The Sullivan County Commissioners discussed options to rescind a tax abatement for a local solar farm with the attorney involved in advising the county council on the abatement during its meeting on Monday.
If you recall, the council reversed course on its rescinding of the 10-year tax abatement — which occurred in June — in late July, due to not meeting a deadline to conduct a public hearing.
The original tax abatement was approved by a slim 4-3 council vote in Feb. 2015. Cypress Creek Renewables actually completed the project in Sept. 2016, after the project was sold to them by juwi solar Inc., which had received the abatement.
“The county council tried to rescind the tax abatement for Sullivan Solar and in doing so were informed they had missed the deadline to be able to do that,” commissioner Ray McCammon said to Terre Haute attorney Lou Britton. “Their attorney did some checking into it and determined that was correct.
“My thought on it was they had never done what they said they would do,” he added.
Britton stated the taxpayer had filed its annual compliance with statement of benefits form in mid-May, as required.
“The county then has 30 days within which to conduct a hearing to make a preliminary determination whether there is compliance or not,” he said. “If there’s not compliance, then they have to issue a notice to the taxpayer and allow them to come in and state their case. That’s just in a normal, old tax abatement.”
Britton explained the council has to determine the property owner has not substantially complied with the statement of benefits and the failure to substantially comply was not caused by factors beyond the control of the property owner.
“It’s really hard, OK?” Britton noted. “The legislature made it really hard for a county to rescind a tax abatement. But, your case is a little bit different because the resolution adopted by the county council says that any real personal property tax abatement received by Sullivan Solar would be subject to conditions or particularly described in the memorandum of understanding entered into by the council, county commissioners and Sullivan (Solar).”
The memorandum of understanding, according to Britton, contains a number of requirements that Sullivan Solar has to meet:
• Requires its third-party contractors to provide notice to local contractors and workforce of all applicable requests for bids, pre-bid meetings, related meetings and information with respect to the project to give local folks an opportunity to bid.
“There was a request they go with local contractors, but they wouldn’t go with that,” Britton said.
• The estimated 60 construction jobs and average wage of $31.13 per hour.
“They indicated there would be vegetation control — and this was pretty loosey-goosey — they expected to spend as much as $40,500 annually with a local vendor,” he said.
“They did commit to a local vendor for that.”
• There were provisions that they were supposed to provide a copy of their personal property tax return, unless the property was assessed as utility distributable property by the state.
“I don’t know how this property is being assessed, but I expect it is being assessed as utility property,” Britton said.
• A provision that said if the nameplate capacity of the facility is not at least 4.5 megawatts, there’s a proportional reduction in their abatement.
“And I could go out and look at it all day and not know what its nameplate capacity is, but you should be able to find those things out,” Britton said.
As for the assignment of the project to another company, Britton said there are circumstances in which that would require consent from the county, noting the new company would have to sign on to this memorandum of understanding.
“So I think what we might want to do is get yourself in a position where come May you will know where you stand on all these things they were supposed to do,” Britton suggested. “You should write to them now ‘you said you would do this, prove to us that you did.’
“You’ve got more arrows in your quiver to fire at them for compliance or noncompliance than you normally do under the statute because of these things that are built into the MOU,” Britton said.
McCammon recalled an advertisement in the newspaper asking for construction workers at $7 per hour.
“I take it you got a copy of that lying around?” Britton asked.
“I think I can find one,” McCammon said.
“That would be handy to have,” Britton replied.
Britton explained the reason the commissioners were signatories for the MOU is they are the contracting body for the county and this established a contract between the county and Sullivan Solar.
“But the enforcement part is for the council, under the statute and they’re the ones that passed the resolution that says our abatement is subject to the terms of the MOU,” he said.
In checking back through correspondence, Britton mentioned the MOU was actually received, he thought, the day of the council vote.
“It’s pretty clear to everybody, (the abatement) wasn’t going to happen without that MOU,” he said.
Britton confirmed two items not in the MOU were a requirement for a site visit for the county council — which was canceled at the last minute — and rotating solar panels — which were not installed.
McCammon said while the commissioners can’t act on the abatement, he asked Britton if he would present their stance on the MOU to the council — which meets this coming Monday.
“I think they are more likely to listen to you guys than they are with me,” Britton said.
“I think you could just say you were contacted by me to come and speak to the commissioners regarding what actions could the council take,” commissioners’ attorney Ann Mischler suggested.
“I asked Ann because of the MOU that was sent to the council from the commissioners as far as the agreement,” McCammon said.
Britton felt the best course of action was to call council attorney Josh Reshey and see how he wants to proceed.
“I don’t want to jump in the middle of his party,” he said.
For additional news from Monday’s commissioners’ meeting, see a future edition of the Times.