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Village of Northport

SWEET GETUP

Ellen Segal of Port Jefferson spotted this candy dress in the storefront window of Carl’s Candies on a recent visit to Northport’s Main Street and just had to stop and snap a photo. The outfit, with a top made of gummy bears, a belt of gumballs and lollipops, a skirt made of candy button sheets and twizzler shoes, is as sweet as sugar.

Northport school district attorney John Gross explains the LIPA lawsuit to residents at a May 1 presentation. Photo by Sara-Megan Walsh

By Sara-Megan Walsh

Northport residents are gearing up for a David-versus-Goliath showdown as school district officials will call on Long Island Power Authority to uphold its promise in Suffolk Supreme Court next week.

Northport-East Northport school district attorney John Gross will present his argument May 9 on why the utility company should be forced to uphold a 1997 promise not to attempt to lower the taxes on the Northport power plant.

As both the district and LIPA’s attorneys have asked for summary judgments, or immediate decision in their favor, Gross explained at a May 1 presentation at Northport High School to the public there could be a decision made that significantly impacts district taxpayers days before the 2018-19 budget vote.

“If there is a substantial reduction in taxes, the impact shifts to the individual taxpayers,” Gross said at the May 1 presentation. “That is the threat. That is the concern of which the school district has spent a lot of time and effort combating.”

If there is a substantial reduction in taxes, the impact shifts to the individual taxpayers.”
– John Gross

LIPA currently pays more than $81 million annually in taxes on the Northport power plant, according to a statement from the utility company. The school district receives approximately $53 million per year in tax revenue from the power plant’s taxes, which would pay for less than 40 percent of the district’s proposed $146 million tax levy for the 2018-19 school year.

“The $81 million tax burden on the Northport plant is not sustainable, especially as the output of the Northport plan is forecast to continue to decline, as more solar and wind energy is added to the electric grid,” LIPA said in a press release.

In 2010, LIPA filed a tax certiorari lawsuit against the Town of Huntington’s Assessor’s Office seeking a 90 percent reduction in the power plant’s taxes. The trial is scheduled to begin June 11.

Gross explained to residents in his May 1 presentation that Northport school district doesn’t have any standing in that lawsuit, but is a mere bystander because the Huntington Town assessor determines the assessed value of the plant, which is currently set at $30,255,550.

“The plant we believe is worth well over $3 billion,” Gross said, speaking to its fair market value.

In 2011, the district’s attorney filed a lawsuit against LIPA claiming it is the third-party beneficiary of a “promise” made in the 1997 Power Supply Agreement between LIPA and National Grid.

Gross pointed to Article 21.16 of the contract that reads the utility company, “may challenge any property tax assessment on its generating facilities or generating facility sites only if the assessment on any such challenged facility is increased not in an appropriate proportion to the increase in value related to taxable capital additions.”

The district’s attorney said he believes LIPA illegally broke contract when it filed the lawsuit against the Town of Huntington to lower taxes on the plant in 2010.

“From 1997 to today, [their taxes] have not been moved one dollar,” Gross said. “It has not been increased.”


Tax Impact of LIPA lawsuit
Assuming 2 percent school tax increase per year and average home assessed value of $3,700

If LIPA wins 90 percent reduction:
– 57.86 percent increase after 2 years
– 67.53 percent increase after 5 years
-81.33 percent increase after 9 years

LIPA settlement offer of 60 percent reduction over 9 years:
– 9.57 percent increase after 2 years
– 26.37 percent increase after 5 years
– 54.66 percent increase after 9 years

LIPA settlement offer of 9-year reduction to $28 million in taxes:
– 12.46 percent increase after 2 years
– 32.11 percent increase after 5 years
– 60.18 percent increase after 9 years

LIPA has refuted this claim for the last seven years. It stated that, “The alleged promises to the school district are not enshrined in the Power Supply Agreement between LIPA and National Grid or any other contract documents.”

Gross said his legal team has deposed 17 individuals on the 1997 Power Supply Agreement and what it contains, and filed more than 60,000 pages of documents with the courts. These documents point to the several 1997 events where former LIPA chairman Richard Kessel spoke with Northport school administrators and Huntington Town officials. Among them is correspondence sent between LIPA, federal agencies and elected officials including documents submitted to the Internal Revenue Service.

“They put the promise in black and white in submissions to the IRS that taxes would not be affected for the host communities — us,” Gross said.

The utility company’s defense is that the original PSA expired May 28, 2013, which was replaced by a new agreement that runs through April 2028. Therefore, the promise claimed by the school district expired nearly five years ago.

Gross claimed LIPA and National Grid said they renewed their original contract in 2013 through 2028, which should extend their promise to the school district for another 15 years.

The alleged promise contained in the 1997 Power Supply Agreement will take front and center stage in the court arguments May 9.

Gross warned residents they’re facing three potential outcomes next week. First, that the judge agrees with Northport’s position, keeping tax rates steady and LIPA will likely appeal. Second, the judge finds for LIPA that there was never a promise made to the schools.

“If it’s decided for LIPA, we are in deep trouble,” Gross said.

Third, if the judge decides both parties have raised significant issues then she can schedule the case to go to trial.

“I feel like we’re on our own in this,” said Michael Marcantonio, of Eaton’s Neck. “If we lose this case it will devastate our community.”

State Sens. John Flanagan (R-East Northport) and Ken LaValle (R-Port Jefferson) introduced legislation April 20 that could help mitigate any potential impact of the lawsuit on Northport taxpayers, and the other
municipalities and school districts battling similar disputes with the utility. The bill seeks to lengthen the time frame over which LIPA’s taxes would be gradually reduced from nine years to a proposed 15 years. In addition, it would grant the municipal governments and school districts who lose a tax assessment challenge to LIPA after April 1, 2018, access to the state’s electric generating facility cessation mitigation program. This way, town government and schools could create reserve funds to mitigate the burden on their taxpayers.

They put the promise in black and white in submissions to the IRS that taxes would not be affected for the host communities — us.”
– John Gross

Northport Superintendent Robert Banzer encouraged residents to reach out to their state
assemblyman and encourage them to push the legislation forward before this year’s session ends June 30.

“We are strenuously working on this from multiple arenas in both the court of law but also the legislation that’s been proposed,” Banzer said. “I want to thank those of you that are advocating for this legislation, as again, we want to cover this on as many fronts as possible.”

A spokesperson for state Assemblyman Andrew Raia (R-East Northport) said Raia had reached out to his fellow Assemblyman Steve Englebright (D-Setauket) to see if he would review the legislation and introduce it as a member of the house’s majority party. If not, Raia would sponsor it.

If LIPA were to win its lawsuit for a 90 percent reduction of taxes against the Town of Huntington, Gross said Northport homeowners whose homes have an assessed value of $3,700 could see their school taxes jump by as much as 81 percent over the next nine years.

Banzer said the district still remains open to negotiation of a settlement.

Brookhaven Town Supervisor Ed Romaine (R) announced April 3 that the town government had reached a settlement with LIPA on its assessment lawsuit over the Port Jefferson power plant. Port Jefferson School District officials called this news “deeply troubling.”

Former Northport Mayor George Doll with newly re-elected Deputy Mayor Tom Kehoe. Photo from Tom Kehoe

Spring brings the winds of change to the village of Northport as the longtime Mayor George Doll and his deputy have stepped down, giving over the reins to  familiar faces.

As of April 3, Doll and Deputy Mayor Henry Tobin have officially retired. Former trustee Damon McMullen has taken up the mantle of village mayor, while Tom Kehoe is now the deputy mayor. The question on many residents’ minds is, why did they retire?

“It’s been 12 years,” Tobin said. “I never meant it to be a career. I loved being a trustee and the deputy mayor, but it’s time to do other things.”

Tobin hopes to travel more. Doll said he is ready to roll up his sleeves and spend more time at his other career, as a commercial fisherman. The former mayor also wants to spend more time with his wife, children and grandchildren.

“I will miss George and Henry both miserably,” said Village Clerk Donna Koch. “It was a pleasure working with them for the past 12 years.”

McMullen served as a Northport trustee for 10 years before running unopposed for mayor last month.

I never meant it to be a career. I loved being a trustee and the deputy mayor, but it’s time to do other things.

— Henry Tobin

“If George had wanted to run again, I would have stepped aside,” McMullen said. “I learned so much from George, mainly to relax and be level headed. He said there’s always a solution to whatever problem was at hand that day.”

McMullen added that he admired Doll’s ability to work well with everyone around him. As a trustee, he felt the two had a good relationship working together.

Kehoe agreed with McMullen on the longtime mayor’s approach to running Northport.

“George had an even-handed approach to managing the village; he never attacked people.” Kehoe said, explaining a prior mayor had been contentious. “There was so much rancor and bitterness before George became mayor. Once George took over, no one was ridiculed. He was approachable. He was never disrespectful.”

Kehoe lauded Doll for transforming the village hall into a community forum where residents felt their concerns and issues could be heard. He said the new board will endeavor to do the same.

As the outgoing deputy mayor, Tobin stressed it is important that the new trustees keep sight of working together.

If George had wanted to run again, I would have stepped aside.”

— Damon McMullen

“‘All of us on the board knew that the public wanted a well-unified, well-functioning village government and so we all worked through all the issues until we had a consensus, trusting George and each other,” he said.

Fellow board members said a great deal was accomplished by Doll during his tenure as mayor. Kehoe said they started outdoor dining in Northport, which turned the village into a destination like Huntington or Port Jefferson.

“We have zero vacancies now on Main Street, except for Gunther’s, which is closed because of the fire,” the new deputy mayor said. “We’ve brought people into the village.” 

Tobin said the former leadership also fostered many community activities such as the farmers’ market and Northport Harbor Family Nights, which occur in August. Among Doll’s successes, he said, was rallying community support to save the post office from being closed.

Northport is a unique place with all types of people here. We have 7,000 residents and we want to balance everyone’s needs.”

— Tom Kehoe

The former board, including McMullen and Tobin, managed to obtain significant grants to cover the cost of upgrading the sewer treatment system and installing sewer mains in Steers Pit. The project cost a total of $13 million, but due to the board’s hard work and financial savvy the village taxpayers only had to pay $1.2 million out of pocket. 

Now with McMullen at the helm, he will be setting new goals for the board and already has a list of projects he wants to tackle.

“I want to see the bay area even cleaner,” McMullen said. “And if the weather ever breaks, we will start a lot of road work, including curbs and sidewalks on Woodbine Avenue and work on Laurel Avenue by the library.”

The new mayor said he plans to have the board review the village’s code book to update some of the existing laws.

“Some of the code is 40 years old and it worked in its day, but it just isn’t practical anymore,” he said.

Both McMullen and Kehoe know they will face a few challenges, but both feel they are up for the job.

“We will keep Northport vibrant,” Kehoe said. “Northport is a unique place with all types of people here. We have 7,000 residents and we want to balance everyone’s needs.

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