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Industry deals concern Jones, county residents

Posted: November 10, 2011 4:29 p.m.
Updated: November 11, 2011 5:00 a.m.

Kershaw County Council decided to move forward with two fee-in-lieu-of-taxes (FILOT) agreements at Tuesday’s meeting despite various questions and concerns raised over the deals.

The first agreement involved plans for Southeast Renewable Energy (SRE) to build a biomass plant in Cassatt. The second agreement called for Oak-Mitsui, a copper producing company headquartered in Camden, to invest additional funds for manufacturing improvements at its facility.

The FILOT agreement with SRE was passed 5-1 on first reading with Councilman Jimmy Jones voting against the proposal and Councilman Tom Gardner absent. Jones and two Cassatt residents raised several questions over the SRE deal largely citing recent problems with a biomass plant located at the University of South Carolina (USC).

Dianne Robinson and Kathy Sherrill, neighbors who live near the proposed site, spoke during the meeting’s public comments period and claimed SRE CEO Raine Cotton had repeatedly compared the company’s proposed plant to the facility at USC.

Problems at the USC plant have included frequent shutdowns with one related to an explosion and the university hiring outside consultants to manage damage issues.

Robinson said questions at earlier public forums on the proposed plant focused on safety, noise and traffic, but the one main concern was that SRE had never built the type of plant planned in Cassatt.

“Mr. Cotton could only refer to ‘prototypes’ in other states, but more consistently referred to the one in Columbia,” Robinson said.

Jones said he had also heard comparisons to the plant at USC.

“That’s what they kept referencing time after time,” Jones said. “We then have an issue with the plant in Columbia and I’m then told they’re not the same.”

Gary Morris, an attorney representing SRE, said the plant at USC is a different model than the one planned for Cassatt.

“They all reach the same ultimate goal as a biomass facility, but that was a different, new type of process and this is a proven process,” Morris said. “This model (in Cassatt) has been done hundreds of times. It is proven technology and it’s going to be financed by lenders and equity partners that have looked very closely at this.”

Councilman Stephen Smoak said the plant at USC was primarily funded through public dollars, while the plant in Kershaw County will be entirely funded through private funds.

SRE bought 30 acres of land from the county in November 2010 for the plant’s construction and plans to invest $46 million over a five-year period with an initial FILOT consisting of a 6 percent assessment ratio for 30 years.

Councilman Bobby Gary mentioned that the county would have three readings of the FILOT agreement with SRE.

“We will have an ample amount of time to be able to get people’s questions and to get answers for the public,” Gary said.

Despite efforts by Jones to continue to ask Morris questions during the meeting, Gary motioned for council to end discussion of the issue and vote on the ordinance. Chairman Gene Wise agreed with Gary, putting the ordinance to a vote. The agreement passed 5-1.

County Attorney Ken DuBose said third reading of the ordinance would likely occur in early December.

Council also passed first reading of an ordinance on a 5-1 vote to amend the multi-county industrial park between Kershaw and Sumter counties to add the SRE property to the agreement.

Jones also expressed concerns over the agreement with Oak-Mitsui even though the ordinance was unanimously passed on third reading.

Most of his issues dealt with the impact on fire safety and fire insurance ratings in the community.

“Does this fee-in-lieu have the potential of depriving our local fire departments? Are they going to be receiving adequate funding for the equipment and fire protection through the reduced tax levy of this fee-in-lieu?” Jones asked. “Fire departments must still provide fee-in-lieu business with the same level of response as other businesses paying the normal tax levy.”

DuBose told Jones the agreement with Oak-Mitsui was an “aggressive industrial recruitment” and would create an enhanced revenue stream.

“I’m not aware that this will cost any extra infrastructure to the county,” DuBose said. “The commitment is $8 million at 7 percent (assessment ratio). So they’re saying they’re going to commit that $8 million in the project. It does say, though, that if they go to $10 million, it drops to 6 percent. It further says that if they invest $25 million, they get a 15 percent special source revenue credit. That’s designed to encourage the company to make further investment, i.e. a new product line. This envisions the expanding of an existing industry.”

DuBose said he would send a letter to the city of Camden Fire Department outlining the FILOT agreement with Oak-Mitsui.

Other actions by council at Tuesday’s meeting included unanimous approval of:

• a contract with Tax Management Associates, under which the company will help determine inconsistencies in the county’s tax records;

•second reading of an ordinance rezoning Wedgewood Subdivision in Elgin;

• the appointments of Lee Williams, Mike Gogan, Jim McLeod and John Courtney Talbert to the Assessment Appeals Board;

• the appointment of Stacie McGee to the Kershaw County Housing Authority;

• the reappointment of David Brown and the appointment of James Pittman to the Planning and Zoning Commission; and

• the appointment of Kershaw County Administrator Vic Carpenter to the Santee-Lynches Council of Governments.

Council also announced that county offices will be closed today for Veterans Day.

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