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Taxpayers could be on the hook for ethanol plant loan
Published 07:51 a.m., September 22, 2009
The taxpayers of Otter Tail County could be paying offa loan to Otter Tail Ag Enterprises for a decade if the ethanol plant’s financial woes continue.
Otter Tail Ag Enterprises also owes money to Otter Tail County. Until the foreclosure process is complete and the county finds out what the terms of any financial deal are, it’s unknown what the foreclosure specifically means to the county, county Auditor Wayne Stein said.
Because the county’s loan to Otter Tail Ag Enterprises is bonded, the county is responsible for repayment of the loan, which was scheduled to be paid off in 2019.
The county loaned $642,000 to Otter Tail Ag Enterprises with payments due annually through 2019, Stein said.The county’s bonds are general obligation bonds, meaning the county can levy the tax on residents to cover the payments.
County commissioners said during their last meeting that they aren’t ready to put the entire amount on the taxpayers. However, a small portion of the 2010 levy is going toward the repayments, according to Stein.
County officials are expected to look for other ways to pay off the loan in the future. However, due to the large amount, the county will likely levy for some of the amount, Stein said. The next payment is due in February 2010, before the levy is collected. A levy could contribute towards a August 2010 payment.
Also named as a defendant is the U.S. Bank National Association, a trustee for the holders of a $20 million facility revenue bond, according to the complaint.
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The Daily Journal is happy to host community conversations about news and life in Fergus Falls and the surrounding area. As hosts, we expect guests will show respect for each other. That means we don't threaten or defame each other, and we keep conversations free of personal attacks. Those who persist with racist, defamatory or abusive postings risk losing the privilege to post. To post a comment you will need to register. Or, if you're already registered but have not included your true, verifiable identity with your registration, you will need to update your account to include your identity. Effective Dec. 1, 2009, all posts appear with the commenter's true identity, which must be verified by site staff. Those who registered prior to Dec. 1, 2009, should be aware that once you update your information with your true identity, all prior posts under your user name will also indicate your true identity. If you do not wish to link yourself to prior comments, you should register again with a different user name.Posted by BWD (David Adams) on September 22, 2009 at 8:55 a.m. (Suggest removal)
Thank you Collin Peterson and Thank You to his powerful Farm Lobby for all their help in this matter!
Posted by akmscott (Mike Scott) on September 22, 2009 at 11:41 a.m. (Suggest removal)
Another boondoogle from the greenies we all get to pay for!
Posted by cascade (anonymous) on September 22, 2009 at 12:06 p.m. (Suggest removal)
I would guess the plant will remain open, but only after a oil company like Exxon swoops in and buys it for pennies on the dollar.
Posted by akmscott (Mike Scott) on September 22, 2009 at 12:14 p.m. (Suggest removal)
Oh yeah-it's the oil companies fault-reality check here!It's going down becuase irs toooooo expensive to produce-period!
Posted by davieboy (anonymous) on September 22, 2009 at 12:25 p.m. (Suggest removal)
And why shouldn't the taxpayers of OtterFail County pick up the tab? After all, look at how much the average taxpayer benefitted from this Boondoggle. It's become a habit.
If some Bigshot or group of Bigshots makes a poor business decision in concert with a government entity, they can just get the tax payers to fix the problem. City,County,State and Federal Governments mess up...there's always the good old taxpayers to correct the mistake. We have deep pockets. Everyone knows that we're far too undertaxed as it is. I know when I'm out and about I hear people say all the time......"Hmm, looks like I might have an extra dollar or 2 left over from my paycheck this time......That just isn't right. I wish the Government would tax us all a little more"!
In the mean time, we keep paying more and more for our goods and services and get less and less in return. A while back, when we were paying so much for gas and everything was going up, we were told it was because of the increase in oil/gas prices. So when the oil/gas prices came down, did anyone see a change in the cost of groceries, etc? Oh that's right...Grocery prices continue to soar because of the Ethanol Plants demand for corn. I paid about $23 for an oil change then.....I pay the same now. Oil has dropped by almost $40 a barrel. What gives? The thing that bothers me the most about all of it is that they all think we're too stupid to know that they are ALL screwing us in a most royal way. The Oil Companies, the Ethanol Companies, the Insurance Companies, The Hospitals and Clinics, your local grocery Stores, your Plumber, your Electricians, your Auto Service Departments, the people that fix you garage door [$60 just to drive out and then $50 an hour? Really?] And it has to be cash cause "We don't take no stinking checks"! It sure would be nice if the average person could charge what they thought they were worth. If we all got paid $50/hour, then it wouldn't be so bad, but how do people making $8/hour get by? No wonder so many people are up to their eyeballs in credit card debt. Businesses are no longer content with making a living........they now have to make a killing,and the sad truth is.....we know what's going on......but because we no longer have any representation...noone to watch out for us....we're powerless to do anything about it. Some experts say that the recession is about over with. About would be the key word. People are still getting laid off or outright losing their jobs and hiring and wages are frozen, unless of course, you are a Corporate Exec. The day is soon coming that one of our Government entities is going to reach into our pockets and find them empty.
Posted by AmyO (anonymous) on September 22, 2009 at 1:23 p.m. (Suggest removal)
"Another boondoogle from the greenies" - akmscott
The greenies?
"Yeah, the greenies made us do it! We really didn't want to. They MADE us! We knew that it would turn out to not be profitable. We knew it would turn out to be a waste of money and a waste of time! We took all those tours of all the other ethanol facilities in Benson, Morris, etc. where everyone told us that they were making tons of money off this stuff and that it was a great way to bring revenue into the community, but we never believed any of that crap. We knew all those farmers and business men (aka "greenies") were lying to us the whole time just so they could save the environment (even though it's been widely accepted for years that the reality of producing ethanol is that it much, much worse on the environment than your typical farming is). And Bush? Well, he's the biggest "greenie" of them all! What with his energy bills that mandated billions of gallons of ethanol to be mixed with our gasoline (Energy Policy Act of 2005 mandated 4 billion by 2006, 6.1 billion by 2009, and 7.5 billion by 2012) and his tax incentives for not only the farmers who produce corn for ethanol, but also the petroleum industry for actually mixing it with their gas. Down with the greenies! Down with the greenies!"
Posted by akmscott (Mike Scott) on September 22, 2009 at 2:32 p.m. (Suggest removal)
Well actually,most informed people did know it was a farce and waste of money-although it pales compared to what will be the biggest boondogle os decades-cap and trade(climate change).
Posted by watermelon (anonymous) on September 22, 2009 at 2:57 p.m. (Suggest removal)
Let me get this straight-climate change is a joke and cap and trade is a boondoggle? What do you suggest we do, oh wise one? Do you figure that you'll be dead and buried by the time we really start to have problems, or are you just that silly?
Reducing pollution is such an idiotic idea. What a waste of our money and time. Everyone knows that the climate is controlled by the hand of a magical being that lives up in the sky.
And of course the taxpayers will need to bend over and cover for bad business decisions and our government. While those who made the original decisions have no repercussions whatsoever. The farmers will be back to where they were before, and those who were employed at the ethanol plant will be handed their pink slips. It's only a short matter of time.
Posted by metasonics (Jamie Cooper) on September 22, 2009 at 3:23 p.m. (Suggest removal)
so all assets of ottertail ag will become the property of the tax payers?
Posted by AmyO (anonymous) on September 22, 2009 at 3:26 p.m. (Suggest removal)
Oh, akmscott, you are so wise! And awesome! I simply love how you are able to get up every Monday morning, take the snap from directly between the center's legs and know exactly what to do. If only there were more people just like you.
BTW, most "informed" people also knew that George W. Bush was one of the dumbest presidents we ever had, yet we still elected him. TWICE! Welcome to the real world. "Most people" are not even close to being "informed." Get ready for at least 3.5 more years of being VERY frustrated, akmscott. LOL!
Posted by metasonics (Jamie Cooper) on September 22, 2009 at 3:28 p.m. (Suggest removal)
so all assets of ottertail ag will become the property of the tax payers? if so, I suggest we use the facility and drill a deep hole until we reach a constant temperature warm enough to pipe refrigerant down to be warmed up by the earths warmth, then use the vapor to spin turbines and thus create a endless, clean, renewable, and profitable energy plant, aka "Geo-thermal" we could use the profits to cover all the debts from this fiasco and pay the taxpayers a dividend from whatever is left over.
Posted by corncob (anonymous) on September 22, 2009 at 3:47 p.m. (Suggest removal)
642,000 dollars on a ten year payback or 64,200 dollars a year divide by the populaion of Otter Tail county 56,000 people. A whole 1 dollar a year per person.
Posted by iloveottertaillake (anonymous) on September 22, 2009 at 3:50 p.m. (Suggest removal)
Well, okay. Here we are in this situation. Can we have a constructive conversation about it without pointing fingers and placing blame? Can a facility like that be used for anything else? Seriously- can it be used to manufacture whiskey or brew beer? I'm admitting my ignorance here, and just trying to steer any reasonable posters towards some creative thinking. Instead of throwing up our hands and submitting to failure (albeit someone else's responsibility), can we think of a way to salvage this investment for the taxpayers of OTC?
Posted by AmyO (anonymous) on September 22, 2009 at 3:50 p.m. (Suggest removal)
Excellent idea, Jamie. Please take the initiative and start doing the footwork the way the members of Ottertail Ag did and let us know #1. when you figure out how much this is going to cost, and #2. where you propose getting the money to do it.
Posted by metasonics (Jamie Cooper) on September 22, 2009 at 4:27 p.m. (Suggest removal)
I think "iloveottertaillake" idea about converting to beverage production is probablly a better idea than the power plant as far as immediate out of pocket cost to do so.
I have no idea how much a geo-thermal energy plant would cost to build, allthough I do know of a man who built one on his farm in Alaska for less than $1,000.00.
he uses the energy to power refrigeration for his pole barns full of ice sculptures and a hotel constructed entirely of ice, as well as all his other day to day energy needs.
in a community as ours, I imagine the costs would be much higher.
for instance when I wanted to install a $240.00 windmill on my property, due to OTP controlling and dictating the specifics of all local installations of wind power, it would have cost, over $4,000.00 to comply, which is way out of my financial reach.
Posted by akmscott (Mike Scott) on September 22, 2009 at 4:46 p.m. (Suggest removal)
Oh liberal ones-you believe you know sooo much because the annointed one in DC has said so!I can't believe you fall for this garbage!Your hero's in DC and Mr. I invented the internet Gore,are all going to profit from this scam.Talk about hypocracy!
Posted by ajohnsonx (anonymous) on September 22, 2009 at 4:50 p.m. (Suggest removal)
A majority of the equipment needed to produce ethanol is the same used to produce whiskey, distillation occurs in both. That could be a profitable enterprise, on a much smaller scale.
Posted by AmyO (anonymous) on September 22, 2009 at 4:57 p.m. (Suggest removal)
Really? Kind of like how Bush, Cheney and all their oil buddies have and will continue to profit off the "scam" of the war with Iraq for the rest of their lives? And their children’s lives, and their children’s lives?
My, how widely the pendulum swings. Wouldn't you agree, akmscott?
Posted by akmscott (Mike Scott) on September 22, 2009 at 5:37 p.m. (Suggest removal)
AmyO,
The Bush-Chaney,Iraq whining by the libs is so pitiful!It's a stinkin broken record you have to use to divert attention away from your false socialist prophet sitting there in DC trying to bring down this great country of ours.Time to chant something new don't ya think?
Posted by pilsnerurquel (anonymous) on September 22, 2009 at 7:26 p.m. (Suggest removal)
Hey now, an ethanol plant is far from a "liberal" business backed by "greenies". Far from it. In fact I happen to personally know investors who are hard core Republicans who, like everyone else who invested in the plant, were capitalists looking to turn a buck. I, for one, do not and have not ever supported the ethanol plant for a variety of reasons and I am definitely not a Republican. I happen to agree with most of the anti-ethanol plant rhetoric here, especially the disgust with Rep. Peterson and his ridiculous backing of corn subsidies for ethanol producers. Ethanol, in my opinion, is a farce and apparently the market agrees. So before you go around blaming the "greenies and liberals" for a failed business plan, try looking at the people who were actually investors and you'll realize that bad business models aren't partisan issues.
Posted by akmscott (Mike Scott) on September 22, 2009 at 7:33 p.m. (Suggest removal)
How about statues for treason and your Obamy, Red cloud?
Posted by jrjj (anonymous) on September 22, 2009 at 8:05 p.m. (Suggest removal)
local news reports say $10-50 increase in property taxes corncob.
Posted by metasonics (Jamie Cooper) on September 22, 2009 at 11:06 p.m. (Suggest removal)
akmscott does not support the president and is there for guilty of treason.
Posted by cascade (anonymous) on September 23, 2009 at 7:10 a.m. (Suggest removal)
How does a comment section of a ethanol plant story turn into a name calling slap-happy bitch-fest?
Too bad.
Posted by metasonics (Jamie Cooper) on September 23, 2009 at 7:24 a.m. (Suggest removal)
cascade, the same way it always does, a Republican nutcase comes here and loses a poorly constructed argument involving some type of fear mongering and then goes off the deep end.
which is met with mockery, as is deserved for making derogatory claims without any merit.
Posted by AmyO (anonymous) on September 23, 2009 at 7:37 a.m. (Suggest removal)
Pils:
Could not have said it better myself.
Not that akmscott will allow reality to unduly influence his opinion. LOL!
Posted by Maxie (anonymous) on September 23, 2009 at 9:51 a.m. (Suggest removal)
It's not the ethanol plant.. it's the vegetation product they're using. Just about everyone with common sense knew corn wasn't going to work for very long. You have to keep replanting it, and you only get one harvest. (Monsanto must have been behind that one)... Corn is used in other food products too.
Grass would have been much better, i.e.; perennial, more harvests in a year, sustainable on it's own.
It's as though the Feds wanted ethanol plants to fail....
Posted by alum03 (anonymous) on September 23, 2009 at 1:31 p.m. (Suggest removal)
THink about it Maxie: WHat farmer in his right mind is going to plant grass???????? And, wouldn't growing grass in one field remove that field from production of row crops, such as your preciouse corn?????? THink about the logistics(amount of grass it would take, or corn it does take to operate the thing),and the business side from the farmer's point of view(where else will he market grass????)
Posted by LoisMustDie (anonymous) on September 23, 2009 at 10:36 p.m. (Suggest removal)
I love to hear people whining about Bush-I'd rather hear some intelligent defense of Obama.....What, NONE?
Posted by BloopTriple (anonymous) on September 23, 2009 at 11:39 p.m. (Suggest removal)
Lois,
Here's my intelligent defense of Obama: He's intelligent.
In other words, he's not a complete moron like Bush, or Sarah Palin, or Michele Bachmann. He actually reads. Like, books. Like, newspapers. He's actually intellectually curious. He understands nuance. He hasn't been perfect, but he did stave off the economic tsunami created by Bush's "no regulation is the best regulation" ignorance. He listens to advisers. Even those who disagree with him. He projects quiet calm and confidence to the rest of the world. Other countries actually listen to us and work with us rather than scoff at us. He doesn't need to threaten anyone with nukes to get results abroad. He genuinely seems interested in making government work rather than just bad-mouthing it for political points, then appointing people who hate the agencies they represent run things there (see: Brownie, John Bolton, Christopher Cox at SEC.)
Obama's not perfect. He put a scoundrel, Geithner, in charge of the Treasury. He's certainly not worse than Hank Paulson, but he's not much better. He has too much faith in the public and Congress, and didn't take the reigns on healthcare reform, the defining issue of this decade (well, maybe second to terrorism.) He promised to roll back the crazy Bush tax cuts, which were never close to sane, but now has bowed to pressure and left them in place.
Defend Obama? Sure, I'm happy to, even though I don't like him all that much right now. But he's certainly not the worst president in history, which he just replaced.
Posted by mnperham (anonymous) on September 24, 2009 at 8:46 a.m. (Suggest removal)
At least Obama is intelligent and can put a complete sentence together. Bush was unable to do that.
Posted by iloveottertaillake (anonymous) on September 24, 2009 at 9:58 a.m. (Suggest removal)
Blood Triple, I don't know if you're male or female, but I think I'm a little bit in love with you right now.
Posted by alum03 (anonymous) on September 24, 2009 at 2:31 p.m. (Suggest removal)
Bood triple: thank you for speaking up.
Posted by shellback (anonymous) on September 26, 2009 at 9:57 p.m. (Suggest removal)
After reading all the Ottertail county wisdom I am amazed someone hasn't suggested holding the county commissioners responsible for the loss. Obviously there was to much taxpayer money available that the commissioners just couldn't keep there fingers off of. The loan was unethical if not illegal. What keeps the commissioner from thinking twice before foolishly spending money that isn't theirs. When are we going to get commissioners that look for ways to give back some of our hard earned money and cut spending??
Posted by battlelake102 (anonymous) on September 30, 2009 at 9:36 p.m. (Suggest removal)
You can't blame the "greenies" for this plant. Who you can blame are the fool hardy investors that managed to scrape together $3 million in equity (with no investment under $30,000!) in less than two months. The dream was NEVER TO OPERATE THE PLANT profitably. That was never the way the investors were going to get paid. The dream was that Monsanto, or ADM, or Exxon would swoop in and buy the plant for six times what was invested. Those were the actual pay-off dreams of the promoters. Frankly, Harold Stanislawski was so overboard on his promotion many people put money into this project, not hoping for a small annual dividend, but for a one-time whopper of a buy-out check. No one cared if the numbers for an operational profit were not there, no one cared because making money on a daily operational basis was not why the plant was built. I asked repeatedly where the waste product was going to be sold, and was told, "livestock" despite the fact that this area does not have many large livestock operations that can use the feed. With so many friends and neighbors of the wealthy farmers in this deal it was impossible for the county board (which largely represents only the interests of the rural population of lakeshore owners and farmers) to say no. Not all farmers are wealthy but this equity drive took only $30,000 checks. I actually know people that took out home equity loans, or loans against their life insurance to come up with their equity investment.
Posted by battlelake102 (anonymous) on September 30, 2009 at 9:43 p.m. (Suggest removal)
Think of it... $600,000 wasted on a pipe dream. It could have built an outdoor pool, it could have been used to expand the library, it could even have been given to a nonprofit like Habitat for Humanity and built a dozen new homes in Fergus Falls for hard working people, but instead it was flushed away in a moment. United Way, the college, the Initiative Foundation all could have benefited. In general, the government at any level, from a city passing a tax increment district, to a county investing in a risky venture, to our state's JOBZ program (another boondoggle) can not and should not use the public's money to pick winners and losers in the name of economic development. The private sector played the county for a patsy.
Posted by mgdbottled (anonymous) on October 2, 2009 at 9:08 a.m. (Suggest removal)
So, the farmers are getting much more money for their corn and still collecting their welfare checks from the government and you' all are paying for it. What's the problem? Business as usual!!
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