|Nestle´ to get continued property tax break through agreement with county
|By Tom Marshall
Senior Advocate writer
The Montgomery County Fiscal Court voted unanimously Nov. 19 to extend the maturity date of some Industrial Revenue Bonds to allow Nestlé to avoid paying full property taxes on the facility for five more years.
Nestlé officials said this will amount to a savings for the company of about $500,000 over the five-year period.
Nestlé officials told the county it plans to add about 60 new jobs as it starts several new lines of products in the near future.
Nestlé has avoided paying full property taxes through tax incentives granted through the Kentucky Rural Economic Act (KREDA) and Industrial Revenue Bonds.
Any business entity that establishes new manufacturing plants or expands existing manufacturing operations in qualifying Kentucky counties is eligible.
The plant began receiving KREDA benefits back when it belonged to Chef America before being sold to Nestlé.
While the company was not required under KREDA to do so, the company has been paying what would be its portion of the property tax to support the local school system, Sandy Romenesko, local Industrial Authority/Chamber of Commerce executive director, said.
That’s about half of what the full property tax would be, Romenesko said.
The 25-year period set forth by KREDA was set to expire Dec. 1, but Nestlé officials approached the county to request that the same maturity date for the revenue bonds be extended five years as is permissible one time, county officials were told.
While the maturity date for the revenue bonds can be extended, KREDA benefits cannot.
By agreeing to the extension the county allows the company to go five more years without paying full local property taxes.
Romenesko thanked the county for its support of the company through the five-year property tax break extension.
“I think the support we’re showing them shows what our industry means to us in this community and the jobs,” she said. “I think the support that their showing solidifies Nestlé’s position even more.”
Romenesko urged the county to take the step because, she said, Nestlé has remained a stable employer who provides more than 1,000 people with jobs.
“This is an opportunity for them to grow as well,” she said, referring to the prospect of soon adding jobs.
County Judge-Executive Wally Johnson said the county wanted to be a good community partner with the company, “which is of major importance to us and the surrounding communities.”
Nestlé not only provides jobs to local workers, but throughout the region.
Nestle´official Andrew Ward said one worker travels two hours one way to get to their job at the plant.
County Commissioners Jack “Rackle” Adams, Melody Townsend and Billy Ray Fawns all thanked company officials for their commitment to the community.
“They’re one of the best community partners we have,” Townsend said.
Ward announced that with KREDA completed, Nestlé will be paying an additional $1.6 million in state payroll taxes yearly.
Johnson said the company pays about 55 to 60 percent of that total in local payroll taxes annually.
There was some initial confusion over who would collect the additional $1.6 million in payroll taxes with local officials believing at first that they would receive at least a portion of that revenue.
Romenesko later confirmed through the state Cabinet for Workforce Development that the revenue would all go to the state to the disappointment of local officials.
That’s because the money had been withheld from employees’ state taxes as part of the incentive, she said.
Romenesko said several other local industries are about to complete state incentive programs, but it was not immediately clear whether local governments would receive any additional revenue.
In other action, commissioners:
• Approved an ordinance granting an easement along Woodland Lane and also across a lot owned by the county in Woodlands subdivision.
The easement was granted to InterCarrier Networks to allow for the installation of an underground fiber optic cable, which will connect two Verizon Wireless cell phone towers, one located at the 110 exit of Interstate 64 and the other at the 113 exit.
The granting of the easement is contingent upon InterCarrier Networks securing all other easements necessary to the installation of the fiber optic cable.
• Approved the holiday schedule for county employees.
• Appointed Gail Wright to replace Tony Fritts who resigned from the Industrial Authority Board. Wright’s term will expire Dec. 31, 2020.
• Reappointed Lisa Patrick to the Cemetery Board with a term expiring Nov. 21, 2023.
• Reappointed Robbie Leggett and Mary Lynn Stockdale to the Extension District Board with terms expiring Dec. 31, 2022.
• Reappointed Melody Townsend to the Revolving Loan Board with a term expiring Dec. 20, 2022.
• Reappointed Ed Razor to the Revolving Loan Board with a term expiring Dec. 31, 2022.
• Reappointed Dan Whitaker to the Emergency Services Board with a term expiring Dec. 3, 2023.
The Fiscal Court will meet again in regular session 2 p.m. Tuesday, Dec. 17, in the fiscal courtroom at the Courthouse Annex. The court also holds workshops the first and third Tuesdays of the month at 10 a.m. in the conference room at the judge executive’s office. Meetings are open to the public.