Council approves new PWSB tax treaty

Council approves new PWSB tax treaty

But Democrats question the deal, saying there was lack of transparency

SCITUATE – The Providence Water Supply Board will pay Scituate more than $80 million over 10 years in an updated tax treaty approved by the Town Council last Thursday, Jan. 9.

According to Councilor Tim McCormick, who led negotiations with the PWSB along with Council President James Brady, Councilor Brenda Frederickson and Town Treasurer Ted Przybyla, the tax treaty will secure 23 to 24 percent of the town’s tax base for the next decade.

McCormick said the PWSB will make payments in lieu of taxes based on the previous rate and will increase at the same rate as the town’s annual property tax increase, McCormick said.

He said the town chose the payment in lieu of taxes, or PILOT, instead of taxes based on actual property value.

He said the PILOT payment is based on last year’s payment to the town, or about $7 million.

Though McCormick and the Republican council felt the treaty was a great deal for the town, Democrats disagreed.

Scituate Democrat Committee Chairwoman Alicia Kelley said the agreement sets the maximum amount the PWSB will pay Scituate regardless of the amount of property owned or the money invested in the treatment plant.

“This 10-year agreement is great for the ratepayers and the city of Providence, but terrible for the taxpayers of Scituate who are the stewards of the state’s largest water supply system,” Kelley said.

Furthermore, the new tax treaty will allow PWSB to continue to buy land tax-free, as well as not being taxed on past land purchases or present or previous facility upgrades.

“This new agreement fails to recognize the loss to the town’s tax base for the last decade. It continues to allow the PWSB board to buy more land in the next 10 years, which will remain tax-free,” Kelley said.

Former Councilor Mike Marcello, also a Democrat, said that the town has lost out on tax dollars by not conducting an appraisal of PWSB land, buildings and equipment.

Marcello said every normal taxpayer gets a property assessment, and PWSB should not be any different. He said in the past 10 years, PWSB paid more than $40 million in upgrades at the Scituate facility, and purchased more than 1,000 acres of land.

Marcello said those 1,000 acres, paid for in part by the town’s $5 million settlement to pay back a PWSB overpayment, are not being taxed like regular taxpayers.

He pointed out that the town earmarked $75,000 to be used for legal consulting during PWSB negotiations during the Financial Town Meeting last April, and he discovered during his questioning that none of the money had been used.

McCormick noted that the PWSB has been the most significant taxpayer in town for decades, representing about a quarter of the tax base each year while needing limited services from the town.

“I think, overall, this is a good deal for the town. It is a significant funding source and I’m pleased to move forward,” McCormick said.

He said negotiations went well, and PWSB is willing to sit down to arrange two other possible deals:

• First, he said the town is interested in gaining access to PWSB land to install up to 24 dry hydrants in town. The hydrants will allow firefighters to have improved access to water, and may lower insurance rates.

• Additionally, McCormick said the town and PWSB may agree to a mutually beneficial land swap, where the PWSB picks up more watershed land and the town gets back useful land for future use.

With last Thursday night being the first chance the public was allowed to comment on the contract after its signing, Marcello said, there was a clear lack of transparency, going against the Republicans’ campaign promise of open government.

“We didn’t have that opportunity (to comment) here and I think that was a misstep,” he said.

Marcello asked McCormick how much the town lost in taxes from the sales of Scituate land or land development rights, and McCormick replied that it was around $45,000.

Resident Tom Angell said he sold development rights to PWSB on Angell Lane, and continues to pay taxes on his land.

“I’m still on the tax roll, and my taxes did not change,” Angell said.