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Sheffield over-estimates wind payment; Selectmen transfer funds to cover difference  

Credit:  Reposted from The Caledonian Record via Energize Vermont ~~

SHEFFIELD — At annual Town Meeting last March, taxpayers voted on an estimated amount the town would receive in supplemental payments from the newly-operating wind project run by First Wind of Boston.

The figure was an estimate and because of a shortfall, the town had to transfer $17,240.54 from a reserve CD to the budget to cover the difference, said Select Board Chairman Max Aldrich at the board’s December meeting.

“We were given an estimated figure at Town Meeting last year that was voted on by the taxpayers, and obviously, we used that figure because we had nothing more concrete at that time, and when the actual numbers came in, they weren’t exactly as the estimated figures,” said Aldrich. “So we have a slightly bigger tax break given this year because of the fact that we were using an estimated figure, which we will make up out of our reserve fund,” he said.

At the annual meeting last March, voters acted on an estimated figure of $495,069, half of which was voted to be applied to property tax relief and the other half to be put into savings. “The half of the $495,069, we have that, because that’s what they said at town meeting, and we used half of that to alleviate the tax burden,” explained Town Clerk and Treasurer Kathy Newland. “And the other half we voted to save, and that’s in an account, in an interest bearing account.”

However, “less came in than what we estimated,” Aldrich said. “It was actually more than the contract stated…it was a mistake the town made and not a mistake that First Wind made.”

“We didn’t have a grand list figure [for First Wind's value] and we were in the middle of a reappraisal,” Newland said. “We had no idea what they were going to pay in taxes, what their assessment would be.”

So the estimate by the town was too large, Aldrich said.

Adding to the confusion in figuring the supplemental payment amount in the first full year of First Wind’s operations was the fact that the company and the town have different fiscal years.

First Wind’s commitment to the town of Sheffield is for a guaranteed $520,000 a year in taxes plus the supplemental payment in lieu of taxes for hosting the wind farm. The $495,069 estimated at the annual meeting last year plus the about $54,000 more in taxes paid by First Wind for the taxes separate from the supplemental payment based on the appraisal set by the town, is more than $520,000, “which is what they are supposed to give us in one year, and so because of that estimate being wrong, they made a correction in the October payment,” Aldrich said. That difference resulted in the town’s $17,000 shortfall.

“[First Wind was] very willing to give us this additional amount but the board decided we should make that up,” said Aldrich.

First Wind spokesman John Lamontagne said of the First Wind’s arrangement with the town, “I guess the only comment we’d have is that we’re happy to be a part of the Sheffield community and appreciate the support we’ve had.”

“All budgets are estimates,” said Newland. “They haven’t actually completed their first full tax year yet,” she said of the wind development.

Aldrich said, “It was a carefully calculated guess,” of the First Wind first year of payments. It’s a learning process for the town officials, with the influx of the First Wind payments and the first year of the supplemental payment coming into the town’s coffers, split between tax relief and savings. “We figure that it’s going to take three years,” to figure it all out, he added. “This last year, and next year…we’ve got corrections to make, and the following year we should be clean. The taxpayers all knew it was an estimate.”

Also at the recent meeting, there was a discussion about the wind project funds that are invested, and Newland explained that town officials are researching to “find the best instrument for investing for long term or short term, depending what the voters instruct us to do.” Charles Gilman, selectman, suggested that the amount saved this year “be split in half with amounts going for short and long term,” the minutes reflect. “It was the consensus to have a separate article for the taxpayers [at Town Meeting this coming March] so they could give us input on the actual investments. The Clerk suggested that we have a financial advisor going forward, similar to the one we have for the Keniston-Dane Educational Fund,” the minutes note.

Sally Wood-Simons, at the meeting, said she was “opposed to forming a foundation for savings from the wind farm,” the minutes show. “She stated that it was not democratic to have a few people decide without taxpayer say how the monies would be spent and the monies would not be for everyone’s benefit.”

Source:  Reposted from The Caledonian Record via Energize Vermont

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

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