[Cassandra]

Article didn't come up for me...can you copy and paste?

I pasted the entire article but the the Ward issue is mostly in the first half of the article:

Commissioners sharply divided on SubTerra loan

Wuolo Creek Kennels loan is approved

Harold S. Riter, Reporting

The County Commissioners met last Tuesday, December 2, which offered a very sunny December afternoon. The roll call following the opening exercises indicated that a full Board consisting of Commissioners Joan Antila, Louis Paulman, Joe Moskwa, Hubert Lukkari, and John Pelkola were present and ready to do business. The minutes of the last regular meeting held on November 18 were approved as presented and then the floor was opened for public comment.

Marni Polkky, a certified veterinary technician, was present to address the “mass breeding program” being proposed by Wuolo Creek Kennels. Polkky criticized EDC Exec. Secertary Dorothy Bussiere’s comments made at the EDC hearing regarding the application of Spencer and Tammy Ward of Wuolo Creek Kennels for RLF funding. Polkky recalled Bussiere’s words that this project would diversify the economy but had also stated that she knows nothing about this business.

Polkky stated that she personally knows the Wards and does not want to create conflicts, but from an ethical point of view, she must object to the project. “We really must consider what we are giving this money to,” she said, characterizing the proposed commercial kennel as a mass production puppy mill which will produce large numbers of small dogs as pets in a world filled with a surplus of unwanted and/or homeless animals. She also contended that the proposal to have over 300 canines in the kennels would make it impossible, by sheer numbers, for the dogs housed to have a real home or meaningful human contact.

Tammy Ward was present and asked to respond. She explained that she and her husband are taking over an established canine breeding business, one that has been in the business for many years. She addressed Polkky by her first name and invited her to come and inspect her kennels. Ward explained that her dogs are handled daily, she also said that she has seen “puppy mills” and described them as “horrible places.” She said, “We are taking care of our dogs and they will take care of us.” Ward also made the claim that OCAP had inspected the facility and was “pleased by what they saw.” Ward denied vehemently that the Wuolo Creek Kennel operation is a puppy mill.

The first item of business was to adopt a resolution approving the Wuolo Creek Kennels Revolving Loan Fund (RLF) loan, which had been recommended by the Ontonagon County Economic Development Corporation Board. There are actually two loans, one for $84,000 at an interest rate of 2.75% to be repaid over four years; and the other a loan for $34,000 at the same rate of interest to be paid off over seven years. Spencer and Tammy Ward, of Stannard Township provided a personal guarantee for the loan in the form of their real estate holdings.

Bussiere was present to explain the loan proposal to the Commissioners. After her introductory remarks, Antila mentioned that the Board had received two negative letters via e-Mail which had been addressed to the Chamber of Commerce and forwarded. Bussiere dismissed these as being too late, pointing out that the public hearing had been announced well in advance with suitable notice having been provided to anyone who had wished to comment either in favor of or against the project. Bussiere added that Spencer Ward is a builder and that the Ward’s have done a great deal of work on their own before asking for the RLF loan. Photos taken at the new kennels were passed among the Commissioners.

Lukkari made the motion to approve the loan request and this was seconded by Pelkola. Antila pointed out that there were no grants involved in this project, but was all loans to be repaid, not a free gift in any way. The Commissioners voted unanimously to approve the use of RLF funds for this project.

The next order of business was a resolution approving an RLF loan to SubTerra of White Pine in the amount of $80,000 at 5% to be paid back over 4 years. In addition, SubTerra has also requested an outright grant of $20,000 for planning purposes.

A letter from the Michigan Economic Development Corporation addressed to Bussiere stated, “According to our records, it is estimated that the uncommitted balance of funds in the Ontonagon County CDBG revolving loan fund amount to $657,000. To meet the needs of Subterra Systems, LLC, Ontonagon County should use its CDBG revolving loan fund to provide $100,000 to Subterra Systems, LLC, in order that the firm may continue operations in Carp Lake Township. These funds could be provided in the form of a loan or grant as determined by the County. It will be necessary for the County to adhere to all Michigan CDBG RLF requirements including the review and approval of a Program Income Project Review form by our office.” The letter also stated that MEDC had previously awarded a Michigan Community Block Grant to Carp Lake Township “for activities associated with Subterra Systems, LLC” in December of 1999. Bussiere had provided the Commissioners with copies of the letter from MEDC.

The specifics of the use of these funds have been withheld for security purposes, but the application from SubTerra states, “The funds would provide SubTerra with the necessary capital to maintain operations while it continues its negotiations with InMet, regarding long-term access to the (underground growth chamber) site.” The application further stated that “The money would allow SubTerra to continue fostering its discussions with current clients and complete a possible contract with one of them. These funds would provide Subterra with the necessary capital to reach a point where it can approach commercial lending and capital markets to conduct an expansion of the underground growth chamber.

Bussiere spoke to this application, pointing out that the interest rate for the SubTerra loan is higher than the loans previously approved for Wuolo Creek Kennels. Bussiere then introduced Scott Grossenbach of SubTerra to speak to their project. Grossenbach provided some printed materials describing the growing plant-made pharmaceutical market. Grossenbach said that plant-produced drugs could save considerably on the production costs of certain prescription medications. Plant made drugs as an industry is just coming into its own and SubTerra is a leading pioneer in this new field.

Grossenbach explained that open air products are becoming harder and harder to maintain as pure and that the future seems to belong to underground growth chambers. Specifics of SubTerra’s plans were not revealed. SubTerra’s current growth chamber is 250 feet below the surface and is currently producing plants in the former White Pine Mine. SubTerra is experienced in all recommended practices and procedures. There are no contaminants, no pesticides used (or needed), so only a pure product is produced.

“We need financing to get us from now to six months...when we are sure we will have a client, we have just started negotiating with clients,” Grossenbach said adding that the State of Michigan and SubTerra have agreed on what is needed to assure the future of the company, but permanent access to the former mine must still be finalized with InMet which still owns underground rights. It has been agreed that the filling of the mine with fresh water will be stopped at a specified level.

Lukkari questioned the stopping of the filling of the mine stating that if enough water is not used to fill the mine, the water which will finally come to the surface (brine water) will require processing. He said that experts have estimated that filling the mine with fresh water can hold off the need for processing the flow from the mine for 250 years. Lukkari then read several articles on the past contributions to SubTerra and its parent firm, Prairie Plant Systems, Ltd. He mentioned $100,000 that had been put forward for a planning grant already. Lukkari alluded to the fact that SubTerra, in its RLF application, had indicated that the company has no collateral to pledge to secure the loan and reminded his fellow Commissioners of the Ontonagon County EDC’s loan funds.

“It seems to me that they (SubTerra) are getting a lot of grants and the little guy is getting nothing, we got ripped off by Flo-Wall and we made regulations that we would not get ripped off again.” Lukkari now made a motion to deny this grant and loan application, and this was seconded by Pelkola who said that without a personal guarantee, there is nothing to protect the taxpayer’s money.

Bussiere replied to Lukkari’s contentions. She said that the $100,000 alluded to included many of the figures Lukkari had mentioned in his recital of past financial support. Bussiere cited the letter from MEDC strongly recommending the loan to SubTerra. Bussiere also told the Commissioners that the revolving loan fund must be active or the State of Michigan may just recall the funds.

Antila asked if the requirement of a personal guarantee was not initiated by the State of Michigan. The answer from Bussiere, “Yes.” Antila drew the conclusion that in light of the letter from MEDC, the State of Michigan seems to be willing to waive this rule. Moskwa said that he would feel better if the $100,000 was a total loan rather than an $80,000 loan and $20,000 grant. On a vote of two to five with Pelkola and Lukkari voting to deny the SubTerra loan, the motion was defeated. Antila asked if there was another motion and was met by a moment of silence.

Paulman agreed with Moskwa that he would favor a full loan of $100,000. Bussiere pointed out that this would require the matter going back to the SubTerra Board, then to the EDC Revolving Loan Committee, then another public hearing, all of which would require more time. Pelkola asked if something could be done to provide collateral to protect the taxpayers? Again, Grossenbach said that this would require going back to his Board. Bussiere again applied the time pressure factor pointing out that the MEDC had called that very day and was waiting for action.

Antila pointed out that the RLF funds are not local taxpayer money but Pelkola maintained that it is ALL taxpayer money. He spoke in favor of sticking with the established EDC policy of requiring a personal guarantee. Paulman now changed his tack stating that he would be willing to support the loan/grant if there is a personal guarantee. Paulman said that the County has dealt with SubTerra for some years and he would not like to see it fail at this point.

Bussiere praised the Commissioners for their past vision to venture; to take a risk to develop the Industrial Park where new industry is now providing jobs. She pointed out that the SubTerra project is very unique in using a closed mine to provide jobs and requires the same willingness to take a chance.

Lukkari said that with the number of stockholders, SubTerra should be able to come up with some guarantee, or else it would appear that they themselves have no real faith in the project. Bussiere replied that the shareholders of SubTerra have put up almost $1 million already. The argument of whether or not to require a personal guarantee passed back and forth. Antila pointed out that the EDC’s RLF Committee had been privy to material that was not being revealed to the general public and that they had recommended the load/grant proposal. Bussiere agreed saying that the “RLF Committee made their recommendation and they felt very strongly about this.”

Antila said that the RLF Committee is not a “bunch of pushovers” and if they recommended it, she could support it. Paulman now did an about-face and made a motion to approve the loan, but there was no second. Antila now asked if she could vacate the chair so that she could second the motion. After some discussion, it was determined that Antila could vacate the chair in favor of another Commissioner of her choice. Antila vacated the chair to Moskwa and then seconded Paulman’s motion to approve the loan/grant request to SubTerra. Moskwa called for a roll call vote and then voted no along with Pelkola and Lukkari. The vote to approve the resolution authorizing the loan was again defeated.

After some discussion and another motion made and withdrawn, Antila made a motion to refer the matter back to the EDC and this was seconded and approved unanimously on a roll-call vote. At this point, a motion was made and approved to return Antila to the chair.

A contract proposal from TopComp, the firm which has done the addressing of the County for the 911 Emergency network was considered next. TopComp, a Williamsburg, Michigan firm, will maintain the County maps and addressing system, adding and/or deleting names as necessary to the database. The cost was quoted as $3,600 per year. The cost will be paid out of 911 Committee monies. It was moved by Moskwa to enter into the contract with TopComp and this was approved on a roll call vote.

The on-going remonumentation program was discussed next. This program of remarking property corners in Ontonagon County has been on-going for about a dozen years and is totally funded by a State of Michigan grant. For 2004, County surveyor Earl Applekamp had submitted a grant application of $63,512 for the Commissioners’ consideration. The proposed work is in T48NR42W in Bergland Township (11 comers) east of Lake Gogebic; T49N-R41W in Matchwood Township north of M-28; T50N-R39W in Rockland Township, a total of nine corners in and around Rockland proper; and T 50N-R42W, a total of 40 corners in and about White Pine in Carp Lake Township. On motion by Paulman, the application was approved.

The Commissioners now considered approval of a renewal of the Par Plan insurance with the Hannula Agency of Lake Linden. This is the total insurance plan on County property including liability. Each County vehicle was listed in turn with its value. County vehicles are covered with a $500 deductible collision insurance plan. Among the buildings listed was the County Jail, valued at $650,000 with $75,000 coverage on the contents; the new OnTran facility valued at $590,000 with $50,000 coverage on the contents; and the County Courthouse itself valued at $1,300,000 with $225,000 coverage on the contents. The total premium was listed at $65,614, which is about 6.5% increase over past year, partly because of increased coverage. On motion by Pelkola, the insurance program was adopted, payable in two installments, and this was approved on a roll call vote.

Sheriff John Gravier was present to present a request to send Deputy Don Lorendo to Camp Grayling for Snowmobile Patrol training. The cost is minimal as the Snowmobile Safety Grant from the State of Michigan will cover most of the costs. The deputy who had previously been assigned to Snowmobile Safety has retired from the Department. On motion by Moskwa, the request was approved.

Pelkola reported on his attendance at a Health Board meeting on December 1 at L’Anse. There is great concern about the current flu strain going about and on first signs, it is recommended that a physician be consulted.

Paulman reported from the Commission on Aging that the EPIC Insurance program is still up in the air with no indications of when enrollments will resume. Paulman reported that Community Action has purchased a new $55,000 school bus.

The Commissioners adjourned at 5:25 PM.