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T & L & KC APPEAL TAX BILL TO STATE BOARD

 

                                

HOW WILL THIS AFFECT LOUDON CITY & LOUDON COUNTY BUDGETS?

BY: PAT HUNTER
 

Have you been reading about Loudon City's budget dilemma? City officials have been concerned about a possible property tax appeal from two large property taxpayers, Kimberly Clark Corp., and British owned Tate & Lyle ( A.E. STALEY). These industries are located within Loudon's city limits. Loudon City and Loudon County officials were waiting for August 1st to learn if Tate & Lyle and Kimberly Clark would file appeals with the Tennessee State Board of Equalization. According to the Tennessee State website, two appeals were filed on July 19th. Website links have been furnished so you may track the appeal process, it's all a matter of public record.  

The Loudon County Budget Committee also discussed this appeal and potential tax consequences to the county budget, some months back. According to  Budget Committee and Commission's discussions, the appeal may impact county coffers by an estimated $800,000 (est.) pending the state appeal outcome. CLICK VIDEO BUDGET COMMITTEE TAX APPEAL $800,000              JUNE 1-2011 BC HANDOUT PDF

Although, the Budget Committee (BC) met on July 25th, interestingly, this matter was not on the BC or commission workshop agenda for open discussion as commissioners also consider employee pay raises and insurance benefits.

Loudon City's budget is also on hold pending the appeal deadline before proceeding with further budget discussions and actions. While Loudon City's budget is not dependent on sales tax, Loudon City is very dependent on their industrial tax base about $1,580,859.00 ending June 30, 2010 Financial Audit. See below: CITY OF LOUDON TOP 10 TAXPAYERS and "City of Loudon may delay budget adoption".

ENVIRONMENTAL ISSUES

These industries have also been the topic of discussions and complaints when it comes to pollution and permit issues. Loudon City hasn't appointed a new representative to the Loudon County Air Quality Task Force since 2008 when their representative abruptly resigned.

TAX INCENTIVES

As the two corporations move forward with their respective tax appeals, county and city officials offered tax and other incentives.  

Kimberly Clark -  Click CORPORATE WELFARE: Tax Break for "Industry X"    1999-2000 Tax Break for Industry X dubbed Project "Phoenix"

and yet another tax break for KC: Loudon County Commission November 03, 2008 Minutes - 

Loudon County Economic Development � Pat Phillips, requested discussion and possible action on the following item:

Resolution of Payment in Lieu of a Tax Program Expansion Approved

1. Consideration of a Payment in Lieu of a Tax Program Expansion for a Local Industrial. After much discussion, A motion was made by Commissioner Park with a second by Commissioner Gardin to approve the resolution of adopting a payment in lieu of a tax program expansion for a Local Industrial. Upon roll call vote the following Commissioners voted Aye: Marcus, Meers, Franke, Bledsoe, Duff, Park, Gardin and Miller: (8) The following Commissioners voted Nay: Maples and Shaver: (2) The following Commissioner was absent: (0) Thereupon the Chairman announced the motion Passed: (8, 2, 0) Resolution 110308-M

 

Click Tate & Lyle seeks tax break 

Loudon mulling proposal that would give company 50 percent cut over 5 years

..." To help fund the expansion, Dupont Tate & Lyle submitted a proposal in April through the Loudon County Economic Development Agency for a 50 percent tax break over five years, amounting to $120,000 in city taxes and $185,000 in county taxes. The tax incentive has not yet been OK'd, but Mirshak said the company will proceed with the expansion in hope that the tax break will receive approval."...

Loudon County Commission Meeting Click Minutes for August 9, 2010 - Page 4

Consideration of Adopting a Click Resolution Authorizing the Industrial Resolution

Development Board of the City of Loudon to accept from Dupont Tate &

Authorizing Lyle Bio-Products an in-lieu of tax payment for a manufacturing expansion Industrial Develop pursuant to TCA 7-53-305.

Board Acceptance A motion was made by Commissioner Marcus with a second by Commissioner of In-lieu Tax Gardin to approve this Resolution.

Payment Upon roll call vote the following Commissioners voted Aye: Meers, Franke, Bledsoe,

Approved Duff, Park, Gardin, Miller, and Marcus: (8)

The following Commissioners voted Nay: Maples, and Shaver: (2)

The following Commissioners were Absent: (0)

Thereupon the Chairman announced the motion Passed: (8, 2, 0) Resolution 080910-F

 

TAX INCENTIVES - OTHER COMMUNITIES

In March 2011, Tate & Lyle made news, when Cargill bought the mothballed ethanol Ft. Dodge Iowa plant for $57 Million. When Tate & Lyle initially announced building the $260 Million wet milling plant at Ft. Dodge, there were plans to create 400 construction jobs, and to employ about 100 with an average wage of $23.54 plus benefits. T & L also requested a number of tax and other incentives from Iowa State, Webster County, and city officials; too numerous to name. Click to see related news http://www.wcfddevelopment.com/news/tate_lyle.htm and http://www.iowalifechanging.com/annualreport/2007/tate&lyle.html

 

Appealing Property Taxes in Tennessee -

Tax Year Appeal Number Appeal Date First Name Last Name Parcel ID County Address Last Action

Date

Source
2011 69229 7/19/2011 KIMBERLY-CLARK CORPORATION C/O CAPITOL ACCOUNTING 025 025 18100 LOUDON 5600 KIMBERLY WAY 7/19/2011 Application Date Keyed
2011 69230 7/19/2011 A E STALEY MFG. CO. TATE & LYLE INDGREDIENTS AMERICAS I 041 041 03700 LOUDON BLAIR BEND ROAD 7/19/2011 Application Date Keyed

 

HOW TO TRACK AN APPEAL - TENNESSEE COMPTROLLER OF THE TREASURY

http://www.comptroller1.state.tn.us/sboe/sbappeal.asp

STATE BOARD OF EQUALIZATION - APPEALS - LOUDON COUNTY

http://www.comptroller1.state.tn.us/SBOnlineReport/Search.asp?T=2011&C=053&S=0&O=2&P=1

FINDING APPEALS BY COUNTY

http://www.comptroller1.state.tn.us/SBOnlineReport/Index.aspx

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CITY OF LOUDON  - TOP 10 TAXPAYERS

(Year Ended June 30, 2010)

1. Tate and Lyle Ingredients  $ 885,302

2. Kimberly-Clark                   $ 440,640 

3. DuPont Tate and Lyle         $ 206,589

4. American Honda Motor       $ 106,965

5. ASTEC Underground           $ 105,478

6. Tennessee National, LLC     $ 98,516

7. Viskase Corporation            $ 62,145

8. Maremont Corporation        $ 45,996

9. Montery Mushrooms, Inc.    $42,826

10. Aleris                               $27,042

TOTAL                         $1,580,859

SOURCE: LOUDON CITY AUDIT

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UPDATE

NEWS HERALD

Industries continue taxation appeals, city considers tax increase

http://www.loudon.xtn.net/story/13221

Aug. 10-11, 2011

Author: Vicky Newman
Source: News-Herald

What is the value of local industry - to the local economy, to government entities or to its owners/stockholders?

Two major Loudon County industries are seeking to reduce further the amount of property tax paid to local governments, causing the city of Loudon to look at a tax increase, to continue services at the existing level.

This year, in the wake of a stifled and still-shaky economy, Loudon's top industries, Tate & Lyle and Kimberly-Clark, have received reductions in assessed valuation.

Both appealed their assessments to the Loudon County Board of Equalization, and their appraised values and assessments were reduced.

Property owners who believe that the classification or value assigned to his property by the assessor is incorrect has the right to appeal that assessment and be heard regarding their opinion of value.

If after discussing a complaint with the assessor, a property owner wishes to file a formal appeal, the County Board of Equalization is the next step in that process. The board consists of five property owners selected from different parts of the county to serve two-year terms.

Because of Lenoir City's population, Tennessee law requires one member of the Equalization Board to be a Lenoir City resident appointed by the city council.

The County Board of Equalization met the first week of June. The board heard appeals from 90-plus property owners who disagreed with the assessment, classification or valuation of property for tax purposes.

Lynn Mills, Loudon city manager, said the reduction given Tate & Lyle and Kimberly-Clark by the equalization board amounted to 17 percent in appraised value - about an $80,000 reduction in property tax revenues to fund the city's budget. That amount, while sizable, could be covered by reductions in spending, Mills said.

Originally the budget had included 2 percent raises for city employees; the amount was reduced to 1 percent as a result of the LUB union contract negotiation, Mills said. The other savings was the result of a police officer position being freed because of a drug task force position funded by the Ninth Judicial District.

But both have appealed the assessed value, seeking further reductions.

In 2010, Tate & Lyle's assessed valuation was at $72.963 million. The Board of Equalization reduced the appraisal to about $60.280 million. The industry seeks further reductions, to less than $30 million.

Kimberly-Clark Corporation's Loudon plant was appraised a year ago at $50.453 million, and the Equalization Board reduced the amount to $43.517 million. The corporation seeks an appraisal of $20.181 million.

Both industries sought reductions because of land improvements, for which they already received tax abatements, officials said.

Assessed value of industries is 40 percent of the appraised value. The assessed valuation is the amount upon which taxes are based.

Should the two industries be successful in lowering their assessments to the asking amount, the impact to the city of Loudon would be significant.

Mills said the city stands to lose about $172,000 if the two industries were completely successful. For planning purposes, the city "split the difference," and will look at increasing taxes enough to cover about half that amount. The remainder will be recouped with budget cuts, or it will cut into the fund balance.

"We need to settle this soon, if we have to take it on the chin and adopt a budget, then take the revenues decrease out of the fund by whatever they get from the state," Mills said. "We could end up $90,000 in the hole."

Mayor Judy Keller said some state requirements, unfunded mandates, are coming that will put the city in a tight spot if budget reductions are necessary.

"We can only deal with the situation we have now" Keller said. "There's no other option here."

vicky.newman@news-herald.net

 

SOURCE: NEWS HERALD

City of Loudon may delay budget adoption

http://www.loudon.xtn.net/story/13098

Published: 11:10 AM, 06/20/2011

Last updated: 11:20 AM, 06/20/2011

 

Author: Vicky Newman
Source: News-Herald

 

A proposed budget ordinance adopted on first reading May 16 by Loudon City Council may be getting another look and more thorough consideration by the board before final adoption and a tax rate is set. In fact, final budget adoption and adoption of a tax rate to fund the budget, originally expected to take place June 20, could be delayed until September.

Council members, in a workshop meeting Tuesday, June 14, said they are reluctant to adopt a budget when the revenue side of the equation remains an unknown. Lynn Mills, city manager, informed the council the property appraisal figures for the city likely would be significantly reduced from the original proposed budget's expected revenues. Revenues are based on assessed values.

The initial budget for fiscal year 2011-12 was about $6.35 million in revenues and expenditures, including an across-the-board salary increase of 2 percent for city employees, and reflected an ending fund balance (2010-11) of about $200,000 more than had been projected.

Actual numbers were not available as early as usual this year, and as was expected because an unusually high number of Loudon County property owners appealed their appraisals. For Loudon, the two largest to appeal, industries Tate & Lyle and Kimberly-Clark, could have a significant impact on revenues this year.

Council member Lynn Millsaps said the uncertainty made him uncomfortable. "I don't think I can vote for a budget if we don't have a tax rate," Millsaps said. "We might not have enough money in the budget..."

Mills said the Council could delay adoption of a new budget for a time by approving a continuing resolution. "The deadline for us would be a September time-frame, because we need to mail out property tax bills.

"We can operate under the existing budget until then," Mills said. "There's $54,000 we know is coming down (decreased revenues) in the budget. Any decrease in the budget will have to be taken out of the fund balance, or we could decrease expenditures to get us savings to equal what we are losing in revenues, or we would have to have a tax increase. Those are the only options we have that I am aware of."

Mills told council members that he expected the equalization process to involve a compromise on most appealed properties, with officials reaching an appraised value somewhere between the county's and property owners' estimates of their value.

However, he said "the two big ones," Tate & Lyle and Kimberly Clark, may choose to appeal the Equalization Board's decision. An appeal would mean further delays in having true numbers.

Mayor Judy Keller said, "I hope this doesn't throw us into a tax increase just to provide services."

Millsaps said, "If there's less money, that means a tax increase for the county."

The Loudon County Board of Equalization concluded a week of appeal hearings Friday, June 10, and the two industries came into the process on the last day. It took most of the following week to get final numbers.

Chuck Jenkins, property assessor, said in response to appeals filed by Tate & Lyle and Kimberly Clark before the County Board of Equalization, the board "approved partial reductions to the extent that were deemed warranted.

"The appellants have until Aug. 1 to decide whether to accept the Board's decision or to elevate their appeal to the state level," Jenkins said. "Should they choose the latter, we will make every effort to vigorously defend our current valuations and protect the financial interests of the city and county."

Jenkins said the total property valuation numbers did reflect a significant reduction to the entire county, "Of course, that (difference) was disproportionately so for the city of Loudon," Jenkins said.

Before the appeals were heard, the total assessment for Loudon County stood at $1,726,317,005 (about 1.726 billion). After the appeals, total county assessment is $1,711,131,722 (about 1.712 billion), a reduction of $14,706,430 million, or 0.8 percent.

The city of Loudon's total assessments before appeals, stood at $320,551,807 ($320.6 million). After appeals, the number is $307,956,625 (about $308 million), a reduction of 3.9 percent.

Countywide reappraisal comes in 2013.


vicky.newman@news-herald.net

 

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08-06-2011