Nestle by the numbers: Commissioners debate economic impact

The Citizen is recapping only the major issues debated by the Chaffee County Board of Commissioners during a special hearing held July 1 to consider Nestle Waters North America proposal to harvest water here for its commercial bottling operations. Additional posts will cover water, wetlands and air quality.

NESTLE ECONOMICS

Commissioner Tim Glenn said one of biggest issues is loss of economic opportunity due to Nestle’s proposal. He noted economic impact analysis by county consultants Coley Forrest placed a higher value on spring water than river water and Nestle obviously puts a significant value on natural spring water.

“We have a resource here that has the ability to create large economic benefit,” Glenn said. Fellow commissioner Frank Holman countered that he could understand Glenn’s position but personally couldn’t can’t look at the issue that way: “There’s too many ifs and other springs available.”

Riffing off Holman, Dennis Giese added the subject property had been for sale on and off for 15 years until Nestle found it and realized it was a valuable resource and came to the county with a proposal to develop it. Giese said “all of us and the public would like to see more economic benefit but this proposal doesn’t do that.”

The commissioners were in agreement that Nestle should do all it can to hire at least 50 percent of its truck drivers from Chaffee County if available, and use as many local contractors, supplies, and materials as possible for building project infrastructure.

During the afternoon’s deliberations Giese and Glenn frequently used the word “struggled” and they did so again when talking about a Coley Forrest suggestion to establish a perpetual mitigation fund, funded by Nestle, to cover unforeseen county expenses related to the project. Giese wasn’t sure what items should or shouldn’t, could or couldn’t be included but he wanted to be sure taxpayers wouldn’t have to pay for any litigation the county may find itself in with Nestle. Giese also concurred with another major concern aired by the public that  “our staff doesn’t have the expertise or time to constantly monitor (the Nestle project);” so outside sources will have to be used which Giese said  he didn’t think taxpayers should have to pay for either. Holman reiterated his belief that if the monitoring is done right there should be very little litigation. Giese likened the situation to a marriage where the parties don’t plan to divorce. Holman seemed uncomfortable with the mitigation fund saying “we wouldn’t do this to any other company but for the 1041, but I also understand the need to protect taxpayers.”

Glenn said he agrees with the oft-heard public refrain that “the benefits don’t outweigh the potential for losses.”

So what are the anticipated economic benefits? County consultant Jean Townsend of Coley Forrest estimates Nestle’s project will generate $3,646 in annual incremental property tax revenue, while Nestle consultants THK Associates Inc., put annual tax revenue at $19,831. The discrepancy stems in large part from interpretation of the impact of TABOR upon the revenues. Despite being challenged by THK on this point, Townsend stuck firm to her number. Other revenue to the county included one-time sales tax revenues from workers needed to build the Nestle infrastructure. Nestle’s THK estimates sales tax of $3,185 while Townsend believes the number will be more in the neighborhood of $1,274. Townsend estimates property tax benefit direct to Buena Vista Schools at approximately $11,292. Both consultants agreed one-time building permit revenues to the County will total $12,455.

Though it did not quantify it, THK also wrote that Nestle improving the wetland and riparian habitat at the hatchery site will have a “profound net positive effect on Chaffee County natural resources.” THK also countered Townsend’s concerns about  permanent loss of value to the county of the spring water resource by pointing out that project spring water is not a county resource, it is a private resource so there is no net loss of economic opportunity.

Bottom line: net quantifiable income to Chaffee County – after initial start-up fees and sales tax from construction employees – will be somewhere between $3,646 and $19,341 annually and nearly $11,300 for Buena Vista schools.

Clearly, the biggest annual economic beneficiary of Nestle’s project, other than the company itself, isn’t even in this valley. Under terms of a 10-year water lease agreement, Nestle will pay Aurora $200,000 each year for 200 acre feet of water to replace the spring water it will harvest here. The lease may be renewed for an additional 10-year period.