Smelter's Tax Waiver Request Turned Down
by Richard Hanners
Hungry Horse News, May 17, 2011
Under state law, businesses that haven't operated for six months prior to their application for a waiver and won't operate for six months after their request can qualify for the tax break.
According to School District 6 business manager Dustin Zuffelato, CFAC's request would cost Columbia Falls schools about $188,000 for 2011, on top of the $185,000 withheld under protest for 2010.
Flathead County deputy attorney Tara Fugina, who drafted a joint resolution for the two boards, said each board had to independently approve CFAC's request for it to be granted. The applicable state law will sunset at the end of 2011, she said, and there was no middle ground -- it was 95 percent or nothing.
In his presentation, CFAC representative Haley Beaudry explained that the company had notified workers of a pending shutdown in December 2008, but the smelter stayed open "one month at a time" until it finally closed in October 2009, after a court case "nullified" CFAC's power contract with the Bonneville Power Administration. Beaudry pointed out that he hadn't received a paycheck since then.
"Look how skinny I am," he said.
The company has continued to negotiate with BPA for a new power contract, Beaudry said. To remain viable, the smelter facility must operate at 50 to 60 percent capacity, but it must also address $10 million to $20 million in restart costs, including power, raw materials and property taxes.
"The reason for this state law is just for this situation," Beaudry said.
When asked by school board member Scott Emmerich to forecast the status of BPA negotiations, Beaudry said a restart is "doable." He noted that CFAC made a profit in 2007 but operated at a loss in 2008 and 2009.
"We're in a trough right now," he said.
School board member Barb Riley asked Beaudry how the $188,000 tax reduction requested by CFAC could help when restart costs might reach $20 million. Beaudry said the accumulative effect of property taxes raises the start-up hurdle even higher.
In reply to Emmerich's question about a "worst-case scenario" if the plant never restarts, Beaudry pointed to the lost, good-paying jobs.
Speaking against CFAC's request, Stefan Belman noted that the smelter is "antiquated" and shipping costs are too high for the plant to be viable. CFAC's land is valuable, he pointed out, and contamination could be cleaned up. Belman wanted to know why a representative from Glencore, CFAC's Swiss-based parent company, was not present at the meeting.
Noting that her husband once worked for CFAC and she had long been a plant supporter, Dee Brown said Glencore's record had been "spotty" of late and she couldn't be sure what they'd do next.
Don Bennett said he also supported CFAC in the past, but in recent years his attempts to work with Glencore on economic development projects had gotten nowhere.
"Turn around is fair play," he said, adding that a tax break is an incentive for not restarting.
Brian Doyle, the current president of the Steelworkers local representing CFAC workers, said he could support the tax break only if Glencore could guarantee they'd restart. School board member Larry Wilson took a hard line against CFAC's request, calling it "extremely arrogant" in light of housing foreclosures in Columbia Falls and the profits "sucked" out of the area by Glencore. Riley also took a hard line, noting that she's a Realtor and nobody bailed her out.
"I'd prefer to see CFAC as a local business, not a company in Switzerland," she said.
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