Article

Turbine tax benefit eludes Freedom residents

Freedom residents who hoped the wind turbines on Beaver Ridge would bring a lower tax bill got a surprise this year as other factors sucked up most of the windfall. ...Freedom town officials, with help from the state, valued the Beaver Ridge development at $9.7 million and the Central Maine Power transmission lines running up the ridge at an additional $480,000. But the value added to the town made barely a dent in the mill rate, which went from 17 to 15.5.

FREEDOM: Freedom residents who hoped the wind turbines on Beaver Ridge would bring a lower tax bill got a surprise this year as other factors sucked up most of the windfall.

The three 400-foot wind turbines started pumping energy into the grid last November. During the planning stages of the project, wind developer Competitive Energy Services estimated the turbines would be valued at $10 million. According to company literature, the boost in the town's overall valuation would contribute to a 27 percent reduction in residents' tax bills.

Freedom town officials, with help from the state, valued the Beaver Ridge development at $9.7 million and the Central Maine Power transmission lines running up the ridge at an additional $480,000. But the value added to the town made barely a dent in the mill rate, which went from 17 to 15.5.

Without the added value of the windmills, Selectwoman Carol Richardson said, the mill rate would have climbed from 17 to 19.8, or $19.80 per $1,000 of property value.

At 15.5, the mill rate is 22 percent below the hypothetical 19.8, but an increase in local valuations means many residents are paying the slightly reduced rate on property valued much higher than last... more [truncated due to possible copyright]  

FREEDOM: Freedom residents who hoped the wind turbines on Beaver Ridge would bring a lower tax bill got a surprise this year as other factors sucked up most of the windfall.

The three 400-foot wind turbines started pumping energy into the grid last November. During the planning stages of the project, wind developer Competitive Energy Services estimated the turbines would be valued at $10 million. According to company literature, the boost in the town's overall valuation would contribute to a 27 percent reduction in residents' tax bills.

Freedom town officials, with help from the state, valued the Beaver Ridge development at $9.7 million and the Central Maine Power transmission lines running up the ridge at an additional $480,000. But the value added to the town made barely a dent in the mill rate, which went from 17 to 15.5.

Without the added value of the windmills, Selectwoman Carol Richardson said, the mill rate would have climbed from 17 to 19.8, or $19.80 per $1,000 of property value.

At 15.5, the mill rate is 22 percent below the hypothetical 19.8, but an increase in local valuations means many residents are paying the slightly reduced rate on property valued much higher than last year.

"Unfortunately that wasn't a 22 percent drop from what we paid last year," said Selectman Ronald Price. "And that's what people wanted to see."

The value of a two-acre base lot jumped from $16,000 to $23,000 this year. Wetland property doubled, from $100 to $200 per acre, and residents with 100 feet of shoreline property have seen the value of that frontage go from $30,000 to $55,500. The list goes on.

Richardson said Freedom was valuing properties at 67 percent of the state's assessment - a difference of $15 million. State valuation is based in part on sales, and according to Richardson, sale prices in Freedom shot up recently, especially on waterfront properties.

The local valuation increases should bring the town to between 95 and 100 percent, she said, adding that the state will not register the value of the wind development until next year.

In theory, changes in valuation are a zero-sum game. The sum total of taxes constitutes the town's contributions to local and county government and the school district. If there's no increase in spending, the bottom line remains the same.

The reason Freedom residents won't see a big benefit from the wind turbines likely has to do with increased spending, lax bookkeeping, or some combination of these, according to people interviewed for this story. Though the town is required to have an internal audit every year, the last audit on the books was in 2005.

"You never have a true picture of what's surplus until you have an audit," said former selectman Tim Biggs, who chalked up some of the problems to the fact that selectmen are not accountants but untrained volunteers.

"I'm a carpenter; I'm a simple man," he said. "I felt overwhelmed the minute I took office."

Mike Rogers of the Maine Revenue Service said it would be easy for Freedom to lose the benefits of a $10 million development if there were spending increases during the same year.

Prior to 2008, Rogers said, the Freedom Board of Selectmen used money from the general fund to keep the town's tax rate artificially low.

"That is wrong. They have no authority to do that without the town's permission," he said. Both Rogers and select board members Richardson and Price said the town was now operating properly with respect to appropriations from surplus.

Richardson called the deviations in past years "honest mistakes." Others interviewed for this article were outspoken that funds were not misappropriated, but rather mismanaged with good intentions.

"We got away with a lower mill rate, but we had an empty checkbook," Richardson said.

Other towns around the county have found themselves in hot water after multiple years of spending savings to lower the tax rate. Swanville residents saw their taxes jump last year in an effort to catch up with state valuations.

A vote last fall backed down the increase in an attempt to ease the catch-up game, but the town now faces another special town meeting to deal with the fluctuating tax rate.

Price said Freedom town officials would tackle the 2006 audit in September, and he expressed hope that the books would be up to date by the end of 2010. The audits would help, he said, but Freedom ultimately has to keep an eye on the bottom line.

"There's some things you can't control, like state subsidies," he said, "but you can control how much you spend, and it's hard to do."


Source: http://waldo.villagesoup.co...

AUG 11 2009
http://www.windaction.org/posts/21724-turbine-tax-benefit-eludes-freedom-residents
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