Wednesday, August 04, 2010

JCIDA: all jurisdictions must agree to PILOTs

Jefferson County could see repeats of the rancor that accompanied the Galloo Island Wind Farm payment-in-lieu-of-taxes approval at the county Legislature after changes made Tuesday morning.

A payment-in-lieu-of-taxes agreement for any wind power project will need approval from all of the involved taxing jurisdictions, agreed members of the governance committee of the Jefferson County Industrial Development Agency.

The committee is updating its uniform tax-exempt policy, which normally allows PILOTs to be approved only by the agency board unless they fall outside of the set policy. The Galloo Island PILOT had exceptions to the current policy, so three taxing jurisdictions were required to approve it.

"I think those communities should run their own shop," board member John Doldo Jr. said. "They ought to have the option of using or not using it."

He wanted to see the approval required on all PILOTs.

"Can a project get to the PILOT stage without approval of the townships?" asked board member Michelle D. Pfaff.

Agency Chief Executive Officer Donald C. Alexander said a project couldn't and he encouraged the board to think about the ramifications on development by leaving every PILOT approval up to the whims of local boards.

"A uniform policy gives developers a notion to talk to their finance people," he said. "It gives them a fixed notion of their cost."

Chairman Urban C. Hirschey agreed with Mr. Doldo on wind power projects.

"There is potential for irreversible damage," he said. "The towns must be trusted to control their own destiny."

Mr. Hirschey referred to the track of development in Cape Vincent, where he is town supervisor, and talked about the potential for conflicts of interest for Town Council and Planning Board members there.

Board member Kent D. Burto said the agency board needs to avoid getting involved in town politics.

"What I see is unfortunately a town that doesn't have control because of the mix of the board and because of that, there are fears and because of those fears, they are looking to the IDA board to resolve them," he said. "That's not the role of the IDA board. We need to look at countywide issues."

The Galloo Island Wind Farm's PILOT was approved by the county Legislature after months of intense pressure. Some members of the county Board of Legislators didn't want to face the same pressures after the Galloo Island vote.

Legislator Michael J. Docteur, R-Cape Vincent, attended the meeting and said he wants to see approval votes on each PILOT instead of passing a uniform tax-exempt policy that would negate the need for taxing jurisdictions to vote.

"Our board did not vote by resolution to charge this group to come up with a UTEP that would overrule the local vote," he said.

"What are you going to do when two taxing jurisdictions support it and one doesn't, which is somewhat likely to happen?" asked attorney W. James Heary. "You will put yourself in a position where if one taxing jurisdiction says, 'No,' you can't do the deal."

Mr. Doldo said, "That community should resolve that problem."

Like the Galloo Island PILOT, the draft policy discussed would allow for agreements to run up to 20 years, instead of the previous 15.

The draft policy includes a separate clause for renewable energy PILOTs, which allows for a fixed base payment per megawatt, increasing each year, and supplemental payments based on high electricity prices. Exact figures would be included in a project development agreement.

In any case, a PILOT already can be approved only after the state environmental quality review and site plan review process is complete. For wind projects, the committee agreed to add that taxing jurisdictions must approve that a PILOT will occur and what the distribution of proceeds will be before the agency can begin collecting and disbursing money.

Normally, PILOT proceeds are disbursed according to the distribution of property taxes among the county, school district and municipality.

"We have to hold up the PILOT until there is agreement among the taxing jurisdictions," Mr. Hirschey said.

"We have used the threat of pro rata distribution to force the negotiations," Mr. Alexander said. "If pro rata is not going to be appealing to people, they will come to terms."

The committee also changed the policy so that all PILOT agreements must include requirements for local labor use and developers must comply with applicable ethics codes. In earlier drafts, that was required just for renewable energy projects.

The full agency board will consider the policy at its meeting at 9 a.m. Thursday in the conference room at 800 Starbuck Ave. If approved, it will be sent to every taxing jurisdiction in the county. They will have 60 days to comment before a public hearing and the agency board makes a final decision.

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