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Schools

Northport Officials Respond to LIPA Tax Grievance

Board President Stephen Waldenburg expresses disappointment and outrage over actions of LIPA and National Grid.

is formally challenging the assessed value of its 243-acre, waterfront Northport property.

Currently the property's assessed value is just over $30 million, according to Town of Huntington records. At the request of the Long Island Power Authority, National Grid is seeking to reduce that value to $3.25 million.

If successful, the amount the power authority contributes to local special districts—such as the library, fire and, perhaps most significantly, the — would be severely reduced.

The total school district tax levy for that the 2009-10 budget year was $127,387,331. LIPA's portion, made in the form of 'payments in lieu of taxes' or PILOTs, was just over $47,211,180, or 37 percent, according to town and school district documents.

LIPA is a non-profit public utility that distributes the power generated by National Grid, a London-based private utility that purchased KeySpan in 2007.

At the most recent Northport School Board meeting, Monday, Nov. 1, President Stephen Waldenburg addressed possible courses of action.

He said that when LIPA was created in 1998, it agreed to assume the tax burden for both the Northport and Port Jefferson power plants by making the PILOTs.

Waldenburg said then-Governor George Pataki came to speak to the community at the and promised those PILOTs would be protected and  not be challenged. 

Since the agreement is between LIPA/National Grid and the Town of Huntington's Assessor's Office,  Waldenburg said the school district has no say other than to object.  He urged board members and members of the community to contact their senators and congressmen to put pressure on LIPA.

Calling the prominent LIPA stacks in Northport a "behemonth," Waldenburg asked rhetorically why any community would allow them without some sort of tax incentive.  He said it was "obscene" that LIPA was now choosing to challenge the amount.

There was some question as to the amount of payments LIPA agreed to in the past. According to Trustee Joe Gannon, the PILOTs were part of the LIPA Act, which created LIPA in 1986 and authorized it to acquire the securities or assets of Long Island Lighting Company through either a purchase or the power of eminent domain.  

Gannon said it was unclear whether LIPA had agreed to maintain those levels, and that in 2005, when property values were at a high point, LIPA had argued that the amounts shouldn't be based on assessed value.

Armand D'Accord, a district resident and member of the district's Audit Committee who was in the audience, noted that it was ironic that five years later, the authority would now try to use assessments to lower their payments. Gannon replied that since the PILOTs were part of the LIPA Act, and not a separate agreement, the issue is really a legal one.

District resident and CPA Larry Beck agreed and said that in his professional experience, PILOTs were generally "contractual agreement."

The PILOTs also contribute $3.18 million to the library district, $3.1 million to the highway district, $9.2 million to the county police district and more. 

At Thursday's meeting of the , Trustee Tom Kehoe said that a lowered assessment doesn't directly affect the village budget, "it indirectly affects our people because the property values could get a significant adjustment."

He called it a "very serious matter" and said that he and his fellow elected officials ahd been looking to work with town, the county and the state "to have some kind of effect on the property taxes village residents pay in the future. Things got put aside temporarily because of the election. But noone is looking to ignore this by any stretch of the imagination."

Trustee Lori McCue, who was quoted in the Newsday article, said she had never been contacted by any reporters from the paper, and was never interviewed. After reading the article, she contacted one of the writers and was told that there had been a "mix-up," and that she was confused with someone from Deer Park. The paper subsequently printed a correction, although McCue said it wasn't exactly as they had promised.

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