LAFARGEVILLE — A public hearing about a tentative tax deal for a Toronto solar developer Friday morning drew less than a dozen people, but spurred almost two hours of discussion.
The Jefferson County Industrial Development Agency hosted the hearing at the Orleans Town Office for the prospective payment-in-lieu-of-taxes agreement for OYA Solar Inc. The deal would provide property tax abatement so OYA can erect its 20-megawatt project, which would include four arrays, each one 5 megawatts, with a combined 88,000 panels between Robinson Road and Blanchard Road.
Donald C. Alexander, CEO of the JCIDA’s sister agency, the Jefferson County Local Development Corp., said the date and time for the hearing where “simply chosen because the room was available.”
How the PILOT would affect the involved taxing jurisdictions, Jefferson County, the towns of Clayton and Orleans and the Thousand Islands and LaFargeville central school districts, dominated the 20-minute hearing and hour-and-a-half long follow-up discussion.
Jack Woodward, Wellesley Island, said he wanted to know how the JCIDA benefitted residents in the town of Orleans. He also criticized the agency for not including Orleans in PILOT negotiations until months after they began, a decision made because the town has no property tax. Mr. Alexander apologized for not incorporating the town in discussions earlier.
“I would like to focus my comments on the value-added of JCIDA. What is it? What’s the role, mission, responsibility as far as we the citizens in the town of Orleans go?” Mr. Woodward said. “There doesn’t seem to be a lot of clarity. There’s been a lot of scrambling in the last three weeks, one way or another.”
Agency officials addressed how PILOT agreements affect school districts, prompted by a question from Carolyn C. Delaney, vice president of Thousand Islands Central’s Board of Education.
Mr. Alexander said when school districts receive PILOT payments, the state removes aid to them in an amount equivalent to those payments. In addition, schools and municipalities cannot incorporate PILOT payments into calculations for their tax cap as a growth factor. With a two percent cap on annual tax levy increases, Mr. Alexander said not incorporating PILOT payments into the calculations limits growth.
“The state really screwed up,” Mr. Alexander said. “They created a monster with this two percent property tax and the impact on school districts, and until we can get that rectified, I don’t know what the future development in our community is going to be.”
Both the state Assembly and Senate have passed bills that would allow municipalities and schools to include PILOT payments into their tax cap calculations, but Mr. Alexander said Gov. Andrew M. Cuomo has yet to adopt any version of them. In order to prevent any loss of school aid, Mr. Alexander said he has tried to determine whether the schools could subtract PILOT payments from their electricity expenses, because the payments would come from an energy developer. That way they would not be considered additional revenue, but just factored in with their expenses.
“The Board of Education needs to discuss this,” Ms. Delaney said, adding that she wants the JCIDA to discuss it at more school board meetings. “We need to be educated, every school board.”
While the project would only create a few jobs, Mr. Alexander said it would bring additional revenue to the affected jurisdictions through PILOT and special district tax payments.
Jefferson County Legislator William W. Johnson, who serves on the JCIDA board of directors, said rough estimates for the first year of payments include $78,000 for Thousand Islands Central, $55,000 for the county, $17,000 for Orleans, $6,000 for Clayton and $5,000 for LaFargeville Central. Unlike most PILOTs, Mr. Alexander said payments will decrease over the 15 years, a decision made to help the schools.
Orleans has no town property tax, only special district taxes, which the JCIDA cannot abate for a PILOT. OYA will pay 100 percent of the special district taxes in Clayton and Orleans, meaning Orleans’s payments will not de-escalate. If Orleans decides to adopt a town property tax sometime in the next 15 years, it will be reduced and the town will receive PILOT payments on a pro rata (proportional) basis.
“That is benefit, there’s no question,” Mr. Woodward said.
Subscribers to community solar projects are expected to receive savings because the arrays earn cost-saving credits from generating electricity.
Mr. Woodward said he heard the developer’s project could save users as much as 10 percent on their electricity costs, which Jefferson County Legislator William W. Johnson confirmed.
“They can sell anywhere in New York state, but we’ve also had that conversation with OYA already to try to get them to say OK people in the immediate area are going to get the first shot,” Mr. Johnson said, “but they need to sell all of it, so if they don’t get enough people signed up locally, they’re obviously going to have to go elsewhere.
Mr. Alexander said he will present the comments from the public hearing to the JCIDA’s board of directors. The particulars of the PILOT agreement must still be finalized, which Mr. Alexander said he will send to the jurisdictions for final review, although “they’re all in agreement to it.”
OYA has established an agreement with NextEra Energy Inc., Juno Beach, Fla., for it to eventually take ownership of the arrays. Selling projects to investors like NextEra is essential to OYA’s business model.
The developer plans to build a fifth 5-megawatt array off Robinson Road separate from its other 20-megawatt project. OYA, however, plans to maintain ownership of its latest array.