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Local Government enters into PILOT agreement with Ginna/Exelon

by WayneTimes.com
August 3, 2019

By Amber Linson

Since the Fall of 2018, representatives from the Wayne County Board of Supervisors, the Town of Ontario, the Wayne Central School District, and Exelon (Ginna Nuclear Power Plant) have been negotiating a payment in lieu of taxes (PILOT) agreement. This agreement coincides with Local Law #5, established on July 22, 2019 by the Town of Ontario, which grants the property tax exemption. With each entity signing off on the agreement over the summer, the new PILOT is scheduled to take effect on January 1, 2020 and continue until December 31, 2029. With the final signature coming on July 22, 2019 at the Ontario Town Board meeting, the payments are secure for another 10 years.

According to the agreement, the Town will receive 12%, the School District will receive 63.5%, and the County will receive 24.5% of the revenue for a total of $51.5 million. The payments will decrease over time in a “step down” manner as explained by Katherine Gavett from Ferrara Fiorenza PC at the Ontario Town Board meeting on July 22. 

Gavett represented the Town, School, and County during the negotiations and explained to the Board that the agreement was based on the ability of the plant to produce a stable payment stream, and not the property value, since the value of the plant will depreciate over time.

First to sign off were the Board members of the Wayne Central School District on June 28, 2019. Steve Gallaher, the newly established President of the Board, said that the 10 year PILOT gives “longer security for taxpayers.” When asked about the impact to the taxpayers if Ginna were to close down after the 10 years are up, Gallaher responded “It is a long slow process to figure out a way to supplement that income”; and continued with “The fact that it is 10 years gives us time to adjust.”

Next to sign off on the PILOT was the Wayne County Board of Supervisors on July 16 2019. County Administrator, Rick House, pointed out that the agreement has a “huge impact” on the local economy as the corporation has incentive now to stay in the district and continue to not only provide revenue, but to employ as well. 

House confirmed that all indicators point to the fact that the company is not likely to renew their license at the end of the 10 years, saying “the output of the plant is going down.” However, he also explained that if nuclear power picks up, then the agreement allows the region to re-open negotiations, but for now the agreement is in the best interest of all involved parties. Although the resolution to accept the PILOT was carried on July 16, not all members of the Board of Supervisors were in favor of the agreement. Supervisor Kenan Baldridge of Rose, and Supervisor Susie Jacobs of Walworth both voted against the resolution. Neither of the Supervisors were available for comment as to why they were against the agreement, but according to the meeting minutes from  July 16, Baldridge addressed the Board and requested that the other Supervisors  reject the PILOT, stating that the “deal” was for a multi-million dollar corporation and would not be fair to the other Wayne County taxpayers. Baldridge continued, saying the agreement would increase property taxes and said it is unfair and unwise.

When asked what his thoughts were on the concerns of the two Board members who voted against the PILOT, House explained “Consultants who are extremely familiar with power plants, and whose predictions were closely similar, agreed that profitability is diminishing. All of the professionals indicated that the agreement is good.”

Ontario Town Supervisor Frank Robusto also voiced his support of the agreement saying “They’ve (Ginna)   been a good neighbor for years, but nuclear power is falling out of favor.”

When asked about the negotiation process, Robusto said “I think we negotiated hard. At times negotiations were at an impasse, but we kept coming back to the table.” When asked about the concerns of the two outlying Supervisors, Robusto said “There is absolutely no better deal. Those Supervisors did that for political grandstanding. Everyone had an opportunity to question board member representatives, the company representatives, and the law firm, but chose not to ask any questions.” Robusto continued, “It is easy to second guess negotiations;  “I hope the community is happy with the results.”

The Ginna Nuclear Power Plant, an Exelon company, has been supplying economic support to the region for over 40 years. When asked how the company feels about the new agreement, Communications Manager Maria Hudson responded: “Exelon Generation is committed to paying its fair share of property taxes that support the communities where we live and work. We are grateful for the support of the community and appreciate the Town of Ontario’s approval of the long-term tax agreement.”

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