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Mary Z is correct that this is a problem, but I think a little more perspective on
what's going on is in order.
The question is this:
How does one get a low-interest operating loan from the City of St. Paul
as a profitable business privately owned by wealthy individuals that is
routinely faced with claims that it violates state and local pollution
laws and court orders while still pocketing a big fat state subsidy check four times
a year?
One word: Ethanol.
In a manner that is likely to anger its last half-dozen supporters left
on the planet, the Strib has discovered that Gopher State Ethanol has
managed to avoid paying its sewer service bill to the St. Paul Regional
Water Services (SPRWS) and has instead turned the arrearages into a low
interest loan financed by St. Paul taxpayers.
This gets complicated, so bear with me. GSE doesn't use City water -
they have their own well. But they use a great deal of sewer capacity,
as ethanol production is a water intensive use. The wastewater is
treated by the Met Council's Environmental Services department, just
like all sewage in the metro area. But like most water users, GSE pays
SPRWS its bill, and SPRWS pays the Met Council. If GSE (like any other
user) doesn't pay, SPRWS has to front the money for sewer services and
try to collect from its customer - usually the threat of turning off the
water coming in is enough to move things along. That's what recently
happened at the Skyline Tower Apartments recently: You don't pay (or the
records show your manager didn't pay), you lose your water.
But we're talking GSE here, so that doesn't happen. GSE doesn't pay its
sewer bill, the City still has to pay the Met Council, and the City then
has to try to collect by whatever means necessary. GSE has somehow
managed to convince someone at SPRWS that its unpaid bills shouldn't
result in service shutoff, they should instead be rolled over as
unpaid assessments on their property taxes. As such, foreclosure can't
take place immediately, the word from the County is that GSE has until
sometime in late 2007 before foreclosure can take place. The interest
rate on this de facto loan? About 5%. The amount of unpaid sewer
assessments? On one parcel of land alone at the GSE complex (Parcel No.
122823230112) the outstanding Sewer Assessment is $688,520.35. There
are five or six parcels in the complex, but not all of them have such
amounts due. Now, given that the total property tax payable on the
complex is about $135,000 per year, this is a bit larger than adding the
costs of mowing Arno Karner's lawn onto his property tax bill.
The Strib story says they owe over $1 million in past-due taxes and
assessments.
Moderate income housing complexes goof up and don't pay their bill and
the water gets shut off, but GSE doesn't pay its bill and gets rewarded
with a low-interest operating loan carried by the taxpayers for years. And it never
even had to apply or go through all that intrusive part of showing
anyone a balance sheet.
Inventive and creative? Yes. Surprising? No.
I understand that there is a proposal at the legislature that would make
sure that local governmental units would have the right to make claim on the
ethanol producer subsidy to satisfy back taxes due by plants. Makes sense to this
taxpayer.
Diane Gerth
I really live in the West End.
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