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Financial status of Carthage Energy questioned, as plant owes $50,000 for PILOT

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The Jefferson County Industrial Development Agency’s board of directors learned that Carthage Energy LLC, which runs the cogeneration plant on West End Avenue in the village, failed to make a $50,000 payment owed in January to taxing jurisdictions under a 15-year payment-in-lieu-of-taxes agreement.

The company’s failure to make the payment comes as it soon will owe an additional $50,000 in June, according to the PILOT agreement approved in 1999. The company, which is owned by Alliance Energy Group, East Aurora, is obliged to make two $50,000 payments a year. The sums are divided among the village of Carthage, town of Wilna, Carthage Central School District and Jefferson County.

Board member Scott A. Gray said Thursday that he was concerned about the 45-megawatt facility’s financial standing. Carthage Energy operates during the summer and peak heating months in the winter, when energy demands are high. If the plant closes, the company could renege on $100,000 in payments owed to taxing jurisdictions, Mr. Gray said.

“If they’re running at a loss, then they could conceivably put it up as a loss,” he said. “At the county, we see so many companies clean out properties and sell them, and then what they owe will go back to the county as (delinquent) taxes. I think we need to be careful on this because if they leave the building, then it would leave the county with the bill.”

The agency has yet to learn why the company failed to make its $50,000 January payment. Its attempts to reach management have been fruitless so far, said Donald C. Alexander, CEO of the Jefferson County Local Development Corp. Mr. Alexander said he does not believe the company erred intentionally. He said the plant changed ownership about six months ago, when it was sold by Cayuga Energy Inc., Binghamton, to Alliance Energy Group.

“I think the issue is it’s a new company, and they’re probably trying to adjust to the nuances and might not be up to speed as to when PILOT agreements are required,” Mr. Alexander said. “The point is that there are only two payments left on the PILOT, and I think it’s an oversight that wasn’t intentional.”

An attempt to reach the plant manager at Carthage Energy last week was unsuccessful.

The board meeting addressed other business matters:

n Based on a recommendation from the agency’s personnel committee, the board agreed to hire RBC Wealth Management, Watertown, to develop a 401(k) profit-sharing plan for the JCIDA’s staff. The move comes after the agency decided to leave the state retirement system last year following a controversy with the state comptroller’s office over whether Local Development Corp. employees could enroll in the state retirement system.

The personnel committee interviewed three local firms that were interested in establishing the plan. Last year, the agency hired Harris Beach of Rochester to help develop a private pension plan for employees. The firm will continue to provide assistance, along with RBC Wealth Management, to develop the plan.

n In a presentation on the agency’s marketing strategy, F. Marshall Weir III announced a plan to rebrand the Jefferson County Industrial Development Agency and Jefferson County Local Development Corp. under the name “Jefferson County Economic Development,” or JCED. Consistent use of the same name would be less confusing to the public and businesses, Mr. Weir said.

nThe board approved a $40,000 loan request from Paul G. Alberry, co-owner of Mr. Rick’s Bakery. Mr. Alberry plans to move his Mill Street bakery to an bigger location off Route 11 in the next six months.

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