Economic report critical of Nestlé benefits

A new economic analysis of the Nestlé 1041 application from Jean Townsend of Denver-based Coley/Forrest is highly critical of proposed benefits to the County from the Nestlé Waters project, and goes so far as to suggest that project revenues may not even cover County expenses.

Some of the issues cited by Coley/Forrest in the April 16 memorandum to Chaffee County Development Services Director Don Reimer include:

• Property tax revenues from estimated increases in NWNA property valuation are exaggerated, both because TABOR limits the ability of local governments to benefit from increased revenue and because a majority of school district revenues are controlled by the State.
  

  Using Chaffee County as an example, TABOR constrained incremental property tax revenues that the County would receive from the Project are estimated to be about 57 percent lower than if TABOR were not in effect. The combined impact of lower assessed valuation and TABOR limitations results in a 61 percent downward adjustment in property tax revenues received by the County from the Project, relative to the THK estimates.

  For the Buena Vista School District, more than 60% of its property tax revenues (16.111 of 26.690 mills) are controlled by the State under its equalization formula and are not directly available to the District. So, revenues from 16.111 mills should also be excluded from the analysis.

• Whether or not Nestlé trucks purchase diesel fuel in Johnson Village is immaterial, because State law does not allow local governments to collect sales tax revenue on fuel used by vehicles which travel on public highways.
• Sales tax revenue from electricity usage by the project will not be available to Chaffee County because State law provides an exemption for manufacturing firms.

In addition, local government expenses may be understated, the memo suggests, because construction impacts have not been considered and because estimates of on-going impacts are arbitrary.

The report also notes that economic projections haven’t considered spring water as an asset, the loss of which should be factored into the analysis of the 1041 application.

The NWNA Project will trigger a permanent loss of a natural resource, spring water. There are distinct economic and environmental benefits from spring water and a corollary economic opportunity loss with the permanent removal of spring water. This lost economic opportunity has not been addressed, quantified or mitigated in the 1041 Application other than an offer to consider limited fishing access and educational opportunities.

Download the Coley/Forrest economic analysis (PDF).