By Larry Rulison Business Writer - Published: 12:00 a.m., Thursday, December 23, 2010
CASTLETON -- The town of Schodack has reached a settlement over a tax dispute with the owners of a power plant here.
Although the dispute is over, the resulting loss of tax revenue -- more than half a million dollars annually -- will have a big impact on school district spending and, possibly, tax rates.
Schodack Central School District officials informed residents in a recent newsletter that the town had resolved its tax dispute with the owners of Castleton Energy Center, a 67-megawatt gas-fired power plant on Route 9J at the village line.
The deal lowers the town's original tax assessment of the plant from $40 million to $10 million, resulting in the loss of $565,000 in tax revenue for the district.
The good news is that as part of the settlement, the district does not have to pay Castleton Energy retroactive tax refunds, a bill that would have set the school district back more than $1 million.
"That certainly would have had a devastating impact," said Sherri Fisher, assistant superintendent for business and support services.
The school district had set aside a reserve fund of $549,000 designed to repay any refund in the case. That money can now be used to plug the hole caused by the loss of tax revenue for the 2011/2012 budget.
"That helps us in that regard," Fisher said. The budget for this school year, which was adopted in the spring, is roughly $20 million, so the loss of more than half a million dollars is cause for concern for the district, which has several other tax challenges still unresolved.
"It's certainly a difficult time for budget building," Fisher said.
According to federal records, Castleton Energy Center was originally built as a cogeneration power plant that provided steam to the former Fort Orange Paper Co. mill that sits vacant next door after closing down in 2002.
The power plant is now owned by an investment fund managed by a Minnesota private equity firm called Wayzata Investment Partners that was previously associated with Cargill, the industrial food giant. Wayzata appears to have acquired the facility in 2009 from a Canadian company.
Officials at the Castleton facility referred questions to John Walsh, a Wayzata executive. Contacted Wednesday, Walsh said the company would have no comment.
Larry Rulison can be reached at 454-5504 or by e-mail at lrulison@timesunion.com.
Read more: http://www.timesunion.com/default/article/Schodack-power-plant-settle-tax-tiff-916385.php#ixzz19PVtcUUp
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