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Failed PILOT deal with NRG causes rise in Ken-Ton tax levy

The property tax rate in the Kenmore-Town of Tonawanda School District is the same as projected when voters approved the 2011-12 budget in May.

That rate -- $41.14 per $1,000 of assessed valuation, increasing the tax bill on the average home by $120 -- was unchanged in a last-minute increase in the tax levy, precipitated by the failure of a payment-in-lieu-of-taxes agreement with NRG Energy's Huntley power station.

District officials announced at Tuesday's School Board meeting that NRG failed to file the paperwork to implement the new 20-year PILOT agreement, which was to begin with the 2011-12 school tax bill. As a result, the plant's $193 million assessment was returned to the district's assessed value and the company immediately filed a legal challenge.

"What that means for us is we have the issue of what should the tax levy be set at," said School Superintendent Mark P. Mondanaro. The School Board approved a tax levy of almost $76.8 million, an increase of approximately $7.3 million, but revenue adjustments were made to bring the numbers into line with what voters approved.

In developing the 2011-12 budget, administrators accounted for a loss of $4.4 million in tax revenue from Huntley. The new agreement between the company and the school district, Town of Tonawanda and Erie County had been approved in 2008.

Because it wasn't implemented, PILOT revenues in the 2011-12 budget were reduced by $3 million, and other changes were made in the use of reserves and fund balance.

"The levy produces the tax rate that we talked about all budget season," said Gerald Stuitje, assistant superintendent for finance. "The reason we can't just leave the rest of the revenue budget alone and increase the tax levy is because we have a voter-approved budget that caps the limit of the budget."

In other business Tuesday night, the School Board approved the appointment of Dean Johnson as principal of Kenmore West High School, for a three-year probationary period beginning today. His annual salary will be $104,181.

Johnson succeeds Karen Geelan, who accepted a job as superintendent of the Allegany-Limestone Central School District. But his promotion now creates a vacancy in his former position of assistant principal, which is expected to be filled by fall.


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