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Town of Littleton

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Littleton, NH 03561
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2010 Meeting Minutes and Agendas

Board of Selectmen

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Public & Bond Hearing Minutes Jun 2, 2010

COMBINED PUBLIC & BOND HEARING
LITTLETON HIGH SCHOOL CAFETERIA
159 OAK HILL AVENUE
WEDNESDAY, June 2, 2010
6:00 PM

Present: Town Manager Chuck Connell, Chairman Ron Bolt, Vice Chairman Ed Boynton, Selectman Marghie Seymour, Executive Secretary Ceil Stubbings

Others Present: Bob O’Conner (Channel Two), Robert Blechl (The Caledonian Record), Barry Lunderville (WLTN Radio), Robert Upton (Attorney – Upton & Hatfield), Ed Hennessey (Moore Dam Reevaluation Committee), Eddy Moore (Littleton Water & Light Commissioner), Joe Wiggett (Town of Littleton Tax Collector)

Chairman Ron Bolt opened the Public Hearing & Bond Hearing at 6:00 PM. Bolt said the purpose of the hearing was regarding the settlement reached between the Town of Littleton and TransCanada. Bolt said that in addition to the selectmen being present, Ed Hennessey was also present. Hennessey has been a member of the Moore Dam Committee since it’s inception. Eddy Moore was also in attendance. Moore was a selectman for three years during the negotiations. The Town Manager Chuck Connell and Robert Upton who is the attorney who represented the Town. Bolt said they had a very basic agenda where they will discuss the history, which Ed Hennessey would present. Then Mr. Upton would provide a briefing of the settlement process. There would then be a short period of questions and answers. They would then have a short break and go into the Bond Hearing presented by the Town Manager. Bolt then turned the hearing over to Ed Hennessey.

Ed Hennessey stated the Moore Dam Reevaluation Committee was formed in 2006 as a result of a petitioned warrant article at Town Meeting. The members consisted of members of the Select Board, the Budget Committee, the Littleton Water & Light Department and two members of the community, appointed by the Board of Selectmen. The Town Manager was an ex-officio non-voting member. The original committee included himself and Don Craigie as the community members, Eddy Moore as the President of the Littleton Water & Light Department, Steve Kelley as the Chairman of the Budget Committee, Selectman Burt Ingerson and the then Town Manger. The purpose of the committee was to review the assessment of Moore Dam and to oversee the reevaluation as of April 1, 2006. In 2005 Littleton’s assessed value of Moore Dam was valued at $105 million. At the time when property values were on the rise many felt the Moore Dam appraisal was not keeping up with the values. After a number of meetings the committee engaged Synapse Energy Economics Inc. to do an appraisal on Moore Dam. Synapse is a company well respected company with a long history of appraising dams. Synapse’s evaluation resulted in the Town of Littleton taxing TransCanada for an assess value of $239,137,280. TransCanada disputed this value in 2006 and filed for abatement with the Town. The abatement was denied. Hennessey said a number of attempts were made to negotiate with TransCanada, both directly and through our attorneys. All attempts failed. TransCanada then filed a lawsuit against the Town of Littleton in Grafton Superior Court on August 8th, 2007.

Hennessey said the tax value of $239 million dollars was again assessed and for 2007, 2008 and 2009. TransCanada also disputed those values. Abatements were filed for the years 2007 and 2008. The Selectmen again denied these abatements. The court case first led the committee to a mediation session that took place in Concord on January 8th, 2009. This session also failed to reach an agreement. However out of that session came an agreement to go into binding arbitration and to avoid going to the superior court. Before going to the formal arbitration session, for which they had a date to meet, the Town came to an agreement with TransCanada after four years of negotiating. The Town agreed to pay interest and principal in the amount of $1,353,188. The other part of the agreement was that going forward, the Moore Dam would be taxed on the assessed value of $177 million for the years of 2010, 2011 and 2012. Hennessey said the committee feels it is a reasonable and fair settlement. The agreement provides stability for the tax payments over the next three years. Hennessey encouraged the community to support the bond warrant article and vote positively at the upcoming Special Town Meeting. Hennessey said to vote against this would only incur additional expenses. Hennessey then turned the hearing over to Attorney Robert Upton.

Robert Upton stated that he wanted to explain how the settlement was reached and why he thinks it is in the Town’s interest to approve this proposed Bond. In 2006 the assessment was for $105 million. The Town had an appraiser who recommended increasing the assessment to $119.3 million. The selectmen and the committee engaged Synapse, who is a very well respected valuation firm to do the valuation. Synapse determined that the value was $239 million. TransCanada’s expert said the value was $134 million. The parties were over $104 million apart in their values. Upton said that to put it into perspective, the 2006 tax rate of $16.73, the difference alone represented $1.7 million. They were talking and fighting about a lot of money. Because of the delays in the state court system, the parties agreed to arbitration in 2009. By 2009, the amount in dispute as tax rates had risen and as interest had been applied, had increased to over $8.7 million. Both sides had an incentive to try and work something out. The Town side had the amount of the risk, due to the significant amount of money and the fact that the 2010 difference in taxes was likely to be added to that $8.7 million. By the time the case was tried, would have pushed to total amount at risk to over $10 million. Upton said that from TransCanada’s perspective there was no guarantee that they would win, and the was a significant risk that the arbitrator’s would value the facility at or close to the value that the Town had assessed. If the Town won or came close, TransCanada feared that all of its other hydro facilities up and down the Connecticut River would be reassessed based upon Littleton’s valuation. There was also the uncertainty about what the Town would do in 2010. Upton said that when it comes to high valued properties it gives them predictability in their budgeting process. Having future certainty was important to both parties. The parties wanted to deal with future years so they agreed upon an assessment of $177 million for the next three years. The settlement has been approved by the Superior Court and a judgment has been entered. Upton said it is important to remember is bonding the payment is going to spread out the impact over a period of time. If you tried to pay a $6.3 million dollar payment out of taxes it would be a significant impact and hurt a lot of people.

Upton said that TransCanada is the largest taxpayer; they pay 25% of all taxes raised. In essence TransCanada pays 25% of this $6.3 million to itself. Upton was trying to anticipate questions a taxpayer would have. One question is what happens if the bond is rejected. $177 million going forward is something that is not contingent on approval of this bond. The party’s thought that was so important that they specifically preserved that in the event the bond issue fails. There is always a concern when you make a settlement like this and it is contingent on a bond issue. The settlement agreement states that if the bond issue were rejected at least on a going forward basis, they would protect the $177 million assessment. There would not be any further lawsuits over the assessment over the next three years. The balance of the case from 2006 through 2009 if the bond issue is rejected goes back to arbitration. The amount at risk, the $8.7 million would be increased by additional interest increasing the amount at risk to $9.4 million. The Town would continue to accrue legal and appraisal fees and arbitration costs. Upton said it is impossible to predict the outcome if the case is tried again. Chairman Bolt closed the public hearing at 6:32 PM. He then opened the bond hearing at 6:33 PM.

Town Manager Chuck Connell provided an in-depth presentation on the bond strategy and the estimated tax implication. Connell first explained the time line consisting of a combined Public Hearing and Bond Hearing leading up to the Special Town Meeting. Over a period of four to five years, previous boards of selectmen had established an extra ordinary overlay. The purpose of an overlay is to cover the abatements that are inevitable in property taxes. The selectmen set aside $2 million in the overlay that has been specifically to the settlement of TransCanada. The settlement requires the payment to TransCanada in the amount of $6,343,188. Connell said he would refer to that amount from now on as $6.3 million and reminded everyone that $54,188 is the amount that is going to be borrowed. The purpose of bonding is to establish a predictable and an affordable payment of the settlement to TransCanada. Connell said they must apply $2 million to the $6.3 million owed to TransCanada then that leaves an amount of $4.3 million. Connell said that in working with the board of selectmen and Attorney Upton and members of the Moore Dam Committee they evaluated a number of different ways to do that. Connell said they looked at the duration of the bond. They looked at ten years, fifteen, twenty years and beyond. The picture became progressively worse beyond twenty years. Connell said they are looking at the total amount of money the Town of Littleton will pay to pay off the debt that is accruing. The best compromise in terms of the number of dollars the town will spend emerged as a ten-year bond. The town would bond $4,353,188 for a 10-year term. Connell stressed the document he provided for the repayment of the bond is only an estimate. The bond would be put out to bid to financial institutions including some banks in town. The bid is being put out to establish the interest rate. Connell said that in his opinion the 3.995% interest rate on the sheet he had passed out is an estimate. He is hoping that putting this out to bid the interest rate would be less than the estimate. The document illustrated how the bond would work. If the money were borrowed in 2010, the first interest and principal payment would be in 2011. This payment would most likely be made in December 2011. The affect in 2010 is negligible. The payment would result in a .94-cent increase per thousand. On a $100,000 tax bill it would equate to a $94.00 increase. Each year after the estimated tax rate declines. Connell said that because of the settlement there is a $62 million reduction in valuation. The principal payment would remain constant in the estimate where they would pay $134,000 for each of the ten years. The interest figure declines each year. At the end of ten years the bond would be paid. This would reduce the impact on the taxpayers. Chairman Bolt called the Bond Hearing to closure at 6:48 PM.

Respectfully submitted Ceil Stubbings



Littleton has functioned as a Board of Selectmen/Town Manager form of government since 1976.

The Littleton Board of Selectmen meets the first and third Wednesdays of the month at 4:00 PM at the Littleton Community House - Heald Room.

If you would like to be put on the agenda for an upcoming Selectmen's meeting, please contact Ceil Stubbings. Please be prepared with all information needed for the Selectmen to make a decision no later than the Friday before the Selectmen's meeting

Members

Ronald J. Bolt, Chairman
Edward C. Boynton, Vice Chairman
Marghie M. Seymour, Selectman

Selectmen's Email: selectmen@townoflittleton.org

Executive Secretary for the Board of Selectmen:

Ceil Stubbings
cstubbings@townoflittleton.org
125 Main Street
Suite 200
Littleton, NH 03561
603.444.3996 x15
603.444.1703 (fax)

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