By Richard Kerns
rkerns@newstribune.info
Tribune Staff Writer
KEYSER – Although they have never endorsed the proposed Pinnacle Wind Farm, the Mineral County Commissioners welcome the tax revenue the project would generate, saying they would dedicate the estimated $125,000 a year to a desperately needed judicial annex.
The commissioners are also working with the Pinnacle developer, US WindForce, to develop a mutually agreed upon “floor” for taxes from the project, in the event that revenue falls below current projections as a result of future tax-rate reductions adopted at either the county or state level.
Commissioner Wayne Spiggle, who acknowledges his “skepticism” about both the 23-turbine Pinnacle project and the wind industry in general, nevertheless said any public official would recognize the importance of a revenue source that promises to pump $11 million in taxes into the Mineral County over the next 25 years.
County schools are slated to receive about $308,000 a year from the project, for a total average tax windfall of $433,000 annually.
“There's no question that for any county commissioner it would be fiscally irresponsible not to favor initiatives that increase tax revenue,” Spiggle said.
All three commissioners attended WindForce's Community Advisory Panel meeting this week in Elk Garden, where a senior state official reviewed tax-revenue projections developed by the company. Scott Burgess, assistant director of property taxes for the state of West Virginia, confirmed that the estimates developed by WindForce were “very solid numbers.”
Pinnacle opponents, pointing to other West Virginia counties that did not reap the promised tax benefits of wind farms, had challenged the WindForce numbers, saying they were inflated to make the project more appealing. Burgess, though, said the project most often mentioned in that regard, in Tucker County, predated a 2007 state law that firmly establishes how wind farms are to be taxed.
With that tax policy pegged to the overall project cost, the $131 million Pinncale wind farm, to be located on Green Mountain just west of Keyser, would provide a major infusion for perpetually stretched county finances.
“The presentation confirmed that the publicized figures are correct,” Spiggle said.
The West Virginia Public Service Commission is to render a decision on the project by early January. If approved, Pinnacle could come online by the end of 2010.
While Mineral County has no shortage of projects or initiatives in need of funding, the commissioners said they would dedicate most of the Pinnacle funds to a long-sought judicial annex to be built near the county courthouse. Commissioner Janice LaRue said numerous judicial and law-enforcement agencies are either crammed into small, outdated offices, or located in rental space that strains the county budget.
“With the economy the way it is, we haven't been able to do some things, not just that we'd like to do, but that we need to do...,” LaRue said. “One of our goals is the judicial annex because the offices are totally over-run. We are all in favor of that.”
Spiggle confirmed that the annex would be his top priority. “It's not anything we've discussed, but I support that 100 percent,” he said. “It is an extraordinary need.”
LaRue noted that the county already dedicates its proceeds from gambling taxes to the annex project. Although Pinnacle taxes would not fully come online for a year or more after the project is operational – given the lag between assessments and the resulting tax bills – locked-in wind farm revenues would help the annex move to reality.
One question mark that hovers over the equation, however, is the fate of two special tax levies that together form a substantial part of Mineral County's 2.58 percent tax rate and, ominously, must be approved by county voters every five years. The fear is that voters, who have consistently rejected an additional levy for school projects, might view the Pinnacle revenue as extra funding that negates the need for the special levies, and vote against one or both assessments. If that happens, Pinnacle would also pay a reduced tax rate, and the $433,000 annual payment could be significantly cut.
Spiggle also noted that Burgess, speaking at the Elk Garden meeting, referred to an active “wind lobby” in Charleston. It is possible, the commissioner said, that the wind industry might eventually prevail upon the Legislature to reduce the tax on wind turbines, which would also undermine local tax revenue
To address such concerns, the county is currently negotiating with WindForce to establish a minimum tax in the event that revenue from the project declines significantly, for any reason. A similar agreement was put in place for a wind farm in Greenrier County.
“US WindForce is currently working on that,” LaRue said.
David Friend, vice president of sales and marketing for WindForce, said a draft agreement has been prepared for the commissioners, establishing $250,000 as a minimum annual tax contribution. Friend said the proposed minimum is "significantly higher" than the Greenbrier County figure.
"We have heard what the commissioners have said about their concerns, and told them we would be happy to look at a 'floor' agreement," Friend said.
Friend noted that such an agreement would go "above and beyond" any state requirements. "We're trying to show the commissioners and the public that we're trying to be good neighbors," he said.
Spiggle appears to be taking a harder line on those negotiations than his two fellow commissioners. He wants WindForce to agree to provide annual tax payments based on current projections for the life of the project, regardless of tax rates.
“I know all three of us think the county should have a contract to provide what Commissioner LaRue calls a 'floor'...,” Spiggle said. “If those numbers are correct, let that be the floor. If you make a promise, why be afraid to sign a contract to keep that promise?”
