AUGUSTA – City councilors approved a strongly worded resolve blasting Central Maine Power and a proposed bill the company backs that could cost the city about $200,000 a year in excise taxes.
But the 6-0 vote late Thursday night came after a lengthy executive session in which the council toned down some of the strongest language in the resolution.
The resolve says the company’s motivation for supporting a bill that would let utilities pay excise taxes to the municipality where their vehicles are garaged rather than where their headquarters is, appears to be retribution for the city’s dealings with Maine Natural Gas, a company owned by CMP’s parent company Iberdrola, USA. The company lost out in competitive bidding to provide natural gas to city and school buildings.
Before going behind closed doors at Thursday night’s meeting, the resolve said that it’s clear CMP’s motivation in “advancing LD 1754 is to punish” the city “for the manner in which the city procured natural gas supplies from the competitor to CMP’s sister corporation, Maine Natural Gas.”
In the approved version of the resolve, the council changed the word “punish” to “penalize,” among other changes.
Ward 4 Councilor Mark O’Brien spoke against the resolve before the executive session, saying the language was too harsh.
“I don’t like the tone of it,” O’Brien said. “I think it reduces us to sniping at CMP. I don’t think this is a good strategy to pursue. I think we ought to focus on the hearing and make our case there.”
However Ward 3 Councilor Patrick Paradis, a former state legislator, said a council resolve is the best way for councilors to make their stance known to legislators short of each councilor attending an upcoming public hearing to testify individually. He said the bill demands a strong response from the city.
“When it’s something offensive to the city, and this is a very low-road type of bill,” Pardis said. “In the 16 years I served, this is about as low as it gets, it demands a total response from the city.”
Councilor Derek Grant abstained from the 6-0 vote because he works in the Legislature.
No one from CMP attended Thursday’s meeting.
The proposed change to the excise tax law could cost the city more than $200,000 in annual payments from CMP, because its headquarters are in the city, but many of its vehicles are parked elsewhere.
Ralph St. Pierre, finance director and assistant city manager, said CMP registers and pays excise taxes on about 500 vehicles to Augusta, generating $314,000 a year in excise tax revenues.
City officials aren’t sure how many vehicles CMP has outside Augusta, which it could register elsewhere if the bill passes, but they estimate the change could cost the city about $200,000 to $250,000 a year.
The resolve asks that the Legislature reject the bill, as it did with a similar one in 2011.
The original version said it was “highly improper” for the company to “exact retribution” through the Legislature, but that language was taken out in the final version.
Last year, Maine Natural Gas and Summit Natural Gas of Maine both submitted bids to deliver natural gas to city and school buildings in Augusta.
Summit was awarded the work after Maine Natural Gas officials withdrew their bid and accused the city of allowing Summit to change its prices after both companies submitted their proposals.
Last week, a company spokesman denied city officials’ claims CMP’s motivation was revenge and said technological advances in recent years have made it easier to pay excise taxes to municipalities and keep track of their vehicle fleet. Paying excise taxes to the 13 other municipalities where their vehicles are located is the right thing to do as a good corporate citizen, said spokesman John Carroll.
“Right now we’re a very good corporate citizen in the city of Augusta,” Carroll said last week. “We’re trying to be an equally good corporate citizen in 13 other communities. It’s unusual that civic leaders would raise a question like this about one of their largest taxpayers and employers.”
City Manager William Bridgeo said in 2011 when identical legislation was proposed to change where utilities pay excise taxes on the vehicles they register in Maine, CMP officials spoke against it, as did the city. The bill failed.
Bridgeo and Mayor William Stokes said they can’t think of any reason CMP would change its stance on the issue, but they’d heard secondhand that company officials were upset by the city’s dealings with Maine Natural Gas.
Carroll said CMP would still register 114 vehicles in Augusta if the law passes. The list of municipalities that would benefit includes Portland, where CMP has almost 100 vehicles; Fairfield, where it has 35; Skowhegan, where it has 19; and Farmington, where it has 21.
Bridgeo said the financial hit to the city of Augusta would be large, while providing only a very modest financial gain to other communities across the state where CMP has vehicles.
The bill is sponsored by Rep. Lance Harvell, R-Farmington, who said CMP officials asked him to reintroduce the bill he sought to pass, unsuccessfully, in 2011.
Harvell said last week he sponsored the bill because it would be good for communities, including Farmington where CMP keeps about 20 vehicles, where CMP keeps vehicles. He said he’d heard there was a dispute involving CMP and the city of Augusta, but that’s not why he sponsored the bill.
Carroll said the logistical challenges of registering vehicles in multiple locations aren’t the challenges they were three or four years ago. And, he said, it’s more fair because CMP vehicles kept in other municipalities add wear and tear to the roads where they are located.
“We want to make sure we’re fair to other communities, that’s what this is,” Carroll said. “If they’re feeling there is something else behind this (regarding the city’s relationship with Maine Natural Gas) then ask them why they’re feeling that way.”
Carroll said CMP will still bring financial benefits to the city of Augusta, particularly in the $1.33 million it pays each year in property taxes.
The proposed bill is slated to come before the Legislature’s Taxation Committee for a public hearing scheduled for 1 p.m. March 12.
Keith Edwards – 621-5647 [email protected]