Fighting LIPA Has A Cost

By Danny Schrafel

dschrafel@longislandergroup.com

 

Huntington has earmarked another $300,000 to fund its defense of a tax certiorari lawsuit against the Long Island Power Authority (LIPA).

The funds will pay the legal fees of Lewis & Greer, the firm defending the town against claims that the power plant in Northport has been grossly over-assessed, for the rest of 2014.

The town board voted unanimously to allocate a total of $600,000 for outside counsel during its June 17 meeting – $300,000 for Lewis & Greer and related experts, and another $300,000 for outside counsel in matters unrelated to the LIPA case.

Town spokesman A.J. Carter said Monday that the town has already spent $802,000 defending the lawsuit, which remains in the pre-trial stages.

According to the town, the large sum for outside counsel on the LIPA case is necessary because of “the complexity and magnitude of the tax certiorari proceeding.”

LIPA first challenged the Northport plant’s assessment in October 2010 and demanded a 90-percent reduction in the facility’s assessed value. The town has argued that LIPA’s original demand for such a drastic reduction would have a devastating impact on taxpayers in both the town and specifically, the Northport-East Northport School District, which also sued LIPA in 2011 for breach of contract.

Huntington town officials and the school district’s legal counsel have said that if LIPA were successful in court, Northport-East Northport School District residents would be walloped with a 60-percent increase in school taxes. Residents across the town wouldn’t be spared, either, and would endure a double-digits town property tax hike in their own right, town officials said.

In June 2013, the utility company presented the town with a settlement offer, which entailed a 50- to 60-percent reduction in the assessed value that would have been phased in gradually starting in 2015. However, Town Supervisor Frank Petrone rejected that offer, arguing it would still saddle residents with an unacceptably devastating spike in taxes.

At the same meeting, the town also moved an additional $600,000 from appropriated fund balance to its judgments and claims account, a “routine” move to ensure funds are available to settle lawsuits, Carter said.

 

Editor’s note: The online version of this report is amended to reflect a correction to be published in our July 3 print edition.