Friday, November 14, 2008
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County hears coal mine's request for enterprise zone

Viper mine planning $20 million expansion

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[November 14, 2008]  An enterprise zone request from International Coal Group, LLC, which mines south of Elkhart, was launched during Logan County's finance committee meeting on Thursday morning and continued in the evening before the full board.

Guests who were present and contributed information at both meetings were Bob Gardner, president and CEO of International Coal Group; Victoria Kennedy, ICG controller; Phil Mahler, enterprise zone manager and Logan County Regional Planning Commission director; and Joel Smiley, Lincoln & Logan County Development Partnership director.

At the top of Logan County interests at this time is the road renovation of County Highway 10, commonly known as the Mount Pulaski-to-Elkhart blacktop. This road passes the mine and is important to it.

Most of the coal that is mined travels on about 1 1/2 miles of Logan County highways to get to Springfield.

Some coal is transported on the Mount Pulaski-to-Elkhart blacktop. In response to a question by Rick Aylesworth, it was said that about 1,200 trucks, or 35,000 tons, travel the blacktop each month.

Logan County highway engineer Bret Aukamp projects costs for the complete road project at $5.5 million, more or less, probably more. He said that this project would need help from some other sources to complete it. If the full funds could not be found, the project would still get done but would have to be scaled back. The mile and a half to the mine would be the first cut. Weight limits over the rest of the road would be reduced.

While the enterprise zone application is unrelated to the grant process for the road project, the coal mine representatives and enterprise zone consultants have been assisting the highway department in trying to get development funds for that project.

Up to $2 million could possibly be obtained from state transportation economic development funds for the road project. Steve McClure said they have been working diligently trying to get some of those funds. He planned to meet with state officials Friday (Nov. 14). "This is clearly a regional economic development project," he said, in that it crosses county borders. It is just the kind of project the state program looks for. "The road is needed for the business; it retains jobs and expands the number of jobs. It is a cookie-cutter project," McClure said.

Right now, because the coal comes out of the mine in Logan County, Logan County collects sales tax on the coal that is sold. Last year sales tax amounted to $10,000. Currently it has been about $1,500 a month, or $18,000 a year. With a new customer that the company has just gotten, the tax is anticipated to come in at about $100,000 next year.

The current branch of the mine is about tapped out. The expansion would be mostly under Sangamon County and would move the mouth of the mine to Sangamon County in about two years. Sales tax would then go to Sangamon County.

Finance chairman Chuck Ruben was glad for the one-year boost the county would be seeing from the higher sales the coal mine is having, but he noted that the county would need to keep that in mind when they are budgeting two years from now, to expect that drop in revenue, as it would now be a more significant loss.

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Smiley, the development partnership director, agreed that this is a good project that helps the region. While some benefits and future sales tax would go to Sangamon County, the $20,000 annual fee the mine is offering would help offset that. Also, some jobs at the mine would be maintained and a few added, with residents of Logan County filling them, in addition to jobs in supporting industries, such as truck drivers.

County board chairman Dick Logan saw job retention as a great value and expressed confidence in the future of Illinois coal.

The county, like the city discussed this week, would also look at using some of the annual fees, which would reach $35,000 a year, to pay for economic administrative service costs. The fees could be used for membership payments to the Lincoln and Logan County Enterprise Zone, Logan County Regional Planning Commission, Lincoln & Logan County Development Partnership, and for the Comprehensive Economic Development Strategy fee.

Smiley said that when he was a city manager they were able to charge against time spent by the city clerk and other entities on the development projects, which then spares the general fund from those costs.

A straw vote of the county board indicated no opposition to approving the enterprise zone designation for the mine expansion. Board members Terry Werth and John Stewart were not present.

The board will take it to a formal vote on Tuesday when they meet at 7 p.m. at the Logan County Courthouse.

The request was presented to the Lincoln City Council earlier this week and awaits voting there as well. For more details, see article posted Tuesday: "City hears enterprise zone request from coal mine; County could see funds for major road project with coal mine expansion."



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