Coos County Commissioners make plan to mitigate taxpayer impact in battle over wind park value

Despite a state decision upholding higher equalized valuations in Millsfield and Dixville, the Coos County commissioners will continue their fight against the valuations and are developing a plan to mitigate any tax impact to residents.

On Wednesday, the New Hampshire Board of Tax and Land Appeals (BTLA) upheld the total equalized valuations for the two unincorporated places set by the New Hampshire Department of Revenue Administration (DRA).

The equalized valuation figures stem from the appraised value of the 33-turbine Granite Reliable wind park, which, in 2012, the DRA appraised at $217 million.

But that figure, the commissioners argue, is essentially twice the value of $113 million a DRA appraiser gave them in 2007, when they entered into an annual payment-in-lieu-of-taxes (PILOT) agreement with the wind park owner based on that figure.

If the higher wind park value is allowed to stand, the result would be an "unprecedented" spike in the total equalized valuation of Dixville and Millsfield, with the consequence being an increased tax assessment for property owners, they said.

"The commissioners are looking at all available alternatives in order to keep this year's tax increase to a minimum," Colebrook attorney Jonathan Frizzell, who is representing the county, said Thursday.

"The commissioners did receive a substantial amount of the land use change tax penalty in a timely fashion from the owners of the wind park and that is one of the sources they are looking at in order to alleviate any increase for the upcoming year," he said.

In May, the county appealed the DRA's appraised wind park value to the BTLA, requesting that the board order DRA to reconsider and revise downward the 2012 total equalized valuation in Dixville and Millsfield by using the PILOT valuation of $113 million for the wind park rather than DRA's appraised utility tax valuation of $217 million.

With that request unsuccessful, the commissioners are now developing both short- and long-range strategies to mitigate any tax impact to residents living in the two unincorporated places.

"There are at least two approaches the commissioners are looking at for this year and two approaches for next year," said Frizzell. "For this year, they are looking at an appeal to the [New Hampshire] supreme court if they have negative decision from the BTLA. The second is a direct action through superior court."

In 2014, the commissioners will explore collective legislation and also the need to hire a separate utility appraiser, he said.

"The commissioners are upset insofar as they asked the state for guidance in 2007 and received it in 2007 and now the state is backing off on what they told the commissioners then," said Frizzell.

In December 2007, when the commissioners met with the DRA for an educational meeting to discuss the utility assessment of the wind park, DRA appraiser Scott Dickman estimated the appraised value at $113 million, according to the minutes of that meeting.

Former county administrator Sue Collins then recalculated the county tax impact worksheet for each municipality based on the $113 million.

In a March 20 letter to DRA Commissioner Kevin Cloughtery, Frizzell said, "After much consultation with your department, the commissioners relied upon this valuation in determining and negotiating the appropriate amount of [PILOT] that would be paid by Granite Reliable Power, which was agreed upon in the amount of $495,000 per year."

Frizzell, in his letter, said the issue is one of "fundamental fairness to the taxpayers in Dixville and Millsfield."

In their two appeals, one for Millsfield and the other for Dixville, the commissioners argued the DRA improperly relied upon an appraisal conducted under the state utility tax in determining the total equalized valuation of the wind farm.

"DRA should not participate in and facilitate a process that allegedly helps local communities in arriving at a first set of appraisals, but then chooses not to rely upon those appraisals at a later date, to the detriment of the communities and taxpayers therein," they said.

For 2011, the total equalized valuation for Dixville was $16.7 million. With the DRA's 2012 wind farm valuation the total equalized valuation in Dixville would more than triple to $54.4 million million.

In Millsfield for 2011, the total equalized valuation was $6.4 million. With the DRA's wind farm valuation that total equalized valuation would increase $174 million, to $180 million.

To the BTLA, the commissioners argued taxpayers in Millsfield and Dixville "will be forced to suffer an increased and disproportionate tax burden by virtue of the methodology employed by the DRA in arriving at the 2012 equalized valuation ..."

Currently, residents in Millsfield and Dixville pay low or sometimes no taxes because the timber taxes on the land often provide enough revenue to cover the expenses of running the two places.

But if the DRA's valuation stands, Dixville and Millsfield will require a reassessment because the value of everyone's property will be raised, county commissioner Rick Samson said Thursday.

"My understanding is they will have to pay taxes because the property values will be raised so high the timber tax will not cover it," he said.

As of the 2010 census, Millsfield had 23 residents and Dixville 12 residents.

On Thursday, DRA Property Appraisal Division Director Stephan Hamilton said the December 2007 meeting was an educational session with several wind park values discussed and no appraisal made at the time because no detailed information was available then to make a specific wind park valuation.

"The department at the time cautioned the commissioners to proceed carefully and said there would be an impact," he said.

In its decision Wednesday, the BTLA referenced Hamilton's predecessor, Guy Petell, who attended the December 2007 meeting.

According to the minutes, Petell "cautioned the commissioners that the equalized valuation of each unincorporated place where the wind park is located will go up a lot and this will have the effect of raising the county tax in those places."

Samson said the county does not yet have the estimated tax increase figures for Millsfield and Dixville.