March 12, 2013

Falmouth aims to develop ‘unprecedented’ finance plan to remove turbines

By Scott A. Giordano | THE BULLETIN | Posted Mar 11, 2013 |

FALMOUTH – Falmouth Assistant Town Manager Heather Harper told selectmen on March 11 that estimated costs to remove the town’s two wind turbines range from $12-15 million, including existing debt, removal fees, legal fees, and consulting work. In addition, special legislation is required to both borrow money to pay removal costs and to potentially refinance tax-exempt bonds in case the turbines are resold to a non-governmental body.

“We have indicated there is considerable complexity in many areas. It is rather extraordinary and there is really no precedent set,” added Town Manager Julian Suso.

Selectmen Chairman Kevin Murphy said there are many variables remaining. For instance: There is still no word on whether the state will offer any financial assistance to the town, no word on whether any existing debts will be forgiven, and no definite figure for resale value of the turbines. In addition, legal expenses are unknown.

“No one has an exact cost for removal. This is a work in progress,” Murphy said. “We are working as hard and diligently as we can to make sure the motion, as well as the ballot question, will be a one-time shot, and we will have everything included in this.”

Murphy added “it appears the state does not have the same urgency” as the town does in resolving the remaining questions on the town turbines located at the Falmouth Wastewater Treatment Facility.

The next available meeting between town and state officials is not scheduled until April 2. Selectmen are hoping to get some more answers on the lingering variables in time for the April 8 Town Meeting and April 9 Special Town Meeting.

Selectmen are planning to hold a meeting at 6 p.m. April 4 to develop a final warrant article to be published in area newspapers prior to Town Meeting.

Special legislation required

Chapter 44, sections 7 and 8 of the Massachusetts General Laws, sets out a list of purposes for which municipalities may borrow money, which does not permit the borrowing of money for costs associated with the decommissioning of assets such as the wind turbines.
Special legislation will be required with respect to this project, as they apply to the costs related to Wind 2 debt and the funds needed to shut down and decommission both turbines and restore the site.

A further complication: If the town decommissions the facilities and then sells off the equipment to a non-governmental entity, tax-exempt bonds issued to fund portions of Wind 1 or Wind 2 may become taxable, necessitating the refinancing of such bonds on a taxable basis. Special legislation will also be needed to permit a refinancing of this kind.

The town has requested that Bond Counsel draft the necessary special legislation so that it may be included in the motion presented by April 8 Town Meeting. Town Counsel has advised that both the Town Meeting motions and the ballot questions may move forward, subject to the enactment of the necessary special legislation.

URL to article: