Tuesday, October 06, 2015

Local Caterpillar Plant Could Absorb Job Cuts Without Penalty Under Terms Of Agreement With Oconee County And Athens-Clarke County

During Restructuring

When Caterpillar announced on Sept. 24 that it plans to cut 10,000 employees and consolidate and close more than 20 facilities around the world, it left unspecified which plants would be impacted.

In its news release, which has been the source of much of the reporting on the announcement, Caterpillar would say only that “There are many factors that impact these contemplated decisions” as well as their timing.

“Employees will be notified as decisions are made for each facility,” the news release said. The closings and job cuts announced are to occur through 2018.

Caterpillar has until 2032 to bring its hiring at its plant on the east side of Bogart up to 1,100 full-time employees without violating the terms of its memorandum of understanding with Oconee County and Athens-Clarke County.

At the end of 2014, when Caterpillar filed the annual report required by that MOU, the total number of full-time jobs based on the monthly average was 658. It was only required to have 250.

Job Creation Figures

Caterpillar reported on July 31 that it had created 1,466 jobs at its local plant, and that figure has been misreported as the number of employees.

Plant Entrance

Jay Boling, economic development assistant with Oconee County, told the Georgia Department of Community Affairs in a letter on July 31 that “The plant now reports 1,466 employees for this reporting period.”

Caterpillar is required to file a semi-annual report on jobs created as well as the annual report on the monthly average of full-time.

The 1,466 figure has been used in several reports by The Oconee Enterprise as the number of full-time employees at the plant.

In the report for last year, dated March 24, Caterpillar reported the 658 full-time jobs and 932 full-time jobs created. Included in the later category were 130 jobs described as “Agency/Leased.”

Milestones Reached

In the July 31 report, Caterpillar reported that it had reached several milestones at the local plant.

In early 2015, the plant began building Small Track Type Tractors, or small dozers, for countries with high emission standards.

In June of this year, according to the report, the plant began production of these tractors for countries with lower emission standards.

Production of a model of “emission complaint” mini-hydraulic excavator was launched in July, the report said. Other models of mini-hydraulic excavators already were in production.

Production volume for both the tractor and excavator is “expected to continue to grow sharply during the second half of 2015 as the facility follows its projected production ramp up,” the report said.

Restructuring And Cost Reduction

Caterpillar’s announcement of its restructuring and cost reduction plans received much national and some local attention.

The company’s sales and revenue for 2015 are expected to be $1 billion lower than the projected figure of $49 billion, and sales and revenues are expected to be about 5 percent below 2015 figures in 2016. That would translate into a decline of $2.4 billion.

If those projections hold, the company would report sales and revenue decreases for four years in a row, a first in Caterpillars 90-year history, according to the news release.

The company blamed the declines on cutbacks in the mining and energy industries, but it said the reductions will be felt in all three of Caterpillar’s “segments,” namely construction industries, resource industries and energy and transportation.

Local Investment

Oconee County borrowed $10.4 million via a revenue bond in 2012 to finance an incentive program to bring Caterpillar to the area. Athens-Clarke County put up roughly the same amount. The plant straddles the border of the two counties.

The two governments developed the plant site, put in the roads and other infrastructure, and built the plant for Caterpillar.

The two counties, through a complicated abatement scheme, waive much of the property taxes Caterpillar would otherwise pay.

If Caterpillar owned the land and building, it would have been billed $91,113 in real property taxes in Oconee County last year. Instead, it paid $42,185 in real property taxes on the "lease" for its facility and manufacturing equipment.

That is a savings of $48,928, or 53.7 percent.

The two counties had expected parts suppliers for Caterpillar to build facilities nearby, providing tax revenue to offset the loss as part of the Caterpillar tax abatement. That has not happened and might be less likely to happen while Caterpillar goes through its planned restructuring.

Jobs Are Payback

The MOU the two counties signed set community job goals for Caterpillar and specify a procedure for how those jobs are to be calculated.

In its first year, Caterpillar was required to have 100 full-time jobs, and it had 214.

The goals increase by 150 each year until 2017. The increase is in uneven increments until 2032–the 20th year of the agreement–when the number of full-time jobs is to be the 1,100 figure.

Other figures have been used in many news reports and statements by government leaders, with 1,400 common, but the MOU is precise in stating the 1,100 minimum figure.

The number of jobs is “determined based on the monthly average number of full-time employees subject to Georgia income tax withholding for the taxable year,” according to the MOU.

Penalties Specified

The MOU specifies that each year, if Caterpillar does not meet its jobs goal, it must calculate a “community jobs shortfall percentage.”

It must do the same for goals on investment in the plant.

The shortfalls in jobs and shortfalls on investment are then averaged, and Caterpillar is to make a “community recovery payment” based on that amount.

These would be the circumstances if Caterpillar were to drastically scale back or even close the plant.

If the shortfall figure is 30 percent or less, however, the payment is waived.

Caterpillar has the option to purchase the property, the facility and the equipment from the two counties at any time prior to the end of the 20-year agreement. If it does that, it will pay taxes at the normal rate.

Monday, October 05, 2015

Oconee County Issued A Permit For LED Sign On SR 316 At McNutt Creek; Two Other Sign Applications Pending

One On Mars Hill Road

Oconee County issued a permit for an 8 foot by 12 foot LED sign at SR 316 and McNutt Creek Road Sept. 29 and is processing applications for two additional large LED signs, one at the Oconee Connector and SR Loop 10 and the other on Mars Hill Road just north of Barber Creek Drive.

A small sign on the property on the northwest corner of SR 316 and McNutt Creek Road will be removed, and the large replacement sign will be just beyond the 10-foot setback from the state right of way for SR 316.

Sunday, October 04, 2015

Oconee County Animal Control Board To Discuss Long List Of Issues At Meeting Wednesday Night

Foster Program On List

The Oconee County Animal Control Advisory Board, meeting on Wednesday evening, will address a full slate of issues, including tethering and hoarding of animals, the status of the foster program, changes to the county’s Animal Control Ordinance, and the status of the shelter facility.

The Advisory Board also will discuss the ordinances passed by the Board of Commissioners creating the Advisory Board and consider changes to its bylaws.

Friday, October 02, 2015

Citizen Files Ethics Complaint Against Oconee County Commission Chairman Over Old Mars Hill Road Proposal

Forwarded To Special Master

Oconee County Attorney Daniel Haygood has referred to Special Master James C. Warnes an ethics complaint that Sarah Bell has filed against Oconee County Board of Commissioners Chairman Melvin Davis.

Bell contends that Davis violated at least eight sections of the county’s ethics code by “using taxpayer money to pay an employee and to prepare and purchase plans” for the reconnection of Old Mars Hill Road to Mars Hill Road proper “as a special favor for one citizen.”

Thursday, October 01, 2015

Oconee County Reports Major Spills At Its Calls Creek Plant In September And In July

Adds To Long List

Oconee County late yesterday informed the Georgia Environmental Protection Division of yet another problem with the operation of its Calls Creek wastewater treatment facility.

From 5 to 8 a.m. on Sept. 25 the plant released an estimated 50,000 gallons of discharge containing total suspended solids that exceeded the permitted level, according to the county’s report.

Tuesday, September 29, 2015

Oconee County Commissioners Let Proposal For Reconnecting Old Mars Hill Road Die Without Discussion

No Citizen Response Allowed

The Oconee County Board of Commissioners tonight let die without comment the proposal to reconnect Old Mars Hill Road with Mars Hill Road proper.

Board of Commissioners Chairman Melvin Davis, who initiated the redesign of the roadway to allow for the connection, brought the proposal before the other commissioners, but none of them wanted to go forward with it.

Sunday, September 27, 2015

Adoptions Increased 159 Percent Since Oconee County Animal Control Began Foster Program

More Animals Kept Alive

In Fiscal Year 2013, the year before the Oconee County Animal Control Department began its foster program, it euthanized 1.4 animals for every animal it was able to adopt out.

In Fiscal Year 2015, the first full year of operation of the adoption program, Animal Control reversed the ratio, adopting out 1.8 animals for every one it euthanized.