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http://www.heraldandnews.com/articles/2005/03/08/news/top_stories/top2.txt

City OKs enterprise zone for Cob plant

A proposal to extend the Klamath Falls Enterprise Zone to include the proposed Cob Energy Facility is one step closer to approval following a vote of the Klamath Falls City Council Monday night.

Councilors unanimously agreed to grant an extension of a district that would allow the county to grant tax breaks to the power plant.

There was no discussion yet of what sort of payments plant-developer Peoples Energy should make in return for the tax breaks. Any tax breaks approved would not affect the city, but Council approval was required because the enterprise zone is governed by both the city and county.

Councilor Bud Hart said that when discussions return to the subject of tax breaks, he hopes the city would be actively involved. He asked the county not to think of the city as just a "rubber stamp."

"It is a joint enterprise zone," he said, emphasizing the word joint.

The Board of County Commissioners has already agreed to extending the zone to the site in Langell Valley about three miles south of Bonanza where the plant would be located.

Cob representative Paul Turner recently upped the amount the plant would contributed to the county from $1 million to an amount at half of the estimated property taxes. He estimated that would start at about $3.2 million the first year and decrease each year to about $2.5 million by year 15 if a full-size plant is built.

Commissioners John Elliott and Al Switzer asked for straight-across payments $3 and $2.8 million respectively. Commissioner Bill Brown voted against the enterprise zone, and reiterated his position that the plant should pay full taxes.

In the meeting, Hart presented his own "unofficial and amateur" analysis of the tax proposals from Cob and from Switzer.

By Hart's calculation, taxing districts such as the county library, 911 and the Bonanza Fire Department would get significantly more money if Cob were to make a payment equal to 50 percent of the taxes than under Switzer's proposal.

For instance, in Switzer's proposal, the library would get $154 and the fire department would get $25,000. In the Cob proposal, the library would get $167,443 and the fire department would get $211,934.

Switzer, at the time he unveiled his proposal, said taxing districts in the Bonanza area would reap the benefits of the Cob plant's construction, while other taxing districts such as the library would continue to receive what they currently get from the unimproved property.

However, all talk about numbers is still just talk.

The city's approval of the joint enterprise zone is only one step in a process to get the zone approved. Next the proposed amendment of the enterprise zone will be sent to the state's economic development office.

After that it would return to the county, and Peoples Energy will be asked to submit an application, and prove the business qualifies for tax exemptions.

Qualifications include having a long-term presence in the community - 15 years in this case - and providing high-wage jobs. Once that has been done, county commissioners and the City Council will discuss what sort of payments they expect Cob to make in exchange for the tax waiver.

During the public hearing the Council heard several people speaking in favor of the plant, and only one protest, from farm-land advocate Lyn Brock.

Councilors also heard testimony from Commissioner Brown.

Brown had queried state education officials about whether the money Peoples Energy paid in taxes would have been subtracted from the state aid the county school district gets.

His sources agreed with the Cob officials and Switzer, saying state money to school wouldn't be affected by the contribution.

Hart said his decision to approve the enterprise zone was strongly influenced after learning about Brown's information from the state.

Trey Senn, director of the Klamath County Economic Development Association, said he had been in conversations with the Oregon Climate Trust organization.

The trust is responsible for administering projects to negate carbon dioxide effects from plants like Cob.

Cob would be required to pay into the trust if it is built in Oregon. However, many of the projects funded by the trust are off shore. Commissioners and Council have asked if something in Klamath County be found.

Senn said projects such as the city's geothermal heat system and Oregon Institute of Technology's sustainable energy project may be eligible.

There is cash available to make the county an alternative energy capital if we aren't afraid to ask, he said.

"I think we have to not be shy in the near future."

Councilors Betty Dickson and Trish Seiler were absent from Monday's meeting and did not vote.


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