As LIPA tax settlements move forward, D'Amato prepares challenge for Island Park

As a settlement of LIPA’s decade-old tax challenge of two power stations heads toward a vote of the full Nassau legislature later this month, the Village of Island Park is preparing to object in a court filing, former U.S. Sen. Alfonse D’Amato said during a hearing Monday.

D’Amato, who announced during public comment of the Nassau Legislature’s finance and rules committee hearing that’s he’s acting as pro-bono co-counsel to the village, said his challenge to the settlement will involve the claim that LIPA “subverted” a 1999 court ruling by not seeking approval of contracts over $1 million from the Public Authorities Control Board. 

He criticized the proposed settlement as a “backroom deal” that would “crucify the working middle-class community of Island Park” by significantly increasing taxpayers property-tax burdens as LIPA’s gets reduced by 46.5% over the next five years.

“What it does to the village is crush them,” said D’Amato, who is arguing the case for Island Park with co-counsel Lawrence Kelly, who has represented Huntington Town Board member Eugene Cook in a similar but unsuccessful claim against LIPA.

LIPA, which said it hasn't been served with any new legal claim, called D'Amato's pending legal filing "another baseless and frivolous lawsuit and we look forward to responding in court should another lawsuit proceed."

Separately on Monday, the North Shore School District reached a tentative settlement with LIPA of the lawsuit it filed against the utility challenging the tax case, according to board president Dave Ludmar. In an interview he said the tentative settlement, which still must be approved by the full board, would resolve the district’s case against LIPA and “allow us to close this chapter of this settlement process and give us some clarity as to the way we will be able to fund our schools vis-à-vis the LIPA tax contribution going forward.”

Like other school districts, North Shore had argued that LIPA’s former chairman Richard Kessel and others had expressly promised not to challenge taxes for the plants as part of the 1998 pact that led to LIPA taking over the electric system.

Ludmar declined to provide specifics of the deal, but said the payment to the district by LIPA would be larger than the $1 million originally offered to settle the matter. “It certainly is not going to make us whole," he said. "There are some tough decisions we’ll have to make, over years.”

At the Nassau legislative committee hearing Monday, Dan Vincelette, a special attorney to Nassau County in the case, initially declined to provide details of the settlement, provoking D’Amato to object, “What the hell kind of a public hearing is this?” Vincelette later returned to the podium to provide previously unreported details of the negotiations.

Significantly, Vincelette told the legislature that in some cases, Nassau County’s own assessments of the plants were below those reached by LIPA in the court proceeding seeking to lower the taxes — a fact that he said “would incur a significant refund to LIPA” should the case go forward.

For instance, the E.F. Barrett plant in Island Park was appraised by LIPA to have a $371 million value for 2015. Nassau valued it in 2015 at $299 million, $72 million below LIPA’s valuation. LIPA’s 2015 value of Glenwood Landing facility, which no longer has a large power plant, was $58.7 million compared with Nassau’s $50.9 million.

After the discussion the Nassau Legislature’s finance and rules committees voted 4 to 3 to approve the settlement, setting the stage for it to advance to a full vote of the legislature in two weeks. LIPA has already reached settlements with two other plants in Suffolk, at Northport and Port Jefferson.

D’Amato charged those prior settlements were with a Suffolk Supreme Court judge that LIPA “bullied out there in Suffolk County, and ran over Huntington and a few other areas.” Both faced the same prospect of having to pay tax refunds to LIPA in the hundreds of millions of dollars.

D’Amato, in an interview last week, noted that while he no longer lives in Island Park, “the village gave me a home when I was  8 and gave me an opportunity” through a business his mother operated there. He called LIPA’s tax challenges “nothing but a money grab,” for “nickels and dimes as it relates” to LIPA’s overall budget.

LIPA, in a statement, called the Nassau settlement a "fair compromise that will allow for continued low taxes for the Island Park, Oceanside, and North Shore school districts, protect Nassau County residents from hundreds of millions of dollars of tax refund liability, and continue the transition to a clean and sustainable energy future for all Long Island residents.”

Island Park Mayor Michael McGinty, in a statement to Newsday, said the proposed LIPA settlement “represents a plague of locusts” for Island Park

“This settlement is a travesty for Island Park, and all Island Parkers,” he said. “It is bad for the village and the entire school district. It is just plain wrong.” He added, “Shame on LIPA."

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.