VERNON -- The town has reached a one-year tax agreement with the owner of the Vermont Yankee nuclear plant, keeping the soon-to-be-shuttered plant's value relatively steady and staving off a municipal cash crunch for the near future.
The tax-stabilization contract, which runs from April 1, 2014, to March 31, 2015, values the plant at $280 million for tax purposes -- just $20 million less than the facility's current value.
The impact, officials said, is that Entergy in the next tax year will pay Vernon about $80,000 less than the company pays now. While that will have an effect on the town's coffers, it is nowhere near the tax hit that Vernon officials had feared.
"It was a great deal for the town, and we really appreciate it," Selectboard Chairwoman Patty O'Donnell said. "It certainly puts us in a better position now than we were in a week ago."
The deal was the result of direct talks between Vernon officials and Entergy, which announced in August that Yankee will cease operations by the end of 2014.
Yankee makes up about half of the town's tax base. While Entergy will continue to own the plant during the decommissioning process, officials had worried that the company would seek a large, immediate decrease in the property's valuation given Yankee's scheduled closure halfway through the next fiscal year.
However, the Louisiana-based company agreed to a much-smaller decrease in valuation -- at least for now.
"We are pleased that we were able to reach a fair agreement with the town of Vernon that provides the town with some certainty for their near-term planning needs," Yankee spokesman Rob Williams said in a statement e-mailed to the Reformer.
The deal's announcement comes as town officials are putting the finishing touches on a fiscal year 2015 budget. That spending plan will take effect July 1 and is subject to voter approval at Town Meeting in March.
A public-information forum for the proposed budget has been rescheduled for 6:30 p.m. Jan. 27 at the town office. The one-week delay from the forum's original date allows the Selectboard more time to finalize details of its spending plan.
O'Donnell on Monday warned that, in spite of the new tax deal with Entergy, the Selectboard still plans significant budget cuts. Given Yankee's pending shutdown, it would be "irresponsible" to not reduce town spending as soon as possible, O'Donnell said.
"The exercise that we've been involved in, looking at the other towns and what the other towns do -- how they provide services and what they spend -- I think it's been an eye-opener for all of us," she said.
"So we will continue to look at the budget and make cuts," O'Donnell added. "I think that the taxpayers expect us to bring the budget under control."
But she also acknowledged that the tax agreement "gives us a little bit of leeway to play with the budget" as the board looks to cut costs and restructure town departments in the next fiscal year.
O'Donnell said the board also hopes to reach a long-term tax deal with Entergy, though such talks will not begin until after Town Meeting. Such a pact could detail a declining tax value for Yankee while also giving the town a firm idea of its anticipated tax revenues as the plant is decommissioned.
"We're going to have to negotiate a longer contract. We're hoping for a 10-year (deal)," O'Donnell said. "But we may end up with a five-year (contract), like the state. We don't know what it's going to be. We're certainly going to push for a longer term, because I think it gives more peace of mind to the community to know exactly what's going to happen from year to year."
The long-term tax deliberations will involve an independent assessment of the plant's value, O'Donnell said, as well as conversations with other communities that have sustained the loss of a nuclear-power plant.
"We'd like to talk to other towns that have gone through this process and find out where they made their mistakes," she said.
Some had argued that it was a mistake to allow O'Donnell to participate in tax talks with Entergy. That's because her private business in Vernon, which provides printing, "marketing solutions" and other services, has had contracts with Vermont Yankee.
But O'Donnell last month denied any conflict of interest, saying she was working in the best interest of the town. And on Monday, Selectboard Vice Chairwoman Chris Howe read a prepared statement saying her research had cleared O'Donnell of any conflict allegations.
"The possibility of improper influence does not exist," Howe wrote. "Therefore, I further find that there would be no financial gain either directly or indirectly by any board member during or after negotiations with VY."
The three remaining Selectboard members each voiced their support for that statement. And O'Donnell again pointed out that she was not the only town official participating in tax discussions with Entergy.
"It's an excellent deal," she said. "It was negotiated by the entire Selectboard and the listers, and it's been checked over by the (town) attorney."
Mike Faher can be reached at email@example.com or 802-254-2311, ext. 275.