Bradford talks bonds at meeting
By the end of the meeting, the town board agreed to begin a process that might lead to cheaper financing for the dairy being built in the township.
Board and audience members had a hard time wrapping their minds around the proposal, which would result in the town issuing industrial bonds.
Jason Chubb, an investment banker with W. R. Taylor & Co. representing dairy farmer Todd Tuls, came to the meeting to explain how it would work.
Tuls and his family are building a 5,200-cow dairy in the town that is expected to cost more than $30 million.
The bonds are called Midwestern Disaster Area bonds, Chubb said. The program was designed as an economic development tool for counties that were declared disaster areas by the Federal Emergency Management Agency after the flooding in 2008.
By using bonds for financing, the business could secure a lower interest rate than it would through normal banking channels. Tuls has already broken ground, and even if he can’t secure the bonds, the dairy will be built.
So what does the town have to do with it?
“The town serves as a conduit for the money,” Chubb said.
The federal government set up the program so bonds would be in the name of the municipality without the municipality bearing responsible for payments of any kind, he said.
The board and audience members were suspicious of possible repercussions—especially the financial ones.
What if the business failed?
What effect would it have on property taxes?
Who would pay the town’s legal fees if the resolution failed at some stage in the process?
“It shouldn’t cost the town a nickel,” board member Don Esselman said.
Chubb said repeatedly that the town would not be held responsible, even it the business failed or something happened to the banks selling the bonds.
Nor would the issuances of industrial bonds affect the agricultural zoning already in place in the township.
Town attorney David Moore reiterated that the bonds would never “constitute an indebtedness” for the town. He also said the town’s legal fees will be paid if the resolution passes.
However, board and audience members were concerned about what would happen if the process went forward, stalled at some point and then failed.
For example, if a number of residents objected to the proposal, they could force a referedum—an expensive prospect.
Moore and town officials asked for an addendum to the resolution that would request the business to pay the town’s legal fees even if the project went forward and then failed.
Chubb and Michael Best, Tuls’ attorney, said they would take the proposal back to Tuls for consideration.
In other business, the board set a public hearing for 6:30 p.m. Monday, June 13, to get opinions on a proposed ordinance that would regulate center-pivot manure spreaders. Other townships have ordinances banning the sprayers in place to reduce residents’ concerns about odor and health issues.