Garfield County road project hits financial snag
Glenwood Springs correspondent
Aspen, CO Colorado
GLENWOOD SPRINGS “The Garfield County commissioners had planned to approve a $21.4 million contract to rebuild County Road 204 on Monday. They didn’t.
The plan it a snag because Chevron Corp., which agreed to put up most of the money for the project, hasn’t been able to get a letter of credit to guarantee its share. Chevron officials said Monday they had been promised the letter from Wachovia bank, but the bank later told them it has frozen all lines of credit that haven’t been issued yet.
Wachovia suffered a $5 billion run on deposits last month and is in the process of being acquired by Wells Fargo.
“It was a sudden and unexpected line of development,” DeBerry said of the notice from Wachovia, which has been swallowed up by Wells Fargo in the wake of the United States’ continuing financial market woes.
DeBerry said the company has since moved to J.P. Morgan Chase to receive that letter of credit, he said.
As a result, county commissioners on Monday voted to amend an agreement with Chevron regarding reconstruction the road, which heads north out of DeBeque and serves the area’s booming natural gas fields. The amendment gives the company another week to obtain the letter of credit.
Republicans Larry McCown and John Martin voted in favor of the move.
The agreement calls for Chevron to put up $25 million to help reconstruct CR 204. The county will contribute $3 million toward the work, with half of that sum coming from a Colorado Department of Local Affairs grant.
Commissioner Tresi Houpt, a Democrat, voted against giving the company more time because of her continuing opposition to a clause in the county’s agreement with Chevron that says the county would support the company’s move to apply for a severance tax credit from the project. Those credits would reduce the company’s severance tax bill.
Houpt has said the use of severance tax credits for CR 204 was not in the public benefit because the project largely benefits Chevron and companies should contribute to help rebuild roads as part of doing business in the county. Other local Democrats worry the county may lose potential severance tax dollars and grant funding because of the county’s support of a tax credit for Chevron.
But DeBerry said on Monday Chevron hasn’t made a decision about whether to apply for the severance tax credits.
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