A mix-up with a tax incentive for a natural gas storage company means the town of Bath will receive less revenues in the future.
The confusion was brought to light after Arlington Natural Gas received its first payment-in-lieu-of-taxes (PILOT) bill for its new storage facility on Coss Corners in Bath.
PILOTS offer new businesses a property tax break, generally over a 20-year period and starting out at 50 percent of the property’s assessed value. The payments then gradually increase during the term of the PILOT until the property is taxed at full value.
But in this case, Arlington, now owned by Inergy, was unaware of the assessed value of the property until it received the bill. The firm argued the assessment is too high, but sent its first payment of $123,000 under protest.
According to the Steuben County Real Property Tax Service the storage facility is assessed at $57.3 million.
Town Supervisor Marcia Burns said the town and Arlington have worked out a settlement, which cuts the assessed property value in half. In return, Arlington will deduct the difference in the first year’s payment over the remaining years of the PILOT.
Burns said the settlement does not affect the town’s 2013 revenues, but will result in lower payments beginning in 2014.
The Arlington PILOT was set up a couple years ago through the Steuben County Industrial Development Agency, before its new executive director, Jamie Johnson, was hired.
Johnson told the Bath town board Monday SCIDA negotiates the terms of PILOTS with businesses, but has no say in the assessed value of the property.
Burns, in her first term of office, asked him why Arlington didn’t protest the assessment at the time the agreement was signed.
“I can’t tell you, I wasn’t here,” Johnson said. “Sometimes, things get overlooked and missed.”
Town Assessor Vicky Adriance said she wanted to know how to avoid similar problems in the future.
“We get slammed out of nowhere,” Adriance said. “We can’t afford to have any more of this.”
Johnson said his policy when working out arrangements with businesses is to keep the affected towns aware of those deals.
“I can tell you this,” he said. “We will communicate with you in the future.”
A mix-up with a tax incentive for a natural gas storage company means the town of Bath will receive less revenues in the future.
The confusion was brought to light after Arlington Natural Gas received its first payment-in-lieu-of-taxes (PILOT) bill for its new storage facility on Coss Corners in Bath.
PILOTS offer new businesses a property tax break, generally over a 20-year period and starting out at 50 percent of the property’s assessed value. The payments then gradually increase during the term of the PILOT until the property is taxed at full value.
But in this case, Arlington, now owned by Inergy, was unaware of the assessed value of the property until it received the bill. The firm argued the assessment is too high, but sent its first payment of $123,000 under protest.
According to the Steuben County Real Property Tax Service the storage facility is assessed at $57.3 million.
Town Supervisor Marcia Burns said the town and Arlington have worked out a settlement, which cuts the assessed property value in half. In return, Arlington will deduct the difference in the first year’s payment over the remaining years of the PILOT.
Burns said the settlement does not affect the town’s 2013 revenues, but will result in lower payments beginning in 2014.
The Arlington PILOT was set up a couple years ago through the Steuben County Industrial Development Agency, before its new executive director, Jamie Johnson, was hired.
Johnson told the Bath town board Monday SCIDA negotiates the terms of PILOTS with businesses, but has no say in the assessed value of the property.
Burns, in her first term of office, asked him why Arlington didn’t protest the assessment at the time the agreement was signed.
“I can’t tell you, I wasn’t here,” Johnson said. “Sometimes, things get overlooked and missed.”
Town Assessor Vicky Adriance said she wanted to know how to avoid similar problems in the future.
“We get slammed out of nowhere,” Adriance said. “We can’t afford to have any more of this.”
Johnson said his policy when working out arrangements with businesses is to keep the affected towns aware of those deals.
“I can tell you this,” he said. “We will communicate with you in the future.”
