On Tuesday at the Cherokee County Supervisors meeting, Ken Slater of the Cherokee Landfill Commission addressed the Cherokee County Board of Supervisors to see if they could roll the current 10-year General Obligation Bond taken out two years ago for the pellet plant located at the Cherokee Landfill, to a 20-year GOB. That GOB was for the amount of $2,920,000.
Currently, the Commission has eight years left on the GOB, and has been struggling with payment this fiscal year due to new stricter emissions requirements from the Environmental Protection Agency (EPA) that make it harder to sell the pellets produced at the Cherokee County Landfill's Pellet Plant. With stricter emission requirements, fewer companies are able to use the product and that, plus the loss of several prospective contracts, also factor in for the plant's economics.
The Commission would like to extend the GOB to a 20-year GOB to make easier payments. The Commission reported to the Board that they did not think that they could make the next payment that consists of both the interest ($77,951) and the principal ($245,000) due on June 1. Also, the Commission requested an additional $427,000 to pay for construction fees on a new cell currently being constructed at the Landfill, a balance that comes due on July 1.
The Board on Tuesday began the process to deal with that request. On Thursday, a special meeting was called with Slater and Don Pitts of the Landfill Commission, along with Scott Stevenson of Ruan Securities, holder of the GOB, and with Lawyer Mark Cory of Ahlers & Cooney PC via phone to talk about a new GOB schedule and set a public hearing.
Cory recommended to the County that the two requests be treated as separate issues. The GOB for the Pellet Plant would have a taxable statute due potential sales of pellets. If the County went with a GOB for the new landfill cell, that would be tax exempt.
The Board authorized Thursday to publish two public notices and to hold a public hearing on June 7 at 9:15 a.m.
The first notice calls for the Board to take additional action for the authorization of a Loan Agreement and issuance of not to exceed $2,008,000 Taxable General Obligation Refunding Capital Loan Notes for an essential County purpose, in order to pay costs of refunding outstanding general indebtedness of the County.
The second notice calls for the Board to take additional action for the authorization of a Loan Agreement and the issuance of not to exceed $450,000 General Obligation Capital Loan Notes for the essential County purpose, in order to pay costs of works and facilities useful for the collection, treatment and disposal of solid waste.
At the June 7 meeting the Board shall receive oral or written objections from any resident or property owner of the County, to the above actions. After all objections have been received and considered, the Board will at this meeting or an adjournment thereof, take additional action for the authorization of the loan agreement and the issuance of notes to evidence the obligation of the County, or will abandon the proposal.
Making the matter more complicated is the time frame that both the GOB payment and the Cell construction payments are due. Currently the County can not amend the County's budget or access the County's General fund until the beginning of the next fiscal year beginning on July 1.
To make both payments, Cory recommended that the Landfill Commission take out a bridge loan (an estimated amount of $750,000) through one of the County's banks and if and when both GOBs are authorized, or other proposals are made, that payment would be made back to the bank or the new fiscal year begins.
If the Landfill Commission cannot continue making further payments, there are several other options currently on the table for discussion, such as raising landfill rates, putting in place a levy tax on county taxpayers that the County is pledged to finish on the GOB, or raising the rates to other counties that bring their solid waste to Cherokee County.
Slater and Pitts also stated that the restriction that was handed down by the EPA has been recently lifted and one of their clients, Poet ethanol producer of Sioux Fall, S.D. will soon be increasing its orders of pellets since the restrictions have been lifted.
It was also estimated by Stevenson, that if the Pellet Plant GOB is to be extended to 20-years, it would be at lower interest at 1.5 percent and after an initial $4,000 in legal