Utilities fight property tax hikes in New Hampton, Northfield


CONCORD — Just days after Gov. Chris Sununu said in his inaugural speech that the state must rethink its energy policy to prevent more businesses from leaving to find cheaper electricity, New Hampshire's two largest utilities are set to renew their argument that they are being overtaxed.

The New Hampshire Electric Cooperative Inc. and Eversource Energy are scheduled to make oral arguments before the state's highest court on Jan. 12, in the appeal of their years-long tax abatement fight.

The municipalities involved in the appeal which include the Lakes Region towns of New Hampton and Northfield, argue that the appraisals of utility owned property provided by both companies as well as by the New Hampshire Department of Revenue Administration aren't reliable, don't provide an opinion of value of the actual assets in each separate community and that the DRA's "net book approach...allowed property to escape taxation."

At stake for the two utilities is the potential savings of millions of dollars in taxes if they are able to prove that their respective properties have been overvalued. And on the flip side of the coin, for small towns, a loss of tax revenue could result in a tax hike for other local property owners or a cutback in municipal services.

Attorney Margret Nelson, who represents NHEC, said the question of how to properly value utility property for local assessment purposes has sparked considerable debate and litigation, dating back to at least 1957, when Public Service Company of New Hampshire filed suit against New Hampton.

In the wake of the state's restructuring how utilities are regulated, the Public Utilities Commission has made it clear that it opposes allowing utilities to pass on "acquisition premiums" to its customers, the amount paid above net book value for utility assets.

The appeal Nelson said, will allow the court to address when and how multi-jurisdictional utility property which is part of an integrated system, operating as a single economic unit, should be valued and how to properly measure the impact of regulation that affects the property, taking into account the market conditions and regulatory constraints in effect during the tax years under appeal.

The NHEC argues there is no consistent and fair method for valuing its electrical distribution property and that the burden of steadily increasing and inconsistent municipal assessments must be borne by its members.

The New Hampshire Electric Cooperative filed a tax abatement appeal with the Board of Tax and Land Appeals involving 11 municipalities for tax year 2011 and 12 communities for tax year 2012.

In all 23 appeals, the parties stipulated that in 2011 that the communities of Andover, Brentwood, Colebrook, Epping, Grafton, Lempster, Lyme, New Hampton, Plainfield, Thornton and Unity had collectively leveled assessments totaling about $27,011,000 for property with a market value of $25,865,600.

For tax year 2012, the town of Northfield was added to the appeal and the total assessment for the 12 communities was $30,945,800 on property with a market value of $29,637,900.

In the Lakes Region, New Hampton assessed NHEC owned property at $2,630,200 in 2011 and $2,801,100 in 2012. Northfield assessed NHEC property at $3,646,400 in 2012.

During a nine-day hearing in January and February 2015, the NHEC argued that the assessments were disproportional as they are a nonprofit, member-owned and controlled electric distribution utility.

They relied on the opinion of George Lagassa, an experienced appraiser who concluded the highest and best use of the property was as part of an integrated electric distribution system.

Using sales comparison, income and cost approaches to value and reconcile those values, Lagassa arrived at what the NHEC asserted was credible estimates of the market value of the property.

Six communities, Andover, Epping, Lempster, Lyme, Plainfield and Warren, acknowledged overassessments occurred and agreed tax refunds were due for 2011 and 2012.

The municipalities argued that the Lagassa's appraisals didn't provide credible opinions of market value and that appraisals done by the DRA shouldn't be considered as proof of disproportionality because each municipality has the lawful authority to set assessments independent of the values arrived at by the state.

The bulk of the towns have relied on assessments of utility property done by professional engineer George Sansoucy of Lancaster.

In July 2015, the Board of Tax and Land Appeals ruled in favor of the towns, concluding that the unit method of valuation sought by Eversource and NHEC – a method through which they seek to reduce their property taxes by one-half to two-thirds – does not represent the fair market value of the utility properties.

In its brief filed with the New Hampshire Supreme Court in September, Eversource asserts that it faces regulatory restrains on income and operations and that "dramatically inconsistent assessment, including assessments more than doubling in one year in one community," necessitated the appeal.

Eversource additionally claims that the market value of utility property established by the DRA for the state utility tax and assessments of the same property completed by individual municipalities "vary widely."

NHEC said it was compelled to appeal to the Board of Tax and Land Appeals as the state was still struggling with the impacts of the global recession which began in 2008, and the co-op is experiencing little or no growth in its
customer base, while the bulk of the tax assessments on the poles, wires and substations it owns in the 118 communities it serves are increasing.

NHEC claims the municipal assessments and appraisals are "methodologically flawed" resulting in values being set that eclipse market value and that are both excessive and disproportional.

As the outcome of the case could have far reaching ramifications on utility property appraisal in the future Unitil Energy Systems Inc., Northern Utilities Inc., and Granite State Gas Transmission, as well
as the DRA have each filed an Amicus Curiae or "friend of the court" brief.

Such briefs provide the chance for non-parties to a suit to address questions of law or fact which are relevant to the resolution of the appeal, which will not be adequately addressed by the litigants.

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Belmont town budget poised for slight rise


BELMONT — An owner of $200,000 in property can expect to pay $66 a year more to support next year's town budget, based on proposed tax revenues of $5.61 million in the 2017 budget.

The overall tax rate currently is $28.83 per $1,000 in assessed valuation, so the town rate only makes up part of this bill, said Town Administrator Jeanne Beaudin. The proposed town share is budgeted to increase to $9.88 per $1,000 in assessed valuation, said Beaudin.

Assessed valuation, one of the factors behind property tax bills, could rise from $595.72 million to $600 million in 2017, she estimated.

"We are doing a mobile home update this year, and we've had some building permits and commercial permits. ... We may see some value adjustments there," Beaudin said. A tax rate is multiplied against the assessed valuation to determine property taxes.

Beaudin briefed the Belmont Budget Committee on the town's proposed $9.83 million in budget appropriations Tuesday. This budget would mark a 0.73 percent increase from appropriations in 2016.

The tax rate would rise from $9.55 per $1,000 of assessed valuation to $9.88 per $1,000, based on the budget, which still faces voter review. This rate would cost the owner of a $200,000 property $1,976 in annual property taxes, based on the town's portion of the budget.
Total appropriations proposed are $9,830,768 (selectmen's and Budget Committee's recommended).
Operating budget is $7,586,951 (selectmen's and Budget Committee's recommended). Last year it was $7,345,399.
Special warrant articles cost $1,968,005 (selectmen's and Budget Committee's recommended). Last year, special warrant articles cost $2,226,491.
Estimated revenues and credits (selectmen's and Budget Committee's recommended) are $4,215,831. Last year's revenues and credits were $4,158,520.
Estimated amount of taxes to be raised is $5,614,937 (selectmen's and Budget Committee's recommended). Last year, the taxes raised totaled $5,600,022.

Regarding Article 9, adopting new provisions of the veterans' tax credit, Beaudin explained that legislators removed a date restriction for times of service, simplifying the veterans' tax credit. This change could add 195 credits in Belmont, she said. If approved by voters, the veterans' tax credit cost would climb from $235,300 in 2016 to $335,500, nearly a 30 percent increase, according to the budget.
Article 12, a request to appropriate $60,776 for a second-year payment on a 2016 lease-purchase agreement for a new fire department pumper truck, was placed on the warrant based on New Hampshire Department of Revenue advice, Beaudin said.
The town is obligated to make these yearly payments based on a agreement from 2016 Town Meeting, she said.
"We made our first lease payment in 2016, so we're obligated," Beaudin said.
The money is not raised through taxation but from a special revenue fund, she said.

• Proposed operating budget highlights include $334,579 for executive; $108,382 for election, registration and vital statistics; $245,708 for financial administration; $55,968 for revaluation of property; $20,000 for legal expense; $330,332 for planning and zoning; $333,032 for general government buildings; $18,800 for cemeteries; $179,944 for insurance; $2,003,609 for police; $1,545,201 for fire department; $126,648 for building inspection; $3,000 for emergency management; $67,803 for highways and streets administration; $1,016,777 for highways and streets; $11,905 for sanitation administration; $233,398 for solid waste collection; $142,255 for solid waste disposal; $63,336 for health agencies, hospitals and other; $73,282 for welfare administration and direct assistance; $130,600 for welfare vendor payments and other; $130,382 for parks and recreation; $144,672 for library; $24,268 for patriotic purposes; $3,153 for other culture and recreation; $25,995 for conservation and development administration and purchasing of natural resources; $112,209 for long-term bonds and notes, principal; $31,212 for long-term bonds and notes, interest; $50,000 for capital outlay, buildings; and $10,000 for improvements other than buildings.
Individual warrant articles include collective bargaining agreement costs of $18,040 for Public Safety Employees Union Fire Unit B; $18,415 for Public Works Employee Union; and $48,260 for Public Safety Employees Union Police Unit A.

At 10 a.m. Saturday, Feb. 4, the deliberative session of Town Meeting takes place at Belmont High School. Voting takes place Tuesday, March 14, from  7 a.m. to 7 p.m., also at the high school.


Dollar-free Belmont Mill articles occupy Budget Committee

01 12 Belmont budget

Some town officials say the Belmont Mill building, if renovated, could house town offices, which are overcrowded. Three warrant articles on Feb. 4 will ask voters for direction. (File photo)


BELMONT — Amid a proposed budget of $9.83 million in appropriations, and 37 warrant articles, the Belmont Mill dominated discussion at Tuesday's town Budget Committee meeting — even though the mill isn't a budget item for the town's Feb. 4 deliberative session.
Articles 6-8 on the 2017 Town Meeting warrant ask voters if they want to renovate, demolish or sell the mill building, respectively.
Budget Committee member Preston "Pret" Tuthill said, "I'm just wondering if there should be some dollar amounts attached to these."
Ruth Mooney, chairman of the Belmont Selectmen, replied, "We have no idea what the dollar amounts could be."
The 1833 brick structure, originally built by the Gilmanton Village Manufacturing Company, has spurred back-and-forth debate about whether the town should try to keep and restore it.
Renovation could involve the entire historic building or a single floor, Mooney said.
"I don't know at this point if we know what the value is of that building," she said.
A "yes" vote to demolish the building could leave the town lacking adequate office space, Mooney said.
"This is only a guideline," Mooney said of the warrant articles. "We're trying to get some idea of what the taxpayers want us to do."
Tuthill concluded, "This is beyond the purview of the Budget Committee."
But the mill's future dominated discussion before the Budget Committee, in a meeting where the board voted to approve its 2017 budget recommendations.
A warrant article calling for the Belmont Mill's renovation was defeated by Belmont voters in March 2015. The proposal called for dedicating $3.36 million — most of it in bond funding — to refurbish the building and move town offices there.
Now, with grants running out that bind the town's use of the mill building, Mooney said Belmont will have a free hand.
"We're looking for public opinion. What do they want to do?" she said. "We had two or three public hearings and we got these three questions from the residents who were here."
During Tuesday's meeting, Mooney and several Budget Committee members commiserated about the uncertainty when dealing with Town Meeting votes.
Mooney said, "Whether we (will) get a clear picture from this or not, we have no idea."
Surveys fail to generate response, she said, so a town vote is one of the few ways to garner feedback.
In January 2015, selectmen estimated the amount spent to date on renovations of the Belmont Mill at over $1 million. On Tuesday, Budget Committee Chairman Ronald Mitchell said, "We've invested a lot of money in this building over the years. To say we'll just tear it down after we've invested all this money in it, I can't see that is an option."
Tuthill said the discussion will happen in earnest at deliberative session.
A 1992 fire damaged the Belmont Mill. A court order halted demolition of the mill building, and a preservation effort spurred acquisition of two grants totaling $1 million to rehabilitate the building. Voters approved a $215,000 bond as a grant match. In 1998, the "Belmont Mill Community Center" opened.
The Belmont Mill is one of seven properties statewide added to the New Hampshire State Register of Historic Places.

The candidacy filing period runs from Wednesday, Jan. 25, to Feb. 3. At 10 a.m. Saturday, Feb. 4, the deliberative session of Town Meeting takes place at Belmont High School. Voting takes place from 7 a.m. to 7 p.m. on Tuesday, March 14, at the high school.