MONMOUTH – The Warren County Board has asked an outside lawyer to review its lease of the county farm with Monarch Wind Farms.
The decision to review the lease sprang from a straightforward request by State’s Attorney Chip Algren, who presented the lease to the County Board at its Wednesday meeting. He said the developer was asking for a four-year extension of a clause in the 2007 agreement that would have allowed the county to terminate the lease of the county farm in August 2011 if Monarch was not producing electricity by then. Algren said the project will not be operational by August because a $5 million federal grant Monarch received is supposed to be distributed by the state; however, the state has used those funds to cover other expenses. Algren said the Justice Department was involved and joked the state’s actions are “generally called theft.”
However, the board was evenly split about extending the clause, with the vote ending in a 7-7 tie. Those who voted against the request said they weren’t necessarily voting against the extension or the lease, they just wanted it tabled so a lawyer could review it to see if the lease was “the best it could be.”
While no one said directly they wanted to increase the amount of money the county received from Monarch, several board members brought up the rate per megawatts in contracts negotiated by other counties was considerably higher. Another issue brought up was the confidentiality agreement spelled out in the lease.
Algren told the board that they were really talking about two separate issues – is the lease legally sound and are the terms acceptable.
“I can tell you right now it’s legally sufficient. If you want to waste money to have someone look it over to tell you the same thing that’s fine,” he said. “If you want to go back you can try to change the terms and conditions, but keep the issues separate.”
Algren also warned that if the board tried to “pull the rug out” from Monarch, the developer could sue the county for failure to operate in good faith.
“The developer is the one who brought (the termination clause) up. My guess is if he hadn’t brought it up you never would have known it was there,” Algren said.
Another concern was that any indication the project might be stalled or in danger would hurt Monarch’s ability to continue getting the finances in order.
Board member Sean Cavanaugh argued changing the lease beyond extending the termination clause was bad business and could drive the developer away.
“This thing has already been approved by the county board. We need to show we’re honest to our word or they’re going to move along and say sorry we met you,” Cavanaugh said. “The only thing different is the four years added to the timeline. You’ve already dealt with all these issues.”
Board members Marvin Hawk, Stephen Johnson and Todd Winkler said when the lease was signed in 2007 the wind farm industry was brand new in Illinois. Johnson said they weren’t “pushing them aside,” but reviewing the lease to see if it needed to be tweaked.
“We negotiated it four years ago and a lot of things have changed,” Winkler said. “The size, the height of the towers changed, the megawatts changed, the generators were a lot smaller. … All we’re saying is let’s take a look at it. … We’re not saying no to this contract.”
At first those in favor of a review wanted the lease compared to one in Champaign County, but Algren said looking at one lease to another isn’t a good indicator of the soundness of either. He suggested the outside lawyer be directed to review it and see if there were any problems or additional provision necessary. He estimated it would cost $1,500 to $2,000 for the review.
After the board split on extending the lease, they voted 9-5 both to table it until their February meeting and have it reviewed.
Also at the meeting, Chairman of the Road and Bridge Committee Bill Thompson presented a report detailing the three-year averages of revenue compared to expenses in the highway department. According to the figures, between the sale of material, the non-county highway work for townships, engineering and county day labor – work on county highways by local workforce using federal funding – the department generates $442,000, while the labor budget for 2011 is $488,000.
The department has a positive financial balance, relies on revenue generated by the work force and, Thompson said, there was concern if the county made any cuts to the highway department it would hurt its ability to generate revenue and cost more in the long run.
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