Hendrick Hudson-Entergy PILOT Agreement

The Hendrick Hudson Board of Education unanimously approved a new financial agreement between the District, several other municipal entities, and Entergy Corporation (operators of Indian Point 2 and 3, in Buchanan) regarding Payments in Lieu of Taxes (PILOT) that support the operations of the District and the additional entities. The additional entities are: County of Westchester; Town of Cortlandt; Hendrick Hudson Free Library; and the Buchanan Fire Department. The approval took place on June 24, 2015.

This new 10-year agreement begins on July 1, 2015, and encompasses the school years 2015-16 to 2024-25. The agreement is on a tax-year basis, and payments will be due in September and January of every year.

Under the new agreement, the School District will receive 80.75% of all payments, with the remainder to be divided among the other recipients. The first payment for the 2015-16 year is $23,272,958. Annual increases in these PILOT payments will vary according to the New York State tax levy cap rules and regulations for individual years.

“This was a very engaging and professional process, working with Entergy,” Said Superintendent Joseph Hochreiter. “We negotiated at a time of great unease and uncertainty regarding Entergy’s relicense, political influences and regional advocacy.”

In the event that the State tax levy cap is abolished, annual increases will be based on the current inflation rate with the same rules applying as for the tax levy cap. Additionally, there will be proportional increases/decreases in payments based on the current generating capacity of the Indian Point Facility, when and if the capacity rises 5 percent above or below the baseline generation rate.

Capital investments in the facility required for safety, security or environmental or regulatory compliance do not increase PILOT Payments.

In case of a permanent shutdown, or of damage or destruction to the facility, both parties have the option to cancel the agreement. If this agreement is canceled, the facility will return to the tax roll. If the agreement continues after a permanent shutdown, PILOT payments will continue as follows: Reduction of 30% for the first year; 60% for the second year; and 90% for the third year.

If the Nuclear Regulatory Commission (NRC) extends Indian Point’s operating license for more than 10 years, both parties have a one-time right to terminate the agreement. Other options include re-negotiating the agreement or moving the facility to the tax roll.

Assistant Superintendent for Business Enrique Catalan presented the terms of the agreement to the Hendrick Hudson School Board at its June 10 meeting. The superintendent and board thanked Mr. Catalan for his diligence in negotiating and crafting this agreement.

PILOT payments from local industry represent a significant proportion of the Hendrick Hudson School District’s annual revenues. For the 2014-15 school year PILOT payments from Entergy and several other local businesses were budgeted at just under $24,500,000, or approximately 33 percent of the projected revenues for the current school year. Other sources of income, in descending order, include the Tax Levy (56 %), State Aid (7%), Fund Balance Transfers (2%), and Other Sources (2%).

Mr. Hochreiter concluded, “The reality is, Entergy’s PILOT payments allow us to have among the lowest property taxes in the county. There is a direct relationship between Entergy’s PILOT Payments and our ability as a District to keep taxes low for homeowners.”