A five-year, 100 percent tax break for parts manufacturer Protomet was approved in a 4-1 vote by the Oak Ridge City Council on Monday.
The tax break could be used to help Protomet more than double the size of its 15,000-square-foot plant in the Bethel Valley Industrial Park, consolidate operations with a Blount County facility, and add 20-30 workers.
Also Monday, the City Council agreed in a voice vote, with no objections, to end the RecycleBank Reward Program and determine later what to do with the savings of $0.84 per household per month. The savings are expected to add up to about $124,000 each year.
The program’s end means citizens will no longer receive rewards for recycling that can be redeemed for discounts at local businesses. But the city will still collect recyclables.
The city staff would like to use the savings to offset an increase in the contract with garbage collector Waste Connections. That contract was recently amended to include an additional 654 homes at an extra $111,000 per year.
Oak Ridge City Council member Anne Garcia Garland unsuccessfully proposed refunding the $0.84 per month to residents. She voted for that amendment, and so did City Council members Charlie Hensley and David Mosby.
Mayor Tom Beehan and Mayor Pro Tem Jane Miller voted against it.
Council members Chuck Hope and Trina Baughn were absent.
The recycling rewards program has been in Oak Ridge since March 2009.
The tax break for Protomet is officially known as a payment-in-lieu-of-taxes agreement, or PILOT. It had been endorsed by the Oak Ridge Industrial Development Board and Oak Ridge City Mark S. Watson. It will be used for the second phase of Protomet’s expansion.
Protomet’s first expansion was in 2005. Since then, the company’s sales have grown by a factor of five, Protomet President Jeff Bohanan said. The company received a four-year, 100 percent tax abatement for its first expansion, but the city’s policies on tax incentives have changed and the new abatement had to be considered by Watson and City Council.
City officials said the value of the abated taxes could be about $125,000.
Garcia Garland, who voted against the PILOT, said she was proud of Protomet, but she wanted to know what taxpayers were getting in return for the tax break.
Bohanan said Protomet has saved jobs in Greenback, Tenn., that would be moving here and has spent more than $400,000 on utilities in Oak Ridge. He outlined the tough times his company and the marine industry—Protomet’s biggest customer—have weathered, citing wage cuts and layoffs. Based on financial considerations, he would seriously consider leaving Oak Ridge and moving to an area with a lower tax rate such as Knox or Loudon counties if the company didn’t get the abatement, Bohanan said.
Watson said Protomet has been encouraged to hire local employees, and 40 percent of its workers are from Oak Ridge. The company will continue to pay its existing property taxes through the new abatement period, or roughly $26,000 per year.
The PILOT agreement will apply only to new investment at Protomet’s eight-acre site in the Bethel Valley Industrial Park. Plans call for another 21,000 square feet of space, an enlarged assembly area, and more space for machining tools. The expansion will also allow the company to consolidate with 4FinalFinish, an aluminum finishing business that Protomet took over in 2008. 4FinalFinish now operates independently in Blount County.
Protomet started in 1997, and among other things, it makes uranium detection devices for homeland security and mirror assemblies for tow boats.
Oak Ridge Public Works Director Gary Cinder said RecycleBank recently notified Waste Connections that it will end the individual recycling reward program on April 15 and convert to a community-based program. Waste Connections had offered to let the city stay with RecycleBank as a community-based program or drop it.
Cinder said residents will still be able to access their accumulated reward points until they have either used them all, or the account has been inactive for one year.