OWEGO — The sun set on a payment-in-lieu-of-tax agreement for a pair of proposed solar farms this week as the Tioga County Legislature’s Economic Development and Planning Committee struck it down, calling it a “slap in the face.”
The 7.8 megawatt solar farms have been proposed in the Town of Nichols, which could potentially generate over $27,000 in new revenue.
That PILOT figure would be divided among the town, the county and the Owego-Apalachin Central School District.
Because the proposal was taken directly to the town, the town board is the lead agency for the project, meaning they set the percentages for how payments will be disbursed.
As with other area solar farm PILOTs, the split is typically close to one-third to each taxing entity.
However, the Town of Nichols proposed 20 percent for the school district, 20 percent for the county and 60 percent for the town — legislators were not pleased, and immediately dismissed the proposal.
“No,” Legislator Dennis Mullen said.
“Absolutely not,” said Legislator Mike Roberts.
“It’s kind of a blatant insult as far as I’m concerned,” said Legislative Chairwoman Marte Sauerbrey. “I’m almost insulted by that offer.”
“With a solar array, there’s not the usual argument you could make that you have to take care of the roads, or additional children at the school,” noted EDP Director LeeAnn Tinney. “Once the array is in, there’s very minimal impact to anybody, and that’s typically why we go one-third, one-third, one-third.”
Sauerbrey compared the proposal to a slap in the face.
“Do we skim any off the top on sales tax when we disburse?” asked Roberts. “I don’t think we do. I think we’re being held up.”
“Remember, we send them $264,000 in sales tax this year, so it’s not like we’re not helping them any,” said Roberts. “We don’t have to, legally, and we don’t charge them to administer that — I don’t think we do.”
“They got the biggest property windfall in the county, and let’s be honest, everybody knows what it is,” said Mullen. “They got a million dollars because of where they are, they’ve got the lowest property tax rate — they’ve got lower taxes than they do in Pennsylvania.”
“I don’t agree with judging the ability to pay by what you have,” Roberts replied.
“I don’t either, but sometimes you’ve got to be happy with what you have,” Mullen continued. “It’s greedy, that’s what it is. They’ve been lucky and have a lot of economic activity down there, we’ve tried to help, and they’re the only municipality that tries to pull this? My answer is an emphatic ‘no.’”
“I agree with Marte that it’s a slap in the face,” Mullen added.
“If you want administrative fees, I don’t know what that’s worth, maybe 34 percent?” Mullen said. “How much does it really take to take a check, cut it into three parts and send it out?”
“That’s what I’d like to see,” said Legislator Dale Weston.
“The average is like two or three percent,” said Roberts.
“And, remind them that we’ve chosen to not to change from being a make-whole county in New York State — which we can do,” said Mullen. “We can dump the whole thing for the whole county. We took down two houses in Nichols for over $100,000 last year.”
“Did they kick anything in?” asked Roberts.
“No, and that’s my point,” said Mullen. “We’re not asking for more than our share. We represent the entire county, and they’re not a special child.”
The proposal was unanimously voted down, but legislators were interested in receiving a counter proposal back.
As far as the town’s rationale for the proposal, Supervisor Kevin Engelbert said the town bears the brunt of the project.
“The board’s thought was that the town is the one that has all the responsibility regarding the installation, maintenance and the distribution of the money that comes in from it,” Engelbert said. “We’re the ones that have done all the work; our planning board has put in all the hours for it.”
Engelbert also noted that the town’s code enforcement officer is going to have to be on site during construction.
Both facilities are located on town roads, adding more traffic for the town, he continued.
“The board thought that it was a fair breakdown for the money because the other two entities don’t really have to do anything — no responsibilities with regard to the projects at all,” Engelbert said.
“Everybody has their own opinion, and every entity needs money because of all the mandates from the state and everything else,” he continued. “I understand, and I hope they understand where we’re coming from.”
In response to the “slap in the face” comment, Engelbert said, “we thought it was a slap in the face the way the Crown Cork and Seal PILOT was divided up — we got only 8 percent of that PILOT.”
Engelbert noted that the town voted it down but that didn’t matter.
As far as the board’s willingness to renegotiate the percentages, Engelbert said he couldn’t speak for the board but added that “we’ll just have to see how it plays out and go from there.”
“I really don’t know how flexible the board is, because I suggested 40/30/30, but the board was adamant that honestly they wanted it 80/10/10,” Engelbert explained. “I said I know that’s never going to fly, and the lowest they would go is 60/20/20.”
“We’ll see what they say,” he added.
Tinney explained that the increase in economic development within the town is the explanation for why the town received 8 percent of the Crown Cork and Seal PILOT.
“Due to the recent development projects such as Crown Cork & Seal, Tioga Downs and Federal Express, the Town of Nichols has experienced an influx of new taxes and revenue,” she explained. The result of which equates to a significant drop in the town tax rate.”
Because the lump sum PILOT payments are prorated to each taxing entity, and because the town tax rate is the lowest of each of the entities, their portion of the PILOT payment disbursement is the smallest, she continued
“This breakdown is the same as for all properties located within the town, whether there is a PILOT attached or not,” Tinney said.
Dan Watson, of Lodestar Energy, said the company will continue moving forward with the projects with the hope that the taxing entities can reach an agreement.
“But, we will not start construction without a PILOT in place,” Watson said. “I am hopeful that we can arrange a split that works for everyone, and we can reach that agreement soon.”