Lyme Final Economic Committee Report

8/3/2019 Lyme Final Economic Committee Report

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Town of Lyme

Economic Wind Committee

Final Report


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6/13/2011 Lyme: Economic Wind Committee 2

Committee Members

Pete Rogers - Co-Chairman Richard Nagel - Co- Chairman Sue Warner Karen Donahue Scott Discount Guy Gosier Dave Henderson Richard Freshour

Mission Statement: Assess the full range of the expected positive and negative

economic impacts on the Town of Lyme.


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Committee GoalObjective: To educate our Towns residents to the various economic

aspects of wind power, so all residents and property owners areaware of the likely short and long term economic impact ofIndustrial Wind Farms.


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Industrial Wind Turbines

Economic Impact on Lyme


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Project Data The currently defined overlay

area is setback 4500 FT from the

Chaumont River and Lake Highwater mark.

Developer - British Petroleum.

Its estimated that there will beapproximately 40 towers in

in the currently defined overlay area (Northeast side of NYS Route 12E).

Expected tower height - 425 Feet (from the ground to the tip of the blade whenit is in the vertical position).

Proposed Megawatts (MW) per turbine - 1.6 Megawatts.

Total Megawatts for the project - approximately 64 MW.


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Project Data (cont) Access roads - gravel/crushed stone, approximately 25 feet wide.

During the construction phase, access to the Overlay Area wouldbe from the Clayton side of Lyme.

Current Town Wide Assessed Values The total assessed tax value for Lyme - 118,881,932.

The total tax exemptions for Lyme - $7,249,942. Current town wide assessed values for Lyme - $111,631,990.

School taxable base $112,436,066.

Village taxable base $12,135,694.

The committee could not determine the assessed value of theproperty in the Overlay Area and thus what percentage of the totalit represents.


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Lyme Wind Overlay Map - As proposed

Currently defined Overlay

Area for Industrial Wind

Turbines.

NYS 12E


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Potential PILOT (Payment In Lieu Of Taxes) Economic Impact of an IndustrialWind Farm

PILOTs are negotiated for 15- 20 years and generally generate less taxrevenue than fully valued property.

Property owners with a wind farm lease, that would transfer with the

property, may see an increase in their own property value.

The impact of a PILOT on the school district.

PILOT payments received could impact the school tax levy by reducing oreliminating the yearly increase in the tax levy. State aid received by the districthas been reduced over the past two years and it is anticipated it will remain atcurrent levels or be reduced again in the near future. This could generate anincrease in the school tax levy.



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Impact on taxes - Assuming a PILOT (Payment in Lieu of Taxes) County taxes would not be affected.

Its expected the County would receive 40% of the revenue.

Town taxes would likely not be affected.

Its expected the Town of Lyme would receive 1.6% of the revenue. The School District would receive approximately 58% of the income.

Risk - Coming late to the game may result in lower tax income per turbine.

The following is an example of the impact of a possible PILOT:

Assuming 40 turbines, 1.6 Megawatts per turbine, and taxed at $8,500 permegawatt. The additional taxes collected from the PILOT and split as mentionedabove, would have the following effect:

Town taxes collected would increase a total of $8,704, which represents approximately0.4% of the towns 2011 total budget and 3.4% of the amount raised through Real PropertyTaxes.

County revenue would increase a total of $217,600. School system taxes collected would increase $315,520 or approximately 4.3% of the total

2011-2012 school budget or about 8% of the amount collected through school taxes.



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Impact on taxes - contt For a homeowner assessed at $35,000, it would represent an additional income for the

Town and School System of about $143 per year from that property. The increase in dollars

collected from a possible PILOT would go mainly to the school system.

The impact on the 2011-2012-school budget year, from the estimated PILOT

income to the school, would have reduced the 4.05% increase in the tax levy, to a2.08% increase. Thus the additional income from the PILOT would not haveeliminated the tax levy increase, but it would have reduced the amount of theincrease.

Risk to revenue side - PILOT payments delayed or stopped.



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Economic Impact on Residential Property Loss of View Shed.

Town, or parts of town, may be

perceived as industrial zone.

The committee reviewed numerous studies regarding the impact ofIndustrial Wind Turbines on property values.

Studies range from no impact, to some properties becoming abandoned andworthless in the Overlay Area.

Studies indicate that properties furthest from the Overlay Area suffer the leastdevaluation.

Most studies agree that properties beyond two miles are not affected.


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None of the wind farm studies reviewed were near an attractive body ofwater or located on flat terrain.

Possible 35% decrease in value for properties located in the Overlay Area.

Possible abandonment of some homes located in the Overlay Area. Possible devaluation of up to 20% for homes which are located in the view

shed and within one-half mile of the Overlay Area.

Possible devaluation of up to 10% for homes which are located in the viewshed and between one-half and one mile of the Overlay Area.

Possible devaluation of up to 5% for homes which are located in the viewshed and between one and two miles of the Overlay Area.

Water front or water view properties located in or near any of these areas,and in the view shed, could incur a larger devaluation

Another possible impact of Industrial Wind turbines is the creation ofdevelopment dead zones.


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View Shed loss could discourage residential development and hinderseasonal businesses (i.e restaurants, marinas, convenience stores).

Potential litigation relative to fair market and assessed property values.

Wolfe Island - A property owner is claiming a 21% decrease in market value

relative to assessment. Mars Hill Mountain, Maine - A group of Mars Hill residents who live near the

second largest wind power project in the state filed a lawsuit against thedeveloper, First Wind, citing noise and health concerns and seekingcompensation for a loss of property value.

The towns located in the three Wind Farms surveyed (Maple Ridge, Fenner, &Chateaugay) report no known pending litigation.

Other possible litigation: For example in Herkimer County (Hardscrabble WindFarm) Mechanics Liens were placed against those leasing their property forturbine construction (General contractor did not pay a subcontractor, resulting in

subcontractor placing a Mechanics Lien against the property).



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Legal Challenges Whatever zoning laws are adopted

are likely to be challenged by eitherthe anti- or pro- wind groups.

Potential assessed value challenges.

Fire Impact Wind-driven brush fires originating from wind

turbine fires can result in significant damage to private property, resultingin a financial loss to the owner.

Some studies reviewed noted the need for water sources in the OverlayArea.

Some studies noted the need to ensure that vegetation growth is controlledin areas around the towers.

Studies also noted the need to maintain access road width and condition,to ensure that fire fighting equipment could access the area.


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Local Employment is not expected to be impacted by the Industrial WindFarm

Construction of wind turbines is highly specialized and crews are usuallybrought in to do most of the work.

Operations Management is also highly specialized and managers wouldmost likely be relocated to the area or assigned on a rotating basis.

Wind Turbine maintenance is extremely specialized and normallyoutsourced to companies specializing in it. These workers move from windfarm to wind farm performing maintenance. Thus it is expected that thisaspect of operation would have no impact on local employment.

Road Degradation - Economic Impact

Negative impact to roads, bridges, and drainage structures. These havebeen fixed by the Industrial Wind Farm Company when vigilance anddiligence was taken by the town to remedy the problems.

Possible negative economic impact from litigation. For example: Damageto personal vehicles, or personal injury resulting from an accident.

Possible negative economic impact to property values.


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Communications Economic Impact. Possible radio wave interference caused by electromagnetic interference

(TV, cell phones, microwave towers, first responders radiocommunications, and other radio wave devices).

This is usually addressed and corrected by the Industrial Wind FarmCompany when vigilance and diligence is taken by the town to remedythe problems.

Possible negative economic impact to the town and residents fromlitigation.

Decommissioning Economic Impact.

Decommissioning cost could be substantial to the taxpayers .

The Town should require a cash escrow account to address this potentialliability.

The decommissioning cost should be reviewed every five years to assurethe secure investment represents the cost of decommissioning.

Local electrical power rates - no impact on local power rates.


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High Voltage Transmission Lines (HVTL)

Project Data Length - 5.7 miles in the Town of Lyme.

Six Lines - three on each side of the pole.

Voltage - 115,000 volts . Single wood pole, approximately

70 - 80 feet in height.

Poles will be placed 4 feet below grade.

Proposed location - Down the formerrailroad line/water line.


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High Voltage Transmission Lines (HVTL)

High Voltage Transmission Line (HVTL) Economic Impact Possible devaluation of up to 6% for homes which are located within 150

yards of the HVTL. Studies indicate that the impact decreases rapidlywhen moving away from the base of the tower or pole.

The current assessed value of the homes in this zone is $2,120,000 or about

1.9% of the total Town assessed value ($111,631,990). The additional taxes collected could be up to 1% of the school budget.

Amounts would likely decrease over time because of depreciation.

Possible electromagnetic interference from the HVTLs (usually addressedand corrected by the transmission line owner).

In the United States, electromagnetic interference from power transmission systems is governed

by the Federal Communications Commission (FCC) Rules and Regulations presently in

existence (FCC, 1988). A power transmission system falls into the FCC category of incidental

radiation device, which is defined as a device that radiates radio frequency energy during the

course of its operation although the device is not intentionally designed to generate radio

frequency energy. Such a device shall be operated so that the radio frequency energy that is

emitted does not cause harmful interference. In the event that harmful interference is caused,

the operator of the device shall promptly take steps to eliminate the harmful interference. For purposes ofthese regulations, harmful interference is defined as: any emission, radiation or induction whichendangers the functioning of a radio navigation service or of other safety services or seriously degrades,obstructs or repeated interrupts a radio communication service operating in accordance with this chapter[FCC 1988}.


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Recommendations Recommendations

Require a Residential Property Value Guarantee Agreement for the originalowners in the Overlay Area, and for five miles from the boundary of theOverlay Area.

Retain professional consultants for all contracts - paid for by the Town withfunds provided by the Industrial Wind Farm Company.

If an Industrial Wind Farm is started, the town should convene a citizensgrievance panel to address grievances initiated by area residents.

Establish a substantial and adequate cash fund, administered by the Town,and funded by the Industrial Wind Farm Company, for dispute resolution,including, but not limited to legal fees.

The town should not accept Letters of Credit, or Letters of Guarantee fordispute resolution or decommissioning accounts.

The Town should exercise its option under Real Property Tax Law 487 andadopt a local law providing Industrial Wind Farms be excluded from the

real property tax exemption in the Town of Lyme. Investigate the pros and cons of a Host Agreement versus a PILOT

(Payment In Lieu Of Taxes).

PILOT contract should be put up for local referendum.


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References/Exhibits

This report is based on the assumption that the wind turbines will belocated in the currently defined Overlay Area, and that no variances will

be granted for other areas.

References are provided in a separate document - The list ofreferences can be obtained from the Town Clerks Office, the TownWebsite, or the Town Library.


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Definitions

Industrial Wind Farms - Wind Turbines installed for the production ofpower which is sold through the grid.

HVTL - High Voltage Transmission Lines.

EMI - Electro Magnetic Interference. Overlay Area - Area in which

wind turbines are located.

PILOT - Payment In Lieu Of

Taxes.


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Appendix

Budgets Amount raisethrough Real

Property Taxes(in Lyme)

Estimatedadditional PILOT

contribution

Town $2,130,243 $240,130 $8,704

County $46,662,838 $2,229,346 $217,600

School $7,329,106 $3,455,000 $315,520

Example of PILOT Impact on

Income


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The Committee

Pete Rogers - Employed with Jefferson County for the past 25 years, consisting of 3 years asmember of Revaluation Staff with the County Real Property Tax Service Office and currently thepast 22 years as Jefferson County Highway Department Right-of-Way Agent. Also, still servingfor past 22 years as sole appointed assessor for Town of Rodman and Lorraine in JeffersonCounty as well as sole Assessor for Town of Lyonsdale in Lewis County. Former electedAssessor for the Town of Lyme. Lifelong resident of Lyme with exception on military serviceand college. Attended Lyme Central School, Jefferson Community College, Sheridan College in

Wyoming and Washington State University. Continuing Education Course include NYSAssessment and Appraisal Courses and courses to maintain certification as State CertifiedAssessor, Advanced Designation.

Sue Warner - MBA from the University of Dallas. Financial career in healthcare. Currentlythe Director of Finance at Hospice of Jefferson County, Inc. For the last 28 years a year-roundresident of the Town of Lyme.

Karen Donahue - Superintendent of Lyme Central School since 2009. Principal for 10 yearsof Camden Elementary School. Assistant Principal for 5 years at the Baldwinsville CentralSchool District. Started teaching middle school science and home & careers education. ProgramLeader for Cornell Cooperative Extension for 11 years. Bachelors degree in Home EconomicsEducation from SUNY Plattsburgh, MS in Secondary Education from Murray State Univ, and aCertificate of Advanced Studies in Education Administration from SUNY Cortland. Year aroundresident of Chaumont.

Dave Henderson - Mechanical Engineering Degree from the University of Hartford and aMasters Degree in International Business from Rensselaer Polytechnic Institute. Spent 25 yearswith Pratt & Whitney. Career assignments included gas turbine design (aerodynamic andmechanical components), development of International Technology Agreements with EuropeanCompanies, and Customer Support, responding to customer issues. Year round resident of Lyme


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The Committee

Richard Freshour - Graduated Albany Law School. Retired from the New York StateAttorney General's Office 2003. Spent 25 years as an Assistant Attorney General in the New YorkState Attorney General's Office. Defended state employees and state agencies in civil litigation instate and federal courts. Year-round resident of Three Mile Bay.

Scott Discount

Guy Gosier

Richard Nagel.


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The Committee

Pete Rogers

Sue Warner

.Karen Donahue

Scott Discount

Dave Henderson

Richard Freshour

Richard Nagel

Guy Gosier

Documents

Lyme Final Economic Committee Report