Oswego School Board Rejects Nuclear Tax Deal

OSWEGO, NY – The Oswego City School District voted against accepting a one-year PILOT agreement with the owners of Nine Mile Unit I.

Wednesday night’s vote, 5-1-1, followed a nearly 45-minute executive session. Board Vice President Jim Tschudy voted against the move to reject the deal and member Sean Madden was absent.

Last week, the town of Scriba voted in favor of accepting the deal.

The third taxing entity in the mix, Oswego County, will vote on the agreement next month.

Kevin Caraccioli, attorney for the town Scriba, described the school board’s vote as “a profound mistake.”

“I do think the school board made a profound mistake with their action,” he said following the special meeting. “This will set back relations between Constellation Nuclear and the community. I am hopeful that that is not irreversible.”

In his opinion, the board’s action was “a misinformed decision.”

“They simply did not have all the information they needed to make a proper determination. They’ve chosen to ignore what information they have.”

“From our perspective, clearly we’re disappointed that this is the outcome. We are committed to operating our plant safely while at the same time being responsible community partners,” said Constellation Energy Nuclear Group spokesperson Jill Lyon.

They negotiated in hopes of reaching a fair agreement for all involved, she said.

“We believe that the agreement demonstrated good faith negotiations,” she said.

Wednesday’s decision doesn’t shut the door on any future talks the two parities might have on this agreement or others, she added.

“This won’t change our commitment to being here. We’ve enjoyed the benefit of operating in a community that’s been very supportive of us and we greatly appreciate that support,” she said.

The current PILOT agreement for Unit I expires on June 30.

The plant will go for what the assessed value is, Lyon said but wouldn’t speculate as to what the next steps might be in this process.

The five board members who voted to reject the deal all indicated that they want the facility to pay its fair share in taxes.

According to John Dunsmoor, a $600 million assessed value (of Unit I) on the tax rolls “would mean somewhere between $10 million to $12 million” in revenue for the district,

Under the PILOT, the district would receive about $6.3 million.

“So, the school district would be leaving $4 million to $6 million on the table,” Dunsmoor said.

“I approved the PILOT before. I’ve learned my lesson,” Fran Hoefer said. “I don’t make the same mistake twice.”

If the plant goes on the tax rolls at a fair value, he said, “then the tax rate for every person in the community will be substantially reduced and we will all be better off.”

“This is an argument over the fair value of the plants,” Dave White said. “I can certainly understand Constellation’s position. The taxpayers have every right to work the best deal that they can. I don’t believe this deal, I agree with Mr. Dunsmoor, is quite fair to the school district. This is not something that I can agree to.”

“I think that the town and the county have moved ahead on this. I think the way would have been much more clear for subsequent development and enhanced relationships if we had the courage to accept this as an agreement that really works to the advantage of the school district,” Tschudy said. “I think that we are missing an opportunity here that is very significant.”

“I think we’ve certainly said enough and certainly heard enough,” Tom DeCastro said. “I can’t go out into the community without running into people telling me they’re not in favor of it; and I represent the community.”

Tschudy said people just want to get as much as they can as fast as they can.

“But sometimes you make that kind of move, you end up harming your interests more than enhancing them,” he added.

Superintendent Bill Crist said he didn’t agree with the present tax agreement.

“I think we have an opportunity (with the new pact) that we are missing out on by voting negatively toward this this evening. This tax agreement was simply a bridge to get us from a time that none of us as Oswegonians appreciated, we felt we didn’t get a fair shake, to an opportunity to look at how all of us including Constellation Energy, the school district, the town of Scriba and Oswego County could work together to benefit from something that we all here enjoy and that’s having two nuclear power plants within our property. I’m disappointed in the outcome of what’s going to happen here this evening. We have an opportunity that I think we’re losing out on.”

With the negotiated tax arrangement, state aid is not adversely affected; the one-year arrangement allows for renegotiation on both plants to continue during the coming year, Tschudy pointed out.

The arrangement would have provided the district three times the revenue received in the past year, and good faith negotiating set the stage for reasonable settlement, he added.

According to Tschudy, the proposed tax arrangement would have avoided:

• A challenge of the agreement

• The costs of litigation that the district is now inviting

• A likely challenge of whatever the ultimate decision turns out to be

• The earning of an adversive image from a corporation that could reasonably be looking to site an additional nuclear plant in the area

• And, the more complicated outcomes that arise from a contested high dollar figure being added to the tax base.

“The decision makes us look like we’re fixated on maximum tax relief  as soon as possible, without giving thought to the prospect that a more deliberate approach could ultimately prove more beneficial,” he said after the meeting.

Obviously, the PILOT  agreement that is coming to an end begged for a new arrangement that would rise to a more equitable level, he said, adding, the  taxing entities and company were moving deliberately toward such a resolution.

“The district is in a stronger position, joined with the town of Scriba and the county in such deliberations. ‘Going it alone’ is likely to be more costly, may not realize a more advantageous outcome, and casts the school district in the role of being intransigent and antagonistic,” Tschudy said. “ I don’t believe it serves our interests well, to pursue this kind of confrontation, when (a) negotiations over Nine Mile II lie ahead and (b) when we’re dealing with a corporation that could be in a position to site another plant here – or someplace else, probably considerably south of here and be greeted with a more favorable response.”

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