| From
the Desk of the CEO Permits Crucial
to Meeting Construction Schedule
MnSP is at that awkward early stage of its life when
the fund raising is done but the construction has not
begun. All of us are anxious to see the first signs
of our cooperative effort (i.e. dirt moving). It
reminds me of the first time I was told I would be a father.
After the initial excitement of the news passed, the balance
of the nine months seemed to pass slowly as I waited.
It has been three months since the annual meeting and
since the last newsletter was sent. As we move forward
we want to keep MnSP's membership informed of the progress
and problems that we may experience through the development
stage. To that end, MnSP will publish The Bean Counter
more frequently and will improve current information on
MnSP's Web page (www.MnSoy.com).
MnSP has received payments on the first 30% installment
from 98% of its members. This demonstrates a strong
commitment of MnSP's membership base and that MnSP will
experience a very small dropout rate.
The engineering and bid packages are in the final stages
of completion. Engineering is over 80% complete.
Letters of Intent and firm quotes have been received on
$31 million of the project's $55 million cost. At
this writing MnSP's budget is tight, but is on target
to meet original expectations. In early August MnSP
will send out major bid packages for quotes. Lightowler
Johnson Associates (MnSP's general engineer) has performed
well for MnSP and we have received high value from their
services.
Before MnSP puts assets on the Brewster site several
items need to be completed to the satisfaction of your
Board of Directors. These include 1) Water allocation,
2) Environmental Assessment Worksheet (EAW) approval (a
permitting step unique to Minnesota), 3) PSD Air Quality
Permit and 4) a development agreement with City of Brewster
and Nobles County. All of these items have been
worked on and discussed since the beginning phases of
the equity drive, governed by funds available at the time.
To paraphrase the old adage, which comes first, the funds
to build or the commitments by the public agencies?
To this point MnSP has met the goals that we have shared
since the start of the project. However, we cannot
say the same for all the public agencies in Minnesota.
MnSP's target remains to start construction by October
2002 and to be in operation the fall of 2003. Unfortunately
MnSP does not solely control the process. Current status
is as follows:
- Water Allocation - The Department
of Natural Resources (DNR) reported that MnSP (the City
of Brewster) will receive its water allocation in phases
matching the actual production capabilities as identified
by MnSP. The City of Brewster's water allocation will
be received after MnSP receives its permit to construct.
- The Environmental Assessment Worksheet (EAW)
- The operations and Environmental Review Section of
the Minnesota Pollution Control Agency's (MPCA) communications
have been positive. Prior to the EAW being released
for public comment, they will need a positive report
on the PSD Air Quality Permit for MnSP.
- The PSD Air Quality Permit - This
permit by far is the most technical and complex in nature.
Part of the permitting process requires predicting the
impact of the new source (MnSP's plant) added to all
other existing activity in the region that contributes
to air pollution. The projections are done through computer
modeling. MnSP's new facility meets and/or exceeds State
and Federal standards. In June MPCA informed MnSP that
our air permit would not go to public comment until
October 1. MnSP requested and has been granted authorization
to expedite the Air Quality Permit. As of this writing
we expect MnSP's PSD permit to be released for public
comment on Aug. 23, 2002. I thank MnSP's Board
Members, Minnesota Soybean Growers, Minnesota Farm Bureau,
Ag Commissioner Gene Hugoson and the many others who
provided support for MnSP's request.
- The Development Agreement with City of Brewster
and Nobles County - Items covered in this agreement
are fresh water, waste water treatment and road improvements.
The estimated cost for public works is $6.5 million.
Tax Incremental Financing (TIF), local, state and federal
grants, bonds or loans are the typical means of meeting
the development needs. Two items make this job more
difficult for the City of Brewster and Nobles County.
The funding for public schools from property taxes now
goes to the State versus local tax authority. Funds
available from TIF thus have been reduced by $1 million.
Minnesota's state budget crunch has made getting state
funds more difficult.
To date MnSP has devoted 100% of its energies to build
a 100,000-bushel soybean plant at Brewster, Minn. On July
15, 2002, the Board of Directors instructed management
to start work to develop alternative sites for MnSP. This
move is to protect the interest of MnSP's membership.
I am confident that the problems that have arisen can
and should be resolved to allow MnSP to move forward.
At the same time, reviewing dealings with the state of
Minnesota leads me to agree totally with the Board that
alternatives need to be developed. We will continue to
work hard to meet MnSP's target and get the wheels moving
this fall. At the same time we will develop alternatives
for our membership.
Rodney Christianson
CEO, Minnesota Soybean Processors |
