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Another Village Budget, Another Question Mark With LIPA Tax Revenue

Officials prepare for upcoming budget season unsure what revenues to expect from LIPA parcel, which makes up nearly half the budget.

While a power service agreement between Long Island Power Authority and National Grid remains under review by State Comptroller Thomas DiNapoli, village officials remain hopeful for a swift approval during a budget season that – as in past years – attempts to take into account a substantial amount of revenue that may, or may not, be there.

In addition to that, Mayor Margot Garant said on Monday night, they hope for someone to speak with at the other side of the bargaining table as the village faces a tax assessment grievance for the LIPA plant.

The assesed valuation currently results in tax revenues from the parcel making up nearly half of the village budget: $2.4 million of a $5 million spending plan, according to Garant.

She and Trustee Larry LaPointe met with John Cochrane, the Global Business Development and Mergers & Acquisitions Director for National Grid, within the past two weeks, she said, in an attempt to open up communication lines as the village prepares its own budget for the upcoming fiscal year.

But setting a budget with a question mark surrounding half of the revenue side of the equation is a difficult task, she said.

"It's awfully difficult to do a budget when $2.4 million of a $5 million tax levy comes from one parcel. But that's the situation we've been in with these guys for four years now," she said. "We're constantly looking for a resolution, with re-powering the plant being one part, and the revenue side side of the equation the other."

The new agreement “would establish procedures for the potential re-powering of the Port Jefferson, Barrett and Northport steam plants as well as the Barrett and Holtsville combustion turbine sites.”

A request for proposals will be prepared once the PSA is in effect to assess economic impact of repowering either of the Port Jefferson or Barrett steam plants. Repowering costs would be subject to a new power purchase agreement and separate from those in the approved PSA.

In a letter written over two years ago, Garant outlined the benefits of re-powering the plant, with cost savings in remediating a former power plant and utilizing an existing one (as opposed to building a new one) among just a couple.

Two years ago, Port Jefferson reached a settlement agreement after LIPA grieved its taxes, and as part of the settlement, LIPA did not file a grievance last year.

Village Budget Will Have 'No Wish Lists'

As village officials prepare for the looming budget season, Garant said on Monday night that department heads will not have the luxury of offering any spending increases from year-to-year.

"We told (department heads) there will be no wish lists. No special requests. Status quo. Zero percent increases on department budgets," she said. "The largest impacts will be mandates we have no control over: contribution to healthcare and pension to employees."

An April 15 date was tentatively set for a public hearing on next year's budget, and village board members agreed to meet Monday, March 11 for a work session on the budget.

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