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Avon Lake school board approves tax settlement for plant


AVON LAKE — A proposed settlement was approved Tuesday by the Avon Lake Board of Education that aims to resolve a dispute as to the value of the NRG Energy Inc. power plant.

The county and Avon Lake Schools have been at odds with NRG since 2013 regarding how much the power plant and the nearly 45 acres of land it occupies is worth.

Citing aging infrastructure and the economic uncertainty of coal-fired plants, NRG has said the plant is worth far less than the auditor’s valuation of $53.9 million. The county and NRG have open cases with the Ohio Board of Tax Appeals as well as the Ohio Supreme Court regarding the value for tax years 2013-15.

NRG is seeking through the Supreme Court case a reduction in the 2013 fair-market value of the real property from $53.9 million to $3.5 million. In the Board of Tax Appeals case, NRG is seeking a reduction in the fair-market value for the 2015 tax year to $9 million.

The county has said the reductions would result in tax repayments to NRG of more than $1.3 million. However, the recommended settlement wouldn’t require refunds to NRG of any real estate tax payments.

That’s not to say the settlement won’t have consequences. Although the fair-market value would rest at $53.9 million for 2013 and $54.4 million for 2014 and 2015, the value will drop starting in tax year 2016 when it dips to a proposed $49.8 million.

In tax year 2017 the value would drop to $27.5 million, in 2018 to $26.5 million, in 2019 to $25.5 million and $23.8 million for tax year 2020.

Avon Lake Schools Treasurer Autumn Reed said it isn’t yet known exactly what the loss in revenue from these reductions will be moving forward because the tax rates will need to be set by the county auditor and approved by the state at the end of each year before taxes on the new values can be collected.

“We don’t know what the tax rates are going to be moving forward,” Reed said.

School board President Chuck Froelich said the settlement is a good one for the district because it provides some stability for the next several years.

“This is going to resolve some issues until 2020,” Froelich said.

However, Froelich said on a separate tax issue NRG has received reductions in Public Utility Personal Property, or PUPP, taxes, which the county and board have no control over.

Public utilities pay PUPP taxes, which are charged on plant equipment owned or leased by the utility and not classified as real or intangible property.

Earlier in August the Ohio Tax Commissioner ruled in favor of an NRG appeal regarding PUPP tax amounts. The ruling states the power plant’s assessed values on public utility personal property taxes for tax years 2014-16 would be reduced from a previously assessed $14.9 million, $16.7 million and $16.2 million to $7.5 million, $8.9 million and $8.8 million for those years.

These reductions result in revenue losses of $2.2 million to Lorain County, Avon Lake Schools, Lorain County Joint Vocational School, the city of Avon Lake and the Avon Lake Public Library. Avon Lake Schools bears the brunt of revenue loss at $1.6 million or about $550,000 annually moving forward.

“NRG will get a refund for those tax years of almost $2.3 million from the taxes they paid to all the entities involved,” Reed said.

Although NRG will receive a refund for those years on the PUPP tax it will not be refunded at once, board member Ron Jantz said, but will instead be paid back in the form of credits over a period of years.

Contact Jon Wysochanski at 329-7123 or Follow him on Twitter @JonWysochanski.

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