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DAYTON–If Columbia Pulp I, LLC, which is currently in foreclosure, defaults, will Columbia County find itself in a financial predicament?
Dayton resident Dave Schreck questioned County Commissioners on the topic at the March 21 meeting.
Schreck questioned Commissioners on the impact on the County from the Pulp Mill halting production. He asked whether the County has developed a plan, if the mill goes “belly-up?” Will the County see a loss?
“It’s a concern and it is a significant amount of money,” answered Commission Chairman Marty Hall. “Obviously, we’re hopeful that that gets ironed out and that place runs and does everything that it was designed to do…. There is a significant amount of [State] forgiven sales tax that will be due if it doesn’t function as intended because there was a lot of sales tax that was deferred in the event that it does what it was supposed to do for seven or eight years.”
Schreck pointed out that if Columbia Pulp I (CPI) is sold, it’s possible nothing can be done with the mill for a year. Hall replied that the buyer would assume the property taxes.
Schreck was concerned they wouldn’t be able to pay if they aren’t producing and suggested the County not plan on receiving the taxes.
Commissioner Charles Amerein said the notice of foreclosure is a way to recoup the money, as well as actual foreclosure after three years of non-payment, so the money will come to County one way or the other. Amerein opined that the County will likely receive money from the sale of the property rather than payment of back taxes, but that, either way, the money will come. In addition, the County has never planned on much money from the mill because it has never been a secure source of income.
Schreck expressed concern about the impact on the County in the interim, and asked how much is actually due from the mill in property taxes. Treasurer Carla Rowe provided documentation reflecting a breakdown of where the property taxes go by district, including such entities as the Port, the fire districts and the library.
Amerein read some of the numbers and said that currently “there is some money that is expected from the property taxes, but if they don’t come through, these are the holes in those particular budgets.” He later added that the taxes “are not giant numbers. They all impact the budgets to some degree...nothing huge is hitting here, and it’s not something we’ve grown accustomed to,” Amerein said.
Rowe stated the County began collecting about two years ago, once Columbia Pulp owned the plant with increased taxation as it was completed. Schreck countered that $1 million per year in taxes is huge and urged caution. But Rowe said all of that money does not go to the County but also to the other districts, which would likely be more impacted than the County because the County can use the reserve if needed.
Hall said when the plant sells, the back taxes will be paid in full. Commissioner Ryan Rundell added, “I think it will become a little clearer after April 15 to see whether they pay their bill or it gets sold.” If it doesn’t sell it would become County property, according to Rowe.
The worst-case scenario is $3 million of back taxes.
