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Suits Seek to Force LIPA to Drop Assessment Challenge

News Conference to Announce Challenge to LIPA Assessment Suit

The Town of Huntington released the following:

The Town of Huntington and the Northport-East Northport School District announced today that each has filed a suit against the Long Island Power Authority and National Grid, charging that the utility companies violated a 1997 agreement when they started litigation last October challenging the assessment on the Northport Power Plant.

In papers filed in State Supreme Court in Riverhead, the Town and the School District note that in June 1997, when LIPA took over the sale and delivery of electricity from the Northport plant from the Long Island Lighting Co., it agreed not to challenge the assessment on the plant unless the assessment was increased out of proportion to any capital improvements there. In particular, the suits cited an August 6, 1997 letter from Richard Kessel, then LIPA’s chairman, to Huntington Supervisor Frank P. Petrone in which Kessel stated, “In the future, there will be no appeal or litigation of any assessment on the Northport facility unless Huntington Town singles out LIPA, LILCO or Brooklyn Union Gas property for reassessment, thus increasing the assessment separate and apart from other properties located within the Town.”

Since the Town has not increased the plant’s assessment since 1997, the suits LIPA and National Grid filed in October 2010 seeking to reduce the plant’s assessment by 90 percent directly violate that 1997 agreement, the Town and School District alleged. The Town and the School District asked the court to declare that the utility companies are  in violation of that agreement; to issue an injunction prohibiting any further action on LIPA and National Grid’s suits; and to award the Town and School District damages for the expenses incurred in fighting those suits, including the costs of hiring outside counsel and experts.

“Aware of the terms of the agreement between LIPA and LILCO, the Town upheld its end in not raising the assessment on the plant,” Supervisor Petrone said. “It is unfortunate that the Town is forced to seek a court order requiring LIPA and National Grid to do the same. However, the Town has no choice.”

“The Northport Power Plant has long made the Northport-East Northport community its home.  Faced with this devastating decrease to its tax base, the Northport-East Northport School District has no choice but to commence action against LIPA, National Grid and all of the entities that have operated under the terms of the various agreements concerning the Northport Power Plant.  These entities made promises and representations to the School District, which were made for the benefit of the School District and its residents,” said Board of Education President, Stephen W. Waldenburg, Jr. on behalf of the Board of Education of the Northport-East Northport Union Free School District.

The filing of the suits is the latest in a series of actions the Town and School Board have taken since LIPA filed the suit that, if successful, would result in tens of millions of dollars in property tax hikes for Huntington Town residents generally, with the heaviest impact on property owners in the Northport-East Northport School District.

Among the actions already taken was the formation of a website, www.stoplipataxhike.com, to raise awareness and educate residents about the devastating effects a successful LIPA property tax challenge would have and the distribution of “Stop The LIPA Tax Hike” lawn signs. The Town Board also created an Assessment Advisory Committee, composed of representatives from Town government, taxing jurisdictions in the Northport area and area business groups, including the Village of Northport, the Northport/East Northport School District, the Northport/East Northport Library District and the Northport and East Northport Chambers of Commerce.

“We are using all of the options at our disposal to fight this improper attempt to dig into the pockets of Huntington taxpayers,” Councilman Mark Cuthbertson said. “We’ve gone to the public, we’ve gone to the courts, and we plan to go to Gov. Cuomo and ask him to rein in this move by a public agency that is not in the public’s best interest.”

LIPA’s suit contends that the Northport plant is worth less than eleven percent of the value reflected by its current assessment, on which LIPA plays a total of roughly $70-million in property taxes.  In addition to serious increases in Countywide and Police District portions of tax bills, Town of Huntington residents broadly would experience tax increases of up to 10 percent.   The Northport-East Northport school and library districts are looking at a whopping 50 percent tax increase.

Under an agreement between LIPA and National Grid, tax savings from an assessment reduction would be passed on to National Grid and its shareholders.

“The Town has always acted responsibly and fully honored its part of the 1997 agreement, said Councilwoman Susan A. Berland. “The Town and the School District expect LIPA to do the same and we are confident that the court will require LIPA to live up to its obligations.”

“We, along with the Northport-East Northport School district, are committed to vigorously pursuing this lawsuit against LIPA and National Grid. The 1997 agreement between LIPA and LILCO clearly prohibits any type of tax grievance to be filed over the Northport plant. I join my colleagues and the Northport-East Northport School district in full support of this lawsuit,” said Councilwoman Glenda Jackson.

“This is one of the many steps that need to be taken to protect the taxpayers of Huntington. In this time of economic crisis, our residents can ill afford the tax increase LIPA and National Grid seek to impose. It is enough that residents have had to spend more on their utilities. They do not deserve this double whammy,” Councilman Mark Mayoka said.

The Huntington State Legislative Delegation — Senator Carl L. Marcellino, Senator John J. Flanagan, Assemblyman James D. Conte and Assemblyman Andrew P. Raia  — said in a joint statement:  “If ultimately successful, LIPA’s move to challenge their property tax assessment would have a crippling, long term effect on the Town’s taxpayers.  If LIPA is having a hard time making ends meets, how do they think the residents of Huntington feel?  We continue to call on LIPA to drop the challenge and put the needs of their customers ahead of their bottom line.  The Town should be commended for leaving no stone unturned in fighting this ill conceived LIPA tax dispute.”

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3 comments to Suits Seek to Force LIPA to Drop Assessment Challenge

  • HS resident

    To bad Frank didn’t remember he had this letter
    BEFORE all the money and time and stress over this issue became such a problem. You can’t make this stuff up!!! I guess he cleaned out his locker and found this in the bottom of the pile??

  • An increase on our taxes is a no way thing in the economic state that the country is in!
    What ever happened to the fishing pier that was planed when the power plant was built in Northport??Another false promise gone by the wayside I guess.MO

  • Npt Resident

    This is a lawyers DREAM come true, between the School District lawyers, who have relatives on the board, the same board who voted to bring the lawsuit forward and the Town Attorneys, bend over tax payers, AGAIN!!!. VOTE VOTE VOTE THEM OUT.

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