AES: Somerset, Barker school district, county agree on new PILOT resolutions

By Bill Wolcott<br><a href="mailto:bill.wolcott@lockportjournal.com">E-mail Bill</a>

The Town of Somerset, Barker School District and the Niagara County Legislature agreed to new payment-in-lieu-of-taxes resolutions at separate meetings Tuesday night, which promises to end the tax assessment battles with the AES coal-burning power plant.

The settlement got unanimous approval from all three taxing jurisdictions. The five-year deal provides for annual in-lieu-of-tax payments from the company and requires all parties who are currently involved in litigation to drop their claims.

“I’m ecstatic,” said Somerset board member Randall Wayner. “It was a lot of hard work and diligence by all the parties. Hopefully we put a contentious issue in our community to rest and we can move forward with an agreement that is much more in-line with the business of AES and the taxing jurisdictions.”

The final chapter will likely be written before the end of January. The Niagara County Industrial Agency must still write a new PILOT.

“There is appreciable sense of urgency among all the parties to get this thing done,” Town Attorney Arthur Herdzik said. “Everyone knows the time schedule and they want to get this done well within time schedule so we don’t go over any taxing lines.”

“I’d be surprised if we’re still doing this at the end of January,” said Supervisor Richard Meyers.

Board member Daniel Engert said the deal almost fell through until Supervisor Richard Meyers offered an agreement for just five years.

“It’s a shorter agreement and provides for a better window,” Engert said. “The duration will give greater incentive to AES to stay in the PILOT and not walk away from PILOT, which at any time they could do. This eliminates uncertainty. We know the amount we’re getting; the school knows what they are getting. We can plan our budgets.”

“I think everyone will be relieved that it can be resolved,” said April Gow who is retiring from the Town Board after 17 years. “It’s not done until the ink is dry. We can agree in principal, but until all the attorneys are done doing their thing and everyone signs, it’s not done.”

The board feels confident the IDA will approve. “They’re looking forward to writing a PILOT that everyone’s in agreement to,” Gow said.

Was the money spent of litigation well spent?

It was, according to resident James Hoffman. “The money for lawyers was well spent or it wouldn’t have got us to where we are today, even though it was a good buck,” he said. “The PILOT was declared illegal, and that would have been devastating to the town for the 12 or 15 years of it.

He noted that school taxes went up 23 percent with the 2006 PILOT in effect. “Every year the PILOT payments went down in the old, illegal PILOT,” he said.

Dan Hogan hopes it’s coming to a head. “I think it’s excellent,” he said. “It’s about time. We should have had it five years ago. If people would sit down and negotiate together, teamwork. We spent too much money for lawyers.”

Barker schools get the biggest cut

The Barker Board of Education approved the settlement with an unanimous 5-0 vote. The school district gets the biggest cut, 59.25 percent.

“It was a cooperative effort between county and school,” Superintendent Roger Klatt said. The agreement will provide an annual payment of $15.8 million for five years or $9,361,500 to the school district per year.

The agreement also ends all litigation involving the AES issue, most of which has been ongoing for some time. With that, Barker will see the end of fees from lawyers working on the AES litigation, Klatt said.

Under the former PILOT, Barker often had trouble preparing a school year budget because it faced uncertainty with how much it received in AES tax revenue. The new PILOT alleviates that concern, by providing Barker with a better idea of revenue from AES, the largest taxpayer in the county. That will make preparing an efficient budget easier for the district.

“It provides a much-needed revenue certainty to the district,” Klatt said. “There’s no fluctuation.”

He thanked county officials for working with the district.

Gow agreed the litigation was pricey but necessary to show the initial PILOT was wrong

The agreement resolves all the outstanding Article 7 tax challenges for 2004 to 2010. “That relieves $350,000 to $600,000 just to deal with article 7s,” Engert said.

The town also saved $280,000 it was slated to put out for a tax appraisal of AES. “If the agreement goes through, we don’t have to worry about that. We put a freeze on that.”

The board hopes the agreement creates a culture of cooperation and collaboration for future agreements.

Niagara County Legislature Chairman Bill Ross, C-Wheatfield, said the settlement brings to an end what has been a lengthy and costly ordeal for all parties involved. He said the arrangement also gives AES Corp. a reasonable property tax assessment that should allow it to continue to be one of the county’s largest employers for years to come.

“It’s great to get away from the litigation because that’s just wasted taxpayer money,” Ross said.

Contact reporter Bill Wolcott at 439-9222, ext. 6246

Reporters Joe Olenick and Mark Scheer contributed to this story.

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