Towns seeking best use of wind farm windfalls

Towns seeking best use of wind farm windfalls

By Steve Virkler, Watertown Daily Times, N.Y. Knight Ridder/Tribune Business News -May 23

While the towns of Martinsburg and Harrisburg have budgets well under $500,000, they're each slated to make more than $1 million annually from the Maple Ridge Wind Farm project after it's completed.

And since the project's payment-in-lieu-of-taxes plan won't allow for a large tax decrease without reducing benefits, town officials are already seeking other ways to make the most of their projected windfall.

Supervisors from those two towns, plus Lowville, have met a couple of times with a representative from Munistat Services Inc., a municipal financial consulting firm based in Williamsville, to talk about fiscal planning and, possibly, contracting with that firm.

"I want to accept everything that's available," Martinsburg Town Supervisor Terry J. Thisse said Wednesday during the most recent meeting. "And I want to put it to use."

Flat Rock Wind Power, a joint venture of Zilkha Renewable Energy of Houston, Texas, and PPM Energy of Portland, Ore., recently began construction on a wind farm in the towns of Martinsburg, Harrisburg and Lowville that would include a 10.3-mile transmission line in the town of Watson. Flat Rock plans to install 120 turbines this year and the remaining 75 in next year's second phase.

The four towns, the county and the Lowville, Copenhagen and South Lewis school districts will split up to $8.8 million annually through the 15-year PILOT agreement, with partial payments to be made during construction.

Martinsburg and Harrisburg -- which now have annual budgets of $400,000 and $258,000, respectively -- would each receive more than $1 million annually for much of that period.

Lewis County is scheduled to receive the first PILOT payment in December 2006 and distribute the money to the other taxing jurisdictions in January 2007.

The initial PILOT plan determined company payments -- up to $46,000 per tower and $92,500 for the transmission line -- and revenue distribution by multiplying 2001 full-value tax rates by assessed values, set by the state Office of Real Property Tax Services, of $1.6 million per tower and $7 million for the transmission line.

However, the taxing jurisdictions in February adopted a new PILOT agreement to help ensure its approval by the state Office for Real Property Services. Under the revised plan, annual payments and distribution are to be determined by multiplying that year's full value tax rates by turbine and transmission line values set by each town assessor. Payments are capped at $46,000 per tower and $92,500 for the transmission line.

If combined full-value tax rates are dropped too much, Flat Rock -- which will be reimbursed for most of its PILOT payment through the state Empire Zone program -- won't have to pay the maximum amount.

Mr. Thisse noted that if the towers are valued at $1.8 million, as suggested on the wind farm's building permits, the combined full value tax rates could be dropped slightly below 2001 values without losing revenue.

"Our goal would be to reduce taxes, or at least stabilize them," said Harrisburg Town Supervisor Norman L. Roof.

Mr. Thisse echoed that sentiment, saying he'd like to set up some type of reserve fund to allow the town to "operate on the interest" after the PILOT expires.

The two supervisors also suggested that wind farm funding could be used to improve roads and infrastructure, set up capital reserve funds for equipment and building upgrades or even create an industrial park, which could create future job opportunities and economic growth.

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