Town Administrator Diana Schindler on Wednesday updated the selectboard on the status of Rodney Hunt, having just attended a meeting of the Massachusetts Office of Business Development.
At that meeting, she said, company representatives confirmed the large-scale layoffs that have long been rumored at Rodney Hunt. However, the company insists that these layoffs are necessary for the company to survive at all. It was also confirmed that they’ve closed the foundry portion of the Orange facility in favor of increased fabrication, but since they’re having difficulty filling their need for skilled welders and fitters they’ve been outsourcing some of that fabrication to other Orange businesses. Rodney Hunt issued a warning to the state at the end of August advising it would be laying off 50-60 people over a 3-month period.
The special 5-year tax incentive that Rodney Hunt worked out with the town hinged upon $6 million in investments at the local facility and strict hiring goals that have not been met. Schindler was told at the MOBD meeting that Rodney Hunt has invested $5 million of the promised $6 million in equipment and improvements, but even before the layoffs began they hadn’t met their hiring goal (of 60 new jobs).
The special agreement gave the company a tax break. The last time the company was billed for a full assessment was in 2012 for $65,000, according to the board of assessors. No value was assessed for 2013. The first year they received 100 percent tax exemption; in 2014 the company was assess $21,000 and was taxed on 25 percent of its value. It is estimated that over the two years the company received $128,000 in tax savings.
Schindler explained that Orange cannot revoke their special tax agreement unless the state decertifies the special tax incentives they gave Rodney Hunt. Her impression was that the MOBD wanted Orange to negotiate a new STA with Rodney Hunt rather than flat out canceling the old one, but she didn’t think there’d be much appetite for that in town.
She expects the state to make its decision about Rodney Hunt’s tax status before the Dec. 17 selectboard meeting, and she enouraged the board to meet face to face with a representative of VAG, Rodney Hunt’s parent company, prior to that.
Treasurer Gabe Voelker came before the board to update them on the closing and reporting of Fiscal Year 2014. She said that the tax rate cannot be set until an audit is completed (the audit began on Nov. 17), and there are still some problems reconciling the financial office’s figures with the new software they installed this year.
She warned that, despite her team’s best efforts and long hours, the town won’t be ready to set a tax rate before the next tax bills go out in January.
She noted that the borrowing for demolition of Putnam Hall is right on schedule; she’s just awaiting a go-ahead from bond counsel. She doesn’t know yet how much the interest on the borrowing will be, but she should have a borrowing note for the board to sign at their Dec. 17 meeting.