Danskammer and school district reach PILOT agreement

By Mark Reynolds
Posted 5/15/19

Marlboro Superintendent Michael Brooks said a Memo Of Understanding [MOU] has been reached between the Marlboro School District and Danskammer Energy LLC on a revised payment in lieu of taxes [PILOT] …

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Danskammer and school district reach PILOT agreement

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Marlboro Superintendent Michael Brooks said a Memo Of Understanding [MOU] has been reached between the Marlboro School District and Danskammer Energy LLC on a revised payment in lieu of taxes [PILOT] and a Community Benefit Agreement [CBA] valued at $39.5 million.

Brooks said Danskammer CEO William Reid has already signed the MOU, which outlines the terms in two phases of the new PILOT and CBA. Phase I, which could go into effect prior to the completion of a new power plant, would continue the existing PILOT of an annual payment of $1.2 million to the district for the next five years. In addition, a new five year CBA agreement would also include an annual payment of $100,000 to the district, set to begin in the 2019-20 school year.

If the power plant is approved and becomes operational, which is projected to be in the year 2023, Phase II goes into effect and will replace the Phase I PILOT with a new 20 year PILOT agreement totaling $38.3 million. This consists of an initial payment of $1.5 million, which will increase by a fixed rate of 2.5% each year for the next 20 years. The Phase II CBA would also increase from the $100,000 payment to $250,000 per year for a total of $1.25 million, pushing the final PILOT and CBA agreements with Danskammer to $39.5 million over 20 years.

Brooks said an agreement with Danskammer comes at a timely moment, as the current CBA and PILOT are set to expire in 2020 and 2022, respectively.

Brooks said this MOU paves the way for the Orange County Industrial Development Agency, that is tasked with approving the PILOT, to simply accept the Danskammer/Marlboro agreement. He expects to see a formal filing for a PILOT from Danskammer to the IDA within a few months, “and then the IDA can act on that application at any time.” Brooks said the agreement that he reached with Danskammer will go before the Marlboro School Board on Thursday, May 16. If they approve it, the document will then be sent to the Orange County IDA as part of the overall package.
Brooks reflected on the MOU with Danskammer.

“In the end, we were successful in striking a deal that we believe would be a true benefit to the school district and the community, and would mean greater financial stability for Marlboro’s future,” he said.

As these agreements were in the works, the Marlboro School Board held a public hearing last week on the 2019-20 school budget, which will go before the voters on Tuesday, May 21 from 6 a.m. to 9 p.m. at the Marlborough Town Hall, 21 Milton Turnpike, Milton.
The 2019-2020 budget stands at $58,363,438 and is $1.47 million higher than this year’s budget. The amount to be collected in taxes is $35,686,305, which is an increase of $907,337 [2.61%] from the current year.

Residents in the Town of Marlborough and Plattekill who have Basic Star will see an increase of $321 in their taxes and those with the Enhanced Star will see a $255 increase over this year. In the Town of Newburgh, residents with Basic Star will pay $288 more than this year and taxpayers with the Enhanced Star will see a $268 increase in their tax bill.

In addition, residents will be asked to vote on the Vision 2020 Capital Project that has been discussed by the board for months. The project is estimated to cost $19,499,279 and will address key infrastructure updates, health and safety issues and spacing improvements across the district.

The board noted that by tapping their reserve and fund balance the total slips to $16.5 million. The state will pay for about 70% of the project, leaving the district to shoulder the remaining $7.9 million. Each year the district will pay $461,741 that is actually a decrease of more than $800,000 annually.

Brooks is pleased with what they are proposing to the public.
“We really have a very good package that we put together, items that need to be addressed are addressed in this package for Vision 2020,” he said. “The school budget remains at the [tax] cap. We were very careful what we put in the budget so we’re sensitive to our taxpayers and sensitive to our children in looking to the future. Both packages – the budget and Vision 2020 - are so fiscally responsible, which this board and this administration have worked so hard on. Our entire debt payment structure dropped by more than $800,000, even with the project...We’re just asking people to come up and give us their perspective of a yes or a no on the vote.”

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