Op-Ed: The ‘Never Settle’ With LIPA Arguments Fall Short

In a few short days, LIPA’s Aug. 11 settlement ultimatum deadline will be upon us. 

Some have suggested it’s a false deadline.  The Town of Huntington has certainly acted that way, scheduling two public hearings over a month apart, and a vote on the matter fully 8 weeks after the deadline. 

Will LIPA agree to extend the deadline?  I don’t know.  But here’s what I do know:  this issue has been on our plate for 10 years.  And it has been in the courts for 9 years.  The town, the school district and many others in our community have fought valiantly.  The result of that fight is a settlement offer, that while far from perfect, provides our school district and community with the time, and the funding, to meet the challenges ahead.  It is also better than any other offer so far, as well as any deal reached in other towns with LIPA. 

I also know that several “Never Settle” theories have been proffered.  

Most are not new, but none of them stand up to critical scrutiny.

The Eminent Domain Strategy– What does the town do with a 60-year old fossil fuel-burning power plant in an era of renewable energy?  To whom do we sell our electricity when LIPA owns the transmission grid?  What about ownership of the environmental liability associated with a fossil fuel power plant when we’ve forcibly said we want it?  Can we make an $82 million profit, the amount necessary to replace the tax revenue the Town would  lose next year, from operating the plant?  The Town commissioned a study to examine just those questions, and the answers weren’t great.  If they were, the plan would have more traction, and more champions.

The Appeal Strategy –Few would argue that Judge Elizabeth Emerson is  likely to rule in the town’s favor, so this argument starts with the town experiencing a significantly negative ruling in the case that is about to be decided.  It then assumes that we can either overturn the decision or keep the case in the courts for several more years—both of which are uncertainties at best. An appeal is not a strategy, and delaying the impact will only exacerbate and concentrate the inevitable. It THEN assumes that, if we don’t “win” on appeal,  LIPA will be in a “settlement” mood. In this scenario, our risk is significantly increased, due to liability for back taxes PLUS 9% annual interest that will accrue starting at the time of judgment. It’s  difficult to see how this places us in a stronger negotiating position to achieve  better terms than we have today.

The Legislative Strategy – The plan here is to pass legislation that will remove LIPA’s ability to seek back taxes.  First, it does nothing to address the issue of LIPA’s massive annual tax rate reduction going forward as a result of an adverse court judgement.  Second, the bill that State Senator Jim Gaughran wrote has received no traction in the Assembly over the past two years, amid concerns regarding constitutionality and strong political and lobbying headwinds against it. Even with the support of Assemblyman Stern and former Assemblyman Raia, the bill went nowhere.  Regardless of who champions the bill, the strong likelihood is that it will languish in Albany for years to come. The idea that any one person in any one assembly seat would change this just lacks maturity and an understanding of what we are facing. Even if the bill did pass the Assembly, it still would need to be signed by Governor Cuomo, the very Executive who appointed the LIPA board members  assailing our community to begin with, and who despite every effort of this and other communities as well as political leaders in his own party, has ignored the very existence of this issue.  I cannot in good conscience endorse a strategy that is so fraught with these political realities.  

The Legal Strategy   – Councilman Eugene Cook believes that LIPA ran afoul of its mandate to report certain “projects” to the Public Authorities Control Board (the “PACB”) for its consent.   His interpretation of the word “project” includes not just construction projects, but bond offerings, tax grievances, and virtually everything beyond the absolute creation of electricity.  The Hail Mary pass there is to invalidate LIPA’s tax grievance because it wasn’t legal.  What about all the legal opinions rendered over decades by well-established law firms endorsing LIPA’s bonds and all its other actions?  What about the novel definition of “project”?  Will a judge agree?  Has Mr. Cook ignored the context of the governing document in so broadly defining a project?  And does he ignore the statute within the very same document that allows LIPA to conduct its business in “ordinary course?”  What about Mr. Cook’s standing as a private citizen to take such legal action against the PACB?  Doesn’t he need the Town Council to vote to take legal action?

All of the above are enticing, taken in part or in whole.  But they are all high risk if they are to be relied upon at this 11th hour of our battle.  I’ve been briefed on most of these strategies because I created a Facebook page in March of last year, Concerned Taxpayers Against LIPA (“CTAL”), whose goal was to inspire activism that would create political pressure (after all, LIPA is an arm of New York State) to drive a better outcome for our community.  Those advocating these strategies–all smart, earnest people–knew that CTAL, with its almost 5,000 members could be the right medium to get their message across.  But, after much thought, I could not endorse those strategies then, and I do not endorse them now. 

It is not fear-mongering, of which I’ve been accused, to give the facts.  The fact is that the law is not on our side.  The fact is that LIPA’s Board of Trustees and the elected officials who appointed them have heard our case and have chosen to look the other way.  The fact is that if any of the above strategies don’t bear fruit, this community gets wiped out.  And we should not delude ourselves into thinking that the State, with the fiscal mess that it’s in due to Covid-19, will bail us out of a bad decision.   We should also not delude ourselves into thinking that the vocal minority of Never Settlers have any greater command of the facts than a 5-1 majority of our School Board did when it rendered its decision. 

I hate what LIPA wants to do to our town, and the slimy way in which they have gone about doing it.  I believe with all my heart that LIPA should live up to its promise and I believe they have further eroded the public trust, but hate and belief are not the foundation for a sound decision that could impact, in a devastating way, the lives of many in our community.

If you agree with me, the Huntington Town Council needs to hear your voice.  They need to see you in person Monday at the public hearing on this matter and they need to be encouraged to vote for the settlement that we have in front of us no later than Aug. 11, the date that the offer expires.  Please attend the public hearing and please call or email the Town Councilmembers who will be voting on this important issue.  I will see you there.

 

 

Northport School Board, LIPA Reach Deal on Taxes

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