Nestle, county economists’ math doesn’t add up

Economic consultants sparred earlier this week over the degree to which Nestle Waters North America plans to harvest spring water from Chaffee County adds up to economic benefit for Chaffee County.

During public hearing earlier this week, findings by the county’s economic impact consultant, Jean Townsend of Coley/Forrest differed dramatically from those presented by Nestle consultant THK Associates as the county tries to determine what economic impacts the Nestle project would have.

Nestle hopes to receive county approval for a special use permit and 1041 regulations to pipe spring water from the mouth of Brown’s Canyon in Nathrop to Johnson Village. There, the water would be loaded onto trucks for transport to a Denver bottling plant to become Nestle’s Arrowhead brand of bottled water.

Demonstrating economic benefit is a condition of the 1041 regulations. Townsend found fault with Nestle’s portrayal of those benefits on several significant fronts including the following:

• Though benefits were calculated on a 30-year term, Nestle has not confirmed the duration of its water extraction plan that could be more or less than 30 years.
• Local government property tax revenues are 61 percent less than Nestle estimates
• There will be no sales tax revenue to the county from the sale of diesel fuel to Nestle trucks as well as electric utility use as THK purported. This is an error THK admitted to in subsequent testimony.
• Local government expenditures would be higher than Nestle estimated in part, because the county would have to hire ongoing technical expertise to monitor Nestle pumping operations and any subsequent mitigation
• The Nestle application did not address, quantify or provide for the mitigation of the economic benefits lost due to the permanent removal of spring water other than mentions of educational projects and restoration work to the fish hatchery site on the property.

Townsend suggested the county work with Nestle to establish a mitigation fund specifically earmarked for the project and funded by Nestle that would help prevent against the county incurring negative financial impacts.

THK’s Peter Elzi questioned Townsend’s math with respect to property tax calculations and pipeline valuation. Townsend, bristling, defended her math on property tax calculations and explained that she used state mandated guidelines for assessing the value of the privately owned water pipeline.

Elzi also noted he recently received revised information from Nestle that showed the project more than doubled in cost from $4 million to $8.2 million. Townsend said she would have to take a look at those numbers in order to make any re-calculation of net tax benefit to the county.

During public testimony, comments by the audience also weighed in on both sides of the coin.

Buena Vista realtors Tom Bell and Brett Mitchell disagreed with the prevailing sentiment in the room, saying Nestle would have a positive impact on the local economy. Bell frankly admitted he is a realtor who stands to make money on the project and that he and others who will gain personally from the project will spend their earnings to the benefit of the local economy.

Avid fly-fisherman David Moore, spoke of the “myth of economic benefit” saying Nestle is acting like it’s doing the county a huge favor by “taking our natural resources.” Businesswoman Colleen Kunkel told commissioners that in her review of the Nestle 1041 application, she found “no evidence that Nestle is a sustainable business of value to this (Chaffee) county”

In an impassioned speech that drew applause from the audience, Salida resident Rebecca Owens told commissioners, in part, “Any company that proposes to harvest on those valuable resources (that attract tourists) and move it out of the county for their profit, just so they can market the product as pure Rocky Mountain spring water and sell it to the folks who actually still buy bottled water, is not a good match for Chaffee County.”

A final story from last week’s hearing on the topic of hydrology/wetlands/augmentation will be featured in an upcoming post.