Representatives from Hellervik Oilfield Technologies paid another visit to Fiscal Court today with more information on their intentions to purchase the Rocky Hill Natural Gas Plant, owned by Atmos Energy. Gary Minard, General Manager of the company, said that he understood why some area residents still opposed the plant being in operation, specifically the noise factor, the company being from out-of-state, and the fact that the company is unknown to this area.
The company is looking to secure industrial revenue bonds from the county, however, does not need the bonds in order to purchase and operate the plant. So what does that mean, exactly?
Industrial revenue bonds are like a governmental stamp of approval on a business, usually a factory or other type of manufacturing facility. Once issued, the company usually saves a huge amount in tax rates, property taxes, insurance and interest rates. A government entity (the county, in this case) would issue the bond for a certain amount to the company (Hellervik). The company keeps all revenue that it generates, but the sponsoring government would hold title to the underlying collateral of the company until the bonds are paid back. This puts financial liability on the company, not the government agency.
In the event the company fails, the government agency is not out any money, but could suffer credit and reputation damage. The county has been researching the risks that could be involved with issuing the bonds, but so far, everything looks to be in the county's favor.
Minard said that Bank of Edmonson County would be able to provide proper financial information to the court in order to prove the company's assets and credit. Hellervik is working with local attorney Greg Vincent, not someone they have on retainer, or an attorney from a larger city. Different court members noted that non-reputable companies usually have trouble when trying to go this route, and discussed how Hellervik has cooperated above and beyond the requirements.
Minard also said that benefits to the county would include: a large amount of tax revenue, 25 new jobs, fair royalty payments to landowners, and the company would be very happy to host several town hall meetings to hear from the public. Minard said the company was more than happy to provide business, personal, and credit references. The company currently has agreements with approximately 1/3 of local landowners.
Judge Cannon and several magistrates asked some questions, had more discussion, and agreed to vote on the bond issue at next Fiscal Court meeting. The court seemed very positive in regards to the issue, but wanted more time to be sure that issuing the bonds would be best for Edmonson County.
We spoke directly with the Chairman and CEO of Hellervik Oilfield Technologies, Dr. Lowell Hellervik and asked him point blank why his company is different than the one that Edmonson Countians were very upset with. "We're not a large utility company," he said. "We're more of a home-grown kind of organization that is probably more aligned with the population of Edmonson County. We want to help Edmonson County citizens get a solid footing on their contributions to the natural gas flow and the gas plant."
When asked how he could convince a small county in rural KY to do business with an unheard of company from North Dakota, he replied, "If folks will just look at the character of our leadership and ownership, I believe that they'll find we're a reputable and honorable organization that will provide a very positive influence in Edmonson County." Mr. Hellervik noted that he was a "small-town guy" himself, and has many similarities with folks here.
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