Luminant, AD settle
Luminant and the Milam Appraisal District (AD) announced Monday afternoon they had reached an out-of-court settlement on Luminant’s lawsuit over taxable values at Sandow Power Plant Units 4 and 5 at Rockdale.
Chief Appraiser Dyann White said, under the settlement, the agreed-upon value of Unit 4 for 2015 is $315 million. Luminant had rendered a value of $125 million and the AD had set the value at $460 million.
For Unit 5 the settlement places the 2016 value at $290 million. Luminant had rendered a value of $50 million and the AD’s value was $434 million.
Even though it’s not part of the lawsuit, the settlement places the 2017 taxable value at $280 million.
“This is a good move for everyone,” White said. “It gives both parties time to recover from the lawsuit and provides the entities with some stability in their tax rolls. The agreed values represent a reasonable approach to the value of these plants.”
Luminant is the largest taxpayer in Milam County and in the Rockdale ISD.
The initial lawsuit was filed by Luminant in August, 2015. An October, 2016, suit added 2016 values. Over the past two years Milam County has cut personnel and trimmed budgets to deal with the anticipated shortfall. The Rockdale ISD raised the tax rate 10 cents in 2015.
CAUTION—Both the county and school district are approaching the settlement with caution, although County Judge Dave Barkemeyer took a “good news, bad news” approach.
“The only good news is that the county can now move forward knowing how much ad valorem tax revenue we can expect, rather than guess at what’s going to happen,” he said.
“The bad news is that in one swift action the county lost 10 percent of its tax base with no way of recovering in the near future,” he added.
Rockdale ISD Supt. Denise Monzingo told The Reporter the district needs time to crunch numbers to assess the impact.
“On behalf of the school district and Board of Trustees, we are ready to put the lawsuit behind us and are grateful for the support received from the appraisal district,” she said.
“As for what the settlement means for our district financially, it could be months until we have final numbers as we must wait on the Comptroller’s Office and the Texas Education Agency to apply the recertified values.”
Barkemeyer said the county already knows the two-percent across-the-board pay increases for county employees, granted contingent on the AD prevailing in the case, will not be given.
But he supports the negotiations which led to the settlement, noting that even if the AD had prevailed in a jury trial the case would have been far from over.
“That decision would no doubt have been appealed at considerable expense,” Barkemeyer said. “I am told the process would have taken an estimated two to three years, minimum, which I believe would have been more than we could endure from a time and cost standpoint.”
“I support the AD’s decision to settle,” he said. “My concern is that the possibility of ending up with an outcome worse than the settlement that was agreed to was not worth the cost of continuing.”
FEES WAIVED—The AD expressed appreciation to the law firm of Fisher, Boyd, Johnson and Huguenard LLP, and attorneys Wayne Fisher and Bernard Johnson, which waived attorney’s fees in order to assist with the case, other than a small retainer paid to cover upfront costs.
While the exact total of potential attorney fees was not released, fees for such a complex and lengthy lawsuit at that level are estimated to run into the hundreds of thousands of dollars.
“There is no way we could have afforded the type of representation that we received,” AD Board Chair Tim Arledge said. “Because of their generosity and love for our community, we will actually be able to give some of the money set aside for this lawsuit back to the taxing entities.”
Both Barkemeyer and Monzingo also praised Fisher and Johnson.
“They spent many hours going through Luminant’s mountain of documents, inspecting plants and questioning their representatives, enduring the resistance,” Barkemeyer said. “No charge to you and me!”
Monzingo added: “We could not have asked for better legal counsel with Mr. Fisher and Mr. Johnson.”