Ag Renewable Resources Gets Approval

Published 4:29 pm Thursday, December 2, 2010

CUMBERLAND – After many hours of discussion and well past the 11 o'clock hour on Tuesday night, the Board of Supervisors finally made a decision on a conditional use permit that was submitted by Ag Renewable Resources LLC, which would allow a thermophilic anaerobic digester to operate within the newly rezoned Cumberland business park.

The conditional use permit was approved.

The proposed facility's business plan includes taking, mainly, poultry litter from local farmers and sending it through a digestion process where methane gas would be utilized to generate electricity, then the by-product of the process would be manufactured into liquid and solid fertilizer.

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The overall decision came after holding one of two public hearings related to Ag Renewable Resources.

The first public hearing was for a code amendment to add “manufacture of fertilizer” as a use permitted by condition in M-1 (industrial).

Legal Advice/Conflict of Interest

Cumberland's County Attorney, Howard Estes, began the meeting by commenting on a question that had been previously raised about the placement of public notices in the County's paper of record, The Herald, even though prior action may have not been completed yet.

“Advertisements are often placed to run concurrent with other public bodies even when action is dependant on the action of the other body,” noted Estes.

The combination of ads is to make publication less expensive and due to the paper's requirement that ads be placed three days in advance of the publication and also because The Herald only publishes twice a week.

“In order for ads to run in FOIA compliant for the two consecutive weeks and at least six days in advance of the meeting, this means that ads must be placed 23 days at a minimum prior to the meeting,” he explained. “It's often quite longer than that given the timing of meetings and the timing of publication. The County Supervisors typically meet 15 days after the Planning Commission which is shorter than the 23 day period…”

According to Estes, this has been “historically decided and as a matter of practice for several years” to provide for concurrent ads to run during the process.

“It's also important to note that the process does not include the referral time to the Planning Commission or workshops held prior to public hearings or staff reviews and comments in research to these applications that are provided to county citizens and businesses,” he asserted about the consistent process.

The next item Estes addressed was about his firm's representation with Ag Renewable Resources LLC.

“My firm has previously disclosed my representation with Ag Renewable to the County this summer and received a waiver of legal conflict of interest,” he said.

“However, while I do not believe there is a conflict under Virginia state laws or ethical rules I wanted to further disclose that I have not nor has the County staff or Board of Supervisors sought legal advice regarding the conditional use permit sought by Ag Renewable Resources tonight or its potential siting in the Cumberland business park or related matters. If this item is discussed in closed session under FOIA I have and will continue to refuse myself from any such discussion. I have further made the County aware that it may seek other counsel if needed in its consideration of the conditional use permit for this evening. With that in mind, Fred Payne, the county attorney for Fluvanna, is here and he will be providing you with legal advice for both the code amendment as well as the conditional use permit public hearing.”

Payne has been in touch with Andrew Sorrell, planning and zoning administrator, related to the application and also provided his review of the 20 proposed supplemental conditions approved by the Planning Commission.

Supervisor Bill Osl, District One, also spoke at the beginning of the meeting about a potential conflict.

“A week ago I dissolved all of my connections with the applicant,” he said about his previous involvement with Ag Renewable Resources. “I have no personal interest in the business and the applicant has repaid what I had invested. I have no personal interest. I have no conflict. I intend to participate this evening.”

Chairman Questions Conflict

After Osl announced that he no longer had a personal interest in Ag Renewable Resources, the Board's Chairman Tim Kennell, District Two, requested information from acting County Attorney Payne about “if there is indeed a conflict looming on the decision to approve this zoning.”

“If there was a concern about the conflict would it then be necessary to hold a public hearing tonight in order to move forward with the conditional use permit until that conflict is resolved?” asked Kennell.

Payne said that the issue is “whether Mr. Osl has a conflict.”

“Mr. Osl has, if I heard him correctly, did have a financial interest in the applicant but has removed that financial interest,” he said while pulling the state statute (Section 2.2-3101 of the Code of Virginia in the definition area of the Conflict of Interest Act).

He then read aloud the definition that can be found in the code regarding a financial or personal interest.

“What it amounts to is that personal interest in a business entity is defined to be three percent or more of that property…,” he explained about a potential conflict of interest. “The other thing is $10,000 income or ownership value.”

According to Payne, he said that what he understood Osl to say was that he did have equity in the business but no longer has that interest.

“No income, zero equity, no investment,” added Osl.

Payne also went into the personal interest claim as it relates to a transaction.

Section 2.2-3112 of the Code of Virginia, he said, defines the conflict of interest.

“It requires a person who has a personal interest in the transaction…has to disqualify himself from participating,” he said. “Under these circumstances it appears to me that the facts are that Mr. Osl doesn't have a personal interest in this transaction and therefore can vote.”

“My concern is on the vote on the Industrial Development Park and whether the vote that we made as a Board on a three/two vote at our last meeting to approve the rezoning to M-1 was there at that point, if there was a concern at that point…” continued to question Kennell.

The action the Chairman was referring to was the November 9 decision, after holding a public hearing, to rezone property on Poorhouse Road from agriculture and recreational area access to industrial for the purpose of constructing a business park that would be owned by the County's Industrial Development Authority.

“The action that the Board took on November 9 is presumptively valid,” offered Payne. “…As I understand it at the time that when that vote was taken the applicant was the IDA and the current applicant, ARR, was a potential user of the property but as I understand it there was no binding contract in the IDA and that entity at that time…It would seem to me that you all do have the authority to go forward…It's lawful until a judge determines it not.”

At that point in the meeting, Chairman Kennell made a motion to rescind the ordinance where the land was rezoned owned by the IDA to the manufacturing category on the grounds that “a member of the Board of Supervisors did indeed have a conflict of interest that should have permitted him from voting on that ordinance.”

Afterwards, Osl asked Payne to “weigh in…on the validity of the Board of Supervisors taking action before holding public hearings.”

Payne then announced that, as a matter of procedure, the motion made by Kennell was “out of order.”

“The reason is that the action that was taken was a legislative act that amended the zoning map,” said Payne. “As you know there is quite an elaborate procedure that is required by statute to amend the zoning map. That action was taken and was completed on November 9. There are two ways that it could be overset other than, of course, litigation. One is a motion to reconsider which has to be made by one of the members who participated in the positive affirmative vote but that vote can only be taken at that same meeting or at an adjournment of that meeting…Now the only other way to rescind this action would be to go through the whole process again and to zone it back…This board's authority to rescind that action, since its completed, would be simply to go back and do that process again.”

In light of the information provided by Payne, the motion made by Kennell was out of order and should not have been made and was then withdrawn by Kennell from the floor.

Code Amendment Hearing

According to Sorrell, the need for the code amendment is because the use “manufacture of fertilizer” is not a currently permitted use.

“Currently, private electrical power generating facilities are permitted by conditional permit in M-1 zoning,” he said. “Manufacture of fertilizer is not a permit use as a matter of right or with condition.”

According to Sorrell, by the County permitting the manufacture of fertilizer in the M-1 zoning district by conditional permit it would allow for new agricultural industries like Ag Renewable Resources to also develop.

The Planning Commission conducted its own public hearing on November 15 and unanimously recommended the code amendment to the Supervisors for adoption.

After Sorrell's background information, the public hearing was opened and three citizens spoke but several of the comments made were not germane to the proposed code amendment.

“I just think we can respond to the land clearing,” noted Supervisor Van Petty, District Three.

The Planning and Zoning Administrator did provide information to the Supervisors related to how the applicant has been able to do land-clearing in the potential area even though the code amendment and permit had not been approved.

When an engineered Erosion and Sediment Control Plan has been approved (by Peter Francisco Soil and Water Conservation District) clearing and grading is “completely legal and legitimate,” noted Sorrell.

“That can occur prior to a zoning action occurring because if the zoning action is not approved then the IDA has a nice lot that they can market to another user…” he added.

Judy Ownby, Cumberland's county administrator, also noted that she had not received any notification from residents of the Poorhouse Road area or Trents Mill Road community concerning contaminated wells.

“They haven't come in to me,” she said about the question of the County receiving claims related to contaminated water.

Supervisor Elbert Womack, District Four, made the motion to approve and adopt the proposed code amendment (CA 10-11) and it passed on a three to two vote. Supervisor Bobby Oertel, District Five, and Chairman Kennell voted in opposition.

Conditional Use Permit

Ag Renewable Resources submitted the conditional use permit request to the County to allow for a facility that is a private electric power generating facility and manufactures fertilizer as a by-product in the M-1, industrial zoning district.

According to Sorrell, the applicant wishes to locate in the County's new business park on approximately 11 acres on Poorhouse Road.

The business proposes to process poultry waste and other renewable feedstock into renewable energy and soil amendments (fertilizers) marketable products.

Ag Renewable Resources was formed by a group of Cumberland poultry and cattle farmers looking for ways to reduce the environmental impacts of farming in central Virginia on the Chesapeake Bay watershed, according to Sorrell. The business goal is also to develop a renewable energy form and recycle the by-products, he said.

The Planning Commission recommended the conditional use permit application to the Board for consideration on November 22 after compiling and agreeing on 20 supplemental conditions that will limit impacts of the conditions uses.

The supplemental conditions also incorporated the third-party legal counsel input provided by Payne.

Those conditions relate to such items as covenants and restrictions, feedstock, storage, odor control, dust control, screening, traffic control, security, testing, and inspection.

After Sorrell's presentation, Daryl Bishop, representing Ag Renewable Resources with assistance from Bowman Consulting, provided the Board with information related to the formation of the concept and how the initial brainstorming for a renewable energy project idea for Cumberland started in 2008.

Grant Funds

Chairman Kennell also requested Michael Cooper, Cumberland's assistant administrator of community development, to detail the grant opportunities that have been awarded to the renewable energy project.

“What I wanted to do is to take the opportunity to clarify the grant dollars that have been invested to date in this project or awarded to the overall project…,” said Cooper.

Regarding the purchasing of the land for the development of an Industrial Development Park, the IDA received a grant in the amount of $99,635 from the Tobacco Commission, which was Cumberland's annual economic development allocation.

“That went towards the purchase price of $197,500 with the balance being paid out of the previously approved capital improvements plan's funds that were designated for that project,” he said.

Another grant was received by the IDA related to the Ag Renewable project in the amount of $200,000, which was originally vested towards purchasing the land but that did not work out, according to Cooper.

In light of Ag Renewable going into the business park, the IDA has since gone back to the Tobacco Commission and requested that allocated money, he also noted.

“Should that come to fruition it would be permitted to be used for another component,” he said. “Specifically the road improvements for Poorhouse Road that will be subject for approval by the Tobacco Commission in their upcoming January 2011 meeting.”

Finally, a recent grant was awarded through the Tobacco Commission's special projects program in the amount of $375,000 to the IDA for the benefit of Ag Renewable Resources. Those funds are to be used for the costs related to the initial startup of the site.

“To date, both the $200,000 and the $375,000 grant have not been expended in any way,” he said. “Typically, the process works that the funds are spent and paid for by the applicant and then reimbursed by the Tobacco Commission. Going forward if this project were to be approved then the Industrial Development Authority, working with Ag Renewable, will continue to use those funds as awarded to go forward with the rest of the project…”

Citizens Speak

James Henshaw addressed the Board and said, “I want to thank Ms. Kennel and Mr. Oertel for trying to right some obvious wrongs that had to do with this project. Thank you tonight. I really appreciate your efforts and the way you voted. You're two stand up men for this community.”

He also explained that he “didn't have any problems with Mr. Bishop or anything to do with this project” but that he believes the choice of property was “very, very, very poor.”

“I think that's the problem that we have all been here fighting or I have been here fighting since May is this location…,” he said.

Randy Bryant, a member of the Planning Commission who said he was speaking as a citizen from District One, asked the Board to support the conditional use permit application from Ag Renewable Resources.

“I come tonight as a citizen of Cumberland County…,” he said.

According to Bryant, he said that he believes that several are opposed to the conditional use permit request because “it was an infringement into the RA-1 zoning area for the industrial park.”

“The fourth issue, infringement into the RA-1 zoning, is not really a issue with this CUP at all,” he advised, “because that was taken up two weeks ago with the rezoning to rezone the land to M-1. So that's a moot issue and over and done.”

Donald Bishop addressed the Board about local farmers having a litter problem.

“I was trying to find a solution for our litter problem,” said Bishop about the digester project and environmental regulations that are restricting land application of raw litter. “…I'm trying to find some way that we can utilize chicken litter. We have about 30 growers in Cumberland County that are going to be out of business if we can't apply our chicken litter to our land or find some use for it. I'm not trying to cause people problems and I'm sorry I got so many people involved in this that has to suffer from it but I'm trying to find a solution for chicken litter in Cumberland County and this seemed to be the best way of doing it.”

Judy Sams, a resident of Trents Mill Road, asked the Supervisors to vote and “reflect the wishes of the people who have voted you into office.”

“Please vote 'no' to Ag Renewable Resources coming into the village area of Cumberland County,” she said.

Hobey Baughan, president of the Virginia Poultry Federation based in Harrisonburg, addressed the Board and said that the federation is in support of the poultry anaerobic digester project.

The statewide trade association represents the poultry industry in Virginia, he said.

“Poultry is Virginia's largest agricultural sector,” he asserted. “…As you know, Cumberland is a very important poultry producing county.”

Several representatives from the County's IDA were in attendance for the meeting and a few had also signed up for the public hearing and spoke in support of Ag Renewable Resources and the project that could potentially bring additional industries into the County.

Those who spoke were Lena Chapman, Chair Beverly Ayers, and Darlene Pelot.

“The whole purpose for us is to attract business and industry into the County and the business park is the first step,” said Ms. Ayers. “This one business, as we've heard, will help us pay for just that and then we can work to bring other businesses or industries into the County.”

Will Sanderson, a Cumberland poultry farmer, spoke during the hearing and addressed the growing concern of local farmers related to being able to use litter.

“I cannot stress to you enough the importance of a facility like the one proposed by ARR that is going to be in the very near future,” he said. “With the continuing pressures from DEQ and EPA, the practice of land applying poultry litter is going to become a thing of the past. Farmers are going to have trouble getting rid of their litter and piles will become large on the farm if there is no outlet for getting rid of it.”

In 1999, he advised, there were no restrictions or regulations on poultry litter.

Roger Hatcher addressed the Board as President of the Cumberland Farm Bureau Board.

“I drove three hours this afternoon to come to this meeting from the annual convention of Farm Bureau and I'll drive three hours tonight to get back there,” he said.

According to Hatcher, the risk to farming in this region is the Chesapeake Bay Act.

“EPA is threatening to take over the management of this process from the state of Virginia,” he advised. “There are six states that contribute to the Chesapeake Bay and it is critical that we employ the technology that has been talked about so much tonight…”

Hatcher also noted that the value of a liquid fertilizer without phosphorus is “immeasurable.”

“It will allow the poultry industry to continue,” he continued about the project.

Pat Bickel, a Cartersville resident, expanded on her comments that were previously sent in an email to the County in favor of the new business opportunity.

“This commercial enterprise is a vast improvement on the current practice,” she said about the current raw materials that are land applied.

“ARR is adapting a cutting edge process that has the potential application throughout Virginia,” she said about her wish for the Board to approve the conditional use permit request.

Kevin Ingle, a Cumberland business owner, spoke during the public hearing about the process.

“Being a business person, you know, I'm always interested with the possibility of new business to help us out with taxes. I'm all in favor of that prospect-that aspect of this deal. But, I think we're kind of overlooking an issue here. I think tonight's issue is whether we've got a clean document, a clean conditional use permit for you all to vote on.”

Ingle went on to request that the Board vote “no” and request that the applicant resend the conditional use permit.

“It's not right. We've got a black cloud hanging over this conditional use permit,” he said about the questions that were previously raised related to conflicts of interests. “The only way to clear this up is to vote 'no' tonight and let this be resubmitted as a conditional use permit, a clean document…”

Joe Hazlegrove Jr. spoke and explained that his family farms in the Guinea area of the County in Districts Three and Four.

He also addressed the growing concern among farmers about the restrictions that are being put in regulation related to controlling the amount of phosphorus that is being allowed for land application in fertilizers.

During the public hearing, the Chairman also read aloud several letters and emails that were submitted to the County related to their position for or against the conditional use permit submitted by Ag Renewable Resources.

Board Comments

Supervisor Womack spoke first about the looming conditional use permit decision and said, “Since my name was spelled out tonight that if I voted for this digester tonight that I would support the cloud that hangs over this Board and the vote that was taken on the rezoning of this property and I would also be condoning Mr. Osl's vote on the rezoning of this area.”

“For the people in this audience, each board member, I represent the Fourth District, and Mr. Osl represents the First District. If I vote on an issue, I'm responsible for if I should or should not vote on that issue,” he continued. “Not any other member. Am I correct Mr. Lawyer?”

At that point, acting County Attorney Payne replied, “Yes sir.”

Womack added, “I take high esteem on what these lawyers here tell me. I'm not a lawyer; I'm just a plain old farmer. When they tell me something that's what we pay them for. When they tell me that what was done was done properly, my vote tonight will be what I believe is the best for the citizens of Cumberland County-not that I condone what has or has not taken place. Make no misunderstandings.”

Supervisor Van Petty, District Three, also spelled out the fact that his “vote does not rely on any other board member's vote.”

According to Petty, more speakers were in favor of the project from his district than against it.

“Then it comes down to the Board member about what decision you make…My vote is for the members who aren't here too,” he said.

“…I will have a lot of free time on my hands if I get voted out. I'm not concerned about my vote, which way I vote determines who is going to vote for me or not. My concern is to do what the right thing is to do. You only get four years in a term and then you have to go meet the citizens again… That's the way the process works…”

Supervisor Oertel, again, questioned the legitimacy of the past zoning vote.

“The question is now at the State Supreme Court who will eventually select a judge to hear it,” explained Oertel about potential litigation against the Board of Supervisors by a citizen. “…It's gong to be heard but we don't know what it's going to be…”

Chairman Kennell wrapped up the comments and said that he thinks the digester is a “great concept.”

“I think it's a great thing, I really do,” he said. “I know the County needs an Industrial Park…and I'm definitely about that… It's a good thing. So I do support what you are doing. I just think this is the most fouled up process that I've ever been a part of. I've got so many different people intertwined in the County working on the project it seems like and whether it's good for the County or not I've never experienced that type of planning…”

Kennel also said he is concerned about the potential conflicts.

“I am concerned about potential conflicts and until those are resolved I don't think I can move forward on this,” he asserted. “It is not because of the conditional use permit but because of the zoning that got us here.”

Supervisor Osl countered and said that he is the only one on the Board that has to answer to potential conflict of interest questions.

“ARR, the applicant, says they are committed to Cumberland County,” said Osl, while looking towards the business representatives. “I say to you to be careful because it doesn't sound like Cumberland County is committed to you. This is more of the…not in my back yard typical of Cumberland County. We get it on every project that comes up. It doesn't matter what it is…It's always a good business but not in my back yard…”

He also noted “all of the accusations” that have been made of him throughout the process.

“I live to the ethics, my own code of ethics and the code of ethics of the Board of Supervisors. I follow the spirit and the letter of the law and I'm willing to stand up to that to anyone who wants to look at it,” said Osl. “…I haven't made a penny off of anything and it's unfortunate that there are citizens who attack in that way…”

The Decision

After the long night, Supervisor Petty made the motion to approve the conditional use permit request because it meets the intent of the Comprehensive Plan and Zoning Ordinance including the supplemental conditions that were provided in a draft resolution that was handed out and dated November 30.

The motion passed on a three to two vote. Supervisor Oertel and Chairman Kennell voted against the conditional use permit.