Towns see ‘significant victory’ in tax decision

Supreme Court rules that municipalities have right to appraise utility infrastructure


The state Supreme Court on Thursday affirmed the right of the cities and towns to appraise utilities within their borders, rejecting arguments by Eversource and the N.H. Electric Cooperative that the appraisals are not a fair indication of their value.
The decision comes after extended litigation that began with an appeal of orders by the Bureau of Tax and Land Appeals in 2015 that rejected the utilities’ requests for tax abatements.
Telephone and electric companies seeking tax abatements from the towns have argued that many of the assessments have overvalued their property. They favor a statewide appraisal that would keep the assessed values consistent, regardless of which town the facilities might lie within.
More than 60 communities were involved in a joint municipal lawsuit to settle the argument, including Gilford which has been setting money aside in case of an adverse court decision.
“To me, the law was crystal clear, anyway,” said Gilford Town Administrator Scott Dunn.
RSA 72:9 requires that utility properties must “be taxed in each town according to the value of that part lying within its limits.”
In separate appeals, Eversource and the N.H. Electric Cooperative argued that the Department of Revenue Administration’s methods of assessment for the statewide utility property tax are a better way to determine the value.
The Bureau of Tax and Land Appeals found that method did not consider the market value of Eversource’s property in individual towns, and the Supreme Court upheld that assessment, saying the DRA’s approach was inconsistent with RSA 72:9.
In advising Alexandria selectmen to reject the utilities’ requests for abatements earlier this year, appraiser Gary Roberge of Avitar Associates of New England, Inc., wrote, “I do not rely on DRA’s opinion of value for many reasons. The most glaring reason why I recommend you do not accept the DRA opinion of value is that it does not report an opinion of market value, but rather an opinion of regulated value while the law clearly requires an estimate of fair market value. Just as important, it does not assess the property physically located in the town, but rather allocates a value to the town with no regard to the actual property or the age and condition of that property in town.”
Belmont Town Administrator Jeanne Beaudin said the utilities’ rights of way through Belmont “don’t have a tremendous amount of value,” so the town had not been setting aside more than it traditionally places into the overlay — funds used to cover veterans’ and other exemptions, as well as property abatements.
The town of Sandwich also was a party to the lawsuit, and selectman Willard “Bud” Martin said the court decision will help the town’s finances.
“We’re conservative in our planning,” he said, “and this justifies taking the time and expense of the legal fight.”
Like Belmont, Sandwich uses its regular reserves — 6 to 7 percent of the town’s annual budget — to accommodate any abatement or exemption that must be given. He said sharing legal counsel with other towns led to “quite modest” expenses.
New Hampton Town Administrator Barbara Lucas said, “We’ve been pretty confident the case would come out on the town’s side,” adding that the town has a healthy fund balance but still is quite pleased at the outcome.
With the Ayers Island dam as part of Eversource’s holdings in New Hampton and Bristol, those towns have significant tax income from the electric utility, and Lucas said the town has set aside about $250,000 to cover potential utility abatements as well as other pending tax appeals.
Durham Town Manager Todd Selig issued a statement, saying, “Municipalities have been steadfast in the appropriateness of their local utility appraisals as doing no more and no less than assigning a fair market value to utility properties within their jurisdictions on behalf of local taxpayers. This decision affirms our approach.
"... It is unfortunate we have had to expend tens of thousands of dollars collectively to prove an argument we all knew to be correct in the first place,” Selig said.
Eversource’s media spokesman, Martin Murray, said, “Eversource always seeks to pay our fair share of taxes and is the largest payer of property taxes in the state of New Hampshire. Ultimately, it is our customers who pay those costs, so we seek to ensure they are fair and reasonable.
“On behalf of our customers, and as a regulated utility, we have a duty to dispute those valuations made by communities that are extreme outliers compared to the New Hampshire Department of Revenue’s assessment of the value of our assets.”
He continued, “We remain concerned at the situation that the Supreme Court today described as ‘troubling’ — the wide variance in some local assessments compared to the Department of Revenue Administration’s assessments. Every taxpayer in New Hampshire has the right to appeal assessments they believe are incorrect and we will retain, on behalf of our customers, that right.”
Lucas expressed concern about House Bill 324, which utility companies were heavily lobbying for, that would require the use of the DRA’s appraisal method for local property tax purposes. The House retained that bill, and Lucas said, “We’ll be anxious to see if the legislature picks up on (that) piece of legislation.”
The N.H. Municipal Association is reviewing the Supreme Court decisions, but stated, “it is clear that they represent significant victories for the municipalities and vindication of their valuation methods.”

Editor's note: This story has been updated to correct that Belmont was not a party to the cases decided by the state Supreme Court. When contacted about the ruling for an article appearing in Saturday’s Laconia Daily Sun, Town Administrator Jeanne Beaudin had not yet read the decision and thought it referred to a separate case involving Fairpoint and right-of-way taxation. Her comments were based on that case, which is still pending.

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NHEC breaks ground on state’s largest solar array

MOULTONBOROUGH — New Hampshire Electric Cooperative has begun construction of what will be the largest solar electric array in the state, a two-megawatt system that will provide its members a clean source of electricity located on NHEC’s own distribution system.
The ground-mounted solar photovoltaic system, comprised of approximately 8,000 panels, will take shape over the next several months on land owned by NHEC adjacent to its substation on Moultonborough Neck Road in Moultonborough. It is expected to be online by the end of 2017 and producing approximately 3.5 million kilowatt-hours of electricity per year for the next 25 years or more, enough power for approximately 600 homes.
The Moultonborough solar array will displace electricity NHEC would otherwise have to purchase and pay to have imported from outside its system, and will generate Renewable Energy Certificates that NHEC can either use to meet its requirements under the state’s Renewable Portfolio Standard or can sell to other electricity providers.
Costs for wholesale generating capacity and transmission, which have risen dramatically in recent years, have been of considerable concern to NHEC and its members. At current costs, the Moultonborough project’s output is expected to save NHEC more than $280,000 per year in costs it would otherwise incur for purchase and delivery of the same products at wholesale from sources outside its system. After factoring in the cost of construction and the expected savings, the power from the project is expected to immediately have a net cost on par with conventionally produced power imported by NHEC from the regional market.
NHEC President and CEO Steve Camerino noted, “Although it will cover a small portion of our members’ total electricity needs, one of the biggest benefits of this project is the price stability it offers. Wholesale power prices can vary widely, but this project will provide NHEC’s members a reliable source of renewable energy at a fixed cost for at least the next 25 years. The Moultonborough solar project will allow NHEC to build on its experience operating two smaller solar PV systems that currently power our district offices in Raymond and Sunapee by exploring how a larger system will work in conjunction with our facilities and whether such installations elsewhere on our system might make sense.”
The project will also support NHEC’s efforts to explore new initiatives that can benefit members, including utility-scale power storage that can help further reduce the financial impact of periods of peak demand when power prices spike.
The total cost of the Moultonborough solar array is approximately $5 million, which is being financed by low interest New Clean Energy Renewable Bonds made available by the U.S. Treasury Department for public sector renewable energy projects. NHEC has engaged Ameresco, Inc. of Framingham, Massachusetts, to build the two-megawatt array. Site work on the 65 acre-parcel off Moultonborough Neck Road is being performed by Jeremy Hiltz Excavating, Inc. of Ashland. Engineering services are being provided by McCourt Engineering of Henniker.
NHEC is a member-owned electric distribution cooperative serving 84,000 homes and businesses in 115 New Hampshire communities.

06 03 Moultonborough Solar Site2 06 01 17 web
Site work is underway in Moultonborough at the future location of New Hampshire Electric Co-op’s 2 MW solar PV system, as seen here on Thursday, June 1. (Courtesy photo)

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Tourism marketing study shows tenfold return in business taxes

Each dollar the state spends on tourism marketing returns $10.15 in taxes, according to an independent advertising effectiveness study commissioned by the state Division of Travel and Tourism Development.
Commissioner Jeffrey Rose of the Department of Resources and Economic Development said the research shows the marketing effort has increased the amount of travel to the state and contributed to the 4.5 percent increase in tourist spending over the Memorial Day weekend.
The division estimated more than 650,000 out-of-state visitors were here last weekend, spending an estimated $100 million.
The increased marketing effort, coupled with positive economic conditions, low gasoline prices, and favorable weather, contributed to the boost in Memorial Day tourism, Rose said.
Karmen Gifford, executive director of the Lakes Region Chamber of Commerce, said the Joint Promotional Program, funded by a percentage of the state’s Rooms and Meals tax revenues, allows local businesses to reach a wider audience, not only within the state, but throughout New England and even overseas.
“We’ve applied for JPP grants for the Summer Guide and the Pumpkin Festival Guide, to promote the Lakes Region as a destination area, and let people know about all the wonderful things we have here,” she said. The program also helps to promote Motorcycle Week, she said.
“We have so many lakes, from Franklin to Castle in the Clouds, to promote, and to see it all, you’ve got to stay the night,” Gifford said. “We want to drive our economy, and that’s a big part of what tourism is in our area.”
The promotions create sustainable revenue, generating higher Rooms and Meals tax income which, in turn, allows for more advertising to create still-higher revenues, Gifford said.
Rose pointed to the ad effectiveness study by SMARInsights that found the state’s marketing effort influenced more than 750,000 trips to the state between November 2015 and October 2016, resulting in $831 million in visitor spending. More than half of the targeted households recalled seeing a component of the advertising campaign.
Of the 750,817 “influenced trips” during that period, the majority (282,880) came from New York City; 93,822 from Boston; 61,052 from Montreal; 32,084 from Toronto; and 280,978 from other New England states, the study found.
The $3,742,250 in media expenditures returned $37,986,030 in taxes, according to the report.

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