|
Court: City must pay $495K to Acciona promptly
by Gregory R. Norfleet · News · February 16, 2017
The City of West Branch last week lost its appeal in the case brought against it by Acciona Windpower and must pay $495,000 in Tax Increment Financing rebates in a lump sum.
The 8th Circuit U.S. Court of Appeals ruled on Feb. 7 that a federal district court ruled correctly that the city must pay two years’ worth of tax rebates, from 2013 and 2014, to the wind turbine manufacturer.
“While we were hoping for a different result, the city is ready to put this issue behind us and move forward,” Mayor Roger Laughlin said in a statement.
A memo to the City Council by City Administrator Matt Muckler clarifies that the city will not appeal again.
“After consulting with legal counsel, the city feels that any further appeals would not be in the best interest of the city,” he wrote.
Attempts by the West Branch Times to reach Acciona by phone and e-mail for comment were unsuccessful.
The city in March 2016 took out a $750,000 line of credit from Community State Bank to cover the amount after Chief Magistrate Judge Jon S. Scoles in December 2015 made his initial ruling. Scoles allowed the city to withhold payment pending its appeal.
Muckler noted in the memo that Acciona initially sued for five years’ worth of payments.
“All of the funding awarded to Acciona will be reimbursed from their own taxes, just as it would have been paid had the tax rebates been made in 2013 and 2014,” he wrote in the memo.
Muckler clarified Monday that the city would borrow the money from CSB, pay the lump sum to Acciona in the near future, then use Acciona’s property taxes under the TIF agreement to pay off the loan.
“None of the funds would come from any other taxpayer,” he said.
Because of state law, the city could not collect TIF funding from Acciona since the city did not plan to refund it to the company, Muckler said.
The TIF agreement between the city and Acciona is still in place. Should Acciona reopen its factory and increase its staff to approximately 100, the city could then restart the tax rebates for the three years that will then remain to the contract, the city administrator said.
A three-judge panel issued a 10-page ruling arguing that once the city passed a budget that included paying Acciona the rebate, the city committed itself to follow through and make that payment. The ruling states that the contract with Acciona did not give the city power to come back months later and amend the budget to remove that payment. Looking at an example of how the city and Acciona viewed a 2010 rebate payment process, the appeals court determined that the district court made the correct decision to award Acciona rebates from 2013 and 2014, but not later years.
“(W)e agree with the district court that West Branch breached the agreement when it declined to pay rebates it had obligated for appropriation in fiscal years 2013 and 2014 after Acciona had already paid its taxes for those years,” read the ruling.
The rebate for 2013 was just over $245,000, and the rebate for 2014 was just under $250,000.
Represented by Dorsey & Whitney law firm, the city made its oral arguments to the appeals court in December in St. Paul, Minn. The appeals judges were Diana E. Murphy, Jane Kelly and Ann D. Montgomery Acciona was represented by attorney Dana Oxley.
|
|
|
|
|
|
|
|
