Richland Township can’t afford to plow its roads often enough to accommodate the wind farm located there, the township’s supervisor told county commissioners Tuesday.
Henning Hansen’s work session with commissioners began with a discussion of that specific issue but evolved into a debate about whether a new state law is needed to reallocate tax revenue generated by wind farms.
Hansen would like to see more of that money go to townships and might be heading to Pierre Feb. 15 to support a bill (House Bill 1128) he and other township officials proposed to the state Legislature to further that cause. (The group proposed a similar measure that failed in the 2010 legislative session).
Hansen said his township is not seeing enough of the tax revenue paid to the state by MinnDakota Wind, LLC, which operates 36 turbines in Richland Township.
The company paid the county $179,984 in taxes in 2010. Out of that sum, Richland received $5,001.
The current state formula – created in 2008 – designates 80 percent of tax revenue generated by wind farms to the state. The remaining 20 percent goes to counties where the farms are located, and a tax levy formula is used to redistribute those funds.
MinnDakota includes 100 wind turbines across Brookings County and Lincoln County in Minnesota that generate enough electricity to power 58,000 homes served by Xcel Energy.
Richland receives a paltry sum compared to its Minnesota counterparts, according to Hansen. He said townships there receive $1,228 per turbine compared to $142 per turbine in Richland.
“So you can see there’s a lot of difference between us (and) crossing the state line,” he said.
The resulting lack of revenue and winter storms have caused problems for MinnDakota, according to Hansen and MinnDakota Wind Power project manager Dave Sweet.
Sweet told commissioners that in order to meet OSHA regulations, roads leading to the wind turbine paths must be cleared so an emergency vehicle can pass through.
He said the township fell behind on its plowing this winter, so he took action.
“To me it was easier to go ahead and plow the road,” he said.
But he ceased plowing the roads after receiving a letter from the township saying it was illegal for him to do so. Now, Sweet says, he is unable to properly maintain towers that are unreachable for days at a time, to the dissatisfaction of his company.
“They’re not getting the service they pay for,” added Hansen.
At times, the township has been unable to plow some roads for two to four days after a snowstorm, Sweet said. Meanwhile, Brookings County roads are typically plowed the day after a storm. With smaller budgets, townships are unable to plow as often.
“I refuse to go to those towers,” Sweet said of the towers on roads that haven’t been plowed. “So not only are the landowners starting to get upset because now they’re not getting the same revenue that they normally get based on contracts, but obviously my company is upset because of the fact that we pay our taxes as we are requested for this function. This function is not being provided in a timely and effective manner.”
Commission Chairman Alan Gregg suggested that the two groups get together and work the problem out.
Hansen said he and other township officials could either work out a snow removal agreement with Brookings County or urge the Legislature to pass the bill he has proposed.
Commissioner Deanna Santema said a deal could be struck so that Sweet would clear roads as necessary.
“That part of it needs to be talked over by you guys. I don’t think we should be in that part of it at all,” she said.
But Sweet said he won’t pay taxes for a service that he performs himself.
“I pay taxes as a company to have this task performed. And if this task isn’t performed by the township, and we have to start taking it and doing it ourselves, I’m not paying twice.”
He said he would likely need to bill the township for the work, which would be problematic because townships tend to struggle financially and lag behind on bills, a trend Hansen described earlier in the meeting.
Commissioner Don Larson would rather see a private agreement than a new state law or county involvement.
“First of all, this gentleman here (Sweet) is working with two political subdivisions and apparently he doesn’t have a problem with one. He has a problem with the other. So you two have got to work out the snow issue, because townships don’t want county government interfering in their business,” Larson said.
He said Hansen is unnecessarily creating an adversarial relationship between the county and township.
“What you’re doing is you’re pitting your political subdivision against ours, when in fact as partners we should be talking to the state about the disbursements of the funds, because they’re the ones that retain 80 percent.” Larson said the county received no communication from Hansen or other townships in the year that passed since Hansen proposed the last bill.
He said an all-encompassing legislative act might not be fair to all counties in the state.
Commissioner Dennis Falken agreed.
“I think it’s a local issue that only affects about three or four townships in the whole state of South Dakota,” he said. “Isn’t there a way that we can sit down and come up with a figure rather than to try to make something in law?”
Hansen said the county could lose its say in the matter by not addressing the legislation now, adding that the county doesn’t spend enough money on his township in general.
“Your money is spent to close to Brookings and not in the rural area. You’re getting 60-some thousand dollars from these wind turbines. How much of that $60,000 that comes from Richland Township do you spend in Richland Township?”
He said the township typically gets turned down when requesting money from the county.
Falken said the county has invested quite a bit of money in townships, including taking over a stretch of township road that leads to the Deer Creek Station power plant site.
Commissioners said they are willing to contribute money but will need to meet with the township and see figures on what their extra costs are in relation to the wind farms.
A date for that meeting was not set.
Hansen said in a later interview that he may testify for H.B. 1128, depending on what other township officials think of his discussion with the county and whether an agreement can be reached locally.
He is tentatively scheduled to discuss the bill in Pierre Feb. 15 before the State House of Representatives Taxation Committee. Hansen has the option of withdrawing the bill before it goes to the committee.
“I’ll take what we discussed today to the others and see whether we go any further or not,” he said.