County denies CHS tax incentive amidst deficit concerns

The Cavalier County Commission held a short meeting on Tuesday, November 5 to discuss county business. The primary topic of discussion was CHS, Inc.’s request for a tax incentive and the possible hiring of a roadmen foreman.

Posted 11/07/2019

By Melissa Anderson

CHS, Inc. was represented by their general manager for the area, Jason Edwards, and Travis Peterson, an agronomy manager for CHS, who put forward their request for 50 percent tax incentive on the new fertilizer facility currently being built south of Langdon. The facility is nearing completion, and the goal is to begin filling by the middle of

December with a roll-out date of February. The expectation is that the facility will bring two to three jobs to Langdon. However, Edwards explained that some of these employees will be coming from Milton.

“One of the reasons we are seeking the tax abatement is to help replenish our working capital,” Edwards explained.

Within the past few years, CHS has invested $17 million for the grain terminal south of Langdon, and the newest fertilizer facility is another $9.6 million that has been invested within Cavalier County.

Within the state of North Dakota, Edwards informed the Commission CHS has sought 50 percent tax with success incentives being granted. The most recent tax incentive approved for a CHS facility was in Gwinner with a 50 percent reduction in taxes.

The Cavalier County Commission reviewed the application but had several concerns with granting the reduction in taxes. Commissioner Nick Moser sited some concerns with the application, specifically with the company’s response to the question of proximity of business competitors. The Commission noted that there are several competitors to the new CHS fertilizer facility, and a few are within half a mile of the location. The Commission does not want to give undue advantage to

CHS over its competitors which is a directive within the North Dakota State Century Code. The commissioners wants to avoid the loss of any current businesses. Another concern the Commission had was the lost revenue from the taxes the facility will bring to the county at a time when deficit spending is occurring.

“The way you have got everything estimated out, the amount of tax exemption would be $46,000 a year, so with inflation in taxes I would estimate close to half a million dollars over ten years,” Moser said.

Cavalier County Tax Director Steph Bata informed the commissioners that the Department of Commearce did not have anything to add to the requirements for the application but did note that CHS should have listed a dollar amount for tax incentives rather than a percentage. Because it is a payment in lieu of tax, a dollar amount is required.

Bata also informed the Commission that there is not currently an assessed value for the facility. Vanguard would be arriving prior to the February 1, 2020, deadline to assess the facility.

“First of all, thank you for investing in our community. As a farmer and involved in business in this area, any type of investment that you get to make things better, to be more competitive and to help agriculture, in particular, is very, very important,” Commissioner Greg Goodman said.

Goodman continued stating that as a county commission, they had to consider consistency. The idea of doing it for one means doing it for all. This also led to how those decisions would impact not just the county but schools and townships. The budget for 2020 is seeing an increase of 4 mills or roughly $200,000 to allow the county to operate. With those increased mills resulting in increased taxes, the county will still be deficit spending by approximately $400,000.

“The misconception from the public to a certain degree is that if we don’t get this money from you guys and give you the full exemption that the county just doesn’t get the money. Well, that’s not true. What we do is pass on that percentage back onto everybody else to make that up. It’s a misconception, I hear it all the time,” Dick said. “Those that are paying the taxes have to pay more to make up for all those exemptions.”

The Commission took a roll call vote for the request which had unanimous support for denying the exemptions.

The commissioners discussed at length the issue of potentially hiring a roadmen foreman to oversee the districts and employees currently in place. Goodman stated that he was adamantly against the creation of the position due to the current financial standing of the county.

Goodman believed that if the commission pursued this, that the commissioners, themselves, should take a cut in pay as the duty to oversee the roadmen in each district fell to them. The discussion also included the amount of work that the roadmen are required to do. The handling of the roadmen was an intense discussion including many different areas like what townships, how many miles, and safety protocols that need to be followed.

In Other Business

• The Commission received an update on the Social Service redesign from Dick. Following a recent meeting of the interim committee, Dick gave the progress made including the agreements for the zone and updates from the state regarding changes that are still being made.

• Cavalier County Road Supervisor Terry Johnston updated the commissioners on the culverts and roads. Johnston also explained that he would recommend keeping the emergency declaration in place as the spring will most likely have excessive damage due to the melt reported. Dick also stated that when these reports are being made to have comments regarding the water along the side of the road be noted. The reason he would like that done is because of the unique situation the area has with fish and wildlife in close proximity to the roads.

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