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City pays $238K on top of $495K payout to Acciona
by Rick DeClue · News · March 09, 2017
The West Branch City Council voted unanimously Monday to borrow funds to pay Acciona Windpower $495,000, awarded recently in the wind turbine company’s lawsuit over property tax rebates from 2013 and 2014.
In March 2016, the city arranged a line of credit for a maximum amount of $750,000 from Community State Bank to be used in the event West Branch lost its appeal of the judgment. Acciona originally sued for five years of rebates, despite shutting down production and eliminating most of the staff at its facility on Fawcett Drive, south of Interstate 80.
City Finance Director Gordon Edgar said the city will sign the loan agreement for the award amount this week and make the payment to Acciona within a few days.
Edgar estimated the legal costs associated with the court case to be somewhere in excess of $200,000.
The CSB loan will have a term of five years and an interest rate of 3.25 percent. The bank reportedly waived or lowered some of its fees associated with the loan transaction, according to City Administrator Matt Muckler.
The council agreed with the five-year term, but intends to repay the loan back in three years, as Acciona’s property taxes come in. The three-year payback, as projected, would include interest payments totaling just under $38,000 at CSB’s interest rate.
Maggie Berger of Speer Financial, Inc. advised the city to take the five-year term from CSB, then refinance the amount later this year as part of a previously planned bond financing to cover, among other things, the next stages of city park improvements. She believes the bond rate could be as low as 2.25 percent, saving the city some interest costs.
The loan payments and all costs — legal and financing related — are covered from Tax Increment Financing dollars, as structured in the original TIF agreement. Any general funds advanced by the city have already been or will be reimbursed with TIF dollars.
Despite the city’s experience with Acciona Windpower, Mayor Roger Laughlin said he is ready to move on. He said he sees the city continuing to pursue local jobs and economic growth through various means, including the TIF under the right circumstances.
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