Utility assessments remain hot topic in Coos County
WEST STEWARTSTOWN — The value of utility-owned property continues to be an issue in Coos County where seven more communities have received money from a special county fund to defend their assessments.
At their June 11 meeting, the three-member county commission approved requests from the towns of Whitefield, Colebrook, Stark, Stratford, Pittsburg, Dalton and Dummer to help them pay their legal expenses as they respond to appeals by utilities.
In 2013, the county established the Utility Valuation Defense Fund as a response to what county officials said was a broad-based effort by utilities to challenge municipal assessments throughout New Hampshire.
The situation is particularly acute in Coos County, said Commission Chairman Tom Brady, where the utilities appear to be “trying to pick off small towns one at a time,” through legal action that the towns and one city — Berlin — are hard-pressed to respond to.
Earlier this year, the county commission gave money from the special fund to Gorham and Lancaster as well as to Berlin, which is in a dispute with Great Lakes Hydro America, the owner of three hydroelectric dams on the Androscoggin River.
Over a three-year period, Berlin has incurred legal expenses of about $250,000.
Should the utilities prevail in their appeals to the New Hampshire Board of Tax and Land Appeals or at the NH Supreme Court, the prevailing wisdom is that the assessing communities can do one of two things: cut services or raise taxes, neither option being especially palatable.
On a separate but related theme, Attorney Jonathan Frizzell, whose firm represents the county on a number of matters, including assessments, on Tuesday said he will meet with representatives of the BTLA and the Department of Revenue Administration to try to come to some sort of resolution regarding the equalized valued set by the DRA for Dixville and Millsfield for the 2012 tax year.
In 2008, the county commission, based on an estimate provided by a DRA appraiser, entered into a 10-year, payment-in-lieu-of taxes (PILOT) agreement with Granite Reliable Power, which proposed building a windfarm in those two unincorporated areas.
The PILOT was based on a valuation of the windfarm at $113 million and requires GRP to annually pay the county $495,000. When the windfarm began generating electricity in 2012, however, the DRA pegged its value at $228 million, prompting an appeal by the county to the BTLA, and after a negative decision there, to the Supreme Court.
Recently, the Supreme Court issued a split decision. The justices found that the county should not have relied upon the DRA appraiser’s figure in calculating the PILOT but that it should have been privy to the DRA’s utility appraisal.
Frizzell said the county commission entered into the PILOT as a means of protecting the integrity of large tracts of timberland in Coos County and ensuring that they stayed in private hands so that it the “timber basket” would always be available for local logging and tourism, rather than broken up and developed for individual home sites or sold to the federal government.
He said one of the “unintended consequences” of the PILOT is that no one foresaw what would happen when the GRP windfarm came online.
In response to the DRA’s revaluation, a number of North Country lawmakers introduced House Bill 1590, which this past session was passed by both the House of Representatives and Senate. The bill is before Gov. Maggie Hassan, and both Frizzell and State Sen. Jeff Woodburn, D-Dalton, think she will sign it into law.
HB1590 would let stand the PILOT agreement between Coos County and GRP as long as the latter made its annual payment. Frizzell said the PILOT can be extended for an additional ten years should both parties want to do so.
Woodburn and his North Country colleagues have warned that should HB1590 not become law, the consequences would be felt not only by the handful of residents in Dixville and Millsfield, who’d see their taxes rise, but countywide, too, in so far that the redevelopment of The Balsams Grand Resort could be affected.
Timber tax revenues and the PILOT payment have covered the county’s expenses in administering Dixville and Millsfield — the county commission serves, effectively, as their board of selectmen — but if the DRA valuation stands, it’ll mean residents — and prospective residents, like The Balsams — will suddenly face the prospect of paying taxes.
“People have told me it is a deal-breaker,” for The Balsams, Woodburn said, which is why he supported HB1590.
A self-described fan of PILOTs, Woodburn thinks more of them would mitigate the expense of communities contesting assessments at the BTLA or in court. He is not thrilled, however, with the county’s PILOT with GRP.
“We have to have PILOTs that provide more of a local benefit. With any of these developments you have to look at whether we are selling ourselves short.”
Conserving more land, Woodburn said, “doesn’t get our economy going or puts people to work, so that model we used in Dixville and Millsfield is not a model I would support going forward.”