Four Sides In LIPA Case To Share Mediation Costs

Marty F. Scheinman

By Connor Beach
cbeach@longislandergroup.com

The Town of Huntington is looking to third party mediation as means to settle its ongoing legal battle with Long Island Power Authority.

The town board approved Tuesday the hire of Port Washington-based arbitrator Marty F. Scheinman, who will be tasked with mediating non-binding negotiations between the town, Northport-East Northport school district, LIPA and National Grid over LIPA’s challenge of the town’s valuation of the Northport Power Plant.

The resolution, a late addition to Tuesday’s agenda by Councilman Eugene Cook, was approved 4-0 — Councilman Mark Cuthbertson abstained.

After the meeting, Cook said Suffolk Supreme Court Justice Elizabeth Emerson, who is presiding over the legal battle, was “very adamant that we sit down and go through this.”

“Since this is non-binding, why don’t we put all the cards on the table and see what we can find,” Cook added.

The Northport-East Northport Board of Education unanimously approved a similar resolution last week that authorized its legal counsel to enter into non-binding mediation “in an effort to resolve the litigation without further litigation costs.” Taxes from the Northport Power Plant represent roughly 38 percent of the district’s tax levy.

The certiorari litigation was initiated in 2010 by the utility with a challenge to the town’s assessment of the value of the Northport Power Plant property.

LIPA currently pays $80 million annually in property taxes based on the town’s $3.8 billion valuation, but seeks to decrease the valuation by nearly 90 percent.

Of the $80 million in property taxes generated by the plant, $50 million is earmarked for the school district, with the remaining $30 million to the town.

If LIPA is successful in its challenge, both the town and school district could see a significant loss in tax revenue.

LIPA has previous offered a settlement to decrease the taxes on the plant over eight years and waive back taxes owed by the town.

“We hope the Town of Huntington will join other local communities on Long Island that are working with LIPA to reach a fair settlement to put the unsustainable tax situation back on a sustainable path,” Sid Nathan, LIPA’s director of communications, said Wednesday.

He added that, at a proceeding on Wednesday, Justice Emerson pushed back the next trial date to Dec. 3 at the Suffolk Supreme Court in Riverhead, giving the involved parties time to mediate.

Cuthbertson said, while he understood the concept of mediation, he abstained from voting because he had did not “agree with the choice of mediator.”

“This particular litigation is specialized litigation,” Cuthbertson said. “This mediator’s experience really is with labor and employment relations.”

Supervisor Chad Lupinacci acknowledged Scheinman’s experience arbitrating “over 18,000 disputes across various industries” since 1978.

The mediation agreement sets Scheinman’s rate at $1,150 per hour, which would be split between the school district, the town, LIPA and National Grid.

Lupinacci said that, because the mediation is non-binding, “if this doesn’t work out then we continue on through regular litigation.”

Cook said he is hopeful that mediation will begin within the next 30 days.