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Walt Smith has organized a meeting to give Langell Valley residents the opportunity to talk with Commissioner Bill Brown and the spokesperson for COB Energy Facility, Paul Turner.  It will be a question and answer session and an opportunity for concerned individuals to voice their concerns about the siting of the COB Energy Facility and the proposal for COB LLC to receive more than thirty million dollars in tax breaks.

Wednesday, January 26, 2005  2:00 p.m.
Lorella Hall      ...more information below ...


COB has now proposed they pay one half of what they would pay if assessed regular property taxes. 

An enterprise zone designation could grant COB about $35,000,000 (thirty-five million dollar) tax break over the next 15 years.  (tax estimate per Reg LeQuieu, Klamath County Tax Assessor)

Total taxes assessed each year in Klamath County (for county and city) is $42,000,000 (forty-two million) according to the assessor's office.  COB should pay about eight million a year at first and then declining amount if assessed their fair share. 

Below is copy of the proposal received in writing from COB's Paul Turner and below that are some items of concern
from the draft of Final Order which we received this past week ...

January 18, 2005

Honorable Al Switzer, Chairman
Honorable Bill Brown
Honorable John Elliott
Klamath County Commission
305 Main Street, 2nd Floor
Klamath Falls, OR  97601

Councilwoman Trish Seiler
Councilwoman Betty Dickson           
Councilman Bill Adams               
Councilman Irving “Bud” Hart           
Councilwoman Cheri Howard           
Klamath Falls City Council
500 Klamath Avenue
Klamath Falls, OR  97601

Re:  Agreement Regarding Extension of Boundaries of Klamath Falls/County Enterprise Zone


This letter sets forth the agreement to date between COB Energy Facility, LLC (COB), a wholly-owned subsidiary of Peoples Energy Resources Company, LLC and Klamath County (the County) and the City of Klamath Falls (the City). 

As you know, the County and the City are the co‑sponsors of the Klamath Falls/Klamath County Enterprise Zone (the Zone).  COB is considering constructing a gas‑fired electric power plant in the County, proposed three miles south of Bonanza, on West Langell Valley Road (the Facility).  The total cost of the Facility is expected to exceed $200 million, and the completed Facility is expected to hire at least 10 full-time employees at no less than 150 percent of the average wage in the County.  The proposed location of the Facility is outside the present boundaries of the Zone and presently is bare land. 

COB wishes to obtain property tax exemption for the Facility for a period of 15 years, plus the construction period, pursuant to ORS 285C.412(5) (2003 House Bill 2671).  The County and the City wish to recover from COB reasonable contributions for local services or infrastructure (the Contributions) as provided in ORS 285C.403(3)(c).

COB, the County and the City hereby agree as follows:

The County and the City agree to submit to a vote of their respective governing bodies, no later than February 1, 2005 and February 7, 2005, respectively, the question whether to extend the boundaries of the Zone to include the proposed location of the Facility; and if the governing bodies approve the boundary extension, to file a complete request for boundary change with the Oregon Economic and Community Development Department pursuant to ORS 285C.115 and OAR 123-065-0310 within thirty (30) days after the later of the two votes.

The County and the City further agree that the duration of any property tax exemption for the facility pursuant to ORS 285C.403 will be not less than 15 years plus the construction period, and that the Conditions below constitute the sole “additional requirements” that the County and the City will request, impose or require in any written agreement entered into by COB, the County and the City pursuant to ORS 285C.403(3).

COB agrees that, if the Facility is certified for property tax exemption for not less than 15 years plus the construction period, then COB will make Basic and Supplemental Contributions as described below:

a.    For each year in which the Facility is exempt from property tax pursuant to this agreement, an amount equal to 50 percent of the total property tax amount (after application of the three-percent discount for payment in a single installment) that would be due and payable for the property tax year with respect to the Facility if the Facility were not exempt and the assessed value were properly and accurately determined (the Basic Contribution).  COB reserves all right to contest the real market value or assessed value shown on the assessment and tax roll, including the right to appeal to the Department of Revenue or in the Oregon Tax Court, as well as the right to contest the assessed value in direct proceedings against the County.

b.    For each year in which the Facility is exempt from property tax pursuant to this agreement, a flat amount of $300,000 would be paid to the Klamath County Economic Development Association (without any adjustment for inflation or other reason) (the Supplemental Contribution). 

c.    At the time construction begins (by issuance of building permits), COB will make a one-time payment to the County in the sum of $500,000 for use in the County’s road fund, as mitigation for any potential impacts of the Project construction on County roads.  This mitigation payment will be in addition to (and not in lieu of) any and all traffic or transportation-related conditions and requirements imposed upon COB through the Energy Facility Siting Council Site Certificate.  This $500,000 payment will be subtracted from the first year’s Basic Contribution.

d.    All Contributions shall be payable annually no later than December 31 of each year in which the Facility is shown as exempt on the assessment and tax roll.  Basic Contributions are payable to the County.  Supplemental Contributions are payable to the Klamath County Economic Development Association.

If you agree with the terms of this letter, please sign below where indicated.  This agreement is effective when the last party signs.

______________________________        ______________________________
Commissioner Al Switzer, Chairman            Paul Turner
Klamath County Commission                Peoples Energy Resources Company

______________________________        ______________________________
Commissioner John Elliott                Commissioner Bill Brown   
Klamath County Commission                Klamath County Commission

______________________________        ______________________________
Councilwoman Trish Seiler                Councilwoman Betty Dickson   
Klamath Falls City Council                Klamath Falls City Council

______________________________        ­­______________________________
Councilman Irving “Bud” Hart            Councilwoman Cheri Howard   
Klamath Falls City Council                Klamath Falls City Council

Councilman Bill Adams
Klamath Falls City Council


From the draft of Final Order, we notice that there are several items of huge significance for which, for the first time that we've noticed, the Siting Council seems to be stating they are not responsible.  Perhaps this means  our Commissioners are liable for taking responsibility for these concerns.  Anyway, thought we'd point out these items   (Page 194 Lines 10- 12,   Lines 24-28,    L 35-37  shown below):

Page 194  The Council concludes that, for the proposed facility, the following state and local government
programs are not within the Council’s jurisdiction because the programs address design-specific
construction or operating standards and practices not related to siting:

Line 24:  (3) Various programs addressing fire protection and fire safety and the storage, use,
handling, and emergency response for hazardous materials and community right
to know laws for hazardous materials,
administered by the Oregon State Fire
Marshal's Office, under ORS Chapters 453, 476, and 480; OAR Chapter 837,
Divisions 40 and 90;

Line 35:  (5) Regulations on the size and weight of truck loads on state and federal highways
administered by the Oregon Department of Transportation under ORS Chapter
818; OAR Chapter 743, Division 82;

Line 19:  "(2) Regulations of building, structure design and construction practices by the Oregon
Building Codes Division under ORS Chapters 447, 455, 460, 476, 479, and 480; 20
OAR Chapter 918, Divisions 225, 290, 301, 302, 400, 440, 460, 750, 770, and 21
780; 22"

Do we have someone in the County who is qualified to inspect the size and type of structures that will be built
for COB Energy Facility to ensure safety or will we have to hire more qualified personnel and at what cost???
I think it was calculated that there will be approximately 25 acres of buildings and equipment
and structures as high as 200 feet. 

And there are a lot more items.  Subjects of Items (3) and (5) i.e. fire department and road damage,
 were discussed Tuesday at the  Commissioners meeting and I see nothing in the written proposal
showing COB's willingness to better equip our Bonanza Fire Department or provide a full-time paid
fire department to handle emergencies at the construction site or after construction...

Lyn Brock
Bonanza, Oregon




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