Town of Lyme

Economic Wind Committee Final Report

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 Goal
Objective:
To educate our Towns residents to the various economic aspects of wind power, so all residents and property owners are aware of the likely short and long term economic impact of Industrial Wind Farms.

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Industrial Wind Turbines

Economic Impact on Lyme

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Industrial Wind Turbines Project Data

The currently defined overlay area is setback 4500 FT from the Chaumont River and Lake High water mark. Developer - British Petroleum. Its estimated that there will be approximately 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 when it 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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Industrial Wind Turbines Project Data (cont)

Access roads - gravel/crushed stone, approximately 25 feet wide. During the construction phase, access to the Overlay Area would be 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 the property in the Overlay Area and thus what percentage of the total it 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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Industrial Wind Turbines

Potential PILOT (Payment In Lieu Of Taxes) Economic Impact of an Industrial Wind Farm
PILOTs are negotiated for 15- 20 years and generally generate less tax revenue 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 or eliminating the yearly increase in the tax levy. State aid received by the district has been reduced over the past two years and it is anticipated it will remain at current levels or be reduced again in the near future. This could generate an increase in the school tax levy.
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Industrial Wind Turbines

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 per megawatt. The additional taxes collected from the PILOT and split as mentioned above, would have the following effect:
Town taxes collected would increase a total of $8,704, which represents approximately 0.4% of the towns 2011 total budget and 3.4% of the amount raised through Real Property Taxes. 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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Industrial Wind Turbines

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 a 2.08% increase. Thus the additional income from the PILOT would not have eliminated the tax levy increase, but it would have reduced the amount of the increase.

Risk to revenue side - PILOT payments delayed or stopped.

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Industrial Wind Turbines

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 of Industrial Wind Turbines on property values.
Studies range from no impact, to some properties becoming abandoned and worthless in the Overlay Area. Studies indicate that properties furthest from the Overlay Area suffer the least devaluation. Most studies agree that properties beyond two miles are not affected.
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Industrial Wind Turbines

None of the wind farm studies reviewed were near an attractive body of water 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 view shed and between one-half and one mile of the Overlay Area. Possible devaluation of up to 5% for homes which are located in the view shed 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 of development dead zones.

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Industrial Wind Turbines

View Shed loss could discourage residential development and hinder seasonal 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 the developer, First Wind, citing noise and health concerns and seeking compensation 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 Wind Farm) Mechanics Liens were placed against those leasing their property for turbine construction (General contractor did not pay a subcontractor, resulting in subcontractor placing a Mechanics Lien against the property).

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Industrial Wind Turbines Legal Challenges

Whatever zoning laws are adopted are likely to be challenged by either the 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, resulting in a financial loss to the owner. Some studies reviewed noted the need for water sources in the Overlay Area. Some studies noted the need to ensure that vegetation growth is controlled in 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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Industrial Wind Turbines

Local Employment is not expected to be impacted by the Industrial Wind Farm
Construction of wind turbines is highly specialized and crews are usually brought in to do most of the work. Operations Management is also highly specialized and managers would most likely be relocated to the area or assigned on a rotating basis. Wind Turbine maintenance is extremely specialized and normally outsourced to companies specializing in it. These workers move from wind farm to wind farm performing maintenance. Thus it is expected that this aspect of operation would have no impact on local employment.

Road Degradation - Economic Impact

Negative impact to roads, bridges, and drainage structures. These have been fixed by the Industrial Wind Farm Company when vigilance and diligence was taken by the town to remedy the problems. Possible negative economic impact from litigation. For example: Damage to personal vehicles, or personal injury resulting from an accident. Possible negative economic impact to property values.
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Industrial Wind Turbines

Communications Economic Impact.
Possible radio wave interference caused by electromagnetic interference (TV, cell phones, microwave towers, first responders radio communications, and other radio wave devices). This is usually addressed and corrected by the Industrial Wind Farm Company when vigilance and diligence is taken by the town to remedy the problems. Possible negative economic impact to the town and residents from litigation.

Decommissioning Economic Impact.

Decommissioning cost could be substantial to the taxpayers . The Town should require a cash escrow account to address this potential liability. The decommissioning cost should be reviewed every five years to assure the 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 former railroad 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 rapidly when 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 addressed and 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 of these regulations, harmful interference is defined as: any emission, radiation or induction which endangers 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 original owners in the Overlay Area, and for five miles from the boundary of the Overlay Area. Retain professional consultants for all contracts - paid for by the Town with funds provided by the Industrial Wind Farm Company. If an Industrial Wind Farm is started, the town should convene a citizens grievance 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 for dispute resolution or decommissioning accounts. The Town should exercise its option under Real Property Tax Law 487 and adopt 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 be located 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 of references can be obtained from the Town Clerks Office, the Town Website, or the Town Library.

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Definitions
Industrial Wind Farms - Wind Turbines installed for the production of power 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
Example of PILOT Impact on Income Budgets

Amount raise through Real Property Taxes (in Lyme) $240,130 $2,229,346 $3,455,000

Estimated additional PILOT contribution $8,704 $217,600 $315,520

Town County School

$2,130,243 $46,662,838 $7,329,106

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The Committee

member of Revaluation Staff with the County Real Property Tax Service Office and currently the past 22 years as Jefferson County Highway Department Right-of-Way Agent. Also, still serving for past 22 years as sole appointed assessor for Town of Rodman and Lorraine in Jefferson County as well as sole Assessor for Town of Lyonsdale in Lewis County. Former elected Assessor for the Town of Lyme. Lifelong resident of Lyme with exception on military service and college. Attended Lyme Central School, Jefferson Community College, Sheridan College in Wyoming and Washington State University. Continuing Education Course include NYS Assessment and Appraisal Courses and courses to maintain certification as State Certified Assessor, Advanced Designation.

Pete Rogers - Employed with Jefferson County for the past 25 years, consisting of 3 years as

Sue Warner

- MBA from the University of Dallas. Financial career in healthcare. Currently the Director of Finance at Hospice of Jefferson County, Inc. For the last 28 years a year-round resident of the Town of Lyme.
of Camden Elementary School. Assistant Principal for 5 years at the Baldwinsville Central School District. Started teaching middle school science and home & careers education. Program Leader for Cornell Cooperative Extension for 11 years. Bachelors degree in Home Economics Education from SUNY Plattsburgh, MS in Secondary Education from Murray State Univ, and a Certificate of Advanced Studies in Education Administration from SUNY Cortland. Year around resident of Chaumont.

Karen Donahue - Superintendent of Lyme Central School since 2009. Principal for 10 years

Dave Henderson - Mechanical Engineering Degree from the University of Hartford and a
Masters Degree in International Business from Rensselaer Polytechnic Institute. Spent 25 years with Pratt & Whitney. Career assignments included gas turbine design (aerodynamic and mechanical components), development of International Technology Agreements with European Companies, 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 State
Attorney General's Office 2003. Spent 25 years as an Assistant Attorney General in the New York State Attorney General's Office. Defended state employees and state agencies in civil litigation in state 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

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