RUMFORD, Maine — Selectmen met with the Board of Assessors and their industrial appraiser Thursday night to learn how they determine the tax assessment for the NewPage paper mill.
NewPage officials initially asked selectmen recently for a tax break, but were told that’s not something selectmen can do. They were told they have to apply for an abatement from the Board of Assessors.
That’s why selectmen asked to meet with the assessors’ board to discuss its roles and responsibilities and how that relates to Maine’s taxation laws regarding the mill’s valuation.
William Van Tuinen of Madison, the industrial appraiser who helps other towns assess paper mills and hydroelectric facilities, explained a history of types of assessments that Rumford has used in the past to determine tax amounts for these industries.
Van Tuinen said determining an assessment formula for a paper mill is a bit harder than doing the same for a hydroelectric plant, because the plant’s income is not as variable due to the recent decline in natural gas prices.
“NewPage is a private corporation, so you can’t get a real idea of what its corporate-wide sales and income is,” he said, which rules out using an income approach.
Selectmen Chairman Greg Buccina, who also works for NewPage, asked most of the questions as a town official and as a taxpayer. He was concerned about the impact to taxpayers and the town should the assessors grant a sizable abatement.
Van Tuinen said town assessor Linnell Geronda received correspondence Wednesday from NewPage about the paper mill’s declaration of value and that it would be based this year on an appraisal done by a national appraiser when the company emerged from bankruptcy.
Van Tuinen said he suspects that it will be based on the appraised value of the Rumford mill, but he doesn’t know that for sure.
“Every year this is done, because every business in town has to do this,” Geronda said of businesses providing her with a declaration of value.
“Are we treating NewPage fairly on a level playing field?” Selectman Brad Adley asked.
“We certainly have tried,” Van Tuinen said. “Our assessment is based on their cost used.”
He said they have taken depreciation out of the equation due to the current state of the paper industry.
“The paper industry is constricting, it’s not expanding,” Van Tuinen said.
He also said they’ve tried to adjust for additional obsolescence. Last year, he said the mill had a $175 million valuation. Putting that into perspective, he said the value of the S.D. Warren mill in Westbrook, “which is clearly a better mill,” is upward of $600 million.
Van Tuinen said the town’s tax assessment of NewPage is not based on inspections of the property and its equipment, because he said he isn’t a qualified engineer. Instead, they rely on information supplied by the mill from previous years and look for changes.
He also warned both boards that should they seek help from the state, it may cost the town $100,000 just to apply for the aid.
In other business, selectmen tabled a request by Rumford attorney and local zip line park developer Thomas Carey to place an article before town meeting voters next month to sell two town lots along the Androscoggin River to his corporation.
Because it wasn’t on the agenda, selectmen had to deem it urgent enough to add, which they did.
Carey said WOW-ZA! Zip-lines LLC wants to buy the two lots, numbered 248 and 250, to establish a zip line and recreation park contingent on several conditions.
Lot 248 includes the portion of the lot not needed for the town snow dump or other town purposes. Lot 250 includes the portion not needed for current library purposes and the portion east of the parking lot and current fence, and a 10-foot right of way along the western side of the current fence to Chisholm park.
Selectmen discussed it before tabling it to their next meeting so a public hearing can be held.