West Texas county to vote on funding nuke site
By Associated Press
May 7, 2009
Many folks in a sparsely populated West Texas county actually embraced the idea of opening up a radioactive waste site because it would bring in much needed jobs and tax dollars.
Now that the waste company's asking Andrews County to go a step further and come up with $75 million to pay for a disposal area at the site, Tom and Rhonda Stark aren't so sure.
"We're not sure they should get into the business of being financiers," said Rhonda Stark, adding that the county also shouldn't put "too many eggs" into one project. "This is a very complicated basket and $75 million buys a lot of eggs."
Voters in the county that borders New Mexico will decide Saturday whether to help Dallas-based Waste Control Specialists fund construction of a low-level radioactive waste disposal facility.
If passed, the measure would give county officials the ability to issue the bonds used to purchase $75 million of Waste Control Specialists' assets and lease those back to the company.
The company, which was issued a low-level radioactive waste disposal license in January by the Texas Commission on Environmental Quality, already stores the material at the site about 30 miles west of the city of Andrews and 370 miles west of Dallas.
The waste will come from Texas and Vermont and from sites run by the federal government.
Waste Control has stored, treated and disposed of hazardous waste at the 1,400-acre Andrews site since 1997. The new disposal facility will be within the 1,400 acres.
Chuck McDonald, a spokesman for Waste Control Specialists, said it and its parent company, Valhi Inc., have invested $225 million in the site. The company has no debt right now, and one of the few viable options for expansion is the municipal bond market, McDonald said.
"It's an unprecedented time financially ... the timing turned out to make it difficult to access traditional financing," he said.
Rhonda Stark said it's Valhi's credit rating that's making it turn to taxpayers, while Waste Control officials are saying they can't get loans because of the tight credit markets.
"The truth is that the current economic crisis has dried up credit markets for higher risk investments," she said.
A watchdog group in Texas said taxpayers should not approve the measure.
"I would hope the people make the decision that this is not a good idea," said Tom "Smitty" Smith, director of the liberal watchdog group Public Citizen of Texas. "I hope that they recognize that this is nothing more than a bailout for billionaires and turn this down."
"I think there's a significant difference between a bailout and entering a joint venture with the county," he said.
The company wants the new disposal area of the site finished in time to apply for some of $6 billion in stimulus money tied to disposing waste from federal cleanup at sites around the country, McDonald said. Those funds need to be spent by 2011, meaning a delay could cause the company to miss out on those opportunities.
The county and the state each get 5 percent of the disposal site's annual gross revenues, part of legislation passed in recent years.
If the company were able to benefit from the stimulus money, it would mean more money to the county and the state.
Peggy Pryor, a longtime opponent of the company and an Andrews resident, said she and others have formed a nonprofit, No Bonds for Billionaires, to fight the ballot measure.
She said she believe many aren't publicly saying they are against it but they are.
"We've been really encouraged with all the support we've been getting," Pryor said.
Andrews County has long been without indebtedness, said Lloyd Eisenrich, president of the Andrews Industrial Foundation, a privately funded group formed decades ago to help attract companies to the city. Money from the oil industry there has always enable the county to fund projects without taking on debt, he said.
Eisenrich said he believed Andrews County would be among a few in Texas to approve subsidizing a private company's venture through bonds should the measure pass and officials sign off on issuing the bonds. A law passed about 20 years ago allows the county to provide the company financing.
Valhi in late March had its credit rating lowered to CCC, down two notches from a B-minus rating in February, and with a negative outlook, according to a Standard & Poor's report.
"Clearly we see indicators moving in the wrong direction," said Henry Fukuchi, a financial analyst with Standard & Poor's.
Andrews County officials are currently working on a proposal with the company that would provide protection to taxpayers. The company is offering to annually place in escrow a year's worth of principal and interest _ about $6.6 million in the first year, and 100 percent of Waste Control's stock and $75 million Valhi Inc.'s stock as collateral.
Waste Control is paying the cost to set up the issuance, which is being handled by First Southwest Company.
The county also would hold title to Waste Control's property, and Valhi's parent company, Valhi Holdings Company, is providing a financial guarantee to the county.
"That's as strong a package of assurances we can come up with," McDonald said. "It's our task to make it clear to people what we're asking the county for is to take advantage of their credit rating and that they'll be paid back."
Eisenrich is confident the package of assurances protects taxpayers.
"They're basically putting up everything," he said.
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