Bradford Township might act to prevent financing of farm
IF YOU GO
What: Regular meeting of the Bradford Town Board
When: 6:30 p.m. Tuesday.
Where: Bradford Town Hall, Bradford Town Hall Road and Carvers Rock Road.
On the agenda: The town board could set a date for a referendum in which residents could overturn the town board’s decision to allow the use of Midwest Area Disaster Bonds to finance the Rock Prairie Dairy. The board also will talk about issues facing the Shady Hills Mobile Home Park and an ordinance that would regulate the use of center-pivot manure sprayers to fertilize crops.
BRADFORD TOWNSHIP Bradford Township residents can’t stop the Rock Prairie Dairy by referendum.
But they could take away a financing opportunity for the project. Judging by the number of signatures on a petition, residents are eager to vote on the matter.
The Bradford Town Board on Tuesday could set a date and approve the language for a referendum about the use of federal tax-exempt bonds to finance the construction that’s underway on Highway 14 two miles west of the Walworth County line.
Owner Todd Tuls of Columbus, Neb., is building a 5,200-cow dairy. He plans to be milking cows by the end of the year in Wisconsin and operates two similarly sized facilities in eastern Nebraska.
Tuls has requested the use of Midwestern Disaster Area Bonds as a way to lower the interest rate on the loan for the project. He has said the facility would cost $35 million.
The bonds are part of a federal program to stimulate economic development in states affected in 2008 by natural disasters, said Steve Sabatke, economic development consultant with the Wisconsin Department of Commerce. In Wisconsin, 30 counties including Rock and Walworth were declared disaster areas in the summer of 2008 and therefore qualified for the bond program.
Record-breaking floods swamped southern Wisconsin at that time. To qualify, applicants must have suffered a loss as a result of the floods or be replacing a business that suffered such a loss, Sabatke said.
That doesn’t mean Tuls is replacing a dairy farm, Sabatke said. The program is intended to fund new construction or businesses that would replace lost tax base, Sabatke said.
“The assumption is made by the federal government that anybody that expands (or builds) in any one of the 30 counties is essentially replacing tax base that was lost somewhere in the county,” Sabatke said.
The bonds can be used to finance a variety of projects.
“It’s a bricks and mortar program,” Sabatke said.
Because the bonds are issued by municipalities, in this case the town of Bradford, the bondholders do not pay federal income tax on earned interest, he said. That makes it possible for the bank to give applicants lower interest rates on loans, Sabatke said.
Tuls could get a 2 percent break on his interest rate, Sabatke said as an example.
According to Department of Commerce data, 41 such bonds have been issued in Wisconsin for a total of $275 million. The program runs through 2012.
Tuls has not applied for the bond program, Sabatke said. The state has not issued disaster bonds in Rock or Walworth counties, according to Department of Commerce data.
State statutes allow residents to oppose the bond issuance by referendum. Residents gathered 116 signatures on a petition for referendum and turned the paperwork in on time, Clerk Sandy Clarke said. That was more than the 5 percent of the 609 registered voters state statutes require.
Eleven signatures lacked dates, but the rest seemed qualified, Clarke said.
Tuls will continue with the project whether or not the bonds are issued, he has said.