As Jefferson County, towns and school districts continue negotiations on splitting wind power development payments in lieu of taxes, towns have asked for an even larger piece of the pie than an earlier suggestion that included a host community agreement.
Under one recent proposal, towns would receive almost half of the money, at the expense of primarily the county, but also the school districts.
According to a spreadsheet obtained by a Freedom of Information request from the Jefferson County administrator’s office, the town of Clayton offered numbers in which towns would receive 47.5 percent, schools would receive 37.5 percent and the county would receive 15 percent of any tax break money.
Payment-in-lieu-of-taxes agreements usually split the money based on tax distribution among those entities. On average over the five towns and four school districts in planned wind farm areas, towns receive 4.5 percent, schools get 56 percent and the county gets 39.4 percent.
So under the recent proposal, towns would increase their share almost tenfold, schools would lose about one-third and the county about 62 percent.
County Legislator Scott A. Gray, R-Watertown, said PILOTs based on the distribution of taxes should be the baseline.
“That should be the starting point,” he said. “From there, if the town can make the case, to be identified in SEQR, that there are impacts that need to be mitigated, the county would be open to slight changes.”
SEQR is the state environmental quality review, which is part of the development process. Mr. Gray said PILOTs have been tweaked before.
“I’m not opposed to mitigating those impacts,” Mr. Gray said. “But it has to be something important under our current taxing system.”
Clayton Supervisor Justin A. Taylor would not comment on any proposals or on whether Clayton was the source of the spreadsheet.
The Freedom of Information request from the Times asked for “communication between the town of Clayton and Jefferson County on the distribution of payment-in-lieu-of-taxes agreements or other tax break agreements for wind power developments.”
“Disclosure of any discussions would be inappropriate until there is a proposal presented to the taxing entities,” Mr. Taylor said. “Anything that you have would be purely speculative.”
But he did say he and other supervisors for towns with proposed wind development believe the towns will be taking the brunt of any negative impacts.
“In this case, the impact is on particular towns and their roads,” he said. “It’s our belief that the lowest impact is on the county and the school districts.”
The Jefferson County Industrial Development Agency has begun drafting a template PILOT agreement for wind power development. The draft will take several months, interim Director Donald C. Alexander said.
“We understand there is a timing issue in all of this and we have concern for the developer, too,” he said. “We don’t want to hold up development.”
But he does not want to rush the process either. “We’re asking for indulgence to allow time to develop policy in a meaningful way,” Mr. Alexander said.
The result will be one uniform tax-exempt policy for all wind farms, just as the county has a policy for manufacturing facilities. There will be options for exceptions, but they are rare “because we understand the value of these things.”
A normal formula for a PILOT agreement is 15 years, with the developer starting with a payment of 25 percent of what the total taxes would be and adding 25 percent more every five years. Money usually is distributed among the taxing entities based on how total property taxes are split the year before the PILOT starts. The uniform policy for wind farms could deviate from that in several ways, including length, payment amount and distribution.
In other New York communities with wind farms, only one is distributing PILOT money based on tax distribution – Lewis County. Others have money weighted toward the towns or cities that hold the turbines – sometimes entirely excluding the county. Madison County receives no money for the Munnsville Wind Farm, and Erie County receives no money from the Steel Winds Farm in Lackawanna.
JCIDA is working with attorneys and seeking input from the taxing jurisdictions as it formulates the PILOT. JCIDA’s board will also examine the PILOT before it is approved.
“We’re carrying the ball here and they’ll all have the opportunity for input,” Mr. Alexander said.
“At the end of the day, we’re all in the same community and reasonable heads will prevail.”
By Nancy Madsen
Times Staff Writer
12 May 2008
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