Teton County approves tax break for Busch Ag

The Teton County commissioners last week voted to give Busch Agricultural Resources Inc. a 10-year tax break to encourage the multi-state corporation to expand its malt barley storage facility at Fairfield.

By Melody Martinsen-Acantha editor

http://www.choteauacantha.com/articles/2004/10/22/news/news1.txt

(Many thanks to Stephen Horowitz for passing this along.- Russ)

Meeting Oct. 14, the commissioners held a public hearing on the requested tax abatement, then unanimously voted to approve the request.

Busch Agricultural Resources Inc. is proposing to invest $7.3 million in building new barley storage bins at the company’s complex in Fairfield. It is negotiating to purchase additional land just west of its existing property to place the bins, which would increase storage capacity from 1.2 million bushels to 3.7 million bushels.

The company requested the county to grant a tax abatement that would abate 50 percent of property taxes for the county, hospital district, town of Fairfield, Teton Nursing Home, county high school and elementary school transportation and retirement and Fairfield Public Schools for the first five years. After that, the local property taxes would be increased by 10 percent each year for five more years until at the end of 10 years, the facility would be paying full property taxes.

Four state-imposed school property taxes would not be abated.

Commissioner Mary Sexton presented a financial statement on the impact of the abatement, prepared by the Department of Revenue, based on the $7.3 million value of the new property and on 2004 mill levies. These figures would change if mill levy amounts rise or fall in coming years. The financial analysis showed that Busch Ag would pay $125,338 a year in state and local property taxes on the new construction without the tax abatement over the first five years.

With the tax abatement, the company would save $53,476 in local property taxes a year over the first five years. The tax bill would be about $71,862 a year instead of $125,338.

Attending the tax abatement hearing, Dave Tweet of Fairfield, the Busch Ag regional manager for Montana Seeds and Elevator Operations, answered questions from the commissioners and members of the public.

He said the Busch Ag board was slated to make a decision on whether to locate the expansion in Fairfield at its Oct. 22 board meeting. Tweet said Busch Ag is looking at other sites for the expansion, but he did not disclose where.

If the expansion is located at Fairfield, he said, it would benefit the community and the county. "I think it’s a good deal for our area. I think it shows the commitment, the stability" of Busch Ag. The company has operated an elevator complex in Fairfield for the past 18 years.

Tweet said the company is doing soil sampling at the proposed building site and, if the board approves the site, construction would begin this fall and the additional storage would be in operation by next fall.

He said the expansion would not bring any new jobs to the community; nor would it involve any shipping equipment – just storage.

Tweet said Busch Ag currently pays farmers on the Fairfield Bench to store grain on-farm, but that the new storage facility may or may not affect that contractual arrangement.

"We are always evaluating storage options," he said. Busch Ag does grain business in North Dakota, Minnesota, Idaho, Montana and Wyoming, and it has storage facilities in all five states plus sites in the Midwest. The storage in the Midwest is becoming out of location for the company, he said, adding that the new storage in Fairfield or another location will not so much replace on-farm storage as it will replace storage in the Midwest that is no longer in the best geographic location for the company.

Brent Poppe, the bureau chief of Ag Marketing and Business Development for the Montana Department of Agriculture, also attended the meeting and supported the tax abatement request.

Poppe said the Montana Agricultural Development Council awarded Busch Ag a $50,000 Growth through Agriculture Grant to defray pre-construction expenses. Teton County Development Corp. applied for the grant on behalf of Busch Ag.

Poppe said Busch Ag has expressed a tremendous interest in expanding operations in Montana, and his experience is that Busch Ag is "very cognizant of the messages you send to them and the actions that you take."

"There is a benefit to seeing this expansion occur in that you’ve got a higher level of quality control on the grain that is being stored which translates into a greater acceptance rate for the producer," he said. The Montana Department of Agriculture is very hopeful that this project moves forward and is willing to do whatever it can to make sure that happens, he said.

He submitted a letter of support for the abatement from Department of Agriculture Director W. Ralph Peck.

"The Department supports and urges the Commission to approve BARI’s proposal," Peck wrote in the letter. Approval of the abatement "will send a clear message to BARI that their investment in Fairfield is a wise and proper decision, welcomed by their many producers and agribusiness partners in Montana."

Not everyone at the meeting supported the proposed abatement however. Dutton grain farmer Bob Stephens Sr. said, "I’m opposed to giving these huge corporations these tax abatements."

Busch Ag’s parent company, Anheuser Busch Inc. had a net income of $2 billion plus last year, he said, adding that he does not understand why a huge corporation would need a tax abatement or a $50,000 grant to undertake a project that is a relatively small expense in the whole corporate scheme.

Can Teton County afford to give a tax break to one of the largest corporations in the world, he asked.

Stephens said the commissioners approved a tax abatement for Mountain View Cooperative to create a high-speed 110-car loading facility east of Collins. That terminal has led to the closure of the elevators in Power and Brady and the partial closure of the elevator in Dutton, Stephens said.

Farmers who want better prices for their grain are now having to haul it to competing elevators in Conrad and Great Falls, Stephens said, adding that the impact on Power and Brady of the elevator closures has been negative.

Stephens said he thinks Anheuser Busch will build in Fairfield with or without the abatement. "I don’t blame them for asking. But I don’t blame me for complaining either," he said.

Stephens’ son, Chris, also a Dutton-area farmer, said, "I just think it’s ridiculous" to give a tax abatement to such a huge corporation. He suggested the county commissioners should pick and choose more selectively which applications for abatement to approve. He said abatements should be targeted for businesses that will provide new employment as well as new tax base.

Sexton said that the county has granted all three abatement requests that have been presented in recent years.

Sexton said it is unfortunate that the proposal pitted rural communities against each other in trying to land the expansion, but that the commissioners want to give Busch Ag the incentive to build here.

"We want to be competitive, but we’re being pitted against other rural communities," she said, adding that the owners of the high-speed grain terminal said it would be located in Pondera County without the tax abatement.

Poppe said that a big part of the impact of the high-speed grain terminals comes from Burlington Northern-Sante Fe Railway which is exerting pressure on the companies it does business with in Montana, forcing them to consolidate and build higher efficiency facilities in return for "not getting really hammered" with freight rates. "There is certainly an impact," he said.

In other business last week, the commissioners:

–Took under advisement three proposals to do a feasibility study for the Teton Nursing Home. Submitting proposals were: St. John’s Lutheran Ministries, Management and Outreach Services, 3940 Rimrock Road, Billings; Allen, Allen & Eliot Inc., 205 Pioneer Ste. 55, Bozeman; and Health Management Services, L.L.C., 2850 Overland Ave., Billings. The commissioners will evaluate the proposals, ranging in cost from $7,000 to $35,000, after the general election. Then they will know whether voters approved or rejected a special permanent tax levy of up to 10 mills for the nursing home.

Commissioner Arnie Gettel said he wants to put together a roundtable discussion with all county medical-service providers to talk about what the scope of a feasibility study should be before making a decision.

–Appointed Choteau-area farmer and truck driver Lyle Weist to replace Jerry Stott, who ranches west of Choteau, on the Teton County Fire Fee Service Area Board. Stott resigned after he has been unable to attend many of the board meetings.

–Agreed to begin working on a plan to make handicapped access improvements at the Teton Nursing Home before the end of this fiscal year next June. The county’s Americans with Disabilities Act lawsuit settlement plan calls for work at the nursing home to be done this year. The county has budgeted about $20,000 to $30,000 for the improvements, which include sidewalk and entrance work. Commissioners Gettel and Sam Carlson will review the settlement plan requirements and put together an action plan and timeline for the work.

–Signed the law enforcement and prosecution services contract with the town of Fairfield for fiscal year 2004-05 totaling $58,500. That includes $4,000 for prosecution services from the County Attorney’s Office, $53,000 for law enforcement services from the Sheriff’s Office, and $1,500 for special police training. The contract is $2,000 higher than last year’s contract.

–Adopted model county policies and procedures, provided by the Montana Association of Counties, subject to amendments to reflect individual county department concerns. The new policy will go into effect Jan. 1, 2005.

–Heard a monthly department report from Sheriff George O. Anderson. Anderson said he is working with state officials to convert the Sheriff’s Office Internet and e-mail system from 3 Rivers Communications to the state-run system, summit.net. Anderson said summit.net qualifies as a "secure" system under federal Homeland Security rules. To maintain the county’s connection to national criminal justice databases, Anderson said, the Internet and e-mail systems must be secure. The monthly subscription for the summit.net service is about $160, Anderson said. He said he has no idea, however, how much in labor and equipment the conversion will cost.

–Heard the Road Department report from office manager Linda Erickson, who said that the county crew helped the city of Choteau chip-seal streets in September. Otherwise, she said, the crew has been busy mowing right-of-ways and grading roads. Some crew members attended an oil spill seminar in Great Falls, and the Road Supervisor is in the process of hiring a new grader operator.

–Heard from the nursing home that it now has 28 residents and has two certified nursing assistants in training. The nursing home is posting help-wanted ads for nurses on http://www.montanahelpwanted.com.