October 31, 2014

City waives employee tax break stipulation for Competitive Machining

Will revisit this time next year

By Tim Barnum|Staff writer
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STANDISH — A Standish industrial company that was in danger last month of losing a 50-percent industrial facility tax abatement (IFT) it was granted for a year 2000 expansion was given a second chance by the Standish City Council during its meeting on March 16.

In a unanimous four man vote (Councilmen Jerry Winslow, Clark Sanford and Lester Couisneau were absent), Competitive Machining, an operation with the majority of its work derived from contracts with Caterpillar and the U.S. Department of Defense, had an IFT stipulation with the city, Arenac County, Standish-Sterling Schools District and the Bay-Arenac Intermediate School District waived. The waived stipulation called for the company to maintain at least 18 employees in order to receive a 50-percent tax break on millage payments to the county and schools, and summer property taxes to the city.

The tax abatement was in its tenth year of a 12-year contract.

City Manager Mike Moran spoke up prior to the decision, saying he had been in contact with Laura Puzzuoli, CM’s owner and fellow city managers facing similar situations since the February meeting when the possibility of waiving CM’s abatement was last discussed in public. He told council that discussions with other city managers had revealed that council has the power to waive certain aspects of the IFT it deemed fitting.

He also said that during conversations with Puzzuoli, she had informed him the majority of the company’s troubles are due to issues in getting credit to assist in getting the company’s cash flow in order.

“They are seeking a loan right now,” Moran said.

After Moran’s comments, council asked to hear from Puzzuoli, who was in attendance.

“We have work, but we have no funds,” Puzzuoli said. “We actually have more prospects now than we’ve had in years.

“It’s all about the money, or the lack thereof.”

She said contracts have surfaced with General Dynamics, a producer for the Department of Defense. However, since last month’s meeting, when CM was employing eight employees due to layoffs in late 2008, hence the discussion of waiving its IFT, things had gotten even worse with the credit situation facing her business, forcing CM to shut down operations approximately two weeks ago and layoff its final eight employees until funding was secured.

According to Puzzuoli, though, employees haven’t given up in trying to keep the business running.

“People are coming in on their own time to finish up projects,” she said. “They know that we have work and if we can get it out they’ll be able to come back to work.”

The industrial business’ owner also shared some figures from CM with the city, informing council that the business had paid over $22,000 per year in taxes from 2001-2007 (after the abatement was granted, the amount changed when the Michigan Business Tax came into effect for CM last year) and in that same time, about $2.5 million in payroll. Puzzuoli says she is pursuing a Small Business Administration loan to get the operation moving once again.

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