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http://www.heraldandnews.com/articles/2004/08/17/news/top_stories/top2.txt

KF Council uneasy about Cob proposal

A tax break deal for the proposed Cob Energy Facility hit a roadblock Monday when the Klamath Falls City Council decided to postpone a vote on extending the boundaries of the Klamath Falls Enterprise Zone.

The move raises questions about whether the Cob project will receive any economic incentive for building its $679 million power plant near Bonanza.

Councilors heard testimony Monday from about 20 opponents of the 1,160-megawatt facility, and about 10 plant supporters, primarily trade union representatives and economic development officials.

The three city councilors at the meeting all agreed the testimony shed new light on the proposal before the city - information which made them uncomfortable approving any tax deal.

"Based on the information I have heard tonight, I would vote against extending the zone," Councilor Bud Hart said, after hearing two and a half hours of deliberation on the topic.

Just two weeks ago Hart told the Herald and News he would be supporting the tax deal.

"I think it's the county's business," he said Aug. 4, adding that it would be hypocritical for the city to deny support for a power plant when the city already owns its own power plant, the Klamath Cogeneration Project. "Whatever the county wants, I'm pretty much going to do."

The proposal before city officials Monday was whether Klamath Falls should approve the extension of a tax-exempt enterprise zone east on Highway 140 past Dairy and Bonanza to the power plant site in Langell Valley.

Cob liaison Rob Trotta had previously offered Klamath County a $1 million payment a year for the 15-year enterprise zone extension, in lieu of estimated property taxes of at least $71 million. Although the city does not have any input on the economic deal and would not receive any tax revenue, its approval is required for any geographical extension of the enterprise zone.

Trotta, who was ridiculed Monday by Cob opponents, told councilors Monday he had increased the economic offer to $1.5 million a year.

"This is a three-fourths of a billion dollar facility in this county," said Trotta, adding that the economic impact of power plant construction and job creation needed to be considered.

His presentation was countered by Cob opponents, who said extending an enterprise zone by "bending the rules" was unconscionable.

"In order to get this done, we're talking about leapfrogging an enterprise zone out to Bonanza," power plant opponent Stan Heidrich said. "It's appalling, and I can't believe all the rules are being bent."

His wife, Delana Heidrich, said Klamath County residents are not in favor of "growth at any cost."

"As a teacher at Bonanza, I would rather personally pay for school supplies I need than take a single penny from the Cob," she said.

Project supporters, such as Gary Weldon, a member of the Klamath County School District board, said Cob's offer of $1.5 million a year would provide desperately-needed money for improvements such as building maintenance.

Councilors heard from a variety of trade union representatives, who said the construction would provide high-wage jobs for hundreds of people.

"I feel People's Energy has addressed many of the concerns of the community," said union organizer Dan Bailey.

Former Klamath County Commissioner Clif McMillan, who has filed multiple petitions with the county against the enterprise zone, said there would be consequences if the city approved the enterprise zone.

"You are exceeding your political authority by leaps and bounds," said McMillan, who filed a petition with the city Monday that would ask voters to deny any city-sponsored enterprise zone to the Cob.

Throughout the evening, Hart asked project opponents whether they would approve extending the enterprise zone if their other concerns about the project were satisfied.

But by the end of the evening, he had his own problems with the zone.

"I'm just very bothered by the way this process has gone forward," said Hart, who added he was frustrated so little information was given to councilors before the meeting.

Councilor Trish Seiler agreed.

"I learned a lot tonight that I didn't know before," she said. "And that concerns me."

Councilor Bill Adams said he was distressed about "leapfrogging" an enterprise zone to Dairy and Bonanza, circumventing state rules that require enterprise zones to be within 15 miles of each other.

"It doesn't seem that it was intended this way when it was put into place," he said.

The Klamath Falls City Council will consider the issue again on Sept. 20, when all five councilors are expected to attend.



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