NewPage's Rumford, Maine, paper mill to receive tax abatement of US$223,000, not the US$1.5M it sought for 2013-2014, based on decision of town's board of assessors, which found that valuation mistakenly included some of mill's property in other towns
May 2, 2014
– NewPage Corp.'s bid to pay $1.5 million less in taxes than it did in fiscal year 2013-14 for its Rumford Paper Co. mill fell short by $1.2 million Thursday afternoon.
Following an executive session, the Rumford Board of Assessors voted 3-0 to grant an abatement of $223,000, based on the recommendation of its assessor, Bill Van Tuinen of Madison.
Van Tuinen said the valuation he produced for the board in April 2013 for the Rumford mill erroneously included the value of certain real and personal property located in other municipalities, especially the mill's landfill in Mexico. Rumford cannot tax property in other municipalities.
The board's attorney, Bill Dale, advised Selectmen Greg Buccina and Brad Adley, and Town Manager John Madigan, to pay the Rumford mill the money rather than wait for interest to continue to accrue. Dale said interest runs from the date that the paper mill overpaid by $223,000.
Madigan had a check drawn up from money in the town's overlay account, which is designated for assessments and abatements.
"Every year, the town assesses overlay and we're allowed up to 5 percent of the budget," Madigan said. "In Rumford's case, there's $400,000 in that overlay and that's for assessments, so we have more than enough to deal with it without any short-term impacts."
Dale said Rumford Paper Co. now has 60 days to appeal the decision to the Maine State Board of Property Tax Review in Augusta. Should that happen, he said the state board can take up to two years to decide the case.
Rumford Paper Co. mill controller Kelly Berry of Dixfield declined to comment.
At the meeting in the Municipal Building Jury Room, Dale provided an overview of the case. He said NewPage Corp., doing business as Rumford Paper Co., filed formal abatement requests for the April 1, 2013, assessment date on April 2, 2014, following six months of meetings with the assessors to explain the mill's position.
Mill officials said mill property was overassessed regarding its just value and that the mill property was discriminated against regarding assessments of other properties in Rumford.
Rumford Paper Co. sought an abatement on $64.74 million of assessed valuation, and said the assessments should reflect that all properties in Rumford were assessed at only 84 percent for the April 1, 2013, assessment date.
Selectman Buccina said he was concerned about the impact of such an abatement on Rumford.
The Board of Assessors held a 20-minute executive session before resuming its public meeting and taking questions.
"My concern as a selectman, citizen and taxpayer of the town is I would hope that the Board of Assessors understood that Mr. Van Tuinen did his job, made an assessment last year and that assessment should stand," Buccina said.
"I can't just say no based on how it will affect the town," Van Tuinen said. "I have to make a professional decision that reflects a judgment based on all the information that's available."
Assessor Rinaldo said the mill is also a taxpayer of Rumford and the Board of Assessors was trying to be fair in deliberating the abatement.
Rumford resident Bromley Cook asked what changed from fiscal year 2012-13 to FY 2013-14 to cause the mill to seek an abatement. He said the mill's taxes were reduced by $1.1 million in 2012.
Berry said that more than half of that $1.1 million would have occurred anyway had mill officials not approached the Board of Assessors about the mill's valuation.
"Every year, our assets depreciate in the mill and we submit what our assets' value is at that time, and in every year since 2009, I believe, the town has been applying a residential ratio to our taxes that every other resident also receives," Berry said.
"Those two things would have happened regardless, had we not asked the town to take a look at our valuation," Berry said. "So, of the $1.1 million, for more than half of that, we would have had a reduction. It's not that the board did anything over and above at that point to get us that reduction."
Assessor French said that from 2006 to 2012, assessors saw a reduction of about 50 percent in the mill's valuation.
"We have been reducing it consistently and considerably every year -- except '07 -- substantially, so this 'big' jump I don't fully understand yet, but I'm trying," French said.
Van Tuinen said that in determining a recommendation for the board on the abatement request for the 2013 tax commitment, he:
-- Looked at the 2005 sale of Rumford Paper Co. by Mead to NewPage.
-- Considered additions made to the mill since the acquisition.
-- Considered ongoing depreciation.
-- Reviewed the economics of the business and decreasing demand for paper in North America.
-- Looked at the Rumford mill's income and expenses.
-- Considered appraisals submitted by the paper mill pursuant to and prior to its abatement request.
"After looking at it very thoroughly, pursuant to the abatement request, it's my recommendation that the board grant an abatement," Van Tuinen said as Buccina slowly shook his head from side to side.
"The abatement that I recommend is a reduction at 100 percent of value of $11,096,423," Van Tuinen said.
"That equates to an abatement at 84 percent valuation ratio of the town of $9,321,000, and I don't make that recommendation lightly," Van Tuinen said. "I think that is an abatement that will put us at a valuation that is realistic, given the economics of the industry and will assist us in the defense of our valuation if it is appealed from the decision of the Board of Assessors."
Assessor Chamberlain motioned that the board approve an abatement of $223,000, based on a valuation of $9,321,000, not $11,096,423. The board voted 3-0 to approve it.
-- Rumford paper mill seeks $1.5 million abatement from last year's taxes
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