North Country: Towns Incurring Big Expense Fighting Big
Legal expenses in
the tens of thousands of dollars are mounting for small towns across the North
Country in their fight against big utilities, whose tax appeal lawsuits, some in
their fourth year, are now dragging into 2015.
"It's an ongoing situation
and is not unique to Haverhill," Haverhill Town Manager Glenn English said this
week. "Their strategy is to outspend us, but the towns have wisely banded
Towns, some sharing legal expenses, argue the N.H. Department
of Revenue Administration's 83-F formula that sets the utilities' contribution
to the state education tax does not reflect a true market value but utilities
such as the New Hampshire Electric Cooperative (NHEC) and Public Service of New
Hampshire (PSNH) are still trying to use it in an attempt to drive their
properties below fair market value.
The issue that involves a N.H.
Supreme Court case and the state's formula on utility property assessment is a
complicated one. If the utilities are successful, it could set a new legal
precedent regarding valuation of their properties and could mean a spike in
residential taxes as small towns adjust to make up the difference of millions of
dollars in lost tax revenue.
In 2011 in Grafton Superior Court, NHEC
filed tax abatement appeals against several Grafton towns, including Haverhill,
where it seeks to slash by two-thirds several years of assessments averaging
That case, after a status conference last week, has been
continued into 2015.
In its fight against NHEC, Haverhill, since March
2012, has accumulated a total of $25,923 in legal fees and $36,954 in assessing
fees, said English.
"We tried mediation in the summer, but that didn't
work so it's going to trial," he said.
NHEC spokesman Seth Wheeler said,
"NHEC has brought these appeals because it believes that its assessments in
particular communities are well above the market value of its property and
results in its members across the state being asked to pay more than their fair
share of the tax burden in these communities."
Wheeler said NHEC seeks to
pay its fair share of taxes and there is an ongoing effort to reach a fair
agreement with a handful of towns.
NHEC is appealing assessments in both
superior court and at the N.H. Board of Tax and Land Appeals (BTLA), and has
filed tax appeals against 37 towns at the BTLA.
PSNH, sharing the same
attorney as NHEC, is also trying its luck at the BTLA, where it has filed a
total of 87 appeals against 56, or about 25 percent, of New Hampshire's 234
municipalities. Most are small towns and many are in the North
The first batch of PSNH appeals at the BTLA are expected to be
heard in January, and PSNH appeals for 2013 have also been filed, to be heard at
a later date.
English said there are two methods a town can use for
utility property assessment - the unit method employed by the DRA and the
"I think our lawsuit has a lot to do with which method
is going to continue," he said.
In 1994, in a superior court case called
PSNH v. Bow, the N.H. Supreme Court affirmed a trial court's ruling that
rejected the unit method in determining fair market value of PSNH
According to the high court, "The trial court found that 'the
unit method as proposed by PSNH is neither reliable nor appropriate for purposes
of ad valorem property taxation of regulated utility property' ... We sustain
the rulings and findings of the trial court ..."
In an Aug. 20 order on
the NHEC case, however, Grafton Superior Court Judge Lawrence MacLeod wrote,
"The issue before this court is whether evidence regarding unit method valuation
of NHEC property is even admissible at trial; not whether the unit method is the
more reliable valuation method ..."
PSNH, seeking to use the unit method,
has appealed against the North Country towns of Bath, Dalton, Gorham, Haverhill,
Landaff, Lincoln, Littleton, Plymouth, Randolph, Stark, Stewartstown and
Whitefield as well as Lancaster, which is currently spending about $55,000
annually fighting appeals by several utilities, with no case having yet gone to
In Lancaster for the 2011 tax year, PSNH is seeking to cut its
assessment from $7.38 million to $3 million.
In Littleton, PSNH, for tax
year 2012, seeks to cut its assessment in half, from $21.9 million to $11.3
In Whitefield, for tax year 2011, PSNH seeks to reduce its
taxable real estate from $12.9 million to $5 million.
In Dalton for 2011,
PSNH seeks to cut a $3.7 million assessment to $1.2 million.
stated it has a duty to dispute those valuations made by communities that are
"extreme outliers" compared to the DRA's assessment of the value of its assets,
but has declined to provide the math it uses to determine what it considers an
Meanwhile, more tax appeals are being filed, including
another against Haverhill, which in September was notified of an appeal by New
England Hydro Transmission.
Not all utilities that file appeals seek to
use the DRA's unit method.
In recent years, North Country towns have seen
utility property appeals - some resolved, others ongoing - by FairPoint
Communications, TDS Telecom, Dunbarton Telephone Co., Granite State Telephone
Co., Great-Lakes Hydro, Northern Utilities, TransCanada, Unitil, EnergyNorth,
Granite State Gas Transmission Co., and New England Electric Transmission Corp.