Berlin City Council
Special Meeting
July 25, 2011
Present were: Mayor Grenier, Councilors Otis, Remillard, Ducharme, McCue, Rozek, Nelson, and Théberge; Councilor Evans was absent.
Others present included Patrick MacQueen, press and public
Proposed PILT Agreement between City and Berlin Station LLC
Mayor Grenier called the meeting to order at 6:30 p.m. He reported that he called a special meeting for the express purpose of discussing an agreement on the terms of a payment in lieu of taxes with Berlin Station, LLC which came about as a result of a year’s worth of work. Mayor Grenier noted that the City Manager, Skip Sansoucy, the City Attorney Chris Boldt and the Mayor are pleased to announce the agreement which remunerates $44 million to the City over 22.5 years of operation/construction of Berlin Station. Unlike the mill, the City will never have to send a utility appraiser to the property and never have to argue about valuation; these are guaranteed revenues to the city. The agreement is a culmination of work that the city benefits from.
Along with covenants and conditions, the agreement between the City of Berlin and Berlin Station LLC establishes that Berlin Station will pay the City of Berlin $34 million over 22.5 years, beginning in December of 2011 and ending in June of 2033. In 2019 Berlin Station will endeavor to sell renewable energy credits and anticipates making additional payments to the city.
From the initial proposal presented to the Council, Mr. MacQueen reviewed the following proposed changes:
- Article I on page 2 has revised language because Mr. Sansoucy was concerned about the wording. The section involves siting a third party which would not be covered by the PILT and it would be taxable. The plant would have to have an increase in megawatts to increase the amounts in the agreement
- On page 2, a period is added under #3.
- On page 4, is an editorial change replacing the word “for” the actual sale to “from” the actual sale.
Mr. MacQueen confirmed that those were the only changes after review by Chris Boldt and Skip Sansoucy. Mayor Grenier added that this binds the City and Berlin Station for 22.5 years.
Councilor McCue questioned the chart in the agreement that assumes 100,000 renewable energy credits (RECS) will be sold; he ask what if they sold more renewable energy credits. Mayor Grenier stated that the maximum is 500,000 and 400,000 is the maximum that PSNH would buy. Councilor McCue commented that 400,000 is exempt we will still get a payment; however it would but not the $9,746,700. Mr. MacQueen clarified that the actual total payment we are certain of is $34 million.
Mayor Grenier stated that if Vermont Yankee were to go off line the $9.7 million could be more. Conservative estimates with COLA attached to estimates were illustrated in the PILT document. Councilor Ducharme questioned whether 15% would be on gross revenue. Mayor Grenier responded that it is 15% of the net after the commissions have been paid.
Councilor Théberge asked if the wood supplier shuts down and they are not meeting their tonnage, would they still have to pay. Mr. MacQueen acknowledged that they would have to pay.
There being no further questions regarding the PILT agreement, Councilor Rozek moved to accept the most recent agreement between the City of Berlin and Berlin Station LLC for a payment in lieu of taxes; and to authorize the City Manager to sign such an agreement on behalf of the City; Councilor Otis seconded and the motion carried unanimously.
Councilor Rozek moved to adjourn; Councilor Nelson seconded and the motion carried. The meeting ended at 6:40 p.m.
Respectfully Submitted,
Susan Tremblay
Administrative Assistant
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