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Barker schools may get more from AES But district is still suing Niagara County IDA and power plant over 12-year PILOT deal

The Barker Central School District may receive a somewhat larger share than first thought from payments-in-lieu-of-taxes that AES Corp. is to make on its Somerset power plant -- but school officials are not supposed to know that.

A meeting scheduled for Thursday between county Industrial Development Agency staff and Barker's acting business administrator, William R. Leardini, was canceled by IDA attorney Mark J. Gabriele because the district sued the IDA and AES on Monday, arguing that the tax break the IDA gave AES was adopted illegally.

"We're being sued, and they want to go over the information they're suing us over?" Gabriele said after Thursday's IDA board meeting, which included an executive session about the suit. The suit will be heard in State Supreme Court in Lockport on Feb. 22.

Leardini, who attended the IDA meeting, told reporters he was baffled by a paragraph in the PILOT agreement that describes how the PILOT payments are to be split up among the school district, the Town of Somerset and Niagara County. It allows AES to make its annual payments in two parts, four months apart.

"That means they will be able to hang onto millions of dollars of our tax money for several months and make it even harder on us," Barker Superintendent Steven J. LaRock said. "All we want is a clarification of this debacle they've placed on us. It's got nothing to do with the lawsuit and they know it."

Leardini said the Barker district is starting work on its 2007-08 budget and needs to know what revenue numbers to use.

"Come on, tell me the numbers. This has nothing to do with the lawsuit," he griped.

Between the uncertainty over the PILOT numbers and the possibility that a bill may pass in Albany to give Barker extra state aid, the budget process is leaving Leardini confused, he said.

"You almost have to do dual budgets," he said.

LaRock said as many as 30 district employees might be laid off because of revenue losses resulting from the PILOT, and seniority lists are currently being reviewed by district unions.

However, county Real Property Tax Services Director William F. Budde Jr., who described the language about the payment formula as "mind-boggling," did receive a briefing from Gabriele Thursday.

But Budde said Gabriele advised him to check with the county attorney's office before he shared any information with the town or the school district.

Budde confirmed what Gabriele had told a reporter after the IDA board meeting.

"What he's indicated to me is there might be a little bit of a change and it would be in favor of the school district," Budde said.
Budde and Leardini had released estimated figures after this year's county and town tax rates were firmed up, figuring that the school district would receive 57.16 percent of the 2007-08 PILOT pie. The county was to take 33.67 percent and the town 9.16 percent. But that didn't take into account a provision revising the shares in the middle of the school year.

Budde said the payment formula appears to be an effort to make the division of money more accurate, by taking into account the changes in property tax rates that the town and county make after school tax bills are sent out.

The provision calls for AES to make 90 percent of its annual payment on Oct. 1 and the balance on Feb. 1. The amount of the Oct. 1 payment is to be calculated using the fresh school tax rates and the town and county tax rates used to calculate the taxes charged the preceding January.
After the town and county adopt their budgets and set new tax rates for each new year, those figures are to be used to recalculate the shares each will receive from AES' remaining 10 percent PILOT payment to be sent in on Feb. 1.

None of this means AES will pay more than is called for in the contract it signed with IDA Jan. 12. It won't.

Its PILOT payments for 2007-08 are to total $17.3 million, a figure that decreases $500,000 a year until 2010-11 and remains at $15.8 million for the remainder of the 12-year deal.


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