Panel advances hog-farm deal
$6.2M for buyout endorsed
A legislative panel on Tuesday endorsed Gov. Asa Hutchinson’s plan to transfer up to $6.2 million in state “rainy-day” funds to the Department of Arkansas Heritage to obtain a conservation easement within the Buffalo National River watershed to shut down a hog farm.
In a voice vote with no audible dissenters, the Legislative Council’s Performance Evaluation and Expenditure Review Subcommittee recommended the full council approve the Republican governor’s request during the council’s meeting on Friday.
The panel also recommended the council approve increasing the department’s spending authority by $6.2 million in fiscal 2019, which ends June 30, and in fiscal 2020, which starts the next day, for the purchase of the conservation easement.
Hutchinson on Thursday announced that C&H Hog Farms, the target of yearslong environmental concerns, will close its doors later this year under a buyout agreement reached with Hutchinson and Arkansas Heritage.
The large-scale hog farm, which sits within the watershed of the Buffalo National River, will have 180 days from last Thursday to cease operations. After that, the Department of Environmental Quality will begin closing and cleaning up the site. The conservation easement will limit the site’s future usage.
State Budget Administrator Jake Bleed told lawmakers on Tuesday that the
governor is requesting up to $6.2 million in rainy-day funds because it reflects that “right now we are going to meet our obligations under that contract from a variety of sources, one of which is the private donations through The Nature Conservancy.
“The amount The Nature Conservancy is going to be able to provide, we’re still pulling that together,” he said.
The Department of Arkansas Heritage also will provide an undetermined amount of money, Bleed said.
The nature of the legislative panel’s schedule is such that state officials could have either presented the governor’s request on Tuesday or wait until its next meeting in August, “so we decided to go ahead and get up before y’all today,” Bleed said. “Our anticipation is that we get all this all nailed down, which will be quite soon, we’ll be able to give you a full report and accounting on that.”
Afterward, Department of Finance and Administration spokesman Scott Hardin said the rainy-day fund balance is now $16.28 million. The governor typically proposes using rainy-day funds in cases of emergencies or for his priority projects.
Sen. Bruce Maloch, D-Magnolia, asked Bleed whether there were any discussions or attempts to raise private funds from others beyond The Nature Conservancy.
“I do not know that answer to that,” Bleed said.
Sen. Jimmy Hickey, R-Texarkana, asked Bleed whether state officials will make a one-time payment or make payments over a few years.
“We will do a one-time transfer once we get the funds together in an escrow account and then that escrow account will be held” until the contract’s requirements are met, Bleed said.
“This is an easement on the use of the land. They will still be able to retain title to the land. They will be able to use it for some function, but the easement will restrict use of the land,” he said.
Hickey asked whether future buyers or heirs of the property also will be under the contract.
“My understanding is that it’s a perpetual easement,” Bleed said.
Maloch asked whether “all the expenses related to closure of the lagoon and that type of thing” will be covered by $6.2 million or will the state or other entity have to pay more money on the closure.
Michael Grappe, chief program officer of the Department of Environmental Quality, said he hasn’t heard of any potential costs, “but if there is, it will come out of the closure fund.”
Sen. Terry Rice, R-Waldron, said he read that up to $1.2 million will be provided from other parties for the purchase of the conservation easement, and wondered, “where is the incentive if we are appropriating this now for the full amount?”
Hutchinson said on Thursday that The Nature Conservancy will not pay more than $1 million toward the buyout and will likely pay closer to $600,000 or so.
Rice asked, “If we changed this appropriation to $5 million, you think it would help him come up with the other $1.2 [million] to get this deal done?
“What my concern is … this farm is going be shut down. I want to make the people whole. The state of Arkansas did this,” Rice said. “I still have concern about the precedent it sets and even in that watershed for other type farms, if this doesn’t clean up that river up to the standard that many people think it should be or we might want it to be, what this opens up down the road.”
C&H Hog Farms has been in operation since 2013. Its operators faced pushback from environmental groups concerned about the manure ending up in the Buffalo River, the first river in the United States to be designated as a national river.
The facility is located on Big Creek, 6.6 miles from where it flows into the Buffalo.
The creek and river are on the department’s proposed list of impaired water bodies because E.coli was detected in them, but no government agency has concluded C&H is responsible for the bacteria’s presence.