where to put additional funding. With that, let me turn some time over to Chuck. He can maybe fill you in on the details of the project and any questions you might have.
Novartis Plant Manager Chuck Legare: Again, I’m Chuck Legare, Plant Manager at the Novartis Seed Plant in Lone Tree, just east of Lone Tree on Highway 22. To give you a little bit more history on our plant, it’s been there since 1982. It was initially constructed by Ken Brandt and Company as a (inaudible) plant, and of course with all the mergers and all the buyouts and everything, transitions, we became, like Bill mentioned, the NK brand, Novartis Seeds in 1996. We raise hybrid seed corn in the Johnson County area. We raise in Washington County. We also raise in Clinton County, and also around Eldora, which, I believe, is Grundy County. All that seed comes to the Lone Tree facility for processing in the fall. With the other mention of another facility closing just recently, that has increased our demand and capacity needs for our plant. That’s why, like Marty mentioned, we worked with him on the warehouse lease in Iowa City. The future probably will be us building a warehouse on our property down there, in a year or 2 when things progress. But at the present time, with this new bulk storage capacity that we added, that’s given us that opportunity to have the capacity for the bulk. This new project that Bill mentioned, insecticidal seed treatment is a project that we have going on right now. Like Bill mentioned, first in the industry. We’re incorporating, in the seed treatment, an insecticide for soil-born insects like corn rootworm and wireworm. That will be incorporated in the seed coating so that when the customer, the farmer, takes it out to the field, he will plant the seed with the insecticide to get it down in the soil, right near where the seedling grows, so he’ll have better control. That’s a project that we’ve got going on right now. Presently, it is still in testing, and we have staff from our corporate office like Bill. Another one of our technical people from up there is down. We have 2 people coming in from our Nebraska facility to help us get this facility up and running. Once we get it all fine-tuned and computer logic control and everything, all the equipment running, we’re probably going to be looking for and anticipating some full time employment for anywhere from 6 to 10 employees at our Lone Tree facility. I guess that kinds of covers it pretty much. Any questions for any of us?
Stutsman: Thank you.
Jordahl: That sure prompted a question in my mind. You’re talking about putting insecticide as you put it right down in the soil. Our Land Use Plan emphasizes, as its very point, the protection of the environment. I’m wondering what kind of assurances, what kind of studies there may be about the biodegradation of this insecticide over time or persistence in the environment, or movement up the food chain, or what do you got?
Legare: This insecticide is the same insecticide that’s being presently used on banding, over at the top, for the farmer when he plants his seed. It’s called Force. It’s an insecticide that’s been on the market. Presently, its banded over the top of the soil, and of course mother nature and the moisture have to activate it so it goes down into the soil to control those insects. Environmentally, we feel it’s much safer. There’s been 3 or 4 years of studies done on this within our organization that you don’t have to worry about it dispersing to somewhere else. It’s right down there near the seedling, where you need the insecticide to control those insects. It’s going to be in a package that is going to be sealed so that the customer will handle it in a sealed bag. He’ll put it in his planter. He’ll actually have one less time of handling any insecticide, because he’ll put it on with his seed, whereas before, the insecticide that was on his seed he handles separately from the insecticide that he would put in his planter to apply over the top of the soil.
Jordahl: What about the processing in the plant, in terms of… I’m thinking of when they talk about fugitive dust from gravel roads. Fugitive insecticide, in terms of, do you manufacture it there? Is there some waste product that’s also expelled into the environment?
Legare: There is an extremely complex dust control, and it’s all been run through the Iowa Department of Natural Resources. We do have a 75 foot stack, that any of the dust particles that are drawn into the system that are not pulled into our collection system will be dispersed at that level. Any of the other wastes that we do have, which there will be some, will be contained, and they will be handled within our Novartis crop protection organization and disposed. That’s already arranged to be lined up with our crop protection division down in Louisiana.
Jordahl: There’s essentially no waste products from this plant? What about wastewater?
Legare: Any water that we have this solution in will be disposed up within our organization and will be handled through Novartis Crop Protection.
Jordahl: It would leave the site.
Legare: It would leave the site, yes.
Jordahl: But not via a stream.
Legare: No, it’ll all be in container. Anything that will be a waste will be in containers.
Jordahl: I suppose out of sight, out of mind, we could say Louisiana will handle it, but I’m kind of curious about what’s happening in Louisiana, too.
Legare: Well, again, we have a crop protection division that is in the insecticide manufacturing, so they handle all those type of things. It’s in their hands once it goes down to them to properly dispose.
Jordahl: I guess it’s really not our purview.
Legare: The Iowa Department of Natural Resources, we’ve been involved with them for 6 months and permitting for all this.
Jordahl: All right. Thank you.
Stutsman: County Assessor Jerry Musser is here. Jerry, can you speak to this project as all as far as what we’re talking about, tax evaluation and things?
County Assessor Jerry Musser: Really, not at all, as far as value. I certainly heard them say one thing that I agree with that I would believe that the tax impact is probably going to be minimal in that their investment, I heard them say 85 to 90% is going to be in equipment. It doesn’t take today much of a building, which would be the only taxable portion of this, to hold a million dollars worth of equipment, or 2 million dollars, or whatever. That part of it I see as being minimal. Understanding that several years ago, the State Legislature exempted machinery and equipment from any tax, so that’s well beyond our thinking. It’s been taken care of several years ago, and would agree with that statement there that the impact one way or the other is minimal. We are talking about, I believe, the partial industrial exemption that’s more commonly known, you refer to it as abatement, it’s Chapter 427 B in the code (inaudible) also notice the partial industrial exemption. It is a faze in type exemption, whereby 75% of the added taxable value is exempt the first year phasing down to 15% exempt in the 5th year of this. There is, I guess, positive impact from the beginning to the tune of 25% of whatever their impact in taxable value would be, and that increases every year. Through 5 years, it is an exemption or an abatement, contrary to some of the TIF things which the payback period is variable. This is set by Code. It’s not subject to being extended in any way, so it’s set by Code at a 5 year phased in exemption, 75 through 15%.
Stutsman: What do you call that again? Partial industrial…
Musser: Partial industrial exemption.
Stutsman: Exemption. OK.
Musser: (Inaudible).
Stutsman: OK. That was Code Chapter 427 B? OK. Yes, because when I first read abatement, to me that says wiping out the taxes forever and ever. OK.
Musser: Again, 25% taxable from the get-go, and phased in there. (Inaudible) added value. The current tax payments would stay as is, subject to whatever the levy is, whatever added taxable value through improvement of their real estate, new buildings, particularly new buildings is what would be added or abated, as the case may be.
Thompson: How many employees do you have now?
Legare: We have 22 full time employees and seasonally, we have 10 or 12 there. I’d say 10 months out of the year, and at the harvest time, we have about 150 seasonal employees for about 6 weeks. September and October.
Thompson: Could you tell us the pay range of the 6 to 10 more jobs that you might be able to create?
Legare: I don’t think I can divulge that right now because we aren’t sure, depending upon how it operates.
Kelly: These wages here you have now are in what range? What range to you pay your employees right now?
Legare: Our present hourly employees range is from $9.50 to $15.00 an hour. That would probably be the range of a starting. We also have salaried employees that are on salaries from $30,000 to $50,000.
Stutsman: Benefits, to you have a benefits package?
Legare: We have a full benefit package of health, dental, vision, 401K plan, vacation policy, sick pay policy.
Thompson: Is that just for the 22 full time employees?
Legare: That’s for the full time employees, yes.
Thompson: Do the seasonal people also make $9.50 an hour?
Legare: No, they don’t make that. They’re under that. Most of our seasonal employees work through contract labor forces like Manpower, Cambridge, Advance Services.
Jordahl: The 6 to 10 would be…
Legare: Potential full time employees.
Kelly: They would fall in the range of somewhere between $9.50 and $15.00 an hour. To back on to the, they call this the proper way, the rational behind that law on the industrial side to do this tax is to encourage companies, like we have here, to expand. This is one trigger to show them that they are wanted in the town that they’re in the County that they’re in, in terms of expansion. It does not hurt the existing taxes, it only encourages them to build new, so that they can…and forgive that, for a portion of time. Then it goes away. But it just sends a clear message to, from my point of view, a clear message to the company that yes, we value you in this community and we want to see you grow, and this a little way we can help you grow now and in the future. That’s why abatement was brought into law about 15 years ago. Most cities in Iowa utilize abatement in some counties. In the case of Johnson County, we’ve not been asked by a company that was outside the proper of a city until Novartis spoke to me. That’s why I mentioned to Mike that we should look at this and see if it was an issue that this Board would be willing to address and want to create a policy. I can help you formalize that in any way you’d like me to. I think this is a good project for you to look at the policy and make a decision one way or the other, that you would be interested in it.
Stutsman: For me, you’ve hit the nail on the head. I’m very willing to consider. I’m bothered that we don’t have a policy to review this or other applications. I don’t know how the rest of the Board feels. I think we need to take you up on your offer and develop a policy and evaluate these requests accordingly.
Kelly: This policy is very simple. It’s not complicated. It’s one of using that same formula that was mentioned. 75% (inaudible) tax the first year, drops to 50%, then 35%, then 25%, then 10%, and it’s out. It’s done. But what it does, it signals a company like this that wants to invest, in this case, 4 million dollars, but most of this 4 million dollars is going to be equipment, so it’s awash. We don’t have to worry about that. We only have to worry about the building, which is a very minor tax consideration, but it is a very positive…
Jordahl: I see that as a positive thing, Marty, and I think it’s a very fine way to say welcome in this case. Sally is talking about the need for a policy, and I can imagine cases where it would be a big deal. I think if somebody wanted to put in a convention resort center and they were going to spend 30 million dollars building this thing. The taxes on that would amount to a significant thing. You wouldn’t have machinery and equipment in any great degree. Here, you’re talking about a pole barn and there, you’re talking about a palace. It’s different things. But ultimately, we still come back on the tax role. But the policy also could be referring to, like, you had this bread deal come in and it was like, oh boy, organic and everything, it’s like it’s perfect. But if we had a really objectionable business, if we didn’t have a policy, they might claim that, oh here, you’ve set a precedent, you used industry, you’ve used these tax abatements, and now we need to get one too, when in fact we don’t want this company here at all. If we can go to a policy that says we will assess this according to our Land Use Plan, or something like that, I think it’s wise that we have a policy before we implement a policy.
Stutsman: It just follows in line with what we talked about with strategic planning, and taking a more assertive role in Economic Development in the area. Those opportunities haven’t been presented to the Supervisors. This gives us an opportunity to say OK, this is what we’ve agreed to do and now we’re ready to do it.
Kelly: If I can suggest a couple things, one of which attacks the policy. As you create it, however you decide to do it, still would have to come, I would still want to bring the project to you for your approval, because it doesn’t mean every… Just because you have a policy you agree with the company. Obviously, I will not bring companies that I feel are not positive to the entire environment of Johnson County as well as the communities involved. What I’m saying here is that yes, I agree with that, also to narrow it down. This is something that you don’t want to give out for every project. Some projects may be more commercial in terms of retail, and those are usually not awarded tax abatement. That doesn’t mean they can’t be, it means that you have the decision and keep the decision within yourself on a case to case basis, to establish the policy to be general in nature and yet has to be approved.
Stutsman: Yes, I would see the policy as part of a review criteria for different groups that want to come in.
Kelly: Exactly.
Thompson: We’ve had this on our strategic plan for the last year, and Charlie and Mike have been working on a plan. It’s an important thing for the County because we haven’t done it before, but by now there are a lot of other areas that have, and we can look at their experience to draft a good policy for ourselves. I don’t personally feel a need to hurry up to get the policy in place just for this one project, although I’m sure it’s worthwhile. I think the important thing for us is to move ahead judiciously and get ourselves a policy that’ll be good for the County in the long run.
Kelly: Yes. Iowa City has a policy, Coralville has a policy, North Liberty has a policy, West Branch as a policy. Most of the communities I work with have the policy and been in effect. It’s not as detailed as the Industrial Revenue Bond Policy is. It can be determined pretty quickly. It’s something that’s been in existence for about 15 years. My fault for not coming here 15 years ago and saying maybe we should have a policy for this in case we ever have a project. It’s my shortcomings of not thinking about that until this project occurred. I would like you to look at that and do what you can, because, as I say, I think this is the kind of company that we want to expand here. It’s formulated, which I find to be very positive. They want to create this seed issue, which will reduce pesticide use, if it can be contained in the seed itself. It doesn’t have to trickle down to the plant root itself. I’m out of my league now, and I look at both of these 2 farmers over here and I start talking about anything farming, I know I’m way out of my league. I just sense that this is a good project, and we want you to consider it and do what you may to maybe bring about the policy and bring this company in.
Stutsman: I was going to ask, is there enough interest on the Board to direct Mike and Charlie to begin working with Marty to come up with a policy?
Thompson: Well, they have been for a year.
Jordahl: Yes, I’d like to hear from Mike and Charlie about this.
Lehman: Well, I wanted to hear what everybody else had to say, but in the 2nd half of development we’ve worked with on some other requests, and one of our goals is increased tax base and also increased employment. I hear a little bit of each (inaudible). We’re not talking a lot of employees. Basic building shelves is not a… But Marty said it’s the message you send. Well, we have to be careful what message we send to future people, they’ll assume they have the green light, too, but not to say a negative to… It sounds like a positive for environmental impact. I know insecticide, you’re not worrying about wind drift, you’re not worrying about erosion after a big rain, applying it on the surface. Those are 2 goals. Then the safety to an operator, mason or farmer. Those are all positive goals. Basically, the impact is going to be local. It’s going to be a property tax thing. There’s no sales tax on seed corn to farmers. We don’t see anything on a state level. Some employees, you’re going to see some income tax paid to state level, that type of thing, and you’re employing local people in that area. Growers, contractors, that type of thing. I guess one thing we need to address in the future is possibly you’re talking about more traffic, employee-wise, and truck traffic. Worry about roads, that type of thing. Turning lanes. There are a lot of things to look at that we may want to visit about in the future. Like Marty said, it’s the message you send, it’s not necessarily the dollar amount. That’s what we need to concentrate on, but we need to be set here for any future ones, rather than just saying OK, here, without any guidelines.
Duffy: Right.
Stutsman: I know you have been working on this Economic Development, but I don’t think we have been working on a specific policy to address this, so that’s what I was referring to. You know, direct them to…
Lehman: I wanted to ask Jerry. We can still allow a tax abatement, there’s no limit after the construction. Can they do it 3 years after a new construction? Is there a timetable after they add value? It does not affect older construction, there’s no increase in the value on that or tax abatement on that. If they build this in 3 years from now, before we get a policy, just to use a worst case scenario, are they eligible to come back and abate what they’ve done, since that was their original request? Does it have to be in a certain timetable?
Musser: I probably should research it, but I believe not. I believe you have to have an ordinance in place so that they might make application by February 1 of the year of the first assessment of the improvement.
Lehman: Your one building is completed. Your other one your working on. We’re looking at February 1 of this year?
Musser: If the one we’re talking about this year is going to be built during 2000, you’d have to have an ordinance in place and they make application with me by February 1 of 2001, I believe.
Lehman: The one that’s already done would have to be February 1 of… Is there a…
Musser: You’d have to have an ordinance in place so they could make application by February 1, 19 days from now, or 20 days from now.
Lehman: They couldn’t make an application if there was no ordinance?
Musser: No. I don’t think so. You keep talking about policy, I don’t know whether creating an ordinance is creating a policy, but really, all it takes is an ordinance saying that this is OK.
Stutsman: Well, you create the policy and then you draft the ordinance to support the policy.
Musser: (Inaudible) ordinance and it’s done, is what it amounts to.
Stutsman: I think the Board prefers to come up with a policy and then have the ordinance to support the policy. I think that’s…
Musser: Again, if you’re talking about, maybe I need to research so they can come back on it, but as I understand it right now, I don’t believe so.
Jordahl: In the absence of the County Attorney, the County’s chief planner here, perhaps Mr. Moore would like to say something.
Assistant Planning and Zoning Administrator R.J. Moore: Well, I agree with what I’m hearing from the majority of the Board. We need an overall economic development plan and policy adopted by the Board. Mike and Charlie and a few other County staff, along with our staff, have been working on that. You know, it’s been a typical ploy of industry in the past to pit governmental entities against each other for abatements or to provide infrastructure for growth. To me, it’s a costs/benefits. What benefits do we accrue for what it costs us to forgo those taxes over those 5 years? 2, the primary things, the benefits we would see would be an increase in our tax base, and secondly, an increase in employment. I’m not sure that without some kind of assurance, that that amount of improvement that’s going to be taxable and added to our tax base, at this point, with information you have, is sufficient to warrant a positive response to this request, or that the employment is potential employment. That’s not guaranteed employment. Rudi’s Bakery, when we came in and went with them, we’re going to gain 100 jobs. That is a benefit that you can identify and guarantee as part of the location of that industry here. Basically, (inaudible) to me is go back to the basics here, and what you’ve been pursuing for years is let’s put together an economic development policy.
Lehman: We’re talking about overall. They’re talking about 6 to 10 this year, they’re talking about possible additions in the future. Do you look at the overall picture, or do you look at increments? That’s something that needs to be addressed.
Stutsman: That’s the kind of thing that I would hope a policy would spell out. What are we looking for, you know, and does this business meet that criteria? That’s what I foresee as being in a policy. Environmental concerns, employment concerns, infrastructure, you know, do we have the roads that will address the needs of the industry? Where are we at, Board?
Duffy: I would like to ask a question. Combined sales of 7.9 billion, that’s a lot of money. Would this affect in any way the companies, co-ops, etc., that are in the seed corn business, chemical business, (inaudible). I know some of them go out and spray the fields, or anything that way, because we have several of these in the County. A couple of them in Solon, Hills, and all over. How would they be affected? Where do they get their seed now? If we approve this, or find some way of tax abatement, how is it going to affect the people that are in agribusiness now, or is it? That’s what I’d like to know, because they pay taxes, too. I’m not speaking negatively about this, I’d just like to know.
Legare: Good question.
Lehman: I could probably answer a little bit of that. They’re talking about lowering their costs. Their processing plant they distribute to some of these co-ops that are dealers for this seed and another seed.
Legare: We co-op with farm service, we co-op with Land O Lakes right now. They sell our brand seed through their (inaudible).
Lehman: You’re a supplier to those outlets.
Legare: Right.
Duffy: There are quite a few of them that don’t. I don’t blame them.
Legare: I’m sure there is.
Thompson: What will happen if we don’t approve this? What will happen to the project?
Creps: The project won’t change. The scope of it won’t change, but it’s mostly in the future looking to management. As we spend our dollars in the future, will it be in Philips, Nebraska, or Paris, Illinois, where we do have abatements, or will it be in Lone Tree, Iowa?
Kelly: This project will move forward. It’s already been planned to move forward. If this seed project is successful, it will expand, double, triple in size. Again, it gets back to what Mike was saying. This is the message we want to send. We want to let them know that we want to be as competitive as the other counties within the state of Iowa or outside the state of Iowa. This is, again, a small amount of money, but what we want to do is make sure that we send the right message to this corporation.
Legare: Right now it’s a pilot project. Small volumes, small capacity, but if it becomes what we hope it does, it’s going to have to be either construction somewhere to upsize the process, or addition at our facility. That hasn’t been decided. It’ll depend upon where the marketing sales goes with the product that we’re developing there.
Jordahl: I think by the time the pilot project is completed, or shows roots, so to speak, we’re likely to have a plan in place that would address the question of tax abatements for future construction, addressing the corporate decision of do you expand here or elsewhere? I think we want to proceed in a plan-full way. I have another thought about that, of course, is that the State obviously already has a plan, that there’s this policy that you can implement in the statute, that there’s a policy. But it doesn’t address the question of in what cases would you not do this?
Kelly: I think it does. It talks about things people are… Things that aren’t included in tax abatement, as I understand it. When it says industrial, it really keys in on jobs rather than retail. But that doesn’t mean that counties have not offered this, so your policy is you can shape it the way you want. You could do it for home construction. I don’t say that’s what… That’s not what I represent, or what my goals or objectives are. That doesn’t mean that you can’t see the need to do that for the right kind of project. But what I’m saying is, I’m very narrow focused. I’m thinking about industrial, anything to do with… This is farm industrial related, so I think this is an excellent project. I think that what I’ve been telling Bill all along, I think we’ve got a great County. I was down and toured their operation with Chuck. I think you’ve got a great operation down there, and I want to see it maintain and grow, so that’s why I thought it would be worthwhile coming before you today to discuss it, and to see where your thoughts were, because I believe in this company. I think it’s got some great potential here.
Jordahl: I have another couple thoughts that are on the positive side of this. I hear the discussion coming to a conclusion, and I’m going to nudge it back to not having a conclusion, if you can bare with me for a second. That’s to say, I wonder if offering a tax abatement to this property would be possible today, given that the State has a statute, and that we don’t have a policy and a County ordinance. Jerry, you suggested that we can’t do it absent the County ordinance. I wish Pat were here to tell me whether we can implement the State statute or not, and, if we did, whether that would constitute some sort of precedent that would bind us, or whether we could then articulate a policy for future cases that might be clearer and satisfy us.
Stutsman: I guess I’m not interested in that approach, Jonathan. I think we need to… You know, you have called the question for the Board as far as our plans for economic development. I think this is a great opportunity, now that we have a project presented to us, to put our energies and resources into developing that policy, and ultimately that ordinance, and go ahead with our plan-full approach to economic development in this County.
Kelly: If I may just say one thing. What Jonathan has said, if there is some way that you could give them some way that you can go back and award this later on, after the policy’s in effect, and if they meet the policy, as you stated, that, I think, would make myself and Novartis happy. Again, I’m not on the legal side, so I don’t know. But if you could say, OK, we can say that we will review this project after we have a policy to see if they meet the policy, then we’ll act upon that individual case there, but I just don’t want to lose this opportunity for them.
Stutsman: I agree. I, for one Board member, would be willing to consider that, or direct a subcommittee to see if that’s a possibility.
Kelly: If we could get that, I would be very satisfied at this point, and develop a policy at our leisure, so that it’s right, it’s correct, it says what it says, and then they stand on their own merits. If they succeed in it, in being qualified, then that’ll be your decision to make. If they don’t succeed, then we shape them up and try to get them to succeed the next time.
Stutsman: Bob, did you have a comment?
Reverend Bob Welsh: Sally, what I heard Jerry say is he’s not sure that that would be legally possible. It seems to me that what would be a positive thing to say to this company, in terms of how I understood Jerry’s time schedule is, that you would hope that you would have that policy in place next year at this time. If you could do that, then, on their future building, they could get that in by, correct me if I’m wrong, Jerry, February 19 or whatever it is…
Thompson: February 1.
Welsh: …of the year 2001. That doesn’t help the building they’re now doing, but it does make that friendly welcome. It does, on the 2nd step, at that point. I think you’re right. There’s no way you’re going to have a policy by February 19 of this year.
Legare: I think that would be agreeable to us. The bulk storage project is completed. It was completed last year. The 2nd phase is still in the wrap-up stage now, so if there was a policy in place by this time next year, then the 2nd half could be considered, and we’d consider that very acceptable.
Stutsman: Is it agreeable, then, with Board members to start working on a policy, and hopefully it can move along as quickly as possible, and we’ll continue to review this request based on policy.
Thompson: OK.
Stutsman: Just gave you (inaudible).
Jordahl: It seems like the only timely and possible thing.
Stutsman: OK, because it seems like there’s a lot of questions that need to be answered, and I’m sure that will come as we develop this policy and move forward. Any other questions?
Kelly: No. Thank you very much. This is exactly what we wanted to hear you say.
Stutsman: Great. Real good. Thank you for coming in.