VELCO makes payments for back taxes to county towns
FERRISBURGH — Vermont Electric Co. (VELCO) recently made good on its September pledge to reimburse five Champlain Valley towns for property tax revenue they had lost since 2009 due to a VELCO mistake on how it assessed property in those towns and in Shelburne.
Three Addison county towns received a total of about $127,000 in early October, with the lion’s share going to Ferrisburgh, which got a check in the mail for $72,619.12.
New Haven received $41,471.72, and Vergennes picked up $13,019.65. VELCO also sent checks to South Burlington and Charlotte to make up for what was a total mis-allocation over five years of $14.6 million in property value.
Those funds included amounts equal to municipal property tax revenue each town should have received between 2009 and 2013, plus 5 percent interest.
In the case of Ferrisburgh, the check also included fees for an attorney and for town appraiser Justus DeVries, who first uncovered the fact that VELCO had for several years been sending property tax revenue to Shelburne instead of the other towns.
VELCO property is not assessed like typical commercial real estate. Because of the complexity of placing taxable values on power lines and power stations, towns rely on sworn statements from VELCO for their assessments.
VELCO officials acknowledged that they discovered in 2013 that their company’s statements of value for the six towns were in error, and earlier this fall said they would pay towns back for the mistake.
Before then, VELCO had simply corrected its accounting error and properly assigned 2014 assessments to each of the towns.
But while putting this year’s Ferrisburgh grand list together, local officials said DeVries noticed an increase of almost $5 million in VELCO’s assessment, something hard to explain with no change in the number of power lines running through Ferrisburgh or any expansion to its Long Point Road substation.
The larger problem then came to light, and the five towns began discussing legal action to recover property tax revenue lost since 2009. Soon afterward, VELCO told the towns not to worry and that it would handle the issue.
Local town officials said they appreciate the way the company eventually dealt with the accounting mistake, which VELCO Vice President of Communication, Systems and Strategy Kerrick Johnson said in September the company uncovered in a complete 2013 audit of its statewide inventory. Johnson said VELCO also reported the issue immediately to the Vermont Department of Taxes.
Vergennes City Manager Mel Hawley expressed his opinion directly to a VELCO official in a recent email.
“I feel that VELCO has been extremely generous in its proposal to make every municipality adversely affected whole in this matter,” Hawley wrote.
New Haven Town Clerk Pam Kingman said that town’s selectboard discussed the VELCO funds at their Oct. 7 meeting.
“They were thrilled we got the check,” Kingman said. “They were happy we were reimbursed for money due.”
Kingman and Vergennes City Clerk Joan Devine said those towns would simply treat the checks as general fund revenue, with Devine noting a new line item would be created to explain the source of the income.
“It’s not earmarked for anything,” Devine said. “It’s just going to be general revenue.”
With the larger amount coming to Ferrisburgh, town officials said they were going to tread more carefully. Board of listers chairman Carl Cole, who worked with DeVries to uncover the problem, said the town attorney advised a vote would be necessary to determine what to do with the cash.
The Ferrisburgh selectboard agreed: The money will be parked in the general fund, but the issue will be brought up at town meeting in March.
All agreed with another Cole statement at the board’s Oct. 7 meeting.
“You’re all richer than you were two days ago,” Cole said.
Andy Kirkaldy may be reached at [email protected].