Ashland City Council
Work Session Minutes
February 15, 2007
Thursday, February 15, 2007, Economic Development Conference Room 7:00
P.M.
Purpose:
1. “Ethanol In Our Community”, with Bob Thompson and
Al Holdren from Town and Country Co-Op.
Attendance:
Council members: Bob Valentine W1, Bob Valentine W2, Ruth Detrow, Paul
Wertz, Glen Stewart
Mayor: Bill Strine
City Engineer: Jim Cooper
Finance Director: Anna Tomasek
Town and Country Co-Op: Al Holdren
Town and Country Co-Op: Bob Thompson
Trustee, Montgomery Township: Richard Wesner
Water/Sanitation: Curt Young
County Commissioner: Mike Welch
County Commissioner: Matt Miller
Fire Department: Duane Fishpaw
Chamber of Commerce: Marla Akridge
Planning Commission: Tom McGee
Council Clerk: Valarie Bishoff
Economic Development: Evan Scurti
County Commissioner: Kim Edwards
Media: T-G Darcie Loreno
Roll
Call: Bob Valentine W1, Bob Valentine W2, Ruth Detrow W3, Paul
Wertz W4, Glen Stewart
Pledge
of Allegiance:
Glen Stewart - The business this evening
is basically, I would like to have any input or thoughts on
Ethanol in our Community. We don’t know that we will have
and we certainly don’t know that we won’t have an Ethanol
production plant in Ashland, Ohio. I will share with you that
paper work is being drafted with a proposal to go to Silver State
Ethanol, Inc. offering them a parcel of land for sale and those of you
down there may not see this. This is our Industrial Park, Route 250 and
60. Here is where Rt 250 comes in from the bypass, Faultless
Drive, our Industrial Park and the 58.9 acres we have offered them in
this initial offering has access to, if they want to develop it
and can work it out with the state to Rt 250, and they also have access
to Faultless Drive. They asked us, if I am not mistaken, they
asked us for 60 acres, Is that correct Mayor Strine? Mayor
Strine:Yes. Stewart- And we, I shouldn’t say we, Our
Engineers and others came up with a 59 acre plot, and puts it pretty
well back to the North in that park area and to the East. It
keeps a lot of, what I would call “Prime Land” that has
frontage on Ford Road and frontage on Faultless Drive. It retains some
of that. Jim Cooper, Have I said that accurately? Jim
Cooper – Perfectly. Stewart – So that is being.
Yes Dick. Richard Wesner: Access to Faultless Drive, Is
that roads you put in? Stewart –Yes. I did not make
that clear. We have a road off of Faultless Drive back here and
it dead ends right here. And then it also goes up here to a
cul-de-sac up towards the farm. They will have frontage on that
and they will actually it is frontage on that extension, mostly at
East/West extension. We don’t know what their response will be
but the ball was in our court from my perspective and the Mayor and
others have put together a package and I don’t know if it has
actually left yet or not. Has it Mayor? It is still being
reviewed but I am sure it will go out very shortly. And that is
where we are at with Silver State. I think it is a topic that
many of us around this table probably have had people share views with
us and has had positive, maybe negative. If it is okay with the
rest of you, I would kind of like to have that shared tonight and see
where we are as a Community. Anybody want to open it up?
Tom McGee – I certainly heard a lot of people talking about it
and every single one has been very positive although some people have
mentioned, this is a concern of mine also, they said just don’t
strap ourselves so much in the water that we cannot get another
business in, but if we get additional water supplies either through an
investment on their part with the wells assuming that our water table
stays high or the Reservoir gets developed, it is fine. But just
don’t use all of the water up. Keep things open. And
I concur with that.
Glen Stewart – I appreciate that Tom. As we speak tonight,
and if you would, please give your Name and if you represent yourself,
a township or commissioners or whatever, that would help Valarie.
Who else would like to make a comment?
Mayor Strine - Glen I would like to bounce off of what Tom was
saying. As people who have to make this decision, basically
ultimately Council, How do you guarantee beyond any shadow of a doubt,
100% that is going to continue to rain, that our wells are going to be
all right. We have plenty of water right now but I think every
night about this issue that if we go ahead with this, we are committing
to some water. It is just something for us to think about.
I can sit here and believe whole-heartedly that we are going to have
enough water, and I do. The fact still remains.
Tom McGee - Mayor, If we develop the Reservoir, we will
absolutely will have enough water, we won’t have to rely on a lot
of rainfall to fill that.
Mayor Strine – No. We would have more water, but if there is a 3
or 4 or 5 year drought, who knows?
Tom - I am just saying, If we had a Reservoir, we don’t
even have to worry about the drought.
Mayor Strine - All I am trying to say Tom, is there is no
way, absolutely no way, that we can guarantee, 100%, that someday we
are not going to ask the citizens to take it easy on water.
Glen Stewart - And I don’t disagree with what the Mayor
said. There is always that risk. In fact there is risk in
almost everything we do. On the other hand of that risk, to
reduce it, the city is working with a consulting firm to give us some
direction on where we should go long-term, where we may be able to go
near-term and they have not presented their proposal in its final
format. There is some early indications that they have projected
the water use for our community. How far up did they go? 30
years? To 2035. And they projected water use on historic growth
and that sort of thing. And the near term, there are graft
recommendations that we continue with wells. Getting a Reservoir in
place in an economical manner is going to take some time. I
personally believe we have a big challenge, one of the big challenges
behind us. We have the site, we have a very appropriate site and I
think our early on engineering drafts indicate that they concur with
this. There is something to be said about this site and I cannot
go too far with this because everything I heard is not concrete, but
the farm has a relatively high water table and the Reservoir or
Reservoirs that my be put in there would not depend on surface water,
it would depend on ground water, big, big difference. The water
table out there is around 8 feet as of today and has been for a
while. I don’t know the range of it. But it is very
high content of sand and gravel. So the water is going to flow in
through the sand and gravel and we won’t be dependent on direct
run off of the Reservoir would have a sealed bottom I presume.
Anyway there is some very early on studies that looks like we have
picked a pretty good spot, it looks like it could produce a significant
amount of water per day. To answer the initial concern Tom, sure
there is risk, absolutely risk, without risk, you never move
forward. Who wants to take the risk? That is a decision we
are all going to be asked to pony up to one of these days in the near
future and if we make the right, if we make a decision and it is right,
we will not be heroes, that is expected. If it goes wrong, we are
a bunch of dummies and there will be an election.
Matt Miller – The residents both inside and outside of the city
seems to think the idea for the creation or resurrection of a new
Reservoir is a good idea for long-term water needs. The area that
raises concern this time around is the talk of putting in another
well. Because there are some of those who live into the vicinity
of the well fields and feel that another well just drops their water
level and makes their current wells less than adequate. That is a
concern, cause I never hear anyone talking negatively towards the
thought of the reservoir but they certainly always have an interest
when there is a possibility of putting in a new well in their back
yard.
Glen Stewart - And I do not want to say that there is or there is
isn’t, someday in probably 6 weeks or 2 months we should have a
final draft of a plan, or not a final draft, but a plan that the
consultants have brought forward and tell us, here is what you can take
to the bank and I suppose that is discounted but none-the-less here is
what’s said.
Bob Valentine - But, well you know a partial solution too would
be the idea that you do have water going up to Nankin so that would be
a partial solution to that, you know. And I don’t know how
many people that signed up for that, I don’t really know.
Glen Stewart – It would not clear. The volume was there, is
that correct Jim?
Jim Cooper - It was marginal, but there is a decent volume, may
1/3 million gallons, yes sir, but it would not clear up.
Glen Stewart – All sand and gravel. The hydrologist
in Ashland happened to be the first time in his 30 years of doing this
that he had a well that wouldn’t clear up. Unfortunate for us.
Al Holdren, Town and Country Co-op - I would say about the
drought thing, depending on how wide spread it is , it certainly
impacts the Ethanol plant because of drought implies fewer crops and
higher prices and I not sure at that point what they would do.
Glen Stewart – Good Point. They may not have the raw
material to produce what they want.
Al Holdren, Town and Country Co- Or it could be so expensive that it
doesn’t make sense to bring it in. It could come in from quite a
ways away.
Glen Stewart – Any other comments from your constituency or your
own personal thoughts, Pros or Cons?.
Matt Miller – These are personal thoughts, but I think is worth
noting. I think I share with the Mayor. We have received
calls with concern about it and the two things that have been mentioned
are: 1)of course the fumes, that is something I don’t that anyone
has experienced with but they are concerned with what that might mean
and: (2) would be viability in the Ethanol plant and I was telling Mike
and Kim today a gentleman that is actually one in government relations
of people with a company out of Cleveland was talking to me about
what is going on in Ashland. I mentioned an Ethanol plant and he
says , we just needed to be careful because he said, he believes
research and technology are leading in a different direction meaning
that there are cheaper things than corn to burn for fuel and he rattled
off a list and I am sorry I cannot repeat it, but I don’t know
how relevant that is and may be Al and Bob Thompson can comment
on that more than I can. But I thought it was very interesting
because he is probably the 3rd person that has mentioned that times are
moving fast and that Ethanol, we need to take a careful look at it
because we might already be.
Bob Thompson -Well, it is certainly gaining an awful lot of national
and international attention. Positive! Neutral! And
Negative! I always try and follow the money trail to see who is
writing what article for what reason. I would encourage everyone
to read US News and World Report, basically the overselling of Ethanol,
there are pros and cons, there is no doubt. It sells I think and
am interested in Al’s opinion too but there is just so many gray
areas to it. It is hard to just wrap your arms around it and say this
is a finite static, take it to the bank we want Ethanol. For 5
years, 10 years or 15 years. Matt, can you think of any of those other
products that he was talking about? Mike or Kim?.
It was Prairie Grass, Saw Grass. Cellulose.
I believe, and Tom you and I talked about this. There are a lot
of options out there other than corn, but I don’t think the
research is there quite yet as this is sustainable in terms of other
products. In terms of an industry that is supply 300 million
gallons daily, I mean that is an awful lot of consumption that
someone has to belly up to the bar and say we can in a huge way replace
hydrocarbon fuel. That is a huge issue. One of things in
going back to Matt’s point about Ethanol in general is Ethanol
just seems to be so widely excepted as “The Replacement”
for the Oxygenate material of MTBE and nobody seems to have any qualms
with that and there is going to be a huge demand for Ethanol just for
that purpose in many states and I heard this morning that it is
actually now the majority of states are mandating a minimum of 10%
Ethanol into gasoline and that in itself is going to create a
huge ongoing demand for it as long as those mandates are in
existence.
Matt Miller – Some of those who have visited the sites and there
are probably aren’t any examples of this, but if one today
wasn’t to be functioning, does it have a lot of environmental
regulations to follow to clean up the site, I mean does it leave a mess
behind or is it something that is pretty environmentally
friendly? Or can it be used for something else, which my personal
understanding is they are fairly easy to convertible to other
“Chemical” in a very generic sense production
capabilities. Now, then you get into other water or related
issues, fumes and odor issues, etc. But that is what I have
heard, they are fairly easily convertible to other products.
Basically a big brewery.
And as far as the odors go, I know the fella said ¼ of a
mile. Liken to Anheiser Busch Brewery in Columbus. That
actually when it first started, for the first 10 years, there was a
definite odor around there. Now it seems it has gone
away. Technology has improved.
Robert Valentine 1 - It is a very practical thing as far as the
consumer is concerned and that is the conversion. 2004-2005 is
now being put on automobiles for flex-fuel. But to convert cars
now will be costly.
The majority of the Ethanol is going to E-10, not E-85. E-10 is
most of the gas that you use here.
Stewart – Bob did you say the daily consumption is 300 million
gallons?
It is a huge, huge staggering number of gallons, not barrels.
If you take 300 million gallons and the majority of the states went to
10% Ethanol, that is 30 million gallons a day of Ethanol just to make
E-10.
Bob Thompson - E-10 is even a stretch on a sustainable basis.
The number I have heard to replace MTBE is like 12 billon gallons,
nationally we are about halfway there in terms of producing that E-10.
Stewart – Some of us went to Blissfield Michigan where a plant
was under construction and they suggested we should go to Benson
Minnesota. Well , I called them today and I talked to the
director of finance, only to find out that the facility was indeed
there. It was just outside the city limits, so they did not have
to supply water, they did not have to supply sanitation/sewer and I
asked him, “How does the Community look at this Ethanol
plant?” His answer was my guess is 95% positive. I
don’t know what the 5% negative was but that was his
answer. He said now keep in mind this is an investor, a
Co-Op. It is not Silver State, It is Chippewa Valley Ethanol and
it is owned by people in the general area, Farmers and Non-Farmers and
he said we have some very wealthy people from this plant. They
started at 30 million gallons 10 years ago, today they are 50 million
and next year they are going to build their second plant right along
side that, another 50 million. The way the plant works, you buy a
share and that share commits you to so many bushels of corn to that
plant every year, either supply it or buy it and supply it, but you are
committed and that is your share. If you are not a grower of
corn, you can buy a share also and you get into what they call the corn
pool. They buy your corn for you and you supply this plant.
But this plant is owned by a co-op and a group of local people, local
money. As the Finance Director said, we have some people
who have become very wealthy. Bill Lee, the plant manager at
Chippewa Valley Ethanol informed me right off the bat, he was not going
to be a free fee consultant. And I said well what are the gripes
about. He said there are going to be lots of lights, there is
going to be noise from the operation, the further away from residents
you are, the better off you are. It is a great operation, and he
as a former Ethanol National Association person that they hired to run
this plant and they are doing very well. As I said they are going
to build another plant right next to this one next year for 50 million
dollars in 2008. I asked him about water use. I keep
hearing ¾ of a million gallons. He said figure 4 gallons
to the bushel. If you figure it that way it is going to come out
630,000.00 gallons per day. But he said your 750,000.00 gallons a
day is in the ballpark. I just wanted to get some
confirmation. I asked him about his thoughts about converting to
Cellulose. He said it can be done, it is not cheap but if the
process finally gets to where it is economical, you eliminate you
cost of natural gas, which I guess is a huge cost. Now, they make
alcohol for a Vodka plant and they also do industrial alcohol. He
was very positive and said if a plant were to come to my community, I
would not worry about it becoming a white elephant in 5-10 years.
He said Cellulose is going to compliment grain produced Ethanol as you
pointed out; there is not enough corn in the country to make what some
people are forecasting we need. So it will be a complimentary
process and from that I did not get much more from him. Then I
was given a name of a local bank president. Jan Lunderbrech and
she is also Vice Chair of the Chippewa Valley Ethanol plant and she was
extremely complimentary to it. She shared with me that the plant
is going on 11 years and they have returned 150% of the original
investment to their investors. She said why in the world
wouldn’t you want to build your own Ethanol plant? Well I
don’t have 100 million dollars. They have been so
successful, and they have been it for so long, they feel really good
about it. She said one of the things you must consider is if
local people own the plant, they are more forgiving for the
light, the noise and if somebody owns a plant, it is an investment
firm. She volunteered about 3-4 years ago they put the thermal
oxidation process in place and reduced the odors. They had
a very nice return per share based on the bushels that each shareholder
sold to the co-op last year. She also said, she thinks that corn
based and cellulosed based at some point will become
complimentary. Now I called, I talked to 3 people, it is a very
different operation, it is locally owned and has been in process going
on its 11th year and they are just tickled pink with it. I do not
know what their water source is. It is on the site of the
plant. They apparently treat their own sewage but several of us
have been to Lima, the plant under construction. I have
personally not seen the plant in operation yet. If we can get
people around the table again and discuss this, what kind of
questions you have, noise, smell. It is there. This
particular plant has processed soybean wheat but primarily corn.
The find the wheat to be more abrasive to their equipment but the corn
is most productive on the cost per bushel basis for Ethanol but they
have used all three, and I don’t know what precipitated that but
they have.
Bob Thompson - Minnesota, wonderfully been one of the early
states to aggressively mandate so much % Ethanol in gas, so much
Soymethalestor or Soy Diesel and again, it is over a decade now.
So that mandated that. They have done a wonderful job. I say if
we are going to go to school on anyone, they are a good group to go to
school on. \
One of the things that drove that out west is that corn is so
much cheaper there than it tends to be over hear. That is why
they got into the whole process earlier. There may be 30-40 cents
a bushel difference in corn prices out there particularly during
harvest because I have so much. I have to get rid of all of
it. Of course that is slowly changing into Iowa being close to
being a corn-deficit state. Regarding the Early Investors,
we talked to a Co-op manager from southern Wisconsin a few
weeks ago. His Co-Op invested 75 thousand dollars and an Ethanol
plant. After 3 years, they had 100% of their investment back and
he sold their share to somebody for ½ million bucks.
He 75 thousand bucks and a 40 million dollar plant. If you take
that ½ million bucks and apply that price to all the stocks, it
is over 260 million for a 40 million dollar investment. That is
why is getting so much attention. I am sure if you want to invest
in this, you can.
Stewart – Big Bucks for the early on. I am sure if you want
to invest in this you can.
Matt Miller – It is so interesting to me because if you think
about it, take the example of STEP II. When STEP II came to
Perrysville, no one ever set around the table locally and determined
whether or not there would be a market for plastic toys and whether or
not the company would be profitable. And yet somehow this
particular discussion of this business that wants to locate here has
come down to us trying to determine whether or not it is
viable and they can actually be a profitable company and I don’t
think that is our role. No other company has approached this area
and did we try to figure out whether or not they had done their
homework on their profitability. Our issue has to be,
I think more than anything else, do we have the resources to the
support and we know the biggest concern, I would have to agree is the
water. We know we have the human capital to meet their staffing
needs and we know that we have the land. Set aside for this type of
industry and expansion and so for us to spend much time trying to
figure out whether or not it is going to be viable economically,
whether they are going to make a profit, I don’t think that is
our role and responsibility. In fact the company is saying that
they are willing to invest $100 million dollars here in this
community. Chances are they might feel that they are going to be
able to profit.
Glen Stewart - I guess I respectively disagree with you
from this aspect Matt in that there are 5 of us around this table that
have to vote yea or nay and we want to know that we are making a good
decision based on bringing a solid business to Ashland, Ohio if
we commit the resources that we have to commit.
Matt - Those resources, that is what I would like to hear, what
are the resources that you feel you have to commit? Additional
water for the land and the Industrial Park, and I am sorry for I have
not read all of the articles in the newspaper, Is the land a gift?
Glen Stewart - No. The land will be purchased.
The price of land varies depending on a number of jobs it is going to
bring to our community. For what it is going to cost our community this
is a low number of jobs. So the price of the land in my opinion
should be higher and that will be my proposal to them with the
understanding they need to make the final decision with Council.
Bob Valentine 1- Our location is technically a good
location. I expect we will get some negative feedback.
Stewart - in response to Matt’s question to put on the
table, Yes I think we have the people. I don’t think there
is any question. In the 2 visits that we made, one of them
trained a bunch of people off site for 12-15 weeks, hired local people,
took them somewhere and trained them.
One of the two plants have a record of they have established a training
process. Both of them have apparently resolved their water supply
problem. The one in Blissfield is just a short distance form 2
major natural gas transmission lines. They have a gas line across the
street. Plus they had 6000.00 feet of rail right within the
property, plus they were sitting on a gold mine with the Pepsi Bottling
Company right next to them so they can sell the CO2 to them.
Is there a diversification option with this facility like that, CO2,
Fish Farm , we have heard of different things.
Glen Stewart - When we talked to the Silver State people, I
talked to them the morning that they made their presentation, and they
had no plans for capturing the CO2 and had no diversification.
They were different than the 2 facilities we visited in respect to how
they were going to market their Ethanol. They were going to
basically go retail and the other 2 plants were going to sell directly
to oil companies as I recall.
But that could be an option for economic development or for someone
looking for a location?
Glen Stewart - That is true.
Matt Miller - So the things that the City will supply would be
water, we will be selling some of the city-owned property and what else
would there be, do we run at our expense, sewer?
They would be using our sewers. For instance the water, figuring
roughly what our water rates are, their water bill will be 86,000.00
dollars per month.
Does that water need to be treated? No. They do not want
treated water, because they have to take some of the chemicals out that
we put in. They cannot deal with chlorine.
We do not have any non-treated water to give them.
There is no way to get any out there that is non-treated.
It sounded great to begin with.
The cost of land, water, cost of repairing the roads.
Mayor Strine – I am going to propose to Silver State that they
pay the City per gallon of their production .0005 cents per gallon to
the City to maintain roads.
That would be kind of like an impact fee wouldn’t it? That
is very good.
So then with the Railroad, does it cost the City of Ashland anything
too.
Glen Stewart – It is my understanding the Railroad is very
excited about having the opportunity for the increased rail traffic.
Does anyone around the table have any thoughts about why, we covered
the water, we know there is noise, there is light, possibly an
odor. Does anyone have any experience or any thoughts on this
that we should just stop and not go any further with this?
Matt Miller - The citizens have expressed concern, because I will
admit the calls I have had have been against it. But they based
them not on specifics, they based them on whether or not they think
that the Company will be able to survive well into the future and to me
I don’t know that that is a decision City Council’s charge
was making.
Stewart – I concur to a degree, I feel we have to be responsible,
we do not want a 60-acre junkyard out there.
Matt – Absolutely and that is why I ask the question, can these
sites be cleaned up easily or are these something that would remain
there. Someone had told me that alcohol is not a detriment to the
ground, I don’t know that. It evaporates.
Mike Welch -I can think of one advantage, I would think Ashland School
board would be rubbing their hands together with property values on 100
million dollar plant.
Stewart – I am glad you mentioned that Mike, both Lima and
Blissfield said that they would not ask for anything that would impact
the schools from an abatement standpoint. Am I right there Ruth?
Ruth Detrow - Yes.
Matt Miller – Many of them have served on some of the committees
with this cash and so on and if you recall so often we hear people tell
us these stories of years gone by when Ashland had the opportunity to
do thus and so and because of fears and local special interest, it was
prevented from happening and people always will refer to the fact just
think what that would have meant to our community if we would
have stepped ahead. Whether those stories are true or not, I
don’t know. Some of them certainly sound true with some of
the parties that comment on them, but the reality is it is hard
for me not to think that we are probably sitting here at a table
discussing one of those very situations where it truly will forever
impact the well-being of the City. I do think we are at a port,
because it is cutting-edge, there is no doubt in Ashland and in the
past hasn’t always pursued those opportunities with great
enthusiasm or interest.
Mayor Strine – To the best of my knowledge, I don’t think
that this Company knows whether they can get the natural gas they need
or the electric they need. We will know in a couple of weeks. So if
they cannot get the natural gas they need, it is not our fault that it
falls through.
Matt Miller – And I will tell you that I did not come here trying
to convince people that this is the route to go because Mike is the one
that has been filling us in all along the way and I will tell you from
the stories that Mike tells and the homework that he has done, it
definitely appears as though the positives out weighs the negatives and
the ancillary effect of having such a plant, lets face it we are
talking about Minnesota, a town almost unknown , simply because such a
plant exists and I would think that the attention that it can bring to
the area and the other opportunities whether it be a bottling company,
or a fish farm, dry ice, it sound that it would have an impact.
This is an FYI, We probably get a call, it seems like every month from
a group that wants to put an Ethanol plant somewhere in Town and
Country’s trade area, and can you supply us the beans or the
corn. It is a Hot topic, it is a highly subsidized product and I
think that is where some of the un-comfort comes from this, how long
will the subsidation be around. If OPEC sneezes the world and
energy market reacts. We all run to get Kleenex and that is a
positive or a negative for us. Also what happens in DC with the
changing of the guards so to speak, there is a huge group that is
quietly against taking Ethanol outside of the Midwest for various
reasons and it is the follow the money trail. It is a highly
debated topic and I think that is where part of the un-comfort comes
from. One of the political things are in order to meet the EPA
standards, they still need the replacement for the MTBE and Ethanol is
the only game in town. It truly is and at that standpoint, right
now we have about 5 ½ - 6 billion gallons a year and it has to
grow to 12. Sharrod Brown now is very energy conscious and I can
tell you that for a fact. That is the new Democratic control
thing. He is on the Ag committee by the way. The Democrats in
general are very pro-energy. I think it is a wonderful
opportunity if for no other reason than MTBE and I am just speaking
Ethanol, that I am saying that there is a lot of people expressing
interest and plopping money down to build a facility, products have to
be available, etc, etc. I think those are bonifide issues for
this discussion. One thing too I think stood out a little in my
mind, you are more experienced than I am, but the whole marketing
approach that these guys have compared to some of the traditional, they
are marketers of E-85, gasoline and everything and their intent is to
the best of their ability to develop E-85 dispensing stations around
the state and if they do that there the blender of record they will get
the 51 cents per gallon subsidy. None of the other Ethanol plants that
I am aware of do that, they are just going to sell their Ethanol into
the main stream Ethanol market and so they will miss that 51 cents. So
these fellas will have better staying power if they are somewhat
successful in doing that then the normal Ethanol plants. I would feel a
little bit better about their viability in the long-term than some of
the other.
And I know the Lima facility has started and stopped and started
because of the capitalization. The realization
is the capitalization probably wasn’t there to begin with.
Just make sure they have the money. Dean Homayouni told us they
have 260 million dollars lined up for something like that.
Matt Miller – I think that is an excellent point, more so than
anything we have talked about because if that is a possibility that it
would be, construction would begin and it would not finish, that would
be a messy situation.
We have talked to 2 different ones and the payback was in 5
years. That is a pretty good return on the money. And that
should tell us that they are there to be in business to make money.
Kim Edwards – I would just like to take a minute to commend this
Council because I think it is important to discuss this publicly and
openly so the public understands that you are looking at their welfare
their benefits and I think that is important for all of us to
understand and appreciate.
Stewart – I appreciate that Kim. It is, we are taking this
very seriously. I am not trying to make a decision on
whether a business is a STEP II or not. I think it goes so
much deeper than that because of the resources that are required and
the commitment as the Mayor has pointed out it is a huge decision and I
personally believe that the people around this table that represent the
people outside of the city of Ashland has as much or more at stake in
this than we do. We represent a lot of people that make their
livelihood outside of the City of Ashland, Ohio whether it be a Farming
process, farm equipment, gasoline, fuel oil. I think it is so
much a bigger project, it has so much more impact outside of the city
that we felt it was an opportunity since we have initiated
these meetings and this is the fourth time that we have met if I
recall. It was an excellent topic to discuss to help us make a
decision. It is okay.
From a Farmer’s point of view, they have to like it? Right
Richard? But it is going to go somewhere. Sure. I
think it would help the Co-Op big time. It is a great market
for corn for a grain farm and the other side of that the
Dairyman, we have a lot in this area, the DCG’s may provide some
protein to their rations at somewhat less for cost than bean
meal. So there are winners on both sides.
Matt Miller – Of Course Glen that is why we are here. If we
did not think we had an interest in or stake in it we wouldn’t
be. We are here because we believe it also impacts people outside
the city. One other comment I would like to mention is we
do have to remember when we talk about sound, lighting and fumes, this
is our Industrial Park, we would expect all 3 of those things in our
Industrial Park.
Stewart - That is exactly right. Whether it comes from a
firm similar to STEP II or Ethanol or a Tire maker. It is an
Industrial Park we have invested in to develop jobs for our Community,
not just the City but Ashland Community and I try to bring that out
because it is more than Ashland City.
Matt Miller- One of the things that have been a pleasant surprise is to
hear that the truck traffic won’t be as extensive as some might
have imagined am I correct that they don’t rely a great deal on.
Glen Stewart –20 Trucks/day. Our product is probably going
to go primarily by truck from what they told us because they want to
hit the retail market and they cannot depend on the rail and you
can’t pipeline it. It has to be truck. That is why
Ethanol costs so much in Ohio right now because we do not have the
source that is that close. It has to be trucked in and that is
why E-85 costs more.
Bob Valentine - I think that that is another point, I think the
mayor kind of brought that up too. We are talking about doubles as far
as trucks are concerned and what effect that is going to have on our
roads and I think the point there he talked about in the contract we
were going to try have some money set aside, is that correct
Mayor? My point is that is the problem. 20 trucks a day and
100 railroad cars every 8 or 9 days.
Matt Miller - 20 trucks a day is minimal compared to other
options that might be constructed in our Industrial Park.
Bob Valentine 2 – The size of trucks, because of what the damage
does to city streets. We have to make sure the roads are going to take
what you are putting on them or you will be out there patching and
fixing all the time.
Glen Stewart – They are still going to be governed by an Axel
weight. If the axel weight is proper, there is no more damage
than a Wal Mart truck.. I believe there is some risk to it and
right now I feel I am sitting next door to one of the biggest risk
takers in the community right now.
Matt Miller – As an individual, one of the ways to reach success
is to diversify your portfolio and for this community it is only in our
interest to diversify our portfolio and make sure we are involved in a
number of industries so if there is a downturn in any specific one, we
will have others that will keep us afloat for years to come and the
ancillary effects of this decision I have a feeling will be far
reaching and will impact the quality of life in a positive way of all
of our residents.
Bob Thompson – For the record, Ethanol is an MTBE replacement, to
me that is the biggest hot topic, I think it is going to be around for
a long time. Just whether it is E-85, it is frosting on the cake,
that is a whole other set of issues that come to the table.
We will go around the table and give each individual an opportunity for
a comment.
Paul Wertz - No comments.
Anna Tomasek - This is an excellent project and obviously as
Finance Director I am here to support any delay we can financially and
my office, right now looking to see if we can do research and a grant
possibility for a Reservoir, but everything right now is preliminary.
Evan Scurti – I want to just thank Glen Stewart, he is our
researcher. I understand what Matt is saying, we have done more
research on this project because it is such a huge impact and requires
so many resources and from an economic development prospective when I
have a project and someone calls me I typically don’t research
the market to try to decide if production is going to be around the
Midwest. The main thing you want to research is the people behind
it, their skills their background, because as I have explained Dean and
Hugh Canady and the rest of their team we talked to their expertise is
not making Ethanol and they admit that and that is why I think we
as a community we need to work very closely with the builders of the
plant to make sure it is not a white elephant. I think Dan and
Hugh have a good plan in selling to the gas stations.
Mayor Strine - I think in my discussions with Council and with
the Sliver State people that I have mentioned that we were going to ask
30,000.00 dollars an acre for 58.9 acres and also that they understand
we are going to have to drill another well for our future water use and
that they are willing to include in the proposal 300,000.00 dollars
towards drilling that well. I also need to tell them that these are
small items now, some blueprint effects the current location of the 12
inch sanitary sewer, Silver State Ethanol will bear the cost of the
location. All permits will be the responsibility of Silver
State. The City of Ashland will retain Main line utility
easements; details need to be addressed as to pre-treatment of sanitary
sewer defluents. Ashland business park covenants are to be part of the
proposal. We have a 20 page covenant that is on the deeds that
they have to follow. The City of Ashland will provide up to 700,000.00
gallons of water per day for the Ethanol complex and cost per gallon to
recover our expenses. Basically, that is what I am going to throw
at them.
Bob Thompson- I think it is interesting to watch and I think it
is an evolutionary topic from a 100,000.00 feet high as the price of
corn moves and as the price of crude moves as an oil-producing nations
will either love us or hate us. If I had the chance I would ask
them to run their financial projections over 5 years and after 5 years
use the Federal and State subsidation and see what the numbers look
like. As the crude moves and corn prices move.
Bob Valentine 2 – They came looking for us right? How many
people have come looking for us? I am just saying that it is a good
idea. I am happy they are here, I am happy Novatec is coming here.
Ruth Detrow –One thing, the byproduct is very important. I
know one person very well who trucks the corn by product to his dairy
cattle to Anheiser Busch and he loves it he says it is just terrific
and so it isn’t like you are taking the corn away form other
things, but the byproduct is good for the animals. The people
heard at first how they are planning to sell this product. I
asked about it at the meeting when they were here and they say they are
going to mix it here right from the trucks. They are doing the
blending. We are also going to have to watch to make sure they
have good management in the company, they are wonderful sales people,
they apparently are rich. They are going to have to manage this company
well. I am worried about our retention basin being able to hold
the amount of added sewage.
Jim Cooper – We do not have a problem with that.
Kim Edwards – In my past experience you almost have to be an
expert to trust the experts and I think you are teaching yourselves
very well. The other thing I would caution is, this is not a
saving grace for the community or the city, this is not something that
is going to be all in one basket to save this community. There is
no saving to be done. Sometimes I think residents may get that
impression. We have quality in this community and throughout.
Jim Cooper – I think the Mayor hit it right in the Bulls eye, I
don’t think it is Ashland that is going to scotch this deal, I
think it is going to be the gas and electric if it gets scotched.
Bob Valentine – I just appreciate all of the input everyone is
putting into this, I think all Council have been researching. A lot of
information to keep up on. We have to make the final
decision. It is a step in the right direction.
Al Holdren – It will be good for farmers. I appreciate being
involved in this.
Richard Wesner – you have to remember Agriculture is the number
one industry in Ashland County and I think it would help farmers in
Ashland County.
Mile Welch - I will go along with that, if you want to preserve
the land keep the farmers farming and the schools will sure like the
taxes.
Matt Miller – I just want to say it is interesting we were
in a work force development meeting with several surrounding counties
and at the end of the meeting we always ask for county reports and we
expressed the fact that we had been chosen as a possible site for an
Ethanol plant but there were a lot of concerns and we
didn’t’ know if the city was going to choose to except the
plant and I will tell you it was interesting to me because the
commissioners from the other counties looked on it as shocked and said
what do you mean, why would you try to keep it out? If you
don’t want it, we will take it. I thought that was a very
interesting comment for them to make and obviously that have not done
the homework that you have done, but it was interesting that it would
be their response. The thing I think the community needs to know,
it is very apparent that City Council and the Mayor have taken the
steps to make sure that the City is in no way taken advantage of by
making sure the company, if it does locate here will pay for the water
they receive and they will pay significantly and they will also pay for
the wear and tear of the roads and they will also pay for the land and
the cost of our new Industrial Park. So the public needs to know that
it is not as though we are giving something away to this company freely
on a hope that they might succeed, you are doing your homework and you
also making sure that the details are taken care of so if they do
choose to come here it is more than just an investment in capital, it
is an investment in the community.
Marla Akridge - Is it a risk? Sure. But like Matt said
earlier, should we take a risk. I want to thank everyone in this
room, because I know several of you have done a lot of homework on this
but it is also important that we keep doing our homework, especially on
the diversification that is out there. From the Commerce aspect there
is $7.00 dollars turned over for every one they put into this for the
Restaurants, gas stations, grocery stores and everything there.
Duane Fishpaw – I am glad we can get together at a table like
this and talk about things and the pros and cons and like Matt was
saying, I think there were things in the past that we missed out on and
If they would have had groups like this getting together and discussing
issues, that maybe that would not have happened.
Tom McGee – First it is remarkable to me that when you have a
large company normally people are fighting for it really hard, they are
giving all types of abatements and a lot of , you here about this all
the time. This is a remarkable opportunity for Ashland. I
would strongly suggest that if we feel the gas and electric can be an
impedment to getting this company here, that we need to do some work
with the gas and electric people so they get on our side to try to
procure this for us. They have mentioned they would be
contracting with good engineering firms and that the firms that they
mentioned Feagin and the BPI, these people are renowned in the world
for doing key turned operations on Ethanol plants and I think we could
rely we are going to get the best engineering firm to do it and they
also mentioned that they would have professional management team that
knows about Ethanol plants. The business sounds pretty good to me.
Glen Stewart - I heard the Fish Farm referred to a couple
of times, the heated water coming off
of the cooling towers for the Ethanol plant is proposed to be piped
across the street and there is a firm that wants to come in for resale
market or the retail market , fish that would normally be caught in
warm waters. Adjacent to their property line, a dry ice producing
plant utilizing their Carbon Dioxide. So as this has been around
the table, there are complimentary processes that stem off from this
Company. I am going to evaluate this evenings meeting and I am a little
disappointed that we did not have more from outside of the community. I
really compliment everyone in sharing. I hope you feel this
evening was of value and I look at it as a valuable input and I guess
by looking at the Council people around the table, the Mayor, it is
good input and I appreciate it. We will look at another get
together on another topic in another 3 months. Sometime in
May or June, we will get together again.
Silver State was talking to the gas company and electric company, did
they say how that was going. It will take 2-3 more weeks to
get numbers. I do not know who we will need to contact but it
sounds like our destiny is in the hands of people outside of our
community and our interest is all of us. Any more
comments? Curt Young any comments.
The work session ended at 8:35 p.m.
Submitted by
Valarie F. Bishoff
Clerk of Council