COAL CITY – Officials in the Coal City School District 1 said they can breathe a sigh of relief now that a five-year property tax agreement with Dresden Nuclear Power Generating Station has been approved.
The Coal City School District 1 Board of Education approved the agreement at its most recent meeting.
The assessment agreement determines what the station’s taxable property value will be for the next five years. Revenue from the station accounts for about 70 percent of the school district’s budget, Superintendent Kent Bugg said.
District 1 and six other taxing bodies, including Grundy County, spent roughly nine months negotiating the property value of the station with Dresden.
“It’s a real relief to get it behind us,” Bugg said.
With the new agreement, District 1 will receive about $1.7 million less in tax revenuethis school year than it did in 2012. It will lose a total of about $18,000 in additional revenue throughout the next five years.
In 2012, when the Dresden Station was assessed at $567 million, District 1 received about $17.7 million from the plant. Now, the district will receive about $15.9 million each year for the next five years, or until 2017, at which time the taxing bodies will have to negotiate a new agreement.
Bugg said the school board anticipated the drop in equalized assessed value and proactively implemented a $1 million budget cut over the next four years.
“If we can get that $1million in cuts, that should make us solvent over the life of the agreement,” Bugg said.
This is the third five-year agreement with Dresden the taxing bodies have entered into. Those taxing bodies are District 1, Grundy County, Coal City Fire District, Coal City Library District, Goose Lake Township, Goose Lake Road District and Joliet Junior College.
Dresden Station’s EAV has been somewhat erratic since 2000, dropping from $290 million to $105 million, then leaping to $540 million before falling down to $495 million – all over the course of about 10 years, Grundy County Assessor Dave Henderson said.
With the current agreement, the station’s property value is locked at $510 million for the next half a decade.
Henderson said Dresden’s EAV changed drastically because of several factors, including the deregulation of the electric producing industry in 2000, which made the market more competitive.
Henderson said the deregulation shifted the historic property assessment basis to a more competitive one because the Illinois Commerce Commission no longer regulated the process.
“When that happened, the method that these properties were valued by was turned inside out,” Henderson said.
The jumps in EAV also were due to the plant becoming more efficient and obtaining a license renewal.
Henderson said there was a time when his office worried Dresden would close if the company’s license was not renewed. That expiration date was factored into the property value assessment.
“Without that renewal, those units would have closed down in 2010,” he said.
With the 20-year license renewal, Henderson said the plant’s EAV is in a more stable position.
That’s good news for District 1 and other taxing bodies that depend on Dresden Station tax revenue when drafting budgets.
“There was just so much variability,” Bugg said. “When you count on one entity for roughly 70 percent of your revenues, having stability in that revenue is extremely important for the budgetary process.”