JAY — The Select Board voted unanimously Friday to accept a settlement agreement with Pixelle Specialty Solutions for a tax abatement of $12.2 million in valuation and $250,100 in tax dollars.
The paper mill and associated properties were valued at $108.5 million in 2022-23. The abatement agreement reduces the valuation to $96.3 million.
Selectperson Gary McGrane thanked the negotiating team of Town Manager Shiloh LaFreniere and assessing agent Paul Binette “for negotiating an agreement we can live with.”
“Shiloh and I worked very hard on it,” said Binette of assessing firm John E. O’Donnell & Associates in New Gloucester.
The negotiating team met with a mill vice president, a controller and appraiser to negotiate an agreement, Binette said. Both parties had separate appraisals done. When they left the negotiation, there was a proposed settlement.
It was brought back to the Jay Select Board to consider during a brief executive session Friday to vote on the settlement.
Pixelle officials agreed to withdraw two pending abatement applications from the state Board of Property Tax Review as part of the settlement. Also as part of the agreement, Jay agreed to assess the mill and property at $3.6 million for this upcoming tax year of 2023-24.
Once the tax rate is set in a couple of weeks, LaFreniere said the town will apply for a state adjustment for sudden and severe disruption of valuation because of the closing of the mill. It will be the fifth time since 2013 the town has applied to the state program to have its valuation dropped because of the mill’s declining operation status.
“Continued litigation of this abatement request would be a no win for everyone involved,” LaFreniere said in an email. “The settlement agreement approved by the Select Board is in the best interest of the town and will allow us to move forward as we head into tax commitment this year, and going forward.”
Last year’s rate is $20.50 per $1,000 of property valuation.
The auditor is coming to Jay next week to audit the town financial records. Once it is known how much is available to be used from the undesignated fund balance, selectpersons will make a decision on how much to use offset the increase before setting the rate for 2023-24, LaFreniere said.
The settlement, along with a loss of $600,000 in revenue-sharing from the state, will contribute to a higher rate. The loss came because the town filed for a state reduction in valuation after a wood digester exploded April 15, 2020. Mill owners shutdown one paper machine, the wood room and stopped making pulp at the facility.
Legislators killed a bill in late July that would have reimbursed the town the $600,000 it lost due the wording of the law. A second bill that would fix the law so another town does not lose revenue-sharing was carried over to the second half of the Legislature’s session in January 2024.
The town is required to pay Pixelle $250,100 within 30 days of the execution of the agreement.
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