The potential ramifications of the looming LIPA lawsuit specter may finally be coming into focus.
Port Jefferson Village Mayor Margot Garant announced during a public hearing April 2 on the 2018-19 budget the village is “on the cusp of a settlement” with the Long Island Power Authority, which would end the legal battle being waged since 2010 regarding the assessed valuation and property tax bill the public utility has been paying on its Port Jefferson power plant. LIPA has argued the estimate is too high based on decreased energy demand, and the village accused LIPA of breaching its contract, which was supposed to run until 2028. The village and Port Jefferson School District receive substantial revenue from LIPA’s tax dollars and have had the prospect of lost revenue hanging over future financial planning. Port Jefferson is among other municipalities, like Northport, which host plants that have lawsuits against LIPA and believe the contract has been breached.
Garant said the board came to the decision to write $107,000 into the upcoming budget to create a reserve fund to prepare in anticipation for a “glide path” agreement, in which the village’s LIPA revenue will be scaled down gradually over time. The figure was chosen to bring the total budget’s tax levy increase to exactly 2 percent, thus avoiding asking residents to pierce the cap. The 2018-19 adopted budget is $10,642,146, about $233,000 up from to the current year, with the largest driver of the increase being the money set aside to deal with LIPA.
“The appropriations of reserves that we have accumulated over the last six to seven years aside, once we know what the glide path looks like, we will be putting our fund balance, monies that we’ve built, into that reserve account, which kind of locks it away so that future boards, if there should be future boards, can’t take that money and do something else with it,” Garant said. “It’ll preserve that money and entrust it to contributing toward the glide path.”
Brookhaven Town Supervisor Ed Romaine (R) announced during his State of the Town address April 3 it had reached a settlement with LIPA on its version of the assessment suit. Village Attorney Brian Egan said Brookhaven’s settlement would have no impact on Port Jeff’s discussions, and that negotiations were ongoing.
“This year it’s basically another rollover budget like we’ve had in the past with very minimal changes,” village treasurer, Denise Mordente, said during the presentation. Other factors contributing to the budget increase included contractual raises for village employees, the increasing minimum wage, increased costs for medical benefits, and some additional funds for code enforcement that were used for installing security cameras and maintenance throughout the village, among a few others.
The board also passed a resolution that would give it the option to pierce the tax levy increase cap — as it does every year — should it need to do so, though that is not in the village’s plans for the upcoming year.
Port Jefferson School District offered a scathing statement in response to the news about Brookhaven’s settlement, saying it is “deeply troubled,” to hear of the settlement.
“This decision will imminently place the School District in harm’s way,” the statement said.
This story was updated April 4 to remove information mistakenly included about a public budget vote, and to include a statement from Port Jefferson School District.