Digester project likely to proceed with or without county bonding
By Kevin O’Brien
If Marathon County decides not to serve as a conduit borrower for a proposed manure digester in the village of Maine, the developer has a backup plan to make sure the project is completed, according to a lawyer working on behalf of the company.
Lynda Templen, who is serving as bond counsel for Macquarie Capital, told county supervisors last week that the bioenergy facility proposed at Van Der Geest Farm “is probably going to happen regardless” of what the county does, but the developer would still like to know by next month if elected officials are interested in signing off on $45 million in tax-exempt bonds.
Members of the Human Resources, Finance and Personnel (HRFP) Committee discussed the proposal at their Nov. 21 meeting, but did not make any recommendations on how the county should proceed.
Macquaire, an Australian firm doing business as WI VDG, LLC, has asked the county to use its ability as a government entity to issue bonds at a significantly lower rate of interest than what would be available through a private lender. The county would not be responsible for paying back the bonds under any circumstances, and the bonds would not affect its debt capacity or credit rating.
Templen said Macqauire can also request conduit bonding through Wisconsin’s Public Financing Authority (PFA), a lending agency made up of county and municipal officials authorized by the state to issue tax-exempt bonds. She said PFA’s issuer’s fee is “a little bit steep, but manageable.”
However, before Macquarie can seek conduit bonds through PFA, state law mandates that both Marathon County and the village of Maine grant their consent. Templen said this requirement was added to the statute at the behest of Milwaukee County, which wanted to drive more potential borrowers to itself so it could make money off issuer’s fees.
Board chairman Kurt Gibbs said “it would be to our advantage” for the board to adopt an initial resolution in December supporting the proposal, as it would give county officials time to negotiate an issuer’s fee without fully committing to issuing the bonds. He said many of the board’s questions were already answered at an Oct. 24 meeting attended by Templen and others involved in the digester proposal.
Supervisor Ann Lemmer, however, said she still has questions about the impact of the project and is concerned about setting a precedent for other entities seeking conduit bonding through the county. (County administrator Lance Leonhard has said another party recently contacted him about financing a different digester).
“I’m just a little nervous about moving ahead without having some guidelines in place,” she said.
Supervisor Corey Hart said he would also like to hear from officials in the village of Maine, since the digester facility would be built “smack dab” in the middle of their community.
Templen said she’d be surprised if village officials have formally discussed the proposal at this point, since the developer has only approached the county about conduit bonding. She noted that the county will be able to recoup any legal and administrative costs it incurs by charging an issuer’s fee.
“I’m not going to say it’s an easy thing,” she said. “Your clerk will get a lot of paper.”
In the event that the county board is not ready to approve an initial resolution next month, Templen said the developer would at least like the county’s consent to seek conduit bonding through the PFA.
“It sounds like there are a lot of things you want to explore that might mean we can’t get it in December,” she said, referring to the initial resolution.
Committee chairman John Robinson said two other committees – Environmental Resources and Education, Extension and Economic Development – have also been tasked with reviewing the digester proposal. He said HRFP will wait to get feedback from those committees before its next meeting on Dec. 13, at which point it will consider making a recommendation to the full board, which meets on Dec. 14.
In the meantime, Robinson directed corporation counsel Michael Puerner to reach out to other counties that have issued conduit bonds and ask them questions about the process.
“I don’t think this issue is going away. I think more and more people will be looking at it,” he said. “Our policy is either going to be ‘We’re going to cooperate’ or we’re not going to, and we’re going to direct them elsewhere.”
Other business
n The committee approved a motion supporting a plan to offer naming rights for donors who contribute to a proposed $14.8 million regional morgue. To date, the county has secured a total of about $10.2 million in funding for the proposed project and is soliciting donations to help make up the remainder. Members of the regional morgue task force plan to offer naming recognition in certain areas, such as the family comfort room and the tissue donation area.
Medical examiner Jessica Blahnik said construction plans for the forensic science center are set to be completed by January so the project can be bid out early next year.
