JAY — The Board of Selectpersons and Verso Corp. reached an agreement Monday to resolve valuation and tax disputes for the 2013, 2014 and 2015 tax years on the company’s Androscoggin Mill and associated property.
Selectpersons agreed Monday to give Verso a credit of $4 million over the next three tax years in six credits to settle the dispute.
The settlement comes on the day before Jay voters consider a proposed $5.2 million municipal budget and a validation vote on the Regional School Unit 73 $18.8 million budget for 2016-17.
Polls are open from 8 a.m to 8 p.m. on Tuesday, April 26, at the Jay Community Building.
Verso had filed a motion with the U.S. Bankruptcy Court in Delaware in March asking the court to settle the valuation of the mill for the three years. Verso claimed the town owed it a tax refund of $11.4 million plus interest for overvaluing and overtaxing the company’s Jay property.
The town opposed the motion.
Verso and 26 subsidiaries voluntarily filed petitions to reorganize under Chapter 11 protection on Jan. 26.
According to the settlement agreement, to continue with additional litigation of the abatement applications would involve significant expense, time and risk for the town and Verso, and a final decision would not be rendered in the near future and would cause financial uncertainties for both parties.
In order to avoid the costs, risks and inconvenience of litigation and to provide financial predictability that is essential to the operations of both the town and the mill, both parties desire to settle and resolve the appeals and avoid litigation for future tax years.
According to the agreement signed by selectpersons Monday, the six credits will be taken against each of the next six payment dates for the next three tax bills issued by the town in October 2016, April and October 2017, April and October 2018 and April 2019.
Verso also agreed to waive all interest that would otherwise be due on the credits.
The credits are in addition to the abatements the Board of Assessors previously granted to the company.
The Jay Board of Assessors granted a partial abatement of $829,258 for the April 1, 2013, and denied the company’s request for more of a valuation reduction. Assessors also granted a partial abatement of $886,157 for the 2015 tax year, denying Verso’s request for a lesser valuation.
In consideration of Verso’s withdrawal of its abatement applications and the appeals, the town agreed to credit to Verso an amount that is sufficient to reduce Verso’s gross tax liability payment to the town, calculated before tax increment financing payments and business equipment tax reimbursements, to:
• $6.75 million for April 1, 2016 property tax year;
• $6.25 million for the April 1, 2017 property tax year;
• $5.75 million for April 1, 2018 tax year;
• $5.25 million for the April 1, 2019 tax year; and
• $4.75 million for April 1, 2020 tax year.
Verso’s gross tax liability payment for tax years of April 1 of 2016, 2017 and 2018 will be further reduced by the six credits of $666,667, which are additions to the credits mentioned above.
The agreement also names other considerations.
“Questions about the future are inherently difficult to answer, but the town will review and analyze its options each year with regards to the credits and decide whether the funds can be withdrawn from the undesignated fund balance or whether additional funds need to be raised through town meeting,” Town Manager Shiloh LaFreniere said.
dperry@sunmediagroup.net
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