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Taxes

Funding would increase for snow removal, environment

Brookhaven Town Supervisor Ed Romaine. File photo by Erika Karp

By Giselle Barkley & Elana Glowatz

Brookhaven Town won’t ask for more money from residents next year, according to Supervisor Ed Romaine’s 2016 budget proposal.

Romaine (R) revealed his nearly $281 million budget plan at a meeting on Oct. 1, touting its benefits of complying with the state-imposed limit on property tax increases and putting more funding toward snow removal as the winter season approaches.

Crafting the budget was a challenge given the tight limit on how much the property tax levy could increase, according to Romaine — the state’s limit was 0.73 percent this year. Despite that, “I support the tax cap because I understand what the tax burden is on the taxpayers of this town,” Romaine said during a meeting with the press last week. “I’m trying to do my best to limit that tax burden while providing needed services and that’s crucial, and our five-year plan reflects that.”

According to the budget proposal, the town’s property tax levy will not see a net increase in 2016, holding taxes steady for many residents. Romaine was able to maintain the levy because of the amount of money the town will save from satisfying debts. Some of the money that would have gone toward those debt payments was used instead to fund increases in other budget lines. When money from the town’s debt reserve fund is excluded, the budget proposal actually reduces overall spending more than $800,000.

“That’s come from careful management of capital projects and the elimination of pipeline debt,” Finance Commissioner Tamara Wright said during the meeting.

Just as there were cuts in the budget, there were also additions. Romaine proposed bringing the highway department’s snow removal budget up to $5.2 million — a budget line the supervisor and the town board have been adding to since the massive February 2013 storm, frequently dubbed Nemo, that buried Long Island under three feet of dense snow. That removal budget has doubled in the last few years.

“I hope that someday we will have a less snowy winter,” Romaine said.

Town officials hope any leftover snow removal money will be deposited into a reserve account, to be used in an emergency winter weather situation.

The supervisor’s proposal also increases spending on environmental protection and funding for public safety staff, code enforcement and internal auditors, among others.

Romaine’s proposed capital budget totals $62.2 million, a reduction of about 2.4 percent from the current year. The capital funds will go toward local projects like long-awaited athletic fields in Selden and road and drainage improvements.

Town wins two court decisions against utility

Northport power plant. File photo

Huntington Town is touting two court decisions boosting its case against the Long Island Power Authority in an ongoing challenge over the assessment of the Northport power plant and the amount the utility pays in property taxes on the facility.

The decisions, issued by State Supreme Court Justice John C. Bivona, were dated earlier this month and received by the town’s special counsel on Sept. 25. The first decision dismissed LIPA’s standing as a plaintiff in the case, since National Grid, and not LIPA, owns the plant, according to the decision.

The second decision granted a stay in the assessment case until there is a final court determination of the town’s argument that National Grid should be held to a 1997 pledge by LIPA not to challenge the plant’s assessment. So far, the town has won pretrial decisions in that case, according to a town statement.

LIPA is suing Huntington Town to recover some $270 million in property taxes it paid since 2010, arguing the aging Northport power plant facility is grossly over-assessed. Northport-East Northport school district is also a party in the lawsuit.

If LIPA wins, Huntington Town taxpayers could see a 15 percent increase in town property taxes and a 60 percent increase in school taxes, according to the town’s website.

The judge dismissed LIPA’s standing as a party initiating tax certiorari proceedings. In one of his decisions, Bivona said that while LIPA believes its financial interests are adversely impacted currently by a wrongly overstated assessment of the power plant, “the result is still remote and consequential and certainly does not constitute a direct loss because the property taxes levied upon the Northport Power Station are actually and directly paid by National Grid Generation, LLC.”

In the second decision, Bivona granted a stay to the town on each of the four tax certiorari proceedings National Grid commenced challenging taxes from 2010 to 2013. The stay was granted until completion of a case involving the town’s contention that National Grid, as the successor to LIPA, should be held to the 1997 pledge.

In previous decisions, the Appellate Division of State Supreme Court cited both a letter then-LIPA chairman Richard Kessel sent to the town and statements Kessel made to the Nassau-Suffolk School Boards Association, during which he said he would drop any pending tax certiorari cases and not initiate any further ones at any time in the future. In return, the town promised not to increase the assessment on the plant. The town has not done so.

Most significantly, Bivona’s second decision means the court needs to consider the validity of the town’s 1997 pledge argument before embarking on a trial on the actual tax challenges — which promises to be complicated, lengthy and expensive.

“These two significant decisions help clarify the process for resolving these cases by first addressing the town’s key contention: that at the heart of the case is our belief that promises made by both sides should be kept,” Huntington Supervisor Frank Petrone said in a statement. “In the long run, resolving that question first should save taxpayers money by potentially obviating the need for a lengthy and expensive trial on the technical question of the assessment.”

A spokesman for the Long Island Power Authority said the utility didn’t have a comment on the issue.

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Extreme low temperatures caused enough demand to require use of the Port Jefferson Power Station. File photo by Erika Karp

Port Jefferson Village moved another chess piece in its match against the Long Island Power Authority last week, filing a lawsuit to dispute the utility’s property tax challenges from the last few years, which are still pending in court.

Village Attorney Brian Egan said at the board of trustees meeting Tuesday night that the village filed the lawsuit last Friday contending LIPA had promised not to challenge its property tax assessment at the Port Jefferson power plant unless the assessment was disproportionately increased.

That perceived promise links back to a 1997 letter from former LIPA chairman Richard Kessel, upon inking a power supply agreement between LIPA and the Long Island Lighting Company, as the former was taking over for the latter. That agreement covered power plants now owned and operated by energy company National Grid, which includes those in Port Jefferson and Northport.

Back then LIPA and local municipalities were embroiled in other tax assessment challenges. Kessel’s letter said the utility would drop those challenges and would not “initiate any further tax certiorari cases on any of their respective properties at any time in the future unless a municipality abusively increases its assessment rate.”

Port Jefferson has actually gone in the opposite direction on the neighborhood power plant’s assessment, officials confirmed Tuesday — LIPA’s assessment was only proportionately increased over time, and since it began challenging its assessment in 2010, it has in fact seen a decrease. Officials called that 10 percent decrease an act of good faith as they negotiated with the utility on the matter.

At the heart of the issue is a disagreement over the worth of the local power plant: LIPA contends it is grossly overassessed, forcing the utility to pay more in property taxes than it should.

The power plant is a large source of tax revenue for the area, particularly the Port Jefferson school district and the village. Smaller stakeholders include the Port Jefferson fire and library districts and the Town of Brookhaven.

As LIPA’s property tax challenges trickle through the court system, Port Jefferson’s latest lawsuit piggybacks on an idea from out west — Huntington Town and the Northport-East Northport school district filed a similar suit a couple of years ago in their battle on the Northport power plant, which mirrors the situation in Port Jefferson. That inceptive lawsuit, challenging LIPA’s ability to challenge its property tax assessment, faced a motion to dismiss that New York State’s highest court recently denied — allowing the case to play out. Seeing the ruling in favor of Huntington and Northport, Port Jefferson followed suit.

“I feel very strong,” Egan said about the case.

According to the village attorney, he will ask that court action on LIPA’s tax challenges be delayed until the new lawsuit is resolved.

The Port Jefferson and Huntington area lawsuits may also be joined, and it is possible more plaintiffs, such as Brookhaven Town and the Port Jefferson school district, could jump in.

At the time the courts denied LIPA’s motion to dismiss Huntington Town and the Northport school district’s lawsuit, a LIPA spokesperson said the utility does not comment on ongoing litigation.

If the municipalities win their lawsuits regarding LIPA’s right to challenge its property tax assessments, those pending challenges would be thrown out.

Commack Superintendent Donald James presented the district's 2018-19 budget draft. File photo by Greg Catalano

A state audit cracked down on the Commack Union Free School District, accusing officials of mishandling funds and costing taxpayers.

The audit, which was released Aug. 5, said Commack school administrators needed to do a better job overseeing the budgeting process after the district overestimated expenditures in its adopted budgets and did not use surplus cash to finance operations. The audit also found the district did not maintain a “complete and adequate” record of its fuel inventory to safeguard and account for its fuel.

“From 2011-12 through 2013-14, total actual revenues exceeded expenditures by as much as $3.7 million,” Comptroller Tom DiNapoli said in the audit, and while the district had a $24 million fund balance, it only used $1.8 million to offset taxes. “Had district officials used more realistic budget estimates, they could have avoided the accumulation of excess fund balance and possibly reduced the real property tax levy.”

The report also found that discrepancies in the fuel inventory records were not investigated. According to DiNapoli, Commack’s head groundskeeper performed a monthly reconciliation of district fuel purchase and use records with the actual fuel on hand but never acted on discrepancies, even though anything left unresolved within 48 hours must be reported to the state Department of Environmental Conservation.

In response, Commack Superintendent Donald James said the district had “varying fiscal philosophies” but cited a list of changes it would be implementing moving forward. As for the comptroller’s remarks on Commack’s financial condition, James kept it short and sweet.

“The district will review the expenditure budget areas and the variables affecting such areas discussed in the audit report in depth to assure reasonable estimates are presented,” he said in a statement.

District spokeswoman Brenda Lentsch said the district saves money through strong budgeting practices and all of its savings are returned to the taxpayers the following year.

“We go to great efforts not to spend the money the residents of this community entrust to us,” she said in a statement. “Further, the district returns every dollar not spent in the budget to the taxpayers to keep the tax levy as low as possible, and to continue to offer the multitude of programs and services that Commack is known for, and the community expects.”

On the subject of fuel inventory records, James had a lot more to say.

“The district has taken great care and effort to develop and implement new procedures to ensure that fuel supplies are adequately safeguarded, accounted for and protected against risk of loss or unidentified leakage,” he said in a response outlined within the audit.

Moving forward, James said the district would record, monitor and reconcile its fuel inventory via a senior account clerk and install video surveillance systems to monitor the area of the 2,500-gallon underground fuel tank and pump.

DiNapoli’s audit set out to evaluate the district’s overall financial condition and fuel inventory, specifically between July 1, 2013, and Nov. 30, 2014. The comptroller extended the scope of his audit back to July 1, 2011, however, to provide better perspective and background.

DiNapoli recommended the district develop procedures to ensure it adopts more reasonable budgets — to avoid raising more real property taxes than necessary — and use more of its surplus funds to support future budgets and reduce the burden on taxpayers. He also recommended the district adopt written policies to ensure fuel is periodically measured and to report discrepancies promptly.

State appellate court sides with municipalities in rulings

Northport power plant. File photo

Huntington Town and Northport-East Northport school district’s fight to knock the lights out of a Long Island Power Authority lawsuit that looks to drastically decrease how much the utility pays in taxes on the Northport power plant recently got a big boost.

Last week, a New York State appellate court ruled in favor of the municipalities, clearing the way for both to go to trial against the utility and engage in pretrial depositions and discovery. In 2010, LIPA filed a tax certiorari lawsuit against the town, claiming the town greatly over-assessed the Northport power plant and that it should be paying millions less in taxes.

Northport-East Northport schools, along with Huntington Town, filed companion lawsuits in May 2011 that claimed LIPA didn’t have the right to file to reduce its taxes and that it breached a 1997 contract promising it wouldn’t. In 2013, a New York State Supreme Court justice upheld the district and town’s rights to sue LIPA and National Grid, and last week’s court ruling upheld that lower court ruling.

LIPA sought to have the school district tossed out of the suit, but the district claimed it was a legal third-party beneficiary of a 1997 power supply agreement between LIPA and the Long Island Lighting Company. Last week’s court ruling upheld that claim. It cites a 1997 letter from LIPA to the Nassau-Suffolk School Boards Association, to which Northport-East Northport belongs, that upon the issuance of a 1997 power supply agreement, “LIPA will immediately drop all tax certiorari cases against all municipalities and school districts,” and that “neither LIPA nor LILCO will initiate any further tax certiorari cases on any of their respective properties at any time in the future unless a municipality abusively increases its assessment rate,” as “spelled out in the [PSA].”

Stuart Besen, the town’s attorney on the case, said he believes the letter from Richard Kessel, former chairman of LIPA, was integral in swaying the judges to rule in favor of the municipalities.

“I just think that Supervisor [Frank] Petrone really deserves a lot of credit for having the foresight for one, making sure the clause was in the [power supply agreement], and two, demanding that Richard Kessel reiterate that position in a letter.”

If successful in the suit, the town wouldn’t have to pay approximately $180 million in taxes the utility claims it overpaid in a three-year period, Besen said. LIPA pays roughly $70 million in taxes on the Northport power plant, town officials have said.

The utility contends the plant is worth less than 11 percent of the value reflected by its current assessment. If LIPA was successful in lowering its assessment and thus the amount it pays in taxes, town residents could be hit with tax increases of up to 10 percent. Those who live in the Northport-East Northport school and library districts could get a whopping 50 percent increase in their taxes.

John Gross, senior managing partner at Ingerman Smith, who represents the school district in the case, said the next step is to move forward with discovery and a motion for summary judgment in favor of the district.

“And if we win that, that means the claims they made to reduce the value of the plant are thrown out,” Gross said in an interview on Tuesday.

The town and the school district are partners in the lawsuit, Gross said.

Asked what town taxpayers should take away from the development, Besen said “that the town is fighting.”

“The town is fighting a big entity, both National Grid and LIPA. But we feel we’re right. We feel that those three years we don’t have to pay, that LIPA and National Grid made a promise to the people of Huntington and the town is going to do everything possible legally to uphold that promise.”

Sid Nathan, a spokesman for LIPA, said the authority couldn’t comment on ongoing litigation.

Northport power plant. File photo

A new Huntington Town citizens group will boost a movement to upgrade the Northport power plant, independently studying the issue and submitting ideas to town officials.

The town board, on Tuesday, unanimously supported a measure co-sponsored by Huntington Town Supervisor Frank Petrone (D) and Councilman Mark Cuthbertson (D) to create the Repower Now Citizens Committee, a group of nine who will weigh in on an analysis the Long Island Power Authority and National Grid are conducting with respect to repowering, or upgrading, the plant.

Earlier this year, the state charged LIPA and National Grid with studying the feasibility of repowering the Northport power plant, the Port Jefferson power plant and others. Having the Repower Now Citizens Committee can only boost that effort, Cuthbertson and Petrone said in interviews with reporters after Tuesday’s meeting.

Local leaders want to see the aging Northport plant repowered so it will remain a source of energy and property tax revenue for years to come. Several local budgets, including that of the Northport-East Northport school district, rely heavily on the tax revenue.

Upgrading the Northport power plant can be done, Petrone said. It will be the new group’s responsibility to support repowering by producing a factual analysis on the issue.

“Our plant is probably the most viable plant to be utilized for that,” Petrone said, explaining Northport’s advantages in being repowered. “It has property available and it can be expanded. The need now is to put together a group to basically put some kind of study together … to support this. And there are many people out there that have expertise that we would wish to tap.”

Membership would include at least one person each from Northport and Asharoken villages, someone from the Northport-East Northport school district and members with engineering and sustainable energy backgrounds.

Repowering has another benefit: It may help settle a lawsuit LIPA brought against the town, challenging it over the value of the power plant.

LIPA claims the plant has been grossly over-assessed and the utility has overpaid taxes to the town. If LIPA’s suit is successful, the judgment could translate into double-digit tax increases for other Huntington Town and Northport-East Northport school district taxpayers.

If, however, the utility chooses to repower by upgrading the facility, the town has offered to keep its assessment flat, preventing those skyrocketing taxes.

“It’s a lawsuit that’s a very, very high-stakes lawsuit,” Cuthbertson told reporters after the meeting. “We have to look at both legal and political solutions, and political being through legislation. This is a part of trying to formulate a legislative solution and come up with a compromise that we might be able to work through.”

Petrone said he hopes to have the repowering citizens group assembled within a month.

Huntington High School. File photo

By Jane Lee Bock

Huntington schools have taken a big step toward ensuring that local taxpayers continue to see some money back in state rebates this year.

School districts have formed a consortium to help reign in expenses, implementing one more of the mandatory steps needed to comply with the regulations of the three-year state property tax freeze credit.

The credit is a new tax relief program that reimburses qualifying homeowners for increases in local property taxes on their primary homes, according to the program’s website. The credit applies to school districts in 2014 and 2015 and to most other municipalities in 2015 and 2016.

Cold Spring Harbor school district has been designated the lead agency for the consortium and is partnering with Western Suffolk BOCES to coordinate the plans and submit them to the state by June 1, 2015. In total so far, 19 districts are eligible to participate in this joint effort. Northport, Huntington, Harborfields and Cold Spring Harbor have officially joined the consortium.

William Bernhard, interim assistant superintendent for business at Cold Spring Harbor. File photo by Karen Spehler
William Bernhard, interim assistant superintendent for business at Cold Spring Harbor. File photo by Karen Spehler

In 2014, New York property owners received a rebate if their school district stayed within the state’s 2-percent property tax cap when developing its budget. In 2015, property owners will get a rebate if the districts demonstrate that they have plans that will develop efficiencies and cost savings, and their local municipal taxing districts stay within the tax cap. In 2016, the rebate requirements will be aimed at only municipalities, requiring them to stay within the tax cap and develop cost savings.

The state estimates this three-year program will result in $1.5 billion in taxpayer savings. This consortium meets the requirements of the government efficiency plan component of the property tax freeze credit.

No specific savings have been announced yet because the plans have to be submitted and approved by the New York State Department of Taxation and Finance and any savings created by efficiencies implemented before 2012, when the freeze was initially created, are allowed to be included in each district’s component of the plan.

“What they have allowed us to do is that if we had some prior efficiencies that were instituted prior to June 2012, which is the first year of the tax cap, we can use that towards demonstrating our savings,” William Bernhard, interim assistant business superintendent of the Cold Spring Harbor school district said in a phone interview. “Many districts had to do that to stay within the tax cap.”

In addition, by grouping the districts together, they will be required to save one percent of their tax levy combined, instead of individually, he said. Those savings must be realized through the 2016-17 school years.
Bernhard said he hasn’t seen the full plan yet because the information has not been submitted.

Visit www.tax.ny.gov/pit/property/property_tax_freeze.htm for more information on the property tax freeze credit program.

Projections could mean scaled back tax rate next year

Huntington school board members attend a town board meeting last year. File photo by Rohma Abbas

Huntington school district taxpayers could see a little extra cash in their wallets next year, if tentative numbers projecting a greater tax base pan out, the district said this week.

School officials announced on Tuesday that the total value of all its assessed properties is expected to rise in 2015-16 by just under one percent — from about $44.8 million this year to $45.3 million in 2015-16. The district cited figures from an April 30 letter it received from Huntington Town Assessor Roger Ramme.

That projection is also significantly higher than an estimate officials used to craft next year’s proposed $120.3 million budget, which district residents will weigh in on in a vote on May 19. If that budget is approved and the hike in assessed valuation becomes a reality, then taxpayers could see an estimated tax increase of just .83 percent, instead of the 2.27 percent officials estimated.

“The tentative spike in assessed valuation translates into good news for taxpayers,” Superintendent Jim Polansky said in a statement on the district’s website. “It can be attributed to a number of factors, not the least of which is an increase in fully taxed properties within district boundaries. While we expect some downward adjustment between now and the fall board meeting during which the tax rate is set, we anticipate that it will be considerably lower than initially projected.”

The assessed valuation won’t be concluded until the fall, and it’s likely the assessed valuation will slip from now until then, when the tax rate is set, the district noted. But if the assessed valuation is finalized at an amount that’s greater than what was used to develop the 2015-16 budget, the school board, “would be in a position to reduce the earlier projected tax rate increase, appropriate less money from the district’s fund balance or some combination of the two,” according to the statement.

This wouldn’t be the first year Huntington school district enjoyed a greater-than-budgeted assessed valuation.

“Trustees have a long history of returning to residents, through a lower tax rate, any increased revenues the district derives from a late-breaking rise in assessed valuation,” according to the district. “That tradition is
expected to continue in the fall, should the tentative increase hold in
large part.”

Town officials could not immediately be reached for comment on Wednesday.

Port Jefferson Treasurer Don Pearce explains the 2015-16 budget at a meeting in Village Hall on Wednesday night. Photo by Elana Glowatz

A week after some Port Jefferson residents called on village officials to keep any tax increases as low as possible in next year’s budget, the board of trustees did just that when they approved a $10.2 million spending plan Wednesday night that complies with the state-imposed cap on tax levy increases.

The budget will raise taxes by $0.46 for every $100 of assessed value on a property. That number comes in just below the village’s tax levy increase cap, at 1.68 percent.

At the time of a public hearing on April 6, the village had been working with a budget draft that would have carried a 4 percent tax increase, even after the board slashed more than $300,000 in expenses during budget workshops. The hearing was on a measure that the trustees ultimately passed that night to give themselves the authority to pierce the cap if necessary — something Port Jefferson has done each year since the state cap was enacted. But some residents implored the board to better control taxes and stay within the cap this time.

Treasurer Don Pearce said at the public hearing that in order to meet the cap, the village would have to cut out more than $140,000 in expenses or add revenues to the spending plan. On Wednesday night, Pearce said the village took residents’ comments and whittled down the budget further to close that gap.

Pearce reported that the 2015-16 budget will represent an increase of about $217,000 over the current year’s budget, which means that the village’s mandated expenses — like employee retirement contributions, health care costs and payments to the local ambulance company — are increasing more than the budget itself.

Brookhaven Councilwoman Valerie Cartright, right. File photo by Elana Glowatz

Brookhaven Town Councilwoman Valerie M. Cartright (D-Port Jefferson Station) is calling on the North Shore community to take her up on an upcoming tax grievance workshop to combat potential disasters at the height of tax season.

The upcoming workshop, led by Brookhaven Tax Assessor James Ryan, will teach residents how to grieve their taxes and survive tax season just in time for the big day on April 15.

The workshop is scheduled for Wednesday, April 15, at 6:30 p.m. at the Comsewogue School District Office, at 290 Norwood Ave. in Port Jefferson Station.

The event is open to all residents.