If Mesa Canyons Wind LLC moves ahead with a request for Lincoln County to issue industrial revenue bonds for the wind farm project near Corona, the county and two school districts might see first checks in late 2020 compensating for the non-payment of property taxes.
Everything depends on the timing and intentions of the wind power initiative, the county’s financial counsel told commissioners at a meeting last week as they approved a resolution related to the proposed industrial revenue bonds .
In her memorandum to commissioners on the agenda item, County Manager Nita Taylor wrote that Mesa Canyons Wind LLC through Pattern Energy, which purchased it in May 2018, proposed the county acquire a lease-hold interest in land and equipment as part of an authorized project with up to 1,000 megawatts of generating capacity to be developed in one or more phases.
A resolution was adopted in February 2018, and amended in August in which the commission expressed its intent to proceed with issuance of up to $1.4 billion in bonds as an inducement to the company to proceed with the project. In return, the company would be required to make payments in lieu of taxes, commonly called PILT, based on the megawatts generated. The PILT would be split between the county and the school districts of Corona and Carrizozo.
Bond repayment would not exceed 30 years and the tax abatement would cover 100 percent of real and personal ad valorem (property) taxes during the bond term, according to county and school district documents.
The commission approved the level of PILT to the county, and the two school districts followed with their approvals.
By a resolution passed in December, the county will receive 67 percent of the payment with the remaining 33 percent shared by the two school districts based on the percentage of the project within their boundaries.
The payment is based on a PILT equal to $2,800 for every megawatt. The wind farm could generate as much as 1,000 MW and will sit on 125,000 acres of private land, according to company information.
By approving the resolution, it amounts to a notice to consider a county ordinance and acceptance and receipt of school districts resolutions, said financial counsel Eduardo Duffy. The next step is to prepare the documents with all of the industrial revenue bond details and vote on an ordinance in May or June, he said.
The deal may close this year or next, depending on the timing of the wind farm, with the first payment due on the one-year anniversary of the bonds and thereafter annually.
The biggest issue was the PILT, most other terms usually can be worked around, Duffy said.
The motion to approve passed 3-1 with Commissioner Tom Stewart voting against and Commissioner Dallas Draper absent.
“I voted no before to using the 20-year average of property tax rates,” Stewart said. “I didn’t prevail. It will cost the county $114,148 per year that instead will go the schools and with this (New Mexico) legislative session being the year of the school, it is ironic we’re giving schools this money when we have a big commitment to our hospital (new construction) coming soon.”