County to settle with Alliance Pipeline

Published 12:00 am Friday, November 24, 2006

By Rebecca Houg, staff writer

After a closed session at Tuesday&8217;s regular County Board meeting, the commissioners unanimously voted to accept the recommendation by the Minnesota Attorney General&8217;s office to settle civil litigation out of court with Alliance Pipeline.

Alliance Pipeline has brought a civil suit against Freeborn County and 13 other Minnesota counties. The pending suit involves what Alliance Pipeline feels was a discrepancy on the tax assessed to it on the property where Alliance&8217;s pipeline lies. Allianc believes its property has been over-valued and would like to adjust the rate it is being taxed and be reimbursed for the 2005-06 tax year.

Alliance Pipeline owns eight parcels of land in Freeborn County and was assessed $271,752 for the 2005 tax year, according to County Treasurer Dennis Distad. The 2006 assessment totals $267,558.

The suits have all been joined together for one action. If all counties accept the settlement proposal, they can avoid taking the issue to tax court.

The details of the settlement proposal are confidential at this time, since the counties are still in the process of negotiations with Alliance Pipeline.

Because pipelines have unique property values, County Attorney Craig Nelson said the county has been using the values originally provided by the Minnesota Department of Revenue to tax the property.

&8220;We decided that, yes, we do think this is a reasonable settlement proposal,&8221; Nelson said.

So far there are about three counties that have approved the recommended settlement, and three more were meeting this week to also enter into closed discussion and make a decision.

In other news, the board:

– Had a public hearing at the start of the meeting to hear opinions from residents of the county on the subject of Allan Larson&8217;s request for a tax abatement to reimburse certain costs for upgrading Albert Lea Public Warehouse No. 4 to a food grade facility.

No proponents, opponents or neutral parties to the tax abatement issue stepped forward to address the board.

After discussion, the board approved Larson&8217;s request with an amendment to name Freeborn County as a co-administrator of the abatement along with the city of Albert Lea.

The warehouse is a 121,280 square-foot building located at 601 E. 14th St. and will be leased to Malt-O-Meal as a storage and packaging facility.

The project will create approximately 20 jobs that will be contracted through Cedar Valley Services and several other new jobs that will be created by Larson&8217;s direct employees.

The estimated cost of the upgrade is $300,000. Larson is requesting a 10 year abatement to improve the financial viability of the project. The abatement financing method would be identical to pay-as-you-go tax increment financing which has been used by the city of Albert Lea on several projects.

Larson needs approval from both city and county government. The city approved the tax abatement at their last meeting on Nov. 13.

The agreement as it was created would transfer the responsibility of administering the abatement to the city upon approval by the county board.

&8220;My concern is that for some unforeseen reason, the county has no rights,&8221; said Commissioner Dan Belshan. &8220;We&8217;re giving up the most taxes, among all parties, and I don&8217;t see why we shouldn&8217;t have some teeth in that agreement.&8221;

In the approval of the abatement it was agreed that the paperwork would be revised to create a three party agreement.

– Heard from Distad as to why it was decided to cancel the scheduled agenda item to rescind the resolution awarding the construction bid of Hutton, Inc. for County Ditch 65 and award it to the second lowest bidder.

The vote was scheduled because Hutton did not return their paperwork in the 10 days as required by the bid agreement. They have since returned the contract and the bond. As a result, it was decided that they would get to keep the awarded bid.

The decision was not easily accepted by all members of the board.

&8220;If I was a contractor, I would think it would be pretty important to get my paperwork in on time,&8221; Belshan said.

&8220;I don&8217;t think it&8217;s right to the rest of the people that did (follow the 10 day rule in the past) to do this,&8221; said Commissioner Jim Nelson. &8220;I&8217;m sure that there are some other bidders that would have (had their paperwork in on time).&8221;

Nelson, county attorney, then stepped forward to address the situation, saying the county would likely get sued if they rescinded the bid award to Hutton.

&8220;We want to save the cost of litigation,&8221; Nelson said. &8220;You can bet your boots, you&8217;d be involved in civil litigation.&8221;

Nelson explained that the technical violations were enough to raise the issue and bring the matter before the board, but that there was nothing for the board to do at this time.

Since Hutton had in fact provided the county with the documents, abet after the deadline, the matter was a technicality.

&8220;Should we stand on technicality? Or do we want to get involved in litigation on this matter?&8221; Nelson said. &8220;The answer is no.&8221;

– Established a resolution establishing a new annual solid waste fee of $26 to replace the $24 fee currently in effect.

The fee hadn&8217;t been increased for seventeen years and during that time the costs involved with collecting recycling and hazardous and solid waste has increased considerably, according the Randy Tuchtenhagen.

State and federal funding has also steadily declined each year for the program, he said.

Rural residents are only charged 86 percent of the fee and apartment units are charged 72 percent.